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Price v. Philip Morris12/15/2005
t issue is "specifically authorized by laws administered" by the regulatory body. 815 ILCS 505/10b(1) (West 1998). As we explain in detail, below, PMUSA's mere compliance with the rules applicable to labeling and advertising is not sufficient to trigger the exemption created by section 10b(1).
Similarly, while the FTC's own use of the terms "low tar" and "ultra low tar" and its apparent adoption of definitions of these terms (15 milligrams or less of tar and 6 milligrams or less of tar, respectively) clearly invites others to use the same or similar terms to describe certain cigarettes, it cannot be said that the FTC's own use of such terms in its reports to Congress or elsewhere "specifically authorizes" cigarette manufacturers to use these terms in labeling and advertising. Conduct is not specifically authorized merely because it has not been specifically prohibited. Conduct is not specifically authorized merely because it has been passively allowed to go on for a period of time without regulatory action being taken to stop it. Instead, we must look to the affirmative acts or expressions of authorization by the FTC to answer this question.
Plaintiffs' argument that the FTC "has never `specifically authorized' the fraudulent use of any descriptor, and it would lack the legal authority to do so in any event" (emphasis in original), is similarly overstated. Whether these terms are deceptive goes to the merits of the fraud claim, not to the threshold question of exemption under section 10b(1), under which the real issue is whether the FTC has specifically authorized PMUSA and other cigarette manufacturers to use these terms on their packaging and in their advertising, no matter how vague or unhelpful these terms might be to consumers.
Plaintiffs also claim that PMUSA's use of these terms cannot be deemed authorized by the 1971 consent order because PMUSA has not accompanied its use of these terms with "a clear and conspicuous disclosure of" the tar and nicotine content of the advertised cigarette and of the cigarettes to which it was being compared. This argument has no merit because the quoted language applies only when the manufacturer is making a direct comparison between its brand of cigarettes and a competing brand. See American Brands, 79 F.T.C. 255 (permitting advertising of cigarettes using "the words `low,' `lower,' or `reduced' or like qualifying terms," if the statement is accompanied by a "clear and conspicuous disclosure" of the tar and nicotine content of the advertised cigarette; and, if a direct comparison is made to another brand or brands, disclosure of the tar and nicotine content of that brand or brands and of the "lowest domestic yield cigarette"). Indeed, the consent order expressly provides that "a comparison to a class of cigarettes, or to many or most of the cigarettes of a class, shall not be deemed a comparison to another brand or brands of cigarettes."
Having disposed of these arguments, we turn to the interpretation and application of section 10b(1) of the Consumer Fraud Act.
1. The Statutory Language
In determining whether section 10b(1) of the Consumer Fraud Act operates to bar the action at issue, we are guided by established principles. The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature. Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill. 2d 141, 149 (1997), quoting Illinois Power Co. v. Mahin, 72 Ill. 2d 189, 194 (1978). To do so, we examine the language of the statute, which is the most reliable indicator of the legislature's objectives in enacting the law. Michigan Avenue National Bank v. County of Cook, 191 Ill. 2d 493, 504 (2000). When interpreting stat
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