Joe RIVERA, individually and as Guardian ad Litem for Joseph Rivera, V, and Jenica Rivera, minors, and Joe Rivera as Special Administrator to the Estate of Pamela Rivera, Plaintiff-Appellant,
v.
PHILIP MORRIS, INC., a Virginia corporation, Defendant-Appellee.
No. 03-16100.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted December 10, 2004.
Filed January 28, 2005.
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Mark Johnson, Esq. and Sims Weymuller, Esq., Johnson-Flora, PLLC, Seattle, WA, for the plaintiff-appellant.
John P. Desmond, Esq., Jones Vargas, Reno, NV, Daniel P. Collins, Esq., Munger Tolles & Olson, Los Angeles, CA, for the defendant-appellee.
Appeal from the United States District Court for the District of Nevada; James C. Mahan, District Judge, Presiding. D.C. No. CV-01-00601-JCM.
Before: FARRIS, D.W. NELSON, and GOULD, Circuit Judges.
FARRIS, Senior Circuit Judge.
Joe Rivera brought a wrongful death action against Philip Morris Inc., a tobacco manufacturer, asserting state law claims for strict product liability, fraud, and conspiracy. Summary judgment in favor of Philip Morris was granted. We affirm in part and remand for further proceedings.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Facts
Joe Rivera initiated this action individually, as Guardian ad Litem for his children and as executor of his deceased wife's estate. He filed suit in Nevada state court, alleging strict product liability based on theories of failure-to-warn and design-defect, fraud based on theories of both fraudulent concealment and fraudulent misrepresentation, and conspiracy. He contended that his late wife, Pamela Rivera, smoked Marlboro cigarettes manufactured by Philip Morris beginning in the summer of 1969 until her death from lung cancer in 1999.
B. District Court Proceedings
This action was timely and properly removed from state to federal court under diversity jurisdiction. The district court subsequently granted summary judgment in favor of Philip Morris, on grounds that (1) the strict product liability claim was preempted by the Federal Cigarette Labeling and Advertising Act of 1965, 15 U.S.C. §§ 1331 et seq., or alternatively, as a matter of law, the claim failed under Nevada's common knowledge test; (2) the fraudulent concealment claim was preempted by the same federal statute, or alternatively, evidence was lacking that the decedent would have acted differently if Philip Morris had disclosed material information concerning the health effects of smoking; (3) the fraud claim was not preempted under federal law but evidence was absent that the decedent saw, heard, or read and relied upon any misrepresentation by Philip Morris; and (4) the conspiracy claim necessarily failed because it was a derivative of other underlying claims. Rivera does not appeal the dismissal of his strict liability design-defect claim. He has not presented any argument with regard to the dismissal of his conspiracy claim and has therefore waived that issue on appeal.
II. DISCUSSION
A. Standard of Review
We review a grant of summary judgment de novo, construing the evidence in the light most favorable to the nonmoving party. Lindsey v. Tacoma-Pierce County Health Dep't,
B. Federal Preemption
As a threshold issue, we first determine whether any of Rivera's state law claims are preempted by federal law. Under the Supremacy Clause of the United States Constitution, Congress may preempt state common law as well as state statutory law through federal legislation. U.S. CONST. art. VI. § 2; Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co.,
In 1965, Congress enacted the Federal Cigarette Labeling and Advertising Act, which required all cigarette packages to contain a warning that smoking was hazardous. The purpose of the Labeling Act was to adequately inform the public of the dangers associated with smoking cigarettes and to protect the national economy from the burden imposed by diverse, non-uniform, and confusing cigarette labeling and advertising regulations. Cipollone v. Liggett Group, Inc.,
In Cipollone, the Supreme Court addressed preemption as applied to several state common law claims against cigarette manufacturers. In interpreting the preemption provision, a four-member plurality of the Court found that the Labeling Act's broad language preempted some, but not all, common law claims. Cipollone,
As to the claims before us, a majority of the Court, including two dissenting Justices, agreed that failure-to-warn claims based on allegations that post-1969 advertising or promotional materials should have included additional, or more clearly stated, warnings are preempted by the Labeling Act. However, a plurality of the Court found that certain claims were not preempted, including (1) failure-to-warn claims based solely on negligent testing, research practices, or other actions unrelated to advertising or promotion, (2) fraudulent concealment claims based on a state-law duty to disclose material facts through channels other than advertising or promotion (e.g., state agency), (3) misrepresentation claims based on false statements of material fact made in advertising, and (4) conspiracy to misrepresent material facts, provided a claim for misrepresentation can be maintained.
