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Price v. Philip Morris12/15/2005
at PMUSA has never claimed to have any proof that its "Lights" are safer than regular cigarettes. These statements are true, but do not resolve the question whether the FTC has specifically authorized the use of these terms. Plaintiffs also assert that the FTC has, fairly recently and after entering into the consent orders, expressly disavowed any "official" definitions of the terms. See Cigarette Testing, Request for Public Comment, 62 Fed. Reg. 48,158, 48,163 (September 12, 1997) ("There are no official definitions for these terms but they appear to be used by the industry to reflect ranges of FTC tar ratings"). It is not clear to this court what the FTC meant by "no official definitions," unless it was referring to the absence of a trade regulation rule. The FTC itself certainly uses these terms in its publications and its reports to Congress. Perhaps the FTC's published definitions of these terms in these contexts are considered by the agency to be "unofficial."
We conclude that the specific authorization required to trigger the exemption of section 10b(1) does not require formal rulemaking or official definitions. See Lanier, 114 Ill. 2d at 12-13 (finding specific authorization in Federal Reserve Board staff interpretation of the applicable regulation). It is sufficient if the authorization proceeds from regulatory activity, including the resolution of an enforcement action by means of a consent order. The consent order provides express authority for the party that was the target of the enforcement action to engage in the conduct described in the consent order. In addition, a consent order entered into by the FTC with one member of a regulated industry, which is published pursuant to statute, provides implied authority for other members of the regulated industry to engage in the same conduct. It would elevate form over substance to say that FTC specifically authorized American Brands to use such descriptors so long as certain conditions were met (American Brands, 79 F.T.C. 255), but did not thereby specifically authorize other members of the industry to act accordingly. Thus, while the authorization given to American Brands was express, the authorization given to the rest of the industry was implied, but no less specific.
The necessary degree of specificity is provided by the language of the consent orders and by the FTC's long-standing use, if not formal adoption, of the definition of "low tar" as meaning 15 milligrams or less of tar per cigarette.
Because PMUSA was specifically authorized to use the disputed terms without fear of the FTC challenging them as deceptive or unfair, it is exempt from civil liability under 10b(1) of the Consumer Fraud Act for the use of the terms so long as the other conditions set out in the consent orders were met. We find no evidence in the record that PMUSA failed to use these terms in compliance with the terms of the consent orders.
The increased mutagenicity of the smoke delivered by Marlboro Lights and Cambridge Lights cannot be a separate basis for a claim under the Consumer Fraud Act because, even if the terms "light" and "lowered tar and nicotine" do convey a message of safety, their use is specifically authorized by the FTC. In addition, any claim of fraud based on PMUSA's failure to disclose increased mutagenicity is barred by this court's long-standing rule against imposing additional disclosure requirements beyond those established by statute or agency regulation.
Plaintiffs' claim under the Deceptive Practices Act must also fail. Section 4 of the Deceptive Practices Act exempts from liability "conduct in compliance with the orders" of a federal agency. 815 ILCS 510/4 (West 2000). Because we have concluded th
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