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In re Santa FE Natural Tobacco Co. Marketing & Sales Practices and Products Liability Litigation

United States District Court, D. New Mexico

December 21, 2017

IN RE SANTA FE NATURAL TOBACCO COMPANY MARKETING & SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION

          Scott P. Schlesinger Jonathan Gdanski Schlesinger Law Offices, PA. Fort Lauderdale, Florida Attorneys for Plaintiffs Justin Sproule, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Charlene Blevins, Sam Bowman, Matokie Brim, Terry Cliver, Christos Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Horton, Collin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King, Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Rudolph Miller, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, and Vicki Wilson

          Jeffrey Louis Haberman Schlesinger Law Offices, P.A. Fort Lauderdale, Florida Attorney for Plaintiffs Justin Sproule, Patrick Scott, Victoria Cuebas, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Charlene Blevins, Sam Bowman, Matokie Brim, Terry Cliver, Christos Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Horton, Collin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King, Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Rudolph Miller, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, and Vicki Wilson

          Randi McGinn McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiffs Anthony Dunn, Ceyhan Haskal, Michael Robinson, Harry Vartanyan, Michael Yang, Doug Pyle, Nick Vadis, Theodore Rothman, Patrick Scott, Russell Brattain, Shannon White, C.M. LeCompte, Danae Grandison, Michael Laboon, Dave Moyer Victoria Cuebas, Ashley Waldo, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Sam Bowman, Makotie Brim, Terry Cliver, Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Hornton, Colin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King, Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, Vicki Wilson, Timothy Ruggiero, Desire Gudmundson, Jacques-Rene Herbert, Sara Benson, Justin Sproule, Rudolph Miller, Carol Murphy, Francisco Chavez, Joshua Horne, Albert Lopez, Abigail Emmons, Charlene Blevins, Scott Johnston, Jason Cole, and Rachel King

          Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiffs Anthony Dunn, Ceyhan Haskal, Michael Robinson, Harry Vartanyan, Michael Yang, Doug Pyle, Nick Vadis, Theodore Rothman, Patrick Scott, Russell Brattain, Shannon White, C.M. LeCompte, Danae Grandison, Michael Laboon, Dave Moyer Victoria Cuebas, Ashley Waldo, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Sam Bowman, Makotie Brim, Terry Cliver, Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Hornton, Colin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King, Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, Vicki Wilson, Timothy Ruggiero, Desire Gudmundson, Jacques-Rene Herbert, Sara Benson, Justin Sproule, Rudolph Miller, Carol Murphy, Francisco Chavez, Joshua Horne, Albert Lopez, Abigail Emmons, and Charlene Blevins.

          Charles J. LaDuca Cuneo Gilbert & LaDuca, LLP Washington, DC and Melissa Wolchansky Charles D Moore Halunen Law Minneapolis, Minnesota and Michael Robert Reese Reese LLP New York, New York and Nicholas Koluncich Law Offices of Nicholas Koluncich LLC Albuquerque, New Mexico Attorneys for Plaintiff Anthony Dunn

          John C. Bienvenu Bienvenu Law Office Santa Fe, New Mexico and Mark H Donatelli Reed C. Bienvenu Rothstein Donatelli LLP Santa Fe, New Mexico and Ronald Marron Law Offices of Ronald A. Marron San Diego, California Attorneys for Plaintiffs Ceyhan Haskal, Michael Robinson, Harry Vartanyan, Michael Yang, Doug Pyle, and Nick Vadis

          Caleb Marker Zimmerman Reed Manhattan Beach, California and Nancy Ruth Long Long Komer & Associates, P.A. Santa Fe, New Mexico Attorneys for Plaintiffs Theodore Rothman and C.M. LeCompte

          Douglas Gregory Blankinship Finkelstein Blankinship, Frei-Pearson & Garber, LLP White Plains, New York Attorney for Theodore Rothman Kim Eleazer Richman Richman Law Group Brooklyn, New York Attorney for Theodore Rothman, Danae Grandison, Michael Laboon, and Dave Moyer

          Benjamin Michael Lopatin Eggnatz, Lopatin, & Pascucci, LLP San Francisco, California Attorney for Plaintiff Russell Brattain Daniel L. Warshaw Alexander R. Safyan Pearson, Simon & Warshaw, LLP Sherman Oaks, California and Erika E Anderson Law Offices of Erika E. Anderson Albuquerque, New Mexico Attorneys for Plaintiff Shannon White

          Gretchen Mary Elsner Elsner Law & Policy, LLC Santa Fe, New Mexico Attorney for Plaintiffs Danae Grandison, Michael Laboon, and Dave Moyer

          John Allen Yanchunis, Sr. Scott W. Weinstein Keith R. Mitnik Marisa Kendra Glassman Morgan & Morgan, PA Fort Myers, Florida Orlando, Florida Tampa, Florida Attorneys for Plaintiff Ashley Waldo

          Steven William Teppler Abbott Law Group, P.A. Jacksonville, Florida Attorney for Plaintiff Timothy Ruggiero

          John Russell Bart Pate J.R. Pate, PC - Law Office St Thomas, Virgin Islands Attorney for Plaintiff Desire Gudmundson

          Matthew David Schultz Levin Papantonio Thomas P.A. Pensacola, Florida Attorney for Plaintiff Scott Johnston

          Joel R. Rhine Rhine Law Firm, P.C. Wilmington, North Carolina Attorney for Jason Cole and Rachael King

          Chad C. Messier Dudley Topper & Feuerzeig St. Thomas, United States Virgin Islands and Andrew G. Schultz Rodey Dickason Sloan Akin & Robb, P.A. Albuquerque, New Mexico and Peter J. Biersteker David B. Alden David M. Monde Paul Courtney Huck, Jr. Sharyl Reisman Mark R. Seiden Charles R. A. Morse David Craig Kiernan Michael Fraser Stoer Jennifer Bunting-Graden William D Coglianese Jon Gregory Heintz Jordan Von Bokern Joseph R Coburn Noel J. Francisco Troy A. Fuhrman Jones Day San Francisco, California Washington, DC Atlanta, Georgia Miami, Florida Tampa Florida New York, New York Cleveland, Ohio Attorneys for the Defendants

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) the Defendants' Request for Judicial Notice in Support of Motion to Dismiss, filed November 18, 2016 (Doc. 71)(“First JN Motion”); (ii) Defendants' Second Motion for Judicial Notice in Support of the Motion to Dismiss the Consolidated Amended Complaint, filed February 23, 2017 (Doc. 91)(“Second JN Motion”); (iii) Defendants' Third Motion for Judicial Notice in Support of the Motion to Dismiss the Consolidated Amended Complaint, filed May 30, 2017 (Doc. 109)(“Third JN Motion”); and (iv) the Defendants' Motion to Dismiss the Consolidated Amended Complaint and Incorporated Memorandum of Law, filed February 23, 2017 (Doc. 90)(“MTD”). The Court held hearings on June 16, 2017 and July 20, 2017. The primary issues are: (i) whether the Court may consider the items presented in the First JN Motion, the Second JN Motion, and the Third JN Motion without converting the MTD into one for summary judgment; (ii) whether the Court may exercise personal jurisdiction over Reynolds American, Inc. for claims that were not brought in a North Carolina forum; (iii) whether the Federal Trade Commission's Decision and Order, In re Santa Fe Nat. Tobacco Co., No. C-3952 (FTC June 12, 2000), filed November 18, 2016 (Doc. 71)(“Consent Order”), requiring Defendant Santa Fe Natural Tobacco Company, Inc. to use a disclosure that “No additives in our tobacco does NOT mean a safer cigarette” impliedly preempts the Plaintiffs'[1] claims to the extent that the Defendants' advertising misled the Plaintiffs into believing that Natural American cigarettes are safer or healthier than other cigarettes; (iv) whether “natural, ” “additive-free, ” and “substantially similar terms” mislead a consumer into believing: (a) that Natural American cigarettes are safer or healthier than other cigarettes, (b) that Natural American's menthol cigarettes do not include any additives; or (c) that Natural American cigarettes undergo fewer engineering processes than other cigarettes; (v) whether the Defendants' use of those descriptors is protected commercial speech under the First Amendment to the Constitution of the United States of America; (vi) whether state law safe harbors shield the Defendants from liability; (vii) whether the Plaintiffs' unjust-enrichment claims fail, because: (a) the descriptors did not deceive consumers, so there is no injustice for equity to correct; (b) the Plaintiffs have an adequate legal remedy under the various state consumer statutes; or (c) state specific law otherwise bars them; (viii) whether the Plaintiffs' breach-of-express-warranty claims are barred, because: (a) the FDA-mandated disclosure and the menthol ingredient modify the warranty such that there is no breach; (b) the Plaintiffs' Consolidated Complaint, filed January 12, 2017 (Doc. 82)(“Amended Complaint”) does not serve as the requisite pre-litigation notice under California, Florida, Illinois, New Mexico, New York, and North Carolina law; and (c) the Plaintiffs failed to allege privity of contract with the Defendants as required by Florida, Illinois, and New York law; and (ix) whether the Memorandum of Agreement Between the United States Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) and RAI Services Company (RAIS)/Santa Fe Natural Tobacco Company, Inc. (Santa Fe), dated January 19, 2017, filed February 23, 2017 (Doc. 91-1)(“Memorandum of Agreement), in which the Defendants agree to remove the descriptors from its packaging and labeling, except for the term natural in its brand name, renders the Plaintiffs' request for injunctive relief moot.

         The Court concludes that: (i) the Court may consider all but one of the documents the Defendants submit without converting the MTD into one for summary judgment, because the documents are incorporated in the Amended Complaint by reference, or they are government documents publically available and capable of ready and accurate determination; (ii) the Court lacks personal jurisdiction over Reynolds American, as to the claims filed outside of North Carolina; (iii) the Consent Order does not preempt the Plaintiffs' claims, because (a) a consent order is not a “law” under the Supremacy Clause, (b) the Consent Order -- as an agreement not to enforce a federal statute -- does not permit conduct; (c) the Consent Order only binds the parties to it, so does not bind all of the Defendants; and (d) the Consent Order covers only the Defendants' advertising, so cannot preempt the Plaintiffs' claims targeting the Defendants' labeling; (iv) the descriptors “natural, ” “organic, ” and “additive-free” would mislead a reasonable consumer into believing that: (a) Natural American Cigarettes are healthier or safer than other cigarettes, because decades of marketing have equated those terms with healthy products; and (b) Natural American menthol cigarettes have no additives, because menthol is a substance that a reasonable consumer would not know much about; (v) the First Amendment does not protect the Defendants' use of the descriptors at issue, because the state action doctrine precludes a First Amendment defense to the claims premised on mutual assent, and the government has a substantial interest in regulating deceptive commercial speech regarding tobacco products; (vi) the state-law safe harbors do not preclude relief, except in Illinois, because the Consent Order does not permit conduct, and the Ohio consumer protection claims are barred for state-specific reasons; (vii) Rule 8 allows pleading in the alternative, but New Jersey and Ohio law do not permit the Plaintiffs' unjust-enrichment claims, because the Plaintiffs cannot allege a remuneration nor can they allege that they conferred a direct benefit on the Defendants; (viii) Florida, Illinois, and New York law preclude the Plaintiffs' express warranty claims, because the Plaintiffs Amended Complaint cannot serve as the requisite pre-litigation notice, and are independently defective under Florida and Illinois law, because there is no privity between the Plaintiffs and the Defendants; and (ix) the Plaintiffs' request for injunctive relief is not rendered moot, because the Memorandum of Agreement is subject to a lawsuit that might invalidate it. The Court therefore grants the MTD in part and denies it in part.

         FACTUAL BACKGROUND

         The Court takes the facts from the Amended Complaint. As the Court must, it accepts all factual allegations in the Amended Complaint as true for the purposes of a motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court may also consider facts judicially noticed on a motion to dismiss without converting the motion into one for summary judgment. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 322 (2007)(“[C]ourts must consider the complaint in its entirety, as well as . . . matters of which a court may take judicial notice.”); S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1191 (D.N.M. 2013)(Browning, J.). The Court recites facts from the documents included in the First JN Motion, the Second JN Motion, and the Third JN Motion to the extent that the Court concludes that it can consider those documents. See infra § I (“The Court concludes that it may consider all of the documents, which the Defendants submit, except the FTC Letter, without converting the MTD into one for summary judgment.”).

         Santa Fe Tobacco is a New Mexico corporation that sells Natural American Spirit cigarettes and uniformly advertises them as “Natural” and “100% Additive Free.” Amended Complaint ¶¶ 1, 24, 40, at 1, 12, 15. Those same descriptors appear on Natural American cigarettes' packaging. Amended Complaint ¶ 4, at 2. The twelve named Plaintiffs believed that, based on those terms and others, Natural American cigarettes were “safer and healthier” than other cigarettes. Amended Complaint ¶¶ 12-23, at 4-11. Because of that belief, the Plaintiffs purchased Natural American cigarettes at a premium over other cigarettes. See Amended Complaint ¶¶ 11-23, at 3-11.

         Reynolds American -- Santa Fe Tobacco's parent corporation -- is heavily involved in Natural American cigarette advertising, and approves “all decisions” that Santa Fe Tobacco makes “with respect to the marketing, design, and composition.” Amended Complaint ¶ 28, at 12. Reynolds American actively monitors the publications in which Natural American cigarettes are advertised. See Amended Complaint ¶ 28, at 12-13. Santa Fe Tobacco's and Reynolds American's assets are identical, and Reynolds American “essentially controls” Santa Fe Tobacco's business initiatives, capital expenditures, and financial operations. Amended Complaint ¶ 35, at 13-14.

         Natural American advertisements from 2013 through 2015 include images of water and plants, along with statements like: “When you work with the best materials, you don't need to add anything else. That's why we use only tobacco and water. We stick with premium quality, whole leaf natural tobacco that's 100% additive-free for a very simple reason -- it's all we need.” Tobacco & Water Advertisement at 113-114, filed November 18, 2016 (Doc. 71-1)(“Tobacco & Water Advertisement”). See Complaint ¶ 43, at 17-21. Advertisements from that period also state in large bold writing, “100% ADDITIVE-FREE NATURAL TOBACCO, ” and advertisements include, in smaller writing, “No additives in our tobacco does NOT mean a safer cigarette.” Tobacco and Water Advertisement (all caps, bold, and emphasis in original); Complaint ¶ 43, at 17-21(all caps, bold, and emphasis in original). In 2015, the Defendants launched a nationwide advertising campaign and targeted Sports Illustrated, Time, Field and Stream, Southern Living, Architectural Digest, Vanity Fair, and U.S. Weekly magazines. See Amended Complaint ¶ 44, at 21. Regarding that advertising campaign, a spokesman for Santa Fe Tobacco explained: “The aim is to drive brand awareness, highlight Natural American Spirit's 100-percent additive-free natural tobacco proposition.” Amended Complaint ¶ 45, at 21-22.

         Natural American cigarettes are the most expensive major brand of cigarette. See Complaint ¶ 88, at 36. Reynolds American explains that the higher price stems from “its use of all natural, additive-free tobacco.” Complaint ¶ 89, at 36 (citing Reynolds American, Inc. Form 10-Q United States Securities and Exchange Commission Filing for the Quarterly Period Ended March 31, 2016, available at http://s2.q4cdn.com/129460998/files/docfinancials/2016/RAI-Q116-10-Q.pdf (last visited Oct. 28, 2017)). Despite their higher price, Natural American cigarette sales increased eighty-six percent from 2009 through 2014, while cigarette sales in the United States of America declined overall by seventeen percent. See Amended Complaint ¶ 45, at 22. Its market share during a similar period “more than doubled.” Amended Complaint ¶ 45, at 22. Between 2014 and 2015 alone, Natural American cigarette sales increased by 21.4%. See Amended Complaint ¶ 45, at 22.

         The Plaintiffs cite numerous studies regarding the popularity and consumer perceptions of cigarettes branded as “natural.” Amended Complaint ¶¶ 50-54, at 23-27.[2] On August 27, 2015, the Food and Drug Administration (“FDA”) sent a Warning Letter, filed November 18, 2016 (Doc. 71-1)(Ex. 8)(“Warning Letter”) to Santa Fe Tobacco asserting that some of the Defendants' cigarette labeling practices “explicitly and/or implicitly” represent that Natural American cigarettes do not contain certain materials, so they represent that Natural American cigarettes pose less of a risk than other tobacco products. Amended Complaint ¶ 58, at 28-29 (quoting Warning Letter at 2). Santa Fe Tobacco previously entered into a Consent Order with the FTC regarding its advertising practices, because the FTC had concerns that the Defendants' advertising mislead consumers into believing that “Additive-Free” or “Chemical-Free” cigarettes are safer or less harmful than other tobacco products. Consent Order at 1-10 [on CM/ECF at 10-19]. The Consent Order requires that, “beginning no later than (30) days after the date of service of this order, ” Santa Fe Tobacco's advertisements must display the warning: “No additives in our tobacco does NOT mean a safer cigarette.” Consent Order, at 4 [at 13 on CM/ECF]. Among other requirements, this statement must be “[i]n the same style and type size as that required for health warnings for tobacco cigarettes.” Consent Order at 3 [at 12 on CM/ECF]. A later “Assurance of Voluntary Compliance” stipulates that, effective March 1, 2010, all advertisements found in either “display or distribution” of any Santa Fe Tobacco cigarette made with organic tobacco should display the statement “Organic tobacco does NOT mean a safer cigarette.” Assurance of Voluntary Compliance at 5-6 [on CM/ECF at 33-34], (dated March 1, 2010), filed November 18, 2016 (Doc. 71-1)(ex. F)(“Voluntary Compliance Agreement”).

         Neither the Plaintiffs nor the Defendants allege that Natural American cigarettes are in any way safer than other cigarettes. See Amended Complaint ¶ 59, at 29. One scientific study, according to the Plaintiffs, found that Natural American blue box cigarettes contain the highest level of polycyclic aromatic hydrocarbons[3] of fifty United States cigarette brands tested. See Amended Complaint ¶ 61, at 29 (citing An T. Vu et al., Polycyclic Aromatic Hydrocarbons in the Mainstream Smoke of Popular U.S. Cigarettes, National Center for Biotechnological Information (July 30, 2015) available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4540633/). Also according to the Plaintiffs, the Centers for Disease Control and Prevention found that Natural American cigarettes contain higher concentrations of both cadmium and mercury than the other fifty varieties of United States cigarettes tested.[4] See Amended Complaint ¶ 62, at 30 (citing Mark R. Fresquez, R. Steven Pappas, and Clifford H. Watson, Establishment of Toxic Metal Reference Range in Tobacco from U.S. Cigarettes, J. Analytical Toxicology, 37(5) 298-304 (2013)). Another study evaluated the levels of “free-base” nicotine in United States cigarettes, and the Plaintiffs allege that it determined that Natural American cigarettes has a higher nicotine concentration than Camel, Marlboro, and Winston-brand cigarettes.[5] Amended Complaint ¶ 66, at 31 (citing Pankow, J., Barsanti, K., & Peyton, D., Fraction of Free-Base Nicotine in Fresh Smoke Particulate Matter from the Eclipse Cigarette by 1H NMR Spectroscopy, Chem. Res. in Toxicology 16(1): 23-27 (2003)).

