Opinion ID: 3135178
Heading Depth: 3
Heading Rank: 3

Heading: Motion for Summary Judgment Based on PMUSA’s

Text: Claims of Preemption and Exemption PMUSA filed a motion for summary judgment on its affirmative defenses of express and implied federal preemption and exemption from liability under sections 2 and 10b of the Consumer Fraud Act (815 ILCS 505/2, 10b (West 1998)). On October 28, 2002, a hearing was held to consider PMUSA’s motion for summary judgment. PMUSA argued that plaintiffs’ claim is expressly preempted by the Federal Cigarette Advertising and Labeling Act, which provides 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 [this Act].” 15 U.S.C. §1334(b) (2000). PMUSA also argued that under the Supreme Court’s decision in Cipollone v. Liggett Group, Inc. , 505 U.S. 504, 120 L. Ed. 2d 407, 112 S. Ct. 2608 (1992), plaintiffs cannot base their claim on an allegation that defendant has neutralized the warning Congress requires on cigarette packages and, under Buckman Co. v. Plaintiffs’ Legal Committee , 531 U.S. 341, 148 L. Ed. 2d 854, 121 S. Ct. 1012 (2001), plaintiffs’ claim cannot be predicated on an alleged fraud upon the FTC. Based on the comprehensive federal regulatory scheme governing the labeling and advertising of cigarettes as well as the disclosure of tar and nicotine levels, PMUSA argued implied preemption. PMUSA further argued that section 10b(1) of the Consumer Fraud Act “exempts conduct that complies with federal laws or the rules, regulations, or decisions of federal agencies” and that the “enormous record” of “advertising guides, agreements, proposed trade regulation rules, consent orders, investigations, determinations, and rulemakings  related specifically to the use of ‘low tar’ and ‘lights’ ” in cigarette advertising and labeling. Because the record clearly demonstrates that PMUSA has used these terms only on products “below the fifteen milligram cutoff,” PMUSA asserted that such compliance provided a “full defense” to plaintiffs’ Consumer Fraud Act claim. Relying on this court’s decisions in Lanier v. Associates Finance, Inc. ,114 Ill. 2d 1, 18 (1986) (finding compliance with disclosure requirements of federal Truth in Lending Act as interpreted by Federal Reserve Board staff to be a defense to liability under the Consumer Fraud Act), Jackson v. South Holland Dodge, Inc. , 197 Ill. 2d 39, 47 (2001) (finding compliance with federal statute to be a defense to liability under the Consumer Fraud Act), and Jarvis v. South Oak Dodge, Inc. , 201 Ill. 2d 81, 88 (2002) (recognizing state policy against extending consumer disclosure requirements beyond those mandated by federal law), PMUSA attempted to rebut plaintiffs’ argument that the lack of trade regulation rules governing the use of these descriptors meant that their use could not have been “specifically authorized” by the FTC. Plaintiffs’ argument on this point was that the FTC had not specifically authorized PMUSA to use the terms “lights” or “lowered tar and nicotine” and, “in fact, lacks the authority to do so.” The circuit court took the matter under advisement. Between that date and November 8, 2002, the date upon which the circuit court issued its order, plaintiffs filed their first amended complaint. In the first amended complaint, plaintiffs abandoned some of the claims that defendants had argued were preempted. The remaining complaint, according to plaintiffs, was that defendant’s use of the terms “lights” and “lowered tar and nicotine” was an affirmative misrepresentation and, thus, according to Cipollone , not preempted by the Act. The circuit court’s order noted PMUSA’s argument that this claim of affirmative misrepresentation necessarily depends on plaintiffs’ proving neutralization of the warning and a fraud on the FTC and acknowledged that “to the extent that their claims do depend on such a showing,” such claims would be preempted under Cipollone and Buckman . However, the circuit court reserved judgment on the preemption question, finding it premature to address these defenses because there were “significant disputes about several material facts” that could not be resolved without live testimony. “A trial,” according to the circuit court, would be required before the court could decide, “on a full and complete record whether the plaintiffs have stayed within the bounds of Cipollone and whether they are attempting to cross the line laid down in Buckman .” The November 8, 2002, order did not address PMUSA’s affirmative defense based on the exemption provision contained in section 10b(1) of the Consumer Fraud Act. The order did not, however, reject this defense. Thus, when the circuit court “specifically reserve[d] judgment until trial on the issues presented in defendants’ motion for summary judgment,” judgment on this defense was reserved, presumably in order for the circuit court to determine, at trial, whether the FTC had specifically authorized the use of the disputed terms.