Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc.

Apr 28, 1998
97 CIV. 4550(SAS), 97 CIV. 4676, 97 CIV. 7346, 97 CIV. 8462 and 97 CIV. 9395 through 97 CIV. 9402
Versions:7 F. Supp. 2d 294
1998 U.S. Dist. LEXIS 5975

OPINION AND ORDER

SCHEINDLIN, District Judge.

On March 25, 1998,1 denied, substantial portions of defendants’ motion to dismiss these complaints for failure to state a claim. Defendants now seek certification for interlocutory review of that order under 28 U.S.C. § 1292(b). Certification is appropriate when an order “involves a controlling question of law as to which there is substantial ground for difference of opinion” and “immediate appeal from the order may materially advance the ultimate termination of the litigation];.]” 28 U.S.C. § 1292(b) (1994). Defendants raise three issues that they believe warrant immediate review:

1. Whether plaintiffs have pled a direct claim for injuries proximately caused by defendants, as is required to state a RICO claim.
2. Whether plaintiffs have pled injury to their business or property, as is also required under RICO.
3. Whether the Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331-40 (1994), preempts plaintiffs’ state law fraud and breach of special duty claims.

Questions one and two merely challenge the sufficiency of the pleadings. “It would seem axiomatic that appeals challenging pre-trial rulings upholding pleadings against demurrer could not be effective in bringing nearer the termination of litigation; on the contrary, they only stimulate the parties to more and greater pre-trial sparring apart from the merits.” Gottesman v. General Motors Corp., 268 F.2d 194, 196 (2d Cir.1959); see also Able v. United States, 870 F.Supp. 468, 471 (E.D.N.Y.1994) (court “should not freely certify orders involving the sufficiency of pleadings”). If reworded more broadly, however, “the issues attempted to be formulated ... [in those questions] can decisively advance the termination of this litigation.” Gottesman, 268 F.2d at 197. Accordingly, instead of defendants’ questions one and two I will certify the following question:

Whether, under the circumstances alleged in plaintiffs’ complaint, economic injuries incurred by a union health care trust fund are purely derivative of the physical injuries which its participants suffered, and are therefore too remote to permit recovery as a matter of law.

The issue lies at the heart of this action, and recent decisions addressing the remoteness issue in tobacco liability cases have come to widely varying conclusions. Compare, e.g., City and County of San Francisco v. Philip Morris, Inc., 957 F.Supp. 1130 (N.D.Cal.1997); Southeast Florida Laborers District Health & Welfare Fund v. Philip Morris, No. 97-8715-CIV, slip op., 1998 WL 186878 (S.D.Fla. Apr. 14, 1998); Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., No. 97-5344, slip op., 1998 WL 212846 (E.D.Pa. Apr. 22, 1998)(motions to dismiss granted on remoteness grounds); with State ex rel. Thomas J. Miller v. Philip Morris, Inc., 577 N.W.2d 401 (Iowa 1998) *297 (interlocutory appeal; affirming decision dismissing four counts on remoteness grounds and rejecting remoteness argument for remaining five counts) and Maryland v. Philip Morris Inc., 1997 WL 540913 (Md.Cir.Ct.1997); Texas v. The American Tobacco Co., No. 5-96CV-91, slip op. (E.D.Tex. Sept. 8, 1997) (motions to dismiss on remoteness grounds denied). There is manifestly substantial ground for difference of opinion. Because a reversal on this issue would likely result in dismissal of the case, the most efficient course is to seek review before the parties and the district court engage in protracted litigation. I therefore certify the above question for immediate review.

I also certify defendants’ question three, as it also involves a controlling and potentially dispositive question of law “as to which there is substantial ground for difference of opinion.” 28 U.S.C. § 1292(b).

Application for an appeal under § 1292(b) “shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.” Id. As neither party is seeking a stay of pretrial proceedings during interlocutory review, pretrial discovery will continue throughout any § 1292(b) appeal.

SO ORDERED.