HOWARD, Circuit Judge.
The plaintiffs appeal from the entry of summary judgment for the defendants, Philip Morris USA Inc. and its parent company (collectively, "Philip Morris"), on state-law claims based on the marketing of "Light" cigarettes.
The plaintiffs, who say they have smoked Marlboro Lights for at least fifteen years, claim that Philip Morris has employed unfair and deceptive practices in "designing, manufacturing, promoting, marketing and selling Marlboro Lights and Cambridge Lights purporting to be `light' and having `Lowered Tar and Nicotine,' all while [it] knew those cigarettes would not deliver less tar or nicotine to the consumer."
The plaintiffs allege that a person smoking "light" cigarettes, however, engages in unconscious behaviors that essentially negate the ventilation effect, such as taking more frequent, voluminous, or longer puffs, covering the air holes with the lips or the fingers, or smoking additional cigarettes. Due to such "compensation," which the plaintiffs attribute to the addictive nature of nicotine, they assert that a smoker consumes the same quantities of tar and nicotine from light cigarettes as from full-flavored ones. The plaintiffs explain that the relative levels of these substances bear on a reasonable consumer's decision on which cigarette to purchase because consumers understand that reducing the quantities of tar and nicotine in cigarettes reduces their adverse health effects. Thus, the plaintiffs allege that Philip Morris has misrepresented material facts by describing its "Lights" as such or as having "lower tar and nicotine," and that Philip Morris—which was aware of the "compensation" phenomenon before it began marketing its "Lights" brands—did so with the intent to deceive.
The plaintiffs claim that these misrepresentations amount to unfair or deceptive acts or practices in violation of the Maine Unfair Trade Practices Act.
In response to the plaintiffs' amended complaint, Philip Morris promptly moved for summary judgment. Philip Morris argued that the plaintiffs' claims were (1) expressly preempted by the FCLAA, (2) implicitly preempted by "the efforts of Congress and the [Federal Trade Commission] for 40 years to implement a national, uniform policy of informing the public about the health risks of smoking," and (3) for similar reasons, not cognizable under the Maine Unfair Trade Practices Act, which does not apply to "[t]ransactions or actions otherwise permitted under laws as administered by any regulatory board or officer acting under the statutory authority of the . . . United States." Me.Rev.Stat. Ann. tit. 5, § 208(1).
Each of these arguments relied to some degree on what Philip Morris described as "the FTC's comprehensive, nationwide program regulating the disclosure of tar and nicotine yields." In 1959, the then-seven major American cigarette manufacturers had agreed to delete all tar and nicotine claims from their advertising. The FTC subsequently advised them, however,
Then, in 1967, the FTC itself began using the Cambridge Filter Method to test, inter alia, all cigarette "brands for which any tar or nicotine statement appears on the label or in the advertising . . . to determine the accuracy of such statement." 32 Fed.Reg. 11,178 (Aug. 1, 1967). Though the FTC understood at the time that this method could not "determine the amount of tar and nicotine inhaled by any human smoker," it was nevertheless adopted to produce results "based on a reasonable standardized method" which were "capable of being presented to the public in a manner that is readily understandable." Press Release, Fed. Trade Comm'n, FTC to Begin Cigarette Testing (Aug. 1, 1967). The FTC agreed to report the test results to Congress periodically in order to ensure their dissemination to the smoking public, and made the first such report in late 1967.
The FTC subsequently proposed a rule requiring cigarette manufacturers "to disclose, clearly and prominently, in all advertising[,] the tar and nicotine content of the advertised variety . . . based on the most recently published [FTC] test results." 35 Fed.Reg. 12,671 (Aug. 8, 1970). But the rulemaking process was suspended when a consortium of cigarette manufacturers, including Philip Morris, reached an agreement with the FTC on a "voluntary program" to like effect. Letter from Horace R. Kornegay, President, The Tobacco Institute, Inc., to Fed. Trade Comm'n (Dec. 17, 1970). By agreeing to the program, however, the manufacturers did not "admit that the failure affirmatively to disclose" the test results in their advertising "constitutes a violation of law," or even that the FTC had the authority to enact the proposed rule. Id. The FTC, for its part, took the position that it "retained the unconditional right to reschedule the . . . Rule proceeding and to take any other action relating to this subject at any time. . . ." 36 Fed.Reg. 784 (Jan. 16, 1971).
Since then, the FTC has neither resumed the rulemaking proceedings suspended by its agreement with the cigarette manufacturers, nor promulgated any formal rule requiring them to disclose the tar or nicotine content of their products. In 1987, the FTC stopped conducting its own tests of cigarettes. The testing continued, however, under the auspices of the Tobacco Institute Testing Laboratory, operated by the major American cigarette manufacturers.
Based on this regime, Philip Morris characterized the lawsuit as "a challenge to the FTC's regulatory scheme," because "terms like `light' and `lowered tar' . . . convey precisely the same comparative information" as the tar and nicotine measurements derived from testing under the Cambridge Filter Method. The district court agreed, reasoning that
436 F.Supp.2d at 152 (internal quotation marks omitted). Finding the plaintiffs' claims thus "grounded on Philip Morris's `advertising or promotion of . . . cigarettes labeled in conformity with the provisions of' federal law and regulation," the district court concluded that they were expressly preempted by the FCLAA. Id. at 153 (quoting 15 U.S.C. § 1334(b)). The court did not decide Philip Morris's alternative arguments for summary judgment.
The plaintiffs challenge the ruling below as at odds with Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992), where a plurality of the Supreme Court held that some—but not all—actions for damages under state law are expressly preempted by the FCLAA. Id. at 523-24, 112 S.Ct. 2608. In response, Philip Morris argues that the district court correctly found the plaintiffs' claims preempted under Cipollone. Philip Morris simultaneously urges us to affirm the entry of summary judgment in its favor on the alternative grounds not reached below, namely, that the plaintiffs' claims are implicitly preempted by federal law or that they complain of "actions otherwise permitted under laws" and therefore cannot serve as the basis for liability under the Maine Unfair Trade Practices Act. We review these arguments de novo. See Philip Morris Inc. v. Harshbarger, 122 F.3d 58, 62 (1st Cir.1997).
"A fundamental tenet of our federalist system is that constitutionally enacted federal law is supreme to state law. As a result, federal law sometimes preempts state law either expressly or by implication." N.H. Motor Transport Ass'n v. Rowe, 448 F.3d 66, 74 (1st Cir.2006) (citation omitted), cert. granted, ___ U.S. ___, 127 S.Ct. 3037, ___ L.Ed.2d ___ (2007). Preemption questions ultimately turn on
As noted at the outset, the FCLAA's preemption clause states that "[n]o requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter." 15 U.S.C. § 1334(b). Those provisions mandate that the packages of all cigarettes sold in the United States—and, in general, their advertisements—bear one of a rotating series of labels warning about the adverse health effects of smoking.
