Amicus Curiae Brief — Blumenthal v. Philip Morris, Inc.

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Supreme Lirnire.

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No. 97-1399

IN THE

MAR 19 1079

SUPREME COURT OF THE UNITED STATES“ -

OCTOBER TERM, 1997

RICHARD BLUMENTHAL.

ATTORNEY GENERAL OF CONNECTICUT .

PETITIONER

PHILIP MORRIS, INC.. ET AL.,

RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF AMICUS CURIAE OF THE

COMMONWEALTH OF MASSACHUSETTS,

FORTY-FIVE STATES, THE DISTRICT OF

COLUMBIA, GUAM, AND THE COMMONWEALTHS

OF THE NORTHERN MARIANAS ISLANDS AND

PUERTO RICO, IN SUPPORT OF PETITIONER

SCOTT HARSHBARGER

Attorney General

of Massachusetts

JEFFREY D. CLEMENTS*

Assistant Attorney General

One Ashburton Place

Boston, Massachusetts 02108

(617) 727-2200

*Counsel of Record

(Additional Counsel on Inside Cover)

BILL PRYOR

Attorney General

of Alabama

GRANT WOODS

Attorney General

of Arizona

DANIEL E. LUNGREN

Attorney General

of California

M. JANE BRADY

Attorney General

of Delaware

ROBERT A. BUTTERWORTH

Attorney General

of Florida

GUS F. DIAZ

Attorney General

of Guam

ALAN G. LANCE

Attorney General

of Idaho

JEFFREY A. MODISETT

Attorney General

of Indiana

CARLA J. STOVELL

Attorney General

of Kansas

ot

BRUCE M. BOTELHO

Attorney General

of Alaska

WINSTON BRYANT

Attorney General

of Arkansas

GALE A. NORTON

Attorney General

of Colorado

JOHN M. FERREN

Corporation Counsel of

the District of

Columbia

THURBERT E. BAKER

Attorney General

of Georgia

MARGERY S. BRONSTER

Attorney General

of Hawaii

JAMES E. RYAN

Attorney General

of Illinois

THOMAS J. MILLER

Attorney General

of lowa

RICHARD IEYOUB

Attorney General

of Louisiana

EEE ————e—EeEeEeEeererroe—t

ANDREW KETTERER

Attorney General

of Maine

FRANK J. KELLEY

Attorney General

of Michigan

JOSEPH P. MAZUREK

Attorney General

of Montana

JEREMIAH W. (JAY) NIXON

Attorney General

of Missouri

FRANKIE SUE DEL PAPA

Attorney General

of Nevada

_ PETER VERNIERO

Attorney General

of New Jersey

DENNIS C. VACCO

Attorney General

of New York

ROBERT B. DUNLAP II

Attorney General

of Northern Mariana Islands

W.A. DREW EDMONDSON

Attorney General

of Oklahoma

J. JOSEPH CURRAN, JR.

Attorney General

of Maryland

HUBERT H. HUMPHREY III

Attorney General

of Minnesota

MIKE MOORE

Attorney General

of Mississippi

DON STENBERG

Attorney General

of Nebraska

PHILIP T. MCLAUGHLIN

Attorney General

of New Hampshire

TOM UDALL

Attorney General

of New Mexico

HEIDI HEITKAMP

Attorney General

of North Dakota

BETTY D. MONTGOMERY

Attorney General

of Ohio

HARDY MYERS

Attorney General

of Oregon

MIKE FISHER

Attorney General

of Pennsylvania

JEFFREY B. PINE

Attorney General

of Rhode Island

MARK BARNETT

Attorney General

of South Dakota

DAN MORALES

Attorney General

of Texas

WILLIAM H. SORRELL

Attorney General

of Vermont

DARRELL V. MCGRAW, JR.

Attorney General

of West Virginia

WILLIAM U. HILL

Attorney General

of Wyoming

JOSE FUENTES-AGOSTINI

Attorney Ceneral

of Puerto Rico

CHARLES M. CONDON

Attorney General

of South Carolina

JOHN KNOX WALKUP

Attorney General

of Tennessee

JAN GRAHAM

Attorney General

of Utah

CHRISTINE O. GREGOIRE

Attorney General

of Washington

JAMES E. DOYLE

Attorney General

of Wisconsin

ABLE OF CONTENTS

ROE Pe POs COTE as ii

ARE MIMIUE OIE CIV GRIRESE we viccs vet csacsvvcurvews |

RIIRELEE SSPE PRP PRIIMEESE bie oceania esmsesere ees 3

REASONS FOR GRANTING REVIEW ................ 5

l. BY ITS DEPARTURE FROM THIS COURT’S APPROACH

TO STATE INTEREST ANALYSIS, THE DECISION BELOW

CREATES AN UNPRECEDENTED “MONEY DAMAGES”

EXCEPTION TO YOUNGER ABSTENTION .............. 5

EME eo ee ee us WU wy oe eae ees : 15

TABLE OF AUTHORITIES

Cases

Baum yv. Grect Western Cities, Inc., 703 F.2d 1197

ge eae ls 3. FRESE Reg aacanaR ep oh Reine <7, kre marae 14

Burford v. Sun Oil Co., 319 U.S. 315 (1943).............. 5

California v. Arc America Corp.,

PO Fag BOOKA PEED, Soi ade eR Kha eee Rs 12

Caterpillar, Inc. v. Williams,

RBZ UG. SOO; SI SD) i io vec bes ieee 10

Commonwealth of Massachusetts v. Philip

Morris, Inc., et al., (Middlesex Sup.

