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California Supreme Court revives class-action suit against tobacco firms

The California Supreme Court decided 4-3 today that consumers can file class-action lawsuits against the tobacco industry and other businesses under a law voters limited in 2004, reversing a trend in the lower courts.

The decision, written by Justice Carlos R. Moreno,  revived a class-action lawsuit against the tobacco industry that lower courts dismissed. The lawsuit charges that the industry lured people into buying cigarettes with deceptive advertising that suggested some brands were safer than others.

The ruling was the state high court’s most significant interpretation of Proposition 64, the 2004 initiative that limited suits under a major consumer law to people who claimed they had lost money or property as a result of a company’s wrongdoing.

By interpreting this so-called “standing” requirement flexibly, the court cleared the way for consumer class actions that many lower courts have been throwing out.

Moreno said the ballot materials for the initiative showed it was intended only to stop “shakedown” lawsuits against businesses. The initiative followed a scandal in which lawyers threatened to sue or sued small businesses for obscure code violations and then pocketed the money the businesses paid to make the suits go away. Some lawyers later lost their licenses as a result of this practice.

“It is clear that the proponents did not intend to eliminate … actions to protect Californians from unfair business practices,” Moreno wrote.

Justice Marvin Baxter, in a dissent, argued that every member of a class action should be required to prove that he or she relied on the allegedly deceptive advertising when they purchased cigarettes, a requirement that trial lawyers argued would be impossible to meet.

“Even if the majority’s holding has some sympathetic appeal on the particular facts alleged here,” Baxter wrote, “the rule the majority announces will apply equally to less egregious cases, where it invites the very kinds of mischief Proposition 64 was intended to curtail.”

Joining Moreno in the majority ruling were Justices Joyce Kennard, Kathryn Mickle Werdegar and Court of Appeal Justice Eileen C. Moore, who sat in for Chief Justice Ronald M. George.  George declined to participate in the case because one of the law firms involved handles his estate planning.

Joining Baxter were Justices Ming W. Chin and Carol A. Corrigan.

-- Maura Dolan

 
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