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Dahl v. R. J. Reynolds Tobacco Company: TORT | TOBACCO - fraud / misrepresentation claims not preempted by federal law

STATE OF MINNESOTA
IN COURT OF APPEALS
A05-1539
Michael S. Dahl, individually and on behalf
of all others similarly situated, et al.,
Appellants,
v.
R.J. Reynolds Tobacco Company, et al.,
Respondents.
Filed December 4, 2007
Reversed and remanded
Dietzen, Judge
Hennepin County District Court
File No. MP-03-5582
Kay Nord Hunt, Phillip A. Cole, Ehrich L. Koch, Lommen, Abdo, Cole, King &
Stageberg, P.A., 2000 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402; and
Gale D. Pearson, Martha K. Wivell, Stephen J. Randall, Pearson, Randall & Schumacher,
P.A., 100 South Fifth Street, Suite 1025, Minneapolis, MN 55402 (for appellants)
Lori Swanson, Attorney General, Mark B. Levinger, Assistant Attorney General, 445
Minnesota Street, Suite 1100, St. Paul, MN 55101 (for amicus curiae State of Minnesota)
William L. Davidson, Richard A. Lind, Sara J. Lathrop, Lind, Jensen, Sullivan &
Peterson, P.A., 150 South Fifth Street, Suite 1700, Minneapolis, MN 55402; and
James S. Simonson, Brian L. McMahon, Gray, Plant, Mooty, Mooty & Bennett, P.A.,
500 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Dietzen, Presiding Judge; Toussaint, Chief Judge; and
Halbrooks, Judge.
2
S Y L L A B U S
1. State law claims for intentional fraud and misrepresentation that are not
predicated on a duty based on smoking and health, but rather on a broader, more general
duty not to fraudulently misrepresent or deceive, are not preempted by federal law.
2. When affidavits are submitted that address a question of law, the affidavits
do not convert a motion to dismiss to a motion for summary judgment.
O P I N I O N
DIETZEN, Judge
Appellants challenge the district courts order dismissing their claims, arguing
(1) the claims are not expressly preempted by the Federal Cigarette Labeling and
Advertising Act (FCLAA); and (2) the claims are not implicitly preempted by Federal
Trade Commission (FTC) oversight of tar and nicotine claims in cigarette advertising.
Because the district court erred in concluding that appellants claims are expressly
preempted by the FCLAA, and because we conclude that they are not implicitly
preempted, we reverse and remand.
FACTS
Respondents R.J. Reynolds Tobacco Company and R.J. Reynolds Tobacco
Holdings, Inc. are engaged in the business of manufacturing, marketing, distributing, and
selling cigarettes, including lowered tar filtered cigarettes under the brand names
Camel Lights and Winston Lights, throughout the United States. Appellant Michael Dahl
claims that he has purchased and consumed, on average[,] approximately two packs a
day of Camel Lights cigarettes in the State of Minnesota for a period of approximately
3
[20] years. Appellant David Huber claims that he has purchased and consumed
approximately [one-half] pack to one pack a day of Camel Lights, Winston Select,
Winston No additives or Winston Lights for approximately the past ten years.
The complaint alleged, among other things, that respondents sold and packaged
Camel Lights and Winston Lights as light and as having decreased tar and nicotine,
that they represented that they are light, that is, lower tar and nicotine than regular
cigarettes, and that the representation is deceptive and misleading and constitute[s]
unfair business practices. The complaint set forth specific examples of false and
misleading representations, which include:
a. Falsely and/or misleadingly representing that their
product is light and/or delivers lowered tar and nicotine in
comparison to regular cigarettes; [and]
b. Describing the product as light when the so-called
lowered tar and nicotine deliveries depended on deceptive
changes in cigarettes design and composition that dilute the
tar and nicotine content of smoke per puff as measured by the
industry standard testing apparatus, but not when used by the
consumer[.]
Appellants assert causes of action for common law intentional fraud and
misrepresentation; unjust enrichment; and violations of the Minnesota Consumer Fraud
Act, Minn. Stat. 325F.68-.70 (2006), the Minnesota Unlawful Trade Practices Act,
Minn. Stat. 325D.09-.16 (2006), the Minnesota Uniform Deceptive Trade Practices
Act, Minn. Stat. 325D.43-.48 (2006), and the Minnesota False Statement in
Advertisement Act, Minn. Stat. 325F.67 (2006).
4
Respondents moved to dismiss appellants claims on the grounds of express and
implied preemption under the FCLAA, 15 U.S.C. 1331 (2000), and the United States
Constitution. The district court granted respondents motion, holding that appellants
claims are expressly preempted by the FCLAA. This appeal follows.
