Appendix — Cipollone v. Liggett Group, Inc.

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Supreme Court LS,

[FILED

OCT 6 1986

Supreme Court of the Hnftededitatesec. m

CLERK

In The

in

October Term, 1986

ANTONIO CIPOLLONE, individually and as Executor of the

Estate of Rose D. Cipollone,

Petitioner,

vs.

LIGGETT GROUP, INC., a Delaware Corporation; PHILIP

MORRIS INCORPORATED, a Virginia Corporation; and

LOEW’S THEATRES, INC., a New York Corporation,

Respondents.

APPENDIX

MARC Z. EDELL

BUDD LARNER GROSS PICILLO

ROSENBAUM GREENBERG & SADE, P.C.

Attorneys for Petitioner

150 John F. Kennedy Parkway, CN 1000

Short Hills, New Jersey 07078-0999

(201) 379-4800

Of Counsel:

ALAN M. DARNELL

WILENTZ, GOLDMAN & SPITZER

900 Route 9 Box 10

Woodbridge, New Jersey 07095

(201) 636-8000

tz i *Nd (201) 257-6850¢NY (212) $40-4640PA (215) 563-5587

ters.ime. MA (617) 542-1114*DC (202) 783-7288¢USA (800) 5 APPEAL

TABLE OF CONTENTS

Page

APPENDIX

Appendix A—Order of the Supreme Court Dated July 21,

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Appendix B—Sur Petition for Rehearing Dated May 9,

Pek SAW LET ADA Sa E Lee TRA ea 2a

Appendix C—Amended Judgment Dated April 7, 1986

oad acl nat Cae eee Kaan Ak ahha eRe ees 4a

Appendix D—Opinion of United States Court of Appeals,

Third Circuit Dated April 7, 1986.............. 6a

Appendix E—Opinion of the United States District Court,

ES ae rane 20a

Appendix F—Statutory Provisions Involved.......... 74a

Appendix G—Article from ‘‘The Nation’’ Dated June 7,

ss bag RS Pay tend dag we a acre Salas 8la

Appendix H—Opinion of the Court in Haight, et al. v.

The American Tobacco Co., et al. ............. 89a

Appendix I[—Opinion on Motion to Vacate of Third

Circuit Court of Appeals Filed September 29, 1986

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APPENDIX A—ORDER OF THE SUPREME COURT

DATED JULY 21, 1986

SUPREME COURT OF THE UNITED STATES

No. A-37

ANTONIO CIPOLLONE, INDIVIDUALLY AND AS

EXECUTOR OF THE ESTATE OF ROSE D. CIPOLLONE,

DECEASED,

Applicant,

y.

LIGGETT GROUP, INC., ET AL.

ORDER EXTENDING TIME TO FILE PETITION FOR WRIT

OF CERTIORARI é

UPON CONSIDERATION of the application of counsel for

the applicant, 3

IT IS ORDERED that the time for filing a petition for a

writ of certiorari in the above-entitled case be, and the same is

hereby, extended to and including October 6, 1986.

s/ William J. Brennan, Jr.

Associate Justice of the Supreme

Court of the United States

Dated this 21st

day of July, 1986.

2a

APPENDIX B—SUR PETITION FOR REHEARING DATED

MAY 9, 1986

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 85-5073 and 85-5074

ANTONIO CIPOLLONE, individually and as Executor of the

Estate of Rose D. Cipollone,

V.

LIGGETT GROUP, INC., a Delaware Corporation; PHILIP

MORRIS INCORPORATED, a Virginia Corporation and

LOEW’S THEATRES, INC., a New York Corporation

Liggett Group, Inc., Appellant in 85-5073

Loew’s Theatres, Inc.; Appellant in 85-5074 ©

SUR PETITION FOR REHEARING

Present: ALDISERT, Chief Judge, SEITZ, GIBBONS,

HUNTER, GARTH, HIGGINBOTHAM, SLOVITER,

BECKER, STAPLETON, and MANSMANN, Circuit Judges

The petition for rehearing filed by ANTONIO CIPOLLONE

in the above entitled case having been submitted to the judges

who participated in the decision of this court and to all the other

available circuit judges of the circuit in regular active service, and

no judge who concurred in the decision having asked for rehearing,

and a majority of the circuit judges of the circuit in regular active

service not having voted for rehearing by the court in banc, the

3a

Appendix B

petition for rehearing is denied. Judges Gibbons and Mansmann

would grant the petition for rehearing.

By the Court,

s/ James Hunter III

Judge

Dated: May 9, 1986

4a

APPENDIX C—AMENDED JUDGMENT DATED APRIL

7, 1986

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 85-5073 and 85-5074

ANTONIO CIPOLLONE, individually and as Executor of the

Estate of Rose D. Cipollone,

Ve

LIGGETT GROUP, INC., a Delaware Corporation; PHILIP

MORRIS INCORPORATED, a Virginia Corporation and

LOEW’S THEATRES, INC., a New York Corporation

Liggett Group, Inc., Appellant in 85-5073

Loew’s Theatres, Inc., Appellant in 85-5074

(D.C. Civil No. 83-2864)

ON APPEAL FROM THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY — NEWARK

Present: HUNTER and SLOVITER, Circuit Judges, and GILES,

District Judge*

AMENDED JUDGMENT

This cause came on to be heard on the record from the United

* Hon. James T. Giles, United States District Judge for the Eastern District

of Pennsylvania, sitting by designation.

Sa

Appendix C

States District Court for the District of New Jersey—Newark and

was argued by counsel February 13, 1986.

On consideration whereof, it is now here ordered and

adjudged by this Court that the judgment of the said District

Court, entered September 24, 1984 as amended December 11, 1984

and certified to this Court pursuant to 28 U.S.C. § 1292(b), be,

and the same is hereby reversed to the extent that it granted the

Cipollones’ motion to strike appellants’ preemption defenses. It

is further ordered that the cause be remanded to the said District

Court for further proceedings consistent with the opinion of this

Court. Costs taxed against the appellee in both cases.

ATTEST:

s/ Sally Mrvos

Clerk

April 7, 1986

6a

APPENDIX D—OPINION OF UNITED STATES COURT OF

APPEALS, THIRD CIRCUIT DATED APRIL 7,1986

Antonio CIPOLLONE, individually and as Executor of the Estate

of Rose D. Cipollone

v.

—

LIGGETT GROUP, INC., a Delaware Corporation; Philip Morris

Incorporated, a Virginia Corporation and Loew’s Theatres, Inc.,

a New York Corporation.

Appeal of LIGGETT GROUP, INC.,

Appellant in 85-5073

Appeal of LOEW’S THEATRES, INC.,

Appellant in 85-5074

Nos. 85-5073, 85-5074.

United States Court of Appeals,

Third Circuit

Argued Feb. 13, 1986.

Decided April 7, 1986.

As Amended April 18, 1986.

Rehearing and Rehearing In Banc

Denied May 9, 1986.

Before HUNTER, SLOVITER, Circuit Judges, and GILES,*

District Judge.

* Honorable James T. Giles, United States District Judge for the District

of Eastern Pennsylvania, sitting by designation.

7a

Appendix D

OPINION OF THE COURT

JAMES HUNTER, III, Circuit Judge.

This case, before the court on the district court’s certification

pursuant to 28 U.S.C. § 1292(b) (1982), presents the question

whether the Federal Cigarette Labeling and Advertising Act, 15

U.S.C. §§ 1331-1340 (1982) (the ‘‘Act’’), preempts any or all of

the state common law claims brought by appellee Antonio

Cipollone and his wife Rose in the district court. Several of the

claims in the Cipollones’ compiaint concern the alleged failure

of the defendants, Liggett Group, Inc., Philip Morris

Incorporated, Loews Corporation, Loew’s Theatres, Inc.

(‘‘Lorillard’’), to provide an adequate warning of the dangers

of the cigarettes that they manufactured and sold. Because these

claims implicate the legislatively mandated warning provided in

section 1333 of the Act, the answers of Liggett Group, Philip

Morris, and Lorillard each included a defense based on the

preemptive effect of the Act. The Cipollones responded by filing

a motion to strike the preemption defenses. Lorillard, later joined

by Philip Morris, then moved for judgment on the pleadings

pursuant to Federal Rule Civil Procedure 12(c). Holding that the

Act preempted none of the Cipollones’ claims, the district court

granted the Cipollones’ motion to strike the defenses and denied

the motion for judgment on the pleadings. Cipollone v. Liggett

Group, Inc., 593 F.Supp. 1146, 1171 (D.N.J. 1984). On January

21, 1984, this court granted appellants Lorillard and Liggett Group

permission to appeal.' Because we disagree with the district court’s

1. Liggett Group petitioned for leave to appeal only from the portion of

the district court’s order granting the Cipollones’ motion to strike defenses.

See Joint Appendix at A205. Lorillard sought leave to appeal from the entire

(Cont’d)

8a

Appendix D

conclusion concerning the preemptive effect of the Act, we will

reverse the district court’s grant of the motion to strike and will

remand the case for further proceedings.

I.

A. The Complaint

In their complaint, Rose and Antonio Cipollone alleged that

Mrs. Cipollone developed lung cancer as a result of smoking

cigarettes manufactured and sold by appellants. The complaint,

which was originally filed on August 1, 1983, further averred that

Mrs. Cipollone began smoking in 1942 and developed lung cancer

as a result of her smoking. Mrs. Cipollone died in October 1984,

but her husband has continued prosecuting this action, individually

and as executor of his wife’s estate. Mr. Cipollone is therefore

the sole appellee in this case.

As observed by the district court, the fourteen-count

complaint sets forth claims based on strict liability (Counts 2,

3, and 9), negligence (Counts 4 and 5), breach of warranty (Count

7), and intentional tort (Counts 6 and 8). The Cipollones claimed

that the defendants’ cigarettes were unsafe and defective (Count

2) and that defendants are subject to liability for their failure

to warn of the hazards of cigarette smoking on the basis of

negligence (Count 4) or strict liability (Count 3). In addition,

(Cont’d)

order, which included a denial of its motion for judgment on the pleadings.

See Joint Appendix at A203. Nevertheless, both appellants made clear in their

reply brief and at oral argument that they did not challenge the district court’s

denial of Lorillard’s motion for judgment on the pleadings. See Reply Brief

of Appellants at 3; Transcript of Oral Argument at 7, 18. We will therefore

consider only the district court’s grant of the motion to strike.

9a

Appendix D

the Cipollones asserted, defendants negligently (Count 5) or

intentionally (Count 6) advertised their products in a manner that

neutralized the warnings actually provided, warnings made

meaningless by the addiction created by cigarettes (Count 9).

Finally, the complaint stated that the defendants ignored, failed

to act upon, and conspired to deprive the public of medical and

scientific data reflecting the dangers associated with cigarettes

(Count 8).?

B. The Federal Cigarette and Advertising Labeling Act

The Federal Cigarette and Advertising Act, originally enacted

in 1965, was a response to a growing awareness among members

of federal as well as state government that cigarette smoking posed

a significant health threat to Americans. The original Act required

- the following warning label on cigarette packages: ‘‘Caution:

Cigarette Smoking May Be Hazardous to Your Health.’’ 15 U.S.C.

§ 1333 (1970). Congress changed this warning, by amendment

to the Act in 1969, to the following: ‘‘Warning: The Surgeon

General Has Determined That Cigarette Smoking Is Dangerous

to Your Health.’’ 15 U.S.C. § 1333 (1976).* The Act, as amended

2. Counts 1 and 10 through 14 are not pertinent to this appeal.

3. In 1984, Congress replaced this warning with rotational warnings

providing:

SURGEON GENERAL’S WARNING: Smoking Causes

Lung Cancer, Heart Disease, Emphysema, And May

Complicate Pregnancy.

SURGEON GENERAL’S WARNING: Quitting

Smoking Now Greatly Reduces Serious Risks to Your Heath.

SURGEON GENERAL’S WARNING: Smoking By

Pregnant Women May Result in Fetal Injury, Premature

Birth, and Low Birth Weight.

(Cont’d)

10a

Appendix D

in 1970, expressly stated the policy behind the required warning:

It is the policy of the Congress, and the

purpose of this chapter, to establish a

comprehensive Federal program to deal with

cigarette labeling and advertising with respect to

any relationship between smoking and health,

whereby—

(1) the public may be adequately

informed that cigarette smoking may be

hazardous to health by inclusion of a warning

to that effect on each package of cigarettes;

and

(2) commerce and the national economy

may be (A) protected to the maximum extent

consistent with this declared policy and (B)

not impeded by diverse, nonuniform, and

confusing cigarette labeling and advertising

regulations with respect to any relationship

between smoking and health.

15 U.S.C. § 1331 (1982).*

(Cont’d)

SURGEON GENERAL’S WARNING: Cigarette Smoke

Contains Carbon Monoxide.

15 U.S.C. § 1333(a)(1) (Supp. II. 1984). The 1984 warning, however, has limited

relevance here because the complaint contains no allegation that Mrs. Cipollone

smoked cigarettes manufactured and sold by any defendant after 1981.

4. Congress amended paragraph one of section 1331 in 1984 by adding

a reference to warning notices in cigarette advertisements. Paragraph one now

(Cont’d)

lla

Appendix D

The Act also contains a preemption provision, which provides

that

(a) No statement relating to smoking and

health, other than the statement required by section

1333 of this title, shall be required on any cigarette

package.

(b) No 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 the provisions of this chapter.

15 U.S.C. § 1334 (1982). Confronted with this provision, the

district court did not question that the Act prohibits state

legislatures from requiring a warning on cigarette packages that

alters that provided in section 1333. Nevertheless, after a

comprehensive analysis of the Act, the court concluded that section

1334 does not preempt state common law claims such as those

that the Cipollones have asserted.

II.

A. Preemption Principles

The United States Supreme Court has identified several

principles for ascertaining congressional intent to preempt state

(Cont’d)

provides: ‘‘(1) the public may be adequately informed about any adverse health

effects of cigarette smoking by inclusion of warning notices on each package

of cigarettes and in each advertisement of cigarettes. . . ’’ 15 U.S.C. § 1331(1)

(Supp. II 1984).

12a

Appendix D

authority. To begin, Congress may preempt state law by express

statement. Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct.

1305, 1309, 51 L.Ed.2d 604 (1977). Without the aid of express

language, a court may find intent to preempt in two general ways.

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104 S.Ct. 615,

621, 78 L.Ed.2d 443 (1984). First, a court may determine that

Congress intended ‘‘to occupy a field’’ in a given area

because ‘‘[t]he scheme of federal regulation may

be so pervasive as to make reasonable the inference

that Congress left no room for the States to

supplement it,’’ because ‘‘the Act of Congress may

touch a field in which the federal interest is so

dominant that the federal system will be assumed

to preclude enforcement of state laws on the same

subject,’’ or because ‘‘the object sought to be

obtained by the federal law and the character of

obligations imposed by it may reveal the same

purpose.’’

Fidelity Federal Savings & Loan Association v. De la Cuesta, 458

U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982)

(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230,

67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)). Second, in those

instances where Congress has not wholly superceded state

regulation in a specific area, state law is preempted ‘‘to the extent

that it actually conflicts with federal law.’’ Pacific Gas & Electric

Co. v. Energy Resources Conservation & Development

Commission, 461 U.S. 190, 204, 103 S.Ct. 1713, 1722, 75 L.Ed.2d

752 (1982). The Court has stated that such conflict arises when

‘*compliance with both federal and state regulations is a physical

impossibility,’’ Florida Lime & Avocado Growers, Inc. v. Paul,

373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217-18, 10 L.Ed.2d 248

13a

Appendix D

(1963), or where state law ‘‘stands as an obstacle to the

accomplishment and execution of the full purposes and objectives

of Congress.’’ Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct.

399, 404, 85 L.Ed. 581 (1941). Finally, in applying these principles,

a court must be mindful of the overriding presumption that

**Congress did not intend to displace state law.’’ Maryland v.

Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129, 68 L.Ed.2d

576 (1981); see also Rice, 331 U.S. at 230, 67 S.Ct. at 1152.

B. Express Preemption

In applying these principles to the statutory scheme at issue

here, we first express our agreement with the district court’s

conclusion that section 1334 does not provide for express

preemption of the Cipollones’ state common law claims. See

Cipollone, 593 F.Supp. at 1154-55; accord Roysdon v. R.J.

Reynolds Tobacco Co.,623 F.Supp. 1189, 1190 (E.D.Tenn. 1985);

Roysdon v. R.J. Reynolds, No. 3-84-606, slip op. at 2 (E.D.Tenn.

Dec. 11, 1985). Because we are constrained by the presumption

against preemption, we cannot say that the language of section

1334 clearly encompasses state common law. We find support

for this determination in Congress’s failure to include state

common law explicitly within section 1334, as it has in numerous

other statutes.’ Indeed, in the absence of a preemption provision

5. Examples of statutes that include a preemption provision explicitly

encompassing state common law include 12 U.S.C. §§ 1715z-17(d), 1715z-18(e)

(Supp. II 1984) (Domestic Housing and International Recovery and Financial

Stability Act); 17 U.S.C. § 301(a) (Copyright Act of 1976); and 29 U.S.C.

§ 1144(a), (c)(1) (1982) (Employee Retirement Income Security Act of 1974).

It should be noted that just as Congress could have included a reference

to preemption of state common law in section 1334, it also could have included

(Cont’d)

l4a

Appendix D

encompassing state common law, the Supreme Court has relied

generaily on principles of implied preemption in evaluating whether

a statutory scheme preempts state common law. See, e.g.,

Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104 S.Ct. 615,

78 L.Ed.2d 443 (1984); Chicago & North Western Transportation

Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 101 S.Ct. 1124, 67

L.Ed.2d 258 (1981). Accordingly, we turn to examining whether

congressional intent to preempt the Cipollones’ claims may be

inferred under the two general principles of implied preemption.

C. Implied Preemption

In pressing their implied preemption arguments in this appeal,

each side relies extensively on the legislative history of the Act.

As is often the case with legislative history, both sides have

succeeded in gleaning passages that bolster their contrary positions.

