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Greetings, Court Fans!

 

The Court has departed for winter recess, but they left us with some parting gifts. First up is the second signed opinion of the Term, which comes in Altria Group, Inc. v. Good (07-562). The Court held 5-4 that neither the Federal Cigarette Labeling and Advertising Act (“the Labeling Act”) nor Federal Trade Commission (“FTC”) policy preempted a Maine lawsuit alleging state-law fraud claims regarding “light” cigarette ads. The substance of the suit was that while the cigarettes may be “light” based on recognized testing criteria, manufacturers knew but hid from consumers the fact that humans compensate for lower nicotine levels in ways that testing cannot capture, rendering light cigarettes potentially even more dangerous than regular cigarettes. Following Cippolone v. Liggett Group (1992), where a plurality found that the Labeling Act preempted failure-to-warn claims “intertwined” with issues of smoking and health, the district court held the suit was preempted, but the First Circuit reversed, holding that the suit was a standard anti-fraud claim that was not preempted under Cippolone.

 

The Court affirmed, and the upshot is that the Cippolone plurality holding distinguishing between substantive state-law “smoking and health” requirements, which are preempted if they go beyond federal law, and general fraud claims, which are not preempted, is now a solid majority holding. Justice Stevens wrote for the majority, which began from the premise that preemption is disfavored. The Labeling Act expressly preempts states from requiring manufacturers to go beyond federal labeling requirements regarding the consequences of smoking, as federal standards for such matters were deemed necessary and sufficient. The Cippolone plurality, however, noted that simple fraud claims depend on a single standard – is the statement true or false? – that invokes a duty not to deceive, not a duty based on the relationship between smoking and health. Here, the Maine law at issue was its general anti-fraud statute, which concerned simply a prohibition on false advertising. (The case was thus distinguishable from last Term’s Riegel v. Medtronic, which held that federal premarket approval for a medical device preempted state-law product liability claims, because that case turned precisely on the content of the respective federal and state safety requirements). The Court also concluded that the Maine law did not run afoul of longstanding FTC policies relying on the testing methods at issue in the case, as the FTC has disavowed any such policy and in fact has noted the shortcomings of the tests.

 

Justice Thomas wrote for the dissent (which included the Chief and Justices Scalia and Alito). They lamented the conversion of the Cippolone smoking/fraud distinction into solid law, running through a litany of cases that highlighted the unworkability of the test in the lower courts. Thomas would have opted for Scalia’s so-called “proximate application” test, introduced in his separate Cippolone opinion, whereby preemption turns on the real-world consequences of allowing the state-law suit: if cigarette companies ultimately have to modify their behavior because of the relationship between smoking and health, then the state law or rule is preempted. Here, as in most cases, that rule would have blocked the state suit. (In response, Stevens noted that seven Justices rejected Scalia’s test in Cippolone for various reasons.)

 

That was it for decisions – though it is interesting to note that, unlike most Terms, the first two rulings have been split decisions, not easy 9-0 opinions. Makes one wonder what lurks in the new year . . . .

 

. . . . Speaking of which, though it did not issue an opinion, the Court issued a ruling granting, vacating, and remanding the D.C. Circuit’s ruling in Rasul v. Myers (08-235), where that court rejected four British citizens’ claims that their “religious abuse” while detained at Guantanamo Bay amounted to violations of, among other things, the Eighth Amendment and the Religious Freedom Restoration Act. The D.C. Circuit found the plaintiffs had no right to make these claims as detainees “without property or presence” in the United States, but the Court has ordered it to reexamine that holding in light of the decision last Term in Boumediene v. Bush. There, the Court held that detainees at least had a constitutional right – still being defined, of course – to challenge their detention via the writ of habeas corpus. The D.C. Circuit now gets to pass on the question of what other parts of the Constitution might extend to Guantanamo detainees. Not to worry – we’ll see the case again.

 

The Court also granted cert in two more cases, which are:

 

Travelers Indemnity Co. v. Bailey (08-295) and Common Law Settlement Counsel v. Bailey (08-307): “Once a bankruptcy court’s subject-matter jurisdiction over a case attaches, whether the court must have a separate jurisdictional basis to approve third-party injunction provision in a plan of reorganization or related confirmation order.” (This case is really complicated, as it stems from longstanding asbestos and bankruptcy claims involving the Johns Manville Corporation. In essence, the issue is whether the federal bankruptcy court can block private lawsuits for damages from asbestos.)

 

Polar Tankers, Inc. v. Valdez (08-310): “(1) Whether a municipal personal property tax that falls exclusively on large vessels using the municipality’s harbor violates the Tonnage Clause of the Constitution, art. I, § 10, cl. 3”; and (2) “Whether a municipal personal property tax that is apportioned to reach the value of property with an out-of-State domicile for periods when the property is on the high seas or otherwise outside the taxing jurisdiction of any State violates the Commerce and Due Process Clauses .of the Constitution.”

 

And that, we think, is it for the Court for calendar year 2008 – but we’ll keep you posted if there are any orders or surprise rulings of note. Otherwise, we wish happy holidays and a joyous new year, and we will see you in 2009!

 

Ken & Kim

From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart, Ken Heath, or any other member of the Practice Group at 203-498-4400