The opinion of the court was delivered by: JACK WEINSTEIN, Senior District Judge
MEMORANDUM AND ORDER DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON
STATUTE OF LIMITATIONS
In this civil RICO class action, defendants move for summary
judgment pursuant to Rule 56 of the Federal Rules of Civil
Procedure. They contend that, as a matter of law, plaintiffs'
claims are barred by RICO's four-year statute of limitations;
plaintiffs oppose. See Defs.' Br. in Supp. of Mot. for Summ. J.
on Stat. of Lims. ("Defs.' Br.") (Docket No. 431); Decl. of Todd
Geremia ("Geremia Decl.") (Docket No. 442); Defs.' Reply Br. in
Supp. of Mot. for Summ. J. Stat. of Lims. ("Defs.' Reply")
(Docket No. 721); Pls.' Br. in Opp. to Defs.' Mot. for Summ. J.
on Stat. of Lims. ("Pls.' Br.") (Docket No. 607). Because the
statute of limitations is an affirmative defense, discovery is
not yet concluded and it cannot be said with any assurance at
this time that defendants would necessarily succeed in proving
the defense at trial, the motion is denied with leave to renew
upon completion of discovery. II. Law
A. Burdens on Summary Judgment
Summary judgment is granted "if the pleadings, depositions,
answers to the interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is entitled to
a judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. The
movant bears the burden of showing "that there is an absence of
evidence to support the nonmoving party's case." Celotex Corp.
v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554 (1986).
Evaluation of the record is conducted in a "light most favorable
to the party opposing the motion." U.S. v. Diebold, Inc.,
369 U.S. 654, 655, 82 S.Ct. 993, 994 (1962) (per curiam); see also
O'Bert ex rel. Estate of O'Bert v. Vargo, 331 F.3d 29, 37 (2d
Critical is recognition of the jury's fact-finding primacy:
It is well established that credibility assessments,
choices between conflicting versions of the events,
and the weighing of evidence are matters for the
jury, not for the court on a motion for summary
judgment. If, as to the issue on which summary
judgment is sought, there is any evidence in the
record from which a reasonable inference could be
drawn in favor of the opposing party, summary
judgment is improper.
Curry v. City of Syracuse, 316 F.3d 324
(2d Cir. 2003)
(quotation marks omitted).
B. RICO Statute of Limitations
The statute of limitations for a civil RICO claim is four
years. Agency Holding Corp. v. Malley-Duff & Assoc., Inc.,
483 U.S. 143, 153, 107 S. Ct. 2759, 2765-6 (1987). RICO itself does
not contain a statute of limitations. See Malley-Duff,
483 U.S. at 146. By reference to the private enforcement provisions of the Clayton Antitrust Act,
15 U.S.C. § 15(a), after which civil RICO was modeled, the Court has supplied
one. Id. at 153. Limitation runs from the date when a plaintiff
discovers or reasonably should have discovered his or her injury.
Rotella v. Wood, 528 U.S. 549, 555-560. The determination of
that date is a question of fact.
The statute of limitations is an affirmative defense;
defendants must plead and prove it. Fed.R.Civ.P. 8(c). They
must demonstrate, as a matter of law, when the class members
either 1) knew or 2) should have known of their injuries. In re
Merrill Lynch Ltd. Partnerships Litigation, 154 F.3d 56, 59 (2d
Cir. 1998). As to the first, they point to several surveys and
statements by experts that less than a majority of smokers
believe "light" cigarettes are healthier than regular cigarettes.
Defs.' Br. in Opp. to Class Cert. 38-40 (Docket No. 346). These
surveys are controverted by plaintiffs, who rely upon surveys
referred to in Risks Associated with Smoking Cigarettes with Low
Machine-Measured Yields of Tar and Nicotine (Nat'l Cancer
Institute, Nov. 1, 2001) ("Monograph 13"). As to the second,
defendants have marshaled a number of media reports, public
service announcements and case filings. See infra at 4, 7.
These, too, are met with evidence supplied by plaintiffs. Id.
Defendants also argue that smokers' knowledge for statute of
limitations purposes must be decided for each individual smoker,
making the statute of limitations defense presumptively valid and
the class action unmanageable. Defs.' Br. in Opp. to Class Cert.
Plaintiffs filed this case on May 11, 2004, claiming economic
injuries arising from their fraud-induced purchases of light
cigarettes marketed by defendants since 1971. Second Amended
Complaint ("Compl.") ¶ 30, No. CV 04-1945 (E.D.N.Y.) (Docket No.
95). The bar of limitations is measured from a date four years
earlier May 11, 2000. Should plaintiffs have known of the fraud prior to that date?
Many attorneys knew of the dangers of "light" cigarettes long
before 2000. A substantial number of actions based on grounds of
fraud much like those now alleged were brought earlier than May
11 of that year. Putative class counsel in the present case
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. and Finkelstein,
Thompson & Loughran ("plaintiffs' counsel") filed four similar
"light" cigarettes class actions in various state courts in 1998
and 1999: Aspinall v. Philip Morris Cos., No. 98-6002
(Mass.Sup.Ct.) (filed Nov. 25, 1998); Cummis v. Philip Morris Cos.,
No. L-2114-98 (N.J.Super.Ct.) (filed July 9, 1998); Marrone v.