CS OV eae FO Te eRe See betes 6

Commonwealth v. Mass. CRINC, 392 Mass. 79,

88-89-(1984) eee )

Dreisbach v. Murphy, 658 F.2d 720 (9th Cir. 1981)... 2... 14

Florida Lime & Avocado Growers, Inc.

Pee Sas Ee Boe, PTE ED oxo hee oe eo ee ee 13

Fulton v. Hecht, 580 F.2d 1243

CIR Meals POTN g ko kde Tae hae pan 14

Gerkin v. Davidson Grocery Co.,

BP Fae ete SRO TE oo ko woh ale oe SRR RRO eS 1]

Gresham Park Community Organization v.

Howell, 652 F.2d 1227, 1248

(tn et, 19D oi hho es 807s REE 14

Huffman v. Pursue, Ltd,

EAE Siiahs DORA EOD 55 ik hb 6 3b ee ee LG 7

Middlesex Ethics Committee v. Garden State

Bar Association,

SE Acs, ese ee Ce ey te eli 3

Mobil Oil Corp. v. City of Long Beach,

Fhe S48 Joe Ce PORE 6h eee ee

nloore v. Sinks, 442 US: S15 CT ks ee oe &

New Orleans Public Service, Inc. v.

City of New Orleans,

491 U'S.-35, 365; 366 (1989) —-~> ses rien: 8

New York v. United States,

SRO Mik Ohad SPORTY os Se ae 2

Ohio Civil Rights Commission v.

Dayton Christian Schools, Inc.,

EF Sis WET RIOR 5554 ea eee 8

Penzoil Company v. Texaco, Inc.,

Wei AGEs hy ADEE ESS eee ae oe 5

ill

People v. Thomas Shelton Powers, M.D., Inc.,

2 Cal. App. 4;

SPU Cl ROG. 205 SS CEPR) hn ka cance ses 8 vee es 13

People ex. rel. Hartigan v. E & E Hauling, Inc.,

COT NE.A6 £05 Ce. BOGE) 5 a cob sdk awed cubase 9, 10

Perma Life Mufflers, Inc. v. International

Parts Corp., 392 U.S. 134, 136 (1968) ........... 14

Philip Morris v. Harshbarger,

946 F. Supp. 1067 (D. Mass 1996) ............. 6,7

Porter v. Warner, 328 U.S. 395, 398-9 (1945) ...... AG

Quakenbush y. Allstate Insurance Company,

$16 S. Ce TTR OF) us ch eee Pewee res 5

Railroad Comm'n of Texas v. Pullman

Co., 312 UB. 400 PAT) oe ciiaxe ca eee ese 6

State of Connecticut v. Philip Morris, Inc.,

et al., Docket No. CV 96-0072414S ............. 3

State of Florida ex. rel. Shevin v. Exxon

Corp.,

526 F.2d 266 (3 Cor. 1970) tae 9,10

State of Tennessee v. Heath,

BUG DS. W208 S35, S37 CEDOOP a's ince e acto ye eceeees 9

Steffel v. Thompson, 415 U.S. 452, 462 (1974) ............ 7

Trainor v. Hernandez, 431 U.S. 434 (1977) .............. 8

Valley Forge Christian College v. Americans United for

Separation of Church and State, Inc.,

re aes Hs PEEOED 0 cca Scie col ehh ee

Younger v. Harris,

401 U.S. 37, 43 (1971) .... 1, 3,4, 5, 7, 8. 9, 10, 13. 15

Federal Statutes

Federal Trade Commission Act, 15 U.S.C.,§ 45 .........14

State Statutes

Ala. Code §8-18-1 ............ Whe tind ta wb cata e l

Alaska Stat. §45.50.471 .......... Pe Pow ere fir ee

Ariz. Rev. Stat. Ann. §44-1521 ............ sighs ak

Ark. Code Ann. §4-88-101 ................. hace kaha aoe

Cal. Bus. & Prof. Code §§17200, 17500 ............ coal

Colo. Rev. Stat. §6-1-101; §6-1-114 ....................

