2011-574, Karen L. Lawrence v. Philip Morris USA, Inc.

This is an interlocutory appeal from an order of the

reporter@courts.state.nh.us York, and Washington, D.C. (Philip Curtis & a. on the brief), for the defendant. Glahn, III, on the brief and orally), and Arnold & Porter LLP of New York, New McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Wilbur A.

___________________________ brief, and Mr. Tillery orally), for the plaintiff. THE SUPREME COURT OF NEW HAMPSHIRE and Chicago, Illinois (Stephen M. Tillery and Maximilian C. Gibbons on the Jason R.L. Major on the brief), and Korein Tillery LLC, of St. Louis, Missouri

to press. Errors may be reported by E-mail at the following address:

editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 II. Analysis

this class.

1, 1995. The only issue before us is whether the trial court properly certified

trial. The trial court later adjusted the class period so that it began on January first introduced into New Hampshire’s stream of commerce until the date of individuals who purchased Lights in New Hampshire from the date they were

the trial court certified a class represented by the plaintiff, consisting of all

pursuant to RSA 358-A:10-a, which allows class representation in CPA claims, The plaintiff initiated this action in March 2002. In November 2010,

difference in value. She does not seek personal injury damages.

and nicotine. She seeks actual and statutory damages based upon this

less than the product Philip Morris promised, a cigarette that delivered less tar delivered the same levels of tar and nicotine as a regular Marlboro, was worth thus argues that the product Philip Morris actually sold, a cigarette that

and nicotine delivered by regular Marlboro cigarettes (Regulars). The plaintiff

A. Standard of Review

2 the machine tests while delivering to human smokers the same amount of tar machines. She alleges that Philip Morris specifically designed Lights to “pass” diluted the tar and nicotine delivered per puff as measured by smoking

New Hampshire Consumer Protection Act (CPA). See

The plaintiff alleges that the filters of Lights had ventilation holes that

certification order. We answer this question in the affirmative and reverse the trial court’s “Lights” and describing the cigarettes as “Lowered Tar & Nicotine,” violated the

necessary. See

would deliver less tar and nicotine than other cigarettes. Supp. 2011). These descriptions, she contends, falsely represented that Lights

that the defendant, Philip Morris USA, Inc. (Philip Morris), by using the name cigarettes (Lights) from approximately 1975 until February 2001. She alleges when it granted Plaintiff’s Motion for Class Certification? The plaintiff alleges that she purchased and consumed Marlboro Lights Did the Superior Court err in its application of New Hampshire law

Rainville v. Lakes Region Water Co., 163 N.H. 271, 273 (2012).

interlocutory appeal statement and rely upon the record for additional facts as We accept the statement of the case and facts as presented in the

our review: trial.” See Sup. Ct. R. 8. The superior court transferred a single question for calibrating the decisional scales.” Id

p. 3 members. Id

reaching a generally discretionary judgment, engenders de

appropriate mix of factors, but commits a palpable error of judgment in improper factor is accorded significant weight, or when the court considers the 3 relevant factor deserving of significant weight is overlooked, or “when an class must outweigh the issues that are particular to the individual class and meaningfully determine the certification issues. Cantwell v. J & R Props. understand the claims, defenses, relevant facts, and applicable substantive law an unsustainable exercise of discretion. Petition of Bayview Crematory Finally, because the trial court in this case relied only upon a paper record and We will not overturn orders granting or denying class certification absent

substantial portions of the underlying litigation.” Id predominate, and determining whether those issues are common to the class.” judgment depends upon an incorrect view of the law. Id. And, a trial court’s trial court necessarily exceeds the limits of its discretion when its decision or

N.H. at 784. A trial court unsustainably exercises its discretion when a To satisfy the predominance test, the issues common to the proposed, 155 Thus, the trial court must go beyond the facts alleged in the pleadings to common issues predominate). omitted).

