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In re Tobacco II Cases-Class Action Defense Cases: California Court Properly Denied Class Action Of CLRA Claims Against Tobacco Companies And Properly Decertified Class As To UCL Claims

Class Action Against Tobacco Companies for Labeling Cigarettes “Light” Allegedly to Mislead Smokers Into Believing They were Less Harmful Than Regular Cigarettes was not Superior Method of Resolution Because Individual Issues Would Predominate California Court Holds

In 1997, smokers filed a putative class action against numerous tobacco companies arising out of “marketing and advertising activities in California” and seeking “to recover economic losses resulting from purchasing cigarettes.” In re Tobacco II Cases, ___ Cal.App.4th ___, 47 Cal.Rptr.3d 917, 919 (Cal.App. September 5, 2006). Eventually, in October 2000, the sole remaining plaintiff sought class certification of his seventh amended complaint, which a Consumer Legal Remedies Act (CLRA) claim, an Unfair Competition Law (UCL) claim, and a false advertising claim. Defense attorneys previously had persuaded the court to deny a motion to certify a class action on common law and CLRA claims because “individual issues of causation and injury predominate over common issues.” Id. The trial court refused to certify a class on the CLRA claim because it was an improper motion for reconsideration “and found that individual issues relating to causation, injury, reliance, materiality, exposure to the alleged misstatements, statutes of limitations, and choice of law predominate.” However, the court granted class certification as to the UCL and false advertising claims as they “do not require the individualized determinations as to reliance.” Id.

In 2004, defense attorneys moved for summary judgment on the UCL and false advertising claims based on “use of the terms ‘lights,’ ‘low tar,’ ‘all natural,’ and ‘no additives.’” In re Tobacco, at 919. The court granted the motion because (1) the claims were preempted by the federal Cigarette Labeling and Advertising Act, and (2) plaintiff presented insufficient evidence “to establish the falsity of the ‘all natural’ and ‘no additives’ claims.” However, the trial court permitted the class action to proceed as to other UCL claims. Id.

California voters passed Proposition 64 in November 2004, requiring that plaintiffs suffer injury in fact in order to pursue UCL claims. Defense attorneys moved to decertify the class on the ground that all class members would be required to demonstrate injury in fact, thus individual issues would predominate; the trial court agreed and decertified the class. In re Tobacco, at 919-20. The Court of Appeal affirmed.

Preliminarily, the appellate court noted that the retroactivity of Proposition 64 had been resolved by the California Supreme Court in Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal.4th 223 (Cal. 2006), which held that the new standing requirements of Proposition 64 applied to all cases pending at the time of its passage. In re Tobacco, at 920. The Court of Appeal then examined in detail the individual issues that would have to be resolved in the lawsuit, see id., at 920-26, and concluded that the trial court did not abuse its discretion in decertifying the class action because individual issues would indeed predominate over common issues. As the Court summarized at page 926:

We agree with the trial court’s determination this case is not suitable for class action on the basis that individual issues predominate over common issues. There were numerous misrepresentations occurring over more than a half a century. The representations changed over time as did the general dissemination of information about the health risks and addictiveness of cigarette smoking. Further, while the class was restricted to smokers who resided in California between 1993 and 2001, these class members began to smoke at different points over several decades and some class members were not even born when some of the representations were made. Therefore, all class members were not exposed to the same representations or information about the health risks and addictiveness of cigarettes. Individual determinations would have to be made as to when the class members began smoking, what representations they were exposed to, what other information they were exposed to, and whether their decision to smoke was a result of defendants’ misrepresentations (and thus they suffered an injury due to defendants’ conduct) or was for other reasons. The numerous individual determinations render this case unsuitable for a class action.

Finally, the appellate court held that class certification was properly denied as to the CLRA claim because individual issues would predominate. In re Tobacco, at 926-27. Accordingly, it affirmed the judgment of the trial court.

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