MANGINI v. REYNOLDS TOBACCO COMPANY

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Court of Appeal, First District, Division 5, California.

Janet C. MANGINI, Plaintiff and Appellant, v. R.J. REYNOLDS TOBACCO COMPANY et al., Defendants and Respondents.

No. A059253.

Decided: July 14, 1993

William S. Lerach, Alan M. Mansfield, Darren J. Quinn, and Milberg, Weiss, Bershad Specthrie & Lerach, San Diego, Alan M. Caplan, Philip Neumark, April M. Strauss, and Bushnell, Caplan & Fielding, San Francisco, for plaintiff and appellant. Robert Chartoff, San Francisco, for amici curiae on behalf of appellant. Martin R. Glick, H. Joseph Escher III, Pamela T. Johann, and Howard, Rice, Nemerovski, Canady, Robertson & Falk, San Francisco, for defendant and respondent.

I. INTRODUCTION

In this case we hold that federal law does not preempt a cause of action alleging that specified cigarette advertising is an unfair business practice under California law.

Janet C. Mangini appeals from a summary judgment in her action challenging the use of a cartoon character by R.J. Reynolds Tobacco Company in an advertising campaign for Camel cigarettes.   Mangini contends the advertising constitutes an unfair business practice (Bus. & Prof.Code, § 17200 et seq.) because it targets minors for the purpose of inducing and increasing their illegal purchases of cigarettes.   We hold such a claim is not preempted by the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.).

II. BACKGROUND

A. The Complaint

Mangini sued R.J. Reynolds Tobacco Company, its parent company (which was never served), and two advertising agencies for injunctive relief.   The complaint asserts two causes of action, styled as “Unlawful, Unfair Business Practices” and “Unjust Enrichment And Imposition of Constructive Trust.”

The complaint alleges the following facts:  About 75 percent of all adult smokers become addicted to tobacco before their 18th birthday, and tobacco advertising is causally related to teenage addiction.   Since 1988, Reynolds has been using a cartoon camel character called Old Joe Camel in the advertising of Camel cigarettes in order to attract teenage smokers.   As a result of the Old Joe Camel advertising campaign, the number of teenage smokers who choose Camel cigarettes has risen from 0.5 percent in 1988 to between 25 and 33 percent in 1992, with teenage smokers accounting for $476 million of Camel sales in 1992 as compared with $6 million in 1988.   Reynolds has disseminated products such as matchbooks, exit signs, scrip, mugs and soft drink can holders which advertise Camel cigarettes but do not contain warnings that cigarettes pose health hazards.

The first cause of action, for unlawful and unfair business practices, alleges that the defendants have “caused the advertisements of Camel cigarettes without any warning that cigarettes pose a health hazard,” and that this conduct violates the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.) and constitutes an unlawful and unfair business practice under Business and Professions Code section 17200 et seq.   The second cause of action, for unjust enrichment, adds that the defendants have been and will be unjustly enriched through the Old Joe Camel advertising campaign.

The complaint seeks an order enjoining the challenged advertising, imposing a constructive trust on the defendants' “ill-gotten gains,” and requiring the defendants to undertake “corrective” advertising and print media campaigns warning consumers of the health hazards of smoking in order to negate the effect of the Old Joe Camel advertisements.

B. The Preemption Context

Six months after this complaint was filed, the United States Supreme Court decided Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407.   That case, which is fundamental to resolution of the present appeal, addressed the scope of preemption of state court common law damages claims by the Federal Cigarette Labeling and Advertising Act (15 U.S.C. § 1331 et seq.).

The Federal Cigarette Labeling and Advertising Act was enacted in 1965.   It required health warnings on cigarette packages but not in cigarette advertising.   It also contained a preemption clause which provided, in pertinent part, “No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.”  (Pub.L. No. 89–92, 79 Stat. 282–283;  see Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at p. 2616, 120 L.Ed.2d at p. 421.)

The 1965 Act was amended in 1969 by the Public Health Cigarette Smoking Act.   The 1969 Act strengthened the cigarette package warning label, banned certain cigarette advertising, and modified the preemption provision quoted above.   (Pub.L. No. 91–222, 84 Stat. 87;  see Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at p. 2617, 120 L.Ed.2d at p. 422.)   That provision now reads, “No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.”  (15 U.S.C. § 1334(b).)

The Cipollone litigation was a state court common law damages action implicating three cigarette manufacturers in the death of Rose Cipollone from lung cancer.   The action was based on multiple theories, including the following:  failure to warn of the health consequences of smoking;  breach of an express warranty that cigarettes did not present significant health consequences;  fraudulent misrepresentation by neutralization of federally mandated warning labels through advertising;  and fraudulent misrepresentation through false statements and concealment of material facts concerning the health hazards of smoking.  (Cipollone v. Liggett Group, Inc., supra, 505 U.S. at pp. –––– – ––––, –––– – ––––, 112 S.Ct. at pp. 2614, 2621–25, 120 L.Ed.2d at pp. 418–419, 427–431.)

