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Price v. Philip Morris12/15/2005
descriptors at issue in this case. The Commission is primarily an enforcement agency charged with protecting consumers from unfair and deceptive trade practices. Unlike the Truth in Lending Act, the Federal Trade Commission Act contains no provision absolving from liability persons who in good faith comply with official interpretations of its regulations. Further, as the Commission has not published any functional equivalent to Regulation Z, there is no comparable Commission regulation governing the conduct at issue here.
Hence, Lanier offers no support for the conclusion that use of the descriptors claimed to be deceptive in this case is specifically authorized by federal law. Lanier teaches only that section 10b(1) can bar a Consumer Fraud Act remedy if the conduct is specifically authorized by a federal law. It neither holds nor suggests that informal agency policy or policy enforcement techniques short of formal, published rulemaking could invoke the section 10b(1) exemption from liability. The majority concludes, however, that "the FTC's informal regulatory activity, including the use of consent orders, comes within the scope of section 10b(1)'s requirement that the specific authorization be made `by laws administered by' a state or federal regulatory body," contending that this assertion "is consistent with our holding in Lanier." Slip op. at 61. Again, Lanier simply offers no support for this conclusion.
Additionally, the majority acknowledges, as noted in my special concurrence in Jackson, that mere compliance with applicable law does not necessarily bar Consumer Fraud Act liability and that, rather, the conduct at issue must be specifically authorized. Slip op. at 54. Yet, the majority effectually ignores that principle in its analysis.
The majority can take no comfort in the reasoning of the Seventh Circuit in Bober. The alleged deceptive statement in that case was held specifically authorized by a rule formally adopted by the FDA and codified in the Code of Federal Regulations. Bober, 246 F.3d at 941. Bober is remarkably similar to this court's holding in Lanier, finding a formal published interpretation of a regulation of the Federal Reserve Board to authorize specifically the disclosures in question.
In this case, the federal law in question forbids unfair or deceptive acts or practices affecting commerce. The FTC has issued no formal rule or regulation authorizing the descriptors in question, as in Bober, and it has issued no formal interpretations of any regulations, as in Lanier.
The majority asserts that Lanier is authority for the proposition that an agency staff interpretation may be a sufficient basis for a finding of specific authorization and that formal rulemaking is therefore not a prerequisite for specific authorization. Slip op. at 56. It must be remembered that the staff interpretation in Lanier was both formal and published and that Congress expressly provided that reliance on staff interpretations would excuse liability. Opening the door to informal policy advice could lead to absurd results. For instance, advice given casually between an FTC commissioner and a PMUSA executive could not and should not serve as the specific authorization required by section 10b(1). Common sense indicates that no specific authorization by law can derive from informal policymaking or agency practices. Thus, there is no basis for the majority to conclude that either informal agency policy and practice or the use of consent orders involving other parties are within the ambit of our holding in Lanier.
Nevertheless, the majority relies on 1971 and 1995 FTC consent orders entered in resolution of claims asserting that American Brands, Inc
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