ASPINALL & another [FN1] vs. PHILIP MORRIS COMPANIES.,
INC., [FN2] &
2004. - August 13, 2004.
Marshall, C.J., Greaney, Ireland, Spina, Cowin, Sosman, & Cordy, JJ.
Tobacco. Advertising. Consumer Protection Act, Unfair or deceptive act,
Class action. Practice, Civil, Class action, Interlocutory appeal.
Appeals Court, Appeal from order of single justice.
Civil action commenced in the Superior Court Department on November 25, 1998.
A motion for class certification was heard by Robert J. Kane, J.
A proceeding for interlocutory review was heard in the Appeals Court by Janis
M. Berry, J. The Supreme Judicial Court granted an application for direct
Thomas V. Urmy, Jr. (Todd S. Heyman with him) for the plaintiffs.
Kenneth J. Parsigian (Paul E. Nemser & Michael J. Tuteur with him)
for the defendants.
Evan Slavitt, for Washington Legal Foundation, amicus curiae, submitted a
[Click here for Dissenting Opinion]
The essential question presented by this appeal is whether the marketing of
Marlboro Lights as "light" cigarettes that deliver "lowered tar and nicotine"
may be challenged in a class action seeking damages, as deceptive conduct in a
trade or business, in violation of G.L. c. 93A, §§ 2 and 9. The individual
plaintiffs, smokers of Marlboro Lights, allege in their second amended complaint
that Philip Morris Companies, Inc., and its subsidiary, Philip Morris, Inc.,
have engaged in practices prohibited by our consumer protection statute by
misleading the public into believing that their product, Marlboro Lights, would
deliver lower levels of tar and nicotine, when the defendant companies knew the
truth to be otherwise and, in fact, intentionally designed the product so that
most smokers of Marlboro Lights would receive as much, or more, tar and nicotine
than if they had smoked regular cigarettes. The allegations, set forth below,
are quite specific. [FN4] The plaintiffs seek, on behalf of
themselves and all other purchasers of Marlboro Lights in Massachusetts, actual
damages or, in the alternative, statutory damages under G.L. c. 93A. [FN5]
The plaintiffs also allege that the defendants' "willful and knowing" conduct
and bad faith refusal to respond to the plaintiffs' demand for relief entitles
them to a statutory award of multiple damages.
The plaintiffs filed a class certification motion pursuant to G.L. c. 93A, §
9(2), that portion of our consumer protection statute allowing persons who have
been injured by an unfair or deceptive act or practice to pursue a class action
"if the use or employment of the unfair or deceptive act or practice has caused
similar injury to numerous other persons." [FN6] After a
hearing, a judge in the Superior Court certified a class consisting of
purchasers of Marlboro Lights in Massachusetts during the four years preceding
the filing of the complaint. [FN7] The defendants filed a
petition under G.L. c. 231, § 118, first par., with a single justice of the
Appeals Court, seeking interlocutory review of the certification order. The
single justice decertified the class and granted the plaintiffs leave to appeal
from her decision to a panel of the Appeals Court. We granted the plaintiffs'
application for direct appellate review. For reasons that follow, we now affirm
the order of the Superior Court judge granting class certification. We shall
first set forth, in some detail, the facts alleged, then deal with two
procedural issues, and finally decide the certification issue. [FN8]
1. The plaintiffs' second amended complaint alleges the following facts. Since
1971, the descriptor "Lights" and the words "LOWERED TAR AND NICOTINE" have
appeared on every pack of Marlboro Lights sold in Massachusetts. "Light"
cigarettes are generally defined as cigarettes containing between seven and
fifteen milligrams of tar. The defendants have long known, however, that most
smokers are likely to receive as much or more tar and nicotine from Marlboro
Lights as they would receive from regular Marlboro (or other "full-flavored")
cigarettes. [FN9] (Careful attention should be paid to the
latter footnote, and to the footnotes that follow in Part 1 of this opinion, as
they set forth documented materials and other facts that bear on the defendants'
level of knowledge with respect to the alleged lower tar and nicotine quality of
Marlboro Lights and the defendants' approach to marketing the cigarettes based
on that information.) The defendants in fact purposefully have designed Marlboro
Lights to produce Federal Trade Commission smoking machine test (FTC test) [FN10]
results that enable, as a matter of Federal law, the defendants to promote their
cigarettes to consumers as "lights" with "lower tar and nicotine." At the same
time, the defendants took steps to ensure that Marlboro Lights would deliver to
smokers amounts of tar and nicotine that are higher than those registered by the
FTC test. The defendants achieved this through a variety of design
modifications, including, but not limited to, the strategic placement of
microscopic ventilation holes in or around cigarette filters; [FN11]
the modification of tobacco blend and weight, rod length and circumference; [FN12]
the use of reconstituted tobacco sheets or expanded tobacco; [FN13]
and the increase of smoke pH level [FN14] through the use of
chemical additives and processes such as ammoniation. [FN15]
The defendants conducted their own internal tests to ensure that the actual
amounts of tar and nicotine delivered under normal use remained at higher levels
than those registered by the FTC test. By marketing their cigarettes as
"Marlboro Lights," and branding them with the label "LOWERED TAR AND NICOTINE,"
the defendants intended to create an impression in the minds of customers that
the cigarettes were "healthier" than regular cigarettes, thereby promoting the
illusion of decreased tar and nicotine deliveries, in full awareness that
Marlboro Lights would (as they were designed to) continue to deliver addictive
levels of tar and nicotine. According to the plaintiffs, the defendants
exploited their knowledge of the shortcomings of the FTC test method for
measuring tar and nicotine levels in Marlboro Lights as part of their strategy
to continue to increase sales and market shares, while concealing this
information from the consumers. The plaintiffs characterize the defendants'
conduct as a "campaign of deception and omission on Massachusetts consumers
which persists to this day." [FN16]
2. We next take up two procedural issues. The parties argue over the role of the
single justice of the Appeals Court in considering the judge's order granting
class certification. The plaintiffs contend that only a panel of the Appeals
Court can rule on the merits of a class certification because an order by a
single justice vacating class certification would (at least in a case like this)
be tantamount to the single justice making a final determination of the case--a
matter usually reserved to a panel. The defendants contend that a class
certification order is simply an interlocutory order, like any other
interlocutory order, that may be reviewed on its merits under G.L. c. 231, §
118, first par. The issue need not be decided. Both parties want the propriety
of the certification order decided by an appellate panel. The single justice of
the Appeals Court appropriately certified the correctness of her ruling to a
panel of the Appeals Court, and, as noted, we granted direct appellate review.
The matter, therefore, is properly before an appellate panel for disposition.
3. There is also disagreement between the parties over the order being
reviewed--is it that of the motion judge or that of the single justice. The
authority of the single justice on petitions arising under G.L. c. 231, § 118,
first par., is "plenary, with the result that [the single justice's] order will
be reviewed [by a panel] on appeal as if it were an identical order by the trial
judge considering the matter in the first instance." Jet-Line Servs., Inc.
v. Selectmen of Stoughton, 25 Mass.App.Ct. 645, 646 (1988). See
Manfrates v. Lawrence Plaza Ltd. Partnership, 41 Mass.App.Ct. 409, 412
(1996); Thorn Transit Sys. Int'l, Ltd. v. Massachusetts Bay Transp.
Auth., 40 Mass.App.Ct. 650, 652 (1996); Petricca Constr. Co. v.
Commonwealth, 37 Mass.App.Ct. 392, 395 (1994); Demoulas v. Demoulas Super
Mkts., Inc., 33 Mass.App.Ct. 939, 940 (1992). The essential legal question
for the reviewing court will be "whether the single justice abused [her]
discretion by entering an order without having a supportable basis for doing
so." Id., quoting Highland Tap of Boston, Inc. v. Boston,
26 Mass.App.Ct. 239, 240 (1988). Answering that question, however, requires
examination of the trial judge's order. See Boston Herald, Inc. v.