The issue before the United States Supreme Court was whether these common law claims were preempted by the above-quoted provisions of the 1965 Act or the 1969 Act.   With regard to the 1965 Act, the court held that its preemption provision (now superseded by the 1969 Act) did not encompass common law claims but extended only to “positive enactments by legislatures or administrative agencies that mandate particular warning labels.”  (505 U.S. at p. ––––, 112 S.Ct. at p. 2618, 120 L.Ed.2d at p. 424.)   With regard to the 1969 Act, the court held that its preemption provision (the one currently in force) preempts common law damages actions as well as positive enactments.   (Id. at p. ––––, 112 S.Ct. at pp. 2620–21, 120 L.Ed.2d at pp. 426–427.)   However, the scope of such preemption is limited;  it does not encompass all common law claims.   Rather, the language of the 1969 preemption clause defines its scope, and each claim must be examined individually to determine whether it is preempted.  “The central inquiry in each case is straightforward:  we ask whether the legal duty that is the predicate of the common law damages action constitutes a ‘requirement or prohibition based on smoking and health ․ imposed under State law with respect to ․ advertising or promotion,’ giving that clause a fair but narrow reading.”  (Id. at p. ––––, 112 S.Ct. at p. 2621, 120 L.Ed.2d at p. 427, quoting 15 U.S.C. § 1334(b).)

Applying this standard to the allegations in the complaint, Cipollone reached the following conclusions:  Claims for failure to warn of the health consequences of smoking were preempted to the extent they relied on a requirement or prohibition with respect to advertising or promotion.  (505 U.S. at p. ––––, 112 S.Ct. at p. 2622, 120 L.Ed.2d at p. 428.)   The claim for breach of express warranty was not preempted because the predicate legal duty was not imposed under state law but instead arose from the manufacturers' statements in their advertisements.  (Id. at p. ––––, 112 S.Ct. at p. 2622, 120 L.Ed.2d at pp. 428–429.)   The claim for fraudulent misrepresentation by neutralization of federally mandated warning labels through advertising was preempted because it was “predicated on a state-law prohibition against statements in advertising and promotional materials that tend to minimize the health hazards associated with smoking,” which was “merely the converse of a state law requirement that warnings be included in advertising and promotional materials,” and was “inextricably related” to the preempted failure to warn theory.  (Id. at p. ––––, 112 S.Ct. at p. 2623, 120 L.Ed.2d at pp. 429–430, original italics.)   The final claim, for fraudulent misrepresentation through false statements and concealment of material facts concerning the health hazards of smoking, was not preempted because it was “not predicated on a duty ‘based on smoking and health’ but rather on a more general obligation—the duty not to deceive.”  (Id. at p. ––––, 112 S.Ct. at p. 2623, 120 L.Ed.2d at p. 430, quoting 15 U.S.C. § 1334(b).)

C. The Judgment

Two weeks after Cipollone was decided, Reynolds and the advertising agencies (hereafter collectively referred to as Reynolds) moved for summary judgment, asserting preemption by the Federal Cigarette Labeling and Advertising Act.

At the hearing on the motion, the court voiced its belief that under the 1969 Act as interpreted in Cipollone, Mangini's claims were preempted:  “As far as I'm concerned, any state law claim ․ no matter how it is labeled, if the underpinning of it is advertising or promotion of cigarettes, you are dead in the water under this opinion.”   Mangini's counsel argued that “if the advertising is fraudulent, we can proceed under state law.”   The court replied, “I don't agree․  [¶] ․ [N]o matter what you label it, if it deals with advertising or promotion, it's preempted․”  The court rendered summary judgment for Reynolds on the ground of federal preemption.

III. DISCUSSION

On appeal, Mangini asserts the following two theories of unfair business practice under Business and Professions Code section 17200 et seq., which she contends are outside the scope of federal preemption:  (1) the Old Joe Camel advertising campaign targets minors for the purpose of inducing and increasing their illegal purchases of cigarettes;  and (2) the advertising glamourizes cigarette smoking to minors without disclosing the ill effects of smoking and the fact it is illegal for minors to purchase cigarettes in California.   Mangini insists her complaint includes these theories, but she also contends that if it did not she should have been given a chance to amend the complaint to include them.

Reynolds responds that these are new legal theories which may not be raised for the first time on appeal, that Mangini did not properly request leave to amend the complaint, and that even if these theories are cognizable they are preempted by the Federal Cigarette Labeling and Advertising Act as interpreted in Cipollone.

