Opinion
September 27, 2000
Chadbourne Parke, L. L. P., New York City (Bruce Sheffler of counsel), for Fortune Brands, Inc., and others., defendants.
Shook, Hardy, Bacon, L. L. P., of the Missouri Bar, admitted pro hac vice, (Billy R. Randles and David M. Woods of counsel), for Lorillard Tobacco Company, defendant.
Greenberg Traurig, New York City (Alan Mansfield and Robert Kirshenberg of counsel), and Winston Strawn, New York City (Thomas J. Quigley and David Mollon of counsel), for Philip Morris Incorporated and another, defendants.
Jones, Day, Reavis Pogue, New York City (Stephen J. Kaczynski and Harold K. Gordon of counsel), for RJR Nabisco, Inc., and another, defendants.
Kasowitz, Benson, Torres Friedman, New York City (Aaron H. Marks and Nancy E. Straub of counsel), for Liggett Group, Inc., also known as Brooke Group, Ltd., and another, defendants.
Seward Kissel, L. L. P., New York City (Jack Yoskowitz of counsel), for The Tobacco Institute, Inc., defendant.
Debevoise Plimpton, New York City (Bruce G. Merritt and Harry Zirlin of counsel), for The Council for Tobacco Research-USA, Inc., defendant.
Finz Finz, Jericho (Gary J. Douglas, Stuart Finz, Joseph S. Hubicki and Michael London of counsel), for plaintiff.
MEMORANDUM
How do we reconcile a Federally pre-empted cause of action for fraudulent concealment with a permitted cause of action for conspiracy to misrepresent or conceal material facts in a smoker's personal injury action under New York law?
This is the second in a series of smoker suits in the Kings County Tobacco Litigation to be subjected to review upon motions for summary judgment. In Anderson, the first such suit, the defendants moved for summary judgment claiming, inter alia, that the cause of action for fraudulent concealment was preempted by the 1969 Cigarette Labeling Act and must be dismissed. Defendants further argued that under principles of New York law, a cause of action based upon a conspiracy to commit the tort of fraudulent concealment must similarly be dismissed since the underlying claim must be dismissed and without such claim there can be no viable cause of action for conspiracy. This court agreed and held, inAnderson, that the cause of action for fraudulent concealment was preempted under the labeling act.
In both Anderson v. Fortune Brands ( 187 Misc.2d 404) and in the instant matter this court decided the summary judgment motions in accordance with the decision of the United States Supreme Court inCipollone v. Liggett Group, 505 U.S. 504 (1992) as follows: Causes of action for failure to warn were deemed viable pre-1969 and pre-empted post 1969; the willful failure to warn was viable pre-1969 and supported concerted action theories; fraudulent misrepresentation was not preempted but was dismissed on evidentiary grounds; fraudulent concealment was viable pre-1969 but pre-empted post 1969. Conspiracy to commit intentional fraud was unsupported by an independent underlying tort post 1969 and hence was not submitted to the jury in Anderson. Negligent design and strict products liability were viable pre and post 1969. Causes of action for express and implied warranty were dismissed or severely limited on statute of limitations grounds. See fn. 6.,infra.
Decision on the motions for summary judgment in Anderson was rendered in March of 2000. No notice of appeal was filed. The Anderson case was tried to verdict. In June of 2000 the jury returned a defendants' verdict finding that cigarette smoking was not a substantial factor in the cause of the plaintiffs lung cancer.
In Davis the allegations with respect to fraudulent concealment were virtually identical to those in Anderson and the claim for fraudulent concealment was dismissed in summary fashion for the same reasons. This expanded decision follows.
Susan Davis' husband began smoking in the early 1960s and continued smoking until 1992. He died of lung cancer in 1995. Susan Davis commenced this suit in 1997 against defendant tobacco companies and two industry related research organizations alleging causes of action for the failure to warn prior to 1969, fraud and deceit, negligent misrepresentation, negligent and defective design, strict product liability and breaches of express and implied warranties.
Our determination of questions of Federal pre-emption is perforce molded by the decision of the United States Supreme Court in Cipollone v. Liggett Group, 505 U.S. 504 (1992). In Cipollone, the smoker's allegations with respect to fraudulent misrepresentation claims were allegations that "respondents had willfully, through their advertising, attempted to neutralize the [federally mandated] warnin[g] labels" and with respect to the fraudulent concealment claims alleged that the defendant cigarette companies "possessed, but had `ignored and failed to act upon' medical and scientific data indicating that `cigarettes were hazardous to the health of consumers'."
