Santa Monica, CA — The tobacco industry is arguing that a ballot initiative promoted as a law to stop “shakedown” lawsuits against small businesses should also allow cigarette makers to get away with lying about the health effects of smoking and marketing cigarettes to children. In a “friend of the court” brief filed with the California Supreme Court today, the nonprofit Foundation for Taxpayer and Consumer Rights (FTCR) challenged the industry’s attempt to invoke the initiative, Proposition 64, to further curtail consumers’ ability to stop unfair and misleading business practices under California’s unfair competition law.
The In re Tobacco II Cases charge the tobacco industry, including Phillip Morris, a $200,000 donor to Prop 64, with denying or disputing the health hazards and addictiveness of cigarette smoking and targeting minors with tobacco advertisements. If the industry wins, Tobacco II would allow other companies to deceive the public through false and misleading advertisements because consumers will have lost their right to hold them accountable.
Proponents of Prop 64 told voters that the initiative would stop frivolous suits against small businesses and protect legitimate public interest cases. However, large donors to the initiative are now using the measure to dismiss legitimate unfair competition lawsuits filed against them.
“Voters did not pass Prop 64 so that Phillip Morris could avoid accountability for marketing tobacco to kids and lying about the health dangers of cigarettes,” said Carmen Balber, consumer advocate with FTCR. “Big tobacco’s courtroom arguments that the initiative was meant to protect cigarette makers and other companies that mislead the public shows that Prop 64 was a fraud sold to the voters as reform.”
The tobacco industry argues in Tobacco II that all members of a class action lawsuit must meet the standing requirements that Proposition 64 only imposed on the representative plaintiff, a rule that would severely restrict the ability of consumers to bring class actions under the unfair competition law. Big tobacco’s interpretation of Proposition 64 imposes requirements that the voters did not enact.
Companies also seek to weaken the unfair competition law’s false advertising protections. Before Prop 64, a plaintiff had to prove that a misleading advertisement was likely to deceive the public. The tobacco companies claim that Prop 64 added tougher requirements to prove a company’s false advertising, limiting the types of activities prohibited under the law.
FTCR’s friend of the court brief challenges these industry claims as both unfaithful to the language of Proposition 64 and in obvious conflict with the intent of the voters. Voters agreed to limit so-called “shakedown” lawsuits, not cases that protect the public from unfair and illegal activities by large corporations.
The unfair competition law has enabled members of the public to eliminate unfair business practices that could not have been otherwise assailed. If industry succeeds in hijacking Prop 64 for its own purposes, past consumer protection successes will not be possible, including cases:
– Forcing pest control companies to stop using misleading and illegal ads claiming termite services were “safe for children and pets” and “environmentally friendly” (CalPIRG v. Unibid);
– Ending false claims by refrigerator manufacturers that their products are good for the environment when in fact they contribute to ozone depletion and global warming (Ozone Action v. Amana);
– Preventing the sale of cigarettes to minors (Stop Youth Addiction v. Lucky Stores);
– Requiring dairies to stop falsely claiming that raw milk is as safe as pasteurized milk and warn consumers of its dangers (Consumers Union v. Alta-Dena Certified Dairy)
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