Amicus Curiae Brief — Philip Morris USA USA Inc. v. Bo Boeken (Nos. 05-594, 05-600)

that analysis. Had it done so, it would have been forced to

conclude that a judgment against PM USA based on application

of the “consumer expectations test” effectively imposes on PM

USA a duty to provide California consumers with additional

warnings regarding health hazards associated with smoking

Marlboro Lights. PM USA is forced to provide these warnings

because if it wishes to continue to market Marlboro Lights in

California, it must do something to bring consumer expectations

regarding the safety of its product (which the jury deemed to be

too high) into line with the priduct’s actual safety level. The

Labeling Act bars California from imposing any such duty.

Review is warranted to correct that error, which threatens to

undermine Congress’s efforts to establish uniform cigarette

labeling and advertising requirements throughout the country.

I. REVIEW IS WARRANTED TO PRESERVE THE

UNIFORMITY PRINCIPLE THAT ANIMATES THE

LABELING ACT AND SIMILAR FEDERAL

STATUTES

In a wide variety of contexts, Congress has adopted

legislation designed to protect consumers by mandating that

businesses provide safety warnings regarding their goods and

services — and also designed to ensure that business do not face

a mishmash of nonuniform warning requirements from State

regulators. The Labeling Act is one such statute. Review is

warranted because of the importance to the business community

of that uniformity principle and because the decision below

threatens to undermine enforcement of that principle in the

context not only of tobacco regulation but in other regulatory

contexts as well.

By adopting the Labeling Act, Congress sought to ensure

that the public would be “adequately informed” about the health

risks associated with smoking by requiring every cigarette

7

package (and, later, by requiring every cigarette advertisernent)

to carry health warnings specified by Congress itself. At the

same time, Congress also sought to “protect commerce and the

national economy” to “the maximum extent consistent with

[that] declared policy” by preserving the cigarette

manufacturers’ ability to advertise and labe) their products free

from “diverse, nonuniform, and confusing” state and local

regulations based on smoking and health. 15 U.S.C. § 1331.’

To give effect to this policy of national uniformity —

protecting cigarette advertising and labeling while providing for

the dissemination of government warnings about smoking — the

Labeling Act contains an explicit preemption provision that

provides:

? Section 1331, which declares the policy and purpose of the

Federal Cigarette Labeling and Adveriising Act, provides in its current

form:

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 adverti:ing with respect to any relationship between

smoking and health, whereby--

(1) the public may be adequately informed about atiy adverse

health effects of cigarette smoking by inclusion of warning

notices on each package of cigarettes and in each

advertisement of cigarettes; and

(2) commerce and the nation economy may be (A) protected

to the maximum extent consistent with this declared policy

and (B) not impeded by diverse, nonvniform and confusing

cigarette labeling and advertising re. ations with respect to

any relationship between smoking and health.

1S U.S.C. § 1331.

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(b). The Labeling Act further provides, “No

statement relating to smoking and health, other than the

statement required by [15 U.S.C. § 1333], shall be required on

any cigarette package.” 15 U.S.C. § 1334(a).

As the Court has noted, Congress passed the current form

of the Labeling Act preemption provision in 1969, in the face of

efforts at the state level to regulate and even ban cigarette

advertising. See Cipollone v. Liggett Group, Inc., 505 U.S. 504,

515 & n.11 (1992) (“For example, the California State Senate

passed a total ban on both print and electronic cigarette

advertisements.”). The Court has observed that, when Congress

amended the Act in 1969-70, it substantially broadened the pre-

emption provision. See id. at 520 (“Compared to its predecessor

in the 1965 Act, the plain language of the 1969 Act is much

broader.”); Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 542

(Z001) (“Without question, the second clause is more expansive

than the first; it employs far more sweeping language to

describe the state action that is pre-empted.”). Prior to the 1969

amendment, § 1334(b) had merely precluded state and local

authorities from requiring any “statement relating to smoking

and health . . . in the advertising of any cigarettes.” As

amended, the expansive language of the preemption provision

does much more than prohibit state and local regulation of the

content of cigarette advertising; it now precludes any state or

local authority from passing “requirement(s] or prohibition({s}

based on smoking and health . . . with respect to the advertising

or promotion” of cigarettes. 15 U.S.C. § 1334(b).

9

Cipollone made clear that Labeling Act preemption

applies to requirements/prohibitions imposed by the common

law as well as by statutes and regulations:

The phrase “[nJo requirement or prohibition” sweeps

broadly and suggests no distinction between positive

enactments and common law; to the contrary, those words

easily encompass obligations that take the form of

common-law rules. As we stated in another context,

“(state] regulation can be as effectively exerted through an

award of damages as through some form of preventive

relief.”

