Good v. Altria Group, Inc., No. CV 05 127-B-W.

• Decision Date: 25 May 2006
• Docket Number: No. CV 05 127-B-W.
• Citation: 436 F.Supp.2d 132
• Parties: Stephanie GOOD, Lori A. Spellman, and Allain L. Thibodeau, individually and on behalf of all others similarly situated, Plaintiffs, v. ALTRIA GROUP, INC., and PHILIP MORRIS USA, INC., Defendants.
• Court: U.S. District Court — District of Maine

436 F.Supp.2d 132

Stephanie GOOD, Lori A. Spellman, and Allain L. Thibodeau, individually and on behalf of all others similarly situated, Plaintiffs, v. ALTRIA GROUP, INC., and PHILIP MORRIS USA, INC., Defendants.

No. CV 05 127-B-W.

United States District Court, D. Maine.

May 25, 2006.

Gerard V. Mantese, Mantese and Associates, P.C., Mark C. Rossman, Mantese and Associates, P.C., Troy, MI, Samuel W.

Lanham, Jr., Cuddy & Lanham, Bangor, for Stephanie Good Individually and on behalf of others similarly situated, Lori A Spellman Individually and on behalf of others similarly situated, Allain L Thibodeau Individually and on behalf of others similarly situated, Plaintiffs.

Frances E. Bivens, Davis Polk & Wardwell, Guy Miller Struve, Davis Polk & Wardwell, New York, NY, David C. King, Rudman & Winchell, Bangor, H. Peter Del Bianco, Jr., Lambert, Coffin, Portland, Kenneth J. Parsigian, Goodwin Proctor LLP, Boston, MA, Teresa M. Cloutier, Lambert, Coffin, Portland, for Altria Group Inc, Philip Morris USA Inc, Defendants.

ORDER ON DEFENDANT PHILIP MORRIS USA, INC.'S MOTION FOR SUMMARY JUDGMENT

WOODCOCK, District Judge.

Long-time smokers of Marlboro Lights cigarettes, Stephanie Good, Lori Spellman, and Allain Thibodeau filed a class action against Altria Group, Inc. (Altria) and Philip Morris USA, Inc. (Philip Morris), claiming that Altria and Philip Morris deliberately deceived them about the true and harmful nature of light cigarettes, thereby violating the Maine Unfair Trade Practices Act and enriching themselves unjustly. Philip Morris moved for summary judgment on the ground that federal law expressly pre-empts these state causes of action. Based on Cipollone v. Liggett Group, 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) and its progeny, this Court agrees that federal law pre-empts the Plaintiffs' causes of action and grants summary judgment in favor of Philip Morris.¹

I. Statement of Facts²

a. The Parties

The Plaintiffs, Maine residents, allege not only that they are long-time Marlboro Lights smokers, but also that they represent a class of all similarly-situated consumers in Maine.³ First Am. Compl. at 11117-9, 41-51 (Docket # 12). Altria is a Virginia corporation, which through its wholly owned subsidiary, Philip Morris, engaged in the business of designing, manufacturing, promoting, marketing, distributing and selling Marlboro Lights and Cambridge Lights brand cigarettes.⁴ Id. at ¶¶ 10, 11.

b. Congressional regulation⁵

Shortly after the Surgeon General's Advisory Committee on Smoking and Health issued its 1964 report concluding that cigarette smoking was a health hazard, Congress responded by enacting the Federal Cigarette Labeling and Advertising Act (FCLAA) in the face of impending regulation by federal agencies and the States. Def's Statement of Undisputed Facts at ¶¶ 1-3 (Docket # 21)(DSUF); Pls.' Opposing Statement of Mat. Facts at ¶ 2 (Docket # 51)(POSMF). The purpose of FCLAA, enacted in 1965, was "to establish a comprehensive Federal program to deal with cigarette labeling and advertising with respect to any relationship between smoking and health . . . ." DSUF at ¶ 3; 15 U.S.C. § 1331. By means of FCLAA, Congress specified the text of the warning labels that manufacturers were required to place on cigarette packages and expressly prohibited others from imposing additional requirements with respect to cigarette labeling. DSUF at ¶¶ 4-5; 15 U.S.C. § 1333-1334. FCLAA, however, did not require the use of a "Lights" descriptor or representations that cigarettes are purportedly "lower in tar and nicotine". POSMF at ¶ 5.

Originally due to expire in 1969, Congress amended FCLAA that year to ban cigarette advertisements on any medium of electronic communication subject to the jurisdiction of the Federal Trade Commission (FTC), taking cigarette advertisements off television and radio. DSUF at ¶¶ 6-7. Also in 1969, Congress changed the required warning labels on cigarette packages and expressly provided that "no 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 Act". DSUF at ¶¶ 8-9; 15 U.S.C. § 1334. The Senate report states that these amendments were intended to ensure national uniformity with respect to the advertising and promotion of cigarettes. DSUF at ¶ 12. See also DSUF at ¶ 1. However, none of the changes added any provisions with regard to the specific use of a "Lights" descriptor or representations that cigarettes are purportedly "lower in tar and nicotine". POSMF at ¶ 12.

