Mangini v. R. J. Reynolds Tobacco Co.

• Decision Date: 30 June 1994
• Docket Number: No. S034603,S034603
• Citation: 31 Cal.Rptr.2d 358,7 Cal.4th 1057,875 P.2d 73
• Court: California Supreme Court
• Parties: , 875 P.2d 73, 63 USLW 2042, 1994-2 Trade Cases P 70,700 Janet C. MANGINI, Plaintiff and Appellant, v. R.J. REYNOLDS TOBACCO COMPANY, et al., Defendants and Respondents.

Page 358

31 Cal.Rptr.2d 358

7 Cal.4th 1057, 875 P.2d 73, 63 USLW 2042,

1994-2 Trade Cases P 70,700

Janet C. MANGINI, Plaintiff and Appellant, v. R.J. REYNOLDS TOBACCO COMPANY, et al., Defendants and Respondents.

No. S034603.

Supreme Court of California,

In Bank.

June 30, 1994.

Milberg, Weiss, Bershad, Specthrie & Lerach, Milberg, Weiss, Bershad, Hynes & Lerach, William S. Lerach, Leonard B. Simon, Eric A. Isaacson, Alan M. Mansfield, Artie Baran, Frank J. Janecek, Jr., Darren J. Quinn, San Diego, Bushnell, Caplan & Fielding, Alan M. Caplan, Philip Neumark and April M. Strauss, San Francisco, for plaintiff and appellant.

Daniel E. Lungren, Atty. Gen., Roderick E. Walston, Chief Asst. Atty. Gen., Herschel T. Elkins, Asst. Atty. Gen., Albert Norman Shelden, Deputy Atty. Gen., Robert Chartoff, Keker, Brockett & Van Nest, Gary M. Cohen and Daralyn J. Durie, San Francisco, as amici curiae on behalf of plaintiff and appellant.

Howard, Rice, Nemerovski, Canady, Robertson & Falk, Howard, Rice, Nemerovski, Canady, Robertson, Falk & Rabkin, Martin R. Glick, H. Joseph Escher III, Pamela T. Johann, San Francisco, Jones, Day, Reavis & Pogue and John L. Strauch, Cleveland, OH, for defendants and respondents.

ARABIAN, Justice.

This lawsuit challenges an advertising campaign for Camel cigarettes featuring a cartoon character called Old Joe Camel. The campaign, it is claimed, improperly targets minors, and seeks to make cigarette smokers of them. The issue before us is whether the action is preempted by federal law. Its resolution requires us to interpret and apply the recent decision of Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407, which itself interpreted the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.).

We conclude that the action, as defined and limited by the Court of Appeal, is not preempted, and affirm the judgment of the Court of Appeal.

I. PROCEDURAL HISTORY

Plaintiff Mangini sued R.J. Reynolds Tobacco Company and others (hereafter collectively Reynolds) for injunctive relief, asserting two causes of action, one for "Unlawful, Unfair Business Practices," and one for "Unjust Enrichment and Imposition of Constructive Trust."

The complaint alleges, among other things, the following: About 75 percent of all adult smokers become addicted to tobacco before their 18th birthdays. Tobacco advertising causes children to become addicted. Since 1988, Reynolds has used a cartoon character called Old Joe Camel in its advertising campaign in order to attract teenage smokers. It has disseminated products such as matchbooks, store exit signs, scrip, mugs, and soft drink can holders advertising Camel cigarettes. The advertising has been effective in targeting adolescents. As a result of the campaign, the number of teenage smokers who choose Camel cigarettes has risen from 0.5 percent in 1988 to between 25 and 33 percent in 1992. Teenage smokers accounted for about $476 million of Camel sales in 1992 as compared with $6 million in 1988. " 'Old Joe, that hip cartoon camel used to advertise Camel cigarettes,' " the complaint alleges, " 'is now as familiar to young children as Mickey Mouse, and apparently is enticing thousands of teens to smoke that brand,' " and has caused Camel's popularity with teenagers to " 'surge[ ] 66-fold.' "

The first cause of action alleges that defendants "caused the advertisements of Camel cigarettes without any warning that cigarettes pose a health hazard" in violation of the Federal Cigarette Labeling and Advertising Act, and that this constitutes an unlawful and unfair business practice under Business and Professions Code section 17200 et seq. The second cause of action alleges that defendants are being unjustly enriched by the advertising campaign.

Six months after the complaint was filed, the United States Supreme Court decided Cipollone v. Liggett Group, Inc., supra, 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407. Two weeks thereafter, Reynolds moved for summary judgment, contending that the action was preempted by the Federal Cigarette Labeling and Advertising Act, 15 United States Code section 1331 et seq., as interpreted in that decision. The trial court agreed, and granted the motion. Plaintiff appealed.