Although we find the legislative history to the Act informative,

no materials have come to our attention that we deem wholly

dispositive of the issue before us. Even more important, we find

the language of the statute itself a sufficiently clear expression

of congressional intent without resort to the Act’s legislative

history. See Blum v. Stenson, 465 U.S. 886, 104S.Ct. 1541, 1548,

79 L.Ed.2d 891 (1984); Piper v. Chris-Craft Industries, Inc., 430

U.S. 1, 26, 97 S.Ct. 926, 941, 51 L.Ed.2d 124 (1977).

Under the principles of implied preemption, we must first

(Cont’d)

a ‘‘savings clause’’ explicitly preserving the continued vitality of state common

law, such as that in the Occupational Safety and Health Act of 1970, 29 U.S.C.

§ 653(b)(4) (1982). Thus, lack of reference to preemption of state common law

in section 1334 has significance only because of the presumption against

preemption.

pet etek

1Sa

Appendix D

determine whether Congress intended ‘‘to occupy the field’’

relating to cigarettes and health to the exclusion of state law

product liability actions such as the Cipollones. Our examination

of the Act leads us to agree with the district court’s statements

that ‘‘Congress . . . intended to occupy a field’’ and ‘‘indicated

this intent as clearly as it knew how.’’ Cipollone, 593 F.Supp.

at 1164 (emphasis in original). Not only did Congress use sweeping

language in describing the preemptive effect of the Act in section

1334, but it expressed its desire in section 1331 to establish ‘‘a

comprehensive Federal program”’ in order to avoid ‘‘diverse, non-

uniform, and confusing cigarette labeling and advertising

regulations with respect to any relationship between smoking and

health.’’ See Palmer v. Liggett & Myers Tobacco, Inc., 635

F.Supp. 392 (D.Mass. 1984) (Congress has preempted field with

respect to cigarette labeling).

In determining the scope of this field, we observe that the

Cipollones’ tort action concerns rights and remedies traditionally

defined solely by state law. We therefore must adopt a restrained

view in evaluating whether Congress intended to supercede entirely

private rights of action such as those at issue here. See Rice, 331

U.S. at 230, 67 S.Ct. at 1152; Cipollone, 593 F.Supp. at 1165-66;

see also Silkwood, 104 S.Ct. at 623-24; Florida Avocado Growers,

373 U.S. at 143-44, 83 S.Ct. at 1211. In light of this constraint,

we cannot say that the scheme created by the Act is ‘‘so pervasive’”’ _

or the federal interest involved ‘‘so dominant’’ as to eradicate

all of the Cipollones’ claims. Nor are we persuaded that the object

of the Act and the character of obligations imposed by it reveal

a purpose to exert exclusive control over every aspect of the

relationship between cigaretts and health. See Banzhaf v. F.C.C..,

405 F.2d 1082, 1089-91 (D.C.Cir. 1968), cert. denied, 396 U.S.

842, 90 S.Ct. 50, 24 L.Ed.2d 93 (1969); see also Southern Railway

Co. v. Railroad Commission of Indiana, 236 U.S. 439, 446-48,

l6a

Appendix D

35 S.Ct. 304, 305-06, 59 L.Ed. 661 (1915). Thus, we look to the

extent to which the Cipollones’ state law claims ‘‘actually conflict’’

with the Act to ascertain whether they are preempted.

The test enunciated by this court for addressing a potential

conflict between state and federal law requires us ‘‘to examine

first the purposes of the federal law and second the effect of the

operation of the state law on these purposes.’’ Finberg v. Sullivan,

634 F.2d 50, 63 (3d Cir. 1980) (in banc) (citing Perez v. Campbell,

402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971)). As mentioned

above, Congress has provided us with an explicit statement of

the Act’s purposes in section 1331. That statement reveals that

the Act represents a carefully drawn balance between the purposes

of warning the public of the hazards of cigarette smoking and

protecting the interests of national economy. See Banzhaf, 405

F.2d at 1090. Moreover, the preemption provision of section 1334,

read together with section 1331, makes clear Congress’s

determination that this balance would be upset by either a

requirement of a warning other than that prescribed in section

1333 or a requirement or prohibition based on smoking and health

‘‘with respect to the advertising or promotion”’ of cigarettes. See

15 U.S.C. § 1334.

Having identified the purposes of the Act, we now must

evaluate the effect of the operation of state common law claims

on these purposes. In so doing, we accept the appellants’ assertion

that the duties imposed through state common law damage actions

have the effect of requirements that are capable of creating ‘‘an

obstacle to the accomplishment and execution of the full purposes

and objectives of Congress.’’ See Hines, 312 U.S. at 67, 61 S.Ct.

at 404; see also Dawson v. Chrysler Corp., 630 F.2d 950, 962

(3d Cir. 1980) (liability under common law has the effect of

imposing requirements), cert. denied, 450 U.S. 959, 101 S.Ct.

17a

Appendix D

1418, 67 L.Ed.2d 383 (1981). As the appellants point out, several

Supreme Court opinions reflect recognition of the regulatory effect

of state law damage claims and their potential for frustrating

congressional objectives. See, e.g., Fidelity, 458 U.S. at 156-59,

102 S.Ct. at 3024-25; Chicago & North Western Transportation

Co., 450 U.S. at 324-25, 101 S.Ct. at 1133-34; San Diego Building

Trades Council v. Garmon, 359 U.S. 236, 247, 79 S.Ct. 773, 780,

3 L.Ed.2d 775 (1959).* Applying this principle, we conclude that

claims relating to smoking and health that result in liability for

noncompliance with warning, advertisement, and promotion

obligations other than those prescribed in the Act have the effect

of tipping the Act’s balance of purposes and therefore actually

conflict with the Act.

Based on the foregoing, we hoid that the Act preempts those

state law damage actions relating to smoking and health that

chailenge either the adequacy of the warning on cigarette packages’

or the propriety of a party’s actions with respect to the advertising

and promotion of cigarettes. We further hold that where the

success of a state law damage claim necessarily depends on the

assertion that a party bore the duty to provide a warning to

consumers in addition to the warning Congress has required on

cigarette packages, such claims are preempted as conflicting with

the Act.

6. The district court noted that Garmon involved claims based on state

statutes, rather than state common iaw. This distinction does not undermine

the significance of Garmon. As the appellants argue, the central inquiry should

be whether a state statute or common law rule providing for civil liability is

regulatory in its effect. The Garmon Court ruled that a claim for compensation

has a regulatory nature and therefore may be preempted by a federal regulatory

scheme. Garmon, 359 U.S. at 247-48, 79 S.Ct. at 780-81.

7. Accord Roysdon, at 1190-91 (1985); Roysdon, slip op. at 3 (Dec. 11,

1985).

18a

Appendix D

As appellants’ counsel conceded at oral argument, it is not

necessary at this stage of the litigation for us to identify which

of the Cipollones’ claims are preempted by the Act. Under 28.

U.S.C. § 1292(b), we are obliged to address the order that was

certified rather than the controlling question of law framed by

the district court. Johnson v. Alldredge, 488 F.2d 820, 822-23

(3d Cir. 1973), cert. denied, 419 U.S. 882, 95 S.Ct. 148, 42 L.Ed.2d

122 (1974); see, e.g., Murphy v. Heppenstail Co., 635 F.2d 233,

235 n. 1 (3d Cir. 1980), cert. denied, 454 U.S. 1142, 102 S.Ct.

999, 71 L.Ed.2d 293 (1982). The district court’s statement of the

controlling issue appears to call for a definitive ruling on each

of the Cipollones’ claims. Nevertheless, we need only decide

whether the district court’s ruling striking appellants’ preemption

defenses should be affirmed or reversed.’ Two principles counsel

8. Section 1292(b) provides:

When a district judge, in making in a civil action an order

not otherwise appealable under this section, shall be of the

opinion that such order involves a controlling question of —

law as to which there is substantial ground for difference of

opinion and that an immediate appeal from the order may

materially advance the ultimate termination of the litigation,

he shall so state in writing in such order. The Court of Appeals

which would have jurisdiction of an appeal of such action

may thereupon, in its discretion, permit an appeal to be taken

from such order, if application is made to it within ten days

after the entry of the order: Provided, however, That

application for an appeal hereunder shall not stay proceedings

in the district court unless the district judge or the Court of

Appeals or a judge thereof shall so order.

9. In Johnson, we stated that section 1292(b) ‘‘does not speak of the court

of appeals deciding a question certified by the disirict court. . . Since under

the clear terms of section 1292(b), we are called upon not to answer the question

certified but to decide an appeal, we do not find ourselves bound by the District

Judge’s statement of the issue.’’ 488 F.2d at 822-23.

19a

Appendix D

us to take such an approach. First, a court should avoid a holding

of preemption that is premised on a merely potential conflict

between state and federal law. See Rice v. Norman Williams Co..,

458 U.S. 654, 659, 102 S.Ct. 3294, 3298, 73 L.Ed.2d 1042 (1982).

In addition, a court should not grant a motion to strike a defense

unless the insufficiency of the defense is ‘‘clearly apparent.’’ See

May Department Stores Co. v. First Hartford Corp., 435 F.Supp.

849, 855 (D.Conn. 1977); Wright & Miller, Federal Practice and

Procedure § 1381, at 802 (1969). The underpinning of this principle

rests on a concern that a court should restrain from evaluating

the merits of a defense where, as here, the factual background

for a case is largely undeveloped. See id. at 800-02.

Mindful of both of these principles, we deem it appropriate

to reverse the order of the district court and remand the case for

further development of the claims and theories of the parties.

The district court will then be in a position to make informed

and definitive rulings on which claims then in contention are

preempted.

III.

For the foregoing reasons, we will reverse the order of the

district court to the extent that it granted the Cipolliones’ motion

to strike appellants’ preemption defenses. We will also remand

the case for further proceedings consistent with this opinion.

20a

APPENDIX E—OPINION OF THE UNITED STATES

DISTRICT COURT, DISTRICT OF NEW JERSEY

Rose CIPOLLONE and Antonio Cipollone,

Plaintiffs,

Vv.

LIGGETT GROUP, INC., Philip Morris Incorporated, and

Loew’s Theatres, Inc.,

Defendants.

Civ. A. No. 83-2864.

United States District Court,

D. New Jersey.

Sept. 20, 1984.

OPINION

SAROKIN, District Judge.

INTRODUCTION

Despite the growing evidence that cigarette smoking is indeed

hazardous to one’s health, as recognized in the warning mandated

by Congress, a legislative decision has been reached not to prohibit

it. Although that decision may be due in some measure to the

ongoing medical dispute as to the risks involved, it is predicated

to a large extent on economic considerations and the apparent

willingness of millions of persons to continue smoking despite

the known and unknown risks. Congress, in order to avoid another

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Appendix E

Prohibition, has decided to permit the manufacture and sale of

cigarettes to continue, but has attempted to assuage its critics by

regulating the industry and requiring it to affix a warning to each

package sold.

The legislative history of the Act here involved reflects a

candid concern for the economy of the entire country if cigarette

manufacturing were curtailed or eliminated. One would hope that

those fiscal considerations were weighed against the costs of illness

and death caused by cigarette smoking as well as the moral

responsibility of protecting the young and future generations who

have not yet begun to smoke.

In any event, that branch of the government which is charged

with the responsibility of protecting the health and welfare of

our society has determined that the cigarette industry shall be

permitted to flourish after consideration of the consequences of

permitting it to do so. This case presents the issue of whether

cigarette manufacturers can be subjected to tort liability, if they

have complied with the federal warning requirement: ‘‘Warning:

The Surgeon General Has Determined That Cigarette Smoking

Is Dangerous to Your Health.’’ In effect, the cigarette industry

argues that compliance immunizes it from liability to anyone who

has chosen to smoke cigarettes notwithstanding the warning, that

the federal legislation has created an irrebutable presumption that

the risk of injury has been assumed by the consumer. This court

rejects that contention.

The clear purpose of the federal legislation was to establish

a uniform warning which would prevail throughout the country.

By so doing, cigarette manufacturers would not be subjected to

varying requirements from state to state. However, the existence

of the present federally mandated warning does not prevent an

22a

Appendix E

individual from claiming that the risks of smoking are greater

than the warning indicates, and that therefore such warning is

inadequate. The court recognizes that it will be extremely difficult

for a plaintiff to prove that the present warning is inadequate

to inform of the dangers, whatever they may be. However, the

difficulty of proof cannot preclude the opportunity to be heard,

and affording that opportunity will not undermine the purposes

of the Act.

Defendants’ argument that the statute was intended to

foreclose such claims is not borne out by either the language or

legislative history of the Act. Simply stated, defendants contend

that a cigarette manufacturer who utilizes the federal warning

cannot be held liable in tort. Just as simply, that statement could °

have been incorporated into the statute, if that were the intention,

but it was not. Before this court or any other court so cavalierly

rejects fundamental principles of the common law, it should

demand a much more definitive statement from Congress.

The information regarding disease from smoking is growing.

Medicai and scientific opinion is divided. The impact on the

economy is a factor considered by Congress and may well have

caused a compromise in the content of the warning. Even

Congress, which once declared that cigarette smoking ‘‘may be’’

hazardous, now finds that it ‘‘is’’ hazardous. This court believes

that an individual injured while the warning was that cigarette

smoking ‘‘may be hazardous to your health’’ would have been

able to prevail if he or she was able to prove that ‘“‘cigarette

smoking is [was] hazardous to your health.’’ Today even some

greater warning may be appropriate, and variations are now being

considered. In any event, no one should be deprived by virtue

of congressional compromise of the opportunity of proving that

contention absent a clear showing that Congress intended that

they be so precluded.

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Appendix E

There are further claims asserted by plaintiff which likewise

deserve their day in court. Thus, even if utilizing the federal

warning relieves cigarette manufacturers of liability for failure

to warn, the question remains whether they can be held liable

for collateral efforts to neutralize or negate the effects of the

warning. Efforts to convince the public that the risks do not exist

or that they are minimal or unsupported by medical or scientific

data may in and of themselves give rise to a cause of action; indeed

they may even constitute a violation of the very statute which

defendants brandish as a shield. Whether the present federally

mandated warning is adequate and whether defendants have

wrongfully attempted to neutralize that warning are thus issues

which survive the federal statute and are not preempted by it.

Certainly, as in all such cases, the federal standard is strong

evidence of the adequacy of the warning, but it is not conclusive.

The federal government regulates many industries, not least of

which is the ethical drug industry. The fact that the safety, efficacy,

literature and warnings pertaining to drugs are reviewed and

approved by the government pursuant to the authority of Congress

has never relieved drug manufacturers of liability in tort if the

risks exceeded the warnings given. These cases, among others,

recognize that even the federal government is fallible. The fact

that it finds a product safe or a warning adequate does not

necessarily make it so. The private citizen should not be deprived

of the opportunity to establish such fallibility and vindicate his

or her rights to recover for injuries sustained if supported by

competent proofs.

THE COMPLAINT

Plaintiff Rose Cipollone is dying of lung cancer. She brings

this products liability action against three cigarette companies,

24a

Appendix E

alleging that they are responsible for her current state. Her

fourteen-count complaint sounds in strict liability (Counts 2, 3

and 9), negligence (Counts 4 and 5), intentional tort (Counts 6

and 8) and breach of warranty (Count 7). She claims that

defendants have produced an unsafe and defective product (Counts

2 and 7), the risk of which outweighs its utility (Count 2), but

have negligently (Count 4) or intentionally (Count 8) failed

adequately to warn consumers of the hazards associated with ~

cigarette smoking. See also Count 3 (strict liability for failure

to warn). Indeed, she contends, defendants have negligently (Count

5) or intentionally (Count 6) advertised their products so as to

neutralize and render ineffective those warnings actually given,

warnings which are made meaningless in any event by the addicitive

qualities of cigarettes (Count 9).'

Defendants have each answered, asserting as an affirmative

defense, inter alia, that plaintiff’s claims are preempted by the

Federal Cigarette Labeling Act, as amended by the Public Health

Cigarette Smoking Act, 15 U.S.C. § 1331 et seq. Plaintiff has

moved to strike such defense. With the cross-motion of defendant

Loew’s Theatres, Inc. for judgment on the pleadings, the parties

are now before the court on this difficult issue.

The Act

The Federal Cigarette Labeling and Advertising Act

Originally enacted in 1965, the Federal Cigarette Labeling

and Advertising Act (‘‘the Act’’) followed a report of the Surgeon

1. Counts 10 through 13 contain allegations concerning the identities of

various defendants. Count 14 comprises plaintiff Antonio Cipollone’s claim

for ‘‘loss of comfort, companionship and consortium. . .’’

——_"

25a

Appendix E

General of the United States concluding that cigarette smoking

comprised a significant health hazard to Americans, warranting

remedial action by Congress. As amended in 1970, the Act sets

forth the following statement of policy:

It is the policy of the Congress, and the purpose

of this chapter, to establish a comprehensive

federal program to deal with cigarette labeling and

advertising with respect to any relaticnship between

smoking and health, whereby—

(1) the public may be adequately informed that

cigarette smoking may be hazardous to health by

inclusion of a warning to that effect on each

package of cigarettes; and

(2) commerce and the national economy may be

(A) protected to the maximum extent consistent

with this aeclared policy and (B) not impeded by

diverse, nonuniform, and confusing cigarette —

labeling and advertising regulations with respect

to any relationship between smoking and health.

15 U.S.C. § 1331. In order to effectuate these purposes, Congress

provided that

It shall be unlawful for any person to manufacture,

import, or package for sale or distribution within

the United States any cigarettes the package of

which fails to bear the following statement:

‘*Warning: The Surgeon General Has Determined

That Cigarette Smoking Is Dangerous to Your

Health.’’ Such statement shall be located in a

26a

Appendix E

conspicuous place on every cigarette package, and |

shall appear in conspicuous and legible type in |

contrast by typograph, layout, or color with other

printed matter on the package.

15 U.S.C. § 1333. The Federal Trade Commission was given the

authority to regulate cigarette advertising, 15 U.S.C. §§ 1335-36,

and the district courts jurisdiction to enjoin violations of the Act.

15 U.S.C. § 1339. A minimal criminal penalty was also provided.

15 U.S.C. § 1338.

Congress included within the Act a provision regarding

preemption, and it is this provision which is now before the court |

for interpretation and application. Congress stated: |

(a) No statement relating to smoking and health,

other than the statement required by section 1333

of this title, shall be required on any cigarette

package.

(b) No 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 labelled

in conformity with the provisions of this chapter.

