In this case, some smokers sued the makers of Marlboro Lights and Cambridge Lights under Maine’s Unfair Trade Practices Act, alleging that the manufacturer’s advertising the cigarettes as “light” and having “lowered tar and nicotine” was deceptive. They claimed that smokers might compensate for the lowered tar and nicotine by increasing their smoking, thus making the products just as unhealthy as non-light cigarettes.
The federal district court held that the state law claims were preempted by the Federal Cigarette Labeling and Advertising Act, which expressly prohibits states from imposing any requirements “based on smoking and health . . . With respect to the advertising or promotion of any cigarettes,” and gives the Federal Trade Commission exclusive authority to regulate all cigarette labeling and advertising involving the health impact of smoking. The First Circuit reversed, holding that the state law claims were not preempted because they were not based on “smoking and health” but instead on a more general duty not to deceive and thus did not fall within the scope of the Federal Cigarette Labeling and Advertising Act.
The NAM filed an amicus brief urging the Court to reverse the First Circuit. We argued that one of the principal reasons for the FTC is to provide regulatory guidance to businesses in order to comply with laws prohibiting deceptive practices. If plaintiffs can file lawsuits in state court with respect to labeling for which the FTC provides guidance, this would undermine the ability of manufacturers in a variety of industries from relying on guidance from the FTC. Congress empowered the FTC to issue guidance with respect to deceptive acts and practices. Allowing this state lawsuit to proceed would not supplement the FTC's role in the area of labeling -- it would be wholly at odds with federal law.
On Dec. 15, 2008, the Supreme Court upheld the lower court, 5 to 4. The majority held that the federal law is narrowly written and bars claims based on the effect of smoking on health, not claims based on fraudulent statements. It ruled that the FTC's approval of the words "light" and "low tar" was not clear enough specific authorization to impliedly conflict with the state fraud claim. When a preemption law is unclear, the benefit of the doubt goes to the plaintiff asserting a state-law claim.
The dissenting Justices oppose this presumption against preemption, and warned that the test adopted by the majority for determining whether state law is preempted is unworkable and has frustrated many courts. Instead, the dissenters argued that claims such as "American-made," or "the official cigarette of Major League Baseball," would not be preempted, since they do not relate to the effect of smoking on health, but that claims such as "Light" or "lowered tar and nicotine" would be. If a fraudulent advertising claim is preempted, federal regulators rather than juries in every state would decide whether the advertising is fraudulent.