transforming certification proceedings into “protracted mini-trial[s] of issues that will control the outcome of the case, assessing which issues will at 512-13. The trial court must employ its discretion, however, to avoid for classes certified under Superior Court Rule 27-A applies. See

trial court receive enough evidence, by affidavits, documents, or testimony, to Unlimited, 155 N.H. 508, 512 (2007). This rigorous analysis requires that the

significant question of law or fact in common and the requirement that. at 786.

court must consider how the case will be tried by identifying the substantive without deciding, that our case law discussing the predominance requirement similarly situated. Id. at 785-86. “To achieve these pragmatic goals, the trial effort, and expense and to promote uniformity of decision as to persons affecting only individual class members. See. at 785. The test’s purpose is to promote economies of time, because common issues of law or fact do not predominate over questions

A(a)(2) combines the requirement that the proposed class share at least one Bayview Crematory, 155 N.H. 781, 785-86 (2007) (acknowledging that Rule 27-

deciding this question, because the parties do not argue otherwise, we assume,

Philip Morris argues that the trial court erred by certifying the class cigarettes to inhale more deeply, hold the smoke in their lungs longer, or cover

p. 4 representations and, therefore, cannot show injury. See

“compensation” phenomenon – that is, the tendency of smokers of light

cigarettes, cannot show that they were deceived by Philip Morris’s obtaining the same amount of tar and nicotine as when smoking regular tendency of smokers to “compensate” when smoking light cigarettes, thereby

regular cigarette – and, therefore, sustained no injury. Cf

determine the extent of each class member’s knowledge about the Philip Morris contends that individual inquiries will be necessary to

members who were exposed to publicly disseminated information about the

cigarette that was capable of delivering the same levels of tar and nicotine as a

proportion of class members experienced no injury at all”).

4 require individual proof and inquiries. Philip Morris asserts that class about Lights, and determining which class members were, in fact, injured, will predominate because not all class members were injured by its representations members, Philip Morris reasons, received exactly what they expected – a plaintiffs failed to introduce sufficient evidence of deceit). These class granting defendants’ motion for directed verdict based upon finding that

certification upon lack of typicality because of “likelihood that some significant Morris USA, Inc., 265 F.R.D. 289, 292-93 (N.D. Ill. 2010) (denying class

In this case, Philip Morris argues that individual issues about injury will

155 N.H. 615, 620 (2007) (trial court unsustainably exercised discretion by

“[e]leven of the thirteen denied class certification; two granted it.” Id not require that common issues predominate over individual ones”). (Mass. 2008) (explaining that Massachusetts consumer protection statute “does light cigarettes.” In re: Light Cigarettes Mktg. Sales Prac. Litig., Moelis v. Berkshire Life Ins. Co., 887 N.E.2d 214, 220 “This is not the first attempt at certification of a class of purchasers of 479, 492 (Mass. 2004) (certifying class under Massachusetts consumer predominate), with Aspinall v. Philip Morris Companies, Inc., 813 N.E.2d 476, 358-A:10-a, II(e)(3) (requiring that common legal or factual issues (assuming truth of plaintiff’s allegations and legal conclusions); compare RSA Morris Companies, Inc., 190 S.W.3d 368, 382-85 (Mo. Ct. App. 2005) 512-13 (court must go beyond facts alleged in pleadings), with Craft v. Philip standards than New Hampshire law requires. Compare Cantwell, 155 N.H. at courts that granted class certification employed less rigorous class-certification

413 (D. Me. 2010) (citing cases). Of the courts that have considered the issue,

B. Individual Issues Regarding Injury Predominate

Hollis v. Maine Bonding & Cas. Co., 135 N.H. 325, 330 (1992). than ordinary deference to the trial court’s factual findings.” Hillside Assocs. of “all of the documents from below are available for our perusal, we . . . give less p. 5 In addressing this issue, we find instructive the reasoning of In re Ford

class litigation.” Id circumstances will require individualized inquiries that are impracticable in

predominate. We agree with Philip Morris that this was error. evidence, and that common issues about lack of knowledge would

to certify the class. Id injury]. Identifying which putative class members purchased under similar handling problems.” Id reports prior to their purchase of [the van] and understood the van to have