15 U.S.C. § 1334. Plaintiff concedes that this section prohibits

states from regulating cigarette packaging, and cigarette advertising

by, for example, requiring a warning other than that set forth

in the Act. She argues, however, that this provision does not

preempt state common law claims such as those asserted by

plaintiff.

27a

Appendix E

Preemption

‘*The Constitution, and the Laws of the United States which

shall be made in Pursuance thereof . . . shall be the supreme Law

of the Land; and the Judges in every State shall be bound thereby,

any Thing in the Constitution or Laws of any State to the Contrary

notwithstanding.’’ U.S. Const., Art. VI, cl. 2. From this simple

mandate springs the doctrine of preemption, as first stated by

Chief Justice Marshall in Gibbons v. Ogden, 22 U.S. (9 Wheat.)

1, 6 L.Ed. 23 (1824):

The nullity of any act, inconsistent with the

Constitution, is produced by the declaration, that

the Constitution is the supreme law. The

appropriate application of that part of the clause

which confers the same supremacy on laws and

treaties, is to such acts of the state legislatures as

do not transcend their powers, but though enacted

in the execution of acknowledged state powers,

interfere with, or are contrary to, the laws of

Congress, made in pursuance of the Constitution,

or some treaty made under the authority of the

United States. In every case, the act of Congress,

or the treaty, is supreme; and the law of the state

though enacted in the exercise of powers not

controverted, must yield to it.

22 U.S. at 210-11. See also Fidelity Federal Savings & Loan Ass’n.

v. De La Cuesta, 458 U.S. 141, 152, 102 S.Ct. 3014, 3022, 73

L.Ed.2d 664 (1982) (preemption doctrine has its roots in the

Supremacy Clause of the Constitution).

From Gibbons v. Ogden on, courts, have struggled with the

28a

Appendix E

question of whether federal law preempts state action. The problem

is ‘‘largely one of statutory construction,’’ and therefore ‘‘cannot

be reduced to general formulas.’’ L. Tribe, American

Constitutional Law at 377 (1978). However, certain principles are

clear. First, federal law may expressly preempt state law. Pacific

Gas & Electric Co. v. State Energy Resources Conservation &

Development Commission, 461 U.S. 190, 103 S.Ct. 1713, 1722,

75 L.Ed.2d 752 (1983), citing Jones v. Rath Packing Co., 430

U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). Absent

express preemption, federal law may nonetheless have an implied

preemptive effect if Congres so intended, and indicated such intent

by ‘‘occupying the field’’ in a particular area. Thus

Congress’ intent to supercede state law altogether

may be found from a “‘scheme of federal regulation

SO pervasive as to make reasonable the inference

that Congress left no room to supplement it,’’

“*because the Act of Congress may touch a field

in which the federal interest is so dominant that

the federal system will be assumed to preclude

enforcement of state laws on the same subject,’’

or because ‘‘the objects sought to be obtained by

the federal law and the character of obligations

imposed by it may reveal the same purpose.”’

Fidelity Federal Savings & Loan Ass’n v. De La Cuesta, supra,

458 U.S. at 153, 102 S.Ct. at 3022; Rice v. Santa Fe Elevator

Corp., 331-U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447

(1947); cited in Pacific Gas & Electric Co. v. State Energy

Resources Conservation & Development Commission, supra, 103

S.Ct. at 1722. And, even if Congress has not entirely displaced

state regulation over the matter in question, state law may

nonetheless be preempted to the extent that it actually conflicts

29a

Appendix E

with the federal law. Such conflict occurs where ‘‘compliance with

both federal and state regulations is a physical possibility,’ Florida

Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43,

83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963), or where state law

‘“‘stands as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.’’ Hines v. Davidowitz,

312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). See

generally Silkwood v. Kerr-McGee Corp., __. U.S. ___., 104

S.Ct. 615, 621, 78 L.Ed.2d 443 (1984); Pacific Gas & Electric Co.,

supra, 103 S.Ct. at 1722; Fidelity Federal Saving & Loan Ass’n,

supra, 458 US. at 153, 102 S.Ct. at 3022. Together, these principles

seek to accommodate the competing interests engendered by

appropriate national regulation and the legitimate exercise of state

power. Underlying any discussion of preemption, therefore, is the

structural foundation of a federal system, in which state and federal

regulation must co-exist. The preservation of that system requires

a presumption “‘that Congress did not intend to displace state law’’,

Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129,

68 L.Ed.2d 576 (1981), quoting Rice v. Sante Fe Elevator Corp.,

supra, 331 U.S. at 230, 67 S.Ct. at 1152; ‘“‘preemption of state

law by federal statute or regulation is not favored ‘in the absence

of persuasiv2 reasons—either that the nature of the regulated subject

matter perrnits no other conclusion, or that the Congress has

unmistakably so ordained.’ ’’ Commonwealth Edison Co. v.

Montana, 453 U.S. 609, 634, 101 S.Ct. 2946, 2962, 69 L.Ed.2d

884 (1981), quoting Chicago & North Western Transp. Co. v. Kalo

Brick & Tile Co., 450 U.S. 311, 317, 101 S.Ct. 1124, 1130, 67

L.Ed.2d 258 (1981); Florida Lime & Avocado Growers, supra, 373

U.S. at 142, 83 S.Ct. at 1217. Moreover, state law should be

suspended ‘‘only to the extent of actual conflict with the scheme

of federal regulation.’’ Jn re Quanta Resources Corp., 739 F.2d

912 at 915 (3d Cir. 1984), citing Stellwagen v. Clum, 245 U.S.

605, 613, 38 S.Ct. 215, 217, 62 L.Ed. 507 (1918).

30a

Appendix E

Here, the preemption issues arises in the context of a claim

that the Federal Cigarette Labeling Act preempts the state common

law claims asserted by plaintiff. There is no question, as defendants

argue, that common law is as susceptible of preemption as are

state statutes or regulations for, as the Supreme Court has stated,

regulation can be as effectively exerted through

an award of damages as through some form of

preventive relief. The obligation to pay

compensation can be, indeed is designed to be a

potent method of governing conduct and

controlling policy. Even the States’ salutary effort

to redress private wrongs or grant compensation

for past harm cannot be exerted to regulate

activities that are potentially subject to the exclusive

federal regulatory scheme.

San Diego Building Trades Council v. Garmon, 359 U.S. 236,

247, 79 S.Ct. 773, 780, 3 L.Ed.2d 775 (1959).? See also Sperry

v. Florida, 373 U.S. 379, 403, 83 S.Ct. 1322, 1335, 10 L.Ed.2d

428 (1963) (‘‘The authority of Congress is no less when the state

power it displaces would otherwise have been exercised by the

state judiciary rather than by the state legislature.’’) Hence, courts

have held that federal statutes have preempted state common law

claims in many areas. See e.g., Arkansas Louisiana Gas Co. v.

Hall, 453 U.S. 571, 582-84, 101 S.Ct. 2925, 2932-33, 69 L.Ed.2d

856 (1981) (Natural Gas Act preempts calculation of damages

under state common law of contract); Kalo Brick, supra, 450 U.S.

2. It should be noted that the Garmon case did not involve the preemption

of state common law claims, since the state courts had relied on various state

statutory provisions in reaching the applicable decisions. 359 U.S. at 239, 79

S.Ct. at 776.

3la

Appendix E

at 317-32, 101 S.Ct. at 1130-37 (Interstate Commerce Act

regulation of abandonment of service preempts state tort claim);

Old Dominion Branch No. 496, National Association of Letter

Carriers v. Austin, 418 U.S. 264, 270-73, 94 S.Ct. 2770, 2774-75,

41 L.Ed.2d 745 (1974) (NLRA preempts certain state libel claims);

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229-33, 84

S.Ct. 784, 787-89, 11 L.Ed.2d 661 (1964) (federal patent and

copyright laws preempt state actions for unfair competition, at

least in part); Hodges v. Atchison, Topeka & Santa Fe Railway

Co., 728 F.2d 414, 416-17 (10th Cir. 1984) (Railway Labor Act

preempts state common law claim for wrongful discharge); Harper

& Row Publishers, Inc. v. Nation Enterprises, 723 F.2d 195,

199-201 (2d Cir. 1983) (Copyright Act preempts state common

law claims for conversion and interference with contract); Howard

v. Uniroyal, Inc., 719 F.2d 1552 (11th Cir. 1983) (Rehabilitation

Act of 1973 preempts state contract claim); Viestenz v. Fleming

Companies, Inc., 681 F.2d 699, 701-04 (10th Cir.), cert. denied,

459 U.S. 972, 103 S.Ct. 303, 74 L.Ed.2d 284 (1982) (National

Labor Relations Act preempts state actions for wrongful discharge '

and intentional infliction of emotional distress arising out of labor

context); Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d

691, 694 (9th Cir. 1978) (National Labor Relations Act preempts

state claims of defamation and business disparagement); City of

Chicago v. General Motors Corp., 467 F.2d 1262, 1265 (7th Cir.

1972 (National Emissions Standard Act preempts state products

liability based upon automobile pollution); Zittrouer v. Uarco

Inc. Group Benefit Plan, 582 F.Supp. 1471, 1477 (N.D. Ga. 1984)

(ERISA preempts state tort claim for bad faith handling of benefits

claim); Delisi v. United Parcel Service, Inc., 580 F.Supp. 1572 -

(ERISA and NLRA preempt state common law claim for wrongful

discharge); Salcedo v. Norfolk & Western Railway Co., 572

F.Supp. 286, 288 (E.D. Mich. 1982) (Railway Labor Act preempts

state law claims for emotional distress and intentional interference

32a

Appendix E

with contractual relations); Videotronics, Inc. v. Bend Electronics,

564 F.Supp. 1471, 1476-77 (D.Nev. 1983) (Copyright Act preempts

state common law claims of misappropriation and trade secret

violations); Shaw v. International Ass’n of Machinists & Aerospace

Workers Pension Fund, 563 F.Supp. 653, 658-59 (C.D. Calif.

1983) (ERISA preempts certain state common law claims for

breach of contract), citing Lafferty v. Solar Turbines International,

666 F.2d 408 (9th Cir. 1982); Huth v. B.P. Oil, Inc., 555 F.Supp.

191, 194 (D.Md. 1983) (Petroleum Marketing Practices Act

preempts conflicting state common law claims), citing, e.g., Meyer

v. Amerada Hess Corp., 541 F.Supp. 321, 332 (D.N.J. 1982)

(same); State of North Dakota v. Merchants National Bank and

Trust Co., 466 F.Supp. 953 (D.N.D. 1979) (federal banking law

preempts state common law of unfair competition). See also City

of Milwaukee v. Illinois, 451 U.S. 304, 101 S.Ct. 1784, 68 L.Ed.2d

114 (1981) (federal statute preempts federal common law).

However, there remains a presumption against the preemption

of state common law, in particular, since such law is often the

result of many generations of judicial development, see, e.z.,

Iconco v. Jensen Construction Co., 622 F.2d 1291, 1296 (8th Cir.

1980), and, more importantly, concerns areas ‘‘traditionally

regarded as within the scope of state superintendence.’’ Florida

Avocado Growers v. Paul, supra, 373 U.S. at 144, 83 S.Ct. at

1218. See also Pacific Gas & Electric Co., supra, 103 S.Ct. at

1723, quoting Rice v. Santa Fe Elevator Corp., supra, 331i U.S.

at 230, 67 S.Ct. at 1152 (‘‘Congress legislated here in a field which

the States have traditionally occupied . . . so we start with the

assumption that the historic police powers of the States were not

to be superseded by the Federal Act unless that was the clear and

manifest purpose of Congress.’’); Milwaukee v. Illinois, supra,

451 U.S. at 316-17, 101 S.Ct. at 1792, citing Jones v. Rath Packing

Co., 430 U.S. at 525, 97 S.Ct. at 1309. See generally Tribe, supra,

§ 6-25 at 385-86. Torts, such as those alleged here, are precisely

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Appendix E

the sort of legal action that falls within the scope of a state’s

historical and prototypical powers. See, e.g., Ferebee v. Chevron

Chemical Co., 736 F.2d 1529, 1542 (D.C. Cir. 1984); Feldman

v. Lederle Laboratories, 97 N.J. 429, 462, 479 A.2d 374 (Sup.Ct.

of N.J. 1984).’ The presumption against preemption of these causes

of action is strengthened where preemption would leave a putative

plaintiff without adequate remedy for violation of his or her state

created rights. See Silkwood v. Kerr-McGee Corp., supra, 104

S.Ct. at 626. See also id. at 629 (‘‘it is inconceivable that Congress

3. The cases involving labor law are instructive on this point. Generally,

labor relations are a federal concern and, state laws conflicting with the NLRA

are preempted. See, e.g., San Diego Building Trades Council v. Garmon, supra,

359 U.S. at 239-45, 79 S.Ct. at 776-79. However, the Supreme Court has carefully

tailored the resulting preemption doctrine to take cognizance of the activities

in which states have a ‘“‘compelling . . .interest,’’ id. at 247, 79 S.Ct. at 781,

or which concern matters ‘‘so deeply rooted in local feeling or responsibility

that, in the absence of compelling Congressional direction, we could not infer

that Congress had deprived the States of the power to act.”” /d. at 244, 79 S.Ct.

at 779. Hence, for example, the Court has carved out exceptions to the. general

preemption doctrine for ‘‘conduct marked by violence and imminent threats

to the public order,”’ id. at 247, 79 S.Ct. at 781 (citing cases) for certain

defamation actions, Old Dominion Branch No. 496, National Ass’n of Letter

Carriers, supra, 418 U.S. at 271-73, 94 S.Ct. 2770 at 2774-75, 41 L.Ed.2d 745,

citing Linn v. Plant Guard Workers, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d

582 (1966) (allowing state defamation actions to the extent that published

statements are made with knowledge of their falsity or reckless disregard for

the truth), for actions for intentional infliction of emotion distress, Farmer v.

United Brotherhood of Carpenters & Joiners of America, Local 25, 430 U.S.

290, 97 S.Ct. 1056, 51 L.Ed.2d 338 (1977), and for trespass actions. Sears,

Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S.

180, 98 S.Ct. 1745, 56 L.Ed.2d 209 (1978). In each of these cases, the Court

found the conduct addressed by state law to be beyond the scope of the NLRA,

and thus of only peripheral concern to federal purposes, to be of a deeply felt

concern of the states, and to pose little risk of state interference with the Act.

See e.g., Farmer, supra, 430 U.S. at 298, 97 S.Ct. at 1062.

34a

Appendix E

intended to leave victims with no remedy at all’’ (Blackmun, J.,

dissenting). However, any application of these principles inevitably

requires the interpretation of a statute. See Note, Preemption as

a Preferential Ground: A New Canon of Construction, 12

Stanf.L.Rev. 208, 208-210 (1959). It is to such interpretation that

the court now turns.

DISCUSSION

A. Express Preemption

The court first addresses the question of whether the common

law causes of action here asserted by plaintiff are expressly

preempted by the Act. Congress has preempted certain state action

by the terms of 15 U.S.C. § 1334, which is entitled ‘‘Preemption,”’

and does not allow any ‘‘statement relating to smoking and health,

other than the statement required by Section 1333 .. .’’ to be

‘“*required on any cigarette package.’’ 15 U.S.C. -§ 1334(a)

(emphasis added). It likewise does not permit any ‘‘requirement

or prohibition based on smoking or health’’ to be ‘imposed under

State law with respect to the advertising or promotion of any

cigarettes the packages of which are labeled in conformity with

the provisions of this chapter.’’ 15 U.S.C. § 1334(b) (emphasis

added). Indeed, plaintiff concedes that the Act ‘“‘precludes state

and government regu/ation of labeling and advertising.’’ Plaintiff’s

Brief (2/24/84) at 4. See also Id. at 8, 18, 29. Nonetheless she

argues that her claims, should they succeed, will not constitute

regulation of cigarette labeling or advertising, but merely

compensation for the harmful effects of smoking and thus, that

they are not preempted. In support of this argument is the language

of the statute, which does not, in so many words, prohibit suits

against cigarette companies based upon state common law.

Plaintiff argues, and the court agrees, that had Congress wished

TF

35a

Appendix E

to extinguish state causes of action, it could easily have done so.

Defendants contend that, as state tort law has a clear

regulatory effect, it falls within the language of § 1334, and indeed

might well act so as to undermine the Act’s purposes of creating

uniformity of effective cigarette labeling and advertising, and of

assuring the continued viability of the tobacco industry. Like

plaintiff, defendants argue based upon what does not appear in

the Act, stating that had Congress wished to allow state common

law causes of action to survive, it would have included a savings

clause. Indeed, defendants complement their superb briefing with

a thorough Appendix, including examples of fifty such clauses

appearing in federal acts.

The court, however, is persuaded that, on its face, the Act

does not explicitly preempt state common law claims, and that

determination of the question of whether preemption was intended

requires an analysis of the legislative history of the Act. It is true,

as defendants argue, that Congress could have included a savings

clause within the Act, as it did, for example, in the Occupational

Safety and Health Act of 1970, 29 U.S.C. § 653(b)(4). It did not.

Nor, however, did Congress explicitly include state common law

within the Act’s preemption provision, as it did, for example,

in the Employee Retirement Income Security Act of 1974, 29

U.S.C. § 1144(c)(1).* The question is thus not one that cai be

4. ERISA’s preemption clause states that

Except as provided in subsection (b) of this section, the

provisions of this subchapter and subchapter III of this

chapter shall supersede any and all state laws insofar as they

may now or hereafter relate to any employee benefit plan

described in section 1003(a) of this title. .

(Cont'd)

36a

Appendix E

resolved through examining the expansiveness of the preemption

(Cont’d)

29 U.S.C. § 1144(a). Later, it makes clear that

For- purposes of this section:

(1) The term ‘‘State law’’ includes all laws, decisions, rules,

regulations, or other State action having the effect of law,

of any State. .

29 U.S.C. § 1144(c)(1) (emphasis added). See generally Dependahi v. Falstaff

Brewing Corp., 653 F.2d 1208, 1214-16 (8th Cir.), cert. denied, 454 U.S. 968,

102 S.Ct. 512, 70 L.Ed.2d 384 (1981). Similar provisions, specifically preempting

state common law appear in other statutes as well, pertaining to both substantive,

see, e.g., 12 U.S.C. § 1715z-17(d), 1715z-18(c); 12 U.S.C. § 2259; 17 U.S.C.

