Legal Issue
Whether a private lawsuit alleging a consumer protection law violation by a tobacco manufacturer should be dismissed for lack of public benefit.
Overview
In November 2001, Marlboro Light smokers in Minnesota commenced a class action against Altria Group, Inc. and Philip Morris USA, Inc. alleging that the tobacco companies falsely and misleadingly represented “light” cigarettes as having lower tar and nicotine than regular cigarettes. The plaintiffs claimed that the defendants deceptively marketed “light” cigarettes as a less harmful alternative to regular cigarettes, despite their knowledge that “light” cigarettes did not reduce exposure to tar and nicotine.
On September 23, 2005, the defendants filed a Notice of Removal, claiming that the class action was subject to federal jurisdiction under the Federal Officer Removal Statute. On October 17, 2007, following a Stay Order pending the outcome of a parallel case, the United States District Court of Minnesota granted the plaintiffs’ motion to remand to the Minnesota District Court of Hennepin County.
On October 14, 2009, the district court ruled in favor of Altria and Philip Morris. The court found that the class action conferred no public benefit, and that therefore, the plaintiffs were not entitled to recover under Minnesota consumer protection laws. The court held that the action was barred by a settlement agreement between the State and Philip Morris in a 1998 suit. The plaintiffs appealed in May 2010, alleging that the action does confer public benefit and that under the principles of contract law, it cannot be bound to a settlement to which it was not party.
This case is of national significance because it could represent the first time that an appellate court has dismissed a lawsuit against a tobacco manufacturer on the grounds of lack of public benefit in a consumer protection action.
In May of 2010, the Tobacco Control Legal Consortium filed an amicus brief in support of the plaintiffs. We argued that private lawsuits under Minnesota’s Unfair and Deceptive Acts and Practices laws further the public health mission of tobacco control and are critical in controlling the ongoing and pervasive fraudulent conduct of tobacco manufacturers. The brief was written by law professor Prentiss Cox from the University of Minnesota Law School.
On December 28, 2010, the court of appeals reversed. The court determined that the public benefit requirement was satisfied by evidence that the alleged misrepresentations were communicated to the public at large and concluded that the 1998 settlement did not negate the public benefit because the settlement did not contain an individual remedy for consumers. The court also held that satisfaction of the public benefit requirement did not transform the private class action into state action and therefore the class action was not barred by the 1998 settlement agreement.
Outcome
On May, 30, 2012, the Minnesota Supreme Court reversed the court of appeals and affirmed the district court’s grant of summary judgment in favor of Altria and Philip Morris, finding the case barred by Minnesota’s 1998 tobacco settlement. The court held that the provision releasing any and all State claims against Philip Morris, including those brought representatively or derivatively, precluded the plaintiffs’ private claims.