Sharpe, 432 Mass. 593, 602 (2000) ("While the focus of the petition should
be on whether the single justice of the Appeals Court erred, the resolution of
that inquiry might require [a reviewing court] to look indirectly at the
underlying order of the judge in the trial court, to see whether there was an
abuse of discretion or error of law when evaluating the competing interests and
issuing the [relevant] order ..."). The single justice is not a fact finder and
must accept any relevant facts found by the judge when those facts have support
in the record. Considerable deference is also required on the part of the single
justice to determinations by the judge, especially where those determinations
involve an exercise of discretion. "In most cases, based on the deference
normally accorded determinations by the judge who heard the matter in the first
instance, the single justice will decline to act on an application for relief
under G.L. c. 231, § 118, first par., that does not disclose clear error of law
or abuse of discretion." Jet-Line Servs., Inc. v. Selectmen of
Stoughton, supra. As to a certification order like the one before us, where
the judge in the Superior Court has (as we shall subsequently discuss) broad
discretion in making a determination, we examine the single justice's decision
to determine whether it is legally correct (including whether discretion has
been abused), bearing in mind that the Superior Court judge's order should
ordinarily not be overturned if it is factually supported and unaffected by
clear error of law. The analysis of whether the single justice has abused her
discretion, therefore, requires examination of the foundational order of the
trial court and the merits of the case for certification presented to the judge.
See generally Planned Parenthood League of Mass., Inc. v. Operation
Rescue, 406 Mass. 701, 706, 709 n. 7 (1990). We now turn to those merits.
4. The standards governing certification of a G.L. c. 93A class action require
findings that "the use or employment of the unfair or deceptive act or practice
has caused similar injury to numerous other persons similarly situated"; the
putative class representation "adequately and fairly represents such other
persons"; and the putative class representative brings "the action on behalf of
himself and such other similarly injured and situated persons." G.L. c. 93A, §
9(2). The statutory language differs in significant respects from that of Mass.
R. Civ. P. 23, 365 Mass. 767 (1974). See Baldassari v. Public Fin. Trust,
369 Mass. 33, 40 (1975). A class action may be maintained under rule 23(a), only
if findings are made that: "(1) the class is so numerous that joinder of all
members is impracticable, (2) there are questions of law or fact common to the
class, (3) the claims or defenses of the representative parties are typical of
the claims or defenses of the class, and (4) the representative parties will
fairly and adequately protect the interests of the class." Rule 23(b) further
requires findings that "questions of law or fact common to the members of the
class predominate over any questions affecting only individual members, and that
a class action is superior to other available methods for the fair and efficient
adjudication of the controversy." A judge deciding a motion under rule 23 has
broad discretion whether to grant class status. We have observed that "[t]he
standard defies mathematical precision, and our cases reflect that fact."
Weld v. Glaxo Wellcome Inc., 434 Mass. 81, 85 (2001), and cases cited.
Although the requirements of rule 23(a) provide a "useful framework for an
analysis," we have cautioned a judge deciding a motion for class certification
under G.L. c. 93A to avoid equating the similarity requirements of rule 23(a)
with requirements of § 9(2) that the parties seeking certification are
"similarly situated" and have suffered a "similar injury" as members of the
class they seek to represent. Fletcher v. Cape Cod Gas Co., 394 Mass.
595, 605 (1985). A judge possesses "a degree of discretion" in this matter,
id., but when the judge is deciding a certification request under § 9(2),
the judge must bear in mind " 'a pressing need for an effective private remedy'
for consumers, and that 'traditional technicalities are not to be read into the
statute in such a way as to impede the accomplishment of substantial justice.' "
Id. at 605-606, quoting Baldassari v. Public Fin. Trust, supra at
40-41. Even under rule 23, a party moving for class certification need only
provide "information sufficient to enable the motion judge to form a reasonable
judgment" that certification requirements are met. Weld v. Glaxo Wellcome
Inc., supra at 87, citing Blackie v. Barrack, 524 F.2d 891, 901 (9th
Cir.1975), cert. denied, 429 U.S. 816 (1976).
The judge certified a class consisting of purchasers of Marlboro Lights in
Massachusetts during the four years preceding the filing of the complaint. His
memorandum of decision reflects findings that the traditional criteria set forth
in rule 23(a) were satisfied and, further, that the asserted claim presented
common questions of fact and law that make it appropriate for class
certification. Implicit in the judge's decision was his finding that, if the
plaintiffs' allegations proved true, all of the members of the certified class
would have suffered a similar injury that would most effectively be redressed
through a G.L. c. 93A consumer class action. In order to ensure that the
prosecution of the case focused exclusively on the conduct of the defendants,
and not on the smoking behavior of the class plaintiffs, the judge expressly
restricted the plaintiffs' theories of actual damages to those "which do not
rely upon individual proof." [FN17]
The judge's conclusion that the plaintiffs' claim warrants certification as a
consumer class action is amply supported by the record. The claims of the
plaintiffs and members of the purported class (estimated to number in the
hundreds of thousands) derive from a common course of conduct on the part of the
defendants and present the identical issue--whether the defendants
misrepresented material information concerning the design, function, marketing,
toxicity, and tar and nicotine yields of Marlboro Lights and, in doing so,
violated G.L. c. 93A, §§ 2 and 9. The plaintiffs are similarly situated to other
consumers of Marlboro Lights, and, because the injury claimed is an economic,
and not a personal, injury, all have been similarly injured. Were there to be
individual trials (a highly unlikely scenario due to the lack of economic
incentive), the common aspects of the defendants' conduct would become a
predominant aspect of each trial. Considerations of delay, high costs, and
arbitrary results provide further support for the appropriateness of class
certification. We conclude that a class action is not only an appropriate method
to resolve the plaintiffs' allegations, but, pragmatically, the only method
whereby purchasers of Marlboro Lights in Massachusetts can seek redress for the
alleged deception. See Weld v. Glaxo Wellcome Inc., supra at 93.
The heart of the defendants' position, and that adopted by the single justice of
the Appeals Court, may be summarized as follows. In order to recover on a class
action claim, the plaintiffs need to do more than merely establish that the
defendants falsely advertised Marlboro Lights as "lowered tar and nicotine" and
that the members of the class purchased the cigarettes. The defendants contend
that a successful class action claim demands proof that the deceptive
advertising caused each member of the class actual harm. Because, as conceded by
the plaintiffs, some smokers of Marlboro Lights did in fact receive "lowered tar
and nicotine," the plaintiffs have no chance of demonstrating that every class
member was injured. The defendants further posit that whether or not the
advertising was deceptive under G.L. c. 93A depends on whether or not a smoker
reaped the benefits of a lowered tar and nicotine cigarette which, in turn,
varied according to how each individual smoked the cigarette and even why the
"light" cigarette was chosen by each smoker over a full-flavored cigarette.
Thus, to some smokers, there was no reduced value and no deceptive advertising.
The defendants contend that there can be no finding of deceptive advertising
with respect to those members of the putative class who received lowered tar and
nicotine because, in the words of the single justice, they "got what the
advertising promised." Because these individualized issues of causation and
injury go to the core of the plaintiffs' G.L. c. 93A claim, the defendants
maintained, and the single justice concluded, they would overwhelm any common
issues with respect to the defendants' conduct. This reasoning and ultimate
conclusion are incorrect.
We reject the proposition that the purchase of an intentionally falsely
represented product cannot be, by itself, an ascertainable injury under our
consumer protection statute. Whether conduct is deceptive is initially a
question of fact, to be answered on an objective basis and not by the subjective
measure argued by the defendants. See Lowell Gas Co. v. Attorney Gen.,
377 Mass. 37, 51 (1979); Commonwealth v. AmCan Enters., Inc., 47
Mass.App.Ct. 330, 335 (1999). A successful G.L. c. 93A action based on deceptive
acts or practices does not require proof that a plaintiff relied on the
representation, see Slaney v. Westwood Auto, Inc., 366 Mass. 688, 703
(1975), or that the defendant intended to deceive the plaintiff, see Swanson
v. Bankers Life Co., 389 Mass. 345, 349 (1983), or even knowledge on the
part of the defendant that the representation was false. See Slaney v.