5 that class members could establish lack of knowledge by relying upon common Id

to exclude persons having [such] knowledge,” and the court, therefore, declined defect prior to the purchase . . . these Plaintiffs have not shown causation [of. As here, the plaintiffs’ proposed class made “no effort

causation inquiries to determine which putative class members saw such news would not rely on common proof.” Id. Rather, “it would take individualized of these problems as leverage when negotiating the purchase of his van. Id problems will have a difficult time proving causation, and in doing so, they these reports and understood the . . . van to have significant handling . The court explained that “[i]t stands to reason that the consumers who saw By certifying the class, the trial court appears to have concluded both at the class certification stage [was] a common benefit-of-the-bargain injury.” high rollover rate made it unfit to do so. In re Ford Motor Co.. As in this case, the plaintiffs’ “primary theory of damages common issues in similar consumer action).

The court ruled that, “if Plaintiffs have actual knowledge of the handling

*14 n.9, *15.

problems and that one of the case’s original plaintiffs had used his knowledge public reports, articles, and broadcasts” documented the van’s handling 379944, at *1. In analyzing class certification, the court noted that “numerous

that its van could carry fifteen passengers when, in fact, the van’s unusually things, the amount of tar and nicotine delivered by light cigarettes outweighed that case, consumers sued an automobile manufacturer over a representation 4558, MDL No. 1687, 2012 WL 379944, at *13-14 (D.N.J. Feb. 6, 2012). In Motor Co. E-350 Van Products Liability Litigation (No. II), Civil Action No. 03–

Morris argues, and, therefore, class certification is improper. See the compensation phenomenon, individual inquiries will predominate, Philip likelihood that numerous class members were exposed to information about

F.R.D. 615, 629 (D.N.M 2007) (individual issues relating to, among other against the predominance of commonality”); Mulford v. Altria Group, Inc., 242 related to when class members learned truth about light cigarettes “weigh[ed] Cigarettes Mktg. Sales Prac. Litig., 27l F.R.D. at 421 (individual inquiries

same amount of tar and nicotine as when smoking Regulars. Because of the up the ventilation holes in the cigarette paper or filter, in order to receive the reported in Consumer Reports

p. 6 and nicotine cigarettes compensated by smoking more. This study was

– a May 1976 British study finding that smokers who switched to low tar

Among the studies described in Professor Greenwood’s declaration are:

studies. reported in the New York Times

declaration also describes the national and regional news reporting about these the compensation phenomenon. (Quotation omitted). This study was smokers of regular cigarettes because of the compensation phenomenon. Her low tar and nicotine cigarettes had “doubtful” health benefits because of smokers of light cigarettes receive the same amount of tar and nicotine as – a September 1982 National Academy of Sciences study concluding that

numerous studies published during that time frame, which concluded that

cigarettes available to consumers from 1976 to 1995. Her declaration identifies inhaling more deeply.” (Quotation omitted.) motion for class certification, describes the detailed information about light “might actually be doing themselves more damage by smoking and Clark University, submitted by Philip Morris in opposition to the plaintiff’s suggesting that, as the surgeon general noted, smokers of light cigarettes

– a July 1983 study published in the New England Journal of Medicine The declaration of Janette Thomas Greenwood, a history professor at – a June 1980 study reported in the press and national television news

was reported in the Concord Monitor extract more satisfaction from them.” (Quotation omitted.) This study 6

concluding that smokers of light cigarettes inhaled just as much tar and

outlets. greater amounts of tar and nicotine than smoking machines recorded. Post, and the Nashua Telegraph, as well as on national television news consumers may have known their smoking behavior could result in receiving, Boston Globe, USA Today, Washington

from low-tar cigarettes in their lungs longer in an apparent effort to

News,” and CBS “Evening News.”