ISSUES
I. Did the district court err in concluding that appellants state-law claims are
expressly preempted by the FCLAA?
II. Are appellants claims implicitly preempted by the FTC oversight of tar
and nicotine claims in cigarette advertising?
ANALYSIS
I.
Appellants argue that the district court erred in determining as a matter of law that
their claims were preempted by the FCLAA. We review a dismissal under rule 12 of the
Minnesota Rules of Civil Procedure de novo to determine whether the complaint sets
forth a legally sufficient claim for relief. Bodah v. Lakeville Motor Express, Inc., 663
N.W.2d 550, 553 (Minn. 2003). In doing so, we consider only the facts alleged in the
complaint, accepting those facts as true and construing all reasonable inferences in favor
of the nonmoving party. Id.; Marquette Natl Bank v. Norris, 270 N.W.2d 290, 292
(Minn. 1978). Whether federal law preempts state law is generally an issue of law
reviewed de novo. Martin ex rel. Hoff v. City of Rochester, 642 N.W.2d 1, 9 (Minn.
2002); see Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S. Ct. 2608, 2617
(1992).
5
A. The Federal Cigarette Labeling and Advertising Act
The FCLAA is a comprehensive federal scheme governing the advertising and
promotion of cigarettes. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541, 121 S. Ct.
2404, 2414 (2001). The FCLAA was enacted in 1965 after the Surgeon General
concluded that [c]igarette smoking is a health hazard of sufficient importance in the
United States to warrant appropriate remedial action. Id. at 542, 121 S. Ct. at 2415
(quotation omitted). The purpose of the act was (1) to adequately inform the public about
the hazards of cigarette smoking; and (2) to protect the national economy from
interference due to diverse, nonuniform, and confusing cigarette labeling and advertising
regulations with respect to the relationship between smoking and health. Id. at 542-43,
121 S. Ct. at 2415. The FCLAA mandated that packages of cigarettes have printed on the
package the following warning label: Caution: Cigarette Smoking May Be Hazardous to
Your Health. Id. at 543, 121 S. Ct. at 2415 (quotation omitted). The FCLAA also
required the Secretary of Health, Education, and Welfare (HEW) and the Federal Trade
Commission (FTC) to report annually to Congress about the health consequences of
smoking and the advertising and promotion of cigarettes. Id. As passed in 1965, section
5 of the FCLAA, captioned Preemption, provided that:
(a) No statement relating to smoking and health, other than the statement
required by [] this Act, shall be required on any cigarette package.
(b) No statement relating to smoking and health shall be required in the
advertising of any cigarettes the packages of which are labeled in
conformity with the provisions of this Act.
6
Federal Cigarette Labeling and Advertising Act, Pub. L. No. 89-92, 79 Stat. 282, 283
(1965); see also Cipollone, 505 U.S. at 514, 112 S. Ct. at 2616 (discussing original
preemption language).
The FCLAA was amended in 1969. Reilly, 533 U.S. at 544, 121 S. Ct. at 2416. One
of the amendments changed the mandated label on cigarette packages to read: Warning:
The Surgeon General Has Determined That Cigarette Smoking Is Dangerous to Your
Health. Id. (quotation omitted). The 1969 amendments also changed the language of
section 5(b) to read:
(b) No requirement or prohibition based on smoking and health shall be
imposed under State law with respect to the advertising or promotion of any
cigarettes the packages of which are labeled in conformity with the
provisions of this Act.
Public Health Cigarette Smoking Act of 1969, Pub. L. No. 91-222, 84 Stat. 87, 88 (1970);
see also Cipollone, 505 U.S. at 515, 112 S. Ct. at 2617.1
B. The Federal Preemption Doctrine
The preemption doctrine stems from the Supremacy Clause of the United States
Constitution, which provides that the laws of the United States shall be the supreme law
of the land . . . anything in the Constitution or laws of any state to the contrary
notwithstanding. U.S. Const. art. VI, cl. 2. The ultimate touchstone of federal
1 In 1984, Congress again amended the FCLAA, but these amendments did not affect the
preemption provision. Instead, the act was amended to change the mandated label on
cigarette packages. Reilly, 533 U.S. at 545, 121 S. Ct. at 2416. The amendments
established a series of warnings to appear on a rotating basis on cigarette packages and in
cigarette advertising. Id. The amendments also directed the Secretary of Health and
Human Services to create and implement an educational program about the health effects
of cigarette smoking. Id. Since 1964, the FTC has continued to report on trade practices
in the cigarette industry. Id.
7
preemption is congressional intent. Gade v. Natl Solid Wastes Mgmt. Assn, 505 U.S.
