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MAGNUS v. FORTUNE BRANDS

March 18, 1999

ANDREA MAGNUS, ALAN MAGNUS, CHARLOTTE LEAVITT AS THE ADMINISTRATIX OF THE ESTATE OF FRIEDA CHASE, AND CHARLOTTE LEAVITT INDIVIDUALLY, PLAINTIFFS,
v.
FORTUNE BRANDS, INC., F/K/A AMERICAN BRANDS, INC., THE AMERICAN TOBACCO COMPANY, PHILIP MORRIS INCORPORATED, PHILIP MORRIS COMPANIES, INC., LIGGETT GROUP, INC., N/K/A BROOKE GROUP, LTD., LIGGETT & MYERS TOBACCO COMPANY, BROWN & WILLIAMSON TOBACCO CORPORATION, BROWN & WILLIAMSON INDUSTRIES, INC., INDIVIDUALLY AND AS SUCCESSOR BY MERGER OF FORTUNE BRANDS, INC., F/K/A AMERICAN BRANDS, INC; AND THE AMERICAN TOBACCO COMPANY; THE TOBACCO INSTITUTE, INC. AND THE COUNCIL FOR TOBACCO RESEARCH-USA, INC., DEFENDANTS.



The opinion of the court was delivered by: Gershon, District Judge.

    Memorandum and Order

Plaintiffs Andrea Magnus ("Magnus"), Alan Magnus and Charlotte Leavitt individually and as the administratrix of the estate of Frieda Chase ("Chase") bring an action against cigarette manufacturers, their current or former parent holding companies and two industry-related associations to recover damages for personal injuries allegedly suffered as a result of smoking cigarettes. Magnus suffers from cancer of the larynx, emphysema and/or other serious illnesses. Chase suffered from cancer of the throat, emphysema, and/or other serious illnesses before she died during the pendency of this action. Plaintiff Alan Magnus is Andrea Magnus's husband.

Defendants Liggett & Myers Tobacco Co., Brown & Williamson Tobacco Corporation ("Brown & Williamson"), Philip Morris Incorporated ("Philip Morris"), and the American Tobacco Company (collectively, the "Manufacturing Defendants") all manufacture or used to manufacture cigarettes.

Defendant Liggett Group, Ltd. is the parent of Liggett & Myers Tobacco Co. Defendant Philip Morris Companies, Inc. is the parent of Philip Morris. Defendant Brown & Williamson Industries, Inc. is the parent of Brown & Williamson. Defendant Fortune Brands, Inc. (formerly known as American Brands, Inc.) used to maintain the American Tobacco Company as a subsidiary until it sold the company to Brown & Williamson in 1995. None of these defendants (collectively, the "Corporate Parents") manufactures or distributes cigarettes.

Defendant Council for Tobacco Research, Inc. ("CTR") is a not-for-profit corporation that funds scientific research on tobacco use. Defendant Tobacco Institute, Inc. ("TI") is a not-for-profit trade association.

Plaintiffs sue defendants, individually and as co-conspirators, aiders and abettors and concerted actors and allege: (1) failure to warn, (2) fraud and deceit, (3) negligent and defective design, (4) strict liability, (5) breach of an express warranty, and (6) breach of an implied warranty. Specifically, plaintiffs claim that defendants failed to warn that cigarette smoking causes cancer and is addictive; distributed deceptive information regarding the addictive nature of nicotine and the health risks of smoking cigarettes; and intentionally controlled and continue to control the levels of nicotine in cigarettes to maintain and maximize their addictive effect.

Plaintiffs' motion to amend the complaint to add additional factual allegations is granted. For the reasons set forth below, defendants' motion to partially dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(6)(6)*fn1 is granted in part and denied in part.

DISCUSSION

When exercising diversity jurisdiction, a district court applies the choice of law rules of the state in which it sits in order to determine which state's law is applicable to the matter before the court. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). "[U]nder New York conflicts principles, controlling effect is accorded to the law of the jurisdiction which has the greatest concern with, or interest in, the specific issue raised in the litigation." David Tunick, Inc. v. E.W. Kornfeld, 813 F. Supp. 988, 994 (S.D.N Y 1993) (quotations and citations omitted). Where, as here, conduct regulating laws are at issue, and the parties are domiciled in different states, the place of injury is generally the determining factor. See Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 74, 595 N.Y.S.2d 919, 612 N.E.2d 277 (1993). Plaintiffs allege that Magnus is a resident of New Jersey and that her exposure to defendants' products and her illnesses occurred in New Jersey. Thus, defendants agree that Magnus's claims are governed by New Jersey law. Plaintiffs further allege that Chase was a resident of Maine and that her exposure to defendants' products and her resulting illnesses occurred in Maine. Defendants, however, do not agree that Leavitt's claims as the administratrix of Chase's estate are governed by Maine law. Nonetheless, they offer no ground for applying the law of any other state. Therefore, Maine law will be applied here.

"[A] complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). When considering a motion to dismiss, the court "must accept the material facts alleged in the complaint as true and construe all reasonable inferences in the plaintiff's favor." Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995), quoting Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836, 115 S.Ct. 117, 130 L.Ed.2d 63 (1994). A motion is dismiss "is addressed solely to the face of the pleadings, and `[t]he court's function . . . is not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient.'" Tinlee Enterprises, Inc. v. Aetna Casualty & Surety Co., 834 F. Supp. 605, 607 (E.D.N.Y. 1993) (quoting Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985)).

Claims for Failure to Warn, Fraud and Deceit, and Implied Warranty

The Labeling Act mandates uniform warning labels on packages of cigarettes. The purpose of the Labeling Act is to adequately inform the public of the dangers of cigarette smoking while simultaneously protecting commerce and the national economy. See 15 U.S.C. § 1331. The Labeling Act at 15 U.S.C. § 1334(b) also contains an express preemption provision, which 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 ...

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