Cipollone, 505 U.S. at 521 (plurality) (quoting San Diego

Building Trades Council v. Gammon, 359 U.S. 236, 247

(1959)); see id. at 548-49 (Scalia, J., concurring in the judgment

in part and dissenting in part).

- The decision below has imposed on PM USA a common-

law duty, if it wishes to continue to market Marlboro Lights in

California, to eliminate any expectation among consumers in the

State that smoking Marlboro Lights is less hazardous. It is

difficult to conceive how PM USA can ensure that California

juries will not continue to conclude that consumers have

unrealistically high safety expectations for Marlboro Lights,

other than by including additional health warnings in its labeling

and advertising directed to Californians. But by requiring PM

USA to provide such additional health warnings in order to

allow it to continue to market its legal product in the State,

California undercuts the uniformity principle animating the

Labeling Act. By requiring additional health warnings within

the State, California is potentially “imped[ing}” “commerce and

the national economy” by imposing “diverse, nonuniform and

confusing cigarette labeling and advertising regulations with

respect to any relationship between smoking and health.” 15

10

U.S.C. § 1331(2). Review is warranted to determine whether

Congress intended to permit States to undermine the uniformity

principle in this manner.

Other federal regulatory statutes contain preemption

provisions that are designed to ensure national uniformity in

regulation and are similariy threatened by the decision below.

For example, in order to ensure nationwide uniformity in the

regulation of medical devices, Congress broadly prohibited

States from imposing “any requirement” on a medical device

“which is different from, or in addition to, any requirement”

imposed on the device by the federal Medical Device Amend-

ments of 1976, and “which relates to the safety and effective-

ness of the device.” 21 U.S.C. § 360k(a). This preemption

provision is fully applicable to State “requirements” imposed by

the common law. See, e.g., Buckman Co. v. Plaintiffs’ Legal

Committee, 531 U.S. 341 (2001). Although § 360k(a) is

generally understood to preempt common-law suits based on

claims that the product label failed to include warnings not

mandated by the federal Food and Drug Administration, the

decision below suggests that § 360k(a) might not preempt

product liability claims based on a “consumer expectations test”

— thereby paving the way for non-uniform labeling requirements

in States permitting such claims.

Similarly, the Federal Insecticide, Fungicide, and

Rodenticide Act (“FIFRA”), 7 U.S.C. § 136 ef seg., imposes

strict labeling requirements on pesticides and at the same time

ensures national uniformity in requirements by providing that

States “‘shall not impose or continue in effect any requirements

for labeling or packaging in addition to or different from those

required under this subchapter.” 7 U.S.C. § 136v(b). The Court

has construed this provision as preempting any common-law

failure-to-warn claims to the extent that such claims effectively

impose labeling requirements that are “in addition to or different

11

from” those required by FIFRA. Bates v. Dow Agrosciences

LLC, 125 S. Ct. 1788 (2005). The decision below jeopardizes

that uniformity provision by suggesting that product liability

claims against a pesticide manufacturer based on a “consumer

expectations test” might not be preempted by § 136v(b).

Federal preemption previsions that govern regulation of

service providers may be similarly affected. For example, the

Federal Railroad Safety Act of '“70 (FRSA), 84 Stat. 971

(1970), 45 U.S.C. § 20101 ef seqg., regulates the types of

warning devices that railroads must install at railroad crossings.

When warning devices are installed using federal funds and in

conformity with regulations adopted pursuant to the FRSA, the

statute preempts common-law failure-to-warn actions

challenging the adequacy of those warning devices. Norfolk

Southern Railway Co. v. Shanklin, 529 U.S. 344 (2000). The

decision below suggests that other common-law actions might

not be preempted even if they would have the effect of creating

warning requirements in addition to those mandated by FRSA

regulations.

Similarly, the Airline Deregulation Act of 1978 (“ADA”),

92 Stat. 1705 (1978), mandates a uniform national policy of

deregulating the airline industry by preempting virtually all

State regulations ‘relating to “rates, routes, or services.” 49

U.S.C. § 41713(6}{1). Thus, the Court ruled in Morales v.

