Key Points

  • The Tenth Circuit denied Santa Fe Natural Tobacco Co.'s petition for rehearing en banc after a majority of non-disqualified active judges voted against it; Judges Hartz and Carson were recused.
  • The denial leaves in place a panel decision that affirmed certification of menthol-purchaser classes and reversed the district court's denial of certification for safer-cigarette classes.
  • Judge Tymkovich, joined by Judge Eid, dissented, arguing the panel's reading of Comcast Corp. v. Behrend tolerates a damages model that is inaccurate so long as it is inaccurate for every class member.
  • The dissent also argued that the circuit's Cline and Rider decisions, which bar denying certification solely on administrative feasibility grounds, conflict with the Rules Enabling Act and Wal-Mart Stores, Inc. v. Dukes.

The full U.S. Court of Appeals for the Tenth Circuit declined on Nov. 12 to reconsider a ruling that lets smokers pursue class claims accusing Santa Fe Natural Tobacco Co. of deceiving them with "natural" and "additive-free" labels on its Natural American Spirit cigarettes.

In a brief per curiam order, the court said a majority of its active judges who were not disqualified voted to deny the tobacco company's petition for rehearing en banc. Judges Tymkovich and Eid voted to grant it. Judges Harris Hartz and Joel M. Carson, III were recused, the order said.

The denial leaves in place a panel decision, Dunn v. Santa Fe Natural Tobacco Co., 185 F.4th 999, that affirmed certification of classes of menthol cigarette buyers in eight states and reversed a trial judge's refusal to certify classes of Spirit buyers in twelve states. Judge Tymkovich, joined by Judge Eid, wrote in dissent that the panel majority's answers on two class-action questions "conflict with the respective Supreme Court precedents."

According to the dissent, Santa Fe marketed Spirit cigarettes during the relevant period as "natural," "organic" and "additive-free." The packages carried a disclaimer stating, "No additives in our tobacco does NOT mean a safer cigarette." The plaintiffs alleged that the company nonetheless led consumers to believe the cigarettes were safer than other brands and charged a premium price for them.

The plaintiffs advanced two theories. Under what the dissent called a "safer-cigarette theory," the labels allegedly misled consumers into believing Spirits were healthier than competing cigarettes. Under a "menthol theory," the plaintiffs claimed that buyers of menthol Spirits were misled because menthol in the filter can migrate into the tobacco during smoking, even though the packs described the tobacco as additive-free.

The certification fight turned on predominance, the requirement in Federal Rule of Civil Procedure 23 that questions common to the whole class outweigh questions affecting only individual members. The federal district court in New Mexico certified the menthol classes but denied certification of the safer-cigarette classes, and both sides appealed.

Judge Tymkovich, who had written a partial dissent from the panel decision, first argued that the plaintiffs' damages model did not match their theory of liability, as the Supreme Court required in Comcast Corp. v. Behrend, a 2013 decision. Under Comcast, he wrote, "a model purporting to serve as evidence of damages . . . must measure only those damages attributable" to the theory of liability.

The plaintiffs' model failed that test, Judge Tymkovich wrote, because a consumer might prefer "natural" cigarettes for reasons unrelated to health, such as "quality, taste, [or] eco-conscious farming practices," a list he drew from Santa Fe's opposition to class certification. He wrote that the model "does not isolate the price premium attributable to the allegedly misleading interpretations."

The panel majority had reasoned that if the model does not accurately capture how a reasonable consumer would read the labels, it errs "in unison for all class members." Judge Tymkovich rejected that view. "On this reading of Comcast, it does not matter whether the damages model is wrong, so long as it is wrong for everyone," he wrote. "Comcast's command that damages must be measurable across the class must mean that damages are accurately measurable across the class."

The dissent's second objection concerned administrative feasibility, the question of whether class members can be identified in a manageable way. Santa Fe had argued that consumers buy Spirits from retailers and that no records identify the purchasers. As the dissent described that argument, the case would then "devolve into mini-trials regarding individual claims of purchase based largely on self-serving affidavits from supposed consumers."

The district court agreed with Santa Fe on that point. But it predicted that the Tenth Circuit would treat the problem as a manageability concern that would defeat certification only if combined with another obstacle. While the appeal was pending, the circuit decided Cline v. Sunoco, Inc. (R&M), in 2025, and Rider v. OXY USA, Inc., in 2026. Judge Tymkovich agreed with the panel majority that those decisions "effectively preclude a district court from refusing class certification based solely on administrative feasibility issues."

He wrote that this approach conflicts with the Rules Enabling Act and with the Supreme Court's 2011 decision in Wal-Mart Stores, Inc. v. Dukes. An individual plaintiff would have to prove a purchase of Spirit cigarettes as part of the claim, he wrote, yet the circuit's rule lets class plaintiffs "punt the issue to the damages stage."

"In sum, our approach to administrative feasibility impermissibly allows plaintiffs to elide proving substantive elements of their claims through artful use of Rule 23," Judge Tymkovich wrote. "That is exactly what the Supreme Court in Dukes told us the Rules Enabling Act prohibits."

Public Citizen and others appeared in the appeals as amici curiae, according to the order's caption.

The denial leaves the panel's certification ruling in place in the cross-appeals, Nos. 23-2180 and 23-2181. The order does not describe further proceedings in the district court. Judge Tymkovich wrote that his reasons were "more thoroughly explained in my partial dissent" to the panel decision.