Brown v. Philip Morris Inc.

• Decision Date: 17 May 2001
• Docket Number: No. 99-1931,99-1931
• Parties: (3rd Cir. 2001) JESSE BROWN, REV., ON BEHALF OF HIMSELF AND ALL MEMBERS OF THE UPTOWN COALITION FOR TOBACCO CONTROL AND HEALTH; AARON ELEAZER; PANSY SMITH; ELLEN IRVING; NATIONAL ASSOCIATION OF AFRICAN AMERICANS FOR POSITIVE IMAGERY, INC., APPELLANTS v. PHILIP MORRIS INC.; BROWN AND WILLIAMSON TOBACCO CORPORATION; B.A.T. INDUSTRIES; LORILLARD TOBACCO COMPANY INC.; THE AMERICAN TOBACCO COMPANY; UNITED STATES TOBACCO COMPANY; THE COUNCIL FOR TOBACCO RESEARCH U.S.A., INC.; THE TOBACCO INSTITUTE, INC.; SMOKELESS TOBACCO COUNCIL, INC.; HILL & KNOWLTON, INC.; RJR NABISCO HOLDINGS CORP.; R.J. REYNOLDS TOBACCO COMPANY; LIGGETT GROUP INC.; LIGGETT & MYERS TOBACCO COMPANY
• Court: U.S. Court of Appeals — Third Circuit

Page 789

250 F.3d 789 (3rd Cir. 2001)

JESSE BROWN, REV., ON BEHALF OF HIMSELF AND ALL MEMBERS OF THE UPTOWN COALITION FOR TOBACCO CONTROL AND HEALTH; AARON ELEAZER; PANSY SMITH; ELLEN IRVING; NATIONAL ASSOCIATION OF AFRICAN AMERICANS FOR POSITIVE IMAGERY, INC., APPELLANTS v. PHILIP MORRIS INC.; BROWN AND WILLIAMSON TOBACCO CORPORATION; B.A.T. INDUSTRIES; LORILLARD TOBACCO COMPANY INC.; THE AMERICAN TOBACCO COMPANY; UNITED STATES TOBACCO COMPANY; THE COUNCIL FOR TOBACCO RESEARCH U.S.A., INC.; THE TOBACCO INSTITUTE, INC.; SMOKELESS TOBACCO COUNCIL, INC.; HILL & KNOWLTON, INC.; RJR NABISCO HOLDINGS CORP.; R.J. REYNOLDS TOBACCO COMPANY; LIGGETT GROUP INC.; LIGGETT & MYERS TOBACCO COMPANY

No. 99-1931

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued January 19, 2001

Filed May 17, 2001

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 98-cv-05518) District Judge: Honorable John R. Padova

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Bruce M. Ludwig, Esquire (Argued) William R. Adams, Jr., Esquire (Argued) Sheller, Ludwig & Badey 1528 Walnut Street, 3rd Floor Philadelphia, PA 19102, Black & Adams 123 S. Broad Street, Suite 1820 Philadelphia, PA 19109, for Appellants.

Jeffrey G. Weil, Esquire (Argued) Michael F. R. Harris, Esquire Matthew S. Miner, Esquire Alan C. Promer, Esquire Dechert, Price & Rhoads 1717 Arch Street 4000 Bell Atlantic Tower Philadelphia, PA 19103, for Philip Morris Incorporated.

Christopher S. D'Angelo, Esquire Montgomery, McCracken, Walker & Rhoads 123 South Broad Street Philadelphia, PA 19109, for B.A.T. Industries.

Howard M. Klein, Esquire William J. O'Brien, Esquire Conrad, O'Brien, Gellman & Rohn 1515 Market Street, 16th Floor Philadelphia, PA 19102, for Lorillard Tobacco Company.

Stephen J. Imbriglia, Esquire Hecker, Brown, Sherry & Johnson 18th & Arch Streets 1700 Two Logan Square Philadelphia, PA 19103, for US Tobacco Company.