A. New Theories and Leave To Amend

 We begin with the obvious:  these are indeed new legal theories intended to replace the existing theory of the complaint, which is preempted under Cipollone.

The theory of the first cause of action (unlawful and unfair business practice under Bus. & Prof.Code, § 17200 et seq.) and the second cause of action (unjust enrichment) is the same:  Reynolds has disseminated products advertising Camel cigarettes “without any warning that cigarettes pose a health hazard.”   This is a failure to warn theory of the sort found to have been preempted in Cipollone.   Mangini does not contend otherwise.1

The complaint includes the factual allegation that Reynolds has been using Old Joe Camel to attract teenage smokers.   Nowhere, however, does the complaint theorize that this is an “unlawful, unfair or fraudulent business practice” or constitutes “unfair, deceptive, untrue or misleading advertising” under Business and Professions Code section 17200.   That legal theory appears for the first time on appeal, and the same is true for the “glamourizing without disclosure” theory.

Reynolds contends these new legal theories are not cognizable on appeal, for two reasons.   First, they are not merely corrective of pleading defects but are completely new theories of liability, and on an appeal after summary judgment “ ‘possible theories not fully developed or factually presented to the trial court cannot create a “triable issue” on appeal.’ ”   (Robinson v. Hewlett–Packard Corp. (1986) 183 Cal.App.3d 1108, 1127, 228 Cal.Rptr. 591, quoting Johanson Transportation Service v. Rich Pik'd Rite, Inc. (1985) 164 Cal.App.3d 583, 588, 210 Cal.Rptr. 433.)   Second, Mangini did not formally request or move for leave to amend the complaint to assert these new theories, but merely stated in a footnote to her opposition to summary judgment that “the hearing on this motion should be continued or stayed to allow amendment of the Complaint.”

The flaw in Reynolds's position is that although Reynolds moved for summary judgment, the motion was in fact a test of the facial sufficiency of the complaint.   Consequently, the motion was equivalent to a motion for judgment on the pleadings, for which there are special rules on new theories and leave to amend.

 The summary judgment procedure allows the use of evidence to look behind the pleadings and determine whether the claims or defenses pleaded are sham or without evidentiary support.   In contrast, a demurrer or motion for judgment on the pleadings attacks the sufficiency of a pleading on its face.   (Weil & Brown, Cal.Practice Guide:  Civil Procedure Before Trial 3 (Rutter 1992) §§ 10:1–10:2, p. 10–1.)

 A defense motion for summary judgment, however, necessarily includes a test of the complaint's facial sufficiency.   If the motion is granted on that basis rather than the nonexistence of a triable fact issue, it is in legal effect a motion for judgment on the pleadings.   (Robinson v. Hewlett–Packard Corp., supra, 183 Cal.App.3d at p. 1131, 228 Cal.Rptr. 591;  see also Kirby v. Albert D. Seeno Construction Co. (1992) 11 Cal.App.4th 1059, 1067, 14 Cal.Rptr.2d 604;  Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 535–536, 249 Cal.Rptr. 5.)

 In such situations, where a summary judgment motion is equivalent to a motion for judgment on the pleadings, if “the facts indicate that a plaintiff has a good cause of action which is imperfectly pleaded, the trial court should give the plaintiff an opportunity to amend.”  (Kirby v. Albert D. Seeno Construction Co., supra, 11 Cal.App.4th at p. 1067, 14 Cal.Rptr.2d 604;  see also Williams v. Braslow (1986) 179 Cal.App.3d 762, 774, 224 Cal.Rptr. 895 [ruling on motion for summary judgment “amounted to a judgment on the pleadings which should have afforded plaintiff a chance to amend”].)   The standard is whether it is “reasonably possible” the complaint can be amended to cure the pleading defect.  (Kirby v. Albert D. Seeno Construction Co., supra, 11 Cal.App.4th at p. 1069, 14 Cal.Rptr.2d 604.)

 The required opportunity to amend may be urged for the first time on appeal.   By statute, upon the sustaining of a demurrer, a trial court's failure to afford leave to amend may be asserted for the first time on appeal and may be reviewed for abuse of discretion, even absent any request below for leave to amend.  (Code Civ.Proc., § 472c;  Aubry v. Tri–City Hospital Dist. (1992) 2 Cal.4th 962, 971, 9 Cal.Rptr.2d 92, 831 P.2d 317.)   The same rule applies on appeal from a judgment on the pleadings.   (MacIsaac v. Pozzo (1945) 26 Cal.2d 809, 816, 161 P.2d 449;  Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 796, 51 Cal.Rptr. 866.)   In other words, on appeal after a pleading-stage disposition (whether by demurrer or judgment on the pleadings), a new theory of liability may be asserted for the first time, and “we search the facts to see if they make out a claim for relief under any theory.”  (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 630, 223 Cal.Rptr. 339, original italics.)   The same rule logically should apply where a summary judgment motion is in legal effect a motion for judgment on the pleadings.

