Monday, November 11, 2013

Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc. case brief

Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc. case brief summary
191 F.3d 229 (2d Cir. 1999)

CASE SYNOPSIS
Defendants appealed from a judgment of the United States District Court for the Southern District of New York, denying their motion under Fed. R. Civ. P. 12 (b)(6) to dismiss plaintiffs' action alleging defendants engaged in a conspiracy to deceive the general public, and to deceive plaintiffs specifically, with respect to the health risks associated with smoking, in order to shift the health-related costs of smoking to plaintiffs.

CASE FACTS

Plaintiffs, labor union health and welfare trust funds, brought an action against defendants, tobacco companies and their agents, alleging defendants engaged in a conspiracy to deceive the general public and plaintiffs with respect to the health risks associated with smoking. Defendants brought a motion to dismiss under Fed. R. Civ. P. 12 (b)(6), on grounds that the harm plaintiffs complained to have suffered from defendants' alleged tortious acts was too remote to sustain a recovery. Defendants appealed from the trial court's denial of their motion.


DISCUSSION

  • The court ruled that plaintiffs' standing to sue under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.S. § 1964(c), required a showing that defendants' violation was the proximate cause of plaintiffs' injuries. 
  • Further, the court held that where plaintiffs complained of injuries that were wholly derivative of harm to a third party, plaintiffs' injuries were deemed indirect and, as a consequence, too remote to support recovery. 
  • The court reversed the judgment denying defendants' motion to dismiss, concluding that plaintiffs failed to establish proximate causation and that they lacked standing to sue defendants.
CONCLUSION

Judgment denying defendants' motion to dismiss was reversed and remanded with directions to dismiss the complaint where the economic injuries alleged in the complaint were derivative of physical injuries suffered by plan participants and too remote as a matter of law for plaintiffs to have standing to sue defendants, and an allegation of specific intent did not overcome the requirement that there must be a direct injury to maintain the action.

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