TWA, 504 U.S. 374, 383 (1992), that the ADA “express[ed] a

broad preemptive purpose” and that States were not free to

regulate advertising regarding airfares. More recently, lower

federal courts have ruled that the ADA and the Federal Aviation

Act (“FAA”) preempt State common-law failure-to-warn claims

that airlines should warn passengers on every fligh' that they

should walk about the cabin to avoid developing deep vein

thrombosis. Witty v.Delta Air Lines, Inc., 366 F.3d 380 (Sth

Cir. 2004); In re Deep Vein Thrombosis Litigation, 2005 U.S.

12

Dist. LEXIS 4043 (N.D. Cal. 2005). As the judge hearing the

latter case (a multi-district proceeding) explained:

[S]tate-law suits based upon a failure to warn of DVT

would most certainly lead to non-uniformity (anathema to

the FAA), for each time a state jury sustains a failure to

warn challenge, airline defendants would be forced to

amend their pre-flight warnings to avoid future liability.

Moreover, such state law verdicts could be inconsistent

among themselves.

Id. at *44. The decision below suggests that while failure-to-

warn claims against airlines may be preempted by the ADA and

FAA, other common-law claims might not be preempted even

if they have the effect of imposing on airlines a duty to provide

additional health warnings to their passengers.

In sum, the decision below potentially affects a broad

range of businesses that currently enjoy federal statutory

protection against nonuniform State regulations. Review is

warranted in light of the potentially broad impact of the decision

below on this uniformity principle.

Il. REVIEW IS WARRANTED BECAUSE THE ISSUE

RAISED HERE RECURS FREQUENTLY AND HAS

DIVIDED THE LOWER COURTS

Review is also warranted because the lower courts are

deeply divided over whether a product liability claim based on

the “consumer expectations test” is preempted by federal law

whenever an equivalent failure-to-warn claim is preempted.

Because at least 25 of the 50 States apply some form of the

“consumer expectations test” to product liability claims, this

issue has arisen often in the past and can be expected to arise

13

with regularity in the future. The Court should grant review to

resolve this conflict.

Use of the “consumer expectations test” in strict product

liability claims generally derives from Comment i of § 402A of

the RESTATEMENT (SECOND) OF TORTS (1965), which provides

the following definition of an “unreasonably dangerous”

product:

The article sold must be dangerous to an extent beyond

which would be contemplated by the ordinary consumer

who purchases it, with the ordinary knowledge common

to the community as to its characteristics.

In the years following 1965, the great majority of States adopted

some variant of this definition, which came to be known as the

“consumer expectations test.” In 1978, in the course of

adopting much of § 402A, the California Supreme Court held:

[A] product is defective in design either (1) if the product

has failed to perform as safely as an ordinary consumer

would expect when used in an intended or reasonably

foreseeable manner, or (2) in light of the relevant factors

{discussed more fully in the opinion], the benefits of the

challenged design do not outweigh the risk of danger

inherent in the design.

Barker v. Lull Engineering Co., 20 Cal. 3d 413, 418 (1978).

» The second of the two methods outlined by Barker for

establishing a design defect — generally referred to as a risk-utility

analysis — is ‘not at issue in this case. The sole basis upon which the

Court of Appeal upheld the product liability award in this case was use

of the “consumer expectation test” — the first of the two methods

outlined by Barker. Pet. App. 28a.

14

Just how juries should go about determining how safely an

ordinary consumer would expect a product to perform has been

a matter of considerable controversy in the ensuing decades.

Some commentators have concluded that the only way to

determine what consumers should reasonably expect from a

product is to assess the product’s risks and benefits in light of

potential alternative designs. Because that formulation sounds

remarkably similar to a risk-utility analysis, the drafters of the

Restatement (Third) of Torts have suggested doing away with

the “consumer expectations test” as a separate basis for recovery

in a product liability action. See RESTATEMENT (THIRD) OF

TORTS: PRODUCTS LIABILITY § 2, Reporters Note, cmt. d

(1998).

Nonetheless, a large number of States adhere to the

“consumer expectations test.” One recent survey of state tort

law placed the number of such States at 25. See John F. Vargo,

“The Emperor’s New Clothes: The American Law Institute

Adorms a ‘New Cloth’ for Section 402A Products Liability

Design Defects —- A Survey of the States Reveals a Different

Weave,” 26 U. MEM. L.REV. 493, 951 (1996). See also

McCathern v. Toyota Motor Corp., 160 Ore. App. 201, 208 n.5

(1999) (listing cases from numerous States adopting the

“consumer expectations test”). As the decision below indicates,

California is one of those States.‘

* More recent California Supreme Court decisions indicate that a

manufacturer may be held liable under the “consumer expectations test”

only if the product has a relatively simple design. If the product is more

complex, the court concludes that the ordinary consumer is incapable

of determining whether the product is as safe as it should be; in such

cases, expert testimony is required regarding risk-utility analysis and

whether alternative designs would render the product safer. Soule v.