Here, the claim of federal preemption asserted by Reynolds in its motion for summary judgment did not go behind the pleadings and was not an attempt to show that Mangini's complaint lacked evidentiary support.   Rather, Reynolds attacked the complaint's facial sufficiency.   The argument was that even if Mangini's factual allegations were true, her action was preempted by the Federal Cigarette Labeling and Advertising Act.   Reynolds specifically asserted in a reply memorandum that “here, the issue [of preemption] turns on the application of a pure question of law to the allegations of the Complaint․  Indeed, for the purpose of the application of the preemption defense on summary judgment only, Defendants have assumed that the allegations of the Complaint are true.”  (Compare Reed v. City and County of San Francisco (1992) 10 Cal.App.4th 572, 12 Cal.Rptr.2d 647 [federal preemption issue raised by demurrer].)

Thus, the summary judgment motion was in legal effect a motion for judgment on the pleadings, and the trial court should have given Mangini an opportunity to amend the complaint if the alleged facts indicate Mangini has a good cause of action which is imperfectly pleaded.   Mangini was not required to make a formal request or motion for leave to amend;  it is inconsequential that she merely requested in a footnote a continuance or stay to allow an amendment.   Mangini's new legal theories may be raised for the first time on appeal.

B. Whether The Alleged Facts Indicate A Good Cause Of Action

 We must therefore decide whether the facts alleged in the complaint indicate Mangini has a good cause of action which is imperfectly pleaded—i.e., whether it is reasonably possible the complaint can be amended to cure the pleading defect.   The answer depends on whether those facts support a legal theory under Business and Professions Code section 17200 et seq. as to which there is no preemption by the Federal Cigarette Labeling and Advertising Act.   If so, we must conclude the trial court erred in failing to give Mangini an opportunity to amend the complaint.

Mangini presents two legal theories on appeal.   One theory—that the Old Joe Camel advertisements glamourize cigarette smoking to minors without disclosing the ill effects of smoking and the fact it is illegal for minors to purchase cigarettes in California—is easily disposed of.   This, like the original theory of the complaint, is a failure to warn theory.   It is analogous to the preempted claim in Cipollone of fraudulent misrepresentation by neutralization of federally mandated warning labels through advertising.   It is “predicated on a state-law prohibition against statements in advertising and promotional materials that tend to minimize the health hazards associated with smoking,” which is “merely the converse of a state law requirement that warnings be included in advertising and promotional materials.”  (505 U.S. at p. ––––, 112 S.Ct. at p. 2623, 120 L.Ed.2d at p. 429, original italics.)   For this reason, the “glamourizing without disclosure” theory is preempted by the Federal Cigarette Labeling and Advertising Act and is not a basis for giving Mangini an opportunity to amend the complaint.

 Mangini's other legal theory is that the Old Joe Camel advertising campaign targets minors for the purpose of inducing and increasing their illegal purchases of cigarettes.   This theory does not have a failure to warn element, and thus there is no preemption on that basis.   The theory focuses on the bare fact of targeting minors.   Preliminarily, we must consider whether, as Mangini urges, this theory is cognizable under Business and Professions Code section 17200.

1. Business and Professions Code section 17200

 California's statutory law of unfair competition (Bus. & Prof.Code, § 17200 et seq.) authorizes actions for injunctive relief (Bus. & Prof.Code, § 17203) by certain state and local officers and persons acting for the interests of themselves or the general public (Bus. & Prof.Code, § 17204).   Unfair competition includes “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising․”  (Bus. & Prof.Code, § 17200.)   In the present context, the question is whether the targeting of minors for Old Joe Camel advertisements constitutes “unfair, deceptive, untrue or misleading advertising” within the meaning of Business and Professions Code section 17200.

The bare fact of targeting minors, in and of itself, does not amount to deceptive, untrue or misleading advertising.   The “targeting” theory focuses not on any affirmative deception in the content of the advertising—and the complaint alleges none—but simply on the purported exploitation of an inappropriate audience of minors.   Thus, section 17200 is invoked only if the advertising is “unfair” within the meaning of the statute.

 What is “unfair” advertising?   There is no statutory definition.   The general proscription in section 17200 against “unfair” business practices “establishes only a wide standard to guide courts of equity;  ․ given the creative nature of the scheming mind, the Legislature evidently concluded that a less inclusive standard would not be adequate.”  (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 112, 101 Cal.Rptr. 745, 496 P.2d 817.)   Thus, section 17200 casts an extremely broad net, with the proscription against unfair business practices intended by the Legislature “to permit tribunals to enjoin on-going wrongful business conduct in whatever context such activity might occur.”  (Id. at p. 111, 101 Cal.Rptr. 745, 496 P.2d 817.)