88, 96, 112 S. Ct. 2374, 2381 (1992). And preemption may be express or implied. Fid.
Fed. Sav. & Loan Assn v. de la Cuesta, 458 U.S. 141, 152-53, 102 S. Ct. 3014, 3022
(1982).
Although the doctrine of preemption is firmly rooted, appellants correctly assert
that there is a presumption against preemption. See, e.g., CSX Transp., Inc. v.
Easterwood, 507 U.S. 658, 668, 113 S. Ct. 1732, 1739 (1993). The presumption against
preemption is a necessary requirement for a properly functioning and well-balanced
federal system. Harbor Broad., Inc. v. Boundary Waters Broadcasters, Inc., 636
N.W.2d 560, 564 n.1 (Minn. App. 2001). The burden of demonstrating preemption rests
with the defendant. See Silkwood v. Kerr-McGee, Corp., 464 U.S. 238, 255, 104 S. Ct.
615, 625 (1984).
C. The Preemptive Effect of the FCLAA
Both parties acknowledge that the United States Supreme Court holding in
Cipollone v. Liggett Group, Inc., addresses whether state-law damages claims are
preempted by the FCLAA. See Cipollone, 505 U.S. at 508-09, 112 S. Ct. at 2614-15.2 In
Cipollone, the Court considered whether the FCLAAs preemption clause barred a statelaw
suit for damages brought by a smoker who had allegedly developed lung cancer from
2 The Minnesota Supreme Court addressed this same issue three years earlier in Forster
v. R.J. Reynolds Tobacco Co., 437 N.W.2d 655 (Minn. 1989). The Forster holding is
contrary to, and thus effectively overruled by, Cipollone. Accordingly, on this federal
preemption issue, we follow Cipollone and not Forster. See Johnson v. Fabian, 711
N.W.2d 540, 544 (Minn. App. 2006) (explaining that United States Supreme Court
decision on federal constitutional issue effectively overruled contrary prior ruling from
Minnesota Supreme Court), affd, 735 N.W.2d 295 (Minn. 2007).
8
the defendants cigarettes. Id. The smoker asserted a number of common-law causes of
action, including strict liability, negligent failure to warn, breach of express warranty,
fraudulent misrepresentation, and civil conspiracy. Id. at 509-10, 112 S. Ct. at 2614. The
Court concluded that the preemptive scope of the FCLAA is governed entirely by the
express language in section 5 of the act. Id. at 517, 112 S. Ct. at 2618.
A plurality of the Court held that common-law claims were neither uniformly
preempted nor uniformly allowed by the FCLAA. Id. at 523-24, 112 S. Ct. at 2621.3
Instead, each claim must be examined to determine whether the legal duty that is the
predicate of the common-law damages action constitutes a requirement or prohibition
based on smoking and health . . . imposed under State law with respect to . . . advertising
or promotion, giving that clause a fair but narrow reading. Id. at 524, 112 S. Ct. at
2621.
The plurality considered each of the smokers claims to determine whether they
were preempted. The plurality first considered, and held preempted, the smokers
failure-to-warn claim, which would require a showing that respondents . . . advertising
or promotions should have included additional, or more clearly stated, warnings.4 Id.
The Court similarly held preempted the smokers fraudulent misrepresentation claim that
3 Although this portion of the Cipollone opinion was joined by only four justices, it has
been widely followed by the lower federal courts, and we, accordingly, adhere to it as
well. See, e.g., Good v. Altria Group, Inc., 501 F.3d 29, 36 (1st Cir. 2007), petition for
cert. filed, ___ U.S.L.W. ___ (U.S. Oct. 26, 2007) (No. 07-562); Brown v. Brown &
Williamson Tobacco Corp., 479 F.3d 383, 389 (5th Cir. 2007) (collecting cases).
4 The plurality allowed that a failure-to-warn claim could be pursued if based solely on
respondents testing or research practices or other actions unrelated to advertising or
promotion. Cipollone, 505 U.S. at 524-25, 112 S. Ct. at 2622.
9
the respondents, through their advertising [of cigarettes], neutralized the effect of
federally mandated warning labels. Id. at 527, 112 S. Ct. at 2623. The plurality
explained that this warning-neutralization claim was preempted because it was premised
on a requirement or prohibition based on smoking and health imposed by state law. Id.
Specifically, the fraud claim alleging warning neutralization would impose
prohibition[s] against statements in advertising and promotional materials that tend to
minimize the health hazards associated with smoking, which were merely the converse
of a state-law requirement that warnings be included in [such] materials. Id. Thus, the
smokers first fraudulent-misrepresentation theory was inextricably related to the
failure-to-warn claim and, accordingly, preempted. Id. at 528, 112 S. Ct. at 2623.