         Although labeled as “additive free, ” the Defendants add menthol in certain varieties of Natural American cigarettes. See Amended Complaint ¶ 68, at 31. Natural American cigarettes are also “flue-cured, ” meaning that the Defendants process the tobacco with heat to secure the sugars, which synthetically lowers the cigarette smoke's pH[6] and makes it easier to inhale. Amended Complaint ¶ 72, at 32. The tobacco in the Defendants' cigarettes is artificially blended and modified, much like other cigarettes in the industry. See Amended Complaint ¶¶ 73-74, at 33. Despite these alterations to the tobacco product, the Natural American cigarettes are labeled “Natural.” Amended Complaint ¶¶ 74-76, at 33.

         PROCEDURAL BACKGROUND

         The Plaintiffs brought thirteen separate actions in eight federal district courts, alleging similar liability theories. See In re Santa Fe Nat. Tobacco Co. Mktg. & Sales Practices Litig., 178 F.Supp.3d 1377, 1378 (U.S. Jud. Pan. Mult. Lit. 2016)(“Transfer Order”).[7] One Plaintiff with an action pending in the District of New Mexico, Ceyhan Haskal, moved for centralization under 28 U.S.C § 1407. See Transfer Order, 178 F.Supp.3d at 1378. Santa Fe Tobacco and Reynolds American opposed centralization, but agreed that the District of New Mexico was an appropriate transferee forum. See Transfer Order, 178 F.Supp.3d at 1378. All responding Plaintiffs agreed on centralization, but disagreed upon the transferee district.[8] See Transfer Order, 178 F.Supp.3d at 1378. The Judicial Panel on Multidistrict Litigation concluded that the actions presented “involve common questions of fact, and that centralization will serve the convenience of the parties, ” and ordered consolidation. Transfer Order, 178 F.Supp.3d at 1378-79. The Panel further concluded that the District of New Mexico was an appropriate transferee district because: (i) Santa Fe Natural Tobacco is headquartered in the District of New Mexico; (ii) key witnesses reside in the District of New Mexico; (iii) four actions were pending in the District of New Mexico; (iv) the Defendants agreed that the District of New Mexico provides a “convenient and accessible location for the geographically dispersed litigation”; and (v) centralizing before the Court allowed the Panel “to assign [the] litigation to an able and experienced jurist who has not had the opportunity to preside over [a multidistrict litigation].” Transfer Order, 178 F.Supp.3d at 1379.

         1. The Motion to Dismiss.

         The Defendants move to dismiss all claims under rule 12(b)(6) of the Federal Rules of Civil Procedure. See MTD at 1. The Defendants marshal ten arguments in favor of full or partial dismissal: (i) the Consent Order preempts the Plaintiffs' claims; (ii) the First Amendment shields the Defendants from liability; (iii) state statutory safe harbors protect the Defendants from the Plaintiffs' unfair and deceptive practice claims; (iv) the unfair and deceptive practice claims fail, because the Defendants' statements do not mislead a reasonable consumer; (v) the unjust-enrichment claims fail, because the Defendants' cigarette advertising is not misleading; (vi) unjust-enrichment is improperly pled, because the Plaintiffs either have a legal remedy or state law otherwise bars the claims; (vii) the Defendants did not breach an express warranty; (viii) the Plaintiffs did not give pre-litigation notice and fail to establish privity; (ix) the Plaintiffs' request for injunctive relief is rendered moot; and (x) the Court does not have specific or general personal jurisdiction over Reynolds America with respect to the Plaintiffs' claims who were not parties to the North Carolina suit. See MTD at 6-80. Before addressing the Defendants' arguments, some context to the Plaintiffs' claims would aid in understanding the issues before the Court. The Plaintiffs allege that the Defendants packaging, labeling, and advertising deceived them in three ways. The three theories of deception are as follows:

(1) The Safer-Cigarette Theory: the Plaintiffs argue that the use of the terms organic, natural, and additive-free mislead tobacco consumers into believing that Natural American cigarettes are safer and healthier. See Amended Complaint ¶¶ 4-8, 47-66, at 2-3, 22-31; MTD at 22-24.
(2) The Menthol Theory: the Plaintiffs argue that, by labeling Natural Americans cigarettes with menthol “additive-free” and “natural, ” the Defendants mislead menthol consumers, because menthol is an additive. See Amended Complaint ¶¶ 10, 67-69 at 3, 31-32; MTD at 24-25.
(3) The Unprocessed-Cigarette Theory: the Plaintiffs argue that, by labeling Natural American cigarettes as Natural, the Defendants mislead consumers into believing that Natural American cigarettes are not subjected to rigorous engineering processes during production. See Amended Complaint ¶¶ 9, 70-74, at 3, 32-33; MTD at 25.

         Turning to the Defendants' arguments, first, the Defendants assert that the Consent Order preempts the Plaintiffs' state law claims premised on the Safer-Cigarette Theory. See MTD at 6-7. According to the Defendants, the Consent Order “authorized Santa Fe [Tobacco]'s use of ‘Additive Free' and all other ‘substantially similar terms' (such as ‘Natural')” in Santa Fe Tobacco's advertisement, as long as it also disclosed in those advertisements that no additives does not mean a safer cigarette. MTD at 6-7.[9] The Defendants conclude that, because the Consent Order authorized the terms, it preempts the Plaintiffs' state claims under the Supremacy Clause. MTD at 8-10 (citing Chamber of Commerce of United States v. Edmondson, 594 F.3d 742, 765 (10th Cir. 2010)).

         The Defendants also declare that the Consent Order is not a “minimum ‘floor' that state law can supplant.” MTD at 14. They argue that the FTC, in making its determination, reconciled “competing interests” -- the speaker's right to make truthful representations versus the consumers' right not to be misled -- and that the Plaintiffs seek, with their state claims, to undercut the balance that the FTC struck. MTD at 14. According to the Defendants, the Consent Order, thus, does not set a floor, but creates a scale that the Supremacy Clause prevents from tipping toward the Plaintiffs. See MTD at 14.

         The Defendants also assert that the FDA's Warning Letter does not undermine their preemption arguments. See MTD at 15. The Defendants note that, the Warning Letter states that Santa Fe Tobacco's advertising language violated the Family Smoking Prevention and Tobacco Control Act, 21 U.S.C. § 387 (“Tobacco Control Act”). See MTD at 15. Nevertheless, the Defendants argue that the Warning Letter does not change the preemption analysis, because the Warning Letter does not state that the terms “Natural” and “Additive-Free” are false or misleading; rather, it requires the Defendants to obtain FDA approval before using those terms. MTD at 17. The Defendants also assert that the Warning Letter cannot overrule the Consent Order, because the Tobacco Control Act cannot reasonably “be construed as limiting or diminishing the authority of the Federal Trade Commission.” MTD at 17 (quoting 21 U.S.C. § 387n(a)(1)). Although they concede that the Tobacco Control Act states that “‘[a]ny advertising that violates' the Act ‘is an unfair or deceptive act or practice, '” the Defendants maintain that the Warning Letter is not a “binding determination” that the Defendants have violated the Tobacco Control Act, nor does it abrogate the Consent Order. MTD at 17 (quoting 21 U.S.C. § 387n(a)(1)).

         Second, the Defendants argue that the First Amendment shields them from liability. See MTD at 20. The Defendants contend that the First Amendment is relevant here, even though it typically protects speakers only from government action, because the First Amendment protects speakers also from state tort suits “that seek to stifle or punish protected speech.” MTD at 20 (citing Snyder v. Phelps, 562 U.S. 443, 451 (2011); Hill v. Pub. Advocate of the U.S., 35 F.Supp.3d 1347, 1357 (D. Colo. 2014)(Daniel, J.)). They then aver that Central Hudson & Gas Electric Corporation v. Public Service Commission of New York, 447 U.S. 557 (1980)(“Central Hudson”) demonstrates that they are shielded from liability, because: (i) their advertising is not misleading; (ii) there is no substantial interest in silencing the Defendants' speech; (iii) silencing the Defendants' speech does not advance a legitimate governmental interest; and (iv) the Plaintiffs' requests are not narrowly tailored. See MTD at 21.

         The Defendants argue that their speech is “lawful” and “not misleading.” MTD at 21. First, they aver that adult cigarette usage is lawful. See MTD at 21 (citing Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 564 (2001)). Second, they argue that the “natural” and “additive-free” labeling is not misleading, given their disclosure that: “No additives in our tobacco does NOT mean a safer cigarette.” MTD at 21 (emphasis in original). Third, they assert that the Plaintiffs' three theories of deception do not demonstrate that the Defendants' speech is inherently misleading. See MTD at 22. They contend that, under established caselaw, the First Amendment does not protect inherently misleading speech, and inherently misleading speech is speech that is incapable of being presented in a non-deceptive way such that it would be misleading under all circumstances. See MTD at 22 (citing Revo v. Disciplinary Bd. of the N.M. S.Ct., 106 F.3d 929, 933 (10th Cir. 1997); Bioganic Safety Brands, Inc. v. Ament, 174 F.Supp.2d 1168, 1181 (D. Colo. 2001)(Babcock, J.)). The Defendants argue that “Natural” and “Additive-Free” can be presented in non-deceptive way, because the FTC-approved disclosure that additive-free cigarettes are not inherently healthier repudiates the inference that Natural American cigarettes are healthier than other cigarettes. MTD at 22-23. The Defendants also argue that it is not inherently misleading to label their menthol cigarettes “additive-free, ” because “consumers are not misled by a product's inclusion of an ingredient that serves as one of its primary distinguishing and desired characteristics.” MTD at 24. They also argue that the “additive-free” labeling is not misleading, because it refers to additive-free tobacco and the menthol is added to the cigarette filters and not to the tobacco. MTD at 24. Finally, they assert that the “Natural” labeling is not misleading, even though the Defendants subject the cigarettes to an engineering process during production, because “Natural” is too expansive a concept to mislead any consumers. MTD at 25-26 (citing Grocery Assoc. v. Sorrell, 102 F.Supp.3d 583 (D. Vt. 2015)(Reiss, C.J.)).

         The Defendants next contend that there is not a substantial interest in silencing their speech, because it is truthful and the Government has no interest in preventing truthful speech. See MTD at 27. They also argue that preventing the Defendants from using “natural” and “additive-free” does not materially advance the Plaintiffs' interest in preventing consumer deception, because the FTC-mandated disclosure already prevents deception, so imposing liability will not “further advance their interest . . . to a material degree.” MTD at 28-29 (emphasis in original). Finally, the Defendants argue that the relief requested is not narrowly tailored, because an additional disclosure would suffice. See MTD at 29-30.

         Third, the Defendants argue that state safe harbors shield them from the Plaintiffs' statutory claims. See MTD at 30. The Defendants argue that the California, Colorado, Florida Count 1, Illinois, Massachusetts, Michigan, New York, Ohio, and Washington claims fail, because federal law -- specifically, the Consent Order -- permits the Defendants' advertising, and the various states' safe harbors foreclose liability for conduct that federal law permits. See MTD at 31-35, 37-39. The Defendants also argue that the New Jersey and North Carolina claims fail, because those states' safe harbors preclude liability for conduct that has been concretely or pervasively regulated, and, according to the Defendants, the Consent Order “deal[t] specifically, concretely, and pervasively” with their advertising. MTD at 35-36, 38.

         Fourth, the Defendants aver that fourteen of the Plaintiffs' nineteen state statutory claims fail, because their advertising is not false or misleading to a reasonable consumer. See MTD at 39-40. The Defendants contend that a reasonable consumer would not believe that Natural American cigarettes are healthier than other cigarettes based on the “Natural” and “Additive-Free” labeling, because the labeling disclaims that their cigarettes are safer than other cigarettes. MTD at 42-46. Regarding the Menthol Theory, the Defendants also argue that “a reasonable consumer . . . could not have been misled into believing that [Natural American] cigarettes labeled ‘menthol' on the package would not contain menthol.” MTD at 46 (emphasis in original). Finally, the Defendants argue that a reasonable consumer would not believe that the tobacco in Natural American cigarettes was unprocessed even though Natural American cigarettes are labeled as “Natural, ” because “virtually all manufactured products undergo some form of processing.” MTD at 47-48 (emphasis in original).

         The Defendants also assert that four of the Plaintiffs' statutory claims fail, because the relevant statutes do not provide relief under these circumstances. See MTD at 49. They contend that: (i) the injunctive relief requested under the Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510, is inappropriate, because injunctive relief requires a likelihood of future harm, and the Plaintiffs admit they will not purchase Natural American cigarettes again; (ii) the Plaintiffs' New Jersey Truth in Consumer Contract Warranty and Notice Act, N.J. Stat. Ann. § 56:12-14 (“TCCWNA”), claim fails, because a predicate act is needed, and there can be no predicate act, because the Defendants' advertising would not mislead a reasonable consumer; (iii) the Ohio Consumer Sales Practice Act, Ohio Rev. Code Ann. § 1345 (“OCSPA”), claim fails, because the Plaintiffs do not allege that they notified the Defendants of their unlawful conduct; and (iv) the Ohio Deceptive Trade Practices Act, Ohio Rev. Code Ann. § 1345.02, (“ODTPA”) claim fails, because that law does not create a private right of action for consumers. See MTD at 50-52.

         Fifth, the Defendants contend that the unjust-enrichment claims fail, because the Plaintiffs have not alleged any misleading conduct. See MTD at 52. As an initial matter, the Defendants argue that the three transferor courts' choice-of-law approaches dictate that the laws of the twelve states where the Plaintiffs purportedly purchased their cigarettes govern the unjust-enrichment analysis. See MTD at 53-54. According to the Defendants, the unjust-enrichment claims fail, because the “Plaintiffs received precisely what they paid for -- cigarettes made with additive-free, natural tobacco -- and so there is no injustice to be remedied.” MTD at 53.

         Sixth, the Defendants argue that ten of the twelve unjust-enrichment claims fail, because the Plaintiffs have an adequate legal remedy -- a state law damages claim. See MTD at 55. The Defendants also argue that the Michigan, New Jersey, North Carolina, and Ohio unjust-enrichment claims fail, because the Plaintiffs do not allege that they directly purchased the Natural Americans from any of the Defendants. See MTD 60-61. The Defendants also argue that the New Jersey unjust-enrichment claim fails, because it sounds in tort, and the New York unjust-enrichment claim fails, because it duplicates the Plaintiffs' statutory claims. See MTD at 62-63.

         Seventh, the Defendants argue that they did not breach an express warranty by selling menthol cigarettes. See MTD at 64. They argue that, under California and New York Law, a breach of an express warranty requires the Plaintiffs to have reasonably relied on a warranty, and the Plaintiffs did not do so here. See MTD at 64. The Defendants also argue that the Plaintiffs' breach-of-express-warranty claims fare no better under Colorado, Florida, Illinois, New Jersey, New Mexico, or North Carolina law, because those states require a court to read the “alleged express warranties” in conjunction with “potentially limiting language.” MTD at 65. They argue that, thus, the “menthol” language “necessarily modified any warranty, ” such as the “Additive-Free tobacco” warranty to mean that “the product, in fact, contains menthol.” MTD at 66.

         Eighth, the Defendants argue that the express warranty claims fail under California, Florida, Illinois, New Mexico, New York, and North Carolina law, because the Plaintiffs did not give the Defendants notice before filing suit. See MTD at 66. The Defendants assert that Florida, Illinois, and New York law preclude the express warranty claims, because “privity is required, ” and the Plaintiffs cannot establish privity. MTD at 67.

         Ninth, the Defendants argue that the Plaintiffs' request for injunctive relief is rendered moot. See MTD at 68. The Defendants maintain that, because they have entered a Memorandum of Agreement with the FDA, see Memorandum of Agreement, under which Santa Fe Tobacco will cease using “additive-free” and “natural” going forward (except for the “Natural” in the “Natural American Spirit” brand name), an injunction is inappropriate, because the Defendants have already undertaken the action that the Plaintiffs have requested. MTD at 68-69.[10] The Defendants aver that the Plaintiffs' requested injunction does not satisfy the mootness doctrine's voluntary-cessation exception, [11] because, if they resumed using “Natural” or “Additive-Free, ” the Defendants would expose themselves to an FDA enforcement action. MTD at 69-70 n.26. The Defendants argue, accordingly, that the Memorandum of Agreement renders “moot[] Plaintiffs' requests for injunctive relief.” MTD at 68.

         Tenth, the Defendants assert that the Court lacks personal jurisdiction over Reynolds American with respect to the five Plaintiffs'[12] claims who were not parties to the North Carolina suit. See MTD at 70. In sum, the Defendants argue that the Court lacks both specific and general personal jurisdiction over Reynolds America. See MTD at 73. Turning first to specific personal jurisdiction, they contend that Reynolds American has not purposefully directed its activities at any of the transferor court states. See MTD at 74. They argue that the Plaintiffs' allegation that Reynolds America is “intimately involved in the marketing, advertising, and overall business development, ” Amended Complaint ¶ 27, at 12, of Natural American cigarettes is conclusory, and that the “mere involvement in nationwide advertising” does not amount to the requisite directed activity, MTD at 74. Turning to general personal jurisdiction, the Defendants say that general personal jurisdiction is proper only in North Carolina, because Reynolds America has no continuous and systematic contacts with any other state. See MTD at 75. Specifically, they contend that Reynolds America “does not do business in any of the transferor States other than North Carolina, does not have any registered agents in any of those States, and does not employ[] any employees in any of those States. . . . Nor does RAI maintain bank accounts in any of those states.” MTD at 75-76. The Defendants also argue that Santa Fe Tobacco's contacts cannot be imputed onto Reynolds America. See MTD at 76. They contend that, to impute a subsidiary's contact onto a parent corporation, the parent company must control the subsidiary's day-to-day activities, and, here, the allegations that Reynolds America “‘exercises control over [Santa Fe's] corporate decisionmaking' and involves itself in Santa Fe's business by treating it as ‘an operating segment'” are conclusory. MTD at 77 (quoting Amended Complaint ¶¶ 34-35, at 13-14)(brackets in MTD). They add that Reynolds American is not involved in Santa Fe Tobacco's day-to-day operations nor is it controlling those operations. See MTD at 78.

