Excerpts: Defendant's oral arguments in Price v. Phillip Morris appeal

The Madison County Record Nov. 11, 2004, 8:07am

Former Illinois Governor James R. Thompson argued on behalf of Phillip Morris.

"Now, one of the most important points in this case I believe is the issue of compensation, and just let me take a moment.

"The theory is that even if a light cigarette, that is a cigarette that contains 15 mg or less tar when tested by the FTC method--or the Cambridge method as it is sometimes called--the only standardized test which the FTC for 40 years has allowed relevant to tar and nicotine advertisements, even if a cigarette is capable of giving low tar and nicotine when compared with the regular Marlboro, smokers compensate.

"They buy the light cigarettes, but then they take deeper puffs or more puffs or more rapid puffs.

"The theory is, we believe, is that you compensate deliberately by buying more cigarettes and smoking more...If you were a half pack a day smoker of Marlboro reds as one member testified, then you switch to lights and become a pack a day smoker

"If you deliberately as a volitional act smoke more cigarettes than you are going to get from the purchase and consumption of a light cigarette of nicotine which is the promise of the cigarette--and the smoker deliberately overrides it... In that case, for example, a class member would not be entitled to damages or to a judgement because he got what he was promised, he got a cigarette that if he had smoked it in the same way or if he had smoked the same amount of cigarettes, delivered what Phillip Morris promised.

"Similarly, people smoke in different ways under different circumstances. As experts testified in this case and as the Surgeon General has noted for years, and has the FTC noted for years, people under stress, they may smoke more. When they get up in the morning and have that first cigarette they may have different kinds of puffs than in the course of the day. If they are watching television they may smoke differently than if they are reading a book, if they are out having a drink and they smoke in the company of other people, they may smoke differently.

"In other words, smokers compensation habits, if they are designs by the smoker to override the product that Phillip Morris promised and delivered, cannot give smokers relief.

"We believe that this judgement should be reversed and remanded and entered for the defendant for three basic reasons.

"First, a class action in this case was improper, and the plaintiff class failed to prove class member that they were entitled to relief.

"Secondly...that the 7.1 billion dollars in compensation damages in this case is so speculative that the verdict and damages could not possibly rest on what the trial judge allowed in the court below...

"That opening the door to this kind of speculative damage that is untethered to any kind of market reality would turn the world of damages in this state on its head and leave no manufacturer safe.

"Our other belief is that the individuals in this case predominated. The common issues did not predominate.

"...Your honor there are four issues we belive, four predominating individual issues: compensation, belief of the plaintiffs and why they chose these cigarettes, cause of their smoking, and the damages.

"We believe that compensation is an individual issue overriding over common issues. Remember what it consisted of: 1.1 millions smokers, anyone who purchased Phillip Morris Marlboro Lights or Cambridge Lights, in the state of Illinis from 1973 on.

"Plaintiffs named ultimately two plaintiffs to represent this class of 1.1 million. Phillip Morris asked the circuit judge for permission to take discovery of the class so that we could demonstrate that there are widely varying views as to why people smoke light cigarettes. That there are widely varying views of how people compensated when smoking light cigarettes. That there were widely varying views as to why people chose light cigarettes, whether it was for taste, or price promotions or because their friends were smoking them. And that there were widely varying views about damage.

"(The lower) Court denied discovery of the class. Then, before the trial proceeded, the plaintiff told us they were going to bring in a total of 23 members of the class to testify. We again asked for class wide discovery or the ability to take a statistically significant survey sample of those who smoke light cigarettes. That was denied. (Judge) said, well, you can depose the 23 that the plaintiff has hand picked. But you can’t depose anybody else in this 1.1 million person class.

"We believe that was unfair and significantly handicapped Phillip Morris in the defense of this case. Remember, your honor, when assessing whether a class action is appropriate, it is appropriate to take into account potential evidence for defendant, as well as the claims of the plaintiff.

"If there were these four predominating issues that were individual to each smoker, it was wrong for the judge to certify this case...So both for reasons of certification and for failure of proof under class action that was tried, we believe this judgement should be reversed.

"The cases were individualized because the question of compensation I would say is an individual question if you compensate to overcome the product that was promised and delivered you have no right to claim damages against Philip Morris.

"Your honor everyone knew smokers compensated. The Surgeon General knew and he started reporting on that in the late 60s. The FTC knew all about compensation. Dr. Benowitz, their primary expert, wrote an article in which he said people compensate and according to Dr. Benowitz that got wide review in the popular press. Consumer Report wrote an article about compensation. Everybody knew that some smokers compensated. Some smokers did not.

"Now, let me move if I may to the second important of this appeal and that is preemption.

"Section 2 of the Consumer Fraud Act, this case was tried under the consumer fraud act tells the trial judge to take into account decisions of the FTC.

"Judge Byron, with all due respect said deliberately and repeatedly. 'I am not going to let you, Phillip Morris, hide behind the decisions of the FTC in this court. I’m only going to govern evidence in this court, I don’t care what the FTC said. This court will totally erase from its mind any decisions by the FTC.'

"It not only was a failure to comply with such consumer fraud act by the trial judge, it was a deliberate defiance of Section 2 of the Consumer Fraud Act. And similarly, Section 10 B of the Consumer Fraud Act, provides a safe harbor for those whose conduct does not violate federal law and our conduct in this case did not violate federal law.

"I think I have read preemption cases until I am blue in the face, and I can’t find an area which is more drenched with preemption than the nearly 40 year control of cigarette advertising by congress and the FTC.

"The congress mandated what warnings should go on the packages and the advertising. It specifically reserved to the FTC the power to regulate cigarette advertising....That sin fact the late 1980s Congressman Lukens convened a hearing and his proposition was simple: we are going to remove the preemption provision from the federal cigarette labeling act and going to allow states to maintain common law for lights advertising. The FTC wrote to the congress and said, that that would create an irreconcilable conflict with federal policy and the congress failed to adopt Congressman Lukens proposal.

"Your honors, we believe that you ought to reverse the judgement of the Circuit Court of Madison County because this should not have been a class action, in conflict with sections 2 and 10B of the Consumer Fraud Act.

"It is in conflict with the decisions of the Supreme Court of the United States, in this court in the Olive case court in the case on implied preemption.

"And that the damages asking people in an internet survey taken in the middle of the night which ultimately boiled down to 200 people are speculative and so untethered to market reality that you cannot sustain $7 billion worth of damages on that kind of evidence without doing grave violence to the law in Illinois.

"We ask the judgement of the lower court be reversed, remanded and that judgement be entered for the defendant."

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