CAN, SOO, POUL POE BOMN ok g doce ceicudweeuc ee ey

(Alma, Coen. SME. 35-24. ce ccc ene Perey eres ee

fee. Oe ys ee PAS ae) ein eee

Seniesa UN MORE sc oe cg Set tee

PER: ats MCINTIRE he ot poe a eee ee

ak. RAE FR Sete ec ab eee ee coke dees ob aes ise

Haw. Rev. Stat. §480 ........ knee CRO S ROS Oe l

ee Re PE oka woah pascacasa cease tecsst tern |

Il]. Comp. Stat. Ann. §505/1 .......... PCR Cyt ek ee |

a SE ELON « vive -b-n'o 40 0's obs bbRoeeeks |

ae FR ik , rrr ert nay ry roe oe |

el, OUR: PRUE, ED len akc a boos 02 oo eek ase ees l

ls Ses Rs SEE ED ou beh dusts Cotes elie eben l

bith: TV: SR FER: SOE vider ere te been ecbeweeen |

Md. Com. Law Code Ann. §§13-101, 14-101 ............. |

Pan. SHE: SAW FU, SORIA 0 -5:0's 5:8 ok odie fd Hae bw ered 1,14

anGet, CE, EDWG FG, Sas | wv s.a.o sone 6c tac eenen l

Minn. Stat. Ann. §8.31, §325D.44, §325F.69 ............. l

Se FMS WE ANOPE. vo vac a wo h-he Hubba emcee eee |

Pe A NEED 55 2k og 5s bw. autod ee hee Res l

POU, CAM FA WORN ion iele v's 0he cbdbeabeeenard |

NCD. IROV. SOR. SSP-1GUE, SE 7-SOL oc ccc cece ee ewcnvwee l

Nev. Rev. Stat. §§41.600, 598.0903 .........00..c5006., }

N.H. Rev. Stat. Ann. §358-A:1

Fahy Ss PUR NIN ok bk Salus eee ade ee hao os ]

Pah, en PU PME eo ee oo Se Ae eee, l

N.Y. Gen. Bus. Law §§349, 350 .

N.C. Gen. Stat. §75-1.1

Pues ey DG ODOR OMEN i's be ce Foon, Cel eee ua |

Cee RW, CC a BE RO i te a anes plat ee

Soma Os: AMM Dts ha PR a ce d-p vn oe ere et ening oe 2

iy SUN. Inc ND ge ciage pte eer hp Be Setii on h 2

PA a Se OPE te ei i Nee re: 2

am S| 2 TS geet ec tat Nin meee Ine ay an 2

Pe EOE) UENENE Gos eee dre ek Ri cing 2) 2

rt A, MN PM ED OSI cog a, 2

UN SE PAM THRE ii a hn ae 2

ree, Be a CO Ce Ae BIT AL Se 2

Utah Code Ann. §§13-2-1, 13-5-1, 13-li-1............... 2

a 2 § RY eee ree rer ee eee 2

peo 2. RE Sieereirin, Cree re eT ek wre nn oat 2

a. 8, FE Ree rn 2

We. Ve, Ce SO ek ei cas... . . twas bean 2

ee ret Perens pace moe 2

Wis. Stat. Ann. §§100.20, 100-24, 100-26 ............... 2

YO. Sant, AaeGeee vis i nae kas Fae ee chan 2

Miscellaneous/Other

Black's Law Dictionary, 1427 (6th ed. 1990) ............ 1]

Ross, State Attorneys General Powers

and Responsibilities,

Appendix K, at 407-411 (1990) ................0.. 2

Vill

STATEMENT OF INTEREST

The amici curiae Commonwealth of Massachusetts and

the states identified on the cover, by and through their attorneys

general, respectfully submit this brief in support of the Petition

for Writ of Certiorari of Richard Blumenthal, Attorney General

of Connecticut.

“Since the beginning of this country’s history Congress

has, subject to few exceptions, manifested a desire to permit

state courts to try state cases free from interference by federal

courts.” Younger v. Harris, 401 U.S. 37, 43 (1971). The

States have an interest in the Petition because the decision of

the Court of Appeals deals a heavy blow to the comity served

by Younger abstention.

These States all have consumer protection and antitrust

statutes to protect the welfare of their citizens and the integrity

of their economies, and the attorneys general of the States are

charged with enforcing these laws.' The States, through their

' See, e.g., Ala. Code §8-18-1; Alaska Stat. §45.50.471; Ariz.

Rev. Stat. Ann. §44-1521 (misdemeanor penalties in certain cases); Ark.

Code Ann. §4-88- 101(criminal penalties in certain cases); Cal. Bus. & Prof.

Code §§17200, 17500 ; Colo. Rev. Stat. §6-1-101 §6-1-114 (criminal

penalties in certain cases); Conn. Gen. Stat. §42-110a; Del. Code Ann. Tit.

6 §§ 2511, 2531; D.C. Code Ann. §28-3901; Fla. Stat. Ann. §501.201; Ga.

Code Ann. §10-1-390; Haw. Rev. Stat. §480; Idaho Code §48-601; III.

