ORDER ON PHILIP MORRIS' MOTION FOR SUMMARY JUDGMENT ON PLAINTIFFS' CLAIMS FOR PURCHASES AFTER DECEMBER 1, 2002

JOHN A. WOODCOCK, JR., Chief Judge.

Occasionally, the law's logic leads to peculiar positions. To succeed on its motion for summary judgment, Philip Morris USA, Inc. (PM) must accept the Plaintiffs' premise that it spent decades lying to the consuming public about the health effects of its light cigarettes,1 but it urges the Court to grant summary judgment against all claims that took place after it began telling the truth. PM's argument has a certain tautological attractiveness: to maintain a misrepresentation cause of action there must be a misrepresentation, and once the defendant began telling the truth, there is no ongoing misrepresentation and hence no cause of action. The Court denies PM's motion because the record viewed in the light most favorable to the Plaintiffs creates a genuine issue of material fact as to whether PM began telling the whole truth about light cigarettes as of December 1, 2002.

I. STATEMENT OF FACTS

In the past, PM marketed light cigarettes as a healthier choice for smokers and did not disclose to consumers all the health risks it knew were associated with smoking light cigarettes. Plaintiffs' Statement of Material Facts ¶¶ 139, 146-52, 155-60 (Docket # 189) (PSMF).2, 3 PM gradually changed tacks.

In 1999, PM posted information about the health risks of smoking light cigarettes on its website and sent a direct mailing to 7 million adult smokers publicizing that its website now contained information about "health issues for smokers" and "tar and nicotine numbers"; for recipients who did not have internet access, the mailing provided a toll-free number that customers could call to receive the information in hard copy. Aff. of Brendan McCormick, Ex. 7 ¶¶ 26-27 (Docket # 130).4 At the end of 2000, PM added a legend to all its light cigarettes advertising that stated, "[t]he amount of `tar' and nicotine you inhale will vary depending on how you smoke" and directed consumers to PM's website and toll-free number. PM's Mot. at 10. In November 2002, PM included an "onsert"—a folded leaflet placed under the cellophane packaging—on approximately 130 million packs of light cigarettes.5 Also in November 2002, PM included 16.7 million "inserts"—20-page booklets detailing the health risks of light cigarettes—in 25 major newspapers, such as The New York Times, the Los Angeles Times, The Washington Post, and USA Today.

On January 22, 2010, PM moved for summary judgment on the Plaintiffs' claims involving purchases of light cigarettes after December 1, 2002. PM's Mot.6 On March 31, 2010, the Plaintiffs filed a response in opposition to the motion. Pls.' Resp. in Opp'n to PM's Mot. for Summ. J. (Docket # 187) (Pls.' Resp.). On April 14, 2010, PM replied to the Plaintiffs' response. PM's Reply to Pls.' Resp. in Opp'n to PM's Mot. for Summ. J. (Docket # 194) (PM's Reply). On April 27, 2010, PM moved for oral argument and the Court granted the request. Oral Mot. for Oral Argument/Hearing (Docket # 200); Order (Docket # 201). The Court held oral argument on May 18, 2010.

II. THE PARTIES' POSITIONS

A. PM

PM argues that its disclaimers preclude the Plaintiffs' unjust enrichment and consumer fraud claims. PM's Mot. at 13. According to PM, "the crux of plaintiffs' claims ... is that PM USA deceived consumers by describing their cigarettes as `lights,' `ultra-lights' or `low tar' and by stating that they have `lowered tar and nicotine' without disclosing to consumers that depending on how they smoked, consumers could inhale as much tar and nicotine from a low tar cigarette as they could from a full flavored brand." Id. at 13-14. By 2002 at the latest, PM asserts that it "provided this exact disclosure to its low tar cigarettes consumers." Id. at 14. PM argues that courts, including the courts in states at issue here, "have consistently held that no fraud or deception exists as a matter of law where—as here—the defendant expressly disclaimed the alleged misrepresentation or disclosed the allegedly concealed information." Id. at 15.

PM presents two reasons for why its disclosures were sufficiently extensive despite the fact that onserts were not included on every pack. First, PM contends that summary judgment is appropriate where, as here, a disclaimer is "reasonably calculated to reach a wide audience"; whether or not class members received, read, or believed the disclosures is a question of causation, not the sufficiency of PM's disclosure. PM's Reply at 6-7. Because cigarette smoking is a "regular and repeated activity," PM argues that "including the onsert on one-to-two week supplies of cigarettes is more than sufficient" to satisfy the requirement that disclosures be "extensive." Id. at 6-7. Second, PM argues that other forms of disclosures make up for any gaps in onsert distribution. Id. at 7. At oral argument, PM emphasized that the five types of disclaimers it made as of December 1, 2002, taken as a whole, were sufficient to preclude the Plaintiffs' claims as a matter of law. Tr. at 25:21-28:16 (Docket # 209).

B. Plaintiffs

As an initial matter, Plaintiffs argue that the sufficiency of PM's disclaimers is irrelevant to Plaintiffs' unjust enrichment claims. Plaintiffs state that because in most jurisdictions unjust enrichment does not "require wrongful conduct by the one enriched," the claim does not depend on material misrepresentation, eliminating disclaimers as a defense. Pls.' Resp. at 13-15.