But the plurality concluded that the smokers second theory of fraudulent
misrepresentationthat respondents had falsely represented or concealed material
factswas not preempted. The plurality reasoned that this claim was predicated not on
a duty based on smoking and health but rather on a more general obligation[:] the duty
not to deceive. Id. at 528-29, 112 S. Ct. at 2624. The plurality found no indication that
Congress wished to insulate cigarette manufacturers from longstanding rules governing
fraud; and that the states proscription of fraudulent advertising was consistent with the
purposes of the FCLAA because it did not create diverse, nonuniform, and confusing
standards. Id. at 529, 112 S. Ct. at 2624. Rather, state-law proscriptions of fraud rely
only on a single, uniform standard: falsity. Id.
Appellants complaint asserts common-law claims for intentional fraud and
misrepresentation and unjust enrichment, and four statutory claims. Following
10
Cipollone, we turn to an examination of each claim. We observe that our decision is
limited to whether appellants claims, as pleaded, are preempted by the FCLAA. We do
not reach the merits of appellants claims, nor do we determine whether their allegations
are sufficient to state claims under the state common law and statutory law that they
invoke. See id. at 524, 112 S. Ct. at 2621 (declining to express an opinion on whether
these actions are viable claims as a matter of state law).
D. Common-law Claims
The common-law fraud claim alleges that respondents knowingly and
intentionally engaged in fraud and misrepresentation in its acts and omissions of material
facts in its advertisements . . . for the purpose of inducing consumers to purchase low tar
and nicotine cigarettes. Respondents argue that the claim is not premised on a duty to
not deceive, but rather is premised on general concerns about smoking and health. We
disagree.
The Cipollone Court specifically rejected respondents argument, holding:
Unlike state-law obligations concerning the warning
necessary to render a product reasonably safe, state-law
proscriptions on intentional fraud rely only on a single,
uniform standard: falsity. Thus, we conclude that the phrase
based on smoking and health fairly but narrowly construed
does not encompass the more general duty not to make
fraudulent statements. Accordingly, [the smokers] claim
based on allegedly fraudulent statements made in
respondents advertisements is not pre-empted by 5(b) of
the 1969 Act.
Id. at 529, 112 S. Ct. at 2624. As in Cipollone, appellants fraud claim alleges false
representation of a material fact [and by] conceal[ment of] a material fact predicated on
11
a state-law duty not to make false statements of material fact or to conceal such facts.
See id. at 528, 112 S. Ct. at 2623.
Respondents contend that the more recent case of Lorillard Tobacco Co. v. Reilly
limits the holding of Cipollone and supports its contention that appellants claims are
preempted. In Reilly, the United States Supreme Court examined whether regulations
restricting the location of cigarette advertisements in order to limit youth exposure were
preempted by section 5(b) of the act. 533 U.S. at 546-51, 121 S. Ct. at 2417-19. The
Court held that the regulations were preempted by the FLCAA. Id. at 548-51, 121 S. Ct.
at 2418-19. In doing so, the Court concluded:
The context in which Congress crafted the current preemption
provision leads us to conclude that Congress
prohibited state cigarette advertising regulations motivated by
concerns about smoking and health. Massachusetts has
attempted to address the incidence of underage cigarette
smoking by regulating advertising, much like Congress ban
on cigarette advertising in electronic media. At bottom, the
concern about youth exposure to cigarette advertising is
intertwined with the concern about cigarette smoking and
health. Thus the Attorney Generals attempt to distinguish
one concern from the other must be rejected.
Id. at 548, 121 S. Ct. at 2418 (citation omitted).
Respondents argue that, as in Reilly, appellants claims are intertwined with
concerns about cigarette smoking and health and, therefore, preempted. Reilly, however,
arose under very different circumstances than those in Cipollone and this case. Unlike
Cipollone, Reilly did not involve determining the scope of preemption for state-law
damages claims. Instead, the Reilly Court addressed positive state enactments directly
targeting cigarette advertising. The issue decided by the Reilly Court was whether
12
content-neutral regulation of cigarette advertising was based on smoking and health
within the meaning of the preemption clause of the FCLAA. Id. at 546, 121 S. Ct. at
2417. In holding that it was preempted, the Court emphasized the distinction between
generally applicable zoning regulations and regulations targeting cigarette advertising.
