In a nearly 250-page Memorandum Opinion and Order, the Honorable James O. Browning of the U.S. District Court for the District of New Mexico has granted in part and denied in part a Motion to Dismiss filed by Defendants Santa Fe Natural Tobacco Co., Reynolds American, Inc., and R.J. Reynolds Tobacco Co. The case is In re Santa Fe Natural Tobacco Co. Marketing & Sales Practices Litigation, No. 1:16-md-02695 (D.N.M.).

By way of background, this multidistrict litigation involves class actions filed by Plaintiffs across various states and under those various states’ respective laws, all directed toward the use of certain descriptors in Natural American Spirit (“NAS”) cigarettes’ packaging, labeling, and advertising.

The Plaintiffs’ claims are based on theories of unfair and deceptive practices, unjust enrichment, and breaches of express warranties. Centrally, they focus on alleged deception insofar as

  • “the use of the terms organic, natural, and additive-free mislead tobacco consumers into believing that [NAS] cigarettes are safer and healthier;”
  • “by labeling [NAS] cigarettes with menthol ‘additive-free’ and ‘natural,’ the Defendants mislead menthol consumers, because menthol is an additive;” and
  • “by labeling [NAS] cigarettes as Natural, the Defendants mislead consumers into believing that [NAS] cigarettes are not subjected to rigorous engineering processes during production.”

Although the bulk of the claims survived the Defendants’ Motion to Dismiss, notable were the Court’s dismissals, with prejudice, of

  • various counts “to the extent that those counts are premised on a theory of deception that a reasonable consumer would believe that the terms natural and additive-free suggest that [NAS] cigarettes are less processed than other cigarettes;” and
  • two Illinois counts “to the extent those claims are premised on the theory that a reasonable consumer would believe that the terms ‘additive-free’ and ‘natural’ in the Defendants’ advertising suggest that [NAS] cigarettes are safer or healthier.”

Other counts were dismissed for failure of particular state-specific elements of certain theories of relief.

The case will proceed to discovery and a determination on the merits on the remaining claims. Meanwhile, for jurisdictional reasons, separate proceedings will be held in the U.S. District Court for the Middle District of North Carolina on the non-North Carolina claims brought against Reynolds American, Inc.

Stay tuned for further developments.