The opinion of the court was delivered by: Weinstein, Senior District Judge.
PRELIMINARY MEMORANDUM AND ORDER
Defendants' motions to dismiss the complaints in these two
cases are denied. A more extensive memorandum will follow this
preliminary memorandum and order as soon as work permits. See
74 F. Supp.2d 221 (E.D.N.Y. 1999).
A. Plaintiffs' Original Claims
These two cases involve claims by medical providers to be
compensated for the economic injuries they have allegedly
sustained as a result of the treatment of tobacco related
illnesses. In both cases the defendants are the major tobacco
manufacturers and related entities.
In Blue Cross & Blue Shield of New Jersey, Inc., et al. v.
Philip Morris, Inc., et al. ("Blue Cross"), the plaintiffs are
medical provider Blue Cross plans ("The Blues") who allege
violations of both federal and state law. The federal causes of
action are brought under the Racketeer Influenced and Corrupt
Organizations Act (RICO) and the antitrust statutes. The pendent
state law claims are asserted under various state statutes and
under common law theories of fraudulent misrepresentation,
fraudulent concealment, breach of special duty, unjust
enrichment, and conspiracy.
In National Asbestos Workers Medical Fund, et al. v. Philip
Morris, Inc., et al. ("National Asbestos"), the plaintiffs are
self-insured ERISA trust funds which provide health care benefits
to union workers in the building trades. The plaintiffs state
claims under federal RICO and under federal common law on
theories of unjust enrichment, restitution, indemnity, and breach
of assumed duty.
The plaintiffs' original allegations are set out in greater
detail in the court's published memoranda. See Blue Cross,
36 F. Supp.2d 560 (E.D.N.Y. 1999); National Asbestos, 23 F. Supp.2d 321
On October 19, 1998, defendants' 12(b)(6) motion in National
Asbestos was denied. See 23 F. Supp.2d 321, 323 (E.D.N.Y. 1998).
Given the expansive public policies of RICO, the comprehensive
preemption force of ERISA law, and the conflicting decisions
regarding the sufficiency of similar claims, a dismissal based on
the pleadings was inappropriate.
Ten days after the Blue Cross opinion was issued and
approximately six months after the National Asbestos opinion,
the court of appeals of the Second Circuit decided an
interlocutory appeal in a case involving RICO allegations against
the tobacco industry by union trust fund-insurers. See Laborers
Local 17 Health & Benefit Fund v. Philip Morris, Inc.,
172 F.3d 223 (2d Cir. 1999) ("Laborers Local 17"). The court in
Laborers Local 17 found the claims of plaintiff trust funds to
be compensated for tobacco related expenditures to be too
"indirect." The defendants then renewed their motions to dismiss
the complaints in both Blue Cross and National Asbestos on the
grounds that both suits are controlled by Laborers Local 17.
C. Amendments To Plaintiffs' Original Complaints
In June 1999 plaintiffs in both Blue Cross and National
Asbestos moved to amend their complaints to add new claims and to
restate, in the alternative, the original federal and state
claims under subrogation; they continue to press all their
original claims. They were permitted to amend their complaints
pursuant to the liberal standards of Rule 15 of the Federal Rules
of Civil Procedure. Decision was reserved on whether the amended
complaints stated valid causes of action.
Defendants argue that Laborers Local 17 bars federal claims
in both Blue Cross and National Asbestos. Yet, even if the
plaintiffs' "direct" RICO theory, discussed in this court's Blue
Cross and National Asbestos memoranda denying motions to
dismiss, were barred by Laborers Local 17, neither of these
actions can be dismissed at the ...