SCOTUS: "Good" news on tobacco preemption

The Supreme Court held, 5-4, that state-law fraud claims against the makers of “light” cigarettes are not preempted by the federal Cigarette Labeling and Advertising Act or the actions of the Federal Trade Commission.

 The Court reasoned that the state law claims were not “based on smoking and health” under the Labeling Act because the general state fraud law being invoked applied to all businesses, not just the tobacco industry. The Court also stated, over the vigorous protests of the dissenters, that the scope of a federal preemption provision should be narrowly construed.  Justice Stevens wrote the opinion of the Court, joined by Kennedy, Souter, Ginsburg and Breyer. Justice Thomas dissented, joined by Scalia, Alito, and the Chief Justice. Altria Group Inc. v. Good, --- S.Ct. ----, 2008 WL 5204477 (Dec. 15, 2008) (No. 07-562).

 

           The Labeling Act expressly preempts any state “requirement or prohibition based on smoking and health”, 15 U. S. C. §1334(b). Here, plaintiffs sued under Maine’s Unfair Trade Practices Act, alleging that “light” cigarettes were fraudulently marketed as delivering less tar and nicotine. The Court held that the Labeling Act preempts laws targeting tobacco, but not rules and standards generally applicable to all businesses or persons. Accordingly, plaintiffs’ fraud claims are not “based on smoking and health,” because the Maine’s fraud statute is generally applicable and does not specifically regulate the tobacco industry.

 

          In Altria, the Court adhered to the plurality opinion in Cipollone v. Liggett Group, Inc., 505 U. S. 504 (1992) (Stevens, joined by O’Connor, Rehnquist, White). The Cipollone plurality focused both on congressional intent and on the principle that preemption should be narrowly construed. Following Cipollone, the Altria majority reasoned that Congress intended to guarantee a uniform national standard for tobacco warning labels and keep states from requiring stronger warnings, but not to permit tobacco makers to make fraudulent health claims. The dissent argued that the whole approach of Cipollone was implicitly undermined by more recent decisions, especially Riegel v. Medtronic, 128 S.Ct. 999 (2008) (holding 8-1 that Medical Device Amendments preempt failure-to-warn claims based on federally-approved device; summary here).

 

          The Court distinguished Riegel and other cases in which the Court found preemption. First, the Court noted that those decisions arose under statutes with much broader preemption language. The medical device statute, for example, preempts state law that is merely “related to” device safety and effectiveness. The Court held that the “based on” language of the Labeling Act “describes a more direct relationship” than does “related to.” The Court also said that unlike Riegel, plaintiffs here were not trying to impose a safety standard more stringent than the federal one.

 

          The Court gave short shrift to Altria’s implied preemption argument, simply saying that the FTC did not have any clear, longstanding policy on the permissibility of claims regarding “light” cigarettes. The FTC had had so little so say about “light” cigarette claims that neither its “handful” of guidances over the years nor its “inaction” with regard to the issue “even arguably” established implied preemption.

 

            Notably, Stevens began the Court’s analysis with the presumption against preemption, a doctrine that has been hotly contested and inconsistently applied by the Court in recent years. The dissent argued that the Riegel majority’s failure to mention the presumption, despite objections by the dissent, “was necessarily a rejection of any role for the presumption” in express preemption cases. The majority’s opinion puts the presumption back in play – though it should be noted that the majority’s holding was largely based on its view of congressional intent, rather than reliance on the presumption.

 

            Altria also reinvigorates an interpretive approach that emphasizes congressional intent, in contrast to the empty-headed literalism of the dissent. Rather than a preemption provision the most sweeping interpretation it would bear, under the banner of “plain meaning,” the Court relied on the sensible inference that Congress did not intend to upset preexisting legal frameworks and enable fraud.

 

            It’s hard to say what Altria portends for the pending drug preemption case of Wyeth v. Levine. Certainly Altria signals that the Court is not moving wholesale in the direction of aggressive preemption of state consumer and tort law, as might have been expected after the sweeping language of Riegel. Instead, outcomes are likely to vary based on the particular state and federal laws at issue. Notably, this decision was based on treating the Labeling Act’s preemption language as narrower than other federal laws. The Court also emphasized that plaintiffs here were not trying to add to federal standards, which petitioner is arguing is the case in Wyeth. More on Altria v. Good at Law.com, SCOTUSblog, and the Text & History blog.