Westwood Auto, Inc., supra. Although our cases offer no static definition of
the term "deceptive," we have stated that a practice is "deceptive," for
purposes of G.L. c. 93A, "if it 'could reasonably be found to have caused a
person to act differently from the way he [or she] otherwise would have acted.'
" Purity Supreme, Inc. v. Attorney Gen., 380 Mass. 762, 777
(1980), quoting Lowell Gas Co. v. Attorney Gen., supra. In the
same vein, we have stated that conduct is deceptive if it possesses "a tendency
to deceive." Leardi v. Brown, 394 Mass. 151, 156 (1985), quoting Trans
World Accounts, Inc. v. Federal Trade Comm'n, 594 F.2d 212, 214 (9th
Cir.1979). "In determining whether an act or practice is deceptive, 'regard must
be had, not to fine spun distinctions and arguments that may be made in excuse,
but to the effect which [the act or practice] might reasonably be expected to
have upon the general public.' " Leardi v. Brown, supra, quoting P.
Lorillard Co. v. Federal Trade Comm'n, 186 F.2d 52, 58 (4th
Our cases, and those of the Appeals Court, also establish that advertising need
not be totally false in order to be deemed deceptive in the context of G.L. c.
93A. See Commonwealth v. AmCan Enters., Inc., supra at 336 ("the question
is whether [use of words 'yellow pages' and 'walking fingers'] in the context of
the solicitation as a whole was misleading"). The criticized advertising may
consist of a half truth, or even may be true as a literal matter, but still
create an over-all misleading impression through failure to disclose material
information. See Urman v. South Boston Sav. Bank, 424 Mass. 165, 168
(1997); Underwood v. Risman, 414 Mass. 96, 99-100 (1993); Greenery
Rehabilitation Group, Inc. v. Antaramian, 36 Mass.App.Ct. 73, 78
(1994) ("One can violate § 2 of G.L. c. 93A ... by failing to disclose to a
buyer a fact that might have influenced the buyer to refrain from the
The Legislature, in G.L. c. 93A, § 2 (b ), has mandated that
Massachusetts courts, in construing which acts are deceptive, must be guided by
interpretations of that term as found in the analogous Federal Trade Commission
Act (FTC Act), 15 U.S.C. § 45(a)(1). Historically, the standard test for
deception prohibited by the FTC Act was whether the act or practice had the
capacity or tendency to deceive the general public, rather than whether it was
relied on or resulted in actual deception. See, e.g., Federal Trade Comm'n v.
Colgate-Palmolive Co., 380 U.S. 374, 391-392 (1965); American Home Prods.
Corp. v. Federal Trade Comm'n, 695 F.2d 681, 687 (3d Cir.1982);
Exposition Press, Inc. v. Federal Trade Comm'n, 295 F.2d 869, 872 (2d
Cir.1961), cert. denied, 370 U.S. 917 (1962). See also Beneficial Corp.
v. Federal Trade Comm'n, 542 F.2d 611, 618 n. 11 (3d Cir.1976), cert.
denied, 430 U.S. 983 (1977), quoting 1 Callman, Unfair Competition and
Trademarks § 19.2(a)(1) at 341-344 (1950) ("The general public has been defined
as 'that vast multitude which includes the ignorant, [the] unthinking, and the
credulous, who, in making purchases, do not stop to analyze but too often are
governed by appearances and general impressions' "). The FTC later clarified
that test as follows: "if, first, there is a representation, omission, or
practice that, second, is likely to mislead consumers acting reasonably under
the circumstances, and third, the representation, omission, or practice is
material." Matter of Cliffdale Assocs., Inc., 103 F.T.C. 110, 165 (1984).
This standard, more difficult to satisfy because it depends on the likely
reaction of a reasonable consumer rather than an ignoramus, appears to have been
applied by Federal courts ever since. See, e.g., Federal Trade Comm'n v.
Pantron I Corp., 33 F.3d 1088, 1095 (9th Cir.1994), cert. denied, 514 U.S.
1083 (1995); Kraft, Inc. v. Federal Trade Comm'n, 970 F.2d 311,
314 (7th Cir.1992), cert. denied, 507 U.S. 909 (1993); Southwest Sunsites,
Inc. v. Federal Trade Comm'n, 785 F.2d 1431, 1436 (9th Cir.), cert.
denied, 479 U.S. 828 (1986). Although we need only be guided by, and not
strictly adhere to, interpretations of the term "deceptive" under Federal law,
what has been said in the above Federal cases comports in substance with what
has been said in our own: an advertisement is deceptive when it has the capacity
to mislead consumers, acting reasonably under the circumstances, to act
differently from the way they otherwise would have acted (i.e., to entice a
reasonable consumer to purchase the product). [FN18]
If, as alleged, the defendants intentionally labeled their cigarettes "Lights"
with "lowered tar and nicotine" in order to establish in the individual and
collective consumer consciousness the concept that Marlboro Lights are more
healthful (or, at least, less unhealthful) to smoke than regular cigarettes, and
thereby increase the defendants' market share of cigarette sales, with full
knowledge that most Marlboro Lights smokers would not in fact receive the
promised benefits of "lowered tar and nicotine," then there can be no question
that the sales of Marlboro Lights occurred in circumstances that make the sales
deceptive under G.L. c. 93A. No individual inquiries concerning each class
member's smoking behavior are required to determine whether the defendants'
conduct caused compensable injury to all the members of the class--consumers of
Marlboro Lights were injured when they purchased a product that, when used as
directed, exposed them to substantial and inherent health risks that were not
(as a reasonable consumer likely could have been misled into believing)
minimized by their choice of the defendants' "light" cigarettes. [FN19]
The plaintiffs need not prove individual physical harm in order to recover for
the defendants' deception. Nor need the plaintiffs show that each individual
consumer relied on the defendants' false promise when purchasing Marlboro
Lights. See Nei v. Burley, 388 Mass. 307, 313 (1983). Neither an
individual's smoking habits nor his or her subjective motivation in purchasing
Marlboro Lights bears on the issue whether the advertising was deceptive.
The plaintiffs' claims that most smokers would not get any benefit by way of
lowered tar and nicotine are pragmatically driven. So far as we are aware, the
actual level of tar and nicotine received by an individual smoker is a factor
that cannot be measured by any test. [FN20] In this regard,
claiming, as the defendants do, that individual proof is necessary, or that
benefits will vary widely between smokers, raises a specious issue that, if
followed to conclusion, would eviscerate G.L. c. 93A as a remedy to abate this
deceptive advertising. [FN21] Further, on the plaintiffs'
theory of economic damages, which will be described next, the market price for
Marlboro Lights was higher than it would have been had the cigarettes been
honestly advertised and, therefore, all purchasers of the product paid
more because of the deception.
What has been said above disposes of the class certification issue. [FN22]
We take this opportunity to comment on the nature of damages under G.L. c. 93A.
The plaintiffs allege that, as a result of the defendants' deceptive
advertising, all consumers of Marlboro Lights in Massachusetts paid more for the
cigarettes than they would have otherwise paid. The plaintiffs expect to offer
proof at trial that the amount that all purchasers of Marlboro Lights paid for
the cigarettes exceeded their true market value (what purchasers would have paid
had they known the truth). If they succeed in their proof, the plaintiffs argue
that the correct model for measuring actual damages is the difference between
the price paid by the consumers and the true market value of the "misrepresent[ed]"
cigarettes they actually received. (Thus, the exact amount of actual damages may
be determined by multiplying the number of cigarettes sold, in the years defined
by the certification order, by the difference between the price paid and actual
fair market value.) This is a variation on the traditional "benefit of the
bargain" rule that awards a defrauded party the monetary difference between the
actual value of the product at the time of purchase and what its value would
have been if the representations had been true. See Danca v. Taunton Sav.
Bank, 385 Mass. 1, 8 (1982); Rice v. Price, 340 Mass. 502, 507
(1960). We agree that "the benefit of the bargain" damages, if proved with
reasonable certainty, would be appropriate in this case. See GTE Prods. Corp.
v. Broadway Elec. Supply Co., 42 Mass.App.Ct. 293, 296 (1997);
Chamberlayne School & Chamberlayne Jr. College v. Banker, 30 Mass.App.Ct.