These provisions were added to the FCLAA through the Public Health Cigarette Smoking Act of 1969, Pub.L. 91-222, 84 Stat. 87-90, enacted as the restrictions on cigarette advertising contained in the prior version of the FCLAA were set to expire. Pub.L. 89-92 § 10, 79 Stat. 282, 285 (1965). As the expiration date approached, both federal and state authorities prepared to resume their efforts to regulate cigarette advertising. See Cipollone, 505 U.S. at 514-15, 112 S.Ct. 2608. Thus, Congress amended the FCLAA
15 U.S.C. § 1331.
With these purposes in mind, the Cipollone Court considered whether the FCLAA's preemption clause barred a state-law suit for damages brought by a smoker who had allegedly developed lung cancer from the defendants' cigarettes. 505 U.S. at 509-10, 112 S.Ct. 2608. The smoker asserted a number of common law causes of action, including strict liability, negligent failure to warn, breach of express warranty, fraudulent misrepresentation, and civil conspiracy. Id. The court of appeals held that, while § 1334(b) did not
A plurality of the Court disagreed with this analysis, holding that "the pre-emptive scope of the [FCLAA] is governed entirely by the express language in [§ 1334(b)]," id., which did, in fact, reach some common law actions. Id. at 521-23, 112 S.Ct. 2608. But because "[f]or purposes of [§ 1334(b)], the common law is not of a piece," the plurality explained that it had to "look to each of [the smoker's] common-law claims to determine whether it is in fact pre-empted." Id. at 523, 112 S.Ct. 2608 (footnote omitted). This approach required the plurality to
Id. at 524, 112 S.Ct. 2608 (quoting 15 U.S.C. § 1334(b)). Employing this analysis, the plurality determined that the FCLAA preempted the claim, pleaded as a failure to warn, that the defendants' "advertising and promotions should have included additional, or more clearly stated warnings," because it relied on "a state-law `requirement or prohibition . . . with respect to . . . advertising or promotion.'" Id. (quoting 15 U.S.C. § 1334(b)).
The plurality proceeded to consider the smoker's two theories of fraudulent misrepresentation. The first, that the defendants, "through their advertising, neutralized the effect of federally mandated warning labels," was preempted by the FCLAA. Id. at 527, 112 S.Ct. 2608. As the plurality explained, this theory was "predicated on a state-law prohibition against statements in advertising and promotional materials that tend to minimize the health hazards of smoking," which is itself "merely the converse of a state-law requirement that warnings be included in [such] materials." Id. This fraudulent misrepresentation claim, then, was "inextricably related to" the failure-to-warn claim and therefore also premised on a "requirement or prohibition based on smoking and health" imposed by state law. Id. at 528, 112 S.Ct. 2608.
But the plurality reached a different conclusion as to the smoker's second fraudulent misrepresentation theory: "intentional fraud and false misrepresentation both by false misrepresentation of a material fact and by concealment of a material fact." Id. (internal quotation marks and bracketing omitted). First, the plurality held that the FCLAA does not preempt fraudulent concealment claims that "rely on a state-law duty to disclose such facts through channels of communication other than advertising or promotion," e.g., in the case of a state law requiring cigarette manufacturers "to disclose material facts about smoking and health to an administrative agency." Id. Second, the plurality held that
Id. at 528-29, 112 S.Ct. 2608. The plurality saw this result as consistent with the text, structure, and purpose of the FCLAA. Id. at 529, 112 S.Ct. 2608. First, the FCLAA "offered no sign that [Congress] wished to insulate manufacturers from longstanding rules governing fraud"—in fact, the Act "explicitly reserved the FTC's authority to identify and punish deceptive advertising practices. . . ." Id. Second, reading § 1334(b) to exclude fraud claims would not frustrate the FCLAA's stated goal of protecting commerce from "diverse, nonuniform, and confusing cigarette labeling and advertising regulations with respect to any relationship between smoking and health," 15 U.S.C. § 1331(2), because "state-law proscriptions on intentional fraud rely only on a single, uniform standard: falsity." 505 U.S. at 529, 112 S.Ct. 2608.
This analysis of the FCLAA's effect on the smoker's claims held sway with only four of the Court's nine Justices. Two others joined Justice Blackmun's opinion that the FCLAA did not preempt any common law claims for damages, id. at 531, 112 S.Ct. 2608, while another joined Justice Scalia's opinion that § 1334(b) preempted all of the smoker's common law theories. Id. at 548, 112 S.Ct. 2608. Most lower courts have nevertheless treated the plurality opinion as controlling, see Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383, 389 (5th Cir.2007) (collecting cases), as have the parties here, both on appeal and in the district court, 436 F.Supp.2d at 142. We therefore do the same.
The parties agree that whether the FCLAA expressly preempts the plaintiffs' claims depends on how best to categorize them by analogy to the various causes of action considered in Cipollone. In doing so, as the district court recognized, 436 F.Supp.2d at 151, we must look beyond the plaintiffs' own classification of their claims and to their actual substance. See Kirksey v. R.J. Reynolds Tobacco Co., 168 F.3d 1039, 1043 (7th Cir.1999); accord Danca v. Private Health-Care Sys., Inc., 185 F.3d 1, 5 (1st Cir.1999) (endorsing the same approach in deciding whether ERISA preempts particular state-law claims).
The plaintiffs seek relief under the Maine Unfair Trade Practices Act, which, in relevant part, outlaws "unfair or deceptive acts or practices in the conduct of any trade or commerce." Me.Rev.Stat. Ann. tit. 5, § 207. Though this prohibition encompasses various kinds of behavior, including "a material representation, omission, act or practice that is likely to mislead consumers acting reasonably under the circumstances," Maine v. Weinschenk, 868 A.2d 200, 206 (Me.2005), the substance of the plaintiffs' claim is that Philip Morris has falsely represented certain of its brands as "light" or having "lower tar and nicotine" although they deliver the same quantities of these ingredients to a smoker as do "full-flavored" cigarettes. So, under the functional approach, we consider how this particular theory—as opposed to a more
While the district court stopped short of assigning a specific label to the plaintiffs' claims, its reasoning suggests that it considered them analogous to the failure-to-warn theory held preempted by Cipollone. The court opined that the plaintiffs had failed in their "valiant attempt to tailor their claims to fit within the Cipollone exception for violations of the duty not to deceive. . . ." 436 F.Supp.2d at 151. Instead, the district court identified "the gist of the Plaintiffs' cause of action" as dependent on "what Philip Morris actually said about Lights and what the Plaintiffs claim [it] should have said." Id. (emphasis added). And what Philip Morris "should have said," the court understood the plaintiffs to assert, was that Marlboro Lights and Cambridge Lights deliver more tar and nicotine to an actual smoker than "the designation `Lights' and `Lowered Tar and Nicotine' would imply." Id. at 152. Because doing so would require Philip Morris to alter its advertising or promotion of its cigarettes, the district court concluded, the plaintiffs' claims were expressly preempted by the FCLAA as construed by Cipollone.