         2. The Response.

         The Plaintiffs responded by filing the Plaintiffs' Opposition to Defendants' Motion to Dismiss the Consolidated Amended Class Action Complaint and Incorporated Memorandum of Law, filed April 6, 2017 (Doc. 98)(“Response”). First, they contend that the Consent Order does not impliedly preempt their claim based on the Safer-Cigarette Theory, because: (i) the FTC's governing statute states that “remedies provided in this section are in addition to, and not in lieu of, any other remedy or right of action provided by state or federal law, ” Response at 7, (emphasis omitted)(citing 15 U.S.C. § 57b(e)); and (ii) the Supreme Court rejected the same arguments that the Defendants bring, namely that an FTC Consent Order requiring a disclosure on a tobacco product impliedly preempts a state deceptive practices claim, see Response at 9 (citing Altria Group, Inc. v. Good, 555 U.S. 70, 89 (2008)(“Altria II”)). The Plaintiffs also refute the Defendants' argument that the United States Department of Agriculture's regulations governing entities' use of “organic” preempts their Safer-Cigarette Theory premised on the term “organic.” Response at 15 (citing Segedie v. Hain Celestial Grp., Inc., No. 14-5029, 2015 WL 2168374, at *2-7 (S.D.N.Y. May 7, 2015)(Roman, J.); Jones v. ConAgra Foods, Inc., 912 F.Supp.2d 889, 894-96 (N.D. Cal. 2012)(Breyer, J.); Brown v. Hain Celestial Grp., Inc., No. 11-3082, 2012 WL 3138013, at *6-12 (N.D. Cal. Aug. 1, 2012)(Beeler, J.)).

         The Plaintiffs also aver that the First Amendment does not protect the Defendants from liability. See Response at 16. They argue broadly that dismissing their false and misleading marketing claims is inappropriate on a motion to dismiss as “such a determination [of falsehood] is for the trier of fact.” Response at 16-17. The Plaintiffs also argue that the Central Hudson test does not apply to sellers or manufacturers who lie about a product in advertising. See Response at 18 (citing Fed. Trade Comm'n v. Wellness Support Network, Inc., No. 10-4879, 2014 WL 644749, at *10 (N.D. Cal. Feb. 19, 2014)(Spero, M.J.)). They continue, however, that, if Central Hudson applies, they still satisfy the test. See Response at 18. They argue that, under Central Hudson's first prong, the Defendants' advertising is misleading, so the Defendants' speech “does not merit any First Amendment protection.” Response at 19. The Plaintiffs refute the Defendants' contention that they must show that the Defendants' speech is “inherently misleading, ” because they challenge the statute “as applied” to specific representations to Plaintiffs. Response at 20 (citing John Doe No. 1 v. Reed, 561 U.S. 186, 194 (2010)). The Plaintiffs also argue that, under Central Hudson, the government has a substantial interest in protecting consumers from deceptive business practices. See Response at 21.

         The Plaintiffs next contend that no safe harbors protect the Defendants from liability. See Response at 23. First, they argue that, in Altria II, the Supreme Court determined that “FTC consent orders only ‘enjoin enforcement' of 15 U.S.C. § 45 and should not be construed as authorizing any specific conduct, ” and that “agency nonenforcement of a federal statute is not the same as a policy of approval.” Response at 23-24 (citing Altria II, 555 U.S. at 89-90). They argue that, therefore, the Consent Order “simply enjoined the FTC from enforcing the FTC Act against Defendants so long as they complied with its terms.” Response at 24. The Plaintiffs add that the Consent Order does not provide complete immunity from suit, because they allege both false advertising and false packaging, and the Consent Order applies only to advertising. See Response at 25-26. They also argue, in a similar vein, that the Consent Order does not address the use of “natural” and “organic, ” so the Consent Order cannot permit the Defendants' use of those terms. Response at 26. They contend that the Consent Order's catch-all “substantially similar terms” language does not capture “natural” and “organic, ” because the Consent Order does not list “those two key terms, ” and the exclusion “cannot be an oversight as the terms are literally contained in the names of the products” and the term “natural” was included in the original FTC investigation. Response at 27.[13]

         The Plaintiffs argue that, even if the Consent Order governed the packaging, the Consent Order would not shield the Defendants from liability. See Response at 28. They aver that the Defendants “buried the [required] disclaimer in small text to avoid” consumer attention, flouting the Consent Order's “equal text size requirement”[14] in some instances -- particularly on the packaging. Response at 28. They add that the Defendants did not bold the word “not” on the packaging as the Consent Order commands. Response at 28.

         The Plaintiffs argue that the Consent Order does not trigger any state safe harbors, because it does not permit the Defendants' conduct; rather, the Consent Order does not prohibit it. See Response at 30. The Plaintiffs continue that their statutory claims are meritorious, because the Defendants' advertising and packaging would mislead a reasonable consumer. See Response at 39. First, they aver that, in most of the relevant jurisdictions, a statement's capacity to deceive or mislead is a fact question, inappropriate for a motion to dismiss. See Response at 39-42 (citing e.g., Williams v. Gerber Prods. Co., 552 F.3d 934, 938-39 (9th Cir. 2008); Guidance Endodontics, LLC v. Dentsply Int'l, Inc., 708 F.Supp.2d 1209, 1241 (D.N.M. 2010)(Browning, J.); Foster v. Chattem, Inc., No. 14-0346, 2014 WL 3687129, at *3 (M.D. Fla. July 23, 2014)(Dalton, J.); Biffar v. Pinnacle Foods Grp., LLC, No. 16-0873, 2016 WL 7429130, at *8 (S.D. Ill.Dec. 26, 2016)(Herndon, J.). Second, they argue that reasonable consumers are not required to look beyond a cigarette package's frontal disclosures to uncover the cigarette's safety disclaimer on the package's side. See Response at 42-43. The Plaintiffs continue that, for many jurisdictions, the relevant reasonable consumer test is to analyze the marketing “as a whole” and not to zoom in on one disclaimer. Response at 48. See Response at 46-49.

         Addressing some of the Defendants' state-specific arguments, the Plaintiffs argue that they are entitled to injunctive relief under Illinois law, because there is a “continuing risk to reasonable consumers.” Response at 55. They also aver that, contrary to the Defendants' contention, they are not required to give pre-suit notice under Ohio law, because pre-suit notice is a procedural rule inapplicable in federal court. See Response at 59. They continue that, even if pre-suit notice was required, they satisfy the requirement, because their Amended Complaint provides sufficient written notice. See Response at 60. Responding to the Defendants' argument that the Plaintiffs do not have standing under Ohio law to sue under ODTPA, the Plaintiffs argue that the statute's express language grants them standing and that courts have affirmed that position. See Response at 61 (citing Schumacher v. State Auto Mut. Ins. Co., 47 F.Supp.3d 618, 630-32 (S.D. Ohio 2014)(Spiegel, J.); Bower v. IBM, 495 F.Supp.2d 837, 843 (S.D. Ohio 2004)(Rice, J.)).

         The Plaintiffs continue that they have properly pled their unjust-enrichment claim. See Response at 62.[15] The Plaintiffs contend that the Defendants' argument that the Plaintiffs' available legal remedy bars their unjust-enrichment claim is premature under rule 8(d) at the motion-to-dismiss stage. See Response at 63 (citing In re Dial Complete Mktg. & Sales Practices Litig., No. 11-2263, 2013 WL 1222310, at *8 (D.N.H. March 26, 2013)(McAuliffe, J.)). They add that the Defendants “adequate remedy at law” arguments flout the presumption that state statutes should not be interpreted to displace common-law claims, unless there is specific legislative intent to the contrary. Response at 63. The Plaintiffs also argue that, under the common law for ten relevant states, their unjust-enrichment claims prevail, notwithstanding the Defendants' arguments to the contrary, because: (i) they request equitable relief distinct from a legal remedy; (ii) there was no express contract; (iii) statutory relief's availability does not bar equitable relief; or (iv) dismissal at the motion to dismiss stage is premature. See Response at 63-68. They argue that they have alleged a direct benefit to the Defendants, sufficient to satisfy the unjust-enrichment standard in Michigan, North Carolina, New Jersey, and Ohio, “in the form of a price premium, increased sales and increased market share.” Response at 69. The Plaintiffs add that, contrary to the Defendants' argument that the Plaintiffs unjust-enrichment allegation fails in New Jersey because it sounds in tort, New Jersey law has no such requirement and that, regardless, their claim is viable, “because it could properly be construed as an equitable remedy” under rule 8(a)(3). Response at 70.

         The Plaintiffs also aver that they properly pled their breach-of-express-warranty claims. See Response at 72. They contend that product labels create “actionable express warranties, ” that the Defendants breached an express warranty by adding menthol to their “additive-free” cigarettes, and, alternatively, that dismissal is premature. Response at 72. They also say that the Defendants had adequate pre-litigation notice of the breach-of-express-warranty claims, because their Amended Complaint put the Defendants on notice, the Defendants “have not been prejudiced, and they had an opportunity to cure the defect -- they knew that their claims that their menthol cigarettes are ‘100% Additive Free' are false.” Response at 73 (citing Amended Complaint ¶ 68, at 30). The Plaintiffs add that, even if they did not meet the pre-suit notice requirement, they meet several state law exceptions to the notice requirement. See Response at 74. They argue that: (i) under New York law, no notice is required for suits involving goods that people consume; (ii) under California law, the notice requirement is inapplicable against manufacturers with whom consumers have not dealt; and (iii) under North Carolina and Illinois law, filing a lawsuit meets the notice requirement. See Response at 74-75.

         The Plaintiffs argue that the Memorandum of Agreement does not render moot their injunctive relief request, because the Memorandum of Agreement exists outside the Amended Complaint's four corners. See Response at 76. They also contend that the Memorandum of Agreement does not cover the Plaintiffs' request that the term natural be removed from their packaging and labeling, so injunctive relief cannot be rendered moot. See Response at 76.

         Finally, the Plaintiffs contend that the Court has personal jurisdiction over Reynolds American. See Response at 77. They argue that Reynolds American has substantial involvement in the activities giving rise to their claims. See Response at 78. They contend that: (i) Reynolds American has an integrated system where executives amongst the three Defendants collaborated; (ii) Reynolds American essentially controls Santa Fe Tobacco's operations, and the two entities share assets and board members; (iii) Santa Fe Tobacco's employees are considered Reynolds American employees; and (iv) Reynolds American is involved in and controls Santa Fe Tobacco's advertising campaign. See Response at 78 (citing Amended Complaint ¶¶ 29, 35-36, at 13-14). They conclude that, because of Reynolds American's active participation in its subsidiaries, the Court has “specific personal jurisdiction over [the] parent company” -- Reynolds American. Response at 79.

         3. The Reply.

         On May 30, 2017, the Defendants replied to the Plaintiffs' Response. See Defendants' Reply in Support of Motion to Dismiss the Consolidated Amended Complaint at 1, filed May 30, 2017 (Doc. 107)(“Reply”). The Defendants maintain that the Consent Order preempts the Plaintiffs' Safer-Cigarette Theory, because the Consent Order “authorizes the exact representations at issue here by this exact manufacturer.” Reply at 2 (emphasis in original). They refute that Altria II undermines their argument, because, the Consent Order in this case, unlike the Consent Order in Altria II, “affirmatively permits” the terms at issue by stating that it will not prohibit terms such as natural or additive-free. Reply at 4. They also contend that, in Altria II, the United States of America expressly disavowed any policy authorizing the terms at issue in an amicus brief. See Reply at 5 (citing Brief for the United States as Amicus Curiae Supporting Respondents at 15, No. 07-562, 555 U.S. 70, available at https://goo.gl/6VvJzA). The Defendants also refute that 15 U.S.C. § 57b(e) undercuts their preemption argument, because that statute applies only to FTC rules or an FTC cease-and-desist order and not to Consent Orders under 15 U.S.C. § 45(b). See Reply at 6. The Defendants also state that the Plaintiffs never pled an “organic-based” deception claim, but if they had pled one, such a theory would fail, because the Defendants have complied with regulations under the Organic Food Production Act, 7 U.S.C. § 6501(2), which allow advertising and labeling to have the term organic -- subject to certain conditions. Reply at 9 (citing 7 U.S.C. § 6501(2)).

         Turning to their First Amendment arguments, the Defendants maintain their previous arguments, see Reply at 10-13, and contend that the Plaintiffs' argument that Central Hudson does not apply to false or misleading advertising is flawed, because the Defendants found only one unpublished decision supporting that argument and that decision does not explain why the First Amendment protects commercial speech limitations imposed via government regulation, but leaves exposed the same speech via a lawsuit, see Reply at 11 n.7. The Defendants also argue that the Plaintiffs address only one of Central Hudson's factors. See Reply at 13. They continue that the Plaintiffs' argument as to that one factor is flawed, because the Defendants' speech is not deceptive. See Reply at 13.

         The Defendants' reassert their arguments that state safe harbors shield them from liability, because the Consent Order permits their conduct. See Reply at 14. The Defendants also argue that the term “natural” falls within the Consent Order's purview, because an FTC letter confirms that “natural” is substantially similar to “additive free.” Reply at 15 (citing MTD at 8). The Defendants also assert that, contrary to the Plaintiffs' position, the Court can conclude, on a rule 12(b)(6)

         motion, whether a reasonable consumer would be misled. See Reply at 20 (citing Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013)(per curiam)). They continue that the packaging would not mislead a reasonable consumer, because the terms “natural” and “additive-free” do not, on their face, contradict the package's safety disclosure. Reply at 22. The Defendants also maintain that Santa Fe Tobacco manufactures cigarettes with additive-free tobacco and contends that the Plaintiffs' arguments that the “additive free” label is misleading, because menthol migrates into the tobacco post-production is incorrect as a matter of law, because the Plaintiffs concede that menthol “migration is inevitable.” Reply at 23 (emphasis in original)(citing Response at 52). Responding to state-specific refutations, the Defendants counter that pre-suit notice requirements are substantive law under Erie R. Co. v. Tomkins, 304 U.S. 64 (1938), so Ohio pre-suit notice law binds the Court here. See Reply at 25 (citing Curry v. High Springs Family Practice Clinic & Diagnosis Ctr. Inc., No. 8-0008, 2008 WL 5157683, at *9 (N.D. Fla. Dec. 9, 2008)(Paul, J.)) They also contend that filing a complaint does not satisfy the notice requirement. See Reply at 25.

         Turning to the Plaintiffs' unjust-enrichment claims, the Defendants argue that the Plaintiffs may not plead an unjust-enrichment claim in the alternative to a legal claim. See Reply at 27. First, the Defendants contend that the Plaintiffs' reliance on express-contract cases where the contract's existence was at issue doom their unjust-enrichment-in-the-alternative theory, because those cases do not speak to available statutory remedies. See Reply at 27. Second, the Defendants aver that courts have rejected unjust-enrichment-in-the-alternative theories in similar circumstances. See Reply at 28 (citing In re Ford Tailgate Litig., No. 11-2953, 2014 WL 1007066, at *5 (N.D. Cal. March 12, 2014)(Seeborg, J.)).

         The Defendants also contend that the Plaintiffs failed to give the requisite pre-suit notice for their breach-of-express-warranty claims. See Reply at 34. Regarding state specific statutes, the Defendants argue that general knowledge of general facts giving rise to the lawsuit are insufficient under Illinois law to provide notice. See Reply at 35. They also contend that the exceptions to notice that the Plaintiffs invoke under Illinois, North Carolina, and New York Law are inapplicable, because those exceptions apply only in personal injury cases. See Reply at 35. The Defendants argue that, similarly, California's exception applies only to tort cases and not to contract cases. See Reply at 36.

         Regarding the Plaintiffs' requested injunctive relief, the Defendants note that they have not finalized changes to their label. See Reply at 37-38. The Defendants argue, however, that the requested relief is still rendered moot, because the label changes will occur by December, 2017, “long before this case reaches judgment.” Reply at 38. See Reply at 37-38. Regarding the voluntary-cessation doctrine, the Defendants argue that the Plaintiffs have pointed to no supportable reason to suggest that the Defendants would resume their prior labeling in the future. See Reply at 38. From that premise, the Defendants conclude that the voluntary cessation doctrine is inapplicable. See Reply at 38.

         Finally, the Defendants argue that the Plaintiffs conceded that the Court does not have general personal jurisdiction over Reynolds American. See Reply at 39. They also argue that the Plaintiffs' allegations do not rise to the level needed for specific jurisdiction, because they do not plausibly support that Reynolds American benefitted from some purposive conduct directed at the forum state sufficient to establish consent to the forum's jurisdiction. See Reply at 39. They also argue that the Plaintiffs' cannot impute Santa Fe Tobacco's contacts onto Reynolds American, because Reynolds American does not have control or de facto dominance over Santa Fe Tobacco. See Reply at 39-40. The Defendants argue that there is no exception to the normal jurisdictional rules for tobacco companies. See Reply at 40. They conclude that, therefore, the Court does not have personal jurisdiction over Reynolds American. See Reply at 40.

         4. The June 9, 2017 Hearing.

         The Court held a hearing on June 9, 2017. See Transcript of Motion Proceedings (taken June 9, 2017), filed June 16, 2017 (“June Tr.”). Taking each argument in turn, the Defendants began by arguing that FTC Consent Orders, even in light of Altria II, still have preemptive effect. See June Tr. at 15:11-17 (Biersteker). The Defendants maintain, as they argued in their Reply, that Altria II applies only to the consent order at issue in Altria II and not to consent orders generally. See June Tr. at 15:24-16:5 (Biersteker). Responding to the Court's observation that “the Supreme Court is so divided on preemption these days, ” June Tr. at 16:18-19 (Court), the Defendants noted that the Supreme Court focused on only the FTC cease and desist order at issue in Altria II, and did not “enunciate some sort of blanket rule that consent decrees cannot be afforded preemptive effect, ” June Tr. at 16:25-17:1 (Biersteker). See June Tr. at 16:22-18:11 (Biersteker). The Defendants also argued that, in contrast to the Altria II consent order, the parties have abided by the Consent Order at issue here, the FTC has not questioned the Consent Order's mandated disclosure, and the Consent Order here, unlike Altria II's consent order, has language permitting the advertising language. See June Tr. at 18:12-18 (Biersteker); id. at 19:17-20:19 (Biersteker). The Court pressed that Consent Orders change based on different administrations, and it queried how a federal judge could choose, in a principled manner, which Consent Orders preempted state law and which did not. See June Tr. 22:22-23:10 (Court); id. at 23:16-23 (Court). The Defendants responded that, because federal regulatory action is generally given preemptive effect, the principled response would be to scrutinize Consent Orders on a case-by-case basis to determine whether the regulatory agency has considered the conduct at issue. See June Tr. at 24:4-12 (Biersteker).