§ 301(a); 25 U.S.C. §§ 1723(a(1), 1753(d) (preemption of common law fraud

claims only), and procedural provisions. See, e.g., 5 U.S.C. §§ 7118(a)(6),

$124(b)(2); 22 U.S.C. § 4116(f); 33 U.S.C. § 923(a); 42 U.S.C. § 1988 (state

common law procedures may be used in criminal cases to the exient consistent

with the Constitution and laws of the United States). See also 25 U.S.C. § 1722(d)

(defining ‘‘laws of the State’’ as including common iaw for purposes of the

Maine Indian Claims Settlement Act of 1980). Hence, it is clear that, just as

Congress could easily have provided a savings clause, so could it easily have

explicitly preempted state common law. Indeed, in certain cases it did both.

See, e.g., 17 U.S.C. § 301; 25 U.S.C. § 1723(a)(1), 1753(d). Here, it did neither.

Moreover, to argue from the non-existence of a savings clause is not

particularly persuasive, and flies in the face of the principle that ‘‘a statute

should not be considered in derogation of the common law unless it expressly

sO states or the result is imperatively required from the nature of the enactment.’’

Bauers v. Heisel, 361 F.2d 581, 587 (3d Cir. 1966) (en banc), cert. denied, 386

U.S. 1021, 87 S.Ct. 1367, 18 L.Ed.2d 457 (1967). See also Checkrite Petroleum,

Inc. v. Amoco Oil Co., 678 F.2d 5, 8 (2d Cir. 1982) (citing cases). Indeed,

one scholar has pointed out that the proper negative inference in cases such

as these is precisely the opposite of that which defendants seek to have the court

draw: ‘*Because statutes in derogation of the common law are disfavored, the

maxim /of expressio unius est exclusio aiterius] has been extensively employed

to avoid repeai of the common law .. .’’ Sands, 2A Sutherland Statutory

Construction § 47.24, at 128 (1973) (emphasis added).

37a

Appendix E

provision of the Act, on its face.°

Nor does the court find it sufficiently clear that state tort

law is encompassed within the terms ‘‘requirement or pichibition’’

utilized in § 1334 to be expressly preempted by the Act. Whethe:

‘or not the effect of such New Jersey tort law is a conflict with

the Act rendering such state law impliedly preempted, a matter

discussed in some detail, infra at 1166-1170, the court cannot find

the terms ‘‘requirement or prohibition’’ expressly to abolish

common law remedies such as those sought by plaintiff. It is true

5. Indeed, even where savings clauses appear, they have often been narrowly

construed so as to effectuate the purposes of a particular congressional enactment.

See, e.g., People of the State of Illinois v. City of Milwaukee, 731 F.2d 403,

413-14 (7th Cir. 1984) (narrowly construing savings clause in Federal Water

Pollution Control Act); American Progressive Life and Health Insurance Co.

of New York v. Corcoran, 715 F.2d 784, 786-87 (2d Cir. 1983) (narrowly

construing savings clause regarding insurance in ERISA); Ventura County v.

Gulf Oil Corp., 601 F.2d 1080, 1084 (9th Cir. 1979) (narrowly construing savings

clause in Mineral Lands Leasing Act); Great Western United Corp. v. Kidwell,

577 F.2d 1256, 1274-81 (Sth Cir. 1978) (narrowly construing jurisdictional savings

clause in Securities Exchange Act of 1934); National Ass’n of Regulatory Utilities

Commissioners of Coleman, 542 F.2d 11, 13-15 (3d Cir. 1976) (narrowly

construing savings clause in Federal Railroad Safety Act). See also Head v.

New Mexico Board of Examiners, 374 U.S. 424, 444, 83 S.Ct. 1759, 1770, 10

L.Ed.2d 983 (1967) (Brennan, '., concurring) (a general savings clause ‘‘does

not resolve specific problems. . .but its inclusion in the statute plainly is

inconsistent with congressionai displacement of the state statute unless a finding

of that meaning is unavoidable’’), cited in Lockheed Air Terminal, Inc. v. City

of Burbank, 457 F.2d 667, 675 (9th Cir. 1972) (finding of preemption

‘‘unavoidable’’ under Federal Aviation Act), aff’d, 411 U.S. 624, 93 S.Ct. 1854,

36 L.Ed.2d 547 (1973). See generally, Note, supra, 12 Stanf.L.Rev. at 211-15

(courts have paid ‘‘slight attention’’ to savings clauses); Sands, supra, § 47.24

at 128 (where ‘‘the policy and purpose of the statute indicate that the common

law was intended to be superseded, and the wording of the statute is so complete

that it reasonably appears to be exclusive’’ statute may preempt the common law).

38a

Appendix E

that, as a secondary effect, tort actions may have some regulatory

effect; this occurs because the primary and unquestionable effect

of a finding of tort liability is to shift the ‘‘burden of losses’’

to ‘‘those who are in a position to either control the danger or

make an equitable distribution of the losses when they do occur.”’

Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 579, 161

A.2d 69 (1960). Indeed, compensation is the very purpose of tort

liability in this state and elsewhere. See, e.g., O’Brien v. Muskin

Corp., 94N.J. 169, 179, 463 A.2d 298 (1983); Michalko v. Cooke

Color & Chemical Corp., 91 N.J. 386, 398, 401 A.2d 179 (1982);

Beshada v. Johns-Manville Product Corp., 90 N.J. 191, 205-06,

209, 447 A.2d 539 (1982); Suter v. San Angelo Foundry & Machine

Co., 81 N.J. 150, 173, 406 A.2d 140 (1979) (‘‘Strict liability . . . is

but an attempt to minimize the costs of accidents and to consider

who should bear those costs.’’); Santor v. A & M Karagheusian,

Inc., 44.N.J. 52, 65, 207 A.2d 305 (1965) (purpose of tort liability

‘*is to insure that the cost of injuries or damage. . . resulting

from defective products . . .is borne by the makers of the products

who put them in the channels of trade, rather than by the injured

or damaged persons who ordinarily are powerless to protect

themselves.’’) See also Cinnaminson Township Board of Education

v. U.S. Gypsum Co., 552 F.Supp. 855, 857 (D.N.J. 1982), quoting

Ramirez v. Amsted Industries, Inc., 86 N.J. 332, 350, 431 A.2d

811 (1981) (‘‘. . . this court has long recognized the significance

of the social policy of risk-spreading in establishing the

manufacturer’s duty to the product user under the rapidly

expanding principles of strict liability in tort.’’) See generally

Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57, 27

Cal.Rptr. 697, 701, 377 P.2d 897 (1962) (citing authorities); Prosser

and Keeton, The Law of Torts § 1 at 5, § 4 at 20 (1984); Harper

and James, The Law of Torts § 13.2 at 762-63 (1965). As

defendants correctly contend, the imposition of tort liability may

as a consequence, have a regulatory impact. Indeed, one purpose

39a

Appendix E

of products liability law is ‘‘to motivate individuals in the context

of commercial enterprise to invest in safety.’’ Michalko, supra,

91 N.J. at 398, 401 n. 4, 451 A.2¢ 179; Beshada, supra, 90 N.J.

at 206-07, 447 A.2d 539. See also Prosser and Keeton, supra,

§ 4 at 25-26. Whether that regulatory impact conflicts with the

purposes of the Act is a matter of implied preemption, and will

be discussed later. Whether such impact comprises regulation,

that is, creates a ‘‘requirement or prohibition,”’ raises the question

of express preemption.

The court finds that it does not. Regulation implies that

certain behavior be absolutely required or prohibited: thus, one

may not run a red light, or under the Act, fail to produce a cigarette

package without the warning required by § 1333, without risking

criminal liability or injunctive sanctions. Such behavior is

prohibited and, in that sense, regulated. Similarly, were the New

Jersey Legislature to mandate that a different warning be placed

on cigarette packages, it would be imposing a requirement and,

in that sense, regulating; such statute would, of course, be expressly

preempted by the Act. Tort liability, however, merely ‘‘motivates’’

a person or business entity to act or refrain from acting by creating

certain financial incentives; failing to do so, however, may or

may not subject one to recurrent tort liability, and cannot subject

one to an injunction or to criminal penalties in the common law

context.* Hence, the producer of a defective produce, who has

6. The federal courts have long held that there is no federal common law

,of crimes, see, e.g., United States v. Best, 573 F.2d 1095, 1101 (9th Cir. 1978),

citing Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240, 249, 96

L.Ed. 288 (1952); United States v. Coolidge, 14 U.S. (1 Wheat.), 415, 4 L.Ed.

124 (1816); United States v. Hudson, 11 U.S. (7 Cranch) 32, 3 L.Ed. 259 (1812).

See also United States v. Berrigan, 482 F.2d 171, 185 (3d Cir. 1973); Levy v.

Parker, 478 F.2d 772, 796 and n. 35 (3d Cir. 1973), rev’d on other grounds,

(Cont'd)

40a

Appendix E

been found liable in tort is put to a choice: it may avoid the risk

of future liability by remedying the defect in its product or, at

the extreme, by withdrawing such product from the market, or

it may confront such risk, hoping that future juries, acting in

light of different sets of facts, will find for it. Which course it

takes depends upon a complex combination of economics, morality

and psychology. In this sense, tort liability does not regulate at

ail; it merely creates some probability of changing the behavior

of those upon whom it imposes liability, and without dictating

the form of such change. See generally Ferebee v. Chevron

Chemical Co., supra, 636 F.2d at 1541. What that probability

is, and the form such behavioral change would take, provides

a starting point for an analysis of whether a conflict exists between

the imposition of state tort liability and federal legislation, here,

the Act. However, the differences between regulation and

motivation are such as to preclude a finding of express preemption.

As the one scholar who has explored this particuiar question has

written

Courts adjudicate prior misconduct and require

payment for injury. When a court imposes liability

for failure to adequately warn, no specific

‘statement relating to smoking and health’’ is

being required. The practical effect of this may

be that cigarette companies will choose to add an

addiction warning so as to avoid future liability.

A damages award, however, requires only payment

(Cont’d)

417 U.S. 733, 94 S.Ct. 2547, 41 L.Ed.2d 439 (1974), and New Jersey agrees.

N.J.S.A. 2C:1-5(a) (‘“‘Common law crimes are abolished and no conduct

constitutes an offense unless the offense is defined by this code or another statute

of this state.’’)

4la

Appendix E

—it is not an injunction requiring the defendant

to incorporate into its advertising a fixed legend

different from the federally required label. The

labeling acts do not prohibit a manufacturer from

warning of undisclosed health risks. The only

prohibition is against a state agency passing a law

requiring cigarette companies to use a different

label.

D. Garner, Cigarette Dependency and Civil Liability: A Modest

Proposal, 53 S.Cal.L.Rev. 1423, 1454 (1980) (footnote omitted).

The question of express preemption and the legal issues raised

thereby ought not, under the principles enunciated supra, at 8-16,

be resolved so as to displace traditional state common law remedies

unless Congress’ expression of its desire to do so is crystal clear.

Congress’ words reveal far less clarity: it did not expressly preempt

the common law claims asserted here.’

B. Implied Preemption

As discussed earlier, the fact that plaintiff’s common law

claims are not expressly preempted does not end this inquiry.

7. It should be noted that this section addresses only plaintiff’s claims

regarding failure to warn, Counts 3, 4 and 8, and deceptive advertising, Counts

5, 6 and 9. It does not address plaintiff’s risk-utility allegation, contained in

Count 2 and, to an extent, Count 7, of the complaint, because defendants do

not contend that such claim is expressly preempted, but only that it is impliedly

preempted as a result of conflict with the Act, Brief of Defendant Loew’s

Theatres, Inc. at 31-32, or because the Act has occupied the field. Jd. at 32-33.

Nor could defendants argue that this sort of claim has been expressly preempted,

for language of the Act addresses only cigarette package labelling, on the one

hand, 15 U.S.C. § 1334(a), and advertising or promotion, on the other. 15

U.S.C. § 1334(b).

42a

Appendix E

Rather, such claims may be impliedly preempted if Congress so

intended, and manifested such intent either by ‘‘occupying the

field,’’ or if plaintiff’s claims implicate state law which ‘‘actually

conflicts’? with the Act. The question of implied preemption

necessarily requires a careful examination of the legislative history

of the Act.

Defendants rest their implied preemption arguments on three

aspects of the legislative history of the Act. First, they state that

Congress made it absolutely clear that the Act was not meant

as a prohibition of cigarette manufacture, sale or use. Citing the

legislative history, defendants point to congressional concen with

the moral and economic effects of such a prohibition, as well

as to evidence that cigarette smoking actually emhances

psychological and social well-being. Second, defendants point to

Congress’ desire to enact a uniform national policy with respect

to the relationship betweer. smoking and health, in part im order

to protect the aforestated values. And third, at oral argument,

defendants contended that Congress intended that omly the

statement prescribed in § 1333 appear on cigarette package:s; thus,

they argue, no court may impose a greater duty to warn and,

indeed, no cigarette company may voluntarily utilize a diifferent

warning.

Plaintiff counters that the legislative history assumes the

continued existence of common law tort actions against ciigarette

companies, particularly in the area of products liability. Specific

passages indicate debate over the effect of the warning maindated

upon the defense of assumption of the risk but, plaintiff argues,

thus indicate an acceptance of the existence of the common law

suits in which such defense would be pled. Moreover, plaintiff

contends, Congress could not have intended, and did not intend,

to deprive prospective plaintiffs of the remedy at law here :sought.

43a

Appendix E

The parties support their contentions with persuasive statutory

authority and legislative history. Hence, defendants rely upon the

debate surrounding passage of the Act, noting that, despite the

call-to-action that ensued upon issuance of the Surgeon General’s

January 11, 1964 report entitled ‘‘Smoking and Health: Report

of the Advisory Committee to the Surgeon General of the Public

Health Services,’’ Congress chose a moderate course. Fearing the

intrusion on ‘‘our personal rights and liberties’’ of a prohibition

of cigarettes, Cigarette Labeling and Advertising: Hearings on

H.R. 2248, 3014, 4007, and 4249 Before the House Committee

on Interstate and Foreign Commerce, 89th Cong., Ist Sess. 225

(1965) (statement of Emerson Foote, Chairman, National

Interagency Council on Smoking and Health), Congress rejected

the notion of, for example, an outright ban on manufacture and

sale. See also Hearings on H.R. 2248, supra, at 24 (statement

of Congressman Morris K. Udall (‘“The Constitution guarantees

us all these great freedoms including the freedom to abuse our

health and make fools of ourselves if we want to, and I do not

intend to deprive people of these great freedoms.’’); Hearings

on H.R. 643, 1237. 3055, 6543 Before the House Committee on

Interstate and Foreign Commerce, 91st Cong., Ist Sess., 348 (1969)

(staternent of Dr. Sol R. Baker, Chairman, Committee on Tobacco

and Cancer, American Cancer Society) (‘‘. .. we are against

prohibition. Some of us lived through one era of prohibition,

and we certainly would not like to see another. We feel that it

is the individual’s right to smoke if he decides to . . .”’); H.Rep.

No. 449, 89th Cong., Ist Sess. (1965), reprinted in 1965 U.S. Code

Cong. & Adm. News 2350, 2352 (‘‘. . . the Committee believes

that the individual must be safeguarded in his freedom of choice-—

that he has the right to choose to smoke or not to smoke. . .’’).

Indeed, it is even true that, in opting for a response to the Surgeon

General’s conclusion that ‘‘Cigarette smoking is a health hazard

of sufficient importance in the United States to warrant

44a

Appendix E

appropriate remedial action,’’ Congress heard testimony of the

‘*significant beneficial effects of smoking primarily in the area

of mental health.’’ Hearings on H.R. 2248, supra, at 167,

(statement of Rep. Horace R. Kornegay) quoting the Surgeon

General’s 1964 Report at 356. See also id. at 438-39 (statement

of Fred S. Royster, Managing Director, Bright Belt Warehouse

Association) (‘‘There seems to be no doubt but that the use of

tobacco in its various forms is relaxing, is enjoyable, and is

conducive of a measure of contentment. . . It is possible that the

relaxation and contentment and enjoyment produced by smoking

has lengthened many lives.’’); Hearings on H.R. 643, supra, at

551 (statement of Joseph F. Cullman, III, Chairman of the

Executive Committee, The Tobacco Institute); id. at 1008-09

(statement of Dr. Charles Hine, Clinical Professor of

Pharmacology and Preventive Medicine, Univ. of California).'

Most importantly, perhaps, Congress’ choice of labeling as the

appropriate response to the Surgeon General’s conclusion that

‘(cigarette smoking is associated with a 70-percent increase in

the age-specific deaih rates of males’’ due to lung cancer, chronic

bronchitis and emphysema, and cardiovascular diseases, see S.Rep.

8. These considerations did not, however, appear in the Senate or House

reports, or the Conference report in either 1965 or 1969. See S.Rep. No. 195,

89th Cong., Ist Sess. (1965); H.Rep. No. 449, 89th Cong., Ist Sess. (1965);

H.Rep. No. 586, 89th Cong., Ist Sess. (1965) (Conference Report), U.S. Code

Cong. & Admin. News 1965, p. 2350; S.Rep. No. 91-566, 91st Cong., Ist Sess.

(1969); H.Rep. No. 91-289 91st Cong., Ist Sess. (1969); H.Rep. No. 91-897

9ist Cong., 2nd Sess. (1970) (Conference Report), U.S. Code Cong. & Admin.

News 1970, p. 2652. It is therefore not clear that these ‘‘beneficial effects’’

were actually considered by Congress. See generally Sands, supra, § 48.10 at

209 (‘‘Although statements in the committee report as to the reason for or the

nature and effect of the proposed law are freely used by the courts to determine

the intent of the legislature, they have been more hesitant in resorting to similar

statements made by committee members or other persons at the committee’s

hearings.’’)

45a

Appendix E

No. 195, 89th Cong., Ist Sess. 2-3 (1965), quoting the Surgeon

General’s 1964 Report, was the result of economic considerations.

Indeed, the Act, in its preamble, seeks explicitly to protect

‘“‘commerce and the national economy . . . to the maximum extent

consistent with this declared policy . . .”? 15 U.S.C. § 1331(2)(A).