346, 355 (1991). [FN23]
The defendants suggest that, regardless of whether or not the advertising of
Marlboro Lights was unlawful under G.L. c. 93A, the plaintiffs are in no worse
economic position than they would have been had they not chosen to smoke
Marlboro Lights over regular Marlboro cigarettes. They point to the apparently
uncontested fact that Marlboro Lights have always been priced exactly the same
in Massachusetts as regular Marlboro cigarettes. Logic, on the other hand,
suggests that, all other things being equal, a truly low tar and nicotine
cigarette would have economic worth greater than a comparable regular cigarette,
due to the added value of an inherently "safer" cigarette. Whether plaintiffs
ultimately will be successful in proving actual damages is a matter that need
not be resolved at the certification stage.
In the event that the plaintiffs are unsuccessful in their attempt to prove
actual damages, however, they will be entitled to recover statutory damages
under G.L. c. 93A, § 9(3) ("if the court finds for the petitioner, recovery
shall be in the amount of actual damages or twenty-five dollars, whichever is
greater"). As this court held in Leardi v. Brown, 394 Mass. 151,
160 (1985), G.L. c. 93A "create[s] a legal right, the invasion of which, without
more, constitutes an injury," and "under circumstances where there has been an
invasion of a legally protected interest, but no harm for which actual damages
can be awarded ... the statute provides for the recovery of minimum damages in
the amount of [twenty-five dollars]."
The defendants refer to a recent decision of the Appeals Court, Lord v.
Commercial Union Ins. Co., 60 Mass.App.Ct. 309 (2004), to support their
contention that some monetary loss must be proved before even minimum damages of
twenty-five dollars may be awarded. See id. at 321. What was said by the
Appeals Court in the Lord decision does not help the defendants. There
the defendant insurer was determined to have violated a legal obligation under
G.L. c. 93A, § 2, by failing to give the plaintiff timely notice that his
automobile coverage had been suspended for noncompliance with the inspection
requirement. Id. at 317. The plaintiff had received prior notice that his
policy would be canceled for nonpayment of premiums. The trial judge found, as
did the jury, that the absence of timely notice was not the reason for the
plaintiff's failure to have the vehicle inspected (there was evidence that the
plaintiff already knew of the inspection requirement and had acknowledged it in
writing), nor was it the reason for his subsequent losses incurred in an
automobile accident. The judge nevertheless awarded the plaintiff statutory
damages of twenty-five dollars, plus attorney's fees and costs. Id. at
317- 318. The Appeals Court vacated the award based on its conclusion that "the
Legislature, in enacting and amending G.L. c. 93A, § 9, did not intend to confer
on plaintiffs who have suffered no harm the right to receive a nominal damage
award which will in turn entitle them to a sometimes significant attorney's fee
recovery." Id. at 321-322. We agree with this observation. It states
nothing more than what our own decisions have made perfectly clear-- causation
is a required element of a successful G.L. c. 93A claim. See, e.g.,
Massachusetts Farm Bur. Fed'n, Inc. v. Blue Cross of Mass., Inc., 403
Mass. 722, 730 (1989) ("In the absence of a causal relationship between the
alleged unfair acts and the claimed loss, there can be no recovery");
International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 850 (1983)
("plaintiff must show ... a causal connection between the deception and the
We do not agree, however, with language of the Appeals Court in the Lord
decision ostensibly limiting the reach of our holding in Leardi v. Brown,
supra at 159-161, to landlord-tenant actions. See Lord v. Commercial
Union Ins. Co., supra at 323 ("To the extent that Leardi v. Brown, [supra
], may suggest otherwise, we believe that it was intended to be limited to the
peculiar facts presented"). Our decision in Leardi emphasized that "G.L.
c. 93A is a 'statute of broad impact,' which forms a 'comprehensive substantive
and procedural business and consumer protection package.' " Id. at 159,
quoting Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693 (1975).
Significantly, the court construed the term "injury," in the context of G.L. c.
93A, to denote "an invasion of a legally protected interest." Leardi v.
Brown, supra at 160. Construction of the term was deliberate, framed after
careful consideration of the 1979 amendment to the statute, St.1979, c. 406, § 1
(deleting requirement of § 9 that plaintiffs show some loss of "money or
property, real or personal" and adding expansive language providing a right of
action to "[a]ny person ... who has been injured by another person's use or
employment of any method, act or practice declared to be unlawful");
consultation of well-respected legal authorities and treatises construing the
term "injury"; decisions by the Supreme Court of the United States; and consumer
protection statutes in force in other jurisdictions, as well as State court
decisions interpreting those statutes. See id. at 158-161.
The circumstances in the Leardi case, in which members of the plaintiff
class challenged a landlord's efforts to mislead tenants by deceptive use of
language in a lease, were essentially no different from the case before us. As
fully explained above, the deceptive advertising, as alleged by the plaintiffs
in this case, if proved, effected a per se injury on consumers who purchased the
cigarettes represented to be lower in tar and nicotine. It follows that, if the
violations of G.L. c. 93A alleged by the plaintiffs are proved, all members of
the class of purchasers of Marlboro Lights in Massachusetts will have been
injured (regardless of whether some smokers actually received lower tar and
nicotine). This is so because all purchased (and, presumably, smoked) a product
that was deceptively advertised, as a matter of law, because it was falsely
labeled or, at least, created the over-all misleading impression that all
smokers would receive "lowered tar and nicotine." Thus, all will be entitled to
statutory damages, without regard to whether the plaintiffs are successful in
establishing that consumers were overcharged for the deceptively advertised
cigarettes. See Ciardi v. F. Hoffmann-LaRoche, Ltd., 436 Mass. 53, 60 n.
14 (2002). In citing to the Lord case, the defendants, once again, have
confused issues of whether the plaintiffs will be able to prove actual damages
with whether they have been injured by the defendants' allegedly unlawful
conduct. Difficult issues with respect to determining the appropriate amount of
actual or statutory damages to be awarded in a class action, or potential
difficulties with the distribution of the aggregate damages award, do not
preclude class certification when all other requirements are met. See Weld v.
Glaxo Wellcome Inc., 434 Mass. 81, 92 (2001).
5. We affirm the order of certification by the judge in the Superior Court of a
class consisting of purchasers of Marlboro Lights cigarettes in Massachusetts
during the four years preceding the filing of the plaintiffs' original
CORDY, J. (dissenting, with whom Ireland and Cowin, JJ.,
This is a case about the propriety of a class certification decision. The issue
is not, as the court puts it, "whether the marketing of Marlboro Lights as
'light' cigarettes that deliver 'lower tar and nicotine' may be challenged
in a class action" under G.L. c. 93A, ante at ----; of course it may
(emphasis added). The issue is whether this class of plaintiffs may bring
that challenge. The proper focus in this case is, therefore, the constituency of
the plaintiff class.
The plaintiff class certified by the motion judge consists of "purchasers of
Marlboro Lights cigarettes in Massachusetts during the four years preceding the
filing of [the plaintiffs' original] complaint." It is this description of the
plaintiff class that must meet the requirements for certification under G.L. c.
93A. The procedure for these consumer class actions is governed by G.L. c. 93A,
§ 9(2). That section provides in relevant part:
persons entitled to bring such action [ [FN1]] may,
if the use or employment of the unfair or deceptive act or practice has
caused similar injury to numerous other persons similarly situated and
if the court finds in a preliminary hearing that he adequately and
fairly represents such other persons, bring the action on behalf of
himself and such other similarly injured and situated persons...."
As the court states, ante at ----, and as the language of § 9(2) itself
makes clear, class certification depends on a showing that the defendants'
deceptive practice caused "similar injury" to the members of the plaintiff
class. G.L. c. 93A, § 9(2). Accord Fletcher v. Cape Cod Gas Co., 394
Mass. 595, 605 (1985) (plaintiffs must allege that they are "similarly situated"
and have suffered "similar injury").