         The Plaintiffs responded that caselaw clearly signals that the Consent Order does not preempt their claims. See June Tr. at 25:2-26:6 (Reese)(citing Pueblo of Pojoaque v. New Mexico, 214 F.Supp.3d 1028 (D.N.M. 2016)(Browning, J.)). They further averred that the Consent Order does not apply to the Defendants' cigarette labeling, because the Consent Order's text does not mention labeling, and the FTC's regulatory structure forbade them from regulating labeling when the Consent Order was entered. See June Tr. at 29:1-7 (Reese). The Plaintiffs also pressed their argument from briefing that 15 U.S.C. § 57b(e) precludes consent decrees from barring other litigation. See June Tr. at 31:20-32:13 (Reese).

         The Defendants responded that the Plaintiffs' statutory interpretation is flawed, because a different section governs FTC consent decrees. See June Tr. at 33:10-13 (Biersteker). The Defendants continued that, although the United States Court of Appeals for the First Circuit, in Good v. Altria, 501 F.3d 29 (1st Cir. 2007), adopted reasoning similar to the Plaintiffs' reasoning here, the Supreme Court did not adopt that reasoning in Altria II, so the Court should disregard the First Circuit's reasoning. See June Tr. at 34:14-23 (Biersteker). The Defendants added that the First Circuit's reasoning -- and the Plaintiffs' -- is flawed, because it ignores the statutory text. See June Tr. at 33:24-34-9 (Biersteker). The Defendants also argued that a reasonable consumer would know to look at the side of a cigarette pack for warnings given that the Surgeon General's warning on the side of a pack is adequate under the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331-1341 (“FCLAA”). See June Tr. at 35:11-24 (Biersteker); 15 U.S.C. § 1331.

         Turning full-force to the reasonable consumer arguments, the Defendants contended that the Court can consider whether the contested advertising language is deceptive or misleading as a matter of law under rule 12(b)(6), and the Court agreed. See June Tr. at 39:4-9 (Court, Schultz). The Defendants maintained their position from their briefing that no reasonable consumer would believe that additive-free menthol cigarettes would not contain menthol. See June Tr. at 40:19-23 (Schultz).

         The Court responded with an analogy and asked whether a reasonable consumer would be deceived if Coca-Cola bottle's front labeling stated that there was no sugar in the product, but the back labeling stated there was sugar. See June Tr. at 42:5-15 (Court). The Defendants replied that the important difference between its case and the Court's analogy is the particular wording on Natural American's labeling; they averred that the language “menthol-flavored” and “the ingredients are organic tobacco and menthol” would alert “a consumer who chooses a menthol cigarette.” June Tr. at 42:16-25 (Schultz). The Defendants again stressed that the one-hundred-percent additive-free tobacco labeling is true, because the menthol is “part of the cigarette, ” but “not part of the tobacco, ” June Tr. at 43:15-16 (Schultz), yet conceded that, when the cigarette is smoked, inevitably the menthol “is part of and touches the tobacco, ” id. at 43:19-23 (Court, Schultz). See June Tr. at 43:6-8 (Schultz).

         The Plaintiffs responded that there is a body of caselaw ruling that a reasonable consumer is not required to turn around a label to verify whether a representation on the front is truthful. See June Tr. at 51:25-52:7 (Wolchansky). The Plaintiffs also argued that consumers may not know much about menthol. See June Tr. at 79:18-24 (Wolchansky). The Plaintiffs added that, even if the Court accepts the Defendants' argument that tobacco is separate from the menthol while the cigarette remains unsmoked, it is still disingenuous to suggest that the tobacco is additive-free when, “the minute that you light that cigarette, ” the menthol, the chemicals, and “everything in that cigarette goes into your mouth and into your lungs.” June Tr. at 53:18-54:4 (Wolchansky). The Plaintiffs explained that menthol is an “organic molecule . . . derived from mint, ” although it “it can [also] be synthesized chemically in a lab, ” June Tr. at 64:13-16 (Schlesinger), it “acts as an anesthetic, ” id. at 56:18 (Schlesinger), “numbs the throat, ” id. at 56:23-24 (Schlesinger), and makes the smoke “inhalable, ” id. at 57:4 (Schlesinger). See June Tr. at 56:15-57:9 (Schlesinger). The Plaintiffs also argued that the Honorable Judge Gladys Kessler of the United States District Court for the District of Columbia already determined that Natural American's use of “the term ‘natural' is unlawful, ” because it suggests that it “confer[s] health benefits, ” and the Plaintiffs ask the Court to “enforce her order.” June Tr. at 58:8-21 (Schlesinger). See United States v. Philip Morris USA, Inc., 449 F.Supp.2d 1 (D.D.C. 2006)(Kessler, J.).

         The Plaintiffs argued that the natural, additive-free, and organic advertising misleads consumers into believing Natural Americans are safer or healthier. See June Tr. at 65:19-24 (Wolchansky). They contended that the disclaimer “does not mean that the front of the pack isn't misleading, ” June Tr. at 67:5-6 (Wolchansky), because the disclaimer is “buried, ” id. at 67:25 (Wolchansky), as “tiny text on the side of the pack, ” id. at 67:22-23 (Wolchansky), underneath the barcode and is phrased in a double negative, see June Tr. at 67:18-68:15 (Wolchansky). The Plaintiffs added that the FDA's Warning Letter[16] buttresses their position, because it tells the Defendants that “Natural and Additive-free represents explicitly and/or implicitly that the products or their smoke do not contain or are free from a substance and/or that the products present a lower risk of tobacco-related disease or are less harmful.” June Tr. at 69:3-14 (Wolchansky)(quoting Warning Letter at 2). The Plaintiffs continued that, in addition to the Warning Letter, peer-reviewed articles conclude that consumers believe that Natural American cigarettes are healthier based on the terms natural, organic, and additive-free. See June Tr. at 70:19-22 (Wolchansky); id. at 72:23-73:4 (Wolchansky). See also June Tr. at 74:17-23 (Wolchansky)(noting that 63.9 percent of Natural American smokers think that Natural American cigarettes are less harmful than other brands); id. at 76:14-20 (Wolchansky)(noting that sixty percent of consumers believe that removing additives from cigarettes make them less dangerous to smoke). The Plaintiffs argued that the caselaw the Defendants cite is inapposite, because, in those cases, the disclaimer is prominent, unlike Natural American's disclaimer. See June Tr. at 82:6-19 (Wolchansky).

         Returning to the Menthol Theory, the Court, again emphasized its concerns that the one-hundred-percent additive-free labeling misleads consumers. See June Tr. at 87:5-6 (Court). It also posited that the “100% Additive-Free” and “Natural Tobacco” labeling is not on one line, but two lines, and that the Plaintiffs might argue that the labeling conveys two separate messages. June Tr. at 87:12-22 (Court). The Defendants disagreed and argued that the labeling conveys one message. See June Tr. at 87:23-88:1 (Schultz). The Court also noted that the package's disclaimer focuses only on the advertising's additive term “and doesn't really address the issue about the natural” term. June Tr. at 89:23-24 (Court). See June Tr. at 89:9-24 (Court). It further noted that the advertising disclaimers diverge from the packaging disclaimers. See June Tr. at 91:2-10 (Court). The Defendants rejoined that the FTC Consent Order does not require a packaging disclaimer, so, by inserting any disclaimer at all, they went beyond FTC's requirements. See June Tr. at 91:23-92:3 (Schultz). The Defendants added that the Amended Complaint does not address the FTC disclaimer, and argued that a reasonable consumer looks at both the advertising labels and the disclaimer. See June Tr. at 92:13-93:3 (Schultz). They also argued that the disclaimer does not contradict the natural or additive-free language, but “helps to amplify the meaning.” June Tr. at 94:4-9 (Schultz). They continued that “natural” is a word with no meaning under the reasonable consumer standard, because “it can have different meanings in different contexts, ” so it cannot have a “safer cigarette” meaning that the Plaintiffs ascribe to it. June Tr. at 96:1-9 (Schultz).

         The Court disagreed and thought that natural had some meaning, otherwise corporations would not use it on products, but it was not convinced that the natural term necessarily signals to a reasonable consumer that the cigarettes are safer. See June Tr. at 100:19-101:5. The Plaintiffs argued that, even if natural does not have a precise and fixed meaning, it still suggests to a reasonable consumer that Natural American cigarettes are not produced through human alteration or engineering. See June Tr. at 102:16-20 (Schlesinger). The Plaintiffs persisted that the natural labeling conveys a message that the Defendants wrap up the tobacco from the plants and sell the product as-is, and that additives associated with tobacco products “are gone” from Natural American cigarettes. See June Tr. at 102:21-103:10 (Schlesinger). The Court responded that natural's meaning might turn on the product sold; for example, a natural marshmallow might be different from a natural orange. See June Tr. at 123:15-25 (Court). The Plaintiffs rejoined that the “natural here means safer and healthier, and it also means that it is manufactured in a way that is natural, ” but “the truth is, it's not.” June Tr. at 124:1-4 (Wolchansky). The Plaintiffs conceded that a reasonable consumer does not think that natural means that the cigarettes are hand rolled, see June Tr. at 124:16-17 (Wolchansky), but argued that whether flue curing the cigarettes or packing the cigarettes with nicotine is a “natural” processes “is a question of fact for a jury, ” June Tr. at 124:19-20 (Wolchansky). The Plaintiffs explained that, in its natural state, tobacco or cigarettes are uninhalable; it is only when the cigarettes are flue cured that cigarettes become inhalable. See June Tr. at 128:8-20 (Schlesinger). The Plaintiffs acknowledged that there is no defined meaning for what a natural manufacturing process is, but emphasized that no reasonable consumer believes that flue curing and the other processes, which the Defendants use to make their cigarettes, are natural. See June Tr. at 126:14-25 (Wolchansky). The Court concluded that it was inclined to let the Menthol Theory proceed, but to dismiss the other two theories. See June Tr. at 133:10-21 (Court).

         Turning to the common-law claims, the Defendants argued that rule 8(b) does not allow the Plaintiffs to plead unjust enrichment in the alternative, because a federal rule of civil procedure cannot alter state substantive law. See June Tr. at 144:14-18 (Biersteker). They explained that equity fills in the gaps that legal remedies leave, and that, because the Plaintiffs have an available legal remedy from the state statutes, unjust enrichment is improperly pled. See June Tr. at 145:8-21 (Biersteker). The Defendants concluded that there is no dispute that legal statutory remedies exist. See June Tr. at 146:7-8 (Biersteker).

         5. The Supplemental Brief.

         On June 30, 2017, the Plaintiffs filed a supplemental brief addressing several issues raised during the June Hearing. See Plaintiffs' Supplemental Brief in Opposition to Defendants' Motion to Dismiss and Consolidated Amended Class Action Complaint and Incorporated Memorandum of Law at 1, filed June 30, 2017 (Doc. 117)(“Supp. Brief”). They assert three arguments: (i) whether a reasonable consumer is misled is typically a fact question that survives a motion to dismiss; (ii) the Defendants' disclaimer arguments are misplaced; and (iii) they have adequately pled their complaint to survive the rule 12(b)(6) standard. See Supp. Brief at 1-4. First, they assert that the Court's function is not to weigh the evidence, but to assess whether the Plaintiffs have plausibly stated a claim. See Supp. Brief. at 4 (citing Walker v. THI of N.M. at Hobbs Ctr., 803 F.Supp.2d 1287, 1330 (D.N.M. 2011)(Browning, J.)). They also aver that “the unanimous weight of case law authority holds that use of terms ‘natural, ' ‘organic, ' or ‘additive-free' do mislead consumers into believing that cigarettes so labeled are safer or healthier.” Supp. Brief at 5 (citing Disc. Tobacco & Lottery, Inc. v. United States, 674 F.3d 509, 536 (6th Cir. 2012); United States v. Phillip Morris USA, Inc., 449 F.Supp.2d 1, 27 (D.D.C. 2006)(Kessler, J.); United States v. Philip, 477 F.Supp.2d 191, 197-98 (D.D.C. 2007)(Kessler, J.); Hunter v. Philip Morris USA Inc., 364 P.3d 439 (Alaska 2015)).

         Second, the Plaintiffs argue that consumers are misled notwithstanding the disclaimer. See Supp. Brief at 11 (citing Amended Complaint ¶ 52, at 25). They contend that, under longstanding false advertising law, representations must be viewed in the context of the packaging or advertising as a whole, see Supp. Brief. at 11 (citing Penrod Ricard USA, LLC v. Bacardi U.S.A., Inc., 653 F.3d 241, 250 (4th Cir. 2011)), and “how consumers view these claims . . . as a whole . . . are questions of fact not appropriate for resolution at this stage, ” Supp. Brief at 11. They also argue that the disclaimer is so obscured on the package that it ineffectively warns a reasonable consumer. See Supp. Brief. at 12. Finally, they argue that a reasonable consumer is “impervious to health warnings and disclaimers, ” because Natural American smokers had “certainly seen and ignored health disclaimers on the packs of other brands” before switching, so the Court “should give little, if any, weight” to the disclaimers in deciding the Motion to Dismiss. Supp. Brief at 13.

         Third, the Plaintiffs clarify that they do not argue that natural is misleading “simply because manufacturing steps must be taken to put their tobacco in cigarette form”; rather, they argue that the Defendants manufacturing processes do not conform to a reasonable consumers' understanding of the natural term. Supp. Brief at 13. They maintain that the term natural is misleading, because Natural Americans undergo flue-curing processing, artificial blending, and engineering to boost nicotine. See Supp. Brief at 14 (citing Amended Complaint ¶¶ 63-66, 72-73, at 30, 32-33). They conclude, thus, that it is plausible that a reasonable consumer would believe that Natural American cigarettes were less chemically enhanced and less nicotine-laced than other cigarettes. See Supp. Brief at 14.

         6. The Supplemental Response.

         The Defendants responded to the Supp. Brief on July 14, 2017. See Defendants' Response to Plaintiffs' Supplemental Brief at 1, filed July 14, 2017 (Doc. 124)(“Supp. Resp.”). The Defendants argue that the Court can, and must, rule on the reasonable consumer arguments on a Motion to Dismiss. See Supp. Resp. at 2-3 (citing Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013)(per curiam)(ruling that it is “well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer”)). The Defendants also state that the administrative and academic findings on the Defendants' advertising do not bind the Court on a motion to dismiss, and many of their findings are inapposite, because the reports did not consider the warning disclosure or are not final determinations. See Supp. Resp. at 6-7. The Defendants also argue that the Court can disregard survey data as immaterial where a reasonable consumer would acknowledge that the advertising is not false or misleading. See Supp. Resp. at 8. The Defendants aver that their disclaimer still wards against the Plaintiffs' deceptive arguments as to the natural term, even though the disclaimer does not mention natural, because the disclaimer makes clear that the cigarettes are not safer than any other cigarette. See Supp. Resp. at 10. The Defendants conclude that the Plaintiffs' Amended Complaint does not support the refined processing theory that the Plaintiffs assert in their Supp. Brief. See Supp. Resp. at 11.

         7. The July Hearing.

         The Court held a hearing on July 20, 2017. See Transcript of Motion Proceedings (taken July 20, 2017), filed August 10, 2017 (Doc. 126)(“July Tr.”). The Defendants argued that, as to four states' laws, the Plaintiffs' unjust-enrichment claims fail, because the Plaintiffs do not properly allege that the advertising conveys a direct benefit to the Defendants. See July Tr. at 35:6-17 (Biersteker). They add that unjust enrichment is a “gap filler, ” and it is likely that those four states' laws narrow the unjust-enrichment remedy, “because numerous legal remedies already exist for consumers who have suffered as a result of deceptive advertising.” July Tr. at 11-17 (Biersteker). The Plaintiffs rejoined that, as to Michigan, the direct benefit element is no longer required. See July Tr. at 37:10-18 (Wolchansky)(citing In re Automotive Parts Antitrust Litig., 29 F.Supp.3d 982, 1021 (E.D. Mich. 2014)(Battani, J.)). They also countered that there are cases from the other three states that similarly obviate the direct-benefit requirement. See July Tr. at 38:11-40:1 (Wolchansky)(citing Stewart v. Beam Global Spirits & Wine, Inc., 877 F.Supp.2d 192 (D.N.J. 2012)(Hillman, J.); Paika v. General Motors Corp., No. 07-0892, 2009 WL 275761 (E.D. Cal. Feb. 5, 2009)(Darmell, J.)).

         Regarding the pre-suit notice requirement for the express warranty claims, the Defendants admitted that the Amended Complaint alleges that the Plaintiffs performed “all conditions precedent to defendants' liability, ” July Tr. at 41:3-6 (Biersteker)(quoting Amended Complaint ¶ 456, at 104), but the Defendants contended that the Amended Complaint's allegation is “legally insufficient, ” July Tr. at 41:13-14 (Biersteker). The Defendants added that filing the Amended Complaint is insufficient for pre-suit notice in Illinois, North Carolina, and New York. See July Tr. at 43:11-14 (Biersteker). They argue that the Plaintiffs' cases to the contrary are personal injury cases, so are inapplicable here. See July Tr. at 43:14-15 (Biersteker); id. at 44:12-18 (Biersteker). The Plaintiffs countered that their Amended Complaint serves as pre-suit notice as do the FDA and FTC letters on these issues, see July Tr. at 48:12-13 (Wolchansky), and that “there is unquestionably knowledge here, ” July Tr. at 49:25-50:1 (Wolchansky).

         Turning to the privity requirement, the Defendants admitted that three states grant an exception to the privity requirement, see July Tr. at 45:14-15 (Biersteker), but the Defendants averred that courts routinely dismiss express warranty claims “based on product packaging and labels, ” which involve economic loss, as here, July Tr. at 45:15-18 (Biersteker). The Plaintiffs rejoined that recent federal Florida cases have denied motions to dismiss for breaches of express warranties on similar facts. See July Tr. at 50:2-52:4 (Wolchansky)(citing Hill v. Hoover, 899 F.Supp.2d 1259 (N.D. Fla. 2012)(Mickle, J.); Smith v. Wm. Wrigley Jr. Co., 663 F.Supp.2d 1336 (S.D. Fla. 2009)(Cohn, J.); Garcia v. Kashi, 43 F.Supp.3d 1359 (S.D. Fla. 2014)(Leonard, J.)). The Plaintiffs continued that other courts provide similar authority for their position. See July Tr. at 52:11-53:23 (Wolchansky)(citing Mednick v. Precor, Inc., No. 14-4231, 2014 WL 6474915 (N.D. Ill. Nov. 13, 2014)(Leinenweber, J.); Baldwin v. Star Scientific, Inc., 78 F.Supp.3d 724 (N.D. Ill. 2015)(Pallmeyer, J.); Mahoney v. Endo Health Solutions, Inc., No. 15-9841, 2016 U.S. Dist. LEXIS 94732 (S.D.N.Y. July 20, 2016)(Cote, J.)).