Id. at 549-50, 121 S. Ct. at 2419 (citation omitted). This distinction is consistent with the
distinction drawn in Cipollone between common-law claims involving duties related to
smoking and health and those claims arising out of more generalized duties. Cipollone,
505 U.S. at 528-29, 112 S. Ct. at 2624.
We do not read Reilly to disturb Cipollones core holding that a state-law duty
not to deceive is broader than a duty that is based on smoking and health and, therefore,
beyond the reach of section 5(b) of the act. Both the holding and result of Cipollone
make clear that a claim is not preempted merely because it arises out of the adverse
health consequences of cigarettes. See id. at 524, 112 S. Ct. at 2621. Clearly, appellants
claims are intertwined with smoking and health. But under Cipollone, the fate of each
claim is dependent on whether the legal duty that is the predicate of the claim
constitutes a requirement or prohibition based on smoking and health that is imposed
by state law regarding the advertising or promotion of cigarettes. Id.
We note that there is a split among the federal circuit Courts of Appeals whether
fraud claims surrounding the use of the terms light or low tar in the advertising of
cigarettes are preempted by the FCLAA. Respondents suggest that our decision should
be guided by Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383 (5th Cir.
2007), in which the Fifth Circuit recently determined that such claims were preempted.
13
Appellants urge that we follow the First Circuits contrary holding in Good v. Altria
Group, Inc., 501 F.3d 29 (1st Cir. 2007), petition for cert. filed, ___ U.S.L.W. ___ (U.S.
Oct. 26, 2007) (No. 07-562).
In Brown, purchasers of light cigarettes brought suit against cigarette
manufacturers, alleging that they were deceived by the companys marketing into
believing that light cigarettes were safer than regular cigarettes. 479 F.3d at 386.
The Brown court observed that the plaintiffs sole basis for claiming affirmative
misstatement was the manufacturers use of the terms lights and lowered tar and
nicotine in their labeling and advertising; and that these terms were accurate based on
the testing of cigarettes under the Cambridge Filter Method, which is the testing method
approved by the FTC. Id. at 391-92; see also Good, 501 F.3d at 30-33 (discussing the
Cambridge Filter Method). The Brown court explained, Cigarettes labeled as light and
low-tar do deliver less tar and nicotine as measured by the only government-sanctioned
ethodology for their measurement. 501 F.3d at 392. Because they were based on the
results of the Cambridge Filter Method test, the Brown court concluded that the terms
light and low tar were FTC-approved as well. Id. Therefore, the court held that the
use of these terms could not constitute fraud. Id. (concluding that the terms could not be
inherently deceptive or untrue).
The Brown court acknowledged the plaintiffs argument that the terms light and
low tarwhile accurately based on machine testingwere fraudulent when considered
in light of the cigarettes delivery of tar and nicotine to actual human smokers. Id. at 392.
In other words, the Brown plaintiffs arguedas do appellants herethat describing
14
cigarettes as light and low tar falsely implies that a smoker will inhale less tar and
nicotine. Id. at 386, 392. But the Fifth Circuit held that this implied misrepresentation
theory was a warning-neutralization claim preempted under Cipollone. Id. at 392.
Respondents argue that appellants claims, like those in Brown, are based on the
manufacturers use of FTC-approved terms and, therefore, are preempted by section 5(b)
of the act. Specifically, respondents argue that appellants claims cannot prevail because
it is undisputed that the terms light and low tar are accurate under the FTC
Cambridge Filter Method and, therefore, consumers cannot be misled. Appellants
respond that in Good, the First Circuit examined and rejected the holding in Brown.
Appellants suggest that Good is better reasoned and should be followed. We agree.
Like the Good court, we conclude that the Brown decision conflates an assessment
of the merits of a fraud claim with the determination of whether that claim is preempted
by the FCLAA. See Good, 501 F.3d at 44-46. As the First Circuit explained:
We think [the Fifth Circuits] approach puts the cart before
the horse. The assertion that Marlboro Lights and Cambridge
Lights rate lower in tar and nicotine than their full-flavored
cousins according to the Cambridge Filter Method may
ultimately affect whether the plaintiffs can show that the
challenged statements are false. We do not resolve the issue,
however, because Philip Morris did not seek summary
judgment on that ground.
Id. at 45 (citation omitted). Appellants may ultimately prove unsuccessful in their claims,
but this does not influence our preemption analysis. For purposes of this motion to
dismiss, we do not go beyond the allegations of the complaint. Rather, we assume that
the allegations are true.