 In determining more specifically what constitutes “unfair” advertising under section 17200, we may be guided by interpretations of similar provisions of federal law.  (O'Connor v. Superior Court (1986) 177 Cal.App.3d 1013, 1017, 223 Cal.Rptr. 357;  People ex rel. Mosk v. National Research Co. of Cal. (1962) 201 Cal.App.2d 765, 772–773, 20 Cal.Rptr. 516.)   Such provisions appear in the Federal Trade Commission Act, which proscribes “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.”  (15 U.S.C. § 45(a)(1).)   Under the Federal Cigarette Labeling and Advertising Act, the FTC retains its authority under the Federal Trade Commission Act to regulate “unfair or deceptive acts or practices in the advertising of cigarettes.”   (15 U.S.C. § 1336.)

 The FTC, whose interpretation is entitled to great weight (Fed. Tr. Comm'n v. Keppel & Bro. (1934) 291 U.S. 304, 314, 54 S.Ct. 423, 427, 78 L.Ed. 814), considers three factors in determining whether a business practice which is neither deceptive nor an antitrust violation is nevertheless unfair:  (1) whether it offends public policy as established by statutes, the common law, or otherwise;  (2) whether it is immoral, unethical, oppressive or unscrupulous;  and (3) whether it causes substantial injury to consumers.  (FTC v. Sperry & Hutchinson Co. (1972) 405 U.S. 233, 244–245, fn. 5, 92 S.Ct. 898, 905, fn. 5, 31 L.Ed.2d 170.)

 Using these factors as our guideline, we conclude that the targeting of minors in cigarette advertising is “unfair” under section 17200.

First, the targeting of minors in cigarette advertising offends public policy as established by statute.   In California, it is unlawful to sell or furnish cigarettes to persons under the age of 18 years, and it is unlawful for minors to purchase or receive cigarettes.  (Pen.Code, § 308, subds. (a), (b).)   This reflects a statutory policy of protecting minors from addiction to cigarettes.   In an analogous context—a statutory proscription against nonsale public distribution of smokeless tobacco and cigarettes (Health & Saf.Code, § 25967)—the Legislature has declared its intent that “keeping children from beginning to use tobacco products in any form ․ shall be among the highest priorities in disease prevention for the State of California.”  (Health & Saf.Code, § 25967, subd. (a)(11).)   Cigarette advertising directed to minors contravenes the statutory policy of keeping children from starting on the road to tobacco addiction.

Second, leaving aside the subjective questions of morals and ethics, the targeting of minors is oppressive and unscrupulous, in that it exploits minors by luring them into an unhealthy and potentially life-threatening addiction before they have achieved the maturity necessary to make an informed decision whether to take up smoking despite its health risks.

Third, a persuasive argument can be made that the targeting of minors causes substantial physical injury to them.   In the statutory proscription against nonsale public distribution of smokeless tobacco and cigarettes, the Legislature has found and declared the following:  “Tobacco product advertising and promotion are an important cause of tobacco use among children.”   (Health & Saf.Code, § 25967, subd. (a)(9).)  “The earlier a child begins to use tobacco products, the more likely it is that the child will be unable to quit.”  (Health & Saf.Code, § 25967, subd. (a)(5).)  “Smoking is the single most important source of preventable disease and premature death in California.”  (Health & Saf.Code, § 25967, subd. (a)(1).)   Mangini's complaint alleges that teenage smokers accounted for $476 million of Camel cigarette sales in 1992 as compared with $6 million in 1988 at the onset of the Old Joe Camel advertisements, implicitly suggesting such advertisements have harmed a great many teenagers by luring them into extended use of and addiction to tobacco products.

There is a closely analogous precedent for our conclusion that the targeting of minors in cigarette advertising constitutes unfair advertising, and hence unfair competition, under Business and Professions Code section 17200.   In Fed. Tr. Comm'n v. Keppel & Bro., supra, 291 U.S. 304, 54 S.Ct. 423, the United States Supreme Court held that the marketing of candy to children through lottery methods constituted “unfair” competition under the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)).

In Keppel, a candy manufacturer marketed individual pieces of “penny” candyby lottery methods as an inducement to retail purchases.   A few candies were wrapped with a concealed cent so that they would be obtained without cost;  some candies had varying prices concealed within the wrapper, with the price to be ascertained only after selection of the candy;  and a few candies had concealed centers of a special color which entitled the purchaser to a prize.   The candies were marketed with “a display card, attractive to children,” explaining the lottery schemes, for exhibition by the dealer selling the candy.  (Fed. Tr. Comm'n v. Keppel & Bro., supra, 291 U.S. at p. 307, 54 S.Ct. at p. 424.)