(1) Strict Liability Failure-to-Warn Claim
The plaintiff advances two arguments to save his strict liability claim from the preemptive effect of the Labeling Act's Section 1334(b) and the Supreme Court's holding in Cipollone: (1) that Cipollone is not binding authority and may be disregarded by this Court, and (2) even if Cipollone is binding, his failure-to-warn claim still survives because it is not based on "advertising or promotion."
Although courts are not bound to follow the preemption test adopted by the four-Justice plurality opinion, other federal courts of appeal have applied the holding in Cipollone as binding precedent. See, e.g., Spain v. Brown & Williamson Tobacco Corp.,
Looking to Cipollone for guidance we must conclude that Rivera's failure-to-warn claim is not preempted by the Labeling Act. A claim is expressly preempted if the predicate duty underlying the claim constitutes: (1) a requirement or prohibition, (2) based on smoking and health, (3) imposed under state law, (4) with respect to the advertising or promotion of cigarettes. Cipollone,
Philip Morris counters that any claim that it should have provided more information than was required on the federally mandated warning labels necessarily challenges the adequacy of those labels and is therefore preempted. See Papike v. Tambrands, Inc.,
Rivera does not, though, challenge the warnings Philip Morris actually gave pursuant to the Labeling Act. Rather, his claim addresses smoking harms outside the Act's reach, about which Philip Morris gave no warnings at all, but could have, through means other than advertising and promotion. His claim is thus unlike the claims in Papike and Taylor, where we held that plaintiffs' failure-to-warn claims regarding harms addressed in federally-regulated warning labels were preempted because the claims were "premised ultimately upon the inadequacy of the product label." Taylor,
Philip Morris also relies on a line of cases which hold that any claim requiring public release or disclosure of information is necessarily related to advertising and promotion. Johnson v. Brown & Williamson Tobacco Corp.,
This broad interpretation of the phrase "advertising or promotion" does not comport with the language of Cipollone, nor does it square with the language and legislative history of the Labeling Act. By preserving some claims in Cipollone that were based, in part, on the duty to communicate smoking and health information to the public (e.g., the communicative duties arising from voluntary activities and research activities), the plurality envisioned continued avenues for cigarette manufacturers to perform those duties through means other than the rigorously controlled avenues of advertising, promotion, and packaging. See Harshbarger,
A trier of fact could find that Philip Morris had an obligation to warn consumers of the health risks of smoking outside of packaging, advertising, and promoting. We conclude that imposing such an obligation would be consistent with a "fair but narrow" reading of the Labeling Act's Section 1334(b) and the plurality's decision in Cipollone. Further, the rationale of those cases holding that public service announcements, lobbying, seminars, or educational programs are necessarily promotional is open to question under Cipollone.
(2) Fraudulent Concealment Claim
Rivera's fraudulent concealment claim is not preempted for similar reasons. Rivera alleges that Philip Morris engaged in fraud by failing to disclose information relating to the addictive qualities of smoking and the true nature and degree of the health hazards associated with cigarettes through media unrelated to the advertising or promotion of cigarettes, such as the industry-established Tobacco Industry Research Committee. A plurality of the Supreme Court in Cipollone agreed that fraudulent concealment claims escape preemption "insofar as those claims rely on a state-law duty to disclose ... [material] facts through channels of communication other than advertising or promotion," such as state statutes requiring a cigarette manufacturer "to disclose material facts about smoking and health to an administrative agency." Cipollone,
The predicate of Rivera's fraudulent concealment claim is the general duty under Nevada law not to conceal statements of material fact. The separate channel through which Philip Morris could communicate those facts was the TIRC, which was established specifically to inform the public of the health risks of tobacco use. Philip Morris' duty to disclose statements of material facts was imposed by state law and unrelated to the advertising or promotion of cigarettes. Rivera's fraudulent concealment claim is not preempted.1
C. Rivera's Substantive Claims
(1) Strict Liability Failure-to-Warn Claim
Having concluded that Rivera's strict liability claim is not preempted, we next determine whether his claim should have survived summary judgment. Rivera appeals the dismissal of his strict liability failure-to-warn claim, contending that the district court erred in two ways: first, by taking judicial notice of the fact that the dangers of smoking were commonly known after 1969, the year that the federal government strengthened the warning labels on cigarette packages and Mrs. Rivera started smoking; and second, by holding, as a matter of law, that after 1969 cigarettes were not unreasonably dangerous under Nevada law.