15
We also agree with the Good courts rejection of the Fifth Circuits distinction
between express and implied misrepresentation claims and its conclusion that the latter
necessarily equate to warning-neutralization claims. Id. at 44. As the Good court
explained, Cipollone does not treat claims based on impliedas opposed to
expressrepresentations differently for purposes of FCLAA preemption. Id. at 44
n.18; see Cipollone, 505 U.S. at 523, 112 S. Ct. at 2621 (rejecting argument that any
familiar subdivision of common-law claims is or is not pre-empted). Here, as in Good,
appellants do not assert that the light term neutralized the federally mandated warnings,
but rather that they were deceived into making a purchase that they otherwise would not
have. See Good, 501 F.3d at 43-44. Again, the burden ultimately will fall on appellants
to prove this claim, but we cannot say that it is preempted under the FCLAA.
Finally, we note that many other courts have concluded that the FLCAA does not
preempt fraudulent misrepresentation claims arising out of false statements made in
advertising or promoting cigarettes. See, e.g., Spain v. Brown & Williamson Tobacco
Corp., 363 F.3d 1183, 1202 (11th Cir. 2004); Mulford v. Altria Group, Inc., 506 F. Supp.
2d 733, 750-51 (D.N.M. 2007); Johnson v. Brown & Williamson Tobacco Corp., 122 F.
Supp. 2d 194, 203 (D. Mass. 2000); Izzarelli v. R.J. Reynolds Tobacco Co., 117 F. Supp.
2d 167, 175 (D. Conn. 2000); Hyde v. Philip Morris Inc., No. 97-0359, 1998 WL 656074,
at *6 (D.R.I. May 1, 1998); Whiteley v. Philip Morris Inc., 11 Cal. Rptr. 3d 807, 842
(Cal. Ct. App. 2004); Price v. Philip Morris, Inc., 848 N.E.2d 1, 33 (Ill. 2005), cert.
denied, 127 S. Ct. 685 (U.S. 2006); Small v. Lorillard Tobacco Co., 252 A.D.2d 1, 15
(N.Y. App. Div. 1998), affd, 720 N.E.2d (N.Y. 1999); Estate of Schwarz v. Philip
16
Morris Inc., 135 P.3d 409, 421 (Or. App. 2006) (en banc). In fact, a number of these
decisions hold that the FCLAA does not preempt the very theory appellants advance here,
that a cigarette manufacturer perpetrated fraud by stating that its light brand offered lower
tar and nicotine than its full-flavored one. See Mulford, 506 F. Supp. 2d at 750; Price,
848 N.E.2d at 33; Estate of Schwarz, 135 P.3d at 421.
Appellants also assert a claim for common law unjust enrichment. The elements
of an unjust enrichment claim are: (1) a benefit conferred; (2) the defendants
appreciation and knowing acceptance of the benefit; and (3) the defendants acceptance
and retention of the benefit under such circumstances that it would be inequitable for him
to retain it without paying for it. Acton Constr. Co. v. State, 383 N.W.2d 416, 417 (Minn.
App. 1986), review denied (Minn. May 22, 1986). A claim for unjust enrichment does
not lie simply because one party benefits from the efforts or obligations of others, but
instead it must be shown that a party was unjustly enriched in the sense that the term
unjustly could mean illegally or unlawfully. First Natl Bank of St. Paul v. Ramier,
311 N.W.2d 502, 504 (Minn. 1981).
Appellants unjust enrichment claim fails to identify any benefit wrongfully
accepted and retained by respondents. The claim is simply a recharacterization of
appellants fraudulent misrepresentation claims. But we cannot say that it is preempted
under section 5(b) of the act.
E. Statutory Claims
Appellants assert statutory claims under four separate consumer protection
statutes: the Minnesota Consumer Fraud Act, Minn. Stat. 325F.68-.70; the Minnesota
17
Unlawful Trade Practices Act, Minn. Stat. 325D.09-.16; the Minnesota Uniform
Deceptive Trade Practices Act, Minn. Stat. 325D.43-.48; and the Minnesota False
Statement in Advertising Act, Minn. Stat. 325F.67. Each of these statutes prohibits
different types of deceptive conduct,5 and all provide claims that are distinct from the
common-law duty not to defraud. See, e.g., Group Health Plan, Inc. v. Philip Morris
Inc., 621 N.W.2d 2, 12 (Minn. 2001) (distinguishing claims under consumer fraud
statutes from common-law fraud claims). Like appellants common-law fraud claim,
however, each of the statutes imposes broad duties not to deceive consumers. Applying
Cipollone, we conclude that these broad statutory claimslike appellants common-law
fraud claimare not preempted by the FCLAA. See Cipollone, 505 U.S. at 528-29, 112
S. Ct. at 2623-24. (stating that fraudulent-misrepresentation claims that do arise with
respect to advertising and promotions (most notably claims based on allegedly false
5 Compare Minn. Stat. 325F.69, subd. 1 (providing that [t]he act, use, or employment
by any person of fraud, false pretense, false promise, misrepresentation, misleading
statement or deceptive practice, with the intent that others rely thereon in connection
with the sale of any merchandise, whether or not any person has in fact been misled,
deceived, or damaged thereby, is enjoinable . . .), and Minn. Stat. 325D.13 (providing
that [n]o person shall, in connection with the sale of merchandise, knowingly
misrepresent, directly or indirectly, the true quality, ingredients or origin of such
merchandise), with Minn. Stat. 325D.44, subds. 7, 13 (providing that an entity
engages in a deceptive trade practice by representing that goods or services are of a
particular standard, quality, or grade, or that goods are of a particular style or model, if
they are of another, or engages in any other conduct which similarly creates a
likelihood of confusion or of misunderstanding), and Minn. Stat. 325F.67 (providing
that any corporation that, with intent to sell or in anywise dispose of merchandise
directly or indirectly to the public, for sale or distribution, actually disseminates in
Minnesota, in any way, an advertisement of any sort regarding merchandise, for use,
consumption, purchase, or sale, which advertisement contains any material assertion,
representation, or statement of fact which is untrue, deceptive, or misleading, may be
enjoined).
