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At issue in the case of Altria v. Good is the question of whether state consumer-fraud laws may be used to sue cigarette companies for labeling certain brands “light,” “mild,” or “low” in tar and nicotine when such brands cause addiction and health problems at the same rates as regular cigarettes. Tobacco companies including Phillip Morris and R.J. Reynolds Tobacco Co. argue that the Federal Cigarette Labeling and Advertising Act effectively preempts any and all state laws which conflict with it.

Because the Federal Trade Commission (FTC) has allowed tobacco companies to label some cigarettes “light,” the companies contend, states’ laws have no jurisdiction over the issue.

Altria involves 1960s legislation requiring warning labels on cigarette packages. In 1992, the high court held in Cipollone v. Liggett Group that tobacco companies could be sued for injuring consumers by making false and fraudulent statements. Precisely such statements are at issue in Altria: The companies marketed "light" cigarettes as having "lowered tar and nicotine" when they knew neither was true. But the court decided to hear their plea for immunity though pre-emption. –Arthur H. Bryant, The National Law Journal.

In August 2006, district judge Judith Kessler concluded a nine month trial by ruling that in their marketing of light cigarettes, cigarette makers violated US racketeering laws by deliberately misleading consumers about the risks of smoking. Her 1,653-page decision ordered the companies to stop labeling their products “light” or “low” in tar and nicotine, and to issue public “corrective statements” about the addictiveness and adverse health effects of smoking.

This week, attorneys for the cigarette companies urged a federal appeals court to overturn Kessler’s ruling. They have planted doubt among the judges as to whether US racketeering laws (originally designed to fight mob-style organized crime) apply to the actions of big tobacco. In order for the companies to be convicted of fraud under these laws, there must be evidence of an ongoing group conspiracy to deceive the public about the dangers of their tobacco products.

The question of federal preemption, however, remains paramount, and a win for the tobacco companies will ultimately mean an end to state-initiated consumer claims against their products–a frightening prospect for the future of American consumer rights.

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