Attorney General – Power to Settle Claims

Respondents brought this action on behalf of themselves and others similarly situated against appellant Philip Morris, Inc., and its parent company, Altria Group, Inc., alleging that Philip Morris’s use of the words “light” and “lowered tar and nicotine” to market and sell cigarettes was false and deceptive, and violated Minnesota’s consumer protection statutes. Respondents asserted claims under Minn. Stat. sec. 8.31, subd. 3a (2010), and for common law fraud and unjust enrichment. The District Court granted, among other things, respondents’ motion to certify the class. Subsequently, Philip Morris moved for partial summary judgment on the grounds that respondents’ consumer protection claims asserted under section 8.31, subdivision 3a, are barred by a previous release and that respondents failed to satisfy the public benefit requirement of section 8.31. The court granted summary judgment on the consumer protection claims asserted under section 8.31, subdivision 3a, and then granted Philip Morris’s motion for judgment on the pleadings on the remaining claim and dismissed the case. The Court of Appeals affirmed the District Court’s certification of the class, but reversed the grant of summary judgment and reinstated respondents’ subdivision 3a consumer protection claims.

The Supreme Court held that, (1) under Minn. Stat.sec. 8.31 (2010), the Minnesota Attorney General has the authority to bring a lawsuit under subdivision 3 on behalf of the State, and to seek not only the relief available to the State AG under subdivision 3, but also the relief available to a private litigant under subdivision 3a. It logically follows that the State AG has the authority to settle and release a private litigant’s claims brought under section 8.31, subdivision 3a; (2) a private litigant pursuing a subdivision 3a claim does not have the authority to settle or release the sec. 8.31 claims of the State without the express consent of the State; a private litigant does have the authority to settle its own subdivision 3a claim with a responsible party, and a District Court may approve a settlement of a subdivision 3a class action of all similarly situated private litigants who could bring a subdivision 3a lawsuit; but that settlement agreement and release are not binding on the State without express written consent of the State AG, approved by the court; and (3) the 1998 Settlement Agreement entered into by the State AG and Philip Morris expressly released and barred respondents’ consumer protection claims asserted under sec. 8.31, subdivision 3a, and is binding on respondents. Reversed.

A10-0215 Curtis v. Altria Group, Inc. (Court of Appeals)

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