The Court of Appeal reversed. It found that the two causes of action pleaded in the complaint were indeed preempted by federal law, which plaintiff does not now challenge, but it concluded that plaintiff should have been granted leave to amend the complaint. On appeal, plaintiff argued two additional theories of unfair business practice based upon facts already alleged in the complaint. The Court of Appeal found that one of the theories was preempted, a finding also not now challenged. The other theory, the one at issue here, "is that the Old Joe Camel advertising campaign targets minors for the purpose of inducing and increasing their illegal purchases of cigarettes."

Preliminarily, the court found the targeting minors theory to be cognizable under Business and Professions Code section 17200. "California's statutory law of unfair competition (Bus. & Prof.Code, § 17200 et seq.) authorizes actions for injunctive relief (Bus. & Prof.Code, § 17203) by certain state and local officers and persons acting for the interests of themselves or the general public (Bus. & Prof.Code, § 17204). Unfair competition includes 'any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising....' (Bus. & Prof.Code, § 17200.)" The court found that cigarette advertising targeting minors was "unfair" within the meaning of this statute.

It stated, "the targeting of minors in cigarette advertising offends public policy as established by statute. In California, it is unlawful to sell or furnish cigarettes to persons under the age of 18 years, and it is unlawful for minors to purchase or receive cigarettes. (Pen.Code, § 308, subds. (a), (b).) This reflects a statutory policy of protecting minors from addiction to cigarettes. In an analogous context--a statutory proscription against nonsale public distribution of smokeless tobacco and cigarettes (Health & Saf.Code, § 25967)--the Legislature has declared its intent that 'keeping children from beginning to use tobacco products in any form ... shall be among the highest priorities in disease prevention for the State of California.' (Health & Saf.Code, § 25967, subd. (a)(11).) Cigarette advertising directed to minors contravenes the statutory policy of keeping children from starting on the road to tobacco addiction."

In addition, the court noted that "the targeting of minors is oppressive and unscrupulous, in that it exploits minors by luring them into an unhealthy and potentially life-threatening addiction before they have achieved the maturity necessary to make an informed decision whether to take up smoking despite its health risks." It also found that "a persuasive argument can be made that the targeting of minors causes substantial physical injury to them. In the statutory proscription against nonsale public distribution of smokeless tobacco and cigarettes, the Legislature has found and declared the following: 'Tobacco product advertising and promotion are an important cause of tobacco use among children.' (Health & Saf.Code, § 25967, subd. (a)(9).) 'The earlier a child begins to use tobacco products, the more likely it is that the child will be unable to quit.' (Health & Saf.Code, § 25967, subd. (a)(5).) 'Smoking is the single most important source of preventable disease and premature death in California.' (Health & Saf.Code, § 25967, subd. (a)(1).) Mangini's complaint alleges that teenage smokers accounted for $476 million of Camel cigarette sales in 1992 as compared with $6 million in 1988 at the onset of the Old Joe Camel advertisements, implicitly suggesting such advertisements have harmed a great many teenagers by luring them into extended use of and addiction to tobacco products."

The court went on to find that this cause of action was not preempted by the Federal Cigarette Labeling and Advertising Act. Finally, it held that although this theory was imperfectly pleaded in the complaint, the motion for summary judgment was equivalent to a motion for judgment on the pleadings, and the theory was supported by the factual allegations; therefore, the trial court should have granted leave to amend the complaint to allege this cause of action. The court thus reversed the judgment and remanded the cause "with directions to the superior court to give Mangini an opportunity to amend her complaint."

Reynolds petitioned for review, contending that the cause of action is preempted by federal law, and that the Court of Appeal erred procedurally in finding that plaintiff should have been granted leave to amend the complaint. Neither in the Court of Appeal nor in the petition for review did Reynolds challenge the holding that the targeting minors theory states a valid cause of action under state law. We granted review limited to the merits of the preemption issue.

II. DISCUSSION

A. Judicial Notice

The parties have filed eight separate requests for judicial notice, five by Reynolds, three by plaintiff. We grant some of the requests and deny the rest.

Although a court may judicially notice a variety of matters (Evid.Code, § 450 et seq.), only relevant material may be noticed. "But judicial notice, since it is a substitute for proof [citation], is always confined to those matters which are relevant to the issue at hand." (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301, 155 Cal.Rptr. 507.) "While Evidence Code, section 451, provides in mandatory terms that certain matters designated therein must be judicially noticed, the provisions contained therein are subject to the qualification that the matter to be judicially noticed must be relevant (Evid.Code, §§ 350, 450)", as well as "qualified by Evidence Code, section 352...." (Mozetti v. City of...