Philip Morris Cos., No. 99 CIV 0954 (Ohio Ct. Com. Pl.) (filed
Nov. 8, 1999); McClure v. Altria Group, Inc., No. 99C148 (Tenn.
Cir. Ct.) (filed Jan. 19, 1999). Other "of counsel" attorneys to
the class filed two "light" cigarettes class actions in state
courts during the same period: Oliver v. R.J. Reynolds Tobacco
Co., No. 268 (Pa.Ct.Com.Pl.) (filed Mar. 6, 1998); Trombino
v. R.J. Reynolds Tobacco Co., No. L-11263-98 (N.J.Super.Ct.)
(filed Jan. 19, 1999). In those state class actions, plaintiffs
sought economic damages on state fraud and consumer protection
law grounds alleging facts similar to those now relied upon.
See Defs.' Br. 4-7. In 1999, the United States government filed
a widely remarked upon complaint in federal district court for
damages and injunctive relief under RICO and other statutes
alleging that the tobacco companies misled consumers about the
dangers of "light" cigarettes. Defs.' Br. 2; Compl. for Damages
and Injunctive and Declaratory Relief ("Gov't Compl.") at 37-40,
United States v. Philip Morris, No. 1:99CV02496 (D.D.C. 1999).
Other private and state government plaintiffs filed RICO and
consumer fraud suits in the 1990s alleging deceptive marketing of
"light" cigarettes. Defs.' Br. 21-22. See, e.g., Allman v.
Philip Morris, Inc., No. 94-0504-IEG (S.D. Cal.); Commonwealth
of Mass. v. Philip Morris Inc., No. 95-7378 (Mass. Dist. Ct.); Maryland v. Philip Morris Inc.,
No. 96122017/CL211487 (Baltimore Cir. Ct.); Oregon v. Philip
Morris, Inc., No. 9706-04457 (Or. Cir. Ct.); Blue Cross & Blue
Shield of N.J., Inc. v. Philip Morris, Inc., CV 98 3287
It is not denied that plaintiffs' counsel has had knowledge of
the RICO injury alleged in this matter since at least July 1998,
when they filed a class action alleging a similar fraud in New
Jersey state court. See Defs.' Br. 4 n. 1; Geremia Decl. Ex. 2.
Defendants contend that this knowledge should be imputed to the
entire class under principles of agency. See Defs.' Br. 4 ff.;
Defs.' Reply 9 ff. To do so would bar the suit entirely.
"The relationship between an attorney and the client he or she
represents in a lawsuit is one of agent and principal." Veal v.
Geraci, 23 F.3d 722, 725 (2d Cir. 1994); see Restatement
(Third) of the Law Governing Lawyers Ch. 2 Introductory Note
(2000) (the attorney-client relationship is, "from one point of
view, derived from the law of agency."). In a conventional
attorney-client relationship, the attorney's knowledge is imputed
to the client. Geraci, 23 F.3d at 725; Restatement (Third) of
the Law Governing Lawyers ("Information imparted to a lawyer
during and relating to the representation of a client is
attributed to the client for the purpose of determining the
client's rights and liabilities in matters in which the lawyer
represents the client. . . ."); see generally Restatement
(Second) of Agency § 272 (agent's knowledge imputed to
principal). An attorney's knowledge of an injury may work to bar
his client's claim under a statute of limitations. See Geracia
at 725 (plaintiff's § 1983 claim time-barred because his attorney
knew of injury outside three-year statute of limitations period).
In some cases it is appropriate for an attorney's knowledge to
be imputed to the client, particularly where there is a single
attorney and a single known client in an ongoing relationship. That is not the situation now presented. In the instant case
defendants seek to impute the knowledge of counsel to a class of
unidentified plaintiffs numbering in the tens of millions who
claim they were defrauded for decades. Principles of agency
applicable in the single-attorney-single-client relationship
cannot be transposed into the class action context under present
circumstances. Cf. Restatement (Third) of the Law Governing
Lawyers § 14 cmt. f ("Class actions may pose difficult questions
of client identification."). How can a smoker who was not even
aware when he purchased a pack of cigarettes years ago that any
of the class attorneys existed be assumed to have known what the
"Agency is the fiduciary relation which results from the
manifestation of consent by one person to another that the other
shall act on his behalf and subject to his control, and consent
by the other so to act." Restatement (Second) of Agency § 1(1)
(1958). Without consent by both parties, there can be no
principal-agent relationship. See Restatement (Second) of
Agency § 15. Unnamed class members have not yet "consented" to be
represented by putative class counsel; these attorneys cannot be
their agent for purposes of imputing knowledge of danger. The
role of class counsel is akin to that of a judicially appointed
fiduciary, not that of a privately retained attorney. See
Restatement (Second) of Agency § 14F ("A person appointed ...