18
statements of material fact made in advertisements) are not pre-empted by 5(b)
because these claims are predicated . . . on a more general obligationthe duty not to
deceive).
We agree with respondents that some of appellants claims may cross the line
established in Cipollone and be preempted by the act. Respondents point to specific
allegations in various paragraphs of the complaint to support its argument that
appellants claims are preempted. For example, appellants allege in the complaint that
(1) [respondents] failed to inform consumers that the tar in their light cigarette smoke
contains higher levels of harmful toxins than the tar in regular cigarette smoke; and
(2) [respondents] failed to inform consumers that the tobacco in their Camel Lights and
Winston Lights was manipulated through the addition of chemicals. To the extent that
these claims suggest that respondents had a duty to warn consumers about the dangers of
smoking light cigarettesas opposed to a duty to refrain from fraudulent
misrepresentationsthey are preempted under Cipollone and may not be pursued. 6
But we read Cipollone to require that we focus on the legal duty that gives rise to
the cause of action and determine whether it is preempted. Here, appellants commonlaw
fraud claim and statutory claims are clearly based on intentional fraud and
misrepresentation and the duty to not deceive through either misrepresentation of a
material fact or omission of a material fact. Accordingly, because counts I through V of
appellants complaint are predicated on the broader duty not to deceive, they are not
6 We note that we do not preclude a subsequent motion to strike particular sentences in
the complaint that may conflict with Cipollone.
19
preempted by the FCLAA. See id. at 529, 112 S. Ct. at 2624 (holding that the phrase
based on smoking and health does not encompass the more general duty not to make
fraudulent statements).
II.
Respondents argue that even if appellants claims are not expressly preempted,
they are implicitly preempted because the claims conflict with a comprehensive federal
regulatory scheme imposed by Congress. More specifically, respondents contend that
Congress designated the FTC to govern cigarette labeling and advertising, and that
appellants claims conflict with the FTCs careful regulation of cigarette advertising
under its exclusive federal authority.
Originally, respondents brought a motion to dismiss under rule 12 for failure to
state a legally sufficient claim. But both parties submitted affidavits in support of their
arguments concerning implied preemption. The affidavits submitted were narrowly
focused on explaining the FTCs authority and conduct relating to the regulation of
cigarette advertising. When the district court considers matters outside the pleadings, a
motion to dismiss is converted to a motion for summary judgment and the legal issue is
whether there are any genuine issues of material fact that preclude summary judgment.
Minn. R. Civ. P. 12.02; see also Carlson v. Lilyerd, 449 N.W.2d 185, 187 (Minn. App.
1989), review denied (Minn. Mar. 8, 1990). But in this case the affidavits submitted by
the parties were addressed not to factual issues relating to liability, but to the legal issue
of preemption. Because the affidavits were submitted on a question of law, they do not
convert the motion to dismiss to a motion for summary judgment. See Jenisio v. Ozark
20
Airlines, Inc., 187 F.3d 970, 972 n.3 (8th Cir. 1999) (a district court may consider
documents without converting a motion to dismiss into a motion for summary judgment
if the claims relate solely to the interpretation of the documents); see also Tomran, Inc. v.
Passano, 891 A.2d 336, 342 n.8 (Md. 2006) (consideration of affidavits does not convert
a motion to dismiss into a motion for summary judgment when the affidavits address a
question of law).
Implied conflict preemption exists when it is impossible for a private party to
comply with both state and federal requirements or where state law stands as an obstacle
to the accomplishment and execution of the full purposes and objectives of Congress.