Thus, in 1965, Congress heard repeatedly of the economic

ramifications of its proposed actions on the tobacco industry,

‘*clearly a vital sector in this country’s economy.’’ Hearings on

S. 559 and S. 547 Before the Senate Committee on Commerce,

89th Cong., ist Sess. 246 (1965) (statement of Bowman Gray,

Chairman of the Board, R.J. Reynolds Tobacco Co.). See also

id. at 396-97 (statement of Sen. Sam J. Ervin, Jr.); id. at 543-45

(statement of Fred S. Royster, Managing Director, Bright Belt

Warehouse Association); id. at 638-39 (statement of Ziggy Lane,

Field Coordinator, National Association of Tobacco Distributors);

111 Cong. Rec. 13897-98 (June 16, 1965) (statement of Sen. Bass);

111 Cong.Rec. 13914-15 (June 16, 1965) (statement of Sen. Ervin).

For example, Congress heard that, at that time, cigarettes were

smoked by over 70 million people, spending over $8 billion, of

which $3.3 billion went to excise taxes, supporting 750,000 farm

families, as well as 96,000 persons in manufacturing. In all, tobacco

was American’s fifth largest cash crop, and accounted for $405

million in exports. These statistics had become more impressive

by 1969, when Congress again took up the issue, ultimately

resolving to strengthen the Surgeon General’s warning. Hearings

on H.R. 643, supra, at 25-26 (statement of Rep. John L.

McMillan), 42-43 (statement of Reps. Richardson Preyer and

Wilmer D. Mizell), 61-63 (statement of Rep. W.M. Abbitt), 64

(statement of Rep. William H. Natcher), 604-05 (statement of

Robert W. Scott, Governor of North Carolina); 115 Cong.Rec.

16189-91 (June 17, 1969) (statement of Rep. Edwards), 115

Cong.Rec. 16193-94 (June 17, 1969) (statement of Rep. Fountain);

115 Cong.Rec. 16294 (June 17, 1969) (statement of Rep. Abbitt).

46a

Appendix E

In light of these facts, Congress chose to attack the health problems

associated with cigarette smoking not by virtue of a tobacco

prohibition, but throug: a labeling requirement, made stronger

in 1969 so as to be more effective. See S.Rep. No. 91-566, supra,

at 2664; H.Rep. No. 91-289, supra, at 5.

Defendants are thus correct that Congress did not intend,

by passing the Act, to eradicate the tobacco industry and did not

expect to abolish cigarette smoking. They are also correct that

Congress viewed this goal as being furthered by the preemption

provision of the statute, which would serve to eliminate ‘‘diverse,

non-uniform, and confusing cigarette labeling and advertising

regulations with respect to any relationship between smoking and

health,’’ 15 U.S.C. § 1331(2)(B), and to establish ‘‘a

comprehensive Federal program to deal with cigarette labeling

and advertising with respect to any relationship between smoking

and health.’’ 15 U.S.C. § 1331. (Congressional declaration of

policy and purpose). Indeed, the preemption provision of the Act,

and the policy which underlies it, grew out of a concern that

various states and localities would enact conflicting laws and

ordinances.

Some of the bills now pending before State

legislatures would require a warning notice in

cigarette advertisements appearing in periodicals

published within the State. Others would require

a health warning in cigarette commercials

broadcast on a TV or radic station located within

the State. The proposed form of the required

caution notice varies from State to State.

As a practical business matter, it would be almost

impossible for any manufacturer to comply with

47a

Appendix E

all of these differing and conflicting State and local

laws

If Congress does not extend [§ 1334], there will

be piecemeal and conflicting Federal and State

regulations in this field. There will be litigation.

And there will be enormous confusion and

uncertainty. These are precisely the considerations

which prompted Congress in 1965 to preempt this

matter.

Hearings on H.R. 643, supra, at 554 (statement of Joseph F.

Cullman, III). Indeed, congressional action in 1965 was directed

at avoiding the ‘‘maze of conflicting regulations’’ which would

have resulted had Congress not acted in this area, 111 Cong.Rec.

13901 (June 16, 1965) (statement of Sen. Moss). See S.Rep. No.

195, supra, at 4; H.Rep. No. 449, supra, at 2352. And, in 1969,

Congress looked back at what it had done and, apparently saw

itself as having ‘‘fended off efforts by regulatory agencies,

individual state governments, and local governments in some cases

to invade its jurisdiction.’’ Hearings on H.R. 643, supra, at 16

(statement of Rep. Carl D. Perkins). See also 115 Cong.Rec. 16299

(June 18, 1969) (statement of Rep. Preyer). Rejecting the argument

that states, or their subdivisions, ought to be able to ‘‘alert their

own citizens to the dangers of smoking,’’ Hearings on H.R. 643,

supra, at 288 (statement of John F. Banzhaf, III, Executive

Trustee, Legislative Action on Smoking and Health), see also

H.Rep. No. 91-289, supra, at 33 (minority views of Reps. Jarman,

Dingeil and Adams), Congress clarified and continued the

preemption provisions then in effect. See S.Rep. No. 91-556, supra,

reported in 1969 U.S.Code Cong. & Adm.News 2652, 2663;

H.Rep. No. 91-289, supra, at 4, 7, 9. Both in 1965, and again

48a

Appendix E

in 1969, Congress spoke of its actions in the language of

preemption. Thus, for example, Senator Morton stated that ‘‘[t]he

problem of smoking and health is national in scope. It is clearly

one in which Congress should occupy the the field.’’ 111 Cong.Rec.

13930 (June 16, 1965). Senator Magnuson, Chairman of the Senate

Commerce Committee, apparently agreed

I think that all of us, or at least speaking for

myself, are in general agreement . . . that if this

matter is to be attended to, that it should be on

a Federal level rather than a local or State level.

This is for very practical reasons, along with other

reasons. If there is one product that is completely

in interstate commerce it is tobacco.

It is grown in very few states and shipped all over

to every State in the Union, every country in the

world and, therefore, it would make it highly

impractical and I think a burden on interstate

commerce in this field should you have all kinds

of regulations in various states.

Hearings on S. 559, supra, at 254. See also id. at 548. And, in

1969, Congressman Fountain argued:

... all of us are mindful of the fact that there

are certain areas in which the national interest is

sO paramount—where individual state laws might

so jeopardize the national interest—that

preemption is necessary; and in my opinion the

problem here and the facts are so obvious—with

every state and probably many municipalities

49a

Appendix E

passing different regulations requiring the

' manufacturers of cigarettes to have different labels

on packages going into different states and areas—

that the situation would become intolerable and

so confusing and so frustrating to all concerned

that the entire tobacco industry might be destroyed.

For these reasons I believe in the doctrine of

preemption in this case.

Hearings on H.R. 643, supra, at 30.

From these, and other, statements, defendants glean a

congressional intent to preempt a field which includes the common

law clairns here asserted. They bolstered this assertion at oral

argument by asserting that Congress intended that only the warning

set forth in § 1333 be permitted to appear on cigarette packages;

hence, a cigarette manufacturer found liable would not be

permitted to escape such liability by altering its behavior, a result

which, they claim, could not have been intended by Congress.

In support of this position, defendants cite to congressional

concern that the labeling requirement include a concise statement:

Such cautionary statement should be short and

direct, and should not be weakened in its impact

by any qualifying adjectives such as ‘‘excessive,’’

‘**continual,”’ or ‘‘habitual.’’ To this end, the

committee had concluded that the following factual

and succinct statement should now be prescribed:

‘*Caution: Cigarette smoking may be hazardous

io your health.’’

S.Rep. No. 195, supra, at 4. Consistent with such concern, the

1969 amendments to the Act changed the warning to: ‘‘Caution:

a

50a

Appendix E

The Surgeon General Has Determined That Cigarette Smoking

Is Dangerous to Your Health.’’ iS U.S.C. § 1333. In so doing,

and thereby lengthening the warning, Congress opted for a shorter

warning than that proposed by the House, which had required

a label stating ‘‘Warning: The Surgeon General Has Determined

That Cigarette Smoking Is Dangerous to Your Health and May

Cause Lung Cancer or Other Diseases,’’ but longer and more

equivocal than that proposed by the Senate, i.e., ‘‘Warning:

Cigarette Smoking Is Dangerous to Your Health.’’ See H.Rep.

No. 91-897, supra, at 5 (Conference Report). Defendants do not,

however, point to any passages stating explicitly that cigarette

manufacturers would violate the Act by including a statement

in addition to that prescribed in § 1333. Nor is the language of

the Act to that effect.

Plaintiff recognizes the arguments proffered by defendant,

responding simply, that Congress not only did not explicitly

preempt state common law claims, but assumed their continued

existence. In support of this argument, plaintiff also quotes

extensively from the legislative history. It is true, as plaintiff argues,

that discussions of preemption are silent as to the common law;

it is also true that they focus upon executive or legislative

regulation. First, congressional concern regarding preemption

have, as plaintiff indicates, consistently been voiced without

mention of the common law, and not even in terms of regulation

in general, but of ‘‘laws’’ or ‘‘regulations’’ implying particular

executive or legislative enactments. See, e.g., Hearings on S. 559,

supra, at 246, 548 (statement of Bowman Gray, Chairman of the

Board of R.J. Reynolds Tobacco Co.) (‘‘It would be intolerable

if the states . . . were to remain free to pass conflicting laws or

to impose conflicting regulations on this subject.’’); Hearings on

H.R. 643, supra, at 30 (discussing ‘‘laws’’ and ‘‘regulations’’);

id. at 554 (same, discussing ‘‘bills pending before State

rage

Sla

Appendix E

legislatures’’); S.Rep. No. 195, supra, at 4 (discussion ‘‘a

multiplicity of State and local regulations’’); H.R.Rep. No. 449,

supra, cited in 1965 U.S.Code Cong. & Adm.News, supra, at

2352 (same). Moreover, in arguing for the extension of the

preemption provision in 1969, Representative Preyer of North

Carolina addressed the amendment which that year altered such

provision so that it no longer applied as previously to federal

agencies. See 15 U.S.C. §§ 1335-36.

... that amendment speaks only to a ban on

cigarette advertising by the FCC. It does not cover

any other Federal agency and, more importantly,

it does not cover such a ban if adopted by each

States legislature or local governing body.

115 Cong.Rec. 16299 (June 18, 1969) (emphasis added). See also

Hearings on H.R. 643, supra, at 610 {statement of Rep. Satterfield)

(discussing federal, state and local ‘‘administrative and executive

agencies’). And, perhaps most significantly, Representative Udall,

in criticizing the bill ultimately passed in 1965 as one that ‘‘should

be entitled, ‘A bill for the relief and protection of the tobacco

industry,’ ’’ listed as separate problems with the bill—which he

labeled Hookers No. 1 and No. 2—its preemptive effect on ‘‘state

and local government,’’ and the extent to which it ‘‘protects [the

cigarette manufacturers] against lawsuits by cigarette users,’’ by

undermining the assumption of the risk defense. 111 Cong.Rec.

16546 (July 13, 1965). Were these problems linked, he would

certainly have discussed them together; that he did not

demonstrates the inapplicability of the preemption clause to

common law actions. It thus appears that Congress, initially acting

in fear of certain state legislative action, see supra, at 30, continued

to contemplate regulation by legislative or administrative processes

as the subject of the preemption provisions of § 1334. See generally

52a

Appendix E

Garner, supra, 53 S.Cai.L.Rev. at 1453-54.’

That common law claims were not intended for preemption

is still clearer when viewed in terms of certain specifics of the

congressional debate and, as defendants urge, within the historical

context of that debate. See Brief of Defendant Loew’s Theatres,

Inc. at 12 (citing cases). Prior to passage and then amendment

of the Act, products liability cases based upon state common law

had, in fact, been brought against cigarette companies. See, e.g.,

Green v. American Tobacco Co., 304 F.2d 70 (Sth Cir. 1962),

9. Defendants’ arguments to the contrary are sparse. Defendant Liggett

Group quotes Senate Report No. 91-566 as stating that the Act ‘‘prohibits health-

related regulation or prohibition of cigarette advertising by any State or local

authority.” In reality, the 1969 Act clarified the previous preemption provision

by making ‘‘it clear that the term ‘State’ includes any political division of any

State.’”’ Id., cited in 1970 U.S. Code Cong. & Admin. News 2652, 2663. And

rather than stating the proposition cited in Liggett’s brief, that Report actually

states: ‘‘This preemption is intended to include not only action by State statute

but by all other administrative actions or local ordinances or regulations by

any political subdivision of the State.’’ Jbid. Thus limited to legislative and

executive action, this statement provides potent support for plaintiffs position.

Defendants are thus left to rely upon the singular statement of Rep. Bolling:

‘This preempts the right of any entity, of any government, to decide for itself

....’? LLL Cong. Rec. 16545 (July 13, 1965). In addition to the fact that this

statement was immediately followed by remarks of Rep. Springer indicating

the continued existence of common law suits, see infra at 38, remarks for which

Rep. Bolling thanked Rep. Springer, the court notes that defendants should

heed their own admonition: the remarks of a single legislator should ‘‘rarely

. . . be taken as final.’’ Brief of Defendant Loew’s Theatres, Inc. at 21 n. 12,

citing Schiaffo v.Helstoski, 492 F.2d 413, 428 (3d Cir. 1974). This is especially

so where these remarks are uncharacteristic of congressional debate in general.

Ibid. Here, Rep. Bolling may well have been making clear that which was clarified

in 1969—that the preemption provision applied to ‘‘any government,’ including

that of a locality.

53a

Appendix E

question certified on rehearing, 154 So.2d 169 (Fla.), rev’d and

remanded, 325 F.2d 673 (Sth Cir. 1963), rev’d and remanded on

rehearing, 391 F.2d 97 (Sth Cir. 1968), rev’d per curiam, 409 F.2d

1166 (Sth Cir. 1969) (en banc), cert. denied, 397 U.S. 911, 90

S.Ct. 912, 25 L.Ed.2d 93 (1970) (implied warranty of fitness for

use under Florida law); Ross v. Philip Morris & Co., 328 F.2d

3 (8th Cir. 1964) (implied warranty of fitness for use under

Missouri law); Lartigue v. R.J. Reynolds Tobacco Co., 317 F.2d

19 (Sth Cir.), cert. denied, 375 U.S. 865, 84 S.Ct. 137, 11 L.Ed.2d

92 (1963) (implied warranty of fitness under Louisiana law), cited

in Hudson v. R.J. Reynolds Tobacco Co., 427 F.2d 541 (Sth Cir.

1970); Pritchard v. Liggett & Myers Tobacco Co., 295 F.2d 292

(3d Cir. 1961), aff’d on rehearing, 350 F.2d 479 (3d Cir. 1965),

cert. denied, 382 U.S. 987, 86 S.Ct. 549, 15 L.Ed.2d 475 (1966),

modified, 370 F.2d 95 (3d Cir. 1966), cert. denied, 386 U.S. 1009,

87 S.Ct. 1350, 18 L.Ed.2d 436 (1967) (warranty of fitness for

use and negligent failure to warn, under Pennsylvania law); Cooper

v. R.J. Reynolds Tobacco Co., 234 F.2d 170 (1st Cir. 1956), on

remand, 158 F.Supp. 22 (D.Mass. 1957), aff’d, 256 F.2d 464 (1st

Cir. 1958) (fraud under Massachusetts law); Albright v. R.J.

Reynolds Tobacco Co., 350 F.Supp. 341 (W.D.Pa. 1972), aff’d

mem., 485 F.2d 678 (3d Cir. 1973), cert. denied, 416 U.S. 951,

94 S.Ct. 1961, 40 L.Ed.2d 301 (1974) (products liability action

under Pennsylvania law).'° And, although neither the statute itself

10. Albright was filed on July 5, 1962. See Garner, supra, 53 S. Cal. L.

Rev. at 1423 n. 3. .

It should be noted that these cases address the problems of labeling and

advertising under the aegis of breach of warranty, negligence or fraud causes

of action. See, e.g., Pritchard v. Liggett & Myers, supra, 295 F.2d at 299-300.

Indeed so intertwined is labeling or advertising with any tort causes of action

based upon design defects, that the position of defendants Philip Morris and

(Cont'd)

54a

Appendix E

nor the final committee reports explicitly address the status of

these cases after passage of the Act, congressional debate

recognized their continued existence. Often, such recognition took

the form of discussion as to the effect of the required warning

on the defense of assumption of the risk. Thus, in 1965,

Congressman Fascell of Florida expressed his view that

The legislative record makes it clear that passage

of this law and compliance by the manufacturer

in no way affects the right to raise the defense of

‘‘assumption or [sic] risk’’ and the legal

requirement for such a defense to prevail; nor does

it shift the burden of proof, nor could it be

considered a legal or factual bar to the plaintiff

user.

111 Cong.Rec. 16543-16544 (July 13, 1965). Later, Congressman

Fascell clarified his position. In response to Congressman Bolling’s

opposition to the preemption provisions of the Act, Mr. Fascell

stated:

There might be one consoling factor in the

adoption of the conference report. By virtue of

the language being required as a result of the law,

it would raise the presumption that every company

that makes and distributes this process does so with

Cont’d)

Liggett Group, that the Act permitted ail tort actions except those based upon

labeling and advertising is absurd. See Brief of Defendant Philip Morris at 27-28;

Brief of defendant Liggett Group at 31-32. Labels and advertisements constitute

a manufacturer’s public statements about its product; they are a necessary

component of any \common law tort analysis.

5Sa

Appendix E

knowledge. If that is true, it would redound to

the benefit of a plaintiff bringing an injury suit.

111 Cong.Rec. 16545 (July 13, 1965). Congressman Fascell thus

believed that the warning would ultimately help plaintiffs in cases

such as these. See also 111 Cong.Rec. 16546 (July 13, 1965)

(statement of Rep. Udall). Theodore Ellenbogen, Acting Assistant

General Counsel of the Department of Health, Education, and

Welfare, testifying before the House Committee on Interstate and

Foreign Commerce, disagreed.

MR. MACKAY: I would like to ask you this as

a lawyer. Would not the presence of the type of

warning suggested in these bills greatly strengthen

the hand of a defendant in a tort case?