Comp. Stat. Ann. §505/1 et. seq.; Ind. Code Ann. §24-5-0.5-1; lowa Code

Ann. §714.16; Kan. Stat. Ann. §50-623; Ky. Rev. Stat. §367.110; La. Rev.

Stat. Ann. §51:1401; Md. Com. Law Code Ann. §§13-101, 14-101

(criminal penalties in certain cases); Mass. Gen. Laws Ann., c.93A; Mich.

Comp. Laws Ann. §445.901; Minn. Stat. Ann. §8.31, §325D.44, §325F.69;

Miss. Code Ann. §75-24-1 (criminal penalties in certain cases); Mo. Rev.

Stat. §407.010 (criminal penalties in certain cases); Mont. Code Ann. §30-

14-101 (criminal penalties in certain cases); Neb. Rev. Stat. §59-1601, §87-

30i (criminal penalties in certain cases); Nev. Rev. Stat. §§41.600,

598.0903; N.H. Rev. Stat. Ann. §358-A:1; N.J. Stat. Ann. §56:8-1; N.M.

Stat. Ann. §57-12-1; N.Y. Gen. Bus. Law §§349, 350; N.C. Gen. Stat. §75-

1.1 (criminal penalties in certain cases); N.D. Gen. Stat. §51-15-01; Ohio

attorneys general, frequently bring enforcement actions in state

courts seeking both injunctive relief and monetary damages

against those engaged in unfair or deceptive conduct in trade

and commerce. The judiciaries of the States frequently issue

judgments in these actions, enjoining defendants’ illegal

conduct, and awarding penalties, restitution, disgorgement of

ill-gotten gains, attorney’s fees and costs to the states and

harmed consumers. Such actions are brought on behalf of the

States in the public interest, and the attorneys general represent

their sovereign state, and not the individuals harmed.

The States respectfully request that the Court grant the

Connecticut Attorney General’s Petition for Writ of Certiorari.

Cf New York v. United States, 326 U.S. 572, 574-5 (1945)

(“The strong urging of New York for further clarification of the

amenability of the States to the taxing power of the United

States led us to grant certiorari... The argument pressed by New

York and the forty-five other States who, as amici curiae, have

joined her deserves an answer.”); Valley Forge Christian

College v. Americans United for Separation of Church and

State, Inc., 454 U.S. 464, 470 (1982) (“Because of the

unusually broad and novel view... adopted by the Court of

Rev. Code Ann. §1345.01; Okla. Stat. Ann. Tit. 15 §751 (criminal penalties

in certain cases); Or. Rev. Stat. §646.605; Pa. Stat. Ann. Tit. 73 §201-1; R_I.

Gen. Law §6-13.1-1; S.C. Code Ann. §39-5-10; S.D. Cod. Laws Ann. §37-

24-1 (criminal penalties in certain cases);Tenn. Code Ann. §47-18-101

(criminal penalties in certain cases); Tex. Bus. & Com. Code Ann. §17.41

(criminal penalties in certain cases, including concealing evidence); Utah

Code Ann. §§13-2-1, 13-5-1, 13-11-1; Vt. Stat. Ann. tit. 9 §2451; Va. Code

§59.1-196; Wash. Rev. Code Ann. §19.86, et. seq.; W. Va. Code §46A-6-

101; Wis. Stat. Ann. §100.18 (criminal penalties in certain instances); Wis.

Stat. Ann. §§ 100.20, 100-24, 100-26; Wyo. Stat. §40-12-101.

For citations to each state criminal! and civil antitrust laws, see

Ross, State Attorneys General Powers and Responsibilities, Appendix K, at

407-411 (1990).

eee

Appeals, we granted certiorari.”’)

1 SUMMARY OF ARGUMENT

The issue in this case is whether Connecticut’s action

to enforce its laws against the tobacco companies implicates

important state interests. The Court should grant Petitioner’s

Petition for Writ of Certiorari because the decision below

departs from this Court’s jurisprudence and invites pre-emptive

federal court speculation about the “primary aim” of not only

the actions pending in over forty States against the tobacco

companies, but of virtually every action brought by the States

to enforce their consumer protection and antitrust laws, as well

to enforce a host of other laws to protect the welfare of the

citizens of each state.

In assessing the nature of the state interest for purposes

of Younger abstention, the Court of Appeals gave short shrift to

Connecticut’s Complaint in the pending state enforcement

action,’ speculated without support that the “primary aim” of

the State was to recover money for its Medicaid program, and

gave insufficient weight to the interest of the States and their

attorneys general in protecting the public and their respective

> Where a federal plaintiff seeks to interfere with a state judicial

proceeding, the federal court should abstain under Younger if (1) the state

proceedings are ongoing; (2) the proceedings implicate important state

interests; and (3) the state proceedings provide an adequate opportunity for

the federal plaintiff to raise any federal constitutional challenges.

Middlesex Ethics Committee v. Garden State Bar Association, 457 U.S.

423, 432 (1982).