We differ with the district court's view of the fit between the plaintiffs' theory and the Cipollone taxonomy and, more fundamentally, of Cipollone itself. To start, we do not read Cipollone to hold that the FCLAA preempts claims "grounded on [a defendant's] `advertising or promotion of . . . cigarettes labeled in conformity with the provisions of' federal law and regulation," as the district court ultimately explained its conclusion. 436 F.Supp.2d at 153 (quoting 15 U.S.C. § 1334(b)). Cipollone reasoned that "each phrase" in § 1334(b)—not just the phrase "with respect to the advertising or promotion of any cigarettes"—"limits the universe of common-law claims pre-empted by the statute." 505 U.S. at 524, 112 S.Ct. 2608. So "[t]he appropriate inquiry is not whether a claim challenges the `propriety' of advertising and promotion, but whether the claim would require the imposition under state law of a requirement or prohibition based on smoking and health with respect to advertising and promotion." Id. at 525, 112 S.Ct. 2608. A claim is not preempted, then, merely because it is "grounded on" the advertising or promotion of cigarettes with FCLAA-compliant labels.
Nor is a claim preempted merely because it arises out of the adverse health consequences of such cigarettes, as both the reasoning and the result in Cipollone make clear. There, in fact, all of the plaintiff's claims were "based on smoking and health" in the sense that they "alleged that [she] developed lung cancer because she smoked cigarettes," 505 U.S. at 509, 112 S.Ct. 2608, yet the Court held that the FCLAA preempted only some of them.
Furthermore, unlike Philip Morris, we do not read the Court's subsequent decision in Reilly to suggest that the statute's preemptive effect on a claim depends on the claim's connection with "smoking and health." In Reilly, the Court held that § 1334(b) preempted regulations on tobacco advertising promulgated by the Massachusetts Attorney General pursuant to his authority under that state's counterpart to the Maine Unfair Trade Practices Act, Mass. Gen. Laws ch. 93A. 533 U.S. at 533, 121 S.Ct. 2404. Though their stated purpose was "to address the incidence of cigarette smoking . . . by children under legal age," id. (internal quotation marks omitted), the Court rejected the notion that the regulations were "not `based on smoking and health' because they do not involve health-related content in cigarette advertising but instead target youth exposure to cigarette advertising." Id. at 547, 121 S.Ct. 2404. Noting that the FCLAA "prohibited state cigarette advertising regulations motivated by concerns about smoking and health," the Court reasoned that "[a]t bottom, the concern about youth cigarette advertising is intertwined with" such concerns, bringing the regulations within the preemptive sweep of the FCLAA. Id. at 548, 121 S.Ct. 2404.
Philip Morris urges us to draw an analogy between the regulations found preempted in Reilly and the claims of the plaintiffs here, arguing that, in either case, a state consumer protection act is used "to create requirements or prohibitions regarding advertisements and promotions that are intertwined with the concern about cigarette smoking and health" (internal quotation marks omitted). But this argument again confuses the claim at hand with its predicate state-law duty as the relevant "requirement
We see nothing in Reilly suggesting any intent to disturb this aspect of the Cipollone plurality holding.
Because the state-law "duty not to deceive" is one such "more general obligation," it falls within Cipollone's express holding that "claims based on allegedly false statements of material fact made in advertisements" survive FCLAA preemption. 505 U.S. at 528-29, 112 S.Ct. 2608. In line with this holding, courts have routinely (though not uniformly) concluded that the FCLAA does not preempt fraudulent misrepresentation claims arising out of false statements made in advertising or promoting cigarettes. See, e.g., Spain v. Brown & Williamson Tobacco Co., 363 F.3d 1183, 1202 (11th Cir.2004); Mulford, ___ F.Supp.2d at ___, 2007 WL 1969734, at *16; Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 178 F.Supp.2d 198,
The district court saw the plaintiffs' case differently, observing that "[o]ther than these descriptors" (i.e., the "light" and "lower tar and nicotine" claims) "the record here is devoid of any affirmative misstatement." 436 F.Supp.2d at 152 (footnote omitted). Based on this reasoning, Philip Morris argues that the district court properly treated the plaintiffs' claims as "based on implied misrepresentations about health," which qualify as preempted failure-to-warn or warning neutralization claims, rather than non-preempted fraudulent misrepresentation claims, which arise out of only "express" misrepresentations. We disagree.
First, we question the conclusion that, although the descriptors are themselves characterized as affirmative misstatements, they cannot ground a fraudulent misrepresentation claim left unscathed by Cipollone's reading of the FCLAA. The district court appears to have based its conclusion on its understanding that, despite the popularity of the terms "light" and "lower tar and nicotine" in cigarette advertising, "Congress and the FTC never acted to restrict the tobacco companies from using these general descriptors." 436 F.Supp.2d at 152; see also Clinton, 498 F.Supp.2d at 652 (finding fraudulent misrepresentation claim arising out of descriptors expressly preempted because "the FTC has declined to disallow those terms despite several invitations to do so"). But whatever support this might lend to an argument for implied preemption of state law — and we consider that question in detail infra—it provides little guidance in applying the express preemption provision of the FCLAA, the scope of which "is governed entirely by the express language in" § 1334(b).
Cipollone arrived at this interpretation in part because, in the FCLAA, "Congress offered no sign that it wished to insulate cigarette manufacturers from longstanding rules governing fraud." Id. at 529, 112 S.Ct. 2608. So if its inaction since has any significance — and we usually hesitate to make much ado about congressional nothing, see, e.g., Estey v. Comm'r, Me. Dep't of Human Servs., 21 F.3d 1198, 1206 (1st Cir.1994) — it could just as likely be that Congress chose not to regulate the descriptors because it believed the generalized state-law prohibitions on fraud left in place under the FCLAA adequately protected smokers against false claims to lower tar and nicotine, and not because it viewed such claims as permissible. But, in either case, what Congress thinks of "light" and "lower tar and nicotine" advertisements in general simply does not speak to whether, in enacting the FCLAA, Congress intended to preempt state lawsuits challenging them. The answer to that question, as Cipollone makes clear, lies in § 1334(b).
Second, Cipollone does not appear to treat claims based on "implied" as opposed to "express" misrepresentations differently for purposes of FCLAA preemption. Under general principles of tort law, either an express or an implied statement can give rise to a claim for fraudulent misrepresentation. See Restatement (Second) of Torts § 526(c) (1977); accord Est. of Whitlock, 615 A.2d 1173, 1176 (Me.1992). And Cipollone flatly holds that "fraudulent-misrepresentation claims that do arise with respect to advertising and promotion (most notably claims based on allegedly false statements of material fact made in advertisements)" are not preempted, without drawing any distinction between the express and the implied. 505 U.S. at 528-29, 112 S.Ct. 2608. Indeed, in either case, the claim is "predicated not on a duty `based on smoking and health' but on a more general obligation — the duty not to deceive." Id. The "express" or "implied" nature of an allegedly fraudulent misrepresentation, then, does not determine whether it is preempted by the FCLAA under the Cipollone approach. See Mulford, ___ F.Supp.2d at ___, 2007 WL 1969734, at *17 (rejecting distinction, for purposes of FCLAA preemption, between fraud claim arising out of statements "light" and "Lowered Tar and Nicotine," and statement "Smoking cures cancer," which Philip Morris had proffered as a counterexample of "express," as opposed to "implied," misrepresentation).