MR. ELLENBOGEN: In the long run it might do

so, because those cases that I have read—and I

have not made a real study of this particular _

thing—but the Green case, for example, is based, —

I believe, on the implied warranty of fitness, and

there being no notice of the health hazard to the

consumer.

Hearings on H.R. 2248, supra, at 176. In response to

Representatiave Mackay’s further inquiries on this topic, a

memorandum was supplied to the Committee, reviewing the

caselaw, and concluding, as follows:

Assuming a clear statement, suits based on

negligence probably would be barred on three

grounds. Having warned the buyer, the

manufacturer could not be said to be negligent;

ES i oS SP TP SS TT NEE RAREST spree

|

56a

Appendix E

the buyer is contributorily negligent in using a

product he knows might harm him; and having

been warned the buyer assumes the risk attendant

to the use of the cigarettes . . . actions based on

breach of warranty would probably be

unsuccessful. When a seller warns a buyer of the

possibility of a certain form of injury, it cannot

be said that he is warranting that the injury will

not occur.

Id. at 178.

Again in 1969, the House Committee on Interstate and

Foreign Commerce considered this point at great length.

Committee members attempted to show that the tobacco industry’s

support of the warning then in effect was as a result of the benefits

it gained from the undermining of the assumption of ‘the risk

defense. Hearings on H.R. 643, supra, at 577-78 (colloquy between

Rep. Moss and Joseph F. Cullman, III), 579-81 (colloqu: tween

Rep. Dingell and Mr. Cullman), 589 (Colloquy between Rep.

Thompson and Mr. Cullman), 589 (colloquy between Rep.

Satterfield and Mr. Cullman). Representative Watson disagreed.

Id. at 579, 582. However, both in 1969, and previously in 1965,

all parties assumed the existence of lawsuits such as the instant

one. Indeed, the congressional debate as to the validity of certain

defenses presupposes such suits. Thus, Congressman Watson was

correct when he stated that ‘‘nowhere in the Act of 1965 does

it preclude an individual or prevent an individual from pursuing

a common-law liability, as far as | know... .’’ Jd. at 579. In

fact, in 1965, the Department of Health, Education, and Welfare

considered such suits to be ‘‘a private matter . . . not regulated

by this bill . . . .”” Hearings on H.R. 2248, supra, at 176 (statement

of Theodore Ellenbogen).

57a

Appendix E

\

The legislative history thus supports plaintiff’s position in

these respects.'' Such position is further strengthened by the

structure of the statute ultimately passed: although injunctive relief

is available if sought by the government, 15 U.S.C. § 1339, and

minimal criminal sanctions applicable to violations of the Act,

15 U.S.C. § 1338, the statute is silent as to damage claims. Absent

the existence of common law claims such as those asserted by

plaintiff, victims of cigarette smoking would thus be left with

no remedy at all, a result which is “‘inconceivable,’’ Silkwood

v. Kerr-McGee Corp., supra, 104 S.Ct. at 629 (Blackmun, J.,

dissenting), especially in light of the existence of such claims prior

to passage of the Act. Nonetheless, such claims might be preempted

_ notwithstanding this legislative history if it were found either that

Congress ‘‘occupied the field’’ or that the existence of such claims

creates an actual conflict with the Act. It is these concerns that

the court next addresses.

1. Did Congress preempt state common law claims by

occupying the field?

As the court has noted earlier, preemption implied from

legislative intent may be inferred where Congress ‘‘occupied the

11. It also supports plaintiff’s position with respect to the ‘‘addiction

theory’’ of Count 9 and the advertising claims of Counts 4 and 5 of plaintiff’s

complaint. It is true that Congress chose not to address the addiction problem,

despite the presentation of ‘‘a great deal of scientific testimony’’ regarding the

issue. See Brief of Defendant Lowe’s Theatres, Inc. at 27, citing legislative

history. Nor, however, did it distinguish claims based upon addiction from the

others which it chose not to preempt. See Garner, supra, 53 S. Cal. L. Rev.

at 1453-54. Similarly, congressional inaction regarding the recognized dangers

associated with cigarette advertising and promotion, see id. at 29, citing legislative

history, ought not be construed as forbidding damage claims for injuries caused

“by such advertising and promotion, if such causation can be proved.

58a

Appendix E

field’? in a given area. Whether Congress did so may, in turn,

be inferred in any of three ways: first, if there is a pervasive scheme

of federal regulation in such area; second, if the federal interest

in such area is dominant; and third, if the objective of federal

law in such area and the obligations imposed by it reveal the same

purpose. See supra at 1150. Defendants argue that Congress

explicitly intended to preempt the field and that, in debate and

elsewhere, it demonstrated such intent explicitly and by creating

a pervasive scheme of federal regulation to deal with a problem

uniquely federal in scope. The court disagrees.

It is true that at least one Senator stated that ‘‘[t]he problem

of smoking and health is national in scope. It is clearly one in

which congress should occupy the field.’ 111 Cong.Rec. 13930

(June 16, 1965) (statement of Sen. Morton). Other Senators,

Representatives and delegates from the tobacco industry, the

executive branch, and public interest groups agreed that federal

regulation was necessary, in order to avoid a ‘‘maze of conflicting

regulations’’ and deal with ‘‘a product that is completely in

interstate commerce.’’ See supra at 1159. Hence, Congress passed

a bill purporting ‘‘to establish a comprehensive federal program

to deal with cigarette labeling and advertising with respect to any

relationship between smoking and health.’’ 15 U.S.C. § 1331.

The court agrees that Congress thus intended to occupy a

field and that it indicated this intent as clearly as it knew how.

It utilized the language of preemption; it stated that it was

establishing a pervasive scheme of regulation; and it discussed

the dominant federal interest in the fields affected by its intended

regulation. See, e.g., H.Rep. No. 449, supra, at 2351-52 (‘‘The

problem has broad implications in the field of public health and

health research, and involves potentially far-reaching consequences

for a number of sectors of our economy. The entire tobacco raising

59a

Appendix E

and manufacturing industry, and the numerous businesses which

market tobacco products, are involved. Some proposals have been

made in this area which might lead to severe curtailing or the

possible elimination of cigarette advertising. This could have a

serious economic impact on the televisicn, radio, and publishing

industries in the United States.’’); 111 Cong.Rec. 14,423 (June

22,1965) (statement of Rep. Harris) (‘‘. . .this is an interstate

problem.’’) However, the legislative history of the Act, as well

as its language, persuades the court that the field it occupied does

not encompass the common iaw products liability claims here

asserted. That field was expressly limited to ‘‘cigarette labeling

and advertising with respect to any relationship between smoking

and health,’’ 15 U.S.C. § 1331; the preemption provision of the

Act proscribes state or local action that would require a particular

statement on cigarette packages, 15 U.S.C.§ 1334(a), or impose

any ‘“‘requirement or prohibition’’ with respect to cigarette

advertising. 15 U.S.C. §- 1334(b). Congress addressed itself to a

problem national in scope, and in 1965, and again in 1969, chose

to remedy that problem by requiring certain labeling, and

regulating advertising, and finally making it ‘‘unlawful . . . on

any medium of electronic communications subject to the

jurisdiction of the Federal Communications Commission.’’ 15

U.S.C. § 1335. It did not, however, address itself to the problem

of compensating the victims of cigarette smoking and/or imposing

civil liability on cigarette companies. Indeed, the issues are within

a different field, that of products liability, the continued existence

of which was assumed by Congress, and left for the states.

Especially because ‘‘federal occupation of a field will not be lightly

inferred,’’ Tribe, supra, § 6-25, at 384 (citing cases), the fact that

two different areas are thus implicated renders preemption

improper. See, e.g., Silkwood v. Kerr-McGee Corp., supra, 104

S.Ct. at 622-26 (Price-Anderson Act does not preempt state tort

law remedies); Pacific Gas and Electric, supra, 103 S.Ct. at 1726

60a

Appendix E

(Atomic Energy Act leaves to the states traditional powers to

regulate utilities); Sears-Roebuck & Co. v. San Diego County

District Council of Carpenters, supra, 436 U.S. at 194-97, 98 S.Ct.

at 1756-57 (cases relating to labor relations are not preempted

if ‘‘different from’’ those presented to the National Labor

Relations Board); Askew v. American Waterways Operators, Inc.,

411 U.S. 325, 336, 93 S.Ct. 1590, 1597, 36 L.Ed.2d 280 (1973)

(Water Quality Improvement Act does not preempt state common

law claims for damages for oil spillage); Huron Cement Co. v.

City of Detroit, 362 U.S. 440, 445, 80 S.Ct. 813, 817, 4 L.Ed.2d

852 (1960) (Detroit ordinance had different purposes from, and

therefore is in a different field than congressional enactments

concerning shipping). That the areas are similar begins rather than

ends the inquiry; where Congress limits the scope of its enactment

and manifests its intent not to interfere with areas beyond that

scope, the preemptive effect of such enactment must be similarly

proscribed. See generally Pacific Gas & Electric, supra, 103 S.Ct.

at 1726 (‘‘When the federal government completely occupies a

given field or an identifiable portion of it ... the test of

preemption is whether ‘the matter on which the state asserts the

right to act is in any way regulated by the federal government.’ ’’),

quoting Rice v. Santa Fe Railroad Corp., supra, 331 U.S. at 236,

67 S.Ct. at 1155. Admittedly, the areas addressed by plaintiff’s

complaint, and those within the scope of the Act are related.

Cigarette labeling and advertising are at issue in plaintiff’s

complaint, and the form they take may be affected by this lawsuit,

if successful. Howevc., as it did with respect to the Price-Anderson

Act and, more explicitly, the Water Quality Improvement Act,

Congress, in enacting the Federal Cigarette Labeling Act, intended

only that states be precluded from regulating cigarette labeling

and advertising. Compensation is, as the court has noted elsewhere,

an entirely different matter. See supra at 1155-1156. The ‘egislative

history demonstrates that Congress assumed that, in appropriate

6la

Appendix E

cases and where liability could be proven, such compensation

would be paid, though such cases had failed in the past. It limited

the scope of the Act, and especially of the preemption provision

to that which it feared would interfere with the operation of the

Act, and the health of the tobacco industry—state or local

regulation, by statute, ordinance or other official legislative or

executive enactment. It correspondingly limited the obligations

imposed and the remedies available under the Act to those

consonant with this purpose; a particular label was required, 15

U.S.C. § 1333, advertising was regulated, 15 U.S.C. § 1334-35,

and reports were called for. 15 U.S.C. § 1337. Only the

government can enforce the statute, by criminal prosecuticn or

injunction. 15 U.S.C. § 1338-39.'* Products liability standards

12. However, Congress did not create a particulariy pervasive or

comprehensive regulatory system when enacting the Cigarette Labeling Act. See

Tribe, supra, § 6-25 at 385 (where a multiplicity of federal regulations govern

a given field, the pervasiveness of the regulations will help to sustain a conclusion

that Congress intend io exercise exclusive control over the subject matter), citing

Amalgamated Association of Street, Electric Railway & Motor Coach Employees

of America v. Lockridge, 403 U.S. 274, 296, 91 S. Ct. 1909, 1922, 29 L.Ed.2d

473 (1971); Castle v. Hayes Freight Lines, Inc., 348 U.S. 61, 75 S.Ct. 191, 99

L.Ed. 68 (1954). See also Fidelity Federal Savings & Loan Association, supra,

458 U.S. at 153, 102 S.Ct. at 3022. But see New York Department of Social

Services v. Dublino, 413 U.S. 405, 415, 93 S.Ct. 2507, 2514, 37 L.Ed.2d 688

(1973) (rejecting the contention that ‘‘preemption is to be inferred merely from

the comprehensive character’’ of the provisions at issue), cited in Motor and

Equipment Manufacturers Association, Inc. v. E.P.A., 627 F.2d 1095, 1107-08

and n. 20 (D.C. Cir. 1979), cert. denied, 446 U.S. 952, 100 S.Ct. 2917, 64 L.Ed.2d

808 (1980). Here, while defendants are correct that Congress has evinced

continuing interest in the area of cigarette smoking, see Brief of Defendant

Loew’s Theatres, Inc. at 33-34, regulation of the area has been considerably

less pervasive than in such areas as labor law, interstate trucking and banking,

in which preemption was found to exist, or in welfare, the environment, or

even nuclear power, in which such preemptive effect has been limited or denied.

See supra (cases cited in this note); Silkwood, supra; Pacific Gas & Electric, supra.

62a

Appendix E

are thus left to the states, and mention of the corresponding private

Tights of action and damage remedies available to individuals is

omitted from the Act. See generally Rice v. Santa Fe Elevator

Corp., supra, 331 U.S. at 230, 67 S.Ct. at 1152 (field preempted

by federal statute determined, in part, by objective thereof) (citing

cases); Old Dominion Branch No. 496, National Association of

Letter Carriers .v. Austin, supra, 418 U.S. at 271, 94 S.Ct. at

2774 (fieid preempted by federal statute determined, in part, by

remedies availab!e thereunder). These private rights of action and

private remedies, iraditionally governed by state law, ought not,

therefore, be assumed to be eradicated by the Act. See Rice, supra,

331 U.S. at 230, 67 S.Ct. at 1152. Congress did not intend that

they be, and this court will not render them so.

2. Does state tort law conflict with the Act?

As in Silkwood, the question of preemption here turns

ultimately ‘‘on whether there is an irreconcilable conflict between

the federal and state standards or whether the imposition of a

state standard in a damages action would frustrate the objectives

of the federal law.’’ 104 S.Ct. at 626. See also Chicago & North

Western Transportation Co. v. Kalo Brick & Tile Co., supra,

450 U.S. at 317-18, 101 S.Ct. at 1130. As noted above, a conflict

occurs either where compliance with state and federal law is a

‘physical impossibility’ or where state law ‘‘stands as an obstacle

to the accomplishment and execution of the full purposes and

objectives of Congress.’’ See supra, at 1151. However, in general,

conflicts ought not lightly be inferred. As the Supreme Court has

recently stated, in a diferent context:

The existence of a hypothetical or potential conflict

is insufficient to warrant the preemption of the

state statute. A state regulatory scheme is not

63a

Appendix E

preempted by the federal antitrust laws simply

because in a hypothetical situation a private party’s

compliance with the statute might cause him to

violate the antitrust laws. A state statute is not

preempted by the federal antitrust laws simply

because the state scheme might have an

anticompetitive effect.

Rice v. Norman Williams Co., 458 U.S. 654, 659, 102 S.Ct. 3294,

3299, 73 L.Ed.2d 1042 (1982) (citing cases). Implicitly utilizing

this standard, the one federal court that has construed the

preemption provision of the Act refused to find a conflict between

the goal of uniformity, as embodied therein, and FCC regulation

of television broadcasts regarding cigarettes. Banzhaf v. F.C.C.,

405 F.2d 1082, 1090-91 (D.C.Cir. 1968), cert. denied, 396 U.S.

842, 90 S.Ct. 51, 24 L.Ed.2d 93 (1969) (Bazelon, C.J.)."°

Nonetheless, the question of whether or not New Jersey common

law of products liability conflicts with the Act is one of first

impression. '*

13. The one scholar that has examined this provision has concluded that

“*[t}he labeling acts manifest neither a congressional intention to preempt courts

from granting money judgments nor a conflict between such judicially imposed

liability and federal law.’’ Garner, supra, 53 S. Cal. L. Rev. at 1454.

14. Defendants are correct that, in addressing this question, the court

focuses not upon the purposes of state law, be they regulatory or merely

compensatory, but upon the effect of such law. See, e.g,, Perez v. Campbell,

402 U.S. 637, 650-652, 91 S.Ct. 1704, 1711-12, 29 L.Ed.2d 233 (1971). Thus,

the court here examines ‘‘first the purposes of the federal law and second the

effect of the operation of the state law on these purposes.’” Finberg v. Sullivan,

634 F.2d 50, 63 (3d Cir. 1980) (emphasis supplied), citing Perez, supra. In this

sense, the analysis here undertaker differs from that regarding express

preemption, supra, at 1153-1156. There, the question was one of whether the

New Jersey common law of products liability constituted regulation; the New

Jersey courts’ characterization of such law is much more relevant to that inquiry.

64a

Appendix E

This question requires that the court first examine the

purposes of the Act. As we have seen, as they relate to its

preemptive provision, those purposes are essentially two: first,

Congress intended to ensure the continued vitality of the tobacco

industry, for economic reasons and to preserve freedom of choice

for the individual; second, Congress sought to implement this

and other goals by making uniform the labeling and advertising

requirements imposed upon cigarette manufacturers. Defendants

also point to the »bvious remedial purposes of the Act, which

sought to address the health concerns raised by the Surgeon

General’s Report, and argue that these purposes are best furthered

by a concise and unambiguous warning. It is claimed that all of

these purposes will be undermined by the simultaneous existence

of state common law claims such as those asserted by plaintiff.

The court first notes that in no event is compliance with both

the Act and state law a ‘‘physical impossibility.’’ At most, state

law imposes liability in the form of damages upon defendants.

Payment of such damages, as well as fulfillment of the labeling

requirements of the Act, are clearly possible. Indeed, the

imposition of criminal liability urder the Act, as well as the

payment of damages, are both possible. See, Silkwood, supra,

104 S.Ct. at 626. Defendants, however, argue that state common

law may impose, for example, labeling requirements inconsistent

with the Act, rendering compliance with both impossible. This

argument is without merit. First, as observed earlier, common

law liability does not impose requirements upon any party; rather,

it allows parties to choose between risking further liability by not

changing their behavior, or attempting to negate such risk by,

for example, adding a more stringent label to a cigarette package.

Which course of action one takes is a matter of choice; one cannot

be enjoined or held criminally liable for the course taken. Hence,

no requirement is imposed. As the Court of Appeals for the District

65a

Appendix E

of Columbia has recently stated, in holding that a label found

adequate by the Environmental Protection Agency for purposes

of the Federal Insecticide, Fungicide, and Rodenticide Act, 7

U.S.C. § 136 et seq., (‘‘FIFRA’’) could nonetheless provide the

basis for liability under Maryland common law, notwithstanding

a preemption clause prohibiting states from imposing different

labeling requirements.