The parties agree that this strict product liability case is governed by Nevada law. Nevada has adopted the strict liability formula set forth in Section 402A of the Restatement (Second) of Torts. See Forest v. E.I. DuPont de Nemours, & Co.,
To state a cause of action for strict product liability in Nevada, Rivera must show that: (1) the product has a defect which rendered it unreasonably dangerous, (2) the defect existed at the time the product left the manufacturer, and (3) the defect caused Mrs. Rivera's injury. Fyssakis v. Knight Equip. Corp.,
The district court took judicial notice of the fact that the health risks and addictive nature of smoking have been common knowledge in Nevada and, as a matter of law, concluded that cigarettes were not unreasonably dangerous. According to Philip Morris, courts have repeatedly dismissed claims brought by cigarette smokers because information regarding the health risks of smoking, including addiction, have long been available to, and known by, the public. Philip Morris argues that the district court correctly took judicial notice of this past awareness and granted dismissal of Rivera's strict liability claim.
The Federal Rules of Evidence allow for judicial notice of a fact that is "not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b). The notes of the advisory committee with regard to Federal Rule of Evidence 201 explain that "[a] high degree of indisputability is the essential prerequisite" to taking judicial notice of adjudicative facts and that "the tradition [of taking judicial notice] has been one of caution in requiring that the matter be beyond reasonable controversy." Fed.R.Evid. 201(a) & (b) advisory committee's notes. "Because the effect of judicial notice is to deprive a party of an opportunity to use rebuttal evidence, cross-examination, and argument to attack contrary evidence, caution must be used in determining that a fact is beyond controversy under Rule 201(b)." Wright v. Brooke Group Ltd.,
The Nevada courts have not determined whether the common knowledge doctrine in the context of tobacco litigation would defeat Rivera's strict liability claim as a matter of law. We therefore "make a reasonable determination of the results the highest state court would reach if it were deciding the case." Aetna Cas. & Sur. Co. v. Sheft,
Philip Morris urges us to hold, as a matter of law, that the dangers of smoking were commonly known by 1969. In Guilbeault v. R.J. Reynolds Tobacco Co.,
Id. at 273. Several courts have also taken this approach and held, as a matter of law, that by 1969 there was common knowledge of the evils of smoking. See, e.g., Glassner,
Other courts deciding the issue have drawn a distinction between common knowledge of the general health hazards of smoking versus the common knowledge of specific illnesses or injuries allegedly caused by smoking. For example, in Tompkin v. Am. Brands,
The pertinent issue here is not whether the public knew that smoking was hazardous to health at some undifferentiated level, but whether it knew of the specific linkages between smoking and lung cancer.
Id. at 572. The court narrowed the common knowledge inquiry to the question of whether the link between cigarette smoking and lung cancer was common knowledge, not merely whether the link between cigarette smoking and general health maladies was common knowledge. The court explained its reason for narrowing the inquiry:
It is one thing to be aware generally that a product might have an attenuated and theoretical connection with a deadly disease like lung cancer; it is another altogether to comprehend that it is the cause of an overwhelming majority of lung cancer cases. The "common knowledge" requirement is emasculated if a defendant may show merely that the public was aware that a product presented health risks at some vague, unspecified, and undifferentiated level.
Id. (internal citation omitted).