General Motors Corp., 8 Cal. 4th 548 (19 94).

15

Given the widespread acceptance of the “consumer

expectations test” as one method of establishing a product

liability claiz: \ ‘s hardly surprising that the issue presented in

this case arin«. frequently: are product liability claims

proceeding under the “consumer expectations test” preempted

by federal law when analogous failure-to-warn claims are

preempted? If, as here, a product liability claim does not

proceed on the basis of a risk-utility analysis, then determining

consumer expectations requires, of necessity, an examination of

statements a manufacturer has made regarding its product. The

more health and safety warnings a manufacturer has made

regarding its provtuct, the less viable is a claim that a product

failed to perform as safely as an ordinary consumer would

expect. Accordingly, if federal law preempts a failure-to-warn

claim, there is reason to conclude that the same federal statute

may preempt a product liability claim proceeding under the

“consumer expectations test,” since the latter claim presupposes

that the manufacturer allowed consumer expectations to rise too

high by failing to give sufficient warnings regarding health and

safety risks.

As the Petition well documents, federal and State courts

are irrevocably divided over this issue. WLF will not repeat

here all the relevant cases cited in the Petition. It bears

repeating, however, that California state and federal courts are

on opposite sides of this issue. The Ninth Circuit held in Papike

v. Tambrands Inc., 107 F.3d 737 (9th Cir.), cert. denied, 522

U.S. 862 (1997), a product liability claim proceeding under the

“consumer expectations test” against a medical device

manufacturer, that the claim failed as a matter of law because

the manufacturer had complied fully with all federally mandated

warning requirements. 107 F.3d at 743 (“To rule otherwise

would allow the anomalous circumstance that a consumer is

entitled to expect a product to perform more safely than its

government-mandated warnings indicate.””). Four years later,

16

the California Court of Appeal explicitly declined to follow

Papike in a FIFRA case. The court ruled that even though 7

U.S.C. § 135v(b) preempted the plaintiffs’ failure-to-warn claim

against pesticide manufacturers and distributors, it did not

preempt the plaintiffs’ product liability claim proceeding under

the “consumer expectations test.” Arnold v. Dow Chemical Co.,

91 Cal. App. 4th 698, 716-717 (2001). The court below relied

on Arnold in concluding that Respondent’s product liability

claim was not preempted by the Labeling Act.

As PM USA notes, granting review to resolve a conflict

among the lower court is particularly appropriate when the

conflicting decisions are from federal and state courts within the

same State. Pet. 10 (citing Baldwin v. Alabama, 472 U.S. 372,

374 (1985)). Unless that conflict is resolved, whether a

California product liability claim proceeding under the

“consumer expectations test” is preempted by federal law will

often depend entirely on whether a defendant is successful in

removing the case from state to federal court.

In sum, the preemption issue raised by the Petition is one

that has deeply divided state and federal courts. That conflict

will remain and will arise with regularity unless the Court grants

review to resolve the conflict.

Ill. REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW CONFLICTS WITH THIS

COURT’S PREEMPT" ON DECISIONS

Review is also warranted because the decision below is so

clearly at odds with the decisions of this Court that have

addressed federal preemption claims. The California Court of

Appeal’s rationale for rejecting PM USA’s preemption claim

amounted to little more than an assertion that Respondent's

product liability claim proceeding under the “consumer

17

expectations test” was a distinct cause of action from a failure-

to-warn claim (which the court apparently conceded was

preempted under the Labeling Act). Pet. App. 29a.

That California law deems Respondent's product liability

claim as one distinct from a failure-to-warn claim simply misses

the thrust of preemption analysis under the Labeling Act. The

Court has made clear that whether a common-law claim is

preempted by federal law does not depend on the name assigned

to that claim:

[Distinguishing between pre-empted and non-pre-empted

claims based on the particular label affixed to them would

“elevate form over substance and allow parties to evade”

the preemptive scope [of federal law] simply “by

relabeling their contract claims as claims for tortious

breach of contract.”

