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Philip Morris USA, Inc. v. Byron

August 22, 2007

PHILIP MORRIS USA, INC., PETITIONER,
v.
HON. NICHOLAS G. BYRON, JUDGE OF THE THIRD JUDICIAL CIRCUIT, ET AL., ETC., RESPONDENTS.



Motion for writ of mandamus/ prohibition

ORDER

This cause coming to be heard on the motion of the petitioner, Philip Morris USA, Inc., an objection having been filed by the respondents Sharon Price, et al., a reply having been filed by the petitioner, and the court being fully advised in the premises;

IT IS ORDERED that the motion for leave to file a petition for writ of mandamus or prohibition is denied. The motion for supervisory order is allowed. In the exercise of this court's supervisory authority, the circuit court of Madison County is directed to vacate its order of May 9, 2007, certifying questions for interlocutory appeal pursuant to Supreme Court Rule 308 in Price et al. v. Philip Morris USA Inc., No. 00 L 112, and to enter an order dismissing plaintiffs' motion to vacate or withhold final judgment pursuant to section 2--1203 of the Code of Civil Procedure (735 ILCS 5/2--1203 (West 2006)).

Order entered by the Court.

CHIEF JUSTICE THOMAS took no part.

JUSTICE FREEMAN, dissenting.

This court allows the motion of Philip Morris USA, Inc., for a supervisory order (188 Ill. 2d R. 383). In the exercise of our supervisory authority, this court directs the circuit court of Madison County to vacate its certification of questions for interlocutory appeal to the appellate court pursuant to Supreme Court Rule 308 in Price v. Philip Morris USA, Inc., No. 00 L 112, and to enter an order dismissing plaintiff's postjudgment motion pursuant to section 2--1203 of the Code of Civil Procedure (735 ILCS 5/2--1203 (West 2006)). I respectfully dissent.

I. BACKGROUND

The supervisory order in this case is the capstone of a highly publicized class action, which resulted in a multibillion dollar judgment in favor of plaintiffs. Some background is in order to appreciate the significance--and predictability--of this court's unusual action.

A. Underlying Action

Plaintiffs brought a class action against Philip Morris USA, Inc. (PMUSA), alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 1998)) and the Uniform Deceptive Trade Practices Act (Deceptive Practices Act) (815 ILCS 510/1 et seq. (West 1998)). Plaintiffs brought the action on behalf of a class of Illinois residents who had purchased "Light" cigarettes in Illinois since the introduction of Marlboro Lights in 1971. Plaintiffs claimed that the word "lights" and the phrase "lowered tar and nicotine" were deceptive in that those words led each consumer to believe that he or she would receive lower tar and nicotine from these cigarettes and that, as a result, smoking them would be less hazardous than smoking regular, full-flavored cigarettes. Plaintiffs alleged that all class members purchased Lights because of a belief that those cigarettes were less hazardous and provided health benefits not associated with regular, full-flavored cigarettes, and that no class member would have purchased Lights "but for" PMUSA's unfair or deceptive acts or practices. The circuit court certified the class.

PMUSA asserted as an affirmative defense section 10b(1) of the Consumer Fraud Act, which exempts conduct "specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States." 815 ILCS 505/10b(1) (West 1998). In pretrial proceedings and at trial, it was PMUSA's position, established through testimony and exhibits, that its use of the terms "lights" and "lowered tar and nicotine" complied with Federal Trade Commission (FTC) policies. Plaintiffs presented evidence that the FTC did not have an official policy that permitted cigarette companies to use these terms.

The parties did not dispute that there is no industrywide formal rulemaking authorizing the use of the disputed descriptors at issue in this case. Further, the FTC does not have any industrywide formal rule that authorizes or requires cigarette manufacturers to use the terms "light" or "low tar" or any variation thereof. Moreover, the FTC views what it considers to be a "regulatory" scheme in this area as a "voluntary approach."

Dr. John Peterman, PMUSA's expert witness, testified, inter alia, that a 1971 agreement between the FTC and a cigarette company, memorialized in a consent order, In re American Brands, Inc., 79 F.T.C. 225 (1971), was "an official act of the FTC," the terms of which provided "industry guidance to [PMUSA] and others regarding the use of descriptors." Likewise, according to Peterman, in a 1995 consent order, In re American Tobacco Co., ...


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