The Plaintiffs give two reasons for why the adequacy of the disclaimers is a question of material fact for the jury. First, the Plaintiffs argue that the information contained in the onserts neither expressly disclaims the alleged misrepresentations nor discloses the information that was allegedly concealed: they describe the onsert language as "waffling" or "intentionally vague" and argue that the onserts failed to include material health information. Id. at 4-5. The Plaintiffs assert that the "deceptive and fraudulent conduct engaged in by Defendant prior to December 1, 2002, amounted to an impenetrable message embedded into the minds of its victims, whereby its practice of `saying less' at a later point in time had no effect on the unstoppable inertia of its past conduct." Id. at 6.

Second, the Plaintiffs contend that PM has not demonstrated a legally sufficient reach to the onserts. The Plaintiffs emphasize that the onserts were included on only a small percentage of light cigarette packs. Id. at 15-16. Further, the Plaintiffs question the effectiveness of PM's periodic placement of onserts: although the packs with onserts were distributed in concentrated one-week supplies, the packs were presumably sold over a longer period of time, decreasing the concentration of packs containing onserts and the chances that any one purchaser received one. Id. at 17-18. The Plaintiffs assert that relevant to the question of sufficiency is whether PM's disclosures were "actually read and understood by consumers" and that PM has offered little evidence that they were. Id. at 16.

III. DISCUSSION

A. Summary Judgment Standard

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. Proc. 56(c). On a summary judgment motion, "[a] genuine issue exists where a reasonable jury could resolve the point in favor of the nonmoving party."' Meuser v. Fed. Express Corp., 564 F.3d 507, 515 (1st Cir.2009) (quoting Suarez v. Pueblo Int'l, Inc., 229 F.3d 49, 53 (1st Cir.2000)). "A fact is material only if it possesses the capacity to sway the outcome of the litigation under the applicable law." Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir.2008) (quoting Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.1997)) (internal quotation marks omitted).

Although the Plaintiffs bring claims under individual state statutes, an element of all consumer fraud claims is "a deceptive act or practice by the defendant." Perona v. Volkswagen of America, Inc., 292 Ill.App.3d 59, 225 Ill.Dec. 868, 684 N.E.2d 859, 864 (1997).7 A deceptive act is "any false or misleading [representation] . . . which may, tends to or does deceive or mislead any person," Salazar v. D.W.B.H., Inc., 144 N.M. 828, 192 P.3d 1205, 1212 (2008), including "[a]n omission or concealment of a material fact." Perona, 225 Ill.Dec. 868, 684 N.E.2d at 866. Thus, there is no actionable consumer fraud if "the allegedly withheld [or false] information was in fact disclosed to the public." City of Monroe Employees Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 676 (6th Cir.2005).8

B. Whether PM Told the Whole Truth by December 1, 2002

Whether PM stopped misrepresenting the health benefits of light cigarettes as of December 1, 2002 is a question of fact and compels the denial of its motion.9 First, after December 1, 2002, PM continued to, and still does, label certain brands of cigarettes "Lights" or "Ultra-Lights." These labels alone raise a factual question as to whether consumers associate the term "light" with healthier.10 At oral argument, PM responded that it had made multiple "other statements that say that the consumers should not view [the light label] as a representation that they will get lower tar or that the cigarettes are safer." Tr. at 29:25-30:2. Although PM is free to make this argument at trial, a reasonable factfinder could conclude that these "other statements" failed to negate the common understanding of the primary label on light cigarette packs. Schwab v. Philip Morris USA, Inc., 449 F.Supp.2d 992, 1086 (E.D.N.Y.2006), rev'd on other grounds, McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir.2008) (stating that "[t]o prevail before trial on all [civil RICO] claims after November 2002, PM USA must demonstrate. . . that its disclosures were so widely distributed and so clear that, as a matter of law, no scheme to defraud existed after that date").

Moreover, PM did not remove "express references to tar and nicotine on low tar cigarette packages—such as the words `Lowered Tar and Nicotine' on Marlboro Lights cigarettes"—until the first quarter of 2003. PM's Mot. at 6. It would be difficult to conclude that PM's misrepresentations ceased as a matter of law by December 1, 2002, since PM's light cigarette packs continued to explicitly claim to be lower in tar and nicotine.

Reasonable jurors could also differ about whether PM's disclaimers sufficiently disclosed all material health information.11 The disclaimers did not inform consumers that light cigarette smokers compensate subconsciously, that the design of light cigarettes results in more mutagenic smoke than regular cigarettes, or that additives alter pH levels resulting in greater tar and nicotine delivery. Pls.' Resp. at 8. Such omissions raise a factual question of whether PM disclosed all material information but they are particularly significant in light of the tenor of the disclosures as a whole, which suggests that light cigarette smokers could inhale less tar and nicotine depending on "how you [the smoker] smoke." PM's Mot. at 5. This is not a situation where PM disclosed the "ultimate fact"—no increased health benefits from light cigarettes—and stopped; instead, PM went on to provide an explanation that effectively reopened the possibility that light cigarettes might in fact be healthier. Cf. PM's Reply at 2 (citing Mittendorf v. J.R. Williston & Beane, Inc., 372 F.Supp. 821, 828 (S.D.N.Y. 1974) (stating that "only the essence of a point need be disclosed, not the minute details")). This potential misimpression is reinforced by word choice: the disclaimers state that "you may not inhale less tar and nicotine than you would from other brands" not "you will not." PM's Mot. at 5 (emphasis added). When, as PM urges, the Court considers PM's representations "viewed as a whole," the Court finds multiple questions of fact for the jury. Tr. at 16:19.12

IV. CONCLUSION

The Court DENIES PM's Motion for Summary Judgment (Docket # 130). PM's Motion to Strike is DENIED to the extent the statements are party admissions and GRANTED to the extent the statements rely on Judge Kessler's factual findings (Docket # 196).

SO ORDERED.