The NAM filed an amicus brief supporting a lower court ruling that decertified a class of plaintiffs that alleged an unfair and deceptive practice for marketing Marlboro Lights with the descriptors “Lights” and “lowered tar and nicotine.” The plaintiffs alleged that the price of cigarettes should have been lower because some smokers may compensate for the low nicotine by smoking more, thus undermining the claim of low nicotine. We opposed certifying a class on a “diminished value” claim whereby plaintiffs could recover under a theory that they paid more than they should have for the cigarettes, since every product defect claim could be converted from a contract claim to a fraud claim. Also, fraud-on-the-market theories have been rejected in the securities context, and “no injury” class actions should be rejected as well.
The Massachusetts Supreme Judicial Court ruled 8/13/2004 that the class was properly certified, saying that consumers need not have relied on the allegedly deceptive advertising. The plaintiffs need not prove any actual physical harm to recover for deception. They will be allowed to try to prove that the price they paid for the "light" cigarettes was higher than it would have been if the representations had been true. Moreover, even if they cannot prove actual damages, they are entitled to recover statutory damages simply because the deceptive act occurred.
Three dissenting judges argued that the Massachusetts statute requires that members of the class must show that the deceptive practice actually caused an injury.