         Turning to the injunctive relief requested, the Defendants conceded that the Memorandum of Agreement does not cover their use of “natural” in Natural American's brand name, so the requested injunctive relief, as to that specific use of natural, is not rendered moot. July Tr. at 55:4-56:24 (Biersteker). The Plaintiffs also argued that the Memorandum of Agreement is not a “final document, ” so it does not render moot their request for injunctive relief. July Tr. at 59:20-21 (Wolchansky). They continued that the FDA was recently sued over Santa Fe Tobacco's use of natural, and that litigation places the Memorandum of Agreement in jeopardy. See July Tr. at 60:3- 13 (Wolchansky); id. at 60:16-20 (Wolchansky); id. at 60:24-61:4 (Wolchansky). The Defendants rejoined that the Memorandum of Agreement “is final, ” July Tr. at 62:23-24 (Biersteker), but conceded that, if the pending lawsuit against the FDA is successful, “it would vacate the memorandum, ” July Tr. at 64:3-4 (Biersteker). They also asserted, however, that the Defendants will not “risk alienating the FDA” by contravening the Memorandum of Agreement. July Tr. at 66:6-11 (Biersteker).

         The Court asked the Defendants whether, in light of the Plaintiffs' supplemental argumentation that, based on studies that terms, such as natural, mislead many consumers, it should reconsider its earlier inclination that the Plaintiffs' safer-cigarette theory is flawed. See July Tr. at 67:2-16 (Court); id. at 27:25-68:8 (Court). The Defendants countered that the studies, which the Plaintiffs present, do not stand for the proposition that the Plaintiffs suggest that they support. See July Tr. at 68:13-19 (Schultz). The Plaintiffs rejoined that, although they cite only one study in their Amended Complaint, there are numerous studies supporting their position and that they will file those studies with the Court. See July Tr. at 74:7-16 (Wolchansky).

         8. Continued Oral Argument.

         On July 21, 2017, the Plaintiffs filed a Notice of Filing Hearing Exhibit, filed July 21, 2017 (Doc.125), which includes their Continued Oral Argument on Defendants' Motion to Dismiss, see Continued Oral Argument on Defendant's Motion to Dismiss, filed July 21, 2017 (Doc. 125-1)(“Cont. Arg.”). The Plaintiffs argue that a 2016 study supports their argument that Natural American cigarettes' disclaimers ineffectively warn consumers. See Cont. Arg. at 3 (citing Misperceptions, at 1-4). The Plaintiffs explain that the study concludes that many Natural American cigarette smokers believe that Natural American cigarettes are less harmful than other cigarettes, and, thus, the disclaimer ineffectively corrects consumers' perceptions. See Cont. Arg. At 3-4 (noting that 63.9 percent of Natural American cigarette smokers believe their brand is less harmful). The Plaintiffs also cite a 2007 study for the proposition that “consumers frequently conclude ‘natural' cigarettes must be healthier, and tobacco companies have understood this for decades.” Cont. Arg. at 4 (citing Patricia McDaniel & Ruth E. Malone, I Always Thought they were all Pure Tobacco: American Smokers' Perceptions of “Natural” Cigarettes and Tobacco Industry Advertising Strategies, 16 Tobacco Control e7 (2007), available at http://www.ncbi.nlm.gov/pmc/articles/PMC2807204/). They continue that a 2004 survey demonstrates that sixty percent of smokers think that removing additives makes cigarettes safer. See Cont. Arg. at 5 (citing K.M. Cummings, Are Smokers Adequately Informed About the Health Risks of Smoking and Medicinal Nicotine?, Nicotine & Tobacco Research 6(3): S333-340 (2004)). They also aver that Reynolds American market research confirms that consumers believe that the additive-free descriptor conveys a safer or healthier message, and that a 2016 study reveals that the “100% Additive Free” descriptor communicates lower health risks to consumers. Cont. Arg. at 5. The Plaintiffs argue that, despite the healthier message that consumers perceive from Natural American's natural and additive-free descriptors, studies show that Natural American cigarettes have higher ash and heavy-metal levels than other cigarettes. See Cont. Arg. at 6.

         The Plaintiffs also argue that several cases, not previously cited, support their position. See Cont. Arg. at 3, 10-19. For example, the Plaintiffs cite to Discount Tobacco City & Lottery, Inc., 674 F.3d 509 (6th Cir. 2012), for the proposition that “naturalists prefer” products with organic and natural labeling, “because they believe the product confer health advantages.” Cont. Arg. at 3 (citing Discount Tobacco City & Lottery, Inc., 674 F.3d at 536). They also argue that the United States Court of Appeals for the Seventh Circuit has ruled that a literal falsehood is not required for liability to attach. See Cont. Arg. at 10 (citing Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 761 (7th Cir. 2014)(“[The district court] appears to assume that a package cannot be misleading if it does not contain literal falsehoods. But that is not the law.”)(alterations in original)). The Plaintiffs also argue that four federal district courts have determined that a natural descriptor misleads a reasonable consumer. See Cont. Arg. at 12-19 (citing Martin v. Tradewinds Beverage Co., No. 16-9249, 2017 U.S. Dist. LEXIS 72698 (C.D. Cal. Apr. 27, 2017)(Gutierrez, J.); In re Frito-Lay N. Am., Inc., No. 12-2413, 2013 WL 4647512 (E.D.N.Y. Aug. 29, 2013)(Mauskopf, J.); Burton v. Hodgson Mill, Inc., No. 16-1081, 2017 WL 1282882 (S.D. Ill. Apr. 6, 2017)(Reagan, J.); Segedie v. Hain Celestial Grp. Inc., No. 14-5029, 2015 WL 2168374 (S.D.N.Y. May 7, 2015)(Roman, J.)).

         Regarding their unjust-enrichment claims, the Plaintiffs argue that their allegations are viable in every state for various reasons. See Cont. Arg. at 23. They argue that: (i) it is premature to dismiss their unjust-enrichment claims at the rule 12(b)(6) stage in Massachusetts, Michigan, North Carolina, and Washington; (ii) their claims satisfy the requisite elements in New Jersey and New York; (iii) their Colorado claim may proceed as a restitution-based remedy; (iv) no New Mexico statute expressly bars their New Mexico claim; and (v) Ohio law allows the Plaintiffs to plead their unjust-enrichment claim in the alternative. See Cont. Arg. at 23. They also argue that, under New Jersey, North Carolina, and Ohio unjust-enrichment law, they do not need to show that the Defendants receive a direct benefit. See Cont. Arg. at 26-28 (citing Metric Constructors, Inc. v. Bank of Tokyo-Mitsubishi, Ltd., 72 Fed.Appx. 916, 921 (4th Cir. 2003)(unpublished); Stewart v. Beam Global Spirits, 877 F.Supp.3d 192, 200 (D.N.J. 2012)(Hillman, J.)). Finally, the Plaintiffs assert that the privity requirement does not bar their breach-of-express-warranty claims in Florida, New York, and Illinois, because the requirement is relaxed in packaging and economic damage cases. See Cont. Arg. at 32-35.

         9. Supplemental brief on the Memorandum of Agreement.

         On November 29, 2017, the Defendants filed a supplemental brief concerning the Memorandum of Agreement. See Santa Fe Natural Tobacco Company's Supplemental Brief in Support of Motion to Dismiss Responding to the Court's Question Regarding Status of Agreement with FDA Regarding NAS Product Labeling and Advertising, filed November 29, 2017 (Doc. 136)(“Supp. Brief on Mem.”). The Defendants argue that they complied with the Memorandum of Agreement and are no longer utilizing additive-free and natural on their labeling, advertising, and promotional material except for natural in the Natural American brand name. See Supp. Brief on Mem. ¶ 6, at 3. They conclude that the Memorandum of Agreement's paragraph two does not require them to remove or recall products that still have the terms natural and additive-free on them. See Supp. Brief on Mem. ¶ 7, at 3.

         LAW REGARDING RULE 12(B)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). The Complaint's sufficiency is a question of law, and, when considering a rule 12(b)(6) motion, a court must accept as true all well-pled factual allegations in the complaint, view those allegations in the light most favorable to the nonmoving party, and draw all reasonable inferences in the plaintiff's favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)(“[O]nly if a reasonable person could not draw . . . an inference [of plausibility] from the alleged facts would the defendant prevail on a motion to dismiss.”); Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)(“[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pled factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.”)(citing Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006)).

         A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. at 678 (2009)(citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678. “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. at 555.

         To survive a motion to dismiss, a plaintiff's complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at 556). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complainant must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). The United States Court of Appeals for the Tenth Circuit has stated:

“[P]lausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)(citations omitted)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570). See Gallegos v. Bernalillo Cty. Board of Cty. Comm'rs, __ F.Supp.3d __, 2017 WL 4402422, at *9 (D.N.M. 2017)(Browning, J.).

         “When a party presents matters outside of the pleadings for consideration, as a general rule ‘the court must either exclude the material or treat the motion as one for summary judgment.'” Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017)(quoting Alexander v. Oklahoma, 382 F.3d 1206, 1214 (10th Cir. 2004)). There are three limited exceptions to this general principle: (i) documents that the complaint incorporates by reference, see Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); (ii) “documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity, ” Jacobsen v. Deseret Book Co., 287 F.3d at 941; and (iii) “matters of which a court may take judicial notice, ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. at 322. See also Brokers' Choice of America, Inc. v. NBC Universal, Inc., 861 F.3d at 1103 (holding that the district court did not err by reviewing a seminar recording and a TV episode on a rule 12(b)(6) motion, which were “attached to or referenced in the amended complaint” “central to [the plaintiff's] claim, ” and “undisputed as to their accuracy and authenticity”). “[T]he court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000), abrogated on other grounds by McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001).

         In Gee v. Pacheco, 627 F.3d 1178 (10th Cir. 2010), the defendants “supported their motion with numerous documents, and the district court cited portions of those motions in granting the [motion to dismiss].” 627 F.3d at 1186. The Tenth Circuit held that “[s]uch reliance was improper” and that, even if “the district court did not err initially in reviewing the materials, the court improperly relied on them to refute Mr. Gee's factual assertions and effectively convert the motion to one for summary judgment.” Gee v. Pacheco, 627 F.3d at 1186-87. In other cases, the Tenth Circuit has emphasized that, “[b]ecause the district court considered facts outside of the complaint, however, it is clear that the district court dismissed the claim under Rule 56(c) and not Rule 12(b)(6).” Nard v. City of Okla. City, 153 Fed.Appx.. 529, 534 n.4 (10th Cir. 2005)(unpublished).[17]In Douglas v. Norton, 167 Fed.Appx.. 698 (10th Cir. 2006)(unpublished), the Tenth Circuit addressed an untimely filed charge with the Equal Employment Opportunity Commission -- which the Court analogized to a statute of limitations -- and concluded that, because the requirement was not jurisdictional, the district court should have analyzed the question under rule 12(b)(6), and “because the district court considered evidentiary materials outside of Douglas' complaint, it should have treated Norton's motion as a motion for summary judgment.” 167 Fed.Appx.. at 704-05.

         The Court has previously ruled that, when a plaintiff references and summarizes statements from defendants in a complaint for the purpose of refuting the statements in the complaint, the Court cannot rely on documents the defendants attach to a motion to dismiss which contain their un-redacted statements. See Mocek v. City of Albuquerque, No. Civ. 11-1009, 2013 WL 312881, at *50-51 (D.N.M. Jan. 14, 2013)(Browning, J.). The Court reasoned that the statements were neither incorporated by reference nor central to the plaintiff's allegations in the complaint, because the plaintiff only cited the statements to attack their reliability and truthfulness. See 2013 WL 312881, at *50-51. The Court has also previously ruled that, when determining whether to toll a statute of limitations in an action alleging fraud and seeking subrogation from a defendant, the Court may not use interviews and letters attached to a motion to dismiss, which evidence that a plaintiff was aware of the defendant's alleged fraud before the statutory period expired, in the Court's ruling. See Great Am. Co. v. Crabtree, No. 11-1129, 2012 WL 3656500, at *3, *22-23 (D.N.M. Aug. 23, 2012)(Browning, J.). The Court determined that the documents did not fall within any of the Tenth Circuit's exceptions to the general rule that a complaint must rest on the sufficiency of its contents alone, as the complaint did not incorporate the documents by reference, or refer to the documents. See 2012 WL 3656500, at *22-23; Mocek v. City of Albuquerque, No. 11-1009, 2013 WL 312881, at *50 (D.N.M. 2013)(Browning, J.)(refusing to consider statements that were not “central to [the Plaintiff's] claims”).

         On the other hand, in a securities class action, the Court has ruled that a defendant's operating certification, to which plaintiffs refer in their complaint, and which is central to whether the plaintiffs' adequately alleged a loss, falls within an exception to the general rule, so the Court may consider the operating certification when ruling on the defendant's motion to dismiss without converting the motion into one for summary judgment. See Genesee Cty. Emps.' Retirement Sys. v. Thornburg Mortg. Secs. Trust 2006-3, 825 F.Supp.2d 1082, 1150-51 (D.N.M. 2011)(Browning, J.); Mata v. Anderson, 760 F.Supp.2d 1068, 1101 (D.N.M. 2009)(Browning, J.)(relying on documents outside of the complaint because they were “documents that a court can appropriately view as either part of the public record, or as documents upon which the Complaint relies, and the authenticity of which is not in dispute”); S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1217-18 (D.N.M. 2013)(Browning, J.)(considering, on a motion to dismiss, electronic mail transmissions referenced in the complaint as “documents referred to in the complaint, ” which are “central to the plaintiff's claim” and whose authenticity the plaintiff did not challenge).

         LAW REGARDING JUDICIAL NOTICE OF DOCUMENTS WHEN RULING ON A MOTION TO DISMISS

         Rule 201 of the Federal Rules of Evidence allows a court to, at any stage of the proceeding, take notice of “adjudicative” facts that fall into one of two categories: (i) facts that are “generally known within the territorial jurisdiction of the trial court;” or (ii) facts that are “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b), (f). “Adjudicative facts are simply the facts of the particular case.” United States v. Wolny, 133 F.3d 758, 764 (10th Cir. 1998)(quoting Advisory Committee Notes to rule 201). A court has discretion to take judicial notice of such facts, regardless whether requested. See Fed.R.Evid. 201(c). On the other hand, if a party requests that the court take judicial notice of certain facts, and supplies the necessary information to the court, judicial notice is mandatory. See Fed.R.Evid. 201(d). Also, if the parties timely request an opportunity to be heard, the Court must grant such an opportunity “as to the propriety of taking judicial notice and the tenor of the matter noticed.” Fed.R.Evid. 201(e). That judicial notice may be taken during any stage of the judicial proceeding includes the motion to dismiss stage. See 21 B C. Wright & K. Graham, Jr., Fed. Prac. & Proc. Evid. § 5110, at 294 & n.17 (2d ed. 2005). Moreover, while ordinarily, a motion to dismiss must be converted to a motion for summary judgment when the court considers matters outside the Complaint, see Fed.R.Civ.P. 12(d), matters that are judicially noticeable do not have that effect, see Duprey v. Twelfth Judicial Dist. Court, No. 08-0756, 2009 WL 2482171, at *7 (D.N.M. July 27, 2009)(Browning, J.)(citing Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 n.1 (10th Cir. 2004)). Also, when considering a motion to dismiss, “the court is permitted to take judicial notice of its own files and records, as well as facts which are a matter of public record.” Van Woudenberg v. Gibson, 211 F.3d 560, 568 (10th Cir. 2000) abrogated on other grounds, McGregor v. Gibson, 248 F.3d 946, 955 (10th Cir. 2001). The documents judicially noticed, however, should not be considered for the truth of the matters asserted therein. See Tal v. Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006). The Court has previously judicially noticed news publications and public filings with the Securities and Exchange Commission. See S.E.C. v. Goldstone, 952 F.Supp.2d at 1219-20; In re Thornburg Mortg., Inc. Securities Litig., 2009 WL 5851089, at *3-4. See also Gallegos v. Bernalillo Cty. Bd. of Cty. Comm'rs, __ F.Supp.3d __, 2017 WL 4402422, at *18-19 (D.N.M. 2017)(Browning, J.)(ruling that the Court may take judicial notice of state court orders); A.M ex rel. Youngers v. New Mexico Dep't of Health, 117 F.Supp.3d 1220, 1232 n.6 (D.N.M. 2015)(Browning, J.).

         LAW REGARDING PREEMPTION

         Article VI, clause 2, of the Constitution provides that the United States of America's laws “shall be the Supreme Law of the Land; . . . any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Consistent with the Supremacy Clause, the Supreme Court has “long recognized that state laws that conflict with federal law are ‘without effect.'” Altria II, 555 U.S. at 75 (quoting Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). The Supreme Court has summarized the following situations in which preemption is likely to be found:

Pre-emption may be either expressed or implied, and is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose. Absent explicit pre-emptive language, we have recognized at least two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it, and conflict pre-emption, where compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

Gade v. Nat'l Solid Wastes Mgmt. Assoc., 505 U.S. 88, 98 (1992).

         As noted, preemption may be express or implied. See Gade v. Nat'l Solid Wastes Mgmt. Assoc., 505 U.S. at 98. When faced with express preemption -- where a statute expressly states that it preempts certain areas of state law -- a court must determine the scope of the preemption that Congress intended. See Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)(stating that “the purpose of Congress is the ultimate touch-stone in every pre-emption case”). “Congress may indicate preemptive intent through a statute's express language or through its structure and purpose.” Altria II, 555 U.S. at 77. When the preemption clause's text is susceptible to more than one plausible reading, courts ordinarily “accept the reading that disfavors pre-emption.” Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 449 (2005). Preemption arguments are analyzed under rule 12(b)(6), 12(c), or 56. See Fisher v. Halliburton, 667 F.3d 602, 609 (5th Cir. 2012); Harris v. Kellog Brown & Root Servs., Inc., 724 F.3d 458, 464 n.1 (3d Cir. 2013).[18]

         Determining express preemption's scope entails scrutinizing the statutory text in light of two presumptions. First,

[i]n all pre-emption cases, and particularly in those in which Congress has legislated . . . in a field which the States have traditionally occupied, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.

Medtronic, Inc. v. Lohr, 518 U.S. at 485. Second, “[t]he purpose of Congress is the ultimate touchstone in every pre-emption case.” Medtronic, Inc. v. Lohr, 518 U.S. at 485.

Congress' intent, of course, primarily is discerned from the language of the preemption statute and the statutory framework surrounding it. Also relevant, however, is the structure and purpose of the statute as a whole, as revealed not only in the text, but through the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law.

Medtronic, Inc. v. Lohr, 518 U.S. at 486.

         Implied conflict preemption is found when it is impossible for a private party to comply with both state and federal requirements, see English v. General Elec. Co., 496 U.S. 72, 78-79 (1990), or where state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, ” Hines v. Davidowitz, 312 U.S. 52, 67 (1941). “Pre-emptive intent may also be inferred if the scope of the statute indicates that Congress intended federal law to occupy the legislative field, or if there is an actual conflict between state and federal law.” Hines v. Davidowitz, 312 U.S. at 67 (citing Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995)).