Aetna Health Inc. v. Davila, 542 U.S. 200, 214 (2004) (quoting

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985)).°

Rather, the question that must be answered is one that the

California Court of Appeal never addressed: does the common-

law duty imposed on PM USA as aresult of the judgment below

amount to a “requirement or prohibition based on smoking and

health” imposed “with respect to the advertising or promotion

of any cigarettes,” 15 U.S.C. § 1334(b), ora “statement relating

to smoking and health . . . required on any cigarette package”?

15 U.S.C. § 1334(a). As the Court explained in Cipolione:

* In Aetna Health, the Court ruled unanimously that the plaintiffs’

causes of action were preempted by the preemption provisions of the

Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001.

The Court deemed it irrelevant, for purposes of deciding the preemption

issue, that the plaintiffs had characterized their action as one sounding

in tort rather than contract. /d.

18

The central inquiry in each case is straightforward: we

ask whether the legal duty that is the predicate of the

common-law damages action constitutes a “requirement

or prohibition based on smoking and health . . . imposed

under State law with respect to . . . advertising or

promotion,” giving that clause a fair but narrow reading.

Cipollone, 505 U.S. at 523-24 (plurality). See also Bates, 125

S. Ct. at 1799 (“The proper inquiry calls for an examination of

the elements of the common law duty at issue.’’).

The common-law duty imposed on PM USA as aresult of

the judgment in this case is relatively clear: if it wishes to

continue to market Marlboro Lights in California, it must do

something to bring consumer expectations regarding the safety

of its product (which the jury deemed to be too high) into line

with the product’s actual safety level. PM USA is, of course,

already doing quite a bit to lower consumer expectations of

safety: every Marlboro Lights package label and every

advertisement for Marlboro Lights contains one of the strong

health warning mandated by the federal government. [f, as

Respondent contends, consumers continue to believe that

“light” cigarettes (i.e., those for which less tar is inhaled when

smoked in the same way as ordinary cigarettes) are significantly

safer than ordinary cigarettes, then PM USA’s only means by

which it can reduce consumer expectations is to include

additional health warnings on its package labels,

advertisements, and other promotional materials.* Certainly,

neither Respondent nor the Court of Appeal suggested an

* Not even the Court of Appeal contends that making Marlboro

Lights significantly safer is a viable means of bringing product safety

into line with consumer expectations. The Court of Appeal quoted one

expert witness as testifying that “the only way to reduce the risk is to

quit smoking.” Pet. App. 29a n.16.

19

alternative means by which PM USA could lower consumer

expectations.

Accordingly, the common-law duty imposed on PM USA

by virtue of this lawsuit is preempted by the I .abeling Act; that

duty consists of a requirement that it provide additional health

warnings on its package labels and advertisements. Such a

requirement is preempted by 15 U.S.C. § 1334(a) and (b).

In an effort to distinguish between Respondent’s product

liability claim and a failure-to-warn cause of action, the Court

of Appeal asserted: “Since smokers do not know they

compensate, a warning may not make the product any safer.”

Pet. App. 29a. That assertion illustrates the Court of Appeal’s

fundamental misunderstanding of the preemption issue raised by

the Labeling Act. Whether one is asserting a failure-to-warn

cause of action or a product liability cause of action that is

proceeding under the “consumer expectations test,” the point of

a warning requirement is not to make the product safer, but

rather to alert the consumer that the product is not as safe as he

or she might otherwise believe. Imposing a common-law

requirement on cigarette manufacturers that “ cy provide

additional health warnings on California packaging and

advertisements (e.g, “WARNING: Due to the tendency of

smokers to ‘compensate’ by drawing more smoke into their

lungs, Marlboro Lights are no safer than ordinary cigarettes and

in some instances may be more dangerous’”’) would undoubtedly

serve to lower consumer health expectations regarding light

cigarettes and thereby bring PM USA into compliance with the

duties imposed under California product liability law. But any

such requirement is a clear violation of the Labeling Act, which

prohibits States from imposing any “requirement... . based on

smoking and health .. . with respect to the advertising and

promotion” of cigarettes, 15 U.S.C. § 1334(b), or requiring that

any “statement relating to smoking and health” be placed on the

20

cigarette package, 15 U.S.C. § 1334(a), and would undermine

the national uniformity principle embodied in the Labeling Act.

In sum, review is also warranted because the decision

below is in clear conflict with the decisions of this Court.

CONCLUSION

Amicus curiae Washington Legal Foundation respectfully

requests that the Court grant the petition for a writ ct certiorari.

Respectfully submitted,

Daniel J. Popeo

Richard A. Samp

(Counsel! of Record)

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

(202) 588-0302

Dated: December 22, 2005