Sprietsma v. Mercury Marine, 537 U.S. 51, 64, 123 S. Ct. 518, 527 (2002) (quotations
omitted).7 [S]tate laws can be pre-empted by federal regulations as well as by federal
statutes. Hillsborough County, Fla. v. Automated Med. Labs., Inc., 471 U.S. 707, 713,
105 S. Ct. 2371, 2375 (1985).
Here, respondents argue that appellants state-law damages claims are implicitly
preempted because they would frustrate Congresss purpose in vesting regulatory
authority over cigarette advertising with the FTC. Respondents do not assert that
appellants claims are implicitly preempted by the FCLAA, an argument that is
foreclosed by the Supreme Courts Cipollone decision. See Cipollone, 505 U.S. at 517,
112 S. Ct. at 2618. Rather, Reynolds argues that the Dahls claims would stand as an
7 Implied field preemption exists when Congress evinces the intent to occupy a field
exclusively. Sprietsma, 537 U.S. at 64, 123 S. Ct. at 527 (quotations omitted).
Respondents do not argue that field preemption applies here.
21
obstacle to the FTCs power, under the Federal Trade Commission Act, 15 U.S.C. 41
(2000), to regulate cigarette advertising.
The FTC Act prohibits unfair or deceptive acts or practices in or affecting
commerce, 15 U.S.C. 45(a)(1) (2000), and empowers the commission both to define
and enforce that prohibition in a number of ways relevant here. The commission may
prescribe either informal interpretive rules and general statements of policy with respect
to unfair or deceptive acts or practices, 15 U.S.C. 57a(a)(1)(A) (2000), or, pursuant to
notice-and-comment procedures, see id. 57a(b)-(e) (2000), formal rules which define
those acts and practices with specificity. Id. 57a(a)(1)(B) (2000). In addition, the
commission may issue cease-and-desist orders against those engaged in violations of the
act. Id. 45(b) (2000). The FTC may enforce such orders, as well as its formal rules, by
suing violators for either civil penalties, id. 45(m) (2000), or such relief as the court
finds necessary to redress injury to consumers or other injured parties. Id. 57b(a), (b)
(2000).
Here, the question is whether the FTCs authority and actions with respect to
cigarette advertising manifests a federal policy to displace state-law damages claims
challenging the use of the terms light and low tar. The Good court, addressing the
same argument, found no implied preemption. 501 F.3d at 55. We agree.
Initially, the Good court observed that the FTC has never issued a formal rule
specifically defining which cigarette advertising practices violate the Act and which do
not. Id. at 51. In explaining the importance of a lack of a formal rule, the court stated
that:
22
Limiting the preemptive power of federal agencies to
exercises of formal rulemaking authority, then, ensures that
the states will have enjoyed these protections before suffering
the displacement of their laws. This reasoning has particular
force in the case of the FTC Act, which imposes procedural
requirements on the Commissions rulemaking powers that
exceed those of the APA.
Id. (citations omitted). The court further noted the FTC Act states that [r]emedies
provided in [15 U.S.C. 57b] are in addition to, and not in lieu of, any other remedy or
right of action provided by State or Federal law. Id. at 52 (quotation omitted). Finally,
the Good court stated that the claims before the court do not pose a threat to any federal
regulatory objectives apparent in the FTCs approach to tar and nicotine claims in
cigarette advertising. Id. at 53. Consequently, the court held that the plaintiffs claims
were not implicitly preempted. Id.
Here, both appellants and respondents submitted affidavits concerning whether the
FTC has taken an official position on the definitions of light and lower tar and
nicotine cigarettes. On this record, we cannot detect a consistent federal policy on lowtar
claims, let alone one driven by the sort of important means-related federal objectives
necessary to preempt conflicting state law. See Hillsborough County, 471 U.S. at 717,
105 S. Ct. at 2377 (preemption should not be inferred whenever an agency deals with a
problem comprehensively). Accordingly, we conclude that appellants claims are not
implicitly preempted.
D E C I S I O N
Under Cipollone, we conclude that appellants claims are not predicated on a duty
based on smoking and health, but rather on a broader, more general duty to not deceive.
23
As such, we hold that appellants claims are not expressly preempted by the FCLAA.
Because the FTC has never issued a formal rule specifically defining the cigarette
advertising practices that violate the FTC Act, or established a clear federal policy on
low-tar claims, we conclude that appellants claims are not implicitly preempted by FTC
oversight of tar and nicotine claims in cigarette advertising.
Reversed and remanded.
____________________________
Christopher J. Dietzen, Judge
 

 
 
 

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