In 1984, Congress amended FCLAA again, this time to require a series of rotating health warnings.⁶ DSUF at ¶ 13; POSMF at ¶ 13. Over time, Congress considered, but rejected, legislation aimed at further regulating tobacco, including legislation that would have required cigarette manufacturers to identify tar and nicotine yields on cigarette packages and would have given the Food & Drug Administration (FDA) authority over cigarettes. DSUF at ¶¶ 14-15.

c. FTC: Early Involvement with the Tobacco Industry

The FTC was created to enforce the nation's antitrust and consumer protection laws. The aim of consumer protection laws is to prevent unfair or deceptive business practices, including unfair or deceptive advertising. DSUF at 1117. Since the 1930s, the FTC has exercised its authority to monitor cigarette advertisements and promotions in several respects and has used several enforcement mechanisms such as cease-and-desist orders, corrective advertising, bans, posting of bonds, disgorgement of profits, and financial penalties.⁷ DSUF at ¶¶ 20, 22; POSMF at ¶¶ 20, 22. In the 1940s, the FTC addressed tar and nicotine claims in cigarette advertisements, but not the specific descriptors "lights" and "lowered tar and nicotine". DSUF at ¶ 23; POSMF at ¶ 23.

In 1955, the FTC issued Cigarette Advertising Guides for staff use in evaluating cigarette advertising, asking that the industry substantiate claims regarding tar and nicotine yields. DSUF at ¶ 24; POSMF at ¶ 24. Nevertheless, in the 1950s, different manufacturers used different test methods, and it was difficult to compare tar and nicotine yields among brands. DSUF at ¶ 25. In 1959, after an FTC statement that it would file enforcement actions against disclosures it deemed to be per se deceptive or unsubstantiated health claims, all seven major manufacturers agreed to delete all tar and nicotine claims from advertising. DSUF at ¶ 26; POSMF at ¶ 26. In regulating cigarette advertising and promotions, the FTC has relied on the views and findings of the scientific community and other government agencies, such as the U.S. Department of Health and Human Services, and has developed expertise in assessing the impact of advertising claims on the general public. DSUF at ¶¶ 19, 21.

d. FTC: The FTC Method

The FCLAA expressly preserved the authority of the FTC to regulate and proscribe unfair or deceptive acts or practices in the advertising of cigarettes, although even the FTC was precluded from requiring additional requirements on cigarette packages. DSUF at ¶¶ 5, 11; POSMF ¶ 5; 15 U.S.C. § 1336. In 1964, after the Surgeon General's report, the FTC proposed a Trade Regulation Rule that would have prevented any cigarette label or advertisement from stating or implying without substantiation that smoking an advertised brand promotes good health or physical well-being, is not a hazard to health, or is less of a hazard to health than smoking other brands and noted that claims regarding lowered tar and nicotine could be deceptive without an adequate warning and scientific support. DSUF at ¶¶ 27-28. The Trade Regulation Rule was vacated by the voluntary agreement of the cigarette companies to subject themselves to a Cigarette Advertising Code and the enactment of FCLAA that same year. DSUF at ¶¶ 29-31; POSMF at ¶¶ 29-30.

In 1966, the FTC, prompted by its belief that a scientific consensus had emerged regarding the hazards of tar and nicotine in cigarettes, proposed a standardized method for measuring tar and nicotine levels. DSUF at ¶¶ 32-35; POSMF at ¶¶ 33-35. Known as the FTC or Cambridge Method, this method involves detailed specifications pursuant to which a machine smokes each cigarette the same way to the same length and the particulate matter is collected on a pad and measured for tar and nicotine content. DSUF at ¶¶ 35-38; POSMF at ¶¶ 35, 37. The FTC established its own testing lab to measure tar and nicotine yields and the testing results were published in the Federal Register. DSUF at ¶ 39, 52; POSMF at ¶ 52. However, the FTC never formally adopted the FTC method. POSMF at ¶ 37.

In 1970, the FTC once again published notice of a proposed trade regulation regarding "advertising of cigarettes", which was never enacted. The regulation would have required the tobacco companies to disclose in their advertising the tar and nicotine content of their cigarettes as measured by the FTC Method, but again did not specifically reference "Lights" cigarettes or the descriptor "lowered tar and nicotine". Pls.' Statement of Additional Mat. Facts at ¶¶ 10-12 (Docket # 51)(PSAMF); Def's Resp. to Pls.' Statement of Additional Mat. Facts at ¶¶ 11-12 (Docket # 55)(DRPSAMF); DSUF at ¶ 53. The FTC informed manufacturers that in lieu of rulemaking, it would accept an agreement from them, and, as a result, the tobacco companies voluntarily undertook to disclose such claims and to use the FTC Method. DSUF at ¶¶ 54-55; POSMF at ¶¶ 54-55; PSAMF at ¶ 15; DRPSAMF at ¶ 15. This agreement did not refer to the use of the specific descriptors at issue here. POSMF at ¶ 55. The FTC reminded companies that it retained the right to reinstitute rulemaking procedures at any time if necessary, and in turn the companies challenged FTC's ability to promulgate the rule in the first place, characterizing it as a voluntary program. DSUF...