The requirement that the plaintiffs demonstrate an "injury" may not be shrugged
off lightly. Rather, as this court has consistently held, the injury requirement
is a fundamental aspect of G.L. c. 93A for both individual plaintiffs and
plaintiff classes. It is insufficient for a plaintiff to show merely that a
trade practice is deceptive; rather, G.L. c. 93A "requires an injury before an
award of even nominal damages is justified." Leardi v. Brown, 394 Mass.
151, 165 (1985). [FN2] The difficulty for the plaintiffs in
this case is that some members of the plaintiff class, as the plaintiffs
concede, actually did receive lower levels of tar and nicotine from
Marlboro Lights. For simplicity, I will refer to the group of smokers who
actually received lower levels of tar and nicotine as the "low-tar group," and
those smokers who actually received equal or higher levels of tar and nicotine
as the "high-tar group." In the words of the Appeals Court's single justice, the
low-tar group "got what the advertising promised," and, as the court concludes,
the members of the low-tar group "have not suffered the 'injury' of higher tar
and nicotine." [FN3] Ante at n. 21. How, then, can a
class meet the "similar injury" requirement when some of its members (the
low-tar group) suffered no injury at all?
The court answers this question by pointing to the pragmatic considerations
surrounding the class certification decision. Specifically, the court concludes
that certification is appropriate in this case because "the members of the class
who have not suffered the 'injury' of higher tar and nicotine are both very few
in number and impossible to identify." Ante at n. 21. I agree with the
court that, in principle, class certification should not be impeded by the
presence of a de minimis number of uninjured class members who are difficult to
identify with specificity. Nevertheless, I do not think that, on the record in
this case, it is possible to form a reasonable judgment that the low-tar group
is made up of "only a very few smokers," who are "impossible to identify."
Ante at ---- n. 21.
On a motion for class certification, the "plaintiffs bear the burden of
providing information sufficient to enable the motion judge to form a reasonable
judgment that the class meets the requirements [for certification]." Weld v.
Glaxo Wellcome Inc., 434 Mass. 81, 87 (2001). It is therefore the
plaintiffs' burden to provide information sufficient to permit the reasonable
conclusion that the class as a whole is "similarly injured," despite the
presence of the uninjured members of the low-tar group; in other words, if the
plaintiffs contend that the low-tar group is only a very few smokers, it is the
plaintiffs' burden to provide information concerning the size of the low-tar
group, and if the plaintiffs claim that members of the low-tar group are
difficult to identify, it is their burden to provide information to that effect.
The plaintiffs presented no evidence before the motion judge concerning how many
members of the proposed plaintiff class may have received lower levels of tar
and nicotine. Rather, the plaintiffs' allegations and evidence focus almost
exclusively on "the average smoker" (or, more generally, "the smoker") and
cigarettes "smoked under normal use." The plaintiffs' exhibits do make a single
passing reference to the percentage of smokers who block cigarette ventilation
holes--an action that can increase the tar and nicotine yield of a cigarette [FN4]--but
the study referenced, which concluded that only fifty-eight per cent of
cigarettes showed signs of significant ventilation "hole-blocking," [FN5]
actually suggests that the low-tar group is fairly large (i.e., those smokers
who smoked the other forty-two per cent of cigarettes). In sum, there was not
sufficient information in the record to permit the motion judge reasonably to
conclude that the low-tar group was so small that the class could meet the
"similar injury" requirement. [FN6]
Likewise, it is not possible reasonably to conclude from the information
submitted by the plaintiffs that the members of the low-tar group are
"impossible to identify." The court may be correct to point out that no
objective scientific test can measure how much tar and nicotine an individual
smoker has ingested. See ante at. Nevertheless, the plaintiffs have
plainly alleged that the increased levels of tar and nicotine ingested by class
members were in large part the result of a number of behavioral factors, namely
smokers' tendency to cover ventilation holes near the cigarette's filter and
smokers' tendency to increase the frequency and volume of puffs to compensate
for lower nicotine levels. [FN7] Plainly, smokers will be able
to provide information concerning how they smoked Marlboro Lights cigarettes. It
is therefore not impossible to identify smokers in the uninjured low-tar group
and to exclude them from the class. [FN8]
In sum, the crux of my disagreement with the court concerns the sufficiency of
the information presented by the plaintiffs in this case. Limited to the record
before the motion judge, I do not think it is possible reasonably to conclude
that the low-tar group is either so small as to be de minimis, or so
unidentifiable as to permit class certification. By certifying a class that
includes uninjured members, the motion judge effectively permitted precisely
what we have criticized: a "purely 'vicarious suit[ ] by self-constituted
private attorneys-general.' " Leardi v. Brown, 394 Mass. 151, 161 (1985),
quoting Baldassari v. Public Fin. Trust, 369 Mass. 33, 46 (1975).
I turn briefly to the court's treatment of the theory of injury actually pressed
by the plaintiffs below, primarily to register a point of agreement with the
court. The motion judge described the plaintiffs' theory as follows: "Plaintiffs
may show a causal relationship between what they paid for Marlboro Lights
cigarettes and what they would have paid if the defendants had not incurred the
expense of false advertising." [FN9] The single justice
restated the plaintiff's theory: "because of [Philip Morris's
misrepresentations], cigarette purchasers were misled to a willingness to pay
more for Marlboro Lights than would have been so, had the cigarette purchasers
known [the truth]." Insofar as this theory purports to be a theory of injury,
the theory is essentially a variant of the "fraud on the market" theory
recognized in Federal securities cases, [FN10] under which
the purchaser of a stock is entitled to the presumption that the purchase was
made in reliance on all material information known to the market as a whole.
See, e.g., Basic, Inc. v. Levinson, 485 U.S. 224, 242 (1988). The
court explicitly states that its opinion in this case does not adopt a " 'fraud
on the market' type theory," ante at n. 23, and I agree that it would be
imprudent to adopt the fraud on the market doctrine in a consumer products case,
when no other State has done so, [FN11] and in the face of
numerous critiques of the theory's validity. [FN12]
Nevertheless, because, like the Appeals Court's single justice, I would conclude
that class certification in this case was improper where the plaintiffs failed
to meet their "burden of providing information sufficient to enable the motion
judge to form a reasonable judgment that the class meets the requirements [for
certification]," Weld v. Glaxo Wellcome Inc., 434 Mass. 81, 87 (2001), I
1. Thomas Geanacopoulos.
2. Now incorporated as Altria Group, Inc.
3. Philip Morris, Inc., now incorporated as Philip Morris USA
4. The plaintiffs' second amended complaint asserts that the
defendants violated G.L. c. 93A, §§ 2(a) and 9, by engaging in the following
"(a) By incorrectly advertising and making false claims that their light
cigarettes, when smoked under normal use, contained lower tar and nicotine than
"(b) By failing to disclose that the design and composition of Marlboro Lights
are intended to deliver lowered tar and nicotine levels under machine testing
conditions and to deliver higher tar and nicotine levels to consumers who smoke
"(c) By placing vent holes on the filter of light cigarettes in a location where
they are covered or blocked by the smoker's lips and/or fingers under normal
use, thereby negating the claim of lowered tar and nicotine;
"(d) By failing to mark the vent holes or to make them visible to the naked eye,
or otherwise to disclose their existence and location, so that smokers could
attempt to smoke the cigarettes in a manner that would allow them to obtain the
claimed reductions in tar and nicotine, notwithstanding the fact that the [d]efendants
are aware that the claimed 'lowered tar and nicotine' cannot be achieved if the
holes are covered;
"(e) By failing to disclose to consumers that smoking [the d]efendants'
cigarettes with the vent holes blocked results in the smoker receiving an
increased amount of tar and nicotine that may be as much as, or more than, the
amounts of those substances the smoker would receive from a 'regular' cigarette;
"(f) By failing to instruct smokers, on the packaging or elsewhere, on how to
smoke the cigarettes correctly in order to obtain the claimed 'lowered tar and
nicotine,' including avoidance of (i) blocking the vent holes and (ii) increased
puff volume and frequency;
"(g) By failing to disclose to consumers that the techniques [the d]efendants
employ purportedly to reduce the levels of tar in Marlboro Lights actually
increase the mutagenicity of the smoke produced by those cigarettes;
"(h) By manipulating the nicotine levels in their light cigarettes; and
"(i) By failing to inform consumers of the [d]efendants' manipulation of the
nicotine levels in Marlboro Lights by the addition of chemicals, among other
things, or the effects of such manipulation or [the d]efendants' reasons for
5. The plaintiffs' second amended complaint, which is the
basis for this appeal, also includes a claim for equitable relief, including
disgorgement of all profits earned by the defendants on sales in Massachusetts
of Marlboro Lights. We are not aware of any Massachusetts decisions holding that
plaintiffs in a successful class action G.L. c. 93A suit may, or may not, be
awarded equitable monetary damages, and the issue has not been thoroughly
briefed or argued. The plaintiffs' possible entitlement to such relief has no
bearing on the issue of class certification, and it is premature to consider the
matter at this stage of the litigation.