This is the authoritative decision in this area — and while we may not be able to live too easily with it — we cannot do without it. Cipollone is a decision carved out of two extreme approaches to the pre-emption provision of the 1969 Cigarette Labeling Act. The Justices sitting at one extreme would rule that the Act pre-empts all of the petitioner's claims, while those opposed would not pre-empt any of them. The plurality decision that emerged was one that gerrymandered its way through the various causes of action "creat[ing] a crazy quilt of preemption from among the common law claims [there] implicated."Cipollone, supra, 505 U.S. at 543 (concurring/dissenting opinion of Justice Blackmun). As Justice Blackmun predicted, "I can only speculate as to the difficulty lower courts will encounter in attempting to implement today's decision." Cipollone, supra 505 U.S. at 543 (concurring in part and dissenting in part).
Here it is alleged that the defendants "failed to disclose the material facts regarding the dangerous and addictive nature, properties and propensities of the cigarettes by concealing and suppressing material facts regarding the dangerous and addictive nature, properties and propensities of its cigarettes." The evidence submitted by the plaintiff in opposition to the defendant's summary judgment motion was directed toward demonstrating that "The cigarette manufacturers conducted a public relations campaign to disinform the public, hide and misrepresent scientific research on smoking and health, and create doubt in the minds of the public that smoking was hazardous."
In determining what claims could be tried as state based common law damage claims after 1969 and which could not, the plurality began with the language of § 5 (b) of the Act and used it as a grid against which to test each of the individual claims. It appeared that the plurality intended to pre-empt those claims that met each and every one of the criteria for preemption enumerated in this provision and deny pre-emption to those claims that did not satisfy each and every criteria. In so doing, the plurality asked "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." Cipollone, supra, 505 US at 523.
To get the flavor of the plurality's analytical method — the breach of express warranty claim is not pre-empted because" [a] manufacturer's liability for breach of an express warranty derives from, and is measured by, the terms of that warranty. Accordingly, the `requirement[s]' imposed by an express warranty claim are not `imposed under state law,' but rather imposed by the warrantor." Cipollone, supra, 505 U.S. at 525. The failure to warn claims were pre-empted "to the extent that they rely on a state-law `requirement or prohibition. [presumably based on smoking and health] . . with respect to . . . advertising or promotion.' Thus, insofar as claims . . . require a showing that respondents' post-1969 advertising or promotion should have included additional, or more clearly stated, warnings, those claims are pre-empted. The Act does not, however, pre-empt petitioner's claims that rely solely on respondents' testing or research practices or other actions unrelated to advertising or promotion."
However, in analyzing the intentional fraud claims, the plurality deviated considerably from that strategy. First, it determined that fraudulent misrepresentation of a material fact and concealment of a material fact were both predicated on the state law duty not to make false statements of material facts or conceal such facts. Next, the plurality determined that neither of these claims are predicated on a duty based upon smoking and health. According to the plurality both of these intentional fraud claims are based on the more general obligation, the "duty not to deceive." Id. at 2624.
It would seem, therefore, that neither of these claims should be preempted. Indeed, claims of fraudulent misrepresentation are not pre-empted even those "that do arise with respect to advertising and promotion . . ." Id. However, when the fraud stems from the concealment of a fact, the § 5 (b) elements of advertising and promotion are taken into account. If the claim alleges that the defendants were obligated to disclose the concealed facts by means of advertising and promotion, then such claim is pre-empted. However where the "claims rely on a state-law duty to disclose such facts through channels of communication other than advertising or promotion" those claims are not pre-empted.
The plurality explained that "if state law obliged respondents to disclose material facts about smoking and health to an administrative agency, § 5 (b) would not pre-empt a state law claim based on a failure to fulfill that obligation." Id.
Accordingly, here as in Anderson, this court held that plaintiffs claim of fraudulent concealment was pre-empted after 1969 because the plaintiff was unable to show its reliance on any State law duty to disclose such facts through channels of communication other than advertising or promotion. See, Tompkins v. RJ Reynolds Tobacco Co., 92 F. Supp.2d 70, 81 (N.D.N.Y., 2000) (". . . Plaintiffs fail to identify in either their complaint, proposed amended complaint, or opposition papers to summary judgment what state-law duty existed that would have required [defendant] to reveal such information through means other than advertising. Such identification is necessary to save the claim from pre-emption.")
