The Volokh Conspiracy

This morning a divided Illinois Supreme Court overturned a $10 billion class action verdict against Philip Morris. The plaintiffs' theory was that the marketing of "light" cigarettes was a form of consumer fraud. Because the cigarettes have less tar, some smokers compensated for the lower quantity of tar in an individual cigarette by inhaling deeper, or smoking larger quantities. Thus, according to the trial court, Philip Morris deceived smokers into thinking the cigarettes were safer. The plaintiffs theory would seem to pave the way for lawsuits against low-calorie "lite" foods, since some consumers compensate for the lower calories of an individual serving by eating more food.

The majority pointed out that, even if one believes (as did the trial judge) the claim of plaintiffs' experts that "compensation is complete" (that every smoker of high-tar cigarettes who switches to low-tar smokes so much extra that total tar intake is the same), new smokers who started on light cigarettes would have nothing for which to "compensate," and therefore would inhale much less tar than than if they smoked "full-flavored" cigarettes.

The majority of the Illinois Supreme Court relied on section 10(b)(1) of the Consumer Fraud Act, which prohibits Consumer Fraud suits regarding conduct "specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States." In a pair of consent orders, the Federal Trade Commission had authorized the use of "light" and "low tar and nicotine."

The decision on narrow statutory grounds appears to be correct, and to have obviated the need to directly address the plaintiffs' outrageous theory that excessive consumer consumption of a "light" product provides a pretext for suing the manufacturer for fraud.

The majority did state that the plaintiff class appeared to have been overbroad and improperly certified. A special concurrence by two justices pointed out that plaintiffs, even if defrauded, had suffered no economic damages, especially because the class representatives continued to smoke, even after learning that "light" cigarettes were not safer (at least not if the smoker "compensates" by smoking extra).

The Supreme Court opinion is here, in PDF. The Illinois Civil Justice League, one the the nation's best tort reform groups, should have updates later today.

The trend towards lower tar and nicotine cigarettes, which began in the late 1960s with the encouragement of the FTC and Congress, has in fact made cigarettes substantially safer than they had been previously.

There is currently a dispute about whether low-tar cigarette smoke may have more mutagenic properties than higher-tar smoke (the trial judge found in the affirmitive), but, in any case, the trend to lower tar was based on the best scientific evidence available at the time. Moreover, the complaint that the reduction of a known danger (tar) may be partially offset by the increase in another danger is similar to complaining that a food which is advertised for reducing the quantity of something the consumer specifically wants to avoid (e.g., calories, carbohydrates, or salt) may also increase the quantity of some other undesirable item (e.g., a synthetic food additive which some people believe is harmful to health).

That the tobacco companies were sued for manufacturing and advertising a safer product is a good example of the perversity of modern tort law, and of the determination of anti-tobacco extremists to punish cigarette companies even when cigarette companies took affirmitive steps to reduce the dangers of smoking.

P.S. The Illinois Supreme Court was not supposed to, and did not, render any decision about the moral behavior of the tobacco companies. My personal belief though, is that the major tobacco companies, including Philip Morris, have engaged in reprehensible and immoral conduct--specifically, by entering into the multistate compact with the state attorneys general. As detailed in a lawsuit by the Competitive Enterprise Institute, currently pending in federal district court, the compact creates a cartel which protects the major companies from price competition by smaller companies--even though the smaller companies were never accused of the supposed misconduct for which the attorneys general sued the larger companies.