Cipollone does set up a dichotomy between fraud "by false representation of a material fact," on one hand, and "by concealment of a material fact," on the other. 505 U.S. at 528, 112 S.Ct. 2608 (internal quotation marks and bracketing omitted). As just discussed, the FCLAA does not preempt claims of the former; Cipollone holds that claims for the latter also survive preemption "insofar as those claims rely on a state-law duty to disclose such facts through channels of communication other than advertising or promotion," such as, for example, a state-law duty "to disclose such facts to an administrative agency." Id. We need not concern ourselves with Cipollone's holding on the reach of § 1334(b) over fraudulent concealment claims, however, because the plaintiffs
Philip Morris nevertheless insists that this theory amounts to a preempted failure-to-warn claim, "[b]ecause any false impression that the descriptors allegedly created would have been eliminated if [Philip Morris] had provided additional health information regarding compensation," that is, a smoker's tendency to take in the same harmful quantities of tar and nicotine from light cigarettes as from regular ones. We accept, for present purposes, that the plaintiffs could not claim to have been defrauded by the statements "light" and "lower tar and nicotine" in Philip Morris's advertising and promotion if they were accompanied by a specific warning about compensation. And we agree that, if the plaintiffs were claiming that the failure to give such a warning through those media was a breach of Philip Morris's duty under Maine law, the FCLAA would preempt that claim as "rely[ing] on a state-law requirement or prohibition with respect to advertising or promotion." Cipollone, 505 U.S. at 524, 112 S.Ct. 2608 (internal quotation marks and ellipses omitted). But that is not the plaintiffs' claim. Again, they allege that Philip Morris made fraudulent misrepresentations in derogation of "a more general obligation-the duty not to deceive." Id. at 528-29, 112 S.Ct. 2608.
The fact that these alleged misrepresentations were unaccompanied by additional statements in the nature of a warning does not transform the claimed fraud into failure to warn. Indeed, we have trouble imagining any misrepresentation claim wholly independent of what else the defendant said or did not say, given the "well-established principle that a statement or omission must be considered in context, so that accompanying statements may render it immaterial as a matter of law." In re Donald J. Trump Casino Sec. Litig., 7 F.3d 357, 364 (3d Cir.1993) (adopting "bespeaks caution" doctrine in federal securities fraud context); accord, e.g., Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 16-17 (1st Cir.2004) (considering effect of disclaimer on plaintiff's ability to show reasonable reliance on false statement). Accepting Philip Morris's argument, then, would extend the preemptive reach of the FCLAA to virtually all fraudulent misrepresentation claims, doing violence to Cipollone's explicit holding that those claims survive preemption.
For the same reason, we do not see the plaintiffs' claims as embracing a preempted warning neutralization theory. Warning neutralization is a species of products liability claim based on conduct by the manufacturer tending to dilute what might otherwise serve as an effective warning of the dangers of its product. See, e.g., McNeil v. Wyeth, 462 F.3d 364, 368 n. 4 (5th Cir.2006); Hon v. Stroh Brewery Co., 835 F.2d 510, 514-15 (3d Cir.1987); 2 Louis R. Frumer & Melvin I. Friedman, Products Liability § 12.03[e], at 12-61-12-62 (1960 & 2003 supp.). As an example, Cipollone cited "advertising that `associated cigarette smoking with such positive attributes as contentment, glamour, romance, youth, happiness,'" noting the FTC's 1964 conclusion that "`[t]o avoid giving the false impression that cigarette smoking is innocuous,'" such advertising "`must also disclose the serious risks to life that smoking involves.'" 505 U.S. at 527, 112 S.Ct. 2608 (quoting 29 Fed.Reg. 8356 (1964)). In light of this "relationship between prohibitions on advertising that downplays the dangers of smoking and requirements for warnings in advertisements," id., Cipollone considered the plaintiff's warning neutralization claim "inextricably related to [her] failure-to-warn claim" and likewise preempted. Id. at 528, 112 S.Ct. 2608.
The plaintiffs here, however, do not allege that the statements "light" and "lower
We acknowledge that the Fifth Circuit came to the opposite conclusion in Brown, ruling that fraudulent misrepresentation claims arising out of the statements "light" and "Lowered Tar and Nicotine" are in effect warning neutralization claims preempted by § 1334(b). 479 F.3d at 392-93; accord In re Tobacco Cases II, 2004 WL 2445337, at *21; Dahl, 2005 WL 1172019, at *7-*8. Taking the plaintiffs there to allege that "the descriptors, though accurate under the FTC method, are misleading because they suggest that Lights are less harmful than full-flavored cigarettes," the Brown court reasoned that the FCLAA "pre-empts these `implied misrepresentation' claims, which arise from statements or imagery in marketing that misleadingly downplay the dangers of smoking, and thus minimize or otherwise neutralize the effect of the federal mandated safety warnings." 479 F.3d at 392 (citing Cipollone, 505 U.S. at 527, 112 S.Ct. 2608).
In line with our earlier discussion, however, we do not see anything in Cipollone's discussion of warning neutralization claims that equates them with "implied misrepresentation" claims as Brown does.
Of course, plaintiffs who elect to proceed on a non-preempted fraudulent misrepresentation theory must eventually prove each of the elements of that cause of action if they are to prevail, including that the challenged representations are indeed false. But, unlike the court in Brown, we do not believe that a plaintiff's chance of proving his claim plays any role in determining whether it is preempted by the FCLAA. In rejecting the plaintiffs' characterization of their claim as sounding in fraud, Brown concluded that "[t]he terms `light' and `Lowered Tar and Nicotine' cannot . . . be inherently deceptive or untrue," because the cigarettes in question "do deliver less tar and nicotine as measured by the only government-sanctioned methodology for their measurement," i.e., the Cambridge Filter Method. 479 F.3d at 392; see also Clinton, 498 F.Supp.2d at 651-52. This reality, in Brown's eyes, foreclosed any fraudulent misrepresentation claim, leaving the plaintiffs to argue that the challenged statements served to neutralize the warnings — a theory preempted by Cipollone's construction of the FCLAA. 479 F.3d at 392.
We think this approach puts the cart before the horse. The assertion that Marlboro Lights and Cambridge Lights rate lower in tar and nicotine than their full-flavored cousins according to the Cambridge Filter Method may ultimately affect whether the plaintiffs can show that the challenged statements are false. Cf. Schwab, 449 F.Supp.2d at 1090-91 ("evidence that the FTC approved defendants' representations [as to tar and nicotine content] might tend to disprove the existence of a scheme to defraud"). We do not resolve the issue, however, because Philip Morris did not seek summary judgment on that ground. Instead, Philip Morris argued that the plaintiffs' claims — as set forth in their amended complaint — were (1) expressly preempted, (2) implicitly preempted, or (3) exempt from the reach of the Maine Unfair Trade Practices Act. We consider the effect of the descriptors' claimed accuracy on the second and third points infra, but we do not believe that the issue has any relevance in deciding the express preemption question.