– a May 1978 Harvard study finding that “most smokers hold the smoke

informed consumers that light cigarettes were no less harmful than regular hundreds of publications and television news reports between 1976 and 1995 light cigarettes are as harmful to smokers as regular cigarettes. Indeed,

substantial information was available to consumers concerning the fact that In this case, the record establishes that between 1976 and 1995, lowering the [tar/nicotine] levels.” (Quotation omitted).

p. 7 ventilation holes in the cigarette paper or filter that are a major factor in

tar/nicotine cigarettes into high [tar/nicotine cigarettes] by covering the Society published a pamphlet that stated: “Too many smokers turn low compensation phenomenon. For instance, in 1982, the American Cancer

and other similar organizations, specifically warning consumers about the

distributed nationally between 1976 and 1995 by the American Cancer Society Professor Greenwood’s declaration also describes publications

higher tar and nicotine yields.”

filters of light cigarettes to achieve a better tasting cigarette but one with and that “smokers often unconsciously blocked ventilation holes in the report in January 1995, explaining how the smoking machine functions

as well as the issue of compensation.” PBS’s “Frontline” aired a similar

was reported in Vogue smokers who may inhale more and hold smoke in longer.” This study smoking machines “do not replicate the smoking behavior of real [Federal Trade Commission] test measurements of tar and nicotine levels

amount of tar and nicotine ingested and that Federal Trade Commission report” about the “risks of ‘light’ cigarettes’ and . . . the accuracy of omitted). In March 1994, National Public Radio aired an “extensive cigarette, they get all the nicotine their body needs.” (Quotations

concluded that the brand of cigarettes smoked had little effect on the

they inhale a little bit more deeply, they beat the machine, they beat the 7

– an August 1993 study by the American Lung Association, which

intake in some smokers.” cigarette notion is basically a scam as smokers take a few extra puffs, reported in February 1994: “Scientifically, the low-tar, low-nicotine – based upon studies such as the August 1993 study, ABC News – a 1989 surgeon general report, cited in an April 1994 Reader’s Digest

who switch to low-tar brands might even increase total tobacco-smoke

– the surgeon general’s 1983 report, reported in the Wall Street Journal

article, which found “compensatory smoking behavior among smokers

low-yield cigarettes tend to inhale more intensively, increasing their and on NBC “Nightly News,” which cited studies “showing that users of

Monitor. newspapers, such as the Manchester Union Leader and Concord the national televised news, as well as in various New Hampshire phenomenon. This study was featured in USA Today, Newsweek, and on nicotine as smokers of regular cigarettes because of the compensation predominate over common ones. See

p. 8 Reversed and remanded 8

that the number of class members exposed to this information was not de 1995 about the compensation phenomenon, we conclude, as a matter of law,

were exposed and what they believed are individual issues that will

that common issues would predominate. individual class members’ injuries could be resolved by common evidence and

Given the volume of information available to consumers from 1976 to

HICKS and CONBOY, JJ., concurred. determining the information about Lights to which individual class members decide such issues as matter of law). Accordingly, we conclude that. reasonable fact finder necessarily would reach certain conclusion, we may

court unsustainably exercised its discretion when it ruled that issues related to impracticable in class litigation.” Id. at *15. Therefore, we hold that the trial similar circumstances will require individualized inquiries that are at *14-*15. “Identifying which putative class members purchased under functioning without nicotine.” (Quotation omitted.) In re Ford Motor Co., 2012 WL 379944, increase your nicotine intake, and the idea is to get your body used to

then advised: “do phenomenon. The brochure advised smokers to switch to light cigarettes, but distributed nationally, and which specifically warned about the compensation ordinarily we will remand unresolved factual issues, if record reveals that minimis. See Auger v. Town of Strafford, 158 N.H. 609, 614 (2009) (although

deeply, or place your fingertips over the holes on the filters. These actions will

not smoke more cigarettes, inhale them more often or more

In 1993, the National Cancer Institute issued a brochure, which was