This court held that fraudulent misrepresentation was not pre-empted, however, the plaintiff was unable to provide any evidence of reliance upon a particular misrepresentation and thus that cause of action was dismissed. All we have is inadmissible hearsay to the effect that television ads made smoking seem cool. See Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 57 (1999)("To make out a prima facie case of fraud, the complaint must contain allegations of a representation of a material fact, falsity, scienter, reliance and injury"). See also Tompkins v. RJ Reynolds Tobacco, supra, 92 F. Supp. 2d at 83 (plaintiffs failed to establish that the plaintiff relied on any RJR advertising or promotional statements in deciding whether to smoke).
Unfortunately in its analysis of the cause of action for conspiracy to misrepresent or conceal material facts, the plurality collapsed the distinction it had just created between misrepresentation and concealment and merged the two, holding that conspiracy is not pre-empted because it is not a prohibition based on smoking and health. If this holding is read as allowing a claim of conspiracy to go forward even where, as here, the underlying cause of action for fraudulent concealment is pre-empted and the cause of action for misrepresentation is dismissed for failure of proof, the result simply cannot be squared with New York's view of the law of civil conspiracy.
The plurality characterizes petitioner's final claim as "a conspiracy among respondents to misrepresent or conceal material facts concerning the health hazards of smoking." The plurality holds that the "predicate duty underlying this claim is a duty not to conspire to commit fraud [and concludes for the reasons stated in connection with the intentional fraud claim that], , , this duty is not pre-empted by § 5 (b) for it is not a prohibition `based on smoking and health' as that phrase is properly construed." Cipollone, supra 505 U.S. at 530.
"New York does not recognize civil conspiracy to commit a tort as an independent cause of action." Pappas v. Passias, 271 A.D.2d 420 (2d Dept. 2000)("since the fraud cause of action was dismissed, the ninth cause of action, which alleged a conspiracy to defraud the plaintiff was also properly dismissed). As the Court of Appeals, in a tobacco suit recently held: "As a result of [the failure of plaintiffs common law fraud claims] there is no independent tort to provide a basis for liability under their concert of action, conspiracy and aiding and abetting theories. These causes of action must fail as well." Small v. Lorillard, supra, 94 N.Y.2d at 57.
Indeed, this is the rule in many, if not most jurisdictions. See In re Orthopedic Bone Screw Products Liability Litigation, 193 F.3d 781 (3rd Cir. 1999) (surveying the field and holding that "The established rule is that a cause of action for civil conspiracy requires a separate underlying tort as a predicate for liability. Thus, one cannot sue a group of defendants for conspiring to engage in conduct that would not be actionable against an individual defendant. Instead, `actionable civil conspiracy must be based on an existing independent wrong or tort that would constitute a valid cause of action if committed by one actor'."
Thus in a case in which fraudulent misrepresentation and concealment are alleged and the evidence makes out a prima facie case of fraudulent misrepresentation, than a conspiracy claim based upon misrepresentation and concealment would not be pre-empted and could, under proper factual circumstances, be submitted to the jury. See Litras v. Litras, 254 A.D.2d 395 (2d Dept. 1998).
In Litras, the plaintiffs alleged that "the individual defendants committed certain torts. The sixth cause of action alleged that the defendants conspired to commit those torts as part of a common scheme to destroy the plaintiffs' business. The verdict sheet reveals that the jury found that each of the three individual defendants [and a fourth defendant] committed one of the underlying torts specified in the complaint, and that all the defendants conspired to commit such tortious acts as part of a scheme to destroy the plaintiffs' business. Accordingly, the defendants were jointly and severally liable for any compensatory and punitive damages awarded for the underlying torts."Litras, supra, 254 A.D.2d at 396.
However, where as here, no such underlying intentional tort remains in the post 1969 era, than the claim for conspiracy in the post 1969 era must be dismissed, not because it is pre-empted, but because it has no underlying independent tort to provide a basis for liability.
Accordingly, the claims for fraudulent concealment and conspiracy to fraudulently conceal material facts post 1969 are dismissed.