Bids to build class action suits against tobacco companies have been dealt another setback in a case whose opinion is worth a look by other industries that could be class action targets.
On Friday, the 2nd U.S. Circuit Court of Appeals threw out a class action on behalf of smokers who claimed they were misled about the safety of light cigarettes. In deciding for the eight tobacco companies, the court held that because generalizations could not be made about why smokers chose "lights," they could not be treated as a class.
This suit stood out because it did not raise health issues directly, but instead claimed financial injuries resulting from defendants' alleged misrepresentation that light cigarettes are healthier. The suit charged racketeering on the part of cigarette makers, accusing them of deceptive advertising that led to inflated prices and artificially high sales. If smokers had known the light cigarettes were no better for them than regular cigarettes, prices would have been forced down, the suit charged.
But the court rejected the RICO (Racketeer Influenced and Corrupt Organizations) legal theory. Class members may have decided to purchase light cigarettes for a variety of reasons, some of which may be unrelated to reliance on the alleged safety misrepresentations, the court noted. Some smokers had continued to puff on the lights even after it was widely reported that they posed no less of a health risk, the court noted. Therefore, proof of each class member's motivations, rather than common proofs for the class in general, is needed. Further weighing against the class action, the court found that class members' damages may have varied widely.
In conclusion, the court found that it was impossible to find enough common proofs to warrant a class action.
Click here to view the full text of the opinion.
Ballard Spahr attorneys regularly defend class action and RICO claims around the country in diverse practice areas including securities, financial institution, antitrust, sub-prime lending, employment law and products liability litigation. Our attorneys also provide pre-litigation counseling regarding advertising and product performance issues which help our clients avoid litigation. To discuss the challenges presented by class action litigation, please contact John B. Kearney at 856.761.3482, Neal Walters at 856.761.3438 or David A. Haworth at 856.873.5525. All are members of the firm's Business Litigation and Products Liability and Mass Tort Groups.