The plaintiffs also sought an injunction requiring the defendants to cease their
deceptive practices and to conduct corrective advertising campaigns. Because a
third amended complaint subsequently has been filed that eliminates those
requests, and because the plaintiffs argue in their briefs only claims for
actual, statutory, and monetary damages, we need not consider any prior claim
for injunctive relief.
6. The relevant portion of G.L. c. 93A, § 9, states:
"(2) Any persons entitled to bring [an action alleging an unfair or deceptive
act under G.L. c. 93A, § 9(1),] may, if the use or employment of the unfair or
deceptive act or practice has caused similar injury to numerous other persons
similarly situated and if the court finds in a preliminary hearing that he
adequately and fairly represents such other persons, bring the action on behalf
of himself and such other similarly injured and situated persons; the
court shall require that notice of such action be given to unnamed petitioners
in the most effective practicable manner. Such action shall not be dismissed,
settled or compromised without the approval of the court, and notice of any
proposed dismissal, settlement or compromise shall be given to all members of
the class of petitioners in such manner as the court directs."
7. The judge concurrently denied the plaintiffs' motion for
class certification, pursuant to Mass. R. Civ. P. 23(a), 365 Mass. 767 (1974),
of a claim of unjust enrichment, on the ground that questions affecting only
individual members would predominate over questions common to the class. The
plaintiffs have not appealed from this portion of the judge's decision.
8. The National Association of Manufacturers (NAM) filed a
motion seeking leave to file an amicus brief in this case, and it submitted a
fourteen page brief listing William C. Paxton, of the law firm Mayer, Brown, Roe
& Maw LLP, as the counsel of record. NAM subsequently revised that section of
the brief labeled "Interest of Amicus Curiae" to reveal that three major tobacco
companies (R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco USA, and
Lorillard Tobacco Company) had made financial contributions to the preparation
of the brief. In that updated filing, however, NAM failed to disclose an
additional significant interest: the law firm that submitted the amicus
brief--Mayer, Brown, Roe & Maw LLP--is also the firm representing Philip Morris,
Inc., in a case addressing similar issues currently pending before the Supreme
Court of Illinois. Rule 17 of the Massachusetts Rules of Appellate Procedure, as
amended, 426 Mass. 1602 (1998), requires that a motion for leave to file an
amicus brief "shall identify the interest of the applicant." A full and honest
disclosure of the interest of amici is crucial to the fairness and integrity of
the appellate process. Briefs of amicus curiae are intended to represent the
views of non parties; they are not intended as vehicles for parties to
make additional arguments beyond those that fit within the page constraints of
their briefs. Because we determine that NAM failed to disclose an important
interest, its motion for leave to file an amicus brief is denied, and its
brief is struck from the record.
We acknowledge the amicus brief filed by Washington Legal Foundation.
9. According to the plaintiffs' second amended complaint, a
1974 Philip Morris document, entitled "Some Unexpected Observations on Tar and
Nicotine and Smoker Behavior," notes: "Generally, people smoke in such a way
that they get more than predicted by machines. This is especially true for
dilution cigarettes.... The [Federal Trade Commission (FTC) ] standardized test
should be retained: It gives low ratings."
In addition, a 1975 Philip Morris internal memorandum, entitled
"Marlboro-Marlboro Lights Study Delivery Data," concluded:
"The smoker data collected in this study are in agreement with results found in
other project studies. The panelists smoked the cigarettes according to physical
properties; i.e., the dilution and the lower RTD [sic ] of Marlboro
Lights caused the smokers to take larger puffs on that cigarette than on
Marlboro 85's. The larger puffs, in turn, increased the delivery of the Marlboro
Lights proportionally. In effect, the Marlboro 85 smokers in this study did not
achieve any reduction in smoke intake by smoking a cigarette (Marlboro Lights)
normally considered lower in delivery."
10. According to the plaintiffs' second amended complaint, the
FTC smoking test (which also goes by the name of the Cambridge Filter System
test) purports to measure the amount of tar and nicotine in a cigarette with a
machine that "mimics" human smoking behavior. The "inhaled" material is
collected on a pad, extracted, and analyzed to arrive at the tar and nicotine
yield levels of that particular cigarette.
11. Exhibits submitted by the plaintiffs in support of their
certification motion include a report documenting a study conducted by the
Massachusetts Department of Public Health. The report indicates that many brands
of light cigarettes are manufactured with ventilation holes in the filter that
allow a smoker to draw in additional air when inhaling. In theory, the
additional air reduces the relative levels of tar and nicotine "per volume of
smoke that enters the body." The plaintiffs allege that the ventilation holes in
Marlboro Lights are placed in an area often covered by a smoker's lips or
fingers and thus are obstructed during normal use of the product. This problem
is exacerbated with Marlboro Lights because the vent holes are virtually
invisible to the naked eye and not marked (e.g., with a colored band or some
other method). According to a study cited in a 1997 publication by the United
States Centers for Disease Control and Prevention, blocking even some of the
ventilation holes in light cigarettes dramatically increase a smoker's intake of
tar and nicotine contained in cigarette smoke.
12. The plaintiffs allege that the defendants have actively
manipulated tobacco blend and weight, rod length and circumference, filters,
tobacco processing, papers, and air dilution in order to maximize the amount of
nicotine delivered to smokers. They cite to a 1971 Philip Morris internal report
stating the following:
"Tar reduction [in our study] was accomplished by means of an air dilution
technique. This results in a reduction of tar delivery. However, it also results
in a reduction of nicotine delivery. Therefore, when the tar delivery was
reduced to get the medium tar delivery, it also reduced the nicotine delivery by
a like amount. Thus, just to maintain the original nicotine delivery required
that nicotine be added to that cigarette."
13. According to the second amended complaint, reconstituted
tobacco is an amalgamation of tobacco stalks, stems, floor sweepings, and dust.
In the reconstitution process, these pieces of tobacco material undergo
treatment that results in the extraction of some soluble components, including
nicotine, and then are combined to form a sheet to which the defendants
"directly apply nicotine extract in the exact amounts they desire."
14. The plaintiffs allege in their second amended complaint
that the defendants have manipulated the smoke pH in their light cigarettes in
order to create more "free" nicotine and thereby enhance the actual nicotine
delivery to smokers beyond that measured by the smoking machines.
15. The plaintiffs allege that ammonia and other substances
added by the defendants to tobacco used in Marlboro Lights create a more potent
"kick." Some of these additives act to vaporize nicotine into a more potent
"free-base" form that may evade detection by the FTC test.
16. We take judicial notice of a comprehensive report of the
Surgeon General of the United States, released on May 27, 2004, three years
after the plaintiffs filed their second amended complaint and forty years after
the 1964 publication of the first Surgeon General report assessing causality of
smoking and disease. The new report, entitled "The Health Consequences of
Smoking," prepared by the National Center for Chronic Disease Prevention and
Health Promotion, is based on contributions and reported findings of studies by
numerous experts and scientists, and has been extensively reviewed by
authorities within the United States Department of Health and Human Services.