> State of Connecticut v. Philip Morris, Inc, et. al., Docket No.

CV 96-0072414 S (Judicial District of Litchfield). The defendants in that

case, and the federal plaintiffs in the case below, are referred to herein as

“the tobacco companies.”

States from illegal conduct in business and trade. The Court of

Appeal’s re-casting of the State’s case raises particularly grave

concerns for the States because the action pending in the '

Connecticut state court implicates a vital state interest in the

health and safety of its citizens, their protection against fraud

and deception, and the economic well-being of the State.

The Court of Appeals’s erroneous interpretation rests

on two points viewed by the court as evidence that

Connecticut’s case “is not a generic proceeding of great

importance to the state:” (1) the state sought “money

damages;” and (2) private parties also could maintain actions

under the state’s consumer protection and antitrust statutes.

(All) Allowing these two points to be the measure of the

State’s interest in its judicial proceedings would shatter the

foundations of state enforcement of consumer protection and

antitrust laws, and the respect due such laws and proceedings

under Younger.

When defendants, such as the tobacco companies in the

Connecticut proceeding, invite the federal courts to interfere

with these state enforcement proceedings, regardless of

whether the State seeks money damages for state residents or

state agencies, “proper respect for state functions” requires that

the federal courts decline the invitation, and abstain. Younger,

401 US. at 44.

REASONS FOR GRANTING REVIEW

2 t F *s Approach

o State Interest Analysis. Th cision Below

rea rec ted “M ages

xception” to the e tention Doctrine

This Court has never held that where a State brought a

judicial proceeding, the state interest was of insufficient

magnitude to justify Younger abstention.* Yet, the Court of

Appeals concluded that the State of Connecticut has an

insufficient interest in its enforcement action pending before

* Indeed, in Pennzoil Company v. Texaco, Inc., 481 U.S. 1,10

(1987), the Court held that Younger abstention warranted a dismissal of

Texaco’s federal challenge to the application of Texas’s appellate bond

requirements because “significant interests [would be] harmed by [the

federal courts’] intrusion into the Texas judicial system.” The State was not

a party in this case, and even “expressly represented to the Court of Appeals

that it ‘has no interest in the outcome of the state-court adjudication

underlying this cause,” except in its fair adjudication.” 481 U.S. at 19

(Brennan, J., dissenting).

In Quackenbush y. Allstate Insurance Company, 517 U.S. 706

(1996), involving abstention under Burford v. Sun Oil Co., 319 U.S. 315

(1943 ), rather than under Younger, the Court weighed a strong federal

interest in arbitrations under the Federal Arbitration Act against a state

interest it saw “at first blush to present nothing more than a run-of-the-mill

contract dispute,” and rejected abstention. Quackenbush does not suggest

any diminution of the Court’s concern for comity under Younger. The state

proceedings did not involve law enforcement on behalf of the state and

public. Instead, Quackenbush, the state insurance commissioner, filed the

suit in his capacity as trustee for insolvent reinsureds to recover reinsurance

proceeds from Allstate. As in Mobil Oil Corp. v. City of Long Beach, 772

F.2d 534 (9th Cir. 1985), the issue was not state policy, or the enforcement

of state law, but the meaning of a commercial contract.

the Connecticut judiciary, despite allegations similar to those

that the Massachusetts Attorney General has observed involve

“the most serious wrongdoing ever alleged in a civil action

filed by the Commonwealth.”

The Court of Appeals reached this conclusion by

misinterpreting the State complaint actually pending in state

court. The Court of Appeals isolated only one portion of the

relief sought by Connecticut-- reimbursement of its Medicaid

costs-- and re-cast an enforcement action in the public interest

as a “subrogation action grounded in tort:”

Although the state pleads its action in state court as an

enforcement action pursuant to CUTPA and the state

antitrust law to prevent deception and unfair and

anticompetitive business practices-- arguably important

state interests-- the underlying claim is more accurately

classified as a subrogation action grounded in tort.

Notwithstanding certain other claims, the primary aim

of the state is to obtain reimbursement from the tobacco

industry for expenditures caused by its allegedly

tortious conduct. This purpose has little to do with

eradicating unfair trade practices or anticompetitive

business practices.

(A10-11) (citations omitted).°

> Memorandum in Opposition to Defendants Motion to Dismiss,

at |, filed in Commonwealth of Massachusetts v. Philip Morris, Inc. et. al.,

(Middlesex Sup. Ct. CV-95-7378).

° The Court of Appeals cited Philip Morris v. Harshbarger, 946

F. Supp. 1067 (D. Mass. 1996), where the court reached a similar

conclusion, but abstained under Railroad Comm'n of Texas v. Pullman Co.,

312 U.S. 496 (1941). The District Court in the Connecticut action

6

This decision conflicts with the very foundation of the

Younger abstention doctrine.

