WASHINGTON — The Supreme Court today handed a surprising defeat to tobacco companies counting on it to put an end to lawsuits alleging deceptive marketing of “light” cigarettes.
In a 5-4 split, high court ruled in Altria Group Inc. v. Good that smokers may use state consumer-protection laws to sue cigarette makers for the way they promote “light” and “low tar” brands.
The decision was at odds with recent anti-consumer rulings that limited state regulation of business in favor of federal power.
The tobacco companies argued that the lawsuits are barred by the federal cigarette-labeling law, which forbids states from regulating any aspect of cigarette advertising that involves smoking and health.
Justice John Paul Stevens, however, said in his majority opinion that the labeling law does not shield the companies from state laws against deceptive practices. The decision forces tobacco companies to defend dozens of suits filed by smokers in Maine, where the case originated, and across the country.
People suing the cigarette makers still must prove that using the terms “light” and “lowered tar” actually violates the state anti-fraud laws, but those lawsuits may go forward, Stevens said.
He was joined by the other liberal justices, Stephen Breyer, Ruth Bader Ginsburg and David Souter, as well as Justice Anthony Kennedy, whose vote often decides cases where there is an ideological division.
The conservative justices, Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas, dissented.
Thomas, writing for the dissenters, said the link between the fraud claims and smokers’ health is unmistakable.
But he also said: “The alleged misrepresentation here — that ‘light’ and ‘low-tar’ cigarettes are not as healthy as advertised — is actionable only because of the effect that smoking light and low-tar cigarettes had on respondents’ health.”
Shares of Altria Group Inc. fell 17 cents, or 1.1%, to $15.17 in morning trading today while shares of rival cigarette maker Reynolds American Inc. lost 91 cents, or 2.2%, to $39.64.
Three Maine residents sued Altria Group Inc. and its Philip Morris USA Inc. subsidiary under the state’s law against unfair marketing practices. The class-action claim represents all smokers of Marlboro Lights or Cambridge Lights cigarettes, both made by Philip Morris.
The lawsuit argues that the company knew for decades that smokers of light cigarettes compensate for the lower levels of tar and nicotine by taking longer puffs and compensating in other ways.
A federal district court threw out the lawsuit, but the 1st U.S. Circuit Court of Appeals said it could go forward.