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Price v. Philip Morris12/15/2005
against American Tobacco Company arising from alleged false advertising of one particular brand of cigarettes. Competitors of American Tobacco Company might look to the order for guidance concerning what advertising practices the Commission may deem unfair or deceptive, but could not reasonably conclude that the use of any descriptors were specifically authorized by the order. The 1995 complaint did not even question American Tobacco's use of particular descriptors. Instead, it contended that American Tobacco's comparative claim was untrue. Thus, that consent order forbade conduct not at issue in this case, and only conditioned use of "low tar" descriptors on American Tobacco's forbearance of using more than a depiction of a single cigarette or pack of its brand versus a single cigarette or pack of any other brand.
Both the 1971 and 1995 consent orders dealt with conduct deemed by the Commission to violate the FTC Act. The orders have the force of law only as to the parties entering into the settlement agreements-American Brands and American Tobacco Company. At most, the orders may be predictive of Commission attitudes toward advertising practices in future cases. Simply stated, those consent orders cannot reasonably be deemed to be an industrywide specific authorization for the use of particular advertising descriptors.
Equally important, the FTC has certainly not closed the book on the issue of deceptive cigarette advertising. In 1997, it sought public comment on whether its policies regarding testing methods and the use of descriptors should be revised. At the agency's request, the National Cancer Institute (NCI) studied the issues and, in November 2001, published Monograph 13. The NCI concluded there was no convincing evidence that cigarettes lower in tar and nicotine yield reduced the disease burden on a population basis. Monograph 13 was critical of industry testing practices and its use of comparative descriptors. According to Dr. Peterman, the FTC, at the time of trial, was evaluating whether to change its policies in light of the NCI's conclusions. The ongoing FTC review should indicate to industry competitors that agency policy on the use of cigarette comparative descriptors was, and remains, in a state of flux.
The foregoing illustrates why policies, as opposed to formal published regulations and statutes, cannot be deemed to have the force of law within the meaning of section 10b(1). The legislative purpose of the exemption in section 10b(1) is to shield defendants from liability for conduct specifically authorized by law. That purpose is not served if discernment of what is forbidden and what is authorized rests on the shifting sands of ever-changing and evolving agency policy. A statute or published regulation, on the other hand, remains in effect unless formally repealed. Policy change can be effected simply by an agency decision to commence an enforcement proceeding. Thus, consent orders enforceable only against parties to an enforcement proceeding are not laws administered by a federal agency within the meaning of section 10b(1). Accordingly, I agree with the trial court that defendant did not establish its section 10b(1) affirmative defense.
On a different issue, I am compelled to respond to Justice Karmeier's argument that plaintiffs did not prove damages. Justice Karmeier observes that plaintiffs cited no authority permitting opinions of Internet survey respondents to establish actual damages under the Consumer Fraud Act because the representative plaintiffs have not been harmed in the way the survey respondents claimed they would be in answering the survey hypotheticals. Slip op. at 78 (Karmeier, J., specially concurring, joined by Fitzgerald, J.). Th
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