Product Liability -- 2005



Craft v. Philip Morris Inc.   (Missouri Supreme Court)

Fraud allegation

The NAM filed an amicus brief 11/18/04 arguing that this Missouri class action suit involving the advertising and pricing of Marlboro Light cigarettes should not have been certified as a class action. The suit alleges that consumers were defrauded by the company's claim that Light cigarettes have lower tar and nicotine, and the price of the cigarettes would have been higher had they actually worked as promised. Rather than bring a contract claim for failure to deliver the product advertised, the plaintiffs accused the company of fraud, and alleged that the cigarettes would have cost more if they worked as promised. Thus, their theory is that they should have paid more, and are entitled to the difference between what they paid and what they would have paid without the alleged fraud. This benefit-of-the-bargain approach (1) would convert every product defect claim into a class action in Missouri, (2) disregarded many other factors that affect price, and (3) provided an improper cause of action for plaintiffs that have actually suffered no injury.

Unfortunately, on 8/16/05, the court ruled that the class was properly certified. The plaintiff alleged that she asserted claims that are typical of the claims of the entire class, that she had no interests antagonistic to those of the class, and that she would fairly and adequately represent and protect the class. The court found that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members. It found that the allegations “go to the condition and labeling of the product at the time it was sold; they do not make defendant’s liability dependent on each consumer’s individual smoking behavior.

The court also found that the law suit was very carefully worded so as not to specifically allege that consumers relied on advertising representations. Rather, the suit was over a violation of the Merchandising Practices Act and consequent losses. It may be that reliance is an element of the claim, but that should be resolved in another motion, not in a challenge to the class certification analysis. The court also found issues relating to the measure of damages to be irrelevant to the class action analysis.