The Massachusetts Supremes Reject Preemption and Safe Harbor for Light Cigarettes
When the Supreme Judicial Court of Massachusetts held that there was no preemption for light cigarette claims on Monday, it was big news that the court was following the U.S. Supreme Court's recent decision in Altria Group, Inc. v. Good, 128 S. Ct. 1119 (2008). But that, of course, was to be expected.
What is more interesting about the Massachusetts Supremes' opinion in Aspinall v. Philip Morris, Inc., 2009 WL 637110 (Mass. Mar. 16, 2009), is the court's analysis of the safe harbor provision of the state's deceptive trade practices act and the deference the court gave to the relevant agency, the Federal Trade Commission.
Massachusetts' statute provides that: "'Nothing in this chapter shall apply to transactions or actions otherwise permitted . . . by any regulatory board or officer acting under statutory authority of the commonwealth or of the United States.'" Id. at *2 (quoting G.L. c. 93A, sec. 3). The tobacco companies argued that they came within this safe harbor because their designations of "lights" and "low tar" were based on the FTC-approved method of measuring tar and nicotine yields. Moreover, the FTC had entered into a consent decree with a manufacturer in 1971 that gave it permission to use the descriptors "light" and "low tar" if they were accompanied by tar and nicotine yields using the FTC method.
The court, however, disagreed. First, it explained that the defendants had the "burden of proving the exemption," and that "burden is a heavy one." Id. at *3. According to the court, a defendant must do more than show mere related or overlapping regulatory schemes to meet its burden of proving the applicability of the safe harbor; rather, it "'must show that such [regulatory] scheme affirmatively permits the practice which is alleged to be unfair or deceptive.'" Id. (citation omitted). The court cited the U.S. Supreme Court's analysis of the 1971 consent order in Good to conclude that the defendants showed nothing proving that the FTC had affirmatively permitted use of the questioned terms. The agency's decision not to act to prevent use of the terms was not the same as affirmatively granting permission to use the terms, the court concluded.
It was particularly interesting -- given the U.S. Supreme Court's recent reluctance to give any credence whatsoever to the Food and Drug Administration's statements about its' regulatory policies and effects in Wyeth v. Levine -- that the Massachusetts Supremes gave substantial deference to the FTC's statements about its regulation on this issue:
[A] high-ranking FTC official stated in a deposition that the FTC has no official position on descriptors on cigarette packages. This testimony is supported by FTC documents that state that there is no official definition for the terms "light" and "low tar" and that FTC guidance concerning the FTC method [of measuring tar and nicotine yields] did not "apply to other conduct or express or implied representations, even if they concern[ed] tar and nicotine yields."
Id. at *3.
The Massachusetts court ultimately held that the defendants failed to meet their burden of proving that they were given "affirmative permission" to use the descriptors "lights" and "low tar," and thus the safe harbor provision did not apply.
