Court mulls allowing class action

The chamber of commerce and others fear class action could hurt state economy.
COLUMBUS (AP) -- Ohio companies are siding with Philip Morris USA Inc. in a lawsuit over light cigarettes, saying success by the suing smokers would make the state a magnet for class-action lawsuits of all kinds.
At issue is the class-action status granted two Northeast Ohio smokers for their contention that the tobacco company knew cigarettes it marketed as having less tar and nicotine would be as dangerous as regular smokes.
The cigarette maker has asked the Ohio Supreme Court to strike down the class-action status, saying Ohio law requires a more specific warning from the state on a company's marketing practices before allowing such lawsuits.
Broad impact
Class-action lawsuits can bring much higher damages than a number of individual lawsuits. A ruling will come next year.
The Ohio Chamber of Commerce, Ohio Manufacturers Association and other trade groups warn that Ohio's economy may be at risk if the case is allowed to be a class action.
"Under the rationale utilized by the lower courts in this case, virtually any consumer transaction can become the foundation for a statewide class action seeking extraordinary damages," argued the groups' attorney William Todd.
"Ohio may become a haven for these new forms of intrastate class actions that would target Ohio businesses."
The court is not deciding the merits of whether the cigarette ads were deceptive.
Instead, the smokers argue that the company knew consumers would cover the filter holes with their fingers or simply smoke more cigarettes to get more addictive nicotine.
The light cigarettes have the same tobacco mix as regular ones but are supposed to provide less tar and nicotine through a special filter.
In Illinois, the state Supreme Court threw out a $10.1 billion fraud judgment Dec. 15 against Philip Morris over its light-cigarette marketing.
The court ruled 4-2 that the U.S. Federal Trade Commission had allowed companies to characterize their cigarettes as "light" and "low tar," so Philip Morris did not improperly mislead customers about the health impacts of its cigarettes.
All Ohio businesses should pay attention to the case, said Ohio State University law professor Christopher Fairman.
"This is a limit-drawing case," he said. "It's going to have ripple effects."
Notification required
Ohio's consumer law outlaws deceptive practices in marketing but says in order to sue as a class, consumers must show the company was notified a practice is deceptive through a previous court case or attorney general's ruling.
Attorneys for the smokers say such notification came in a prior ruling on the marketing of automobiles.
That decision said a manufacturer can't make false claims about a product's performance that a reasonable consumer would think are true.
"Whether you're selling iPods or automobiles or gasoline or cigarettes, a knowing misrepresentation is clearly covered," Charles Saxbe, attorney for the smokers, said in arguments before the court in October.
Philip Morris attorney Irene Keyse-Walker called that an unfair characterization of her argument. She said the cigarette case is different from the car case because the performance of the cigarettes depends on how the consumer uses them.
Ohio Justice Evelyn Lundberg Stratton told Saxbe she was struggling with his argument.
"This is going to affect every single business," she said. "We have a very specific rule, and you're urging a very general construction of it."