Munger Tolles Wins Trial Victory on Behalf of Philip Morris USA

Following 16 years of litigation – including a trip to the California Supreme Court – Gregory P. Stone led a team of Munger, Tolles & Olson lawyers to a trial victory on behalf of Philip Morris USA in a massive, statewide class action involving false advertising claims about Marlboro Lights.

The plaintiffs alleged that Philip Morris violated California’s Unfair Competition Law and False Advertising Law in its marketing of Marlboro Lights. Because of the size of the class and the length of the damage period, the stakes were enormous. The plaintiffs were seeking between $544 million and $1.04 billion dollars in damages, as well as injunctive relief.

In his September 24 decision, California Superior Court Judge Ronald S. Prager (San Diego) found that plaintiffs failed to establish entitlement to either restitution or injunctive relief and, on that basis, decided that judgment should be entered in favor of Philip Morris USA.

The case was originally filed in 1997, alleging numerous causes of action under California’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act. A class was certified in 2001. Following passage of California’s Proposition 64, Judge Prager decertified the class on the grounds that standing required an individual analysis of whether each of the class members could demonstrate an injury. In 2009, the California Supreme Court reversed, holding that the standing requirements of Prop. 64 applied only to the class representatives. At trial in 2013, the class, comprised all California smokers of Marlboro Lights cigarettes from June 1993 to April 2001, sought between $544 million and $1.04 billion in restitution.

In an unusual procedural move, Mr. Stone and his team deposed a sample of 156 individual class members with the goal of proving there was no liability and no damages because class members testified they were not misled and also would have bought Marlboro Lights regardless of the advertising. "These depositions showed us that many people were pleased with the product," Stone said in a press interview following the verdict. "Many people who bought the cigarettes said they were aware of plaintiffs' theory. And for the people who weren't aware of plaintiffs' theory, once we explained it to them, many of them told us they still would have bought Marlboro Lights."

Judge Prager completely rejected the plaintiffs’ restitution model. Describing the results of a survey conducted by the plaintiffs’ expert as “nonsensical,” he concluded, “Plaintiffs’ model failed to provide any reasonable basis to support an award of any amount of restitution and the totality of the evidence suggests the amount of actual restitution is zero.” Judge Prager similarly rejected the plaintiffs’ claims for injunctive relief, finding new labeling would be redundant because the word “lights” was removed from all packages of Marlboro Lights in 2010. The case is Willard R. Brown, et al. v. The American Tobacco Co., Inc. et al., case number 711400.

Mr. Stone is widely recognized for his trial skills, particularly in patent, antitrust and unfair competition cases. He also specializes in defending, and trying, class actions, including product liability, toxic tort and antitrust class actions.