...Maryland can be conceived of as having

decided that, if it must abide by EPA’s

determination that a label is adequate, Maryland

will nonetheless require manufacturers to bear the

risk of any injuries that could have been prevented

had Maryland been allowed to require a more

detailed label or had Chevron persuaded EPA that

a more comprehensive label was needed. The

verdict [against Chevron] does not command

Chevron to alter its label—the verdict merely tells

Chevron that if it chooses to continue selling

paraquat in Maryland, it may have to compensate

for some of the resulting injuries. That may in

some sense impose a burden on the sale of paraquat

in Maryland, but it is not equivalent to a direct

regulatory command that Chevron change its label.

Chevron can comply with both federal and state

law by continuing to use the EPA-approved label

and by simultaneously paying damages to

successful tort plaintiffs such as Mr. Ferebee.

Ferebee v. Chevron Chemical Co., supra, 736 F.2d at 1541."*

15. Defendant Loew’s Theatres, Inc. has attempted to distingish Ferebee

(Cont’d)

66a

Appendix E

Moreover, even if a verdict against cigarette manufacturers were

viewed as imposing a requirement upon them, and the

manufacturers thus chose to place an additional warning on, or

in their packages, such action would not be incompatible with

the Act. Section 1333 makes it unlawful not to place the prescribed

warning on cigarette packages; it is silent as to additional

information or warnings that might also be included.'* Hence,

it is not ‘‘physically impossible’’ for a cigarette manufacturer to

chose to alter its behavior in response to an adverse jury verdict.

Nor does the existence of state common law claims stand

as an obstacle to the execution of Congress’ intent in passing,

and then amending, the Act. Primarily, this is because, as in

Silkwood, Congress intended that state common law claims

survive, and thus, that whatever tension exists between federal

regulation of cigarette labeling and advertising and state common

law claims be tolerated. 104 S.Ct. at 625. That congressional

(Cont’d)

from the instant matter, based primarily upon the regulatory scheme created

by FIFRA. It is true that FIFRA, unlike the Federal Cigarette Labeling Act,

delegates great responsibility to the states. From this fact, defendant gleans a

legislative intent not to preempt state common law claims. While the existence

of a state role may be evidence of an intent not to preempt, it is neither the

only such evidence, nor necessary to a holding that preemption has not occurred.

Just as the court did in Ferebee, and in Silkwood, this court has examined the

legislative history of the Act at issue in great detail. Its conclusion—that

preemption is not warranted—is based, as it should be, on that particular history.

See Note, supra, 12 Stanf. L. Rev. at 208-210. Other cases, such as Ferebee

and Silkwood, state general principles applicable here, but the court recognizes

that the results reached in each of those cases are instructive only by analogy.

16. Because the Act carries criminal penalties, it should be strictly construed.

See, e.g., United States v. Bass, 404 U.S. 336, 348, 92 S.Ct. 515, 522, 30 L.Ed.2d

488 (1971).

67a

Appendix E

intent is, as has been shown, clear: state common law claims existed

prior to passage of the Act, were assumed to have a continued

existence during the legislative process, and were not eliminated

by the passage of the Act. Though it is true that, as defendants

argue, even state regulation supplementary to a federal

enactment—a characterization not inapposite here—may be

preempted by such federal enactment, see, e.g., Campbell v.

Hussey, 368 U.S. 297, 302, 82 S.Ct. 327, 329, 7 L.Ed.2d 299

(1961); Cosmetic, Toiletry & Fragrance Association, Inc., v. State

of Minnesota, 440 F.Supp. 1216, 1224 (D.Minn. 1977), aff’d,

575 F.2d 1256 (8th Cir. 1978), that is only the case where there

is an actual conflict between the two, and the federal enactment

is “‘significantly impeded by the state law.’’ Tribe, supra, § 6-24

at 379 and n. 12. No such conflict exists here.

First, Congress’ intention that the cigarette industry be

allowed to survive, and that the consumer remain free to choose

or not to choose to smoke, is not undermined by the imposition

of liability upon cigarette companies.'’ That concern was reflected

in Congress’ decision not to ban cigarettes or cigarette advertising

altogether, and to maintain uniform labeling. Congress recognized

that liability under state tort law would continue to exist, and

did nothing to immunize cigarette manufacturers from such

liability. The argument that the imposition of such liability will

jeopardize the entire cigarette industry, and with it the nation’s

economic well-being and its citizens’ freedom of choice, is

hypothetical and speculative at best. Indeed, even those claims

based upon theories of strict products liability, may co-exist with

an industry whose development and promotion are to be fostered

by congressional action. See Silkwood, supra, 104 S.Ct. at 625-26.

17. The court notes that this is particularly true in light of the failure of

prior cases of this sort. See supra at 1161-1162 (citing cases).

7

68a

A ppendix 2 sin

A fortiori, they exist where, as here, the industry upon which

liability is to fall is one which Congress has found responsible

for death and disease. In any event, as with nuclear power, the

legislative history of the Federal Cigarette Labeling Act reveals

a Congress unwilling to deprive individuals of their common law

damage remedies, whatever they may be."

18. Defendants argue that plaintiff’s risk-utility claims in particular are

preempted in that, since such claims would enable juries to drive the cigarette

industry out of business, they conflict with the congressional purpose to ensure

the survival of the cigarette industry. See O’Brien v. Muskin Corp., supra, 94

N.J. at 184, 463 A.2d 298. This argument misconceives the nature of this claim:

risk-utility is one method of taking the first step in deciding whether a strict

liability analysis should be applied, by proving the existence of a defect. O’Brien,

supra, 94.N.J. at 185-86, 463 A.2d 298. See also Feldman v. Lederle Laboratories,

supra, 97 N.J. at 444 and n. 4, 479 A.2d 374. That method renders a

manufacturer strictly liable for injuries suffered as a result of its product,

irrespective of whether such manufacturer knew or should have known of the

product ‘‘defect.’’ See Feldman, supra, at 450-51, 479 A.2d 374. However, the

method also requires the assessment of many factors—the so-called ‘‘Wade

factors’’—including the reasonableness of the defendant’s conduct in. failing

to improve the product (factor 4) and of the plaintiff’s conduct in using it (factors

5 and 6). In particular, risk-utility analysis requires that the jury assess

(6) The user’s anticipated awareness of the dangers inherent

in the product and their avoidability, because of general public

knowledge of the obvious condition of the product, or the

existence of suitable warnings or instructions.

O’Brien, supra, 94 N.J. at 182, 463 A.2d 298, quoting Cepeda v. Cumberland

Engineering Co., 76 N.J. 152, 174, 386 A.2d 816 (1978). Hence, reflected in

risk-utility analysis is a set of principles traditionally associated with torts based

upon negligence. O’Brien, supra, 94 N.J. at 181, 463 A.2d 298. More important,

age-oid notions of assumption of risk, such as those about which Congress was

concerned in debate, see supra, at 1162-1163, are contemplated in factor 6,

quoted above. The argument then, that this type of analysis was outside the

(Cont’d)

69a

Appendix E

Second, as shown above, Congress manifested a deep concern

over the possibility that different states or localities would impose

different labeling or advertising requirements, thereby both

imperiling the tobacco, advertising and related industries, and

undermining the ‘‘comprehensive federal program’’ which it

sought to implement. Of course, such uniformity would not

necessarily be imperiled by a jury verdict against cigarette

manufacturers, for such verdict might not result in a corresponding

change in behavior on the part of the manufacturers; the choice

would be theirs to make. Thus, in other areas in which federal

labeling is mandated, or directed by federal agencies, as advertising

is under the Act, 15 U.S.C. § 1335-36, state common law liability

has nonetheless been allowed to survive. See, e.g., Ferebee, supra,

736 F.2d at 1540-52; Feldman, supra, 97 N.J. at 461, 479 A.2d

374, citing, e.g., Brochu v. Ortho Pharmaceutical Corp., 642 F.2d

652, 658 (Ist Cir. 1981) (drug manufacturer liable under state

tort law for failure to warn notwithstanding FDA approval of

“‘uniform’’ label);'? Raymond v. Riegel Textile Corp., 484 F.2d

(Cont’d)

scope of congressional contemplation, is without merit. Congress abridged no

common law cause of action whatsoever in passing the Act. That each such

cause of action, and this one in particular, may prove injurious to the cigarette

industry is a truism, but one that apparently did not bother Congress.

19. FDA approved warnings thus do not preempt state common law

products liability claims despite the preemptive effect that has generally been

given the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq..See

generally McDermott v. State of Wisconsin, 228 U.S. 115, 131-32, 33 S.Ct.

431, 434-35, 57 L.Ed. 754 (1913); National Women’s Health Network v. A.H.

Robins Co., 545 F. Supp. 1177, 1181 (D. Mass. 1982); Pharmaceutical Society

of the State of New York, Inc. » Lefkowitz, 454 F. Supp. 1175, 1179 (S.D.N.Y.

1978) (state labeling laws preempted to the extent they conflict with the Act)

(dictum), aff’d, 586 F.2d 953 (2d Cir. 1978); Cosmetic, Toiletry & Fragrance

Association, Inc. v. State of Minnesota, supra, 440 F. Supp. at 1220-25.

70a

Appendix E

1025, 1026-28 (1st Cir. 1973) (state products liability law applied

notwithstanding standards promulgated in the Flammable Fabrics

Act, 15 U.S.C. § 1191 ef seg., which, at that time, contained

a broad preemption provision) (citing cases); Hubbard-Hall

Chemical Co. v. Silverman, 340 F.2d 402, 405 (Ist Cir. 1965)

(Department of Agriculture approved label did not preempt state

tort action for failure to warn, in part because Congress had not

occupied the field in this area). Underlying these decisions, is the

recognition that compensation for individuals as a result of an

injury caused by particular products is not only a right that ought

to be abridged only where Congress clearly intended to do so,

see Silkwood, supra, 104 S.Ct. at 623; id. at 629 (Blackmun, J.,

dissenting); Raymond v. Riegel Textile Corp., supra, 484 F.2d

at 1028, but also one that does not necessarily interfere with

governmental regulation of such products. See Silkwood, supra,

104 S.Ct. at 626. Here, too, the notion that unless state common

law claims are preempted, cigarette manufacturers will be subjected

to multiple and conflicting standards with regard to labeling and

advertising, is purely hypothetical. Plaintiffs may not prevail in

these lawsuits and, if they do, manufacturers may not respond

to such suits by altering their labels or changing their advertising

practices. See Ferebee, supra, 736 F.2d at 1541. Viewed this way,

the payment of compensation to victims of tortious activity on

the part of defendants, if it is proved, does not necessarily, or

even probably, conflict with the purposes of uniformity that

underlie the Act, let alone jeopardize the survival of the tobacco

industry.

Indeed, the payment of such compensation may further the

remedial purposes of the Act, by, for example, aiding in the

exposure of dangers not previously associated with cigarette

smoking, encouraging manufacturers or consumers to petition

Congress, the FCC or the FTC for reasonable regulatory changes,

RIO me |

Tla

Appendix E

or itself pressuring Congress to act. See Ferebee, supra, 736 F.2d

at 1541-42. Moreover, defendant’s argument that, were the Act

to result in added warnings, it would dilute the effectiveness of

the warnings that now exist, thereby undermining the primary

purpose of the Act, is without merit. Congressional concern was

focused on a fear that such warnings would become encumbered

with qualifications, and the message that cigarette smoking is

dangerous be accordingly weakened. See S.Rep. No. 195, supra,

at 4. Congress feared not stronger, but weaker statements; only

the former would be encouraged by state tort recoveries.?° Hence,

even industry reaction to a finding of liability would not, in this

sense, engender conflict with the Act.

In sum, the payment of compensation to injured individuals

in no way creates an actual conflict with the Federal Cigarette

Labeling Act, or Congress’ goals in enacting it. As Congress has

not occupied a field which encompasses common law causes of

action, or explicitly stated that it intended to preempt such claims,

the court cannot but find that such claims exist now, as they existed

prior to passage of the Act. The legislative history of the Act,

and its amendment, further confirms that Congress did not intend

that such claims be preempted. These claims survive and continue

20. The court notes in this regard that the House of Representatives has

recently passed a measure that would mandate stronger warnings on cigarette

packages; these four warnings would be placed on such packages on a rotating

basis. In addition to complicating the entire warning scheme, three of these

four warnings are longer than the body of the present labeling requirement.

See 130 Cong. Rec. H9222 (Sept. 10, 1984) (text of H3979, § 4(a)(1)). The court

recognizes that this bill represents legislation which remains pending and is

therefore of limited value in assessing even Congress’ present inclination, let

alone that of the Congress which passed the Act here unde: consideration. Stil!,

the Bill demonstrates a diminished congressional concern with a simple or concise

labeling scheme where such scheme does not accurately represent the dangers

associated with smoking.

72a

Appendix E

to represent an individual’s sole recourse in the event of injury

based on cigarette smoking, should that injury be found to have

resulted from manufacturers’ tortious activity, whether that be

in the manufacture, design, advertising or marketing of their

undisputably harmful products. Congress did not, despite its

solicitousness for the cigarette industry, deprive citizens of this

recourse. Nor shall the court, in deference to Congress and with

respect for the state common law and individuals’ right to invoke

it, do so.

CONCLUSION

The arguments presented by the defendants in this case

symboiize a common misperception of the function of government

regulation and the imposition of standards of conduct which result.

It would be inappropriate to conclude that what is not prohibited

is permitted or that a minimum standard fixes the maximum as

well. It is irmpossible for the government to codify every act which

should not be done or the standards by which every act should

be performed. Thus, government has frequently established

standards in those areas in which a particular industry has failed

to establish its own. But injuries to persons, property and the

environment were vrong even before government declared that

they were wrong.

Now that government has acted in many areas and decreed

safety and quality standards, it would be unfortunate if those

directed to do no less, assume that they need do no more. In

almost every instance, government standards are meant to fix a

level of performance below which one should not fall. However,

legal minimums were never intended to supplant moral maximums.

Nor were they intended to eliminate pride in quality and

craftsmanship or self-imposed standards of health and safety.

73a

Appendix E

In this case the tobacco industry argues that because the

warning mandated by Congress prohibits them from doing less,

they need not and cannot do more. The court here concludes that

the warning of the Surgeon General fixes the minimum. Indeed,

indications are that the Surgeon General himself does not view

the warning as adequate. For these reasons, persons who claim

that the warnings are not adequate and that they have been injured

as a result should not be deprived of the opportunity of so proving.

By this decision the court does not find that they will succeed,

but only that they have the right to present their claims for

adjudication.

Defendant’s motion for judgment on the pleadings is denied.

Plaintiff’s motion to strike defendants’ preemption defenses is

granted. An appropriate order will issue.

74a

APPENDIX F—STATUTORY PROVISIONS INVOLVED

§ 1331. Congressional declaration of policy and

purpose ;

It is the policy of the Congress, and the

purpose of this chapter, to establish a

comprehensive Federal program to deal with

cigarette labeling and advertising with respect to

any relationship between smoking and health,

whereby—

5 ne TE ma —

(1) the public may be adequately

informed that cigarette smoking may be

hazardous to health by inclusion of a warning

to that effect on each package of cigarettes;

and

(2) commerce and the national economy

may be (A) protected to the maximum extent

consistent with this declared policy and (B)

not impeded by diverse, nonuniform, and

confusing cigarette labeling and advertising

regulations with respect to any relationship

between smoking and health.

§ 1332. Definitions

As used in this chapter—

(1) The term ‘‘cigarette’’ means—

(A) any roll of tobacco wrapped in

paper or in any substance not containing

tobacco, and

Dano es

ee

75a

Appendix F

(B) any roll of tobacco wrapped in anv

substance containing tobacco which, because of

its appearance, the type of tobacco used in the

filler, or its packaging and labeling, is likely to

be offered to, or purchased by, consumers as a

cigarette described in subparagraph (A).

(2) The term ‘‘commerce’’ means (A)

commerce between any State, the District of

Columbia, the Commonwealth of Puerto

Rico, Guam, the Virgin Islands, American

Samoa, Wake Island, Midway Islands,

Kingman Reef, or Johnston Island, but

through any place outside thereof; (B)

commerce between points in any State, the

District of Columbia, the Commonwealth of

Puerto Rico, Guam, the Virgin Islands,

American Samoa, Wake Island, Midway

Islands, Kingman Reef, or Johnston Island,

but through any place outside thereof; or (C)

commerce wholly within the District of

Columbia, Guam, the Virgin Islands,

American Samoa, Wake Island, Midway

Islands, Kingman Reef, or Johnston Island.

(3) The term ‘‘United States’’, when used

in a geographical sense, includes the several

States, the District of Columbia, the

Commonwealth of Puerto Rico, Guam, the

Virgin Islands, American Samoa, Wake

Island, Midway Islands, Kingman Reef, and

Johnston Island. The term ‘‘State’’ includes

any political division of any State.

76a

Appendix F

(4) The term ‘‘package’’ means a pack,

box, carton, or container of any kind in which

cigarettes are offered for sale, sold, or

otherwise distributed to consumers.

(5) The term ‘‘person’’ means an

individual, partnership, corporation, or any

other business or legal entity.

(6) The term ‘‘sale or distribucion”’

includes sampling or any other distribution

not for sale.

(7) The term ‘“‘little cigar’? means any roll

of tobacco wrapped in leaf tobacco or any

substance containing tobacco (other than any

roll of tobacco which is a cigarette within the

meaning of subsection (1) of this section) and

as to which one thousand units weigh not

more than three pounds.

§ 1333. Labeling; requirement; conspicuous

statement

It shall be unlawful for any person to

manufacture, import, or package for sale or

distribution within the United States any cigarettes

the package of which fails tc bear the following

statement: ‘‘Warning: The Surgeon General Has

Determined That Cigarette Smoking Is Dangerous

to Your Health’’. Such statement shall be located

in a conspicuous place on every cigarette package

and shall appear in conspicuous and legible type

iindaacieiaiiilatiiit te |

77a

Appendix F

in contrast by typography, layout, or color with

other printed matter on the package.

§ 1334. Preemption

(a) No statement relating to smoking and

health, other than the statement required by section

1333 of this title, shall be required on any cigarette

package.

(b) No requirement or prohibition based on

smoking and health shail be imposed under Siate

law with respect to the advertising or promotion

of any cigarettes the packages ot which are labeled

in conformity with the provisions of this chapter.

§ 1335. Unlawful advertisements on medium of

electronic communication

After January !, 1971, it shall be unlawful

to advertise cigarettes and little cigars on any

medium of electronic communication subject to

the jurisdiction of the Federal Communications

Commission.