The issue is unresolved in Nevada, but there is a basis to conclude that Nevada courts would narrow the inquiry and distinguish between knowing about general health risks of smoking and knowing about specific risks, like lung cancer or addiction, caused by tobacco products. See Allison v. Merck & Co., Inc.,
Philip Morris urges us to affirm the district court based on the evidentiary record. The test for whether a product is "unreasonably dangerous" is an objective determination and is measured by the "ordinary consumer" for whom the product is designed. See McLennan v. Am. Eurocopter Corp.,
Rivera, through Marvin E. Goldberg, Ph.D., submitted an expert report highlighting public opinion polls conducted in 1970 and 1999 which found that "[o]ver half (53%) of smokers believed that smoking was not hazardous or that only heavy smoking was hazardous." Dr. Goldberg's report also discussed various studies conducted by the tobacco industry that were allegedly concealed from the public but confirmed "the relationship between heavy and prolonged tobacco smoking and the incidence of cancer of the lung." An inference can be drawn from this evidence that if the tobacco industry purposefully suppressed scientific findings which were supportive of a link between tobacco and cancer, then it is less likely that the ordinary consumer could have known of the connection between smoking and lung cancer. We cannot weigh evidence. The evidence, and the favorable inferences to be drawn from it, is sufficient to question whether ordinary consumers were aware of the association between smoking and lung cancer, and the requisite presumptions on summary judgment leave the question to a trier of fact. See, e.g., Tompkin,
Rivera also argues that the typical consumer was unaware in 1969 that smoking was addictive. "The idea is that the first cigarettes don't cause cancer, but they do make you crave more cigarettes and those additional cigarettes are the ones that cause cancer down the road." Insolia,
Philip Morris, on the other hand, submitted affidavits and reports from two experts, both of whom concluded that the hazards of smoking, including lung cancer and addiction, have been commonly known since well before 1969. Some of Rivera's own experts did not challenge these conclusions and, in one instance, supported a finding of common knowledge as to the risk of contracting lung cancer from smoking. We recognize that a trier of fact can reject expert testimony, but the evidence in the record, though slight, is sufficient to survive summary judgment and raise a question for a trier of fact. See Texas v. Am. Tobacco Co.,
(2) Fraudulent Concealment
Rivera claims that Philip Morris fraudulently concealed the link between smoking and lung cancer. In Nevada, the elements of fraudulent concealment are:
(1) the defendant concealed or suppressed a material fact; (2) the defendant was under a duty to disclose the fact to the plaintiff; (3) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; that is, the defendant concealed or suppressed the fact for the purpose of inducing the plaintiff to act differently than she would have if she had known the fact; (4) the plaintiff was unaware of the fact and would have acted differently if she had known of the concealed or suppressed fact; (5) and, as a result of the concealment or suppression of the fact, the plaintiff sustained damages.
Dow Chem. Co. v. Mahlum,
To sustain a claim for fraud based on concealment or omission, Rivera was required to present evidence showing that the fraud victim would have acted differently if there had not been fraudulent concealment. Nev. Power Co. v. Monsanto Co.,
(3) Misrepresentation Claim
Rivera claims that the defendant made affirmative misrepresentations regarding the health risks of smoking. False representation claims, whether or not they allege misrepresentation in advertising and promotional materials, are not preempted by the Labeling Act because they are based on a general duty not to deceive. Cipollone,
Under Nevada law, the elements of fraud are: (1) a false representation made by the defendant; (2) defendant's knowledge or belief that the representation was false (or insufficient basis for making the representation); (3) defendant's intention to induce the plaintiff to act or refrain from acting in reliance upon the misrepresentation; (4) plaintiff's justifiable reliance upon the misrepresentation; and (5) damage to the plaintiff resulting from such reliance. Bulbman, Inc. v. Nev. Bell,
Philip Morris contends that the allegation of fraudulent conduct must fail as a matter of law because Rivera cannot show that the decedent justifiably relied on any representation made by the defendant. To establish justifiable reliance, Rivera must show that an alleged false representation played a material and substantial part in leading his late wife to adopt her particular course. See Blanchard v. Blanchard,
Rivera filed this lawsuit after his wife died. The record contains no admissible evidence identifying what statements attributable to Philip Morris the decedent actually saw, heard, or read and relied upon to support her decision to start and continue smoking. During discovery, Rivera admitted that he was:
unable to point to a specific statement in any advertisement or public communication from [Defendant] which influenced Mrs. Rivera's decision to start, continue or fail to quit smoking.
Rivera argues that the pervasiveness of Philip Morris' advertisements creates an issue of material fact as to whether his late wife saw those advertisements and relied upon them. The mere pervasiveness of the advertisements is insufficient to counter the plaintiff's testimony. During his deposition, Rivera could not identify any misrepresentation by Philip Morris that his late wife saw or relied upon in deciding to smoke cigarettes in general and Marlboro cigarettes in particular. Reliance is an essential element of a misrepresentation claim. Summary judgment on that claim was appropriate.
We affirm in part and remand for further proceedings. In doing so, we do not preclude further pretrial considerations that might rebut the presumptions that must be overcome to justify summary judgment. Each party shall bear its own costs.
AFFIRMED IN PART AND REMANDED.
Notes:
Notes
InCipollone, the Supreme Court insinuated that "state law" does not include legal duties imposed on voluntary acts. See Cipollone,
