 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Price v. Philip Morris12/15/2005
rmally promulgated regulation. Indeed, the enabling legislation recognizes such a staff interpretation. In this case, the FTC has never promulgated any industrywide formal rule that regulates the use of the disputed descriptors. There is no formal rule to interpret, either formally or informally. The evidence adduced at trial established that, rather than employ even informal rulemaking, the FTC took a "voluntary approach" to regulating the cigarette industry. Dr. Peterman acknowledged that the FTC, generally, does not adopt trade rules that approve conduct that an FTC-regulated business may choose to engage in. Rather, the FTC adopts regulations that require or forbid specific conduct. Regarding cigarettes, the FTC has never promulgated a single trade regulation governing cigarette advertising that has ever been in effect. No FTC regulation, document, or official statement has ever regulated "low tar" and "lights" descriptors. Further, the FTC has disavowed any "official" definition of these terms. Rather, a cigarette company's decision to use descriptors such as "light," or "low tar," is voluntary; there is no FTC rule requiring their use. A cigarette company could stop using those descriptors and there is no FTC policy that would prohibit it. Indeed, Dr. Peterman admitted that if "light" cigarettes delivered the same level of tar and nicotine as "regular" cigarettes, the "light" descriptor would be false and misleading.
In its opinion, the court describes a 1970 FTC proposal that would have declared it an unfair or deceptive practice under the FTC Act for cigarette manufacturers to fail to disclose in their advertising the tar and nicotine content of the product, based on the most recent FTC test results. Slip op. at 7. The court notes that this proposal was dropped after eight cigarette companies voluntarily agreed to provide the information on their cigarette packages. Slip op. at 7. The court, however, fails to observe that, during his cross-examination, Dr. Peterman recognized that the 1970 trade agreement was not all-inclusive. In other words, not every cigarette company signed the agreement. Further, those companies who did not sign the agreement have not included tar and nicotine rates in their cigarette advertising. Indeed, up to the time of trial, the FTC has taken no enforcement action against those companies.
Unwilling to allow the FTC's lack of definitive regulations in the area of cigarette advertising to control the question of the application of section 10b(1) to this case, the court holds that two consent orders entered into by the FTC and another tobacco producer constitute the type of regulatory activity that falls within the scope of section 10b(1). The majority opinion describes the background to the 1971 consent order against American Brands (slip op. at 8-11) and the 1995 consent order against American Tobacco (slip op. at 19-20).
During his direct examination, Dr. Peterman, defendant's expert, testified that the 1971 FTC consent order against American Brands, Inc., was "an official act of the FTC." Further, the order provided "industry guidance to [PMUSA] and others regarding the use of descriptors." This "guidance" was found in the terms of the order against American Brands. According to Dr. Peterman, nonparties to a consent order, even an entire industry, learn from the order how far it can and cannot go. According to Peterman, the 1971 consent order was exemplary of the FTC intending to provide industrywide guidance with respect to issues addressed in consent orders.
However, the 1971 consent order did not mention the descriptor "lights." Nor did it concern the disputed descriptor in this case, "lowered tar and nicotine." The consent order did
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 Illinois Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|