The FTC concluded that these marketing methods constituted unfair competition under the Federal Trade Commission Act because they encouraged gambling among children.  (291 U.S. at pp. 307–308, 54 S.Ct. at p. 424.)   The United States Supreme Court upheld that determination, even though there was no fraud or deception (id. at p. 309, 54 S.Ct. at p. 425), based on common notions of unfairness and public policy.   The pivotal factor was that “here the competitive method is shown to exploit consumers, children, who are unable to protect themselves.”  (Id. at p. 313, 54 S.Ct. at p. 426.)   The exploitation occurred through use of “a device whereby the amount of the return [the children] receive from the expenditure of money is made to depend upon chance.”  (Ibid.)  The court deemed this practice to be “contrary to public policy.”   The court concluded, “It would seem a gross perversion of the normal meaning of the word, which is the first criterion of statutory construction, to hold that the method is not ‘unfair.’ ”  (Ibid.)

The similarity to the present case is inescapable.   If the marketing of candy to children by lottery methods was “unfair” under the provisions of the Federal Trade Commission Act because it violated public policy by luring children into gambling, then the marketing of Camel cigarettes to minors (if that has in fact occurred) may be deemed “unfair” under the comparable provisions of Business and Professions Code section 17200 if it violates public policy by luring minors into unlawfully purchasing and consuming cigarettes.2

We conclude, therefore, that Mangini's “targeting of minors” theory, as supported by the factual allegations of the complaint, constitutes a good cause of action under Business and Professions Code section 17200 et seq.

2. Preemption

 The remaining question is whether a cause of action for targeting minors in cigarette advertising is preempted by the Federal Cigarette Labeling and Advertising Act.

The key to resolution of this question lies in Cipollone's analysis of the claim in that case for fraudulent misrepresentation through false statements and concealment of material facts concerning the health hazards of smoking.   The United States Supreme Court held that claim was not preempted because it was “not predicated on a duty ‘based on smoking and health’ but rather on a more general obligation—the duty not to deceive.”  (Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at p. 2624, 120 L.Ed.2d at p. 430, quoting 15 U.S.C. § 1334(b).)   In reaching this holding, the court noted that “in the 1969 Act, Congress offered no sign that it wished to insulate cigarette manufacturers from longstanding rules governing fraud.   To the contrary, both the 1965 and 1969 Acts explicitly reserved the FTC's authority to identify and punish deceptive advertising practices—an authority that the FTC had long exercised and continues to exercise.”  (Id. at p. ––––, 112 S.Ct. at p. 2624, 120 L.Ed.2d at p. 430;  see 15 U.S.C. § 1336.)   This statutory reservation of FTC authority, the court concluded, “indicates that Congress intended the phrase ‘relating to smoking and health’ (which was essentially unchanged by the 1969 Act) to be construed narrowly, so as not to proscribe the regulation of deceptive advertising.”   (Id. at p. ––––, 112 S.Ct. at p. 2624, 120 L.Ed.2d at pp. 430–431.)

 This reservation of FTC authority is not limited to “deceptive” advertising but extends also to “unfair” advertising.   The statute provides, “Nothing in” the Federal Cigarette Labeling and Advertising Act “shall be construed to limit, restrict, expand, or otherwise affect the authority of the Federal Trade Commission with respect to unfair or deceptive acts or practices in the advertising of cigarettes.”  (15 U.S.C. § 1336, italics added.)   If, as the court concluded in Cipollone, the reservation of FTC authority to identify and punish deceptive advertising indicates Congress intended that the preemptive phrase “based on smoking and health” (15 U.S.C. § 1334(b)) does not proscribe the regulation of deceptive advertising, then the same must be true for unfair advertising.   The statutory reservation of FTC authority to identify and punish unfair advertising indicates Congress intended that the phrase “based on smoking and health” does not operate to preempt state regulation of unfair advertising.

We conclude, therefore, that just as a state court action for deceptive advertising is not preempted, a state court action for unfair advertising based on the facts alleged in Mangini's complaint is not preempted.   Like the Cipollone theory of fraudulent misrepresentation that was not “based on smoking and health” within the meaning of the 1969 Act's preemption provision but on the more general duty not to deceive, Mangini's “targeting of minors” theory of unfair advertising is not “based on smoking and health” but on the more general duty not to engage in advertising that is against public policy, oppressive and unscrupulous, and harmful to consumers.

 This brings us to a final point on preemption.   The issue in Cipollone was whether state court common law damages claims were preempted.   The present litigation, in contrast, is a statutory action for injunctive relief.   Does that make any difference?

