In re Tobacco Cases II
192 Cal. Rptr. 3d 881
Cal. Ct. App.2015Background
- Plaintiffs (class represented by Trina Watton) sued Philip Morris under the UCL and FAL for advertising Marlboro Lights as "Lights"/"lowered tar and nicotine," alleging those descriptors falsely implied reduced health risk.
- Trial court found (based on Philip Morris internal research and testimony) Marlboro Lights were no less harmful than full‑flavored cigarettes and the advertising was deceptive and likely to mislead consumers.
- The court denied restitution because (1) plaintiffs admitted class members received value from Marlboro Lights apart from the deceptive claims, and (2) plaintiffs’ expert conjoint survey (the sole attempt to measure price‑vs‑value differential) was found unreliable and inadmissible; the court applied the Vioxx price-minus-value restitution measure.
- The court denied injunctive and declaratory relief as moot or untimely (federal injunctions and statutes had already barred the challenged descriptors, and plaintiffs did not litigate declaratory relief at trial).
- The court awarded costs of $764,552.73 to Philip Morris; plaintiffs’ motion for discovery sanctions under Code Civ. Proc. §2033.420 was denied for lack of accounting.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of restitution under UCL for products sold with deceptive labels | Vioxx is not exclusive; court could order full refunds or disgorgement of profits for deterrence without proof of consumer loss | Repose on Vioxx and UCL limits: restitution must restore measurable losses; nonrestitutionary disgorgement unavailable | Court: Vioxx measure (price paid minus value received) governs where consumers received value; full refund/disgorgement solely for deterrence is not allowed |
| Sufficiency of plaintiffs’ conjoint survey to show classwide loss | Survey proves a price/value differential (40.8% then adjusted to 22.8%) supporting classwide restitution | Survey is methodologically flawed, not reliable, not representative, and yields nonsensical results | Court: Survey inadmissible/insufficient; plaintiffs failed to establish price‑value differential; restitution denied |
| Request for injunctive relief (post‑trial) | Continued marketing (Marlboro Gold in light packs) still conveys health message; injunction still necessary | Federal injunction and federal statute already proscribe the descriptors; alleged pack‑color issue was not pleaded or proven | Court: Denied as moot or not pleaded; no finding of ongoing deceptive conduct requiring injunction |
| Declaratory relief and trial costs/sanctions | Declaratory relief appropriate; costs to defendant improper given liability finding; sanctions warranted for failures to admit | Declaratory relief untimely/waived and unnecessary; defendant is prevailing party under CCP §1032; sanctions unsupported by accounting | Court: Declaratory relief untimely/waived; awarded costs to Philip Morris; denied discovery sanctions for lack of detailed fee/cost proof |
Key Cases Cited
- In re Vioxx Class of Cases, 180 Cal.App.4th 116 (Cal. Ct. App.) (price-paid minus value-received is an appropriate restitution measure under the UCL and requires proof of product value)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (distinguishes standing and restitution standards under Proposition 64; injunction is primary UCL remedy)
- Cortez v. Purolator Air Filtration Prods. Co., 23 Cal.4th 163 (Cal. 2000) (restitution may overlap with damages; measure focuses on return of money improperly acquired)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (UCL remedies are equitable and limited; nonrestitutionary disgorgement is not available)
- United States v. Philip Morris USA, Inc. (Philip Morris I), 449 F. Supp. 2d 1 (D.D.C.) (federal finding that tobacco companies misled consumers about "light"/"low tar" cigarettes and injunctive relief against health descriptors)