The report presents persuasive evidence that smoking harms nearly every organ of
the human body, causes many diseases and reduces the health of smokers in
general. Of relevance to the plaintiffs' G.L. c. 93A claims is one of four major
conclusions presented therein, that smoking so-called low-tar or low- nicotine
cigarettes offers no clear health benefit over smoking regular or
"full-flavored" cigarettes. Chapter 2 of the report reads, in relevant part:
"Since the first research reports linking smoking to lung cancer and other
diseases, the tobacco industry has continually changed the characteristics of
the cigarette.... These changes have included the addition of filter tips,
perforation of the filter tips, use of reconstituted tobacco, and changes in the
paper and in additives. During the nearly 50 years that these changes have been
made in the United States, there have been substantial declines in the
sales-weighted average tar and nicotine yields of cigarettes as measured by the
[FTC test] protocol.... Limitations on this protocol for assessing actual yields
to smokers have been widely acknowledged.... For example, tar and nicotine
yields are lowered by perforation of the filter with small holes to increase
dilution during machine smoking in the FTC protocol; unlike the machines,
smokers tend to cover these holes with their fingers, thereby increasing the
yield beyond that measured by the machine.... The changing cigarette was the
focus of the 1981 report of the Surgeon General...." (Citations omitted.)
Health Consequences of Smoking: A Report of the Surgeon General, Office of the
Surgeon General, United States Department of Health & Human Services at 49 (May
17. We interpret this statement to limit the plaintiffs'
theory of damages to that which was argued in their memorandum in support of
their motion for certification, and in their memorandum in reply to the
defendants' memorandum in opposition to their motion, namely, the difference in
market value between Marlboro Lights cigarettes that purchasers actually
received and Marlboro Lights cigarettes as represented, and not, as somewhat
awkwardly phrased in the judge's memorandum of decision, to the difference
between what purchasers "paid for the Marlboro Lights cigarettes and what they
would have paid if the defendants had not incurred the expense of false
18. Interpretative regulations adopted by the Attorney
General, pursuant to G.L. c. 93A, § 2 (c ), also utilize the "capacity or
tendency" to deceive standard throughout. Title 940 Code Mass. Regs. § 3.05(1)
(1993) provides: "No claim or representation shall be made by any means
concerning a product which directly, or by implication, or by failure to
adequately disclose additional relevant information, has the capacity or
tendency or effect of deceiving buyers or prospective buyers in any material
respect." See also 940 Code Mass. Regs. § 3.04 (deceptive pricing) and § 3.10
(1993) (career schools); 940 Code Mass. Regs. § 3.09 (2003) (door-to-door
With different language of similar effect, § 3.16(2) of the Attorney General's
regulations provides that an act or practice is a violation of G.L. c. 93A, § 2,
if "[a]ny person or other legal entity subject to this act fails to disclose to
a buyer or prospective buyer any fact, the disclosure of which may have
influenced the buyer or prospective buyer not to enter into the transaction."
940 Code Mass. Regs. § 3.16(2) (1993). See also 940 Code Mass. Regs. § 6.01
(material representation is claim "which has the tendency or capacity to
influence the decision of reasonable buyers or reasonable prospective buyers
whether to purchase the product") and § 6.04(1) (1993) (misleading
representation is material representation which seller knows or should know "is
false or misleading or has the tendency or capacity to be misleading"). These
regulations are authorized by G.L. c. 93A, § 2 (c ), have the force of
law, and "set standards the violations of which ... constitute violations of [G.L.]
c. 93A." Purity Supreme, Inc. v. Attorney Gen., 380 Mass. 762,
19. The plaintiffs do not seek damages for personal injuries.
Were it otherwise, unique and different experiences of each individual member of
the class would require litigation of substantially separate issues and would
defeat the commonality of interests in the certified class. The defendants argue
that principles of claim preclusion may operate to harm the interests of future
class members who may wish to assert personal injury claims in a future action.
This argument has no merit. "Claim preclusion makes a valid, final judgment
conclusive on the parties and their privies, and prevents relitigation of all
matters that were or could have been adjudicated in the action." O'Neill v.
City Manager of Cambridge, 428 Mass. 257, 259 (1998), quoting Blanchette
v. School Comm. of Westwood, 427 Mass. 176, 179 n. 3 (1998). It is true that
neither G.L. c. 93A, § 9(3), nor rule 23 allow a member of a certified class not
wishing to be bound by the class litigation to "opt out." The doctrine of claim
preclusion, however, only applies in circumstances where the party to be
precluded has had the incentive and opportunity to raise the claim fully in the
earlier lawsuit. See id.; United States v. American Heart Research Found.,
Inc., 996 F.2d 7, 11 (1st Cir.1993). The doctrine is grounded on
considerations of fairness and judicial efficiency and would not operate to bar
a member of a class certified to proceed, as here, only on an economic theory of
damages from future pursuit of claims for personal injury unsuitable for class
treatment. See Gloucester Marine Rys. v. Charles Parisi, Inc., 36
Mass.App.Ct. 386, 391 (1994).
20. Indeed, it may be unlikely that any individual would smoke
a cigarette the exact same way twice. Thus, by implication, it is probable that
no smoker received the promised benefit of lowered tar and nicotine every time
he or she smoked a Marlboro Lights cigarette.
21. The defendants' allegedly deceptive claims should be
distinguished from other statements by manufacturers that their products deliver
certain benefits (such as "helps to lower cholesterol") where most consumers
actually receive the promised benefit, as may be ascertained by objective tests.
If such a statement is untrue as to only a tiny percentage of consumers, a class
action consisting of all purchasers would obviously not be appropriate. What we
have in the present case, however, is the exact opposite: statements made by the
defendants which are alleged to be untrue for the overwhelming majority of
smokers, with only a very few smokers who fortuitously happened to smoke all
their cigarettes in a manner that has resulted in the intake of lower tar and
nicotine. Here, the members of the class who have not suffered the "injury" of
higher tar and nicotine are both very few in number and impossible to identify.
The device of a class action is (as has been mentioned) driven by pragmatic
considerations. Requiring individual actions to be brought by thousands of
individual smokers, merely to provide absolute certainty that (for example) each
plaintiff sometimes covered up the vent holes, would be wholly impractical.
22. The issue may be revisited. The "decision as to class
certification is not immutable and if at any time it appears that for any reason
[the representative plaintiff] no longer fairly and adequately protects the
interests of the class, class status may be withdrawn or appropriately
modified." School Comm. of Brockton v. Massachusetts Comm'n Against
Discrimination, 423 Mass. 7, 14 n. 12 (1996), paraphrasing in parenthetical
Social Servs. Union, Local 535 v. County of Santa Clara, 609 F.2d 944,
948-949 (9th Cir.1979).
23. We reject the defendants' repeated mischaracterization of
the plaintiffs' theory of damages as a novel "fraud on the market" type theory,
a theory we do not adopt today. Should the plaintiffs succeed in proving that
the defendants' conduct in their marketing of Marlboro Lights constitutes
deceptive practices prohibited by G.L. c. 93A, there is nothing novel or
hypothetical about the plaintiffs' entitlement to damages that are measured by
the difference between value paid and value received. As indicated above,
whether the plaintiffs can establish proof of any difference at trial is another
24. We decline to consider the plaintiffs' request, set forth
in their brief, to extend the class definition adopted by the judge's
certification order to include all purchasers of Marlboro Lights up until the
date of final judgment. The matter is most appropriately raised before the judge
in the Superior Court now that the judge has the guidance of this opinion.
1. "[S]uch action" refers to the action described in the
previous paragraph, G.L. c. 93A, § 9(1), which provides:
"Any person, other than a person entitled to bring action under section eleven
of this chapter, who has been injured by another person's use or employment of
any method, act or practice declared to be unlawful by section two or any rule
or regulation issued thereunder ... may bring an action...."
2. This court and the Appeals Court have consistently made
clear that a defendant's deceptive act must adversely affect the plaintiff
before recovery under G.L. c. 93A, § 9, is permitted. See, e.g., Gurnack v.
