Opinion ID: 2382064
Heading Depth: 1
Heading Rank: 2

Heading: Federal Preemption Defense

Text: We turn finally to the claims American alleges are preempted by federal law. In 1965, Congress enacted the Federal Cigarette Labeling and Advertising Act, Pub.L. No. 89-92, 79 Stat. 282, and in 1969, it amended the 1965 Act by enacting the Public Health Cigarette Smoking Act, Pub.L. No. 91-222, 84 Stat. 87. Both Acts, codified at 15 U.S.C. §§ 1331-1340, specify the warnings a cigarette manufacturer must place on its packages and advertisements. Both Acts also effectively prevent the states from regulating the design, manufacture, marketing, and sale of cigarettes. The United States Supreme Court considered the preemptive effect of the Acts in Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992). In that case, the Supreme Court held that the Federal Cigarette Labeling and Advertising Act of 1965 precludes the states only from imposing their own labeling requirements on cigarette manufacturers, Cipollone, 505 U.S. at 518-20, 112 S.Ct. at 2618-19, but that the Public Health Cigarette Smoking Act of 1969 preempts all claims predicated on a requirement or prohibition based on smoking and health ... imposed under State law with respect to ... advertising or promotion. Cipollone, 505 U.S. at 520-24, 112 S.Ct. at 2621. Because the Public Health Cigarette Smoking Act took effect in 1969, the Act preempts claims based only on activities arising after the effective date of the Act. Claims brought after the effective date of the Act are not preempted provided they are based on pre-1969 activities. Specifically, in Cipollone the Court held that the 1969 Act preempts two types of claims. First, the 1969 Act preempts failure to warn claims based on allegations that post-1969 advertising or promotional materials should have included different warnings. Id. at 524-25, 112 S.Ct. at 2621-22. Second, the 1969 Act preempts claims based on misrepresentations designed to neutralize the effect of federally mandated warnings on cigarette packages. Id. at 527, 112 S.Ct. at 2623. This type of claim stems from state-law prohibitions on statements in advertising that tend to lessen the impact of the federal warnings and is the converse of a requirement that warnings be included in advertisements. Id. The 1969 Act preempts neutralization claims because these claims are inextricably related to a failure to warn theory. Id. at 527-28, 112 S.Ct. at 2623-24. The Court also held that claims related to smoking and health that do not impinge on advertising or promotion are not preempted. First, negligent testing and research claims are not preempted, provided they are not related to advertising or promotion. Id. at 524-25, 112 S.Ct. at 2621-22. Second, breach of express warranty claims are not preempted even if the warranty is included in advertising materials because the terms of the warranty are imposed by the warrantor, not state law. Id. at 526-27, 112 S.Ct. at 2622-23. Third, the 1969 Act does not preempt fraudulent concealment claims based on a state-law duty to disclose material facts through channels other than advertising or promotion. Id. at 528, 112 S.Ct. at 2623. Fourth, misrepresentation claims based on false statements of material fact made in advertising, claims that are based on the general duty not to deceive, are not preempted. Id. at 528-29, 112 S.Ct. at 2623-24. Last, claims asserting conspiracy to misrepresent material facts are not preempted, provided a claim for misrepresentation can be maintained. Id. at 530, 112 S.Ct. at 2624-25. As we explain below, some, but not all, of the Grinnells' claims are preempted by the 1969 Act to the extent they are based on post-1969 acts or omissions. The first category of preempted claims are those based on the allegation that American should have provided different warnings or warnings in addition to those mandated by the 1969 Act or that it otherwise concealed the dangers of smoking. Claims based on the failure to warn allegations include strict liability failure to warn, negligent failure to warn and negligent testing, and fraudulent concealment. Regarding the Grinnells' strict liability and negligent failure to warn claims, both are based upon American's failure to adequately warn of the dangers of smoking on its products' packages, in advertisements, and through other promotional materials before and after the imposition of the federal warnings. Claims based on factual allegations that American's post-1969 advertising and promotional materials should have included additional, or more clearly stated, warnings are preempted. Cipollone, 505 U.S. at 524-25, 112 S.Ct. at 2621. The Grinnells' negligent testing claim is also preempted. The 1969 Act preempts negligent testing claims to the extent they are related to advertising or promotion. Id. In this case, the Grinnells' negligent testing claim is inextricably intertwined with advertising and promotional materials because the Grinnells allege only that American should have tested its products to determine the dangerous characteristics about which American should have warned consumers. Because the 1969 Act preempts strict liability and negligent failure to warn claims in so far as they rely on post-1969 advertising and promotional materials, American has no duty, other than its federally mandated duty, to warn of product dangers. The negligent testing claim asserted by the Grinnells necessarily depends on liability for failure to warn and is therefore preempted. The fraudulent concealment claims are preempted because they too are premised on American's failure to disclose information regarding the dangers of cigarettes. This claim is essentially a variation on the Grinnells' failure to warn claim because it is based on American's alleged duty to disclose information about the harmful effects of cigarettes. See Forster v. R.J. Reynolds Tobacco Co., 437 N.W.2d 655, 662 (Minn.1989). Fraudulent concealment claims are preempted insofar as they rely on a state-law duty to disclose facts through advertising or promotion. Cipollone, 505 U.S. at 524-28, 112 S.Ct. at 2621-24. With regard to the Grinnells' DTPA claims, we first note that the pre-1969 DTPA claims fail as a matter of law. The DTPA applies only to acts or practices occurring after May 21, 1973, the DTPA's effective date. TEX. BUS. & COM.CODE § 17.63; see Litton Indus. Prods., Inc. v. Gammage, 668 S.W.2d 319, 324 (Tex.1984). Accordingly, if all of the Grinnells' post-1969 claims are preempted, then all of their DTPA claims must also fail. The Grinnells argue first that American violated DTPA section 17.46(b)(23) by intentionally failing to disclose information about the dangers of its cigarettes in order to induce people to smoke. As discussed above, claims for failure to disclose information through advertising or promotional materials clearly fall within the 1969 Act's preemptive scope. Cipollone, 505 U.S. at 524-25, 112 S.Ct. at 2621-22. Therefore, the Grinnells' DTPA failure to disclose claims are preempted. Second, the Grinnells allege that American violated sections 17.46(b)(5) and (7) of the DTPA by using deceptive representations in its advertisements. Sections 17.46(b)(5) and (7) of the DTPA specifically prohibit deceptive representations in connection with the advertisement and sale of goods. TEX. BUS. & COM.CODE §§ 17.46(b)(5) & (7). The Grinnells' claim under these sections is properly characterized as a neutralization claim because American allegedly made the deceptive statements in its advertizing and promotional materials with the intent of diminishing the impact of the federal warnings. This claim is also preempted by the holding in Cipollone that claims based on a manufacturer's attempt to [neutralize] the effect of federally mandated warning labels through advertising and promotion are preempted. Id. at 527-28, 112 S.Ct. at 2623. Preemption of neutralization claims is based on the rationale that a state-law prohibition of advertising that tends to minimize the health hazards associated with smoking is simply the converse of a state-law requirement that additional warnings be included in advertising and promotional materials. Id. Accordingly, the DTPA deceptive advertising claim is also preempted. For the foregoing reasons, we hold that summary judgment on the Grinnells' post-1969 claims regarding warnings and the duty to avoid neutralizing the effect of the federally mandated warnings was proper as those claims are preempted by the 1969 Act.