The answer is no.   The concern in Cipollone was whether the Federal Cigarette Labeling and Advertising Act preempts common law damages actions as well as positive enactments by legislatures and administrative agencies.   The court concluded that common law damages actions are preempted by the 1969 Act, but the scope of such preemption is limited by the language of the 1969 preemption clause, and each claim must be examined individually to determine whether it is within the scope of preemption.  (Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at pp. 2620–21, 120 L.Ed.2d at pp. 426–427.)   The court did not address the scope of preemption of positive enactments such as statutes, but the analysis must be the same:  if a state statutory cause of action is outside the scope of the express federal preemption provisions, it is not preempted.  “[T]he pre-emptive scope of the 1965 Act and the 1969 Act is governed entirely by the express language in [the preemption provisions] of each Act.”  (Id. at p. ––––, 112 S.Ct. at p. 2618, 120 L.Ed.2d at p. 423.)   The express statutory provisions defining the preemptive reach of the 1965 and 1969 Acts “impl[y] that matters beyond that reach are not pre-empted.”  (Ibid.)  If this is true for common law damages actions, it must be true for statutory actions for injunctive relief.

Thus, if a cause of action for unfair advertising is beyond the scope of the preemption language—as we conclude with regard to Mangini's “targeting of minors” theory due to its predication on a general duty not “based on smoking and health”—it makes no difference whether the cause of action arises from the common law or a state statute, or whether the plaintiff seeks damages or injunctive relief.   The sole inquiry is whether the action is encompassed by the preemptive language of the Federal Cigarette Labeling and Advertising Act.   If it is not, as we conclude here, there is no preemption.3

3. Conclusion

 We have come full circle, back to the question whether the facts alleged in the complaint indicate Mangini has a good cause of action which is imperfectly pleaded.   The answer is yes.   The alleged facts support a legal theory of unfair advertising under Business and Professions Code section 17200 et seq.—that the Old Joe Camel advertising campaign targets minors for the purpose of inducing and increasing their illegal purchase of cigarettes.   This theory is not subject to preemption by the Federal Cigarette Labeling and Advertising Act, because it is not “based on smoking and health” but on a more general duty not to engage in advertising that is against public policy, oppressive and unscrupulous, and harmful to consumers.   It is reasonably possible the complaint can be amended to cure the pleading defect;  a cognizable cause of action can be stated through amendment of the complaint to set forth Mangini's “targeting” theory on the existing factual allegations.   The trial court was required to afford Mangini that opportunity before granting a motion for summary judgment which simply tested the complaint's facial sufficiency.  (Kirby v. Albert D. Seeno Construction Co., supra, 11 Cal.App.4th at pp. 1067, 1069, 14 Cal.Rptr.2d 604;  Williams v. Braslow, supra, 179 Cal.App.3d at p. 774, 224 Cal.Rptr. 895.)

 The trial court's comments from the bench indicate where the court went astray.   In concluding that “you are dead in the water” if the underpinning of a state law claim is “advertising or promotion” of cigarettes (ante, at p. 237), the court erred by focusing solely on the “advertising or promotion” element of the 1969 Act's preemption provisions.  (15 U.S.C. § 1334(b).)   That element is only one part of the equation.  Cipollone draws no bright lines amenable to easy application, but close scrutiny of the decision reveals that preemption is a four-part proposition, demanding (1) a requirement or prohibition, (2) based on smoking and health, (3) imposed under state law, and (4) with respect to advertising or promotion.  (15 U.S.C. § 1334(b);  Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at p. 2621, 120 L.Ed.2d at p. 427.)   The trial court erroneously ended its preemption inquiry after considering but one element of that four-part proposition while ignoring the other three.   Careful analysis of the factual allegations of Mangini's complaint, the Cipollone decision, and the law of unfair competition under Business and Professions Code section 17200 et seq. reveals that Mangini can amend her complaint to allege a valid legal theory which is beyond the scope of federal preemption due to the absence of the “based on smoking and health” element and the presence of advertising and promotion which by reason of its oppressive and unscrupulous nature is harmful to consumers and violative of public policy.   She must be given an opportunity to do so.4

We stress, however, that within the present procedural context—appeal from a summary judgment which is equivalent to judgment on the pleadings—we have merely assumed the truth of the factual allegations in Mangini's complaint.   (See, e.g., Stockton Newspapers, Inc. v. Redevelopment Agency (1985) 171 Cal.App.3d 95, 99, 214 Cal.Rptr. 561.)   Proof of those allegations is another matter entirely.   In order to prevail on the merits, Mangini must establish a link between the Old Joe Camel advertising campaign and the consumption of cigarettes by minors.   That link, no doubt, will be hotly contested by Reynolds.