Younger recognizes that under “Our Federalism,”

principles of comity counsel against permitting a state

defendant to interfere with a state judicial proceeding by

seeking equitable relief in federal court. If the defendant can

vindicate its federal rights in the state proceeding, a duplicative

federal action would needlessly disrupt important state interests

and “reflect negatively upon the state court’s ability to enforce

constitutional principles.” Steffel v. Thompson, 415 U.S. 452,

462 (1974).

The Court’s Younger abstention decisions have

carefully examined both the procedural state interest-- the

integrity of its own judicial process-- and the substantive state

interest at stake in that judicial process. Thus, Younger

abstention recognizes the States’ interest in criminal

proceedings, Younger; proceedings “in aid of and closely

related to criminal statutes,” Huffman v. Pursue, Ltd., 420 U.S.

592 (1975); the States’ judicial contempt process, Judice v.

Vail, 430 U.S. 327 (1977); and processes for enforcing state

judgments, Pennzoil Co. v. Texaco, Inc., 481 U.S. 1 (1987).

Younger abstention also guards against federal

distinguished Harshbarger on the grounds that the Massachusetts complaint

did not then contain statutory consumer protection counts. The

Massachusetts Attorney General’s motion to dismiss the tobacco

companies’ federal complaint was filed on December 19, 1995, and argued

July 30, 1996. Massachusetts did not file its amended complaint containing

the consumer protection counts until August 7, 1996. While the

Harsh.Sarger decision was not issued until November, 1996, the chronology

and the decision’s reference only to the original December, 1995 complaint,

indicate that the District Court in this case correctly stated that the

Harshbarger decision did not address consumer protection and antitrust

claims. In any event, that decision was incorrect for the reasons stated here.

a Moneta

interference with pending state judicial proceedings involving

important state interests such as policies to safeguard the fiscal

integrity of state welfare programs, Trainor v. Hernandez, 431

U.S. 434 (1977); to protect children from child abuse, Moore v.

Sims, 442 U.S. 415 (1979); or to eliminate sex discrimination,

Ohio Civil Rights Commission v. Dayton Christian Schools,

Inc., 477 U.S. 619 (1986).

In none of these cases did the Court consider the

availability of monetary relief under state law in deciding

whether the principles of Younger applied to protect important

state interests from undue federal interference. Nor did the

Court consider whether other specific relief sought might affect

the nature of the state interest in its judicial proceeding.’

In New Orleans Public Service, Inc. v. City of New

Orleans, 491 U.S. 350, 366 (1989), the Court made clear that

such speculation about the “outcomes” of the state judicial

proceeding has no place in assessing whether important state

interests are implicated in the state proceeding: “When we

inquire into the substantiality of the State’s interest in its

proceedings we do not look narrowly to its interest in the

outcome of the particular case-- which could arguably be off-

set by a substantial federal interest in the opposite outcome.”

Instead, “what we look to is the importance of the generic

proceedings to the state.”

In this case, the generic proceeding is an enforcement

” “In Younger, for example, we did not consult California’s

interest in prohibiting John Harris from distributing handbills, but rather its

interest in ‘carrying out the important and necessary task’ of enforcing its

criminal laws.’ Similarly, in Ohio Civil Rights Commission v. Dayton

Christian Schools, Inc., 477 U.S. 619 (1986), we looked not to Ohio’s

specific concern with Dayton Christian Schools’ firing of Linda Hoskinson,

but to its more general interest in preventing employers from engaging in

sex discrimination....”". New Orleans Public Service, Inc. v. Council of the

City of New Orleans, 491 U.S. 350, 365 (1989)(citations omitted).

8

action under Connecticut’s laws regulating commercial

practices in the State. Connecticut may seek reimbursement to

its Medicaid program, along with other monetary and

injunctive relief, as a “particular outcome” of the action. The

“generic proceedings,” however, determined from the

Complaint itself, are proceedings to enforce the State’s laws

against defendants alleged to have engaged in serious

wrongdoing that has harmed the health and welfare of the

State’s citizens. For Younger purposes, the question is not

whether the “outcome” will lead to, among other relief,

reimbursement of Connecticut’s Medicaid fund, but whether

the State has an important interest in regulating the conduct of

those doing business in the State.

The State of Connecticut’s action against the tobacco

companies seeks to enforce state law under the Attorney

General’s common law powers to represent the public interest

of the state, as well as under the specific statutory authority,

and responsibility, to enforce the Connecticut Unfair Trade

Practices Act, Conn. Gen. Stat. §42-110a, ef. seg. and the

Connecticut Antitrust Act, Conn. Gen. Stat. §35-24, et. seq.

See, e.g., State of Florida ex. rel. Shevin v. Exxon Corp., 526

F.2d 266, 268-9 (5th Cir. 1976) (Duties and powers of state

attorneys general “include all those exercised at common law...

he typically may exercise all such authersty as the public

interest requires. And the attorney general has wide discretion

in making the determination as to the public interest.”); State

of Tennessee v. Heath, 806 S.W.2d 535, 537 (1990), citing 7

Am.Jur.2d Attorney General §9 (1980); People ex. rel.

