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NATIONAL ASBESTOS MEDICAL FUND v. PHILIP MORRIS

March 3, 2000

THE NATIONAL ASBESTOS WORKERS MEDICAL FUND, ET AL., PLAINTIFFS,
V.
PHILIP MORRIS, INC., ET AL., DEFENDANTS.



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

AMENDED MEMORANDUM AND ORDER

I. INTRODUCTION

A number of self-insured building trades health and welfare plans have brought suit against the tobacco industry under the Racketeer Influenced and Corrupt Organizations Act ("RICO") seeking to recover millions of dollars expended in connection with tobacco-related illnesses of their members. B.A.T. Industries, p.l.c. ("BAT"), the British holding company parent of defendant Brown & Williamson Tobacco Corporation ("B & W"), has moved for judgment on the pleadings on the ground of lack of personal jurisdiction. Because service on BAT was not authorized by RICO's nationwide service provision, personal jurisdiction must be based on either New York law or, in the event BAT is not subject to the jurisdiction of the courts of New York or any other state, on Rule 4(k)(2) of the Federal Rules of Civil Procedure, the federal long arm provision.

In a similar motion in a related case, Simon v. Philip Morris, Inc., 86 F. Supp.2d 95 (E.D.N.Y. 2000), evidence of BAT's participation in an industry-wide conspiracy with significant links to New York supported the exercise of personal jurisdiction under CPLR 302(a)(2). CPLR 301 and 302(a)(3)(ii) afforded additional jurisdictional bases. Personal jurisdiction over BAT was held to comport with the Due Process Clause of the Fourteenth Amendment. The same conclusion is required in the instant case. Federal long arm jurisdiction is unavailable.

II. PROCEDURAL HISTORY

Suit was filed in February 1998 asserting RICO and various pendent state law claims. In June 1998 BAT filed a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Almost simultaneously a similar motion filed by BAT in Falise v. American Tobacco Co. was denied as unripe for decision because of the need for further discovery on the personal jurisdiction issue. See No. 97 CV 7640, 1998 WL 372401 (E.D.N.Y. July 2, 1998). A discovery scheduling order was entered. See Order dated July 21, 1998. Guided by these two orders, in August 1996, BAT and the National Asbestos plaintiffs stipulated that BAT would withdraw its 12(b)(2) motion, file an answer preserving its jurisdictional defense, and provide plaintiffs with information in accordance with the Falise order.

BAT renewed its personal jurisdiction motion in February, 1998 pursuant to Rule 12(c). That Rule permits conversion of a motion for judgment on the pleadings into one for summary judgment under Rule 56 when matters outside the pleadings are presented for the court's consideration.

In view of the extensive materials submitted and considered, BAT's Rule 12(c) motion was converted into a summary judgment motion. See generally 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1371 (2d ed. 1990). It was denied by order of July 19, 1999. This memorandum explains the reasons for the denial.

III. FACTS

Substantially the same jurisdictional facts are alleged here as in Simon. See 86 F. Supp.2d at 99-119. Essentially the same documents are relied upon by the plaintiffs in both cases. As in Simon, supplementation of the record with tobacco industry documents posted on the website of the University of California at San Francisco's Library and Center for Knowledge Management is warranted. See http://www.library.ucsf.edu/tobacco. The findings in Simon are adopted and made a part of this memorandum.

IV. LAW AND ITS APPLICATION

A. Federal Rules of Civil Procedure

Rule 4(k) of the Federal Rules of Civil Procedure governs amenability to suit in a federal district court. It specifies the circumstances in which service of process confers personal jurisdiction over a defendant, providing for service authorized by state law (Rule 4(k)(1)(A)) or by federal law (Rules 4(k)(1)(D) and Rule 4(k)(2)). Insofar as pertinent, the Rule, denominated "Territorial Limits of Effective Service" reads:

(1) Service of a summons or filing a waiver of service is effective to establish jurisdiction over ...

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