555 U.S. 70 (2008), 07-562, Altria Group, Inc. v. Good

Docket Nº:07-562
Citation:555 U.S. 70, 129 S.Ct. 538, 172 L.Ed.2d 398, 77 U.S.L.W. 4021
Party Name:ALTRIA GROUP, INC., et al., Petitioners, v. Stephanie GOOD et al
Case Date:December 15, 2008
Court:United States Supreme Court
 
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555 U.S. 70 (2008)

129 S.Ct. 538, 172 L.Ed.2d 398, 77 U.S.L.W. 4021

ALTRIA GROUP, INC., et al., Petitioners,

v

Stephanie GOOD et al

No. 07-562

United States Supreme Court

December 15, 2008

Argued October 6, 2008

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

[129 S.Ct. 539] Theodore B. Olson, for petitioners.

Davis C. Frederick, for respondents.

Douglas Hallward-Driemeier for United States as amicus curiae, by special leave of the Court, supporting respondents.

Kenneth J. Parsigian, Goodwin Procter LLP, Boston, MA, Theodore B. Olson, Counsel of Record, Mark A. Perry, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, D.C., Kenneth S. Geller, Mayer Brown LLP, Washington, D.C., for Petitioner Philip Morris USA Inc., Guy Miller Struve, Davis Polk & Wardwell, New York, NY, for Petitioner Altria Group, Inc.

Gerard v. Mantese, Mark Rossman, David Hansma, Mantese & Rossman, P.C., Troy, Michigan, David C. Frederick, Counsel of Record, Mark L. Evans, Kelly P. Dunbar, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C, Washington, D.C., Thomas v. Urmy, Jr., Todd S. Heyman, Shapiro Haber & Urmy LLP, Boston, Massachusetts, Samuel W. Lanham, Jr., Lanham Blackwell, P.A., Bangor, Maine, for respondents.

Syllabus [*]

Respondents, smokers of petitioners' "light" cigarettes, filed suit, alleging that petitioners violated the Maine Unfair [129 S.Ct. 540] Trade Practices Act (MUTPA) by fraudulently advertising that their "light" cigarettes delivered less tar and nicotine than regular brands. The District Court granted summary judgment for petitioners, finding the state-law claim pre-empted by the Federal Cigarette Labeling and Advertising Act (Labeling Act). The First Circuit reversed, holding that the Labeling Act neither expressly nor impliedly pre-empts respondents' fraud claim.

Held:

Neither the Labeling Act's pre-emption provision nor the Federal Trade Commission's actions in this field pre-empt respondents' state-law fraud claim. Pp.___ _ ___.

(a) Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose. See Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 51 L.Ed.2d 604. When the text of an express preemption clause is susceptible of more than one plausible reading, courts ordinarily "accept the reading that disfavors preemption." Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687. The Labeling Act's stated purposes are to inform the public of the health risks of smoking while protecting commerce and the economy from the ill effects of nonuniform requirements to the extent consistent with the first goal. Although fidelity to these purposes does not demand the pre-emption of state fraud rules, the principal question here is whether that result is nevertheless required by 15 U.S.C. § 1334(b), which provides that "[n]o requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter." Pp.___ _ ___.

(b) Respondents' claim is not expressly pre-empted by § 1334(b). As determined in Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407, and Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 121 S.Ct. 2404, 150 L.Ed.2d 532, the phrase "based on smoking and health" modifies the state-law rule at issue rather than a particular application of that rule. The Cipollone plurality concluded that "the phrase 'based on smoking and health' fairly but narrowly construed" did not pre-empt the Cipollone plaintiffs common-law claim that cigarette manufacturers had fraudulently misrepresented and concealed a material fact, because the claim alleged a violation of a duty not to deceive—a

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duty that is not "based on" smoking and health. 505 U.S. at 528-529, 112 S.Ct. 2608. Respondents here also allege a violation of the duty not to deceive as codified in the MUTPA, which, like the common-law duty in Cipollone, has nothing to do with smoking and health. Respondents' claim is not analogous to the "warning neutralization" claim found to be preempted in Cipollone. Reilly is consistent with Cipollone's analysis. This Court disagrees with petitioners' alternative argument that the express pre-emption framework of Cipollone and Reilly should be rejected. American Airlines, Inc. v. Wolens, 513 U.S. 219, 115 S.Ct. 817, 130 L.Ed.2d 715, and Riegel v. Medtronic, Inc., 552 U.S. —, 128 S.Ct. 999, 169 L.Ed.2d 892, are distinguished. Pp.___ _ ___.

