Business Law the 1988 and Later 1992

Business Law

The 1988 and later 1992 Supreme Court decision in Cipollone v. Liggett Group, Inc. illustrates the functions and role of law in business and public health. This case relates to the tobacco industry's culpability in promoting smoking through marketing campaigns after knowledge of the detrimental effects of smoking, and in spite of the mandatory Surgeon General Warning labels that had been federally mandated since the 1960s and the Federal Cigarette Labeling and Advertising Act (1965 Act).

In the Cipollone v. Liggett Group, Inc., case, it was ultimately decided that the federal laws trumped state laws that permitted promotion of harmful materials, in this case, cigarettes. What is interesting about this case is that it pertains directly to marketing, rather than to the tobacco companies themselves. Separate litigation, of course, impinged upon the tobacco companies. The Cipollone v. Liggett Group case illustrates several key points. First, the case upholds federal legislation related to public health announcements as being superior to any state business law. This is known as the Supremacy Clause. The Supremacy Clause is something that all businesses do need to be aware of, especially if their operations in one state conflict with laws in another state or with federal law. With regards to the Cipollone v. Liggett Group scenario, the state laws that were related to marketing the products were the ones that were overruled by the Supreme Court.

A similar scenario could potentially develop in the future as more states decriminalize cannabis, while cannabis remains on the list of federally controlled substances. As this is my current industry, I am paying close attention to the evolution of business and case law in this currently unregulated and legally nebulous area. It is critical to synchronize federal and state laws in situations that could give rise to legal conundrums such as this.

One of the original findings of the court was that the tobacco companies had indeed engaged in a conspiracy to withhold information about safer cigarettes that could have prevented the deaths of people like Mrs. Cipollone, about whom the son argued in the trial. The courts indeed found the tobacco companies culpable of this offence, and duly charged them as such. Additionally, the case reveals the Court's willingness to place some responsibility on the individual consumer. Some responsibility was assigned to Mrs. Cipollone, but it was also determined that the cigarette companies were aware of the dangers of smoking well before the labeling. The case therefore addresses issues of preemptive legislation. The plaintiff's mother had started smoking prior to the Federal Cigarette Labeling and Advertising Act, but the companies still did know that cigarette smoke was potentially hazardous. The tobacco company claim that personal responsibility trumped their responsibility to warn the public was not the basis for their decision. The decision was based on the fact that even though Cipollone was capable of choosing her destiny, the tobacco companies had to comply with federal laws regarding public health policy.

Public health policy is often in direct conflict with business law. The Cipollone v. Liggett Group case illustrates this case in point. The Supreme Court ruled that smokers who would not have known about the dangerous of smoking prior to the warning labels were thereafter prevented from suing the tobacco companies. Because the tobacco industry is a large and powerful one with strong lobbying presence in Washington, this case becomes even more meaningful. It represented the first of many decisions in the Supreme Court but also in District Courts and also in Congress, which weakened the clout of the tobacco companies. Correspondingly, the Cipollone v. Liggett Group case strengthened the role of government in public health policy. Public health campaigns for anti-smoking awareness increased in the decades following the decision, leading to a dramatic decrease in new smokers and in smoking behaviors in general. The shift in consumer awareness and consumer behavior also came concurrently with local policies related to smoking in public places. Bans on smoking in bars and restaurants altered the character of local businesses, and changed the discourse related to the relationship between law and business.

Business prefers not to have the law dictate its practices, but unregulated businesses often commit ethical infractions in light of the drive to maximize profit and shareholder value. When the law does intervene, it is usually in unfortunate cases like these, in which numerous deaths have already occurred. Applying the law proactively, rather than retroactively, would be preferable and could save lives as well as money. If issues can be framed as public health matters more than business matters, then it may be possible for legislation to reach a fine balance between the needs of business and the needs of consumers for legal protections.