Court revives low-tar cigarette case

The Minnesota Court of Appeals on Tuesday reinstated a consumer-protection lawsuit against Philip Morris Inc. and allowed the case to go forward as a class-action claim that alleges the company misled smokers by marketing low-tar cigarettes as a healthier form of tobacco use.

Philip Morris issued a statement strongly suggesting that it will appeal the ruling to the Minnesota Supreme Court.

But if the opinion by the three-judge Appeals Court panel holds, it could open the courts to a broader array of consumer-protection lawsuits.

The 45-page opinion, written by Judge Terri Stoneburner, clarifies earlier decisions arising under the state's consumer fraud, deceptive trade practices and false advertising laws. The law giving individuals standing to file such lawsuits is known generally as the "private attorney general statute."

In 2000, the state Supreme Court ruled that it applies only to those who can "demonstrate that their cause of action benefits the public." Until now, lower courts have taken a restrictive view, making it hard for individuals to bring such cases.

That made it hard for small to medium cases to get into court because lawyers didn't want to risk working on cases that were likely to get tossed out, said Marshall Tanick, a Minneapolis consumer rights attorney who isn't involved in the tobacco case. He said Stoneburner's opinion will have "very significant impact" by making it easier to bring such cases, which should pressure firms to settle.

"Even though this is a big case, the irony is that this will have its greatest impact on smaller cases," Tanick said.

They seek disgorgement of cigarette-company profits, restitution for the cost of cigarettes they bought and legal fees.

The Appeals Court opinion cited a 2003 Minnesota Supreme Court decision in finding that individuals can file lawsuits alleging a violation of the state's consumer-protection laws if they can show that the defendants made misrepresentations about a product or a service to "the public at-large." In addition, it said that claims in such cases can go forward even if the government brings a halt to the offensive conduct that prompted the lawsuit while the case is pending.

The Appeals Court also found that the trial judge had met the legal requirements to certify the case as a class action over the tobacco company's objections.

It cited the judge's finding that "a class action is not only an appropriate method to resolve the plaintiffs' allegations, but pragmatically, the only method whereby purchasers of Marlboro Lights in Minnesota can seek redress for the alleged deception."

The court remanded the case to the trial court for further proceedings consistent with the order. The plaintiffs' attorneys said they were more than satisfied.

"Part of the problem is [that] an individual consumer cannot take on, alone, a Philip Morris," Hunt said. "So I think it's very important to the Minnesota consumers ... that they can proceed as a class."

Philip Morris USA said it was "considering its appellate options."

"We believe it is inappropriate to give class-action status to smokers' claims because they raise numerous individual issues that can only be resolved based on the factual circumstances of each individual smoker," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris. Altria Group Inc., a holding company, was dismissed from the suit on jurisdictional grounds.

"Today's ruling is contrary to every federal court decision on whether cases such as these should be certified [as a class action] and the overwhelming majority of state court decisions on the issue," Garnick said.

Edward L. Sweda Jr., senior attorney for the Tobacco Products Liability Project, based in Boston, called the decision a "resounding victory" for consumers. Sweda noted that the Appeals Court rejected Philip Morris' contention that Minnesota's 1998 settlement with the major tobacco companies barred this lawsuit, which was brought on behalf of individual consumers, not the state.