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Cleary v. Philip Morris USA

January 13, 2010

BRIAN CLEARY AND RITA BURKE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
PHILIP MORRIS USA, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

MEMORANDUM OPINION AND ORDER

Brian Cleary and Rita Burke, representing a putative class, have sued several tobacco companies and tobacco-related entities. They filed the case in state court in 1998. Defendant Lorillard Tobacco Co. removed it to this Court after plaintiffs filed a third amended complaint on March 3, 2009.

In their third amended complaint, plaintiffs made several claims against the defendants on behalf of a putative class of Illinois residents. Among other claims, plaintiffs alleged that defendants deceptively marketed "low tar," "light," and "ultra light" cigarettes as being safer than regular cigarettes, although they were equally dangerous.

Defendants moved for judgment on the pleadings with respect to plaintiffs' light cigarette claims on the ground that they are time-barred. On September 8, 2009, the Court granted the motion as to the defendants other than Philip Morris and as to all of Philip Morris' light cigarette brands other than Marlboro Lights. The Court deferred ruling as to that particular brand. For the following reasons, the Court now denies the motion for judgment on the pleadings on Count 3 of the third amended complaint insofar as it relates to Marlboro Lights and vacates the order previously entered by the state court in this case dismissing that particular claim.

Background

Plaintiffs first asserted light cigarettes claims in their first amended complaint, which they filed in state court on January 19, 2000. In that complaint, plaintiffs requested certification of a separate class of plaintiffs -- Illinois residents who purchased and smoked Marlboro Lights, a brand of cigarettes manufactured and sold by Philip Morris. Plaintiffs alleged that Philip Morris marketed Marlboro Lights cigarettes as safer than regular cigarettes even though they were just as dangerous. They sought recovery under the Illinois Consumer Fraud Act (ICFA) and based on a theory of unjust enrichment.

In November 2001, plaintiffs withdrew their Marlboro Lights claims. In a memorandum they filed in state court, plaintiffs said that those claims "are no longer before the Court . . . . Another circuit court certified the class on February 1, 2001. Miles v. Philip Morris, Inc., No. 00-L-0112 (Ill. Cir. Ct. Madison Cty.)." Pls.' Factual Mem. (filed Nov. 26, 2001). In essence, the plaintiffs advised the state court that because of the other pending class action, they were no longer proceeding in this case with their Marlboro Lights claims against Philip Morris.

Philip Morris moved to strike portions of plaintiffs' first amended complaint that referred to the Marlboro Lights claims. In response, plaintiffs did not oppose the striking of the claims; they again said the claims were no longer before the Court "because another circuit court certified that class on February 1, 2001." Pls.' Mem. In Opp. To Def.'s Mot. to Strike ¶ 1. Plaintiffs opposed, however, the striking of certain factual allegations. The state court granted Philip Morris' motion to strike and dismissed plaintiffs' Marlboro Lights claims. The Court stayed the order, however, pending a ruling on plaintiffs' motion for leave to file a second amended complaint. Plaintiffs filed a second amended complaint on April 5, 2005. That complaint contained no light cigarettes claims.

In 2006, the Illinois Supreme Court dismissed the Madison County class action. Price v. Philip Morris, Inc., 219 Ill. 2d 182, 273-74, 848 N.E.2d 1, 54-55 (2006). The court held that claims arising out of tobacco companies' concealment of the true nature of light cigarettes under the ICFA (the only claim before the court at the time) failed because the Act exempts from liability "conduct in compliance with orders" of a federal agency. Id. Concluding that the defendants were authorized by FTC practice and consent orders in their marketing of light cigarettes, the court ruled that plaintiffs' claims were barred. Id.

On December 15, 2008, the United States Supreme Court held that the Federal Labeling Act and the FTC's decisions regarding the advertising of low tar or light cigarettes do not preempt state-law claims against manufacturers of light cigarettes predicated on a duty not to deceive. Altria Group, Inc. v. Good, 129 S.Ct. 538 (2008). Plaintiffs contend the Altria decision represents a significant change in the law that would have changed the outcome in Price.

Shortly after the decision in Altria, plaintiffs moved the state court for leave to file a third amended complaint, a motion the state court granted. The new complaint reasserted one of the light cigarettes claims from the first amended complaint -- the unjust enrichment claim -- and expanded it to encompass other defendants in addition to Philip Morris and all low tar, light, and ultra light cigarette brands made and sold by Philip Morris, not just Marlboro Lights.

On March 13, 2009, Lorillard removed the case to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1446(b). Lorillard's removal of the case was premised on the proposition that the inclusion of the light cigarettes claims amounted to the filing of a new action under CAFA. Otherwise, the case would not have been removable. Plaintiffs then moved to remand the case to state court. This Court concluded that the light cigarette claims against Lorillard did not relate back to the plaintiffs' first amended complaint because that complaint referenced only Marlboro Lights, a Philip Morris product. As a result, the third amended complaint was, in fact, a new action under CAFA. See Order of May 4, 2009. In a later ruling, the Court dismissed the light cigarettes claims against Lorillard as time-barred, based on the same relation-back determination. The Court declined, however, to remand the case, for reasons described in the ruling. See Order of July 1, 2009.

Defendants Philip Morris, R.J. Reynolds Tobacco Company, American Tobacco Company, Inc., Brown & Williamson Tobacco Corporation, and Liggett & Myers, Inc. then moved for judgment on the pleadings on Count 3 of the third amended complaint, arguing that the light cigarettes claims against them contained in that count were likewise time-barred. On September 8, 2009, the Court granted the motion with regard to all defendants other than Philip Morris and with regard to all light brands made by Philip Morris other than Marlboro Lights.

The Court declined, however, to rule on the motion with regard to Philip Morris. The Court noted that the U.S. Supreme Court's decision in Altria "arguably amounts to a change of law that enables plaintiffs to proceed on an unjust enrichment claim" and that might render unjust the state court's 2002 order dismissing the plaintiffs' original unjust enrichment claim against Philip Morris concerning Marlboro Lights. Though the claim would be time-barred if it were new, plaintiffs had originally asserted this claim within the period of limitations. The Court directed Philip Morris to show cause why the Court should not vacate the state court's order dismissing the claim.

In response, Philip Morris has argued, among other things, that irrespective of the impact of Altria, the plaintiffs' light cigarettes claim in this case is precluded by the adverse judgment in Price, because the plaintiffs in this case were members of the class in that case. Plaintiffs, in turn, seek reconsideration of the Court's ruling that their expanded light cigarettes claim against other Philip Morris brands does not relate back, for purposes of the statute ...


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