         Obstacle preemption is one form of implied preemption. Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 373 (2000)(holding that preemption is appropriate where the challenged state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”); Pharm. Research and Mfrs. of Am. v. Walsh, 538 U.S. 644, 679 (2003)(Thomas, J., concurring)(“Obstacle pre-emption turns on whether the goals of the federal statute are frustrated by the effect of the state law.”). The Supreme Court instructed that, in obstacle preemption cases, “there is no federal pre-emption in vacuo, without a constitutional text or a federal statute to assert it.” P.R. Dep't of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 503 (1988). See Gade v. Nat'l Solid Wastes Mgmt. Assoc., 505 U.S. at 98. A reviewing court must still “examine the explicit statutory language and the structure and purpose of the statute.” Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138 (1990). In 2000, the Supreme Court decided Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000), which held, in a five-to-four decision, that a federal regulation which permitted, but did not require, airbags to be installed in passenger vehicles preempted claims that a car was defective because it lacked an airbag. See 529 U.S. at 874. The majority found: “The rule of state tort law for which petitioners argue would stand as an ‘obstacle' to the accomplishment of [the federal regulation's] objective. And the statute foresees the application of ordinary principles of preemption in cases of actual conflict. Hence, the tort action is pre-empted.” 529 U.S. at 886. Justice Stevens, in dissent, expressed a desire to eliminate obstacle preemption. He argued that the presumption against preemption

[s]erves as a limiting principle that prevents federal judges from running amok with our potentially boundless (and perhaps inadequately considered) doctrine of implied conflict pre-emption based on frustration of purposes -- i.e., that state law is preempted if it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

529 U.S. at 907-08 (Stevens, J., dissenting).

         The Supreme Court has begun to back away from finding implied preemption based on an alleged conflict with the purposes underlying federal regulations. In 2003, the Supreme Court issued a unanimous decision in Sprietsma v. Mercury Marine, 537 U.S. 51 (2002), rejecting implied conflict preemption of state law claims that a boat engine was defective because it lacked a propeller guard. See 537 U.S. at 70. In so doing, the Supreme Court considered and rejected an argument that the Coast Guard's decision not to adopt a regulation requiring propeller guards impliedly preempted state-law claims, which inflicted liability for lack of a propeller guard. See 537 U.S. at 65. It explained:

The decision in 1990 to accept the subcommittee's recommendation to take no regulatory action left the law applicable to propeller guards exactly the same as it had been before the subcommittee began its investigation. Of course, if a state common-law claim directly conflicted with a federal regulation promulgated under the Act, or if it were impossible to comply with any such regulation without incurring liability under state common law, pre-emption would occur. This, however, is not such a case.

537 U.S. at 65.

         In Altria II, the Supreme Court again considered the implied preemption doctrine and rejected the defendants' obstacle-preemption argument that the FCLAA, preempted a similar state act, Maine's Unfair Practices Act, Me. Rev. Stat. Ann., Tit. 5, § 207 (2008). See 555 U.S. at 90-91.

         In Altria II, the plaintiffs filed suit against defendant cigarette manufactures for deceptively marketing their Marlboro and Cambridge Light cigarettes as containing lower tar and nicotine to convey that their light cigarettes were less harmful than regular cigarettes. See 555 U.S. at 73. The Supreme Court concluded that the FCLAA, which forbids state law from requiring or prohibiting language with respect to cigarette advertising and promotion, presented no obstacle to the plaintiffs' lawsuit, because the federal law ultimately regulated warning labels, and did not regulate false or misleading statements. See 555 U.S. at 82-83. The Supreme Court also considered whether an FTC guidance statement, which noted that “a factual statement of the tar and nicotine content . . . would not violate the FTC Act, ” impliedly preempted the Plaintiffs' claims. 555 U.S. at 87. The Supreme Court contemplated and rejected the cigarette manufacturers' argument that the FTC's statement “authorized them to use descriptors” such as “light or low tar, ” because the FTC statements did not require that cigarette manufacturers disclose their tar and nicotine yields, and the United States “Government itself disavows any policy authorizing the use of light and low tar descriptors.” 555 U.S. at 88. Moreover, the Supreme Court determined that an FTC consent order that prevents the cigarette manufacturers from using “light” and “low tar” descriptors, unless they are accompanied “by a clear and conspicuous disclosure of the cigarettes' tar and nicotine content” does not preempt the plaintiffs' claims, because “the decree only enjoined conduct, ” and “a consent order is in any event only binding on the parties to the agreement.” 555. U.S. at 589 n.13. The Supreme Court concluded, thus, that federal law and regulations did not preempt the plaintiffs' state-law claims. See 555 U.S. at 90.

         In Wyeth v. Levine, 555 U.S. 555 (2009), six Justices of the Supreme Court, including Justices Breyer and Kennedy, who joined in the majority decision in Geier v. Am. Honda Motor Co. rejected the plaintiff's two implied preemption arguments -- impossibility preemption and obstacle preemption. See Wyeth v. Levine, 555 U.S. at 581. The Supreme Court held that

it is not impossible for Wyeth to comply with its state and federal law obligations and that Levine's common-law claims do not stand as an obstacle to the accomplishment of Congress' purposes in the [Federal Food, Drug, and Cosmetic Act, 21 U.S.C.A. §§ 301, 321, 331-337, 341-350, 361-364, and 381-399; 21 C.F.R. § 201.80(e)(“FDCA”)].

Wyeth v. Levine, 555 U.S. at 581. In so ruling, Justice Stevens, writing for the majority, narrowly limited Geier v. Am. Honda Motor Co. to its facts, noting that the decision in that case is based on the substantive regulation's “complex and extensive” history at issue. 555 U.S. at 566. The Supreme Court rejected obstacle preemption, stating: “If Congress thought state-law suits posed an obstacle to its objectives, it surely would have enacted an express pre-emption provision at some point during the FDCA's 70-year history.” 555 U.S. at 609. Justice Stevens quoted Justice O'Connor's explanation in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 (1989): “The case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to stand by both concepts and to tolerate whatever tension there is between them.” Wyeth v. Levine, 555 U.S. at 575 (quoting Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. at 166-67). Of particular import for the current status of implied obstacle preemption is Justice Thomas' concurring opinion in Wyeth v. Levine, in which he wrote:

I write separately, however, because I cannot join the majority's implicit endorsement of far-reaching implied pre-emption doctrines. In particular, I have become increasingly skeptical of this Court's “purposes and objectives” pre-emption jurisprudence. Under this approach, the Court routinely invalidates state laws based on perceived conflicts with broad federal policy objectives, legislative history, or generalized notions of congressional purposes that are not embodied within the text of federal law. Because implied pre-emption doctrines that wander far from the statutory text are inconsistent with the Constitution, I concur only in the judgment.

555 U.S. at 583 (Thomas, J., concurring in the judgment). Justice Thomas continued:

Under the vague and potentially boundless doctrine of purposes and objectives preemption . . . the Court has pre-empted state law based on its interpretation of broad federal policy objectives, legislative history, or generalized notions of congressional purposes that are not contained within the text of federal law . . . Congressional and agency musings, however, do not satisfy the Art. I, § 7 requirements for enactment of federal law and, therefore, do not pre-empt state law under the Supremacy Clause.

555 U.S. at 587. Justice Thomas emphasized that, when analyzing the federal statutes' or regulations' preemptive effect, “[e]vidence of pre-emptive purpose must be sought in the text and structure of the provision at issue” to comply with the Constitution. 555 U.S. at 588 (citing CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993)).[19]

         Moreover, the Supreme Court has put renewed emphasis on the presumption against preemption. See Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 449 (2005). “In areas of traditional state regulation, [the Supreme Court] assume[s] that a federal statute has not supplanted state law unless Congress has made such an intention clear and manifest.” Bates v. Dow Agrosciences, LLC, 544 U.S. at 449. If confronted with two plausible interpretations of a statute, the court has “a duty to accept the reading that disfavors pre-emption.” Bates v. Dow Agrosciences, LLC, 544 U.S. at 449. See Wyeth v. Levine, 555 U.S. at 565; Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 518 (1992)(plurality opinion). In Arizona v. United States, 567 U.S. 387 (2012), the Supreme Court once again emphasized the importance of clear Congressional intent when applying obstacle preemption. See 567 U.S. at 398-99. The Supreme Court struck down provisions of an Arizona immigration law that would penalize aliens who sought, or engaged in, unauthorized employment, because it “would interfere with the careful balance struck by Congress with respect to unauthorized employment of aliens.” 567 U.S. at 406. With Justice Kagan taking no part in the consideration or decision of the case, writing for a five-to-three majority, which included Chief Justice Roberts and Justices Ginsburg, Breyer, and Sotomayor, Justice Kennedy wrote: “The correct instruction to draw from the text, structure, and history of [the Immigration Reform and Control Act of 1986, 8 U.S.C. § 1101] is that Congress decided it would be inappropriate to impose criminal penalties on aliens who seek or engage in unauthorized employment.” 567 U.S. at 406. The Supreme Court ruled that Congressional intent was clear; Congress had considered and rejected penalizing aliens who sought unauthorized employment. See 567 U.S. at 405. Federal immigration law therefore preempted the Arizona law that would have penalized aliens seeking unauthorized employment, because it would have created a penalty that Congress had clearly and intentionally omitted. See 567 U.S. at 407.

         The Tenth Circuit has recognized federal preemption of state law in three categories: (i) when a federal statute expressly preempts state law (“express preemption”); (ii) where Congress intends to occupy a field (“field preemption”); and (iii) to the extent that a state law conflicts with a federal law (“conflict preemption”). Colo. Dept. of Pub. Health and Env't., Hazardous Materials and Waste Mgmt. Div. v. United States, 693 F.3d 1214, 1222 (10th Cir. 2012). As the defendant in Colo. Dept. of Pub. Health and Env't., Hazardous Materials and Waste Mgmt. Div. v. United States, the United States invoked only conflict preemption to dismiss Colorado's claims against it. See 693 F.3d at 1222. “To avoid conflict preemption, ‘it is not enough to say that the ultimate goal of both federal and state law is the same. A state law also is pre-empted if it interferes with the methods by which the federal statute was designed to reach this goal.” Chamber of Commerce v. Edmondson, 594 F.3d 742, 769 (10th Cir. 2010)(quoting Int'l Paper Co. v. Ouellette, 479 U.S. 481, 494 (1987)(alterations, citation omitted)). In Colo. Dept. of Pub. Health and Env't., Hazardous Materials and Waste Mgmt. Div. v. United States, the state of Colorado created a schedule for the United States to follow in the destruction of hazardous waste stored in the state, in an attempt to prohibit the storage of hazardous waste within the state. See 693 F.3d at 1223. The Tenth Circuit held that the state statute creating this schedule conflicted with a federal statute, which mandated a deadline for the destruction of the materials. See 693 F.3d at 1224. The Tenth Circuit reasoned that allowing Colorado to set a deadline for the destruction of the materials would impede the flexibility with which Congress had intended in its deadline. See 693 F.3d at 1224. Because the Colorado deadline would interfere with the method that Congress had intended for the waste's disposal, the Tenth Circuit concluded that the state law is in conflict with the federal law, and therefore, that the federal law preempts Colorado's schedule. See 693 F.3d at 1224.

         LAW REGARDING DIVERSITY JURISDICTION AND ERIE

         Under Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938)(“Erie”), a federal district court sitting in diversity applies “state law with the objective of obtaining the result that would be reached in state court.” Butt v. Bank of Am., N.A., 477 F.3d 1171, 1179 (10th Cir. 2007). Accord Mem. Hosp. v. Healthcare Realty Trust Inc., 509 F.3d 1225, 1229 (10th Cir. 2007). The Court has held that if a district court exercising diversity jurisdiction cannot find a Supreme Court of New Mexico “opinion that [governs] a particular area of substantive law . . . [the district court] must . . . predict how the Supreme Court of New Mexico would [rule].” Guidance Endodontics, LLC v. Dentsply Int'l., Inc., 708 F.Supp.2d 1209, 1224-25 (D.N.M. 2010)(Browning, J.). “Just as a court engaging in statutory interpretation must always begin with the statute's text, a court formulating an Erie prediction should look first to the words of the state supreme court.” Peña v. Greffet, 110 F.Supp.3d 1103, 1132 (D.N.M. 2015)(Browning, J.).[20] If the Court finds only an opinion from the Court of Appeals of New Mexico, the Court “certainly may and will consider the Court of Appeal[s'] decision in making its determination, [but] the Court is not bound by the Court of Appeal[s'] decision in the same way that it would be bound by a Supreme Court decision.” Mosley v. Titus, 762 F.Supp.2d at 1332 (noting that where the only opinion on point is “from the Court of Appeals, [] the Court's task, as a federal district court sitting in this district, is to predict what the Supreme Court of New Mexico would do if the case were presented to it”)(citing Wade v. EMCASCO Ins. Co., 483 F.3d 657, 666 (10th Cir. 2007)(explaining that, “[w]here no controlling state decision exists, the federal court must attempt to predict what the state's highest court would do, ” and that, “[i]n doing so, it may seek guidance from decisions rendered by lower courts in the relevant state”)).[21] The Court may also rely on Tenth Circuit decisions interpreting New Mexico law. See Anderson Living Trust v. WPX Energy Prod., LLC, 27 F.Supp.3d at 1243 & n.30.[22] Ultimately, “the Court's task is to predict what the state supreme court would do.” Wade v. EMCASCO Ins. Co., 483 F.3d at 666. Accord Mosley v. Titus, 762 F.Supp.2d at 1332 (citation omitted); Rimbert v. Eli Lilly & Co., 577 F.Supp.2d 1174, 1188-89 (D.N.M. 2008)(Browning, J.)(quoting Wade v. EMCASCO Ins. Co., 483 F.3d at 665-66).

         LAW REGARDING ERIE AND THE RULES ENABLING ACT

         “In diversity cases, the Erie doctrine instructs that federal courts must apply state substantive law and federal procedural law.” Racher v. Westlake Nursing Home Ltd. P'ship, 871 F.3d 1152, 1162 (10th Cir. 2017)(“Racher”). “If a federal rule of civil procedure answers the question in dispute, that rule governs our decision so long as it does not ‘exceed[] statutory authorization or Congress's rulemaking power.'” Racher, 871 F.3d at 1162 (quoting Shady Grove Orthopedic Assocs. v. Allstate Ins. Co, 559 U.S. 393, 398 (2010)(“Shady Grove”)). “When faced with a choice between a state law and an allegedly conflicting federal rule, ” the Tenth Circuit “follow[s] the framework described by the Supreme Court in Shady Grove, as laid out by Justice Stevens in his concurring opinion.” Racher, 871 F.3d at 1162. “First, the court must decide whether the scope of the federal rule is sufficiently broad to control the issue before the court, thereby leaving no room for the operation of seemingly conflicting state law.” Racher, 871 F.3d at 1162 (citations and quotations omitted). There is a conflict between federal and state law if there is a “direct collision” that is “unavoidable, ” but there is no collision if the state and federal rules “can exist side by side . . . each controlling its own sphere of coverage.” Racher, 871 F.3d at 1163 (citations omitted). If there is no direct collision, “there is no need to consider whether the federal rule is valid, and instead, the analysis must proceed under Erie.” Racher, 871 F.3d at 1163. If there is a direct collision, a court must follow the federal rule if it is a valid exercise of the Supreme Court's authority pursuant to the Rules Enabling Act, i.e., it must “not abridge, enlarge or modify a substantive right.” 28 U.S.C. § 2072(b). See Racher, 871 F.3d at 1163-64. A state law is substantive if after examining “the language and policy of the rule in question . . . the primary objective is directed to influencing conduct through legal incentives, ” and a state law is procedural if the law's purpose is to “achiev[e] fair, accurate, and efficient resolutions of disputes.” Sims v. Great American Life Ins. Co., 469 F.3d 870, 883 (10th Cir. 2006). See Leon v. FedEx Ground Package Sys., Inc., 313 F.R.D. 615, 641 (D.N.M. 2016)(Browning, J.). The Tenth Circuit recently added: “If a state law ‘concerns merely the manner and means' by which substantive rights are enforced, it is procedural, but if its application would ‘significantly affect the result of litigation, it is substantive.'” Racher, 871 F.3d at 1164 (quoting Guaranty Trust Co. v. York, 326 U.S. 99, 109 (1945)).

         LAW REGARDING SEVERANCE UNDER RULE 21

         A district court may sever a case under Rule 21 to “transfer one action while retaining jurisdiction over the other.” Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1519 (10th Cir. 1991)(citing Wyndham Assoc. v. Bintliff, 398 F.2d 614, 618 (2d Cir.1968)). Courts are mindful of judicial efficiency concerns, however, and might not sever and transfer a case when doing so results in two venues hearing virtually the same case based on the same set of facts. See, e.g., Gallery House, Inc. v. Yi, 587 F.Supp. 1036, 1039-40 (N.D.Ill.1984)(“When the most efficient administration of justice in a copyright infringement action compelled the continuation of the action against both defendants in a single forum, severance of the claim against one defendant as to whom transfer would have been permissible was inappropriate.”).

[T]he court must weigh carefully whether the inconvenience of splitting the suit outweighs the advantages to be gained from the partial transfer [and] should not sever if the defendant over whom jurisdiction is retained is so involved in the controversy to be transferred that partial transfer would require the same issue to be litigated in two cases.

Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148 (5th Cir.1984), overruled on other grounds by In re Air Crash Disaster Near New Orleans, La.. on July 9, 1982, 821 F.2d 1147 (5th Cir.1987). When the granting of a motion to sever and transfer claims would require two separate sets of discovery proceedings with regard to events surrounding a single [event], and when the moving defendants were alleged to have acted singly and in concert with other defendants in the commission of securities law violations, severance prior to the completion of discovery was denied. Sec. & Exchange Comm'n v. Nat'l Student Mktg. Corp., 360 F.Supp. 284, 296 (D.D.C. 1973)(Parker, J.).

         LAW REGARDING THE FIRST AMENDMENT

         “Congress shall make no law . . . abridging the freedom of speech.” U.S. Const. amend. I. This clause -- the Free Speech Clause -- may act as a shield to liability in instances where otherwise illegal or unlawful conduct implicates a party's freedom of speech. See Marsh v. Alabama, 326 U.S. 501, 509 (1946)(ruling that the Free Speech clause shielded a Jehovah's witness who distributed religious material on a company town's sidewalk from criminal trespass charges). “It is, of course, commonplace that the constitutional guarantee of free speech is a guarantee only against abridgment by government, federal or state.” Hudgens v. N.L.R.B, 424 U.S. 507, 513 (1976). State action, thus, is typically a prerequisite for First Amendment protections. See Hudgens v. N.L.R.B, 424 U.S. at 520-21.