Under Cipollone, whether § 1334(b) expressly preempts a particular claim depends on "whether the legal duty that is the predicate of the common-law damages action constitutes a requirement or prohibition
Finally, Philip Morris argues that, because "the standards for finding liability under consumer protection acts around the country vary widely," allowing the plaintiffs' claims to survive preemption will undermine the FCLAA's goal of protecting manufacturers from "diverse, nonuniform, and confusing cigarette labeling and advertising regulations with respect to any relationship between smoking and health." 15 U.S.C. § 1331(2). This is not an imaginary concern. As we have explained, however, fraudulent misrepresentation claims, even if brought under the aegis of a state consumer protection act, are not premised on "regulations with respect to any relationship between smoking and health." They are premised on "longstanding rules governing fraud," which themselves arise not from any duty based on smoking and health, but on a duty not to deceive. Cipollone, 505 U.S. at 528-29, 112 S.Ct. 2608. So, as Cipollone holds, neither the text of the FCLAA's statement of purpose nor the preemption provision itself fairly evinces the intent to displace all potentially inconsistent state cigarette advertising regulations, only such regulations that are "based on smoking and health." Id.
Of course, Cipollone further reasoned that § 1334(b) does not encompass fraudulent misrepresentation claims because they "rely only on a single, uniform standard: falsity" and therefore "do not create diverse, nonuniform and confusing standards." Id. at 529, 112 S.Ct. 2608 (internal quotation marks omitted). Seizing on this language, Philip Morris notes that some of the elements of consumer protection violations, such as reliance and actual damages, vary from state to state. Yet the same can be said of the elements of common-law fraud,
Philip Morris also challenges the plaintiffs' claims as impliedly preempted by federal law. Even in the absence of express preemptive language — which the FCLAA contains, but which we have concluded does not reach the claims in this case — federal law can preempt state law by implication in two other ways. See, e.g., California v. ARC Am. Corp., 490 U.S. 93, 100, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989). First, "Congress implicitly may indicate an intent to occupy an entire field to the exclusion of state law." Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988). "Second, even if Congress has not occupied the field, state law is nevertheless pre-empted to the extent it actually conflicts with federal law, that is, when compliance with both state and federal law is impossible, or when the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." ARC Am. Corp., 490 U.S. at 100-01, 109 S.Ct. 1661; see also, e.g., United States v. Locke, 529 U.S. 89, 109-11, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000). And, whether through field or conflict preemption, "state laws can be pre-empted by federal regulations as well as by federal statutes." Hillsborough County, Fla. v. Automated Med. Labs., Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985).
Philip Morris does not argue that either Congress or the FTC has evinced an intent to occupy the entire field of cigarette advertising, or even the narrower field of low-tar cigarette advertising. Nor does Philip Morris protest that complying with both the state law the plaintiffs say has been violated and some contrary federal law would be impossible. Instead, Philip Morris maintains that the "[p]laintiffs' claims conflict with the FTC's 40-year history of regulation and control over the development, testing and marketing of low tar cigarettes, as well as the reporting of tar and nicotine measurements pursuant to the FTC Method and the use of descriptors substantiated by those measurements." Because Philip Morris has limited its implied preemption argument to the so-called "frustration-of-purpose" theory, see Geier v. Am. Honda Motor Co., 529 U.S. 861, 873-74, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000) (collecting cases), it cannot prevail unless "the rule of law for which [the plaintiffs] contend [stands] `as an obstacle to the accomplishment and execution of the important means-related federal objectives" at stake. Id. at 881, 120 S.Ct. 1913 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941)).
In identifying those objectives, Philip Morris argues that "Congress and the FTC have both sought uniform, national standards for cigarette advertising with respect to smoking and health. And State-law actions like this one would create a different standard of deceptiveness that would plainly conflict with these goals." At the outset, we reject the notion that the plaintiffs' claims would interfere with any congressional designs on cigarette advertising.
In any event, both the Supreme Court and this one have squarely held that the FCLAA has no preemptive force beyond the language of § 1334(b) itself. Cipollone, as we have noted, overturned the ruling of the court of appeals "that Congress had impliedly pre-empted [the plaintiff's] claims challenging the adequacy of warnings on labels or in advertising or the propriety of [the defendants'] advertising and promotional activities," holding instead that "the pre-emptive scope of the [FCLAA] is governed entirely by the express language in [§ 1334(b)]." 505 U.S. at 517, 112 S.Ct. 2608. Relying on Cipollone, we decided in Harshbarger that the FCLAA could not sustain an implied preemption challenge to a Massachusetts law requiring, inter alia, cigarette manufacturers to provide the state health department with nicotine yield ratings for each of their brands "`which shall accurately predict nicotine intake for average consumers.'" 122 F.3d at 62 (quoting Mass. Gen. Laws ch. 94, § 307B (1996)).
In declining to imply a preemptive effect from the FCLAA, Cipollone reasoned that "[w]hen Congress has considered the issue of pre-emption and has included in the enacted legislation a provision explicitly addressing that issue, and when that provision provides a reliable indicium of congressional intent with respect to state authority, there is no need to infer congressional intent to pre-empt state laws from the substantive provisions of the legislation." 505 U.S. at 517, 112 S.Ct. 2608 (internal quotation marks and citation omitted). Philip Morris argues that this reasoning has lost its force in light of subsequent Supreme Court decisions teaching that an express "pre-emption provision, by itself, does not foreclose (through negative implication) `any possibility of implied conflict preemption.'" Geier, 529 U.S. at 869, 120 S.Ct. 1913 (quoting Freightliner Corp. v. Myrick, 514 U.S. 280, 288, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995) (bracketing by the Court and further citation omitted)); see also Sprietsma v. Mercury Marine, 537 U.S. 51, 65, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002). Philip Morris maintains that Cipollone and Harshbarger thus pose no obstacle to its implied preemption claim.
By the time we decided Harshbarger, however, the Supreme Court had already made clear in Freightliner that "[a]t best, Cipollone supports an inference that an express pre-emption clause forecloses implied pre-emption; it does not establish a rule." 514 U.S. at 289, 115 S.Ct. 1483. Yet we did not read Freightliner — which considered the preemptive effect of a safety standard for trucks promulgated under the National Traffic and Motor Vehicle Act of 1966 ("NTMVSA"), 514 U.S. at 283-86, 115 S.Ct. 1483 — to cast doubt on Cipollone's view that the presence of an express
Given this alternative basis for Cipollone's holding that the FCLAA does not implicitly preempt state-law claims arising out of cigarette advertisements or promotions, it remains good law regardless of what the Court has since said, in other contexts, about the effect of express preemption clauses on implied preemption. Furthermore, we see nothing in either Geier or Sprietsma — which, like Freightliner, did not consider the preemptive effect of the FCLAA, but other federal statutes with express preemption provisions — suggesting that the Cipollone Court was wrong to draw an inference against implied preemption of state-law challenges to cigarette advertising from the presence of an express preemption provision in the FCLAA, as opposed to those other statutes. Just as in Harshbarger, then, "[w]e are bound by the Cipollone majority's holding that § 1334(b) governs the preemptive scope of the FCLAA" and, therefore, "we are not at liberty to address any implied preemption theories" premised on the statute. 122 F.3d at 78.