(c) Various Federal Trade Commission decisions with respect to statements of tar and nicotine content do not impliedly pre-empt state deceptive practices rules like the MUTPA. Pp.___ _ ___.

501 F.3d 29, affirmed and remanded.

Stevens, J., delivered the opinion of the Court, in which Kennedy, Souter, Ginsburg, and Breyer, [129 S.Ct. 541] JJ., joined. Thomas, J., filed a dissenting opinion, in which Roberts, C. J., and Scalia and Alito, JJ., joined.

OPINION

STEVENS, JUSTICE

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Respondents, who have for over 15 years smoked "light" cigarettes manufactured by petitioners, Philip Morris USA, Inc., and its parent company, Altria Group, Inc., claim that petitioners violated the Maine Unfair Trade Practices Act

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(MUTPA). Specifically, they allege that petitioners' advertising fraudulently conveyed the message that their "light" cigarettes deliver less tar and nicotine to consumers than regular brands despite petitioners' knowledge that the message was untrue. Petitioners deny the charge, asserting that their advertisements were factually accurate. The merits of the dispute are not before us because the District Court entered summary judgment in favor of petitioners on the ground that respondents' state-law claim is pre-empted by the Federal Cigarette Labeling and Advertising Act, as amended (Labeling Act). The Court of Appeals reversed that judgment, and we granted certiorari to review its holding that the Labeling Act neither expressly nor impliedly preempts respondents' fraud claim. We affirm.

I

Respondents are Maine residents and longtime smokers of Marlboro Lights and Cambridge Lights cigarettes, which are manufactured by petitioners. Invoking the diversity jurisdiction of the Federal District Court, respondents filed a complaint alleging that petitioners deliberately deceived them about the true and harmful nature of "light" cigarettes in violation of the MUTPA, Me. Rev. Stat. Ann., Tit. 5, §207 (Supp. 2008).1 Respondents claim that petitioners fraudulently marketed their cigarettes as being "light" and containing "'[l]owered [t]ar and [n]icotine'" to convey to consumers that they deliver less tar and nicotine and are therefore less harmful than regular cigarettes. App. 28a–29a.

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Respondents acknowledge that testing pursuant to the Cambridge Filter Method2 indicates that tar and nicotine yields of Marlboro Lights and Cambridge Lights are lower than those of regular cigarettes. Id., at 30a. Respondents allege, however, that petitioners have known at all relevant times that human smokers unconsciously engage in compensatory behaviors not registered by Cambridge Filter Method testing that negate the effect of the tar- and nicotine-reducing features of "light" cigarettes. Id., at 30a–31a. By covering filter ventilation holes with their lips or fingers, taking larger or more frequent puffs, and holding the smoke in their lungs for a longer period of time, smokers of "light" cigarettes unknowingly inhale as much tar and nicotine as do smokers of regular cigarettes. [129 S.Ct. 542] Ibid. "Light" cigarettes are in fact more harmful because the increased ventilation that results from their unique design features produces smoke that is more mutagenic per milligram of tar than the smoke of regular cigarettes. Id., at 31a–32a. Respondents claim that petitioners violated the MUTPA by fraudulently concealing that information and by affirmatively representing, through the use of "light" and "lowered tar and nicotine" descriptors, that their cigarettes would pose fewer health risks. Id., at 32a, 33a.

Petitioners moved for summary judgment on the ground that the Labeling Act, 15 U.S.C. §1334(b), expressly preempts respondents' state-law cause of action. Relying on our decisions in Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992), and

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Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001), the District Court concluded that respondents' MUTPA claim is pre-empted. The court recast respondents' claim as a failure-to-warn or warning neutralization claim of the kind pre-empted in Cipollone: The claim charges petitioners with "produc[ing] a product it knew contained hidden risks . . . not apparent or known to the consumer"—a claim that "runs to what [petitioners] actually said about Lights and what [respondents] claim they should have said." 436 F.Supp.2d 132, 151 (Me. 2006). And the difference between what petitioners said and what respondents would have them say is "'intertwined with the concern about cigarette smoking and health.'" Id., at 153 (quoting Reilly, 533 U.S. at 548, 121 S.Ct. 2404). The District Court thus concluded that respondents' claim rests on a state-law requirement based on smoking and health of precisely the kind that §1334(b) pre-empts, and it granted summary judgment for petitioners.

Respondents appealed, and the Court of Appeals reversed. The Court of Appeals first rejected the District Court's characterization of respondents' claim as a...

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