Daniels v. Philip Morris Inc.
(Class Action, CA Sup. Ct. 1999 Def's Decision) Citation: 18 F.Supp.2d 1110 (S.D.Cal.,1998.)This class action suit was filed by representative plaintiffs Devin Daniels, Bryce Clements, Daimon Fullerton, and Nicole Morrow against Philip Morris, R.J. Reynolds, Lorillard, and Brown & Williamson on April 2, 1998.
The class was defined as Californians that were addicted to cigarettes because of the defendants' deceptive warning labels and advertising between April 2, 1994 and December 31, 1999. The defendants allegedly violated state unfair business laws by designing advertising and marketing strategies targeted at minors. These include failure to warn consumers that tobacco is addictive, resulting in the plaintiffs becoming addicted to cigarettes and costing them thousands of dollars each in cigarettes. The plaintiffs sought relief in the form of monetary compensation for cigarettes purchased while addicted, an injunction against future deceptive advertising, attorney fees and costs, and restitution of profits from the defendants' sales to minors.
The case was heard in the Superior Court of the State of California for the County of San Diego (No. 719446). The defendants attempted to remove the case on the basis of diversity jurisdiction on May 4, 1998, but the United States District Court for the Southern District of California (18 F.Supp.2d 1110) remanded the case to state court on August 7, 1998. The court ruled that each member of the class must satisfy the $75,000 amount in controversy requirement for federal diversity jurisdiction and the defendants failed to show that.
The case was added to Tobacco Casses II (Judicial Council Coordination Proceeding No. 4042). It was heard in the California Superior Court, San Diego County. At the same time, the judge certified the class.
In September 2000, the judge granted reconsideration of class certification. In November, 2000, the judge granted class certification. The defendants appealed.
The judge granted summary judgment to the defendants on November 1, 2002. He found that the Federal Cigarette Labeling and Advertising Act (FCLAA) preempted the plaintiffs claims, and that defendants' advertising and marketing practices were protected under the First Amendment of the U.S. Constitution. The plaintiff appealed.
The California Court of Appeal, San Diego, affirmed the dismissal on October 6, 2004. The court found that the United States Supreme Court's decision in Lorillard v. Reilly overruled Mangini v. R.J. Reynolds by holding that the FCLAA preempted claims under the state unfair competition laws. The claims held that the defendants advertised in a way that encouraged minors to smoke. The court did not rule on the First Amendment issue.
The Supreme Court of California affirmed the appeals court's judgment on August 2, 2007. The court ruled that the the FCLAA's preemption was limited to its express language. However, under Lorillard v. Reilly, this included claims based on an attempt to limit youth smoking, since this had an underlying motivation of smoking and health. Since the state unfair competition law was not targetted at cigarettes, it was not preempted on its face, but claim imposing a duty not to advertise in a way that encouraged minors to smoke was preempted by the FCLAA according to Lorillard v. Reilly. Because the defendants' advertisements were targetted at adults, and not just youth, they were part of a legal activity. It was not reasonable to hold them criminally liable every time a minor got a hold of their cigarettes, therefore, the First Amendment would not permit the advertisement to be treated as aiding and abetting in a criminal offense.
The California Supreme Court affirmed the dismissal of the case on August 2, 2007. The court found that the plaintiffs' claims were preempted by federal law.