Philip Morris also founds its implied preemption claim on the FTC's oversight of cigarette advertising under the Federal Trade Commission Act, 15 U.S.C. § 41 et seq. (1997). We agree that neither Cipollone nor Harshbarger bars this argument, because those cases considered the preemptive effect of only the FCLAA, which did not "limit, restrict, expand, or otherwise affect the authority of the [FTC] with respect to unfair or deceptive acts or practices in the advertising of cigarettes." 15 U.S.C. § 1336. But we do not agree that the FTC's exercise of its authority in this area has preempted state-law damages actions, like this one, alleging that a cigarette manufacturer has engaged in such acts or practices through its use of the terms "light" and "lower tar and nicotine."
In brief, the FTC Act prohibits "unfair or deceptive acts or practices in or affecting commerce," 15 U.S.C. § 45(a), and empowers the Commission both to define and enforce that prohibition in a number of ways relevant here. The Commission may prescribe either informal "interpretive rules and general statements of policy with respect to unfair or deceptive acts or practices," id. § 57a(a)(1)(A), or, pursuant to notice-and-comment procedures, see id. §§ 57a(b)-(e), formal rules which define those acts and practices "with specificity," id. § 57a(a)(1)(B). In addition, the Commission may issue cease-and-desist orders against those engaged in violations of the Act. Id. § 45(b). The FTC may enforce such orders — as well as its formal rules — by suing violators for either civil penalties, id. § 45(m), or "such relief as the court finds necessary to redress injuries to consumers"
The FTC has regularly trained these powers on tar and nicotine claims in cigarette advertising; as the district court observed, "the tobacco industry is hardly unregulated in what it says to consumers about its products, including light cigarettes." 436 F.Supp.2d at 151. But we reject the suggestion — and we describe it that way because, as we have noted, Philip Morris does not purport to make a field preemption argument — that the degree of federal regulation over a particular industry, no matter how "comprehensive" or "detailed," can itself displace state law.
As we have discussed, the FTC advised the tobacco industry in 1966 that it could make "factual statements" of tar and nicotine content, so long as they "were supported by adequate records of tests conducted in accordance with the Cambridge Filter Method." Press Release, Fed. Trade Comm'n (Mar. 25, 1966). The FTC soon began to assess such claims by conducting its own tests of cigarettes under the method, and proposed a formal rule requiring cigarette manufacturers to disclose the results of those tests in their advertisements. The proposal was put on hold, however, when the manufacturers agreed to make those disclosures voluntarily.
Before entering into this agreement, the FTC had sought a cease-and-desist order against The American Tobacco Company, charging that ads for certain brands of its cigarettes deceitfully created the impression that they were "low in tar" when they in fact contained more tar than the average brand per then-current FTC test results. This charge was resolved through a 1971 consent order forbidding American from "advertising that any cigarette manufactured by it, or the smoke therefrom, is low or lower in `tar' by use of the words `low,' `lower,' or `reduced' or like qualifying terms, unless the statement is accompanied by a clear and conspicuous disclosure of the `tar' and nicotine content in milligrams in the smoke produced by the advertised cigarette." In re Am. Brands,
Based principally on these exercises of authority over tar and nicotine claims, Philip Morris argues that the FTC has expressed a "policy of allowing their use so long as substantiated with the FTC Method numerical results and requiring publication of those results in all brand advertisements." Because the plaintiffs' claims "stand as an obstacle" to this policy, Philip Morris continues, they are implicitly preempted. Like the plaintiffs, we see a number of problems with this argument.
First, since its 1969 agreement with the tobacco companies, the FTC has never issued a formal rule specifically defining which cigarette advertising practices violate the Act and which do not. As the plaintiffs point out, there is some authority for the proposition that "[s]tate prohibitions of unfair and deceptive practices are not preempted unless they conflict with an express FTC rule." United States v. Philip Morris, Inc., 263 F.Supp.2d 72, 78 (D.D.C.2003) (emphasis omitted); see also Katharine Gibbs Sch., Inc. v. FTC, 612 F.2d 658, 667 (2d Cir.1979); Wisconsin v. Amoco Oil Co., 97 Wis.2d 226, 293 N.W.2d 487, 496 (1980); accord Wabash Valley Power Ass'n v. Rural Electrification Admin., 903 F.2d 445, 454 (7th Cir.1990) (declining to give preemptive effect to agency action taken without regard to formal rulemaking procedures); Elizabeth Blackwell Health Ctr. for Women v. Knoll, 61 F.3d 170, 196 (3d Cir.1995) (Nygaard, J., dissenting). Other courts, however, have held that an agency can preempt state law through action short of formal rulemaking. See, e.g., Elizabeth Blackwell Health Ctr., 61 F.3d at 182-83 (HHS interpretive rule); Feikema v. Texaco, Inc., 16 F.3d 1408, 1418 (4th Cir.1994) (EPA consent order); Gen. Motors Corp. v. Abrams, 897 F.2d 34, 39 (2d Cir.1990) (FTC consent order); Dowhal v. SmithKline Beecham Consumer Healthcare, 32 Cal.4th 910, 12 Cal.Rptr.3d 262, 88 P.3d 1, 9-10 (2004) (FDA letters to drug manufacturers).
Unlike many other exercises of agency authority, formal rulemaking comes with a host of procedural protections under the Administrative Procedure Act ("APA"), such as notice of the proposed rule, an opportunity for interested parties to participate, a statement of the basis and purpose of any rule adopted, and its publication in the Federal Register. 5 U.S.C. § 533 (2007). Limiting the preemptive power of federal agencies to exercises of formal rulemaking authority, then, ensures that the states will have enjoyed these protections before suffering the displacement of their laws. See, e.g., Wabash Valley Power Ass'n, 903 F.2d at 453-54; Richard J. Pierce, Jr., Regulation, Deregulation, Federalism and Administrative Law, 46 U. Pitt. L.Rev. 607, 664-65 (1985). This reasoning has particular force in the case of the FTC Act, which imposes procedural requirements on the Commission's rulemaking powers that exceed those of the APA. 15 U.S.C. §§ 57(c)-(e). Indeed, courts and commentators have understood these additional safeguards to reflect a
Second, apart from the likely import of its rulemaking provisions, the FTC Act raises an additional hurdle to Philip Morris's implied preemption theory, at least insofar as that theory relies on the 1971 and 1995 consent orders. The Act states that "[r]emedies provided in [15 U.S.C. § 57b] are in addition to, and not in lieu of, any other remedy or right of action provided by State or Federal law." 15 U.S.C. § 57b(e). And § 57b, as we have observed, empowers the Commission to sue for relief on behalf of consumers against those who violate its cease-and-desist orders against unfair or deceptive acts or practices. We do not think it a stretch, then, to say that when the FTC merely issues such an order, but never uses it as the basis for a subsequent lawsuit, the order does not supplant state-law rights of action any more than the lawsuit would have. A number of authorities have reached the same conclusion, though not necessarily by way of the same rationale. See California v. Am. Stores Co., 872 F.2d 837, 843-44 (9th Cir.), rev'd on other grounds, 495 U.S. 271, 110 S.Ct. 1853, 109 L.Ed.2d 240 (1990); Louisiana ex rel. Guste v. Fedders Corp., 543 F.Supp. 1022, 1024 (M.D.La.1982); Arvin Indus. v. Maremont Corp., 1973-1 Trade Cases ¶ 74,416, 1973 WL 784, at *3 (S.D.Ind. Mar.9, 1973); 1 Stephanie W. Kanwit, Federal Trade Commission § 12:6 (2006); but see Gen. Motors Corp., 897 F.2d at 39 (holding that an FTC "consent order reflecting a reasonable policy choice and issued pursuant to a congressional grant of authority may preempt state legislation").