Hartigan v. E & E Hauling, Inc., 607 N.E.2d 165 (Ill. 1992);

Commonwealth v. Mass. CRINC, 392 Mass. 79, 88-89 (1984)

(“the Attorney General is acting in accordance with his broad

common law and statutory powers to represent the public

interest” and “the Attorney General has a general statutory

mandate, in addition to any specific statutory mandate, to

protect the public interest.”’)

The Attorney General’s inclusion of a state agency,

such as its Medicaid program, among those harmed by illegal

conduct does not alter the sovereign nature of the State’s effort

to enforce its laws against defendants alleged to have harmed

both consumers and state agencies. In cases such as this, the

State attorneys general do not simply represent an agency

seeking reimbursement, but represent the larger interest of the

State and its people. People ex. rel. Hartigan v. E & E Hauling,

Inc., 607 N.E.2d 165, 170 (ill. 1992) (Attorney General had

standing under the common law powers to represent “the

broader interests of the State...” and “does not purport to

represent the [state agency], but rather the People and taxpayers

of the State.”); State of Florida ex. rel. Shevin v. Exxon Corp..,

526 F.2d 266 (Sth Cir. 1976).

The Court of Appeals’s decision, however, deems the

Attorney General of Connecticut in this action to be nothing

more than a collection attorney for the State’s Medicaid fund,

and deems the sovereign enforcement of the State’s laws as

nothing more than a collection action.

If the respect for the States’ interest in their judicial

proceedings under Younger is to have any meaning, a federal

court cannot attempt to discern this interest by conducting an

inquiry into, or speculating about, the supposed motives of the

State’s highest law enforcement officer. The only appropriate

evidence as to the nature of the state proceeding, and the state

interest implicated by that proceeding, is the state law as

asserted in the complaint and other pleadings from that

proceeding. Cf Caterpillar, Inc. v. Williams, 482 U.S. 386,

398-99( 1987) (under “well-pleaded complaint rule” for

removal to federal court, “the plaintiff is the master of the

complaint...’’)

Connecticut’s Complaint, to be sure, includes

allegations that would support a court award of reimbursement

10

for the State’s increased Medicaid costs due to the conduct of

the tobacco companies. The State, however, clearly seeks to

protect the health of the state’s residents, including children,

through enforcement of the Connecticut Unfair Trade Practices

Act and the Connecticut Antitrust Act, and the common law of

Connecticut. The Complaint’s allegations concerning the

conduct of the tobacco companies, the harm resulting from that

conduct, as well as the nature of relief sought, demonstrate that

Connecticut’s state court action cannot fairly be described as a

“subrogation action.”®

The State alleges that the tobacco companies conspired

to “mislead, deceive, and confuse the State of Connecticut and

its residents regarding” the dangers and addictiveness of

tobacco use (A24-5); the tobacco companies direct their

products at children, who cannot legally purchase them, as a

central part of the manufacturers’ business strategy (A25-6);

the State of Connecticut has a long-standing policy of

preventing minors from using tobacco products, and it is a

crime in that state to provide minors with tobacco (A26).

The State also alleges harms that implicate traditional,

and substantial, state interests in protecting consumers, the

health of its residents, and fair business competition. The

CUTPA violations limited the ability of consumers to evaluate

information about tobacco products and “to obtain safer

tobacco products at the lowest possible competitive price,”

caused adverse health consequences to Connecticut’s residents,

and facilitated and encouraged the use of tobacco by minors

* Subrogation is the “substitution of one person in the place of

another with reference to a lawful claim, demand or right, so that he who is

substituted succeeds to the rights of the other in relation to the debt or

claim, and its rights, remedies or securities.” Black’s Law Dictionary, 1427

(6th ed. 1990), citing Gerken v. Davidson Grocery Co., 69 P.2d 122, 126

(1937).

1]

(A116-7); the antitrust violations misled consumers and

affected the allocation of resources in the Connecticut economy

(A121-122).

Finally, the relief requested in the state proceeding goes

well beyond the simple reimbursement of funds to the State,

but also includes injunctive relief requiring the defendants to

cease the CUTPA violations; to require the disclosure of

research and studies concerning the dangers of tobacco; to fund

public education campaigns and tobacco cessation programs; to

cease the marketing and sales targeting of children. The State

also seeks the disgorgement of ill-gotten gains, restitution,

punitive damages, and civil penalties. (A127-32).’