         1. The First Amendment and State Action.

         For most of American history, enforcing the common law was not thought to implicate state action. See Daniel J. Solove & Neil M. Richards, Rethinking Free Speech and Civil Liability, 109 Colum. L. Rev. 1650, 1656 (2009). In Coppage v. Kansas, 236 U.S. 1, 17 (1915), the Supreme Court ruminated:

[I]t is self evident that, unless all things are held in common, some persons must have more property than others, it is from the nature of things impossible to uphold freedom of contract and the right of private property without at the same time recognizing as legitimate those inequalities of fortune that are the necessary result of the exercise of those rights.

Coppage v. Kansas, 236 U.S. at 17 overruled in part Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 187 (1941). After the New Deal, the state action doctrine underwent a radical transformation, and the Supreme Court ruled that various judicial actions amounted to state action where, previously, those actions likely would not have. See Shelley v. Kraemer, 334 U.S. 1, 18-19 (1948)(ruling that judicial enforcement of racially restrictive covenants is state action); New York Times Co. v. Sullivan, 376 U.S. 254, 265 (1964)(holding that state adjudication of a libel lawsuit is state action); Cohen v. Cowles Media Co., 501 U.S. 663, 668 (1991)(“Our cases teach that the application of state rules of law in state courts in a manner alleged to restrict First Amendment freedoms constitutes ‘state action'”). In Shelley v. Kraemer, the Supreme Court explained:

The short of the matter is . . . the action of the States to which the [Fourteenth] Amendment has reference, includes action of state courts and state judicial officials. Although, in construing the terms of the Fourteenth Amendment, differences have from time to time been expressed as to whether particular types of state action may be said to offend the Amendment's prohibitory provisions, it has never been suggested that state court action is immunized from the operation of those provisions simply because the act is that of the judicial branch of the state government.

334 U.S. at 18. Thus, as the Supreme Court has recently reaffirmed, the Free Speech Clause “can serve as a defense in state tort suits.” Snyder v. Phelps, 562 U.S. 443, 451 (2011). See N.A.A.C.P. v. Claiborne Hardware Co., 458 U.S. 886 n.51 (1982)(“Although this is a civil lawsuit between private parties, the application of state rules of law by the Mississippi state courts in a manner alleged to restrict First Amendment freedoms constitutes ‘state action' under the Fourteenth Amendment.”)

         The state action doctrine as applied to judicial enforcement of statutory and common-law claims has limits. See Solove & Richards, Rethinking Free Speech and Civil Liability, 109 Colum. L. Rev. at 1664. For example, the Supreme Court has limited the same state action rationale in the property-law context. See Hudgens v. N.L.R.B., 424 U.S. at 513; Lloyd Corp., Ltd. v. Tanner, 407 U.S. 551, 570 (1972). In Hudgens v. N.L.R.B., the Supreme Court considered whether the First Amendment protected union members picketing in a privately owned shopping center from a threat of criminal trespass charges. See Hudgens v. N.L.R.B., 424 U.S. at 508. In considering that issue, the Supreme Court explained:

It is, of course, a commonplace that the constitutional guarantee of free speech is a guarantee only against abridgement by government, federal or state. Thus, while statutory or common law may in some situations extend protection or provide redress against a private corporation or person who seeks to abridge the free expression of others, no such protection or redress is provided by the Constitution itself.

Hudgens v. N.L.R.B., 424 U.S. at 513 (citation omitted). In ruling that the First Amendment did not apply, the Supreme Court emphasized that: “In addressing this issue, it must be remembered that the First and Fourteenth Amendments safeguard the rights of free speech and assembly by limitations on State action, not on action by the owner of private property used nondiscriminatorily for private purposes only.” Hudgens v. N.L.R.B., 424 U.S. at 519 (quoting Lloyd Corp., Ltd. v. Tanner, 407 U.S. at 567). See Central Hardware Co. v. N.L.R.B., 407 U.S. 539, 547 (1972)(“The First and Fourteenth Amendments are limitations on state action, not action by the owner of private property used only for private purposes.”). The Supreme Court concluded, thus, that the First Amendment offered no protection to the picketers, because the shopping center was a private entity and not “the functional equivalent of a municipality.” Hudgens v. N.L.R.B., 424 U.S. at 520.

         The Supreme Court has also stated that private party conduct may be deemed state action when the “conduct allegedly causing the deprivation of a federal right may be fairly attributable to the State.” Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937 (1982). Whether the conduct may in fact be “fairly attributed” to the state requires a two-part inquiry. “First, the deprivation must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the state or by a person for whom the State is responsible.” Lugar v. Edmondson Oil Co., Inc., 457 U.S. at 937. “Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor.” Lugar v. Edmondson Oil Co., Inc., 457 U.S. at 937. See West v. Atkins, 487 U.S. 42, 48 (1988)(explaining that, to state a claim under § 1983, the plaintiff must show: (i) deprivation of a right that the federal constitution or federal laws secure; and (ii) that a person acting under color of state law caused the deprivation).

         In Lugar v. Edmondson Oil Co., Inc., the Supreme Court explained that the two prongs merge when the claim is “directed against a party whose official character is such as to lend the weight of the State to his decisions, ” whereas they remain distinct when analyzing the private parties' conduct. 457 U.S. at 937. The Lugar v. Edmondson Oil Co., Inc. test's first prong -- that the deprivation of a right is attributable to the state -- is satisfied when “the authority of state officials . . . put the weight of the State behind [the] Defendant's private decision.” 457 U.S. at 940. The Supreme Court, in Lugar v. Edmondson Oil Co., Inc., further instructed that the second prong, identification of a defendant as a state actor, may arise, “because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the state.” 457 U.S. at 937.

         In Lugar v. Edmondson Oil Co., Inc., the Supreme Court determined that the plaintiff's allegation that the defendants unlawfully deprived the plaintiff of his property without due process under state law failed to state a claim under 42 U.S.C. § 1983. See 457 U.S. at 940. The Supreme Court also held that the plaintiff's claim alleging that the private parties had invoked a state statute maliciously or without valid grounds did not give rise to state action. See 457 U.S. at 940. Instead, that claim amounted to nothing more than the private misuse or abuse of a state statute. See 457 U.S. at 940-41.

         For a private individual to be acting under color of state law, the deprivation of a federal right “must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the state or by a person for whom the State is responsible, ” and “the party charged with the deprivation must be a person who may fairly be said to be a state actor . . . because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the State.” Lugar v. Edmondson Oil Co., 457 U.S. at 937.

Congress did not, in using the term “under the color of state law, ” intend to subject private citizens, acting as private citizens, to a federal lawsuit whenever they seek to initiate a prosecution or seek a remedy involving the judicial system. To hold otherwise would significantly disregard one purpose of the state action requirement, which is to “preserve[ ] an area of individual freedom by limiting the reach of federal law and federal judicial power.” Lugar, 457 U.S. at 936. . . . Instead, in enacting § 1983, Congress intended to provide a federal cause of action primarily when the actions of private individuals are undertaken with state authority. See Id. . . . Thus, absent more, causing the state, or an arm of the state, to initiate a prosecution or serve process is insufficient to give rise to state action.

How v. City of Baxter Springs, 217 Fed.Appx.. 787, 793 (10th Cir. 2007)(unpublished).

         The Tenth Circuit has described the determination of state action as “particularly fact-sensitive, so the circumstances must be examined in their totality.” Marcus v. McCollum, 394 F.3d 813, 819 (10th Cir. 2004). According to the Tenth Circuit, “[t]he Supreme Court has counseled us that the state action inquiry, although a legal determination to be made by the court, [see Gilmore v. City of Montgomery, 417 U.S. 556, 570 (1974), ] requires the ‘sifting [of] facts and weighing [of] evidence.'” Phelps v. Wichita Eagle-Beacon, 886 F.2d 1262, 1271 (10th Cir.1989)(quoting Burton v. Wilmington Parking Auth., 365 U.S. 715, 722(1961)). In Gilmore v. City of Montgomery, the Supreme Court ruled that, although it was the Court's role to determine whether the use of zoos, museums, parks, and other recreational facilities by private school groups and private non-school organizations “involved government so directly in the actions of those users as to warrant court intervention on constitutional grounds, ” the factual record before the Supreme Court “[did] not contain sufficient facts upon which to predicate legal judgments of this kind.” 417 U.S. at 570.

         On the other hand, leaving the determination of state action to the jury has shown to be ill-advised. The cases in which the acts of private entities have been held to constitute state action or to be under color of law, and cases in which they have not, tend to be distinguished “by fine shadings in the sometimes complex interrelationships that develop between the state and private bodies.” Adams v. Vandemark, 787 F.2d 588, 1986 WL 16606, at *2 (6th Cir.1986)(unpublished). In Adams v. Vandemark, the United States Court of Appeals for the Sixth Circuit reviewed a jury instruction from the United States District Court for the Eastern District of Michigan, instructing the jury on when to find state action. 1986 WL 16606, at *1. The Sixth Circuit concluded that the few words that were given to the jury on when to find state action “gave the jury little to guide it in making its determination on this crucial element of the claim for relief.” 1986 WL 16606, at *2. The Sixth Circuit noted that the application of the state action test is a “very difficult and complex question[], ” and, “[t]o the extent a jury is to decide upon the proper factual predicates for this essentially legal determination, it must be given instructions that are clear, precise and informative as to the factors involved and the factual issues to be determined.” 1986 WL 16606, at *2. The Sixth Circuit found that the defendants were entitled to a new trial, because the jury was given no direction that could have enabled it to make the necessary underlying factual determination regarding state action. See 1986 WL 16606, at *2-3.

         The Supreme Court has articulated four different tests for courts to use in determining whether conduct by an otherwise private party is state action: (i) the public-function test; (ii) the nexus test; (iii) the symbiotic-relationship test; and (iv) the joint-action test. See Johnson v. Rodrigues (Orozco), 293 F.3d 1196, 1202-03 (10th Cir. 2002)(reviewing the various tests); Gallagher v. Neil Young Freedom Concert, 49 F.3d 1442, 1447 (10th Cir.1995)(noting that “[a]pplication of the state action doctrine has been characterized as one of the more slippery and troublesome areas of civil rights litigation”)(internal quotation marks omitted)). Under the public-function test, a court determines whether a private party has exercised “powers traditionally exclusively reserved to the State.” Jackson v. Metro. Edison Co., 419 U.S. 345, 352 (1974). The public-function test is difficult to satisfy, because while many functions may be traditionally governmental, few are “exclusively” governmental functions, as the test requires. Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1456. The courts have found exclusive government functions to include holding elections, performing necessary municipal functions, and running a nursing facility. See Johnson v. Rodrigues (Orozco), 293 F.3d at 1203.

         Under the nexus test, state action is present if the state has ordered the private conduct, or “exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State.” Blum v. Yaretsky, 457 U.S. 991, 993 (1982). A court determines, under the nexus test, whether there is a sufficiently close nexus between the state and the challenged conduct, such that the conduct “may be fairly treated as that of the state itself.” Jackson v. Metro. Edison Co., 419 U.S. at 351. “Private use of state-sanctioned private remedies or procedures does not rise to the level of state action. . . . But when private parties make use of state procedures with the overt, significant assistance of state officials, state action may be found.” Tulsa Professional Collection Servs., Inc. v. Pope, 485 U.S. 478, 486 (1988)(internal citations omitted).

         Under the symbiotic-relationship test, state action is present if the state “has so far insinuated itself into a position of interdependence” with a private party that “it must be recognized as a joint participant in the challenged activity.” Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, (1961). “[E]xtensive regulation, receipt of substantial state funds, and the performance of important public functions do not necessarily establish the kind of symbiotic relationship between the [state] and a private [party] that is required for state action.” Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1451.

The applicable decisions clearly establish no bright-line rule for determining whether a symbiotic relationship exists between a government agency and a private entity. Questions as to how far the state has insinuated itself into the operations of a particular private entity and when, if ever, the operations of a private entity become indispensable to the state are matters of degree.

Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1452.

         State action exists under the joint-action test if the private party is a “willful participant in joint action with the State or its agents.” Dennis v. Sparks, 449 U.S. 24, 27 (1980). Courts look to “whether state officials and private parties have acted in concert in effecting a particular deprivation of constitutional rights.” Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1453. “[I]f there is a substantial degree of cooperative action between state and private officials . . . or if there is overt and significant state participation, in carrying out the deprivation of the plaintiff's constitutional rights, state action is present.” Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1454 (internal quotation marks and citations omitted). Joint participation can also take the form of a conspiracy between public and private actors; in such cases, the plaintiff must show that the public and private actors shared a common, unconstitutional goal. See Sigmon v. CommunityCare HMO, Inc., 234 F.3d 1121, 1126 (10th Cir. 2000). Even a conspiracy claim requires a sufficient level of state involvement to constitute joint participation in the unconstitutional actions. See Soldal v. Cook Cty., 506 U.S. 56, 60 n.6 (1992). The Tenth Circuit has previously dismissed constitutional claims against a private individual where the plaintiff did not give specific facts showing a conspiracy evidencing state action. See Martinez v. Winner, 771 F.2d 424, 445 (10th Cir.1985)(“Beyond the bare conclusory allegation that [the defendant], a private citizen, conspired with the other defendants to deprive plaintiff of his constitutional and civil rights, no facts are stated indicating that [the defendant] did anything.”).

         In Gallagher v. Neil Young Freedom Concert, the Tenth Circuit surveyed several instances in which courts have found action “under color of state law” where governmental and private parties have acted together in joint-action:

We have applied the joint action test in several cases involving allegations that private citizens acted in concert with police officers in making arrests. In both Carey v. Continental Airlines Inc., 823 F.2d 1402 (10th Cir. 1987), and Lee v. Town of Estes Park, 820 F.2d 1112 (10th Cir. 1987), we held that citizens who made complaints to police officers that resulted in arrests were not state actors. We found nothing in the record in either case from which we could infer that the allegedly unconstitutional arrests “resulted from any concerted action, whether conspiracy, prearranged plan, customary procedure, or policy that substituted the judgment of a private party for that of the police or allowed a private party to exercise state power.” Carey, 823 F.2d at 1404. In both cases, the record indicated that the police officers had made an independent decision to make the challenged arrest. In contrast, in Lusby v. T.G. & Y. Stores, Inc., 749 F.2d 1423, 1429 (10th Cir. 1984), cert. denied, 474 U.S. 818, 106 S.Ct. 65, 88 L.Ed.2d 53 (1985), we concluded that a store security guard who reported a suspected shoplifter to the police was a state actor. We noted that the officer that made the arrest did not make an independent investigation but relied on the judgment of the security guard. In Coleman v. Turpen, 697 F.2d 1341 (10th Cir. 1982) (per curiam), we applied the joint action test by focusing on the manner in which the alleged constitutional deprivation was carried out. There, the plaintiff challenged the seizure and sale of his property and named as defendants not only state officials but also the wrecking company that towed his truck and subsequently sold it. We found the company to be a state actor because it had “jointly participated in seizing the truck by towing it away” and because the company's sale of the plaintiff's property was “an integral part of the deprivation.” Id. at 1345.

Gallagher v. Neil Young Freedom Concert, 49 F.3d at 1453-56. The Tenth Circuit noted that, “just as with the other tests for state action, the mere acquiescence of a state official in the actions of a private party is not sufficient.” 49 F.3d at 1453. The Tenth Circuit ruled that the joint-action test can be satisfied where police are involved in cooperative action with a private party when “the police have substantially assisted in the allegedly wrongful conduct.” 49 F.3d at 1455. Joint participation typically arises when the authorities agree to facilitate private parties' acts that, if a state conducted, would be unconstitutional, through affirmative action. See Soldal v. Cook Cty., 506 U.S. at 60 n.4.

         2. Commercial Speech.

         The Supreme Court's First Amendment decisions create a rough hierarchy in the constitutional protection of speech. See Snyder v. Phelps, 562 U.S. at 452; R.A.V. v. St. Paul, 505 U.S. 377, 422 (1992)(Stevens, J. dissenting). “Core political speech occupies the highest, most protected position; commercial speech and nonobscene, sexually explicit speech are regarded as a sort of second-class expression; obscenity and fighting words receive the least protection of all.” R.A.V. v. St. Paul, 505 U.S. at 422 (Stevens, J. dissenting). Commercial speech is “speech that does no more than propose a commercial transaction.” Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976). See Central Hudson, 447 U.S. at 561(“The Commission's order restricts only commercial speech, that is, expression related solely to the economic interests of the speaker and its audience.”). The following characteristics indicate that speech is commercial speech: (i) if the speech is contained in an advertisement; (ii) if it is made with an economic motive; or (iii) if it refers to a specific product. See Proctor & Gamble Co. v. Haugen, 222 F.3d 1262, 1274 (10th Cir. 2000). A representation, however, is not automatically commercial speech because it contains one or more of the preceding characteristics. See Proctor & Gamble Co. v. Haugen, 222 F.3d at 1274.

         The Supreme Court, in Central Hudson, provided the analytical framework to determine what kind of commercial speech is entitled to First Amendment protection. See Central Hudson, 447 U.S. at 564. It explained:

The First Amendment's concern for commercial speech is based on the informational function of advertising. Consequently, there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. The government may ban forms of communication more likely to deceive the public than to inform it, or commercial speech related to illegal activity.

Central Hudson, 447 U.S. at 563. The government has, accordingly, the power to regulate deceptive or commercial speech related to an illegal activity, but less power to regulate lawful and non-misleading commercial speech. See Central Hudson, 447 U.S. at 564. Before proceeding to the Central Hudson balancing test, a court must perform a threshold inquiry to determine whether the speech is non-misleading and concerns lawful activity. See Central Hudson, 447 U.S. at 566. “At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading.” Central Hudson, 447 U.S. at 566. See Revo v. Disciplinary Bd. of the Supreme Court for the State of N.M., 106 F.3d 929, 932 (10th Cir. 1997)(“Revo”).

         If a court determines that the speech is commercial, lawful, and not deceptive, the Court proceeds to a three-part balancing test. See Central Hudson, 447 U.S. at 564-66. “If the communication is neither misleading nor related to unlawful activity . . . we ask whether the asserted governmental interest is substantial. . . . [W]e must [next] determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.” Central Hudson, 447 U.S. at 564, 566. See Revo, 106 F.3d at 932. The Tenth Circuit has expressed the Central Hudson test in following manner:

As a threshold inquiry under Central Hudson, we must determine whether the particular advertisement is protected speech -- i.e., whether it concerns lawful activity and is not misleading. If not, the speech may be freely regulated. Protected commercial speech may also be regulated, but only if the government can show that (1) it has a substantial state interest in regulating the speech, (2) the regulation directly and materially advances that interest, and (3) the regulation is no more extensive than necessary to serve the interest.

Revo, 106 F.3d at 932 (citations omitted). “[T]he regulation may not be sustained if it provides only ineffective or remote support for the government's purpose.” Central Hudson, 447 U.S. at 565.