Relying on the Supreme Court's decision in Geier, Philip Morris argues that § 57b(e), which it calls a "savings clause," "does not bar the ordinary working of conflict pre-emption principles." 529 U.S. at 869, 120 S.Ct. 1913. Geier held that the savings clause of the NTMVSA, which provides that "`[c]ompliance with' a federal safety standard `does not exempt any person from liability under common law,'" id. at 868, 120 S.Ct. 1913 (quoting 15 U.S.C. § 1397(k) (1988)), did not preserve "state-law tort actions that conflict with federal regulations." Id. at 869, 120 S.Ct. 1913. The Court reasoned that "[t]he words `compliance' and `does not exempt' sound as if they simply bar a special kind of defense, namely, a defense that compliance with a federal standard automatically exempts a defendant from state law, whether the Federal Government meant that standard to be an absolute requirement or only a minimum one." Id. (citation omitted). Thus, the Court explained, the federal standard would displace conflicting state law in the former case, but not the latter, where a plaintiff remains free to argue for a higher state-law standard as envisioned by the savings clause. Id. at 870, 120 S.Ct. 1913.
But unlike the savings clause of the NTMVSA, § 57b(e) does not speak of compliance with a federal standard as a defense to a state-law claim, leaving open the possibility of a preemptive conflict between the standard and the claim. Instead, § 57b(e) specifically provides that state-law rights of action survive the FTC's efforts at judicial enforcement of its own federal standards: in other words, that those efforts are "in addition to, and not in lieu of" other available remedies. We can think of no other purpose for this clause other than to allow further relief from
This reading of § 57b(e), moreover, does nothing to diminish the FTC's power to preempt state law through other assertions of its authority. After entering into a consent order, for example, the Commission remains free to adopt its terms as a formal rule, 15 U.S.C. § 57a(b)(1); as we have discussed, this process affords states and other interested parties with the kinds of procedural protections usually deemed essential to regulatory preemption. See, e.g., Wabash Valley Power Ass'n, 903 F.2d at 454. We acknowledge, as Philip Morris points out, that an agency often prefers to formulate policy through case-by-case adjudication, rather than rulemaking, and that adjudicated cases "generally provide a guide to action that the agency may be expected to take in future cases." NLRB v. Wyman-Gordon Co., 394 U.S. 759, 765-66, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969) (plurality opinion). "But this is far from saying . . . that commands, decisions, or policies announced in adjudications are `rules' in the sense that they must, without more, be obeyed by the affected public." Id. Indeed, the FTC Act itself reflects this distinction, at least with regard to consent orders: it specifically provides that the Commission cannot enforce them against non-parties.
Third, as the one court squarely holding that FTC consent orders can preempt state law has recognized, the mere entry of such an order dealing with a particular practice "is insufficient to preclude supplemental state regulation." Gen. Motors Corp., 897 F.2d at 39. Thus, even if we were to agree that FTC action short of formal rulemaking — including consent orders — can implicitly preempt state law in some cases, we do not think that this is one of them, because the plaintiffs' state-law claims do not pose a threat to any federal regulatory objectives apparent in the FTC's approach to tar and nicotine claims in cigarette advertising.
Though Philip Morris argues that FTC policy permits a manufacturer to make such claims so long as they are consistent with the results of testing under the Cambridge Filter Method and those results are disclosed in the manufacturer's advertising, the Commission has on occasion challenged statements about the tar or nicotine content of a particular brand even though they were supported by such testing. In 1982, for example, the FTC told a cigarette manufacturer that it could not rely on the Cambridge Filter Method to substantiate claims that one of its brands had only 1 milligram of tar, because the method did not accurately measure the tar and nicotine content of that brand due to its unusual filter design. See FTC v. Brown & Williamson Tobacco Corp., 778 F.2d 35,
The FTC, then, has not invariably allowed tar and nicotine claims that are supported by the Cambridge Filter Method, but has recognized that such claims may nevertheless amount to unfair or deceptive acts or practices in certain circumstances. We acknowledge that the claim at issue here — that Marlboro and Cambridge Lights have "lower tar and nicotine" than their full-flavored versions — differs from those the FTC has challenged in the past, but our task is not to decide whether the FTC would view a particular kind of tar and nicotine claim as a violation of the FTC Act.
We derive additional support for this conclusion from Geier and Sprietsma.
Geier and Sprietsma, then, teach that it is not the fact of agency action on a particular subject alone — but the reasons for the action — that control its preemptive effect. And here, no clear rationale emerges from the history of the FTC's treatment of tar and nicotine claims; indeed, the parties point to conflicting statements by the Commission itself on whether it even has an official position on the definitions of the terms "light" and "lower tar and nicotine." Compare, e.g., 62 Fed.Reg. 48,158, 48,163 (Sept. 12, 1997) ("There are no official definitions for these terms") with, e.g., 1980 FTC Rep. to Congress 18 n. 11 ("The FTC has not defined . . . any term related to tar level except for `low "tar"', which the FTC defines as 15.0 mg or less `tar.'"). Moreover, as in Sprietsma and in contrast to Geier, the Solicitor General recently filed a brief in the Supreme Court explaining that the FTC "has never promulgated definitions of terms such as `light' and `low tar'" and that its previous statements purporting to define them "did not reflect an official regulatory position." Br. for United States as Amicus Curiae Supporting Petitioners, Watson v. Philip Morris Cos., ___ U.S. ___, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (No. 05-1284), 2006 WL 3694382, at *4. On this record, we cannot discern a coherent federal policy on low-tar claims, let alone one driven by the sort of "important means-related federal objectives" necessary to preempt conflicting state law. Geier, 529 U.S. at 881, 120 S.Ct. 1913; cf. Int'l Paper Co. v. Ouellette, 479 U.S. 481, 497, 107 S.Ct. 805, 93 L.Ed.2d 883 (1987) (finding conflict between Clean Water Act and inconsistent state law where "[i]t would be extraordinary for Congress, after devising an elaborate permit system that sets clear standards, to tolerate common-law suits that have the potential to undermine this regulatory structure") (emphasis added). The plaintiffs' claims are not implicitly preempted.
