Smokers Lose Unjust Enrichment Class Action

CHICAGO (CN) - Philip Morris dodged a class action by cigarette smokers who say the tobacconist concealed the health risks of Marlboro Lights.

The original complaint filed 13 years ago in Illinois state court claimed that Phillip Morris and other tobacco companies had conspired to conceal the addictive and dangerous nature of cigarettes by intentionally using incomplete and misleading advertising.

In 2000, the complaint was amended to propose three classes: Illinois residents who bought cigarettes from 1953 to 1965 when the tobacco companies allegedly concealed facts about cigarettes' addictive nature; residents who began smoking as minors; and residents who bought Marlboro Lights.

By 2009, the class was expanded to include any Illinois residents who had smoked any brand of "low-tar," "light" or "ultra light" cigarettes, in addition to Marlboro Lights.

Phillip Morris was the only defendant not dismissed under the statute of limitations as the case was removed to federal court. The final incarnation of the suit alleged unjust enrichment against Philip Morris for Marlboro Lights.

Ultimately, a federal judge dismissed the case with prejudice for failure to state a claim.

The 7th Circuit affirmed Thursday, finding that the plaintiffs had made a critical misstep when they "disavowed any need to allege that they were deceived or injured by the defendants' actions."

"It is crucial to note that the plaintiffs do not allege that they suffered any harm, that they relied on the defendants' marketing, or that they would have acted differently had the defendants been truthful about the cigarettes they were selling," Judge Daniel Manion wrote for a three-judge panel. "In other words, the plaintiffs assert that their unjust enrichment claim does not require proof of deception, causation, or actual harm with regard to individual members of the plaintiff class."

The court said the allegations did not present a detriment to consumers or a connection between the detriment and the benefit retained by Philip Morris. Unjust-enrichment claims require both elements.

"We hold that the mere violation of a consumer's legal right to know about a product's risks, without anything more, cannot support a claim that the manufacturer unjustly retained the revenue from the product's sale to the consumer's detriment," Manion wrote.

"For many of [the proposed class members] the defendants' retention of the cigarette revenue is not a detriment to them - it is possible that many of the consumers have no regrets about their purchases and would willingly repeat the same transaction, despite the violation of their legal right to be informed about the nature of cigarettes," the 20-page decision states. "Since these consumers would have acted no differently had the defendants properly informed them about the true nature of cigarettes, their transfer of money to the defendants in exchange for cigarettes was not to their detriment."

Since failure of the unjust-enrichment claim is certain, the court also declined to ask the Illinois Supreme Court whether the claim could survive as an independent cause of action.

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