C. The First Amendment Issue

 Finally, we point out that the only issue before us, and the only one we decide, is whether it is reasonably possible Mangini can state a good cause of action under Business and Professions Code section 17200 et seq. which is not preempted by the Federal Cigarette Labeling and Advertising Act.   An entirely separate issue is whether state law restrictions on the Old Joe Camel advertising campaign would violate the “limited form of First Amendment protection” afforded to commercial speech that “concerns a lawful activity and is not misleading or fraudulent.”  (Posadas de Puerto Rico Assoc. v. Tourism Co. (1986) 478 U.S. 328, 340, 106 S.Ct. 2968, 2976, 92 L.Ed.2d 266.)   Such speech “may be restricted only if the government's interest in doing so is substantial, the restrictions directly advance the government's asserted interest, and the restrictions are no more extensive than necessary to serve that interest.”  (Ibid.;  see Central Hudson Gas & Elec. v. Public Serv. Comm'n (1980) 447 U.S. 557, 566, 100 S.Ct. 2343, 2351, 65 L.Ed.2d 341.)   Here, on this point, factual questions are implicated.   For example, whether there is a substantial governmental interest in restriction depends on the link shown between the Old Joe Camel advertisements and the consumption of cigarettes by minors.   Thus, resolution of the First Amendment issue must await the development of a factual record below.5

IV. DISPOSITION

The judgment is reversed, and the cause is remanded with directions to the superior court to give Mangini an opportunity to amend her complaint.   Mangini shall recover her costs on appeal.

FOOTNOTES

1.   Because such preemption is undisputed, we need not address Reynolds's alternative claim that the dissemination of these products is unactionable because they are exempt from the labeling requirements of the Federal Cigarette Labeling and Advertising Act.

2.   Within the present context, the question of “unfairness” under section 17200 would seem to be, as much as anything else, simply one of degree:  has Reynolds gone too far in marketing Camel cigarettes?   If Reynolds had, for example, presented Teenage Mutant Ninja Turtles on children's lunch boxes to promote cigarette smoking, we have little doubt there would be a statutory cause of action for unfair advertising.

3.   Indeed, Justice Scalia's concurrence and dissent in Cipollone, which urges complete preemption of state court common law damages claims, recognizes that the court's decision leaves the door open to state court statutory actions as well as common law actions.   In arguing against the decision's method of evaluating whether a legal duty is “based on smoking and health” by focusing on the ultimate source of the duty—i.e., whether the law from which the duty derives is directed only to smoking and health—Justice Scalia points out that this approach extends beyond the common law to permit regulation under general state statutes that, like Business and Professions Code section 17200 et seq., proscribe unfair trade practices.  (Cipollone v. Liggett Group, Inc., supra, 505 U.S. at p. ––––, 112 S.Ct. at p. 2636–2637, 120 L.Ed.2d at pp. 446–447.)

4.   Indeed, as a practical matter it would now be pointless to deprive Mangini of the opportunity to amend.   The Old Joe Camel advertising campaign is still ongoing.   Thus, as defense counsel conceded at oral argument, even if the present judgment were affirmed, a new, properly pleaded action could be filed by a different plaintiff.   Affirmance would merely delay the inevitable.   Sooner or later, the “targeting” theory must be confronted on its merits.

5.   Mangini raises other issues, pertaining to a postjudgment costs award, of which our consideration would also be premature.   She argues that the court erred in awarding Reynolds fees of $4,625 it paid for deposing a doctor who had written an article quoted in the complaint, for two reasons.   First, she argues the deposition was not “necessary” within the meaning of Code of Civil Procedure section 1033.5, subdivision (a)(3) (which specifies costs associated with “necessary depositions”), because the deposition had no bearing on the federal preemption issue pending before the trial court.   Second, she argues any such fee award should have been limited to $35 per day under Government Code section 68093 (which specifies that amount for a witness's attendance at “a civil action or proceeding in the superior, municipal, and justice courts”) rather than the $250 per hour afforded by the court.   She also challenges the inclusion of a $124 filing fee for a federal court removal petition, on the ground removal was found to be improvident and thus the fee was not “necessary” to defense of the case.   Because we reverse the judgment—and the costs award along with it—in order to give Mangini an opportunity to amend her complaint, we need not resolve these costs issues in conjunction with our decision whether to reverse.   And because we cannot know who will ultimately be the prevailing party entitled to costs in this case (Code Civ.Proc., § 1032, subd. (b)), we cannot conclude that these costs issues should presently be addressed as being “necessary to the final determination of the case” (Code Civ.Proc., § 43).

KING, Associate Justice.

PETERSON, P.J., and HANING, J., concur.