Finally, Philip Morris argues that its challenged advertising practices constitute "[t]ransactions or actions otherwise permitted under laws as administered by any regulatory board or officer acting under the statutory authority of the United States" and, as such, are excepted from the Maine Unfair Trade Practices Act. Me. Rev.Stat. Ann. tit. 5, § 208(1). This argument, like Philip Morris's implied preemption theory, depends largely on its characterization of FTC policy to allow the use of the terms "light" and "lower tar and nicotine" when supported by testing under the Cambridge Filter Method. And, as we have explained, we disagree with that characterization: the full history of the FTC's oversight of tar and nicotine claims
We disagree, then, with those courts holding that the FTC has "authorized" Philip Morris's "light" and "lower tar and nicotine" claims so as to put them beyond the reach of state consumer protection statutes with exceptions similar to Maine's. See Flanagan v. Altria Group, Inc., No. 05-71697, 2005 WL 2769010, at *6 (E.D.Mich. Oct.25, 2005); Price, 302 Ill.Dec. 1, 848 N.E.2d at 50; see also Sullivan v. Philip Morris USA, Inc., No. 03-796, 2005 WL 2123702, at *9 (W.D.La. Aug.31, 2005) (finding "light" and "lower tar and nicotine" claims to constitute "conduct that complies with" 15 U.S.C. § 45(a)(1) and therefore exempt from Louisiana Unfair Trade Practices and Consumer Protection Act). In our view, these decisions overlook the subtleties in the Commission's approach to tar and nicotine claims we have already discussed.
The court in Price, for example, concluded that the FTC, through its 1971 and 1995 consent orders with American Tobacco, "could, and did, specifically authorize all United States tobacco companies to utilize the terms `low,' `lower,' `reduced' or like qualifying terms such as `light' so long as the descriptive terms are accompanied by a clear and conspicuous disclosure of the `tar' and nicotine content in milligrams of the smoke produced by the advertised cigarette." 302 Ill.Dec. 1, 848 N.E.2d at 50. As we have explained, though, the American Tobacco consent orders may have provided guidance to the rest of the industry on how the Commission would likely view such claims in the future, but they by no means reflected an across-the-board approval of the use of the descriptors alongside the tar and nicotine ratings. And again, had the FTC intended to "authorize" those kinds of advertisements, it needed only to exercise its rulemaking authority to that end.
Furthermore, even if the consent decrees did "authorize" particular tar and nicotine claims for purposes of state consumer protection laws, that authorization does not appear to extend to the claims at issue here. Insofar as the 1971 consent decree permits "use of the words `low,' `lower,' or `reduced' or like qualifying terms," it does so only if "the statement is accompanied by a clear and conspicuous disclosure of the `tar' and nicotine content in milligrams in the smoke produced by the advertised cigarette" per the Cambridge Filter Method. In re Am. Brands, Inc., 79 F.T.C. at 258 (internal formatting omitted). But, as the plaintiffs point out, Philip Morris uses the terms "light" and "Lowered Tar and Nicotine" on the packages
We see at least two weaknesses in this position. First, as we have noted, the FCLAA also provides that "[n]othing in this chapter (other than the requirements of [15 U.S.C. § 1333]) shall be construed to limit, restrict, expand, or otherwise affect the authority of the [FTC] with respect to unfair or deceptive acts or practices in the advertising of cigarettes." 15 U.S.C. § 1336. So it is at least arguable that the restriction on additional health-related statements in the FCLAA does not apply to the FTC. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 185, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (Breyer, J., dissenting). Second, if the portion of the 1971 consent order requiring disclosure of tar and nicotine yields does not apply to cigarette packages, then, it would seem to us, neither does the portion of the order permitting the use of the descriptors. Otherwise, the order would have allowed American Tobacco to label its cigarettes as low tar without disclosing that they in fact had more tar than the average cigarette — in essence, to continue the same allegedly deceptive practice that led the FTC to seek the order in the first place. We have great difficulty reading the consent order in such a self-defeating manner.
We do not mean to suggest that the consent orders have no bearing at all on whether Philip Morris's use of the terms "light" and "Lowered Tar and Nicotine" violates the Maine Unfair Trade Practices Act. Indeed, the Act provides that, in construing its ban on unfair or deceptive acts or practices, "courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to [15 U.S.C. § 45(a)(1)], as from time to time amended." Me.Rev.Stat. Ann. tit. 5, § 207; see, e.g., Searles v. Fleetwood Homes of Pa., Inc., 878 A.2d 509, 520 (Me.2005) (relying on FTC consent decree to determine whether particular practice was unfair under § 207). But whether Philip Morris's challenged statements fit the statutory proscription is not the question before us. We conclude simply that those statements are not "authorized" by the consent orders or anything else in the FTC's approach to tar and nicotine claims so as to exempt them from the Act. See Mulford, ___ F.Supp.2d at ___, 2007 WL 1969734, at *29; Aspinall v. Philip Morris Cos., Civ. A. No. 98-6002, 2006 WL 2971490, at *8 (Mass.Super.Ct. Aug. 9, 2006), rev. granted, No. SJC-09981 (Mass. Apr. 25, 2007).
Finally, in an echo of its implied preemption argument, Philip Morris posits that, even if the consent orders did not authorize the tar and nicotine claims at
Unlike Philip Morris, we do not believe that the Maine Supreme Judicial Court equated these two concepts in First of Maine Commodities v. Dube, 534 A.2d 1298 (Me.1987). There, the plaintiffs claimed that the defendant real estate broker had violated the Maine Unfair Trade Practices Act by failing to notify them of their purported right under another statute to void the parties' exclusive listing agreement within three days of its execution. Id. at 1301. The court observed that the Maine Real Estate Commission "may investigate and penalize licensed brokers who violate the numerous statutory restrictions on their activities," including one imposing specific standards on exclusive listing agreements — but not the three-day voiding option the plaintiffs sought to enforce. Id. at 1301 (citing Me.Rev.Stat. Ann. tit. 42 § 4004 (1978 & 1986 supp.)). Thus, the court concluded that "[b]ecause by statute the Maine Real Estate Commission extensively regulates brokers' activities, including the execution of exclusive listing agreements, such activities fall outside the scope of Maine's Unfair Trade Practices Act." Id. at 1302.
We read First of Maine Commodities, then, for the proposition that conduct is exempt from the Unfair Trade Practices Act where it is subject to specific standards left to the enforcement of an administrative agency, not merely those circumstances in which the agency's regulatory scheme is generally "extensive" or "detailed." See also Weinschenk, 868 A.2d at 205 (rejecting argument that § 208(1) exempted builder's sales of homes "because industry operations are separately regulated by state or federal law"). As we have discussed, the FTC does not appear to have imposed specific standards on tar and nicotine claims in cigarette advertising; even if it has, the plaintiffs here, in contrast to the plaintiffs in First of Maine Commodities, do not seek to hold Philip Morris liable under the Unfair Trade Practices Act for complying with those standards. Neither First of Maine Commodities nor the language of § 208(1) itself supports Philip Morris's argument that its use of the terms "light" and "Lowered Tar and Nicotine" is a "transaction[ ] or action[ ] otherwise permitted under laws administered by any regulatory board or officer" exempt from the Maine Unfair Trade Practices Act.
In summary, we conclude that the plaintiffs' claims that Philip Morris has made fraudulent misrepresentations in violation of the Maine Unfair Trade Practices Act by advertising and promoting Marlboro and Cambridge Lights as "light" and having "Lowered Tar and Nicotine" are not (1) expressly preempted by the FCLAA, (2) implicitly preempted, either by the FCLAA or by the FTC's oversight of tar and nicotine claims in cigarette advertising, or (3) barred by the Act's exemption for "transactions or actions otherwise permitted." We do not, of course, reach any conclusion on the merits of the plaintiffs' claims, the availability of summary judgment on other grounds, or the force of or any other defense potentially available to