The State’s complaint, therefore, demonstrates that

Connecticut’s interest in bringing its action against the tobacco

companies is to protect its citizens from the serious

wrongdoing alleged in the Complaint, enforce state laws

regarding unfair, deceptive or anticompetitive business

practices, and restore those harmed by unlawful activities. Cf,

California v. Arc America Corp., 490 U.S. 93, 101 (1989)

(“state common-law and statutory remedies against monopolies

and unfair business practices” are among the “historic police

powers of the States”); Florida Lime & Avocado Growers, Inc.

v. Paul, 373 U.S. 132, 144 (1962) (“...the States have always

possessed a legitimate interest in ‘the protection of their people

* The tobacco companies claim that they seek only to enjoin the

seeking or awarding of monetary relief in the state case (A10). Such a step,

however, would profoundly interfere with the on-going state judicial

proceeding. A state court could award Connecticut not merely

reimbursement of the State’s Medicaid expenditures, but restitution and

penalties under its consumer protection or antitrust statutes. A federal

injunction against such remedies in a state enforcement action, where the

tobacco companies are free to raise all federal defenses and rights, would

unnecessarily restrain not only the State’s enforcement efforts, but also the

State judiciary’s selection of available remedies.

12

—

against fraud and deception in the sale of food products’ at

retail markets within their borders.”) (citation and internal

ellipses omitted).

The isolation by the Court of Appeals of only the

money damages portion of the relief scught by Connecticut is

an irrelevant exercise under Younger. “Money damages”--

whether in the form of restitution of ascertainable losses, civil

or criminal penalties, disgorgement of ill-gotten gains, and

reimbursement of the costs of investigation, are an integral part

of most state consumer protection or antitrust statutes. Supra,

n. 1; People v. Thomas Shelton Powers, M.D., Inc., 2 Cal. App.

4th 330; 3 Cal Rptr.2d 34 (1992) (“[T]he laws against unfair

business practices were drafted in large part to prevent a

wrongdoer from retaining the benefits of its illegal acts.”)

The recovery by Connecticut of such damages would

serve the same purpose as in most state enforcement actions:

to restore victims; punish wrongdoers; and deter other

violations of law. If the inclusion of “money damages” among

relief sought by the States is a measurement of whether

Younger applies, there would be, contrary to the jurisprudence

of this Court, very few instances of state law enforcement that

would implicate a sufficient state interest to justify Younger

abstention.

In addition, the fact that Connecticut, and most other

States and the United States, supplement public enforcement of

consumer protection and antitrust laws by authorizing private

actions does not diminish the States’ interest in their own

proceedings to enforce such laws.'°

'° Statutes cited n. 1, supra. See,also, Perma Life Mufflers, Inc. v.

International Parts Corp., 392 U.S. 134, 136 (1968) (petition for certiorari

granted and decision below reversed, because erroneous “rulings by the

Court of Appeals seemed to threaten the effectiveness of the private action

as a means for enforcing the antitrust policy of the United States...”) Cf,

13

If anything, “private attorney general” provisions reflect

the importance of the state interest by ensuring greater judicial

enforcement than would otherwise be possible within the

resources of the public enforcement agencies. As the Court of

Appeals for the Fifth Circuit observed in Gresham Park

Community Organization v. Howell, 652 F.2d 1227, 1248 (Sth

Cir. 1981), “we find unpersuasive any suggestion that

Georgia’s ‘delegation’ of the civil suit to a private party

implies a lesser state interest: on the contrary, granting private

parties who have a strong self-interest in stopping unlawful

behavior the right to sue on their own behalf appears to indicate

a greater state interest in eliminating behavior elsewhere made

criminal.”

Moreover, private actions and attorney general actions

to enforce the consumer protection laws, while both supporting

overall state policy, are not the same. When state attorneys

general bring actions to enforce consumer protection or

antitrust laws, they do so in the public interest. For example,

under the Massachusetts consumer protection statute, private

actions may be brought under sections 9 or 11 of General

Laws, Chapter 93A, but only the Attorney General may utilize

section 4, which requires that the action be brought in the

public interest.

The Court of Appeals, therefore, erroneously relied on

the States” use of money damages and private remedies to

denigrate the substantial interest of the States in preventing and

punishing illegal business conduct. The States have a vital

interest in protecting their citizens from such conduct, and,

Fulton v. Hecht, 580 F.2d 1243 (5th Cir. 1978), rehearing denied, 585 F.2d

520, cert. denied, 440 U.S. 981 (1979) (no implied right of private action

under Federal Trade Commission Act, 15 U.S.C. §45); Baum v. Great

Western Cities, Inc., 703 F.2d 1197 (10th Cir. 1983) (same); Dreisbach v.

Murphy, 658 F.2d 720 (9th Cir. 1981) (same).

14

under Younger, enforcement actions on behalf of this interest

must remain free from federal interference.

CONCLUSION

The Commonwealth of Massachusetts and the States

named herein respectfully request that the Court grant the

Petitioner’s Request for a Writ of Certiorari.

SCOTT HARSHBARGER

Attorney General of Massachusetts

JEFFREY D. CLEMENTS*

Assistant Attorney General

Office of the Attorney General

One Ashburton Place

Boston, Massachusetts 02108

(617) 727-2200, ext. 2986

* Counsel of Record

Dated: March 19, 1998

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