         In considering the threshold inquiry -- whether the speech concerns lawful activity and is not misleading -- Supreme Court jurisprudence has drawn distinctions between misleading commercial speech, potentially misleading commercial speech, and truthful commercial speech. See e.g., In re R.M.J., 455 U.S. 191, 203 (1982).[23] Misleading commercial speech may be prohibited entirely without a Central Hudson analysis. See In re R.M.J., 455 U.S. at 203.[24] The Central Hudson balancing test, however, applies when the speech is potentially misleading or when it is truthful. See In re R.M.J., 455 U.S. at 203. See also Revo, 106 F.3d at 933. Potentially misleading speech occurs when “the information also may be presented in a way that is not deceptive.” In re R.M.J., 455 U.S. at 203. Commercial speech is not “potentially misleading” simply with the “rote invocation of the words”; the party asserting that the speech is potentially misleading must “point to . . . harm that is potentially real, not purely hypothetical.” Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy, 512 U.S. 136, 146 (1994). In contrast, inherently misleading speech is “incapable of being presented in a way that is not deceptive.” Revo, 106 F.3d at 929. In Revo, for example, the Tenth Circuit considered whether direct mailing advertisements from a personal injury attorney “inevitably convey a false message that soliciting lawyers are more experienced, tougher, more skillful, and better qualified than non-soliciting lawyers, notwithstanding the fact that the letters themselves make no reference to those attributes.” Revo, 106 F.3d at 933. The Tenth Circuit concluded that the mailings could not be inherently misleading, because the defendants “offer[ed] no proof that some other qualified lawyer who could superbly represent personal injury victims would nevertheless be misleading potential clients simply by sending a direct mail solicitation.” 106 F.3d at 933. Thus, to determine whether speech is inherently misleading, the proper inquiry is to consider whether there are any circumstances under which the speech could be truthful; if it could possibly be truthful, the speech is not inherently misleading. See 106 F.3d at 933. When applying the Central Hudson test, the Supreme Court and the Tenth Circuit have identified several substantial governmental interests in regulating speech. See Central Hudson, 447 U.S. at 568 (ruling that the government has a substantial governmental interest in energy conservation); Florida Bar v. Went For It, Inc., 515 U.S. 618, 625-26 (1995)(holding that “protecting the privacy and tranquility of personal injury victims and their loved ones against intrusive, unsolicited contact by lawyers” is a substantial interest); Posadas de Puerto Rico Associates v. Tourism Co. of Puerto Rico, 478 U.S. 328, 341 (“We have no difficulty in concluding that the Puerto Rico Legislature's interest in the health, safety, and welfare of its citizens constitutes a ‘substantial' governmental interest.”); Utah Licensed Beverage Ass'n v. Leavitt, 256 F.3d 1061, 1070 (10th Cir. 2001)(holding that promoting temperance and supplying revenue are substantial governmental interests). The Supreme Court has concluded, however, that “the Government's interest in preserving state authority is not sufficiently substantial to meet the requirements of Central Hudson.” Rubin v. Coors Brewing, Co., 514 U.S. 476, 486 (1995). See Matal v. Tam, 137 S.Ct. 1744, 1764 (2017)(ruling that “preventing speech expressing ideas that offend” is not a substantial governmental interest); Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 70 (1983)(ruling that shielding citizens from offensive speech is not a substantial governmental interest); Utah Licensed Beverage Ass'n v. Leavitt, 256 F.3d at 1070 (holding that protecting nondrinkers from alcohol-related speech is not a substantial state interest); U.S. West, Inc. v. F.C.C., 182 F.3d 1224, 1235 (10th Cir. 1999)(ruling that protecting dissemination of private information “does not necessarily rise to the level of a substantial state interest under Central Hudson”). In the tobacco context, the Supreme Court has recognized that there is a substantial governmental interest in preventing minors from using tobacco. See Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 555 (2001). “Unlike rational basis review, the Central Hudson standard does not permit [a court] to supplant the precise interests put forward by the State with other suppositions.” Florida Bar v. Went For It, Inc., 515 U.S. 618, 624 (1995)(quoting Edenfield v. Fane, 507 U.S. 761, 768 (1993)).

         Central Hudson's third step -- determining whether the speech restriction directly and materially advances the asserted government interest -- requires more than just “mere speculation or conjecture” that the speech restriction will advance the interest. Lorillard Tobacco Co. v. Reilly, 533 U.S. at 555. “[R]ather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.” Lorillard Tobacco Co. v. Reilly, 533 U.S. at 555 (quoting Greater New Orleans, 527 U.S. 173, 188 (1999)). To satisfy the third step,

[w]e do not, however, require that “empirical data come . . . accompanied by a surfeit of background information. . . . [W]e have permitted litigants to justify speech restrictions by reference to studies and anecdotes pertaining to different locales altogether, or even, in a case applying strict scrutiny, to justify restrictions based solely on history, consensus, and “simple common sense.”

Lorillard Tobacco Co. v. Reilly, 533 U.S. at 555 (quoting Florida Bar v. Went For It, Inc., 515 U.S. at 628). In Lorillard Tobacco Co. v. Reilly, for example, the Supreme Court considered whether a regulation prohibiting smokeless tobacco or cigar advertising within a 1, 000-foot radius of a school or playground directly advances the governmental interest in preventing minors from using tobacco. See 533 U.S. at 556-57. The tobacco company argued, in part, that there is no link between the regulation and the substantial governmental interest in preventing minor tobacco use, because the government had only identified a problem with underage cigarette smoking and not a problem with smokeless tobacco use. See Lorillard Tobacco Co. v. Reilly, 533 U.S. at 556-57. The company further averred that the government could not prove that there is a causal link between advertising and tobacco use. See 533 U.S. at 557. After considering those arguments, the Supreme Court concluded that the regulation banning the advertising advances the governmental interest identified, because many studies support the claim that minors' smokeless tobacco use has increased, and other studies demonstrate a link between advertising and a demand for smokeless tobacco products. See 533 U.S. at 557-61.

         In considering the final factor -- that the regulation is no more extensive than necessary to serve the governmental interest -- the Supreme Court has cautioned that it is not a “least-restrictive-means requirement.” Board of Trustees of the State University of New York v. Fox, 492 U.S. 469, 478 (1989). Rather, as “commercial speech [enjoys] a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values, ” the “ample scope of regulatory authority suggested . . . would be illusory if it were subject to a least-restrictive-means requirement, which imposes a heavy burden on the State.” Board of Trustees of the State University of New York v. Fox, 492 U.S. at 477 (alteration in original).

What our decisions require is a “‘fit' between the legislature's ends and the means chosen to accomplish those ends, ” a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is “in proportion to the interest served, ” that employs not necessarily the least restrictive means but, as we have put it in the other contexts discussed above, a means narrowly tailored to achieve the desired objective.

Board of Trustees of State University of the New York v. Fox, 492 U.S. at 480 (citations omitted).

         “It is far different, of course, from the ‘rational basis' test used for Fourteenth Amendment equal protection analysis.” Board of Trustees of the State University of New York v. Fox, 492 U.S. at 480.

There it suffices if the law could be thought to further a legitimate governmental goal, without reference to whether it does so at inordinate cost. Here we require the government goal to be substantial, and the cost to be carefully calculated. Moreover, since the State bears the burden of justifying its restrictions, it must affirmatively establish the reasonable fit we require.

Board of Trustees of the State University of New York v. Fox, 492 U.S. at 480. See Utah Licensed Beverage Ass'n v. Leavitt, 256 F.3d 1061, 1066 (10th Cir. 2001)(“Under Central Hudson, laws restricting commercial speech are subject to an ‘intermediate' level of scrutiny.”).

         In Lorillard Tobacco Co. v. Reilly, for example, the Supreme Court determined that a tobacco advertising ban within 1, 000 feet of schools or playgrounds in Massachusetts was not reasonably fitted to the legislature's goal -- preventing minors' tobacco use. See Lorillard Tobacco Co. v. Reilly, 533 U.S. at 561. The Lorillard Tobacco Co v. Reilly Court determined that the ban was unreasonable, because, in effect, the ban would “prevent advertising in 87% to 91% of Boston, Worcester, and Springfield Massachusetts.” Lorillard Tobacco Co. v. Reilly, 533 U.S. at 562. The Supreme Court reasoned:

In some geographical areas, these regulations would constitute nearly a complete ban on the communication of truthful information about smokeless tobacco and cigars to adult consumers. The breadth and scope of the regulations, and the process by which the Attorney General adopted the regulations, do not demonstrate a careful calculation of the speech interests involved.

533 U.S. at 562. It concluded, therefore, that the government “has failed to show that the outdoor advertising regulations . . . are not more extensive than necessary to advance the State's substantial interest in preventing underage tobacco use.” Lorillard Tobacco Co. v. Reilly, 533 U.S. at 565.

         STATE LAW REGARDING UNFAIR AND DECEPTIVE PRACTICES

         1. California Law.

         The California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (“UCL”), prohibits “any unlawful, unfair or fraudulent act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 17200. To bring suit under the UCL, a consumer must demonstrate that she suffered injury in fact and lost money or property as a result of the unfair competition. See Kwikset Corp. v. Superior Court, 246 P.3d 877, 884 (Cal. 2011) “Under the statute ‘there are three varieties of unfair competition: practices which are unlawful, unfair or fraudulent.'” In re Tobacco II Cases, 207 P.3d 20, 29 (Cal. 2009). “[C]laims of deceptive advertisements and misrepresentations” fall under the fraudulent variety of unfair competition. In re Tobacco II Cases, 207 P.3d at 29. “[T]o state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, ‘it is necessary only to show that members of the public are likely to be deceived.'” In re Tobacco II Cases, 207 P.3d at 29 (quoting Kasky v. Nike, Inc., 45 P.3d 243, 250 (Cal. 2002)). Whether the public is likely to be deceived “is judged by the effect [the challenged conduct] would have on a reasonable consumer, ” unless “the challenged conduct targets a particular disadvantaged or vulnerable group.” Puentes v. Wells Fargo Home Mortg., 160 Cal.App.4th 638, 645 (2008)(citations omitted). See Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016); Quelimane Co. v. Stewart Title Guaranty Co., 960 P.2d 513, 530 (Cal. 1998).

         “A UCL action is equitable in nature; damages cannot be recovered. . . . We have stated under the UCL, “[p]revailing plaintiffs are generally limited to injunctive relief and restitution.” In re Tobacco II Cases, 207 P.3d at 29 (quoting Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 943 (Cal. 2003)).

         UCL liability is subject to a safe harbor. See Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Telephone Co., 973 P.2d 527, 551 (Cal. 1999)(“Cel-Tech”); Ebner v. Fresh, Inc., 838 F.3d at 963. “To forestall an action under the unfair competition law, another provision must actually ‘bar' the action or clearly permit the conduct.” Cel-Tech, 973 P.2d at 541. “Conversely, the Legislature's mere failure to prohibit an activity does not prevent a court from finding it unfair.” Cel-Tech, 973 P.2d at 542. “There is a difference between (1) not making an activity unlawful, and (2) making that activity lawful.” Cel-Tech, 973 P.2d at 541.

         2. Colorado Law.

         The Colorado Consumer Protection Act, Colo. Rev. Stat. §§ 6-1-101-115 (“CCPA”), prohibits deceptive trade practices. See Colo. Rev. Stat. §§ 6-1-105, 6-1-113. Relevant to this Memorandum Opinion and Order, a deceptive trade practice occurs when

in the course of the person's business . . . the person:
(e) Knowingly makes a false representation as to the characteristics, ingredients, uses, benefits, alterations, or quantities of goods, food, services, or property;
(g) Represents that goods, food, services, or property are of a particular standard, quality or grade . . . if he knows or should know they are of another.

Colo. Rev. Stat. § 6-1-105(1)(e), (g). “A plaintiff may satisfy the deceptive trade practices requirement of section 6-1-105(1)(e) by establishing either a misrepresentation or that the false representation had the capacity or tendency to deceive, even if it did not.” Rhino Linings USA, Inc. v. Roby Mountain Rhino Lining, Inc., 62 P.3d 142, 147 (Colo. 2003)(en banc). A misrepresentation is “a false or misleading statement that induces the recipient to act or refrain from acting . . . [and] is made ‘either with knowledge of its untruth, or recklessly and willfully made without regard to its consequences, and with an intent to mislead and deceive the plaintiff.” Rhino Linings USA, Inc. v. Roby Mountain Rhino Lining, Inc., 62 P.3d at 147 (quoting Parks v. Bucy, 211 P.638, 639 (Colo. 1922)). To establish liability under the CCPA, “any person, ” as Colo. Rev. Stat. § 6-1-102(6) defines, must demonstrate:

(1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of defendant's business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant's goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff's injury.

Hall v. Walter, 969 P.2d 224, 235 (Colo. 1998)(en banc). See Alpine Bank v. Hubbell, 555 F.3d 1097, 1112 (10th Cir. 2009).

         The CCPA does not apply to “[c]onduct in compliance with the orders or rules of, or a statute administered by, a federal, state, or local governmental agency.” Colo. Rev. Code § 6-1-106(1)(a). “The plain meaning of the exclusion section of the [Colorado Consumer Protection Act] is that conduct in compliance with other laws will not give rise to a cause of action under section 6-1-106(1)(a).” Showpiece Homes Corp. v. Assurance Co. of America, 38 P.3d 47, 56 (Colo. 2001)(en banc)(emphasis in original). Only activities “specifically authorized by a regulation or another statute [are] exempt” from the safe harbor. Showpiece Homes Corp. v. Assurance Co. of America, 38 P.3d at 56.

         3. Florida Law.

         The Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.204 (“FDUTPA”), prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Fla. Stat. § 501.204. Trade or commerce includes “advertising . . . or distributing . . . any good or service, or any property . . . wherever situated.” Fla Stat. § 501.203. “[U]nder FDUTPA, the plaintiff must only establish three objective elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Carriuolo v. General Motors Co., 823 F.3d 977, 985-86 (11th Cir. 2016). See Soper v. Tire Kingdom, Inc., 124 So.3d 804, 806 (Fla. 2013)(Canady, J. dissenting)(“[C]onsumer claim[s] for damages under FDUTPA . . . require[] proof of: (1) a deceptive or unfair practice; (2) causation; and (3) actual damages.”). FDUTPA has two distinct prongs: an unfair practice prong and a deceptive prong. See PNR, Inc. v. Beacon Property Management, Inc., 842 So.2d 773, 777 (Fla. 2003). An unfair practice is “one that ‘offends established public policy' and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.'” PNR, Inc. v. Beacon Property Management, Inc., 842 So.2d at 777. A deceptive practice “occurs if there is a representation, omission, or practice that is likely to mislead consumers acting reasonably in the circumstances, to the consumers' detriment.” State v. Beach Blvd. Automotive Inc., 139 So.3d 380 (Fla. Dist. Ct. App. 2014)(citing PNR, Inc. v. Beacon Property Management, Inc., 842 So.2d at 777). See Zlotnick v. Premier Sales Group, Inc., 480 F.3d 1281, 1284 (11th Cir. 2007). FDUTPA does not apply to “[a]n act or practice required or specifically permitted by federal or state law.” Fla Stat. § 501.212(1).

         4. Illinois Law.

         The Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2 (“ICFA”), prohibits

unfair or deceptive acts or practices, including but not limited to the use . . . of any deception, fraud, . . . misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment . . . in the conduct of any trade or commerce . . . whether any person has in fact been misled, deceived or damaged thereby.

815 Ill. Comp. Stat. 505/2. “[T]rade and commerce mean the advertising, offering for sale, sale, or distribution of any services and any property . . . and shall include any trade or commerce directly or indirectly affecting the people of this State.” 815 Ill. Comp. Stat. 505/(1)(f) (quotations omitted).

         To sustain a claim under the ICFA, a plaintiff must show “(1) a deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the deception, (3) the occurrence of the deception in a course of conduct involving trade or commerce, and (4) actual damage to the plaintiff that is (5) a result of the deception.” De Bouse v. Bayer, 922 N.E.2d 309, 313 (Ill. 2009). See Philadelphia Indem. Ins. Co. v. Chicago Title Ins. Co., 771 F.3d 391, 402 (7th Cir. 2014).

         The ICFA does not apply, however to “[a]ctions or transactions specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States.” 815 Ill. Comp. Stat. 505/10b(1). “The plain language of section 10b(1) requires that two separate conditions be present before a claim is barred.” Price v. Philip Morris, Inc., 848 N.E.2d 1, 36 (Ill. 2005). “First, a regulatory body or officer must be operating under statutory authority.” Price v. Philip Morris, Inc., 848 N.E.2d at 36. “Second, liability under the Consumer Fraud Act is barred by section 10b(1) only if the action or transaction at issue is ‘specifically authorized by laws administered' by the regulatory body.” 848 N.E.2d at 36 (quoting 815 Ill. Comp. Stat. 505/10b(1)). In Price v. Philip Morris, the Supreme Court of Illinois determined that the FTC's use of the terms “low tar” and “ultra low tar” in its reports to Congress, did not “specifically authorize[] cigarette manufactures to use these terms in labeling or advertising.” 848 N.E.2d at 36. “Conduct is not specifically authorized merely because it has not been specifically prohibited.” 848 N.E.2d at 36. Moreover, “[c]onduct is not specifically authorized merely because it has been passively allowed to go on for a period of time without regulatory action being taken to stop it.” 848 N.E.2d at 36. The proper inquiry, instead, is to “look to the affirmative acts or expressions of authorization by the FTC.” 848 N.E.2d at 36. The Supreme Court of Illinois emphasized that “[t]he term ‘specifically' indicates a legislative intent to require a certain degree of specificity or particularity in the authorization, ” see 848 N.E.2d at 38, and that “mere compliance with applicable federal regulations is not necessarily a shield against liability under the Consumer Fraud Act, ” 848 N.E.2d at 40. It concluded, however, that a regulatory body “may specifically authorize conduct . . . without engaging in formal rulemaking” and that while authorization must be specific “it need not be express.” 848 N.E.2d at 42. The Supreme Court of Illinois ruled, accordingly, that an FTC consent order “specifically authoriz[ing] all United States tobacco companies” to use “low, ” “lower, ” “reduced” and other similar words “so long as the descriptive terms are accompanied by a clear and conspicuous disclosure of the ‘tar' and nicotine content” barred a plaintiff's claim under 815 Ill. Comp. Stat. 505/10b(1). 219 Ill.2d at 265-66.

         The Illinois Uniform Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/2 (“IUDTPA”), similarly prohibits deceptive practices performed “in the course of his or her business” that

(5) represents that goods or services have . . . benefits . . . that they do not have;
(7) represents that goods or services are of a particular standard [or] quality;
(9) advertises goods or services with intent not to sell them as advertised; and
(12) engages in any other conduct which similarly creates a likelihood of confusion ...

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