§ 1336. Authority of Federal Trade Commission

Action prior to and after July 1, 1971

(a) The Federal Trade Commission shall not

take any action before July 1, 1971, with respect

to its pending trade regulation rule proceeding

relating to cigarette advertising. If at any time on

78a

Appendix F

or after July 1, 1971, the Federal Trade

Commission determines it is necessary to take

action with respect to such pending trade regulation

rule proceeding, it shall notify the Congress of the

determination. Such notification shall include the

text of the trade regulation rule and a full statement

of the basis for such determination. No trade

regulation rule adopted in such proceeding may

take effect until six months after the Commission

has notified the Congress of the text of such rule,

in order that the Congress may act if it so desires.

Unfair or deceptive acts or practices

(b) Except as provided in subsection (a) of

this section, nothing in this chapter shall be

construed to limit, restrict, expand, or otherwise

affect the authority of the Federai Trade

Commission with respect to unfair or deceptive

acts or practices in the advertising of cigarettes.

Issuance of trade regulation rules or requirements

for affirmative statements in advertising

(c) Nothing in this chapter shall be construed

to affirm or deny the Federal Trade Commission’s

holding that it has the authority to issue trade

regulation rules or to require an affirmative

statement in any cigarette advertisement.

§ 1337. Reports to Congress

(a) The Secretary of Health and Human

79a

Appendix F

Services shall transmit a report to the Congress

not later than January 1, 1971, and annually

thereafter, concerning (A) current information in

the health consequences of smoking, and (B) such

recommendations for legislation as he may deem

appropriate.

(b) The Federal Trade Commission shall

transmit a report to the Congress not later than

January 1, 1971, and annually thereafter,

concerning (A) the effectiveness of cigarette

labeling, (B) current practices and methods of

cigarette advertising and promotion, and (C) such

recommendations for legislation as it may deem

appropriate.

§ 1338. Criminal penalty

Any person who violates the provisions of this

chapter shall be guilty of a misdemeanor and shall

on conviction thereof be subject to a fine of not

more than $10,000.

§ 1339. Injunction proceedings

The several district courts of the United States

are invested with jurisdiction, for cause shown,

to prevent and restrain violations of this chapter

upon the application of the Attorney General of

the United States acting through the several United

States attorneys in their several districts.

80a

~ Appendix F

§ 1340. Cigarettes for export

Packages of cigarettes manufactured,

imported, or packaged (1) for export from the

United States or (2) for delivery to a vessel or

aircraft, as supplies, for consumption beyond the

jurisdiction of the internal revenue laws of the

United States shall be exempt from the

requirements of this chapter, but such exemptions

shall not apply to cigarettes manufactured,

imported, or packaged for sale or distribution to

members or units of the Armed Forces of the

United States located outside of the United States.

8la

APPENDIX G—ARTICLE FROM ‘“‘THE NATION’’ DATED

JUNE 7, 1986

ANTI-CIGARETTE SUITS

Federalism With Smoke and Mirrors

Laurence H. Tribe

In the past few years a wave of lawsuits has crashed against

the shores of our beleaguered legal system. Cigarette smokers have

gone to court, suing tobacco companies for injuries allegedly

caused by years of a deadly habit. If smokers win, cigarette makers

may be held accountable for an estimated $80 billion a year in

smoking-related losses; cigarette prices may shoot up to $3 a pack,

radically reducing smoking and saving millions from premature

death.

A major issue in the lawsuits involves the familiar warnings

on cigarette packages and in cigarette advertisements. Plaintiffs

say that the warnings did not make them adequately aware of

the dangers or of the risk of contracting the particular diseases

they developed. They also claim that industry advertisements

directly challenged or more subtly undercut the warnings,

encouraging smokers to disregard health risks. Whatever the merit

of those novel legal theories, unless the Supreme Court rules

otherwise, plaintiffs could be deprived of the chance to raise them

in court.

In a key ruling in April, the U.S. Court of Appeals for the

Third Circuit, invoking the doctrine of ‘‘implied Federal pre-

emption,”’ ruled that the estate of lifetime smoker Rose Cipollone

could not sue tobacco companies on the basis of the new legal

theories. Two weeks later a Federal District Court in Boston came

to the opposite conclusion. It will soon fall to the Supreme Court

82a

Appendix G

to decide which ruling was correct. Unless the Court reverses the

Third Circuit, we will witness a major departure from established

principles of federalism, representing yet another in a seemingly

endless string of legal and political victories, for the tobacco

industry.

| The basis for the appellate court’s decision—‘‘pre-

emption’’—is an idea firmly rooted in the Constitution: Article

VI’s supremacy clause makes Federal law the ‘‘supreme law of

the land.’’ Thus, when a Federal law and a state law directly

conflict, the Federal law controls. What this means when the

conflict is more oblique has been the subject of debate for decades.

And the pre-emption idea is locked in a tug of war with another

basic constitutional concept: the preference in our Federal system

for state governments to have broad powers to make and change

their legal policies.

So what does all of this have to do with smoking, lawsuits

and cigarette packages? It seems that the 1965 and 1969 Federal

laws that require package warnings (and made the Surgeon General

famous) also provided that ‘‘no statement relating to smoking

and health [other than the federally specified warning] shall be

required’’ on cigarette packages, and that ‘‘no requirement of

\ prohibition based on smoking and health shall be imposed under

\State law with respect to the advertising or promotion’’ of

cigarettes. As a result, no state could pass a law ordering cigarette

makers to put additional warnings on their packages. Nor could

any state force cigarette makers to include.a skull and crossbones

in their advertisements. |

But the tobacco industry takes this agrument one significant

step further. It contends that the legislation also prohibits

individual lawsuits based on state tort law complaining about the

Ere ec ome

AI TE MED AOR IE REE

83a

Appendix G

inadequacy of the warnings or about the cigarette ad campaigns.

The industry says that such suits, if successful, would effectively

establish a state ‘‘requirement’’ that manufacturers provide

additional warnings. Because states cannot directly require the

industry to provide more warnings, cigarette makers argue, they

cannot hold the companies liable for failing to do so, or for

running advertisements that might have tended to undermine the

warnings’ effectiveness.

However, a liability judgment in a state or Federal court is

hardly the same as a requirement that the industry do more than

the Federal warning law mandates. If an adequate warning would

scare off too much business, the cigarette companies could choose

to continue to meet only the Federal minimum and pay damage

awards to injured smokers for generations to come. The decision

to pursue or reject this policy—to choose whichever path is most

prudent—is up to the industry. In either case, as long as it

continues to meet the requirements of Federal law, it is free to

meet its state-imposed obligations to its customers as it sees fit.

If a state court finds that the industry has not fulfilled its

responsibilities to warn consumers, there is no reason for the

industry not to take its licking as the rest of American businesses

do. In countless other areas manufacturers are first held responsible

for the damage that they cause and then are left to choose between

paying to increase product safety, paying to increase warnings

and restrain their ads, or paying damages to injured consumers.

Did Congress mean to exempt the tobacco industry from the same

set of pressures and limited options? Did it mean to indemnify

this industry from all responsibility for the costs its product

imposes on our health care, welfare and tax systems? Laws may

be made in smoke-filled rooms, but rarely does Congress grant

the exemption from the laws of economics that the cigarette

industry claims.

84a

Appendix G

Just what Congress meant when it enacted the pre-emption

clause of the cigarette labeling act has troubled the courts.

Plaintiffs agrue that if Congress had intended to ban individual

damage actions, it would have said so, as it did when it enacted

laws on copyright and on pensions (Employee Retirement Income

Security Act). Similari;, the tobacco companies contend that if

Congress had meant to leave the right to bring tort suits intact,

it would have said so, as it did when it included ‘‘savings clauses’’

in laws concerning employee safety (Occupational Safety and

Health Act) and mineral lands leasing (such as the Surface Mining

Control and Reclamation Act). Both arguments demonstrate the

manifest dangers in trying to discern the tune when listening to

the sounds of Congressional silence. But, as even the court for

the Third Circuit noted, the benefit of the doubt in our Federal

system is tilted against Federal pre-emption of state law: the

symphonic tie normally goes to the plaintiffs.

Much of the legislative history behind the labeling acts is

ambigious, but a recurring chord in the debates is problematic

for ihose who argue that Congress intended to pre-empt all

warning-related lawsuits. During the 1965 and 1969 debates,

representatives and senators struggled over exactly what impact

the warnings might have in suits against cigarette companies. Some

lawmakers suggested that warnings could make recovery

impossible, inasmuch as consumers so warned ‘‘assumed the risk’’

of smoking; others argued that the warnings would have no impact.

Whichever view is correct, if Congress had meant to bar warning-

related litigation, that discussion would never have taken place.

The issue of how well the prescribed messages warned consumers

would arise predominantly in lawsuits challenging the adequacy

of the warnings. Even if legislators were only succumbing to

cigarette industry demands when they ‘‘forced’’ warnings on

tobacco makers—a charge that some critics leveled during the

85a

Appendix G

debates—Congress hardly thought that it was barring warning-

related lawsuits altogether.

To be sure, this agrument about Congress’ intent does not

put the industry’s smoke-and-mirrors federalism to rest. For even

if Congress did not explictly pre-empt lawsuits against cigarette

companies, the industry says, Congress did so implicitly.

Courts often invoke the theory of ‘‘implied pre-emption’’

when Congress has not explictly barred state action but instead

has created a comprehensive scheme of Federal regulation that

is meant to ‘‘occupy the field’’ that the state would seek to affect.

The tobacco industry argues that Congress imposed such a Federal

regulatory scheme in the area of cigarette labeling. It is this theory

that several courts, including the U.S. Court of Appeals for the

Third Circuit, have accepted in ruling for the cigarette makers.

But the Supreme Court and other Federal courts have been

hesitant to use the slippery doctrine of implied pre-emption to

circumscribe state action or keep litigants out of the state courts.

In 1983 the Supreme Court concluded that Federal laws

establishing safety regulations for nuclear power plants did not

pre-empt a California law that limited plant construction, for

economic reasons, until safe disposal of nuclear waste could be

arranged. A year later the Court held that the same law, even

when boosted by the Price-Anderson Act’s limitation of a nuclear

plant’s civil liability, did not pre-empt a lawsuit by Karen

Silkwood’s estate, against Kerr-McGee for her radiation-related

injuries. In siding with Silkwood, the Supreme Court said,

‘*Whatever compensation standard a state imposes . . . a [nuclear]

licensee remains free to continue operating under federal standards

and to pay for the injury that results.’’

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Appendix G

If the Silkwood opinion did not provide enough guidance |

for the Third Circuit, the court needed only to look to a 1984

opinion by Judge Abner Mikva of the U.S. Court of Appeals

for the District of Columbia in a case that concerned a worker’s

allegations that Chevron, notwithstanding its compliance with

Federal labeling laws, had failed to give adequate warning of the

dangers posed by the insecticide paraquat, which it produced.

The paraquat case involved the very issues central to the cigarette

litigation: a Federal warning statute, the absence of express pre-

emption, and a plaintiff claiming inadequate warning. It is strange,

then, that the Third Circuit’s opinion makes no reference to Judge

Mikva’s careful review of the same set of competing concerns—a

review that allowed the plaintiff’s suit to proceed.

In the cigarette cases it is clear that Congress intended to

occupy a field; the question is, Which one? It is a question the

Third Circuit never answered. As other courts have found, a

Congressional intent to occupy the health and safety field does

not bar state courts from awarding damages for compensatory

or economic purposes.

In any event, instead of pinpointing what area Congress meant

to pre-empt, the appellate court ruled against the Cipollones,

deeming their lawsuit to be at cross-purposes with the Federal

cigarette labeling act. The court found that the law’s ‘‘purpose’’

was to establish a ‘‘comprehensive Federal program to deal with

cigarette labeling and advertising,’’ with the goal of avoiding

‘“*diverse, nonuniform, and confusing”’’ regulations. But just how

does this conflict with the Cipollones’ claims? On several

occasions—including recent challenges to a local rent control

ordinance on the ground that it contravened the anti-price fixing

and pro-competition goals of Federal antitrust law, and to a state

tax on coal alleged to be opposed to a Federal policy of

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Appendix G

encouraging coal use—the Supreme Court has rebuffed the idea

that a Congressional aim to foster something like competition

or nuclear power can in itself suffice to squelch state action that

dampens what Federal law would promote. Even if the purpose

of the Federal label law is to foster interstate commerce in

cigarettes, it is hard to see how allowing plaintiffs to bring their

warning-related lawsuits would imperil that commerce. Tobacco

companies may choose not to add any warning, or—as do

producers of lawn movers, drill presses and stepladders—they may

choose to provide a uniform warning and advertising materials

that satisfy the courts and consumers of all fifty states.

It is the broader ramifications of the Third Circuit’s ruling

that are most ominous. That court’s view of pre-emption has the

burning force of a prairie fire, and it is hard to see what structures

of state compensation would survive the ensuing conflagration.

Food, drugs, cosmetics and toxic substances are all governed in

some manner by Federal warning laws. If innocent people are

injured because of inadequate warnings, or because advertisements

downplay the product’s dangers, are all of them barred by Federal

law from pursuing tort claims in state court? If so, the circuit

court’s ruling is cause for a knowing snicker in corporate board

rooms across the country.

It is true that such litigation is highly controversial. Like the

cigarette cases, the food and drug cases have been critized by some

as excessive and wasteful. But in our Federal system, reform of

litigious excesses should ordinarily come from the states. If state

legislatures and courts decide to act to limit or constrain recovery,

that is their prerogative. For a Federal appellate court to draw

a cloak of immunity over such cases is to overstep its place in

our Federal scheme.

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Appendix G

The Third Circuit’s decision confers such a sweeping grant

of immunity that even cigarette makers, never at a loss for

chutzpah in the political realm, would have blushed at asking

Congress expressly for such protection: ‘“The point, Congressman

Bumpus, is that even if we discover that cigarettes cause X disease,

we might want to keep it a secret. And if millions of people get

X disease as a result, we certainly don’t want anyone to be able

to sue us for failing to warn them.’’ Not even a hardened

Congressional cynic can envision such an argument winning the

day on Capitol Hill.

This is not to say that juries will or should accept plaintiffs’

claims that the actual warnings of the actual diseases they

contracted (generally heart and lung ailments) were inadequate.

There is plenty of information about the health dangers of cigarette

smoking. And it is not clear how juries will deal with the plaintiffs’

claims that cigarette advertisements undercut the warnings and

lured them into smoking. Some may believe the smokers’ claims

of ignorance and deception; others may choose to believe that

the smoker was the cause of his or her own demise, as did a jury

in California recently.

But as long as state law permits, the verdicts should be left

by courts where they were left by Congress: for juries to decide,

based on the particular set of circumstances in each case. To the

extent that Rose Cipollone’s claim rests on the cigarette industry’s

failure to tell her what it knew, or on its efforts to preserve

smoking’s allure against a backdrop of grim statistics and deadly

warnings, Congress did not pull the legal rug out from under her

twenty years before tobacco pulled the breath from her cancer-

devastated lungs.

eo

Id EE LICE OOD cael

89a

APPENDIX H—OPINION OF THE COURT IN HAIGHT, ET

AL. V. THE AMERICAN TOBACCO CO., ET AL.

UNITED STATES DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF WEST VIRGINIA

No. 84-2232

ROSALEE HAIGHT, JOHN HAIGHT, ANDREW J.

GOODWIN, CHARLES FORBES and JUNE FORBES,

Plaintiffs

v.

THE AMERICAN TOBACCO CO. a division of American

Brands, Inc.; BROWN & WILLIAMSON TOBACCO

CORPORATION; LORILLARD DIVISION OF LOEW’S

THEATRES, INC.; PHILIP MORRIS INCORPORATED; R.J.

REYNOLDS INDUSTRIES, INC.; LIGGETT GROUP, INC.;

S.S.S.C. & B., INC.; McCANN-ERICKSON, INC.; FOOTE

CONE & BELDING, INC.; LEO BURNETT U.S.A.; WELLS,

RICH, GREENE, INC.; WILLIAM ESTY COMPANY, INC.;

BATTEN, BARTON, DURSTINE & OSBORNE, INC.; THE

BLOOM AGENCY; ANCHOR TOBACCO CO.; and HECK’S,

INC.,

Defendants

December 26, 1984

COPENHAVER, D.J.:

MEMORANDUM ORDER

4 This matter is before the court on the plaintiffs’ motion to

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Appendix H

remand this action to the Circuit Court of Kanawha County, West

Virginia.

On May 15, 1984, a complaint was filed in the Circuit Court

of Kanawha County, West Virginia. Subsequently, a plaintiff was

Aeleted and a defendant added through the filing of an amended

complaint on June 1, 1984.

The plaintiffs include five individual residents of Kanawha

County, West Virginia. They allege that as the direct and proximate

result of the use of tobacco products, including cigarettes, :hey

suffered serious and permanent physical and psychological injuries.

The defendants are assembled into three basic groups; six of the

defendants manufacture tobacco products, eight are alleged to

promote and advertise tobacco products, and two allegedly

distribute tobacco products.

Fourteen counts are raised by the complaint. The first six

counts are directed to the defendant manufacturers and allege

the intentional omission of material facts, negligence, strict

liability, breach of warranty of merchantability, breach of warranty

for fitness for purpose, and absolute liability. Counts seven and

eight allege intentional omission of material facts and negligence

on the part of the advertisers. Counts nine through fourteen

contain allegations against the distributors of intentional omission

of material facts, negligence, strict liability, breach of warranty

of merchantability, breach of warranty for fitness for purpose,

and absolute liability.

On June 14, 1984, a joint and separate petition for removal

was filed by all defendants removing the action from the Circuit vA |

Court of Kanawha County, West Virginia, to the United States ,

District Court for the Southern District of West Virginia. Plaintiffs

subsequently filed a motion to remand, alleging improper removal. «

’

it

Te eT

9la

Appendix H

FEDERAL QUESTION REMOVAL

A. General Principles

The statute authorizing removal of actions from state to

federal courts on the basis of a federal question provides as follows:

Any civil action of which the district courts have

Original jurisdiction founded on a claim of right

arising under the Constitution, treaties or laws of

the United States shall be removable without regard

to the citizen

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