Appeals court lets BAT class action over cigarette labels proceed

British American Tobacco must keep defending a class-action lawsuit over Natural American Spirit cigarette labels after a divided U.S. Court of Appeals for the 10th Circuit let the case move forward on July 29. The suit says consumers were misled into believing the cigarettes were safer than other brands and contained no additives.

Circuit Judge Timothy Tymkovich dissented, saying neither class should have been certified and that the damages model was inadequate for the safer-cigarette claim. The panel did not decide whether the labeling claims are true, but it blocked BAT’s bid to end the case early and sent the fight back to lower court, where discovery, expert testimony and consumer evidence will matter.

The ruling lands in a long tobacco-accountability record in which labels, warning language and product descriptions have been used to shape perceptions of risk. In August 2015, the Food and Drug Administration sent warning letters to Santa Fe Natural Tobacco Co. and Reynolds American over deceptive marketing concerns tied to Natural American Spirit. Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, said the FDA action was critically important to protect the American public from tobacco industry deception.

The consumer-perception backdrop is hard to ignore. In a January 2017 national survey of smokers, almost 64% of Natural American Spirit users said their own brand was safer than other brands. That result helps explain why plaintiffs have focused on the packaging and label language: the dispute is not only about what BAT printed on the pack, but about what smokers believed those words meant.

The case also fits a broader wave of consumer-fraud litigation over how companies describe products, from tobacco to food, drink and e-cigarettes, when marketing language can obscure material information. Tobacco Tactics describes British American Tobacco as a transnational tobacco company headquartered in the United Kingdom, and BAT’s London ticker is BATS.L. If the class action survives further challenges, BAT may have to lay out internal decisions on packaging and marketing strategy, including how product labels were designed and tested.