Decision opens door to Wisconsin smoker suits

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In light of the U.S. Supreme Court opinion last week in Altria Group v. Good, Wisconsin consumers can plausibly sue tobacco companies under at least two different statutory provisions, sec. 100.20 and sec. 100.18.

Section 100.20, entitled “Methods of competition and trade practices”, provides generally, “(1) Methods of competition in business and trade practices in business shall be fair.

Unfair methods of competition in business and unfair trade practices in business are hereby prohibited.”

This is, for all material purposes, identical to the Maine statute at issue, which provides, “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are declared unlawful.” Me.Rev.Stat.Ann., Tit. 5, sec. 207.

However, sec. 100.18 of the Wisconsin statutes, entitled “Fraudulent representations,” is even more applicable to suits alleging that the marketing of light cigarettes is misleading: “(1) No person … shall make, publish, disseminate, circulate, or place before the public, … an advertisement, announcement, statement or representation of any kind to the public … which … contains any assertion, representation or statement of fact which is untrue, deceptive or misleading.”

The downside to suing under sec. 100.18 is that it contains a three-year statute of repose, and the discovery rule does not apply, limiting the potential damages, and the number of potential plaintiffs.

A plaintiff suing under sec. 100.18 can recover pecuniary loss, costs, and attorney fees.
In contrast, sec. 100.20 offers better remedies, and less obstacles to recovery.

A plaintiff suing under sec. 100.20 can recover double his pecuniary loss, costs, and attorney fees. In addition, there is no statute of repose.

Instead, there is a six-year statute of limitations, and the discovery rule applies.

Issues of Proof

A plaintiff seeking to recover under sec. 100.18 need not show reasonable reliance, nor any reliance on the alleged misrepresentation, at all. However, he must still prove causation. A court may determine that the representation did not materially induce the plaintiff’s decision to act and that plaintiff would have acted in the absence of the representation. Novell v. Migliaccio, 2008 WI 44.

The basis of the allegations of fraud against Altria Group is that, even though light cigarettes yield lower tar and nicotine yields, as tested by machines, Altria knew that consumers “unconsciously engage in compensatory behaviors not registered by Cambridge Filter Method testing that negate the effect of the tar- and nicotine-reducing features of ‘light’ cigarettes.”

Behaviors listed by the court included covering filter vents with the lips or fingers, taking larger or more frequent puffs, and holding the smoke in the lungs for a longer period of time. According to the complaint, smokers of light cigarettes “unknowingly” inhale as much tar and nicotine as do smokers of regular cigarettes.

One problem consumers are likely to face should they bring similar suits in Wisconsin is that the “unconscious” and “unknowing[]” behaviors described above are frequently not unconscious or unknowing.

Many smokers of light cigarettes who engage in these nicotine-enhancing behaviors do so “unconsciously” only in the respect that, having consciously done so for so many years, the behaviors become subconscious.

A smoker who consciously covers the filter’s ventilation holes with his lips when he inhales will not be able to prove that the misrepresentations caused him injury.

For other smokers, the behaviors will be genuinely unconscious. But distinguishing between the two will likely involve a complicated factual inquiry.

Pending Suits

In an interview, Mark L. Thomsen, the President of the Wisconsin Association of Justice, and an attorney with Cannon & Dunphy, S.C., said he is unaware of any similar suits pending in Wisconsin.

In addition, while Thomsen said he agreed with the court’s holding as “good basic sound policy,” he acknowledged that proving causation in such cases would be a “huge issue.”