John Hancock Mut. Life Ins. Co., 406 Mass. 748, 753 n. 5 (1990), citing
Van Dyke v. St. Paul Fire & Marine Ins. Co., 388 Mass. 671, 678 (1983)
(denial of claim under insurance policy does not warrant liability unless
plaintiff is harmed by that denial); Lord v. Commercial Union Ins. Co.,
60 Mass.App.Ct. 309, 321 (2004) ("G.L. c. 93A, § 9, [requires] actual injury
or loss before even minimum damages of $25 can be awarded"); id. at
321-322 ("the Legislature, in enacting and amending G.L. c. 93A, § 9, did not
intend to confer on plaintiffs who have suffered no harm the right to receive a
nominal damage award"); Schwartz v. Travelers Indem. Co., 50 Mass.App.Ct.
672, 676 n. 5 (2001) ("Plaintiffs would not be allowed to recover on [a G.L. c.
93A, § 9,] action where they have suffered no harm at all; the case law
indicates that some kind of harm is required before damages can be recovered");
Abdella v. United States Fid. & Guar. Co., 47 Mass.App.Ct. 148, 153
(1999) (affirming dismissal "[b]ecause [plaintiff] was not injured by
[defendant's] violation ...").
3. The court "reject[s] the proposition that the purchase of an
intentionally falsely represented product cannot be, by itself, an ascertainable
injury under our consumer protection statute." Ante at ----. I take the
court to mean simply that purchase of a deceptively advertised product may
in certain circumstances be alone sufficient to meet the injury requirement of
G.L. c. 93A, § 9(2), not that the mere purchase of a deceptively advertised
product necessarily constitutes per se injury.
4. Ventilation holes are designed to allow smokers to draw in
extra air while smoking, thereby reducing the relative levels of tar and
nicotine per inhalation. Marlboro Lights contain ventilation holes, but those
holes are unmarked and are in the area of the cigarette filter that may be
covered by the smoker's lips or fingers.
5. The exhibit, entitled "Health Warning: Low Tar Cigarettes
Are a Deliberate Con," references a 1988 study analyzing smoked cigarette butts.
According to the exhibit, that study concluded that "58% of low tar cigarettes
showed signs of significant hole-blocking."
6. It is not surprising that the plaintiffs made no serious
attempt to present evidence demonstrating that the low-tar group made up only a
small portion of the certified class. The plaintiffs never argued the point
because their theory of injury was that both groups were adversely affected not
merely because they purchased a deceptively advertised product, but because the
deceptive advertising inflated the market price of Marlboro Lights for all
7. Despite the conceded fact that at least some smokers did
receive lower levels of tar and nicotine from Marlboro Lights, the court
nonetheless speculates that "it is probable that no smoker received the promised
benefit of lowered tar and nicotine," because "it may be unlikely that any
individual would smoke a cigarette the exact same way twice." Ante at n.
20. This speculation runs in the face of an uncontested fact found on the record
by both the motion judge and the single justice--namely, that whether a smoker
received lower levels of tar and nicotine was dependent on the way that the
smoker smokes. If the plaintiffs had intended to rest their certification motion
on the argument that no one "smoke[s] a cigarette the exact same way twice,"
they would have made this argument below and provided "information sufficient"
to permit the motion judge to make a finding on that issue. Weld v. Glaxo
Wellcome Inc., 434 Mass. 81, 87 (2001). They did neither.
8. Importantly, the requirement that the plaintiffs present
evidence concerning the manner in which individual class members smoke
cigarettes would not necessarily preclude class certification under G.L. c. 93A,
§ 9(2). While class certification under Mass. R. Civ. P. 23, 365 Mass. 767
(1974), requires compliance with both the prerequisites of rule
23(a)--numerosity, commonality, typicality, and fairness and adequacy of
representation--and the requirements of rule 23(b)--predominance of
common issues and superiority to other available methods of litigation--class
certification under § 9(2) does not require a showing of predominance of
common issues or superiority to other available methods of litigation. Weld
v. Glaxo Wellcome Inc., supra at 86. Baldassari v. Public Fin. Trust,
369 Mass. 33, 39-40 (1975). Because the plaintiff class in this case does not
need to demonstrate the predominance of common issues of fact or law, the
necessity of individual proof concerning smoking behavior would not foreclose
9. I do not understand the motion judge to mean merely that the
advertising costs incurred by the defendants increased the cost of Marlboro
Lights. While the amount of advertising undertaken by the defendants may have
affected the price at which it was willing to sell Marlboro Lights, the expense
of advertising (and, correspondingly, its effect on price) does not depend on
whether the advertising was misleading. An honest advertisement is just
as expensive as a dishonest one. Rather, as the single justice did, I understand
the motion judge to mean that the plaintiffs may show relationship between the
content of the deceptive advertising and the market-determined price of Marlboro
10. The court notes, and I agree, that insofar as the
plaintiffs' market-based theory relates only to proof of the amount of damages,
not injury, the analogy to the "fraud on the market" theory of causation
and injury is inapt. See ante at ---- n. 23.
11. "Since the Supreme Court accepted fraud on the market in [Basic
Inc. v. Levinson, 485 U.S. 224 (1988) ] ... no [S]tate court with the
authority to consider whether Basic is persuasive has chosen to apply it
to claims arising under its own [S]tate's laws." Kaufman v. i-Stat Corp.,
165 N.J. 94, 113 (2000). Accord Recent Case, 114 Harv. L.Rev. 2550, 2550 (2001)
( "no [S]tate appellate court has incorporated [the 'fraud on the market
doctrine'] into the common law"). But see Hurley v. Federal Deposit Ins.
Corp., 719 F.Supp. 27, 34 n. 4 (D.Mass.1989) (speculating that "if the
Supreme Judicial Court were faced with the question, it would recognize the
fraud on the market theory as a substitute for pleading reliance where a
company's stock is traded in an efficient market").
12. When the Supreme Court of the United States first adopted
the fraud on the market theory, it did so over lingering doubts about both the
validity of the economic theory itself and the ability of courts to understand,
evaluate, and apply it. See Basic Inc. v. Levinson, 485 U.S. 224,
255-257 (1988) (White, J., concurring in part and dissenting in part) (outlining
economic critique of fraud on the market theory); id. at 253 (White, J.,
concurring in part and dissenting in part) ("with no staff economists, no
experts schooled in the 'efficient-capital-market hypothesis,' no ability to
test the validity of empirical market studies, we are not well equipped to
embrace novel constructions of a statute based on contemporary microeconomic
theory"); id. at 253 n. 4 (White, J., concurring in part and dissenting
in part), quoting Gilson & Kraakman, The Mechanisms of Market Efficiency, 70 Va.
L.Rev. 549, 549-550 (1984) ("legal culture's remarkably rapid and broad
acceptance of an economic concept that did not exist twenty years ago is not
matched by an equivalent degree of understanding " [emphasis in original]
). In the sixteen years since the Basic case, doubts about the economic
validity of the "fraud on the market" theory remain. See Bernard, Challenges to
the Efficient Market Hypothesis: Limits to the Applicability of the
Fraud-on-the-Market Theory, 73 Neb. L.Rev. 781, 782-783 (1994), quoting Jensen,
Some Anomalous Evidence Regarding Market Efficiency, 6 J. Fin. Econ. 95 (1978)
("Since Basic, there has been an explosion of literature in financial economics
casting doubt on the efficiency of at least some segments of the stock market.
The theory once characterized in 1978 by Professor Michael Jensen as having
'more solid empirical evidence supporting it ... [than any] other proposition in
economics' has undergone so much questioning that leading researchers are now
creating new theories to explain how, in equilibrium, market prices could
reflect random factors that have nothing to do with firms' underlying
fundamental values"). See also Ferrillo, The "Less Than" Efficient Capital
Markets Hypothesis: Requiring More Proof from Plaintiffs in Fraud-on-the-Market
Cases, 78 St. John's L.Rev. 81 (2004) (critiquing fraud-on-the-market theory);
Gordon, Efficient Markets, Costly Information, and Securities Research, 60 N.Y.U.
L.Rev. 761 (1985) (same).