Patrick W. Kittredge, Esquire Kittredge, Donley, Elson, Fullem & Embrick 421 Chestnut Street, 5th Floor Philadelphia, PA 19106, for the Council for Tobacco Research, U.S.A., Inc.

Wilbur L. Kipnes, Esquire Schnader, Harrison, Segal & Lewis 1600 Market Street, suite 3600 Philadelphia, PA 19103, for Smokeless Tobacco Council, Inc.

Richard L. Kremnick, Esquire Blank, Rome, Comisky & McCauley One Logan Square Philadelphia, PA 19103, for Hill & Knowlton, Inc.

Daniel F. Kolb, Esquire Anne B. Howe, Esquire Davis, Polk & Wardwell 450 Lexington Avenue New York, NY 10017, for RJR Nabisco Holdings.

Edward C. Schmidt, Esquire Jones, Day, Reavis & Pogue 500 Grant Street, 31st Floor Pittsburgh, PA 15219, and Morton F. Daller, Esquire Daller, Greenberg & Dietrich 7111 Valley Green Road Valley Green Corporate Center Fort Washington, PA 19034, for R.J. Reynolds Tobacco.

J. Kurt Straub, Esquire Jonathan W. Hugg, Esquire One Penn Center, 19th Floor Obermayer, Rebmann, Maxwell & Hippel 1617 John F. Kennedy Boulevard One Penn Center, 19th Floor Philadelphia, PA 19103, for Liggett Group, Inc., and Liggett & Myers Tobacco.

Before: Roth and Barry, Circuit Judges, and SHADUR,^* District Judge

OPINION OF THE COURT

Roth, Circuit Judge

Mentholated tobacco products apparently pose greater health risks than non-mentholated ones. Plaintiffs, a group of African-Americans, brought a civil rights action, contending that, with this knowledge, defendant tobacco companies have targeted the marketing of mentholated tobacco products at African-Americans.

Plaintiffs, who designate themselves the "Black Smokers," are the Rev. Jesse Brown, the Uptown Coalition for Tobacco Control and Healing, Aaron Eleazar, Pansy Smith, Ellen Irving, and the National Association of African Americans for Positive Imagery, Inc. They brought this civil rights action on behalf of a class of all living Black Americans who have, since 1954, purchased or consumed mentholated tobacco products. They named as defendants the tobacco companies: Philip Morris, Inc., R.J. Reynolds Tobacco Company, RJR Nabisco Holdings Corporation, Br own & Williamson Tobacco Corporation, B.A.T. Industries, the American Tobacco Company, Lorillard Tobacco Company, Inc., Liggett & Myers Tobacco Company, Liggett Group Inc. and United States Tobacco Company; the non-profit organizations supported by the tobacco-industry: the Tobacco Institute, Inc., the Council for Tobacco Research --U.S.A., Inc., and Smokeless Tobacco Council, Inc.; and the public relations firm Hill & Knowlton, Inc. Black Smokers contend that each of the defendants has unlawfully engaged in targeted marketing and sales of mentholated tobacco products to African-Americans on the basis of their race in violation of the civil rights statutes codified at 42 U.S.C. SS 1981, 1982, 1983 and 1985(3). Black Smokers also assert a cause of action against defendants under Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999 (1971), and the Fifth Amendment to the United States Constitution, arguing that defendants should be considered federal actors by virtue of the federal regulatory scheme to which the tobacco industry is subject.

The District Court granted defendants' motion to dismiss for failure to state a claim. We will affirm that decision. We agree with the District Court that Black Smokers' allegations of racially targeted marketing of mentholated tobacco products cannot, in the absence of any disparity between the products sold to African-Americans and the products sold to others, constitute a deprivation of contract or property rights actionable under SS 1981 or 1982. We also concur with the District Court that there is no allegation that defendants are state actors to support the S 1983 claim and that defendants cannot be regarded as federal actors as is required to maintain the claims under Bivens and the Fifth Amendment. Although we agree with the District Court that Black Smokers failed to state a claim under S 1985(3), we need not reach the further question whether SS 1981 and 1982 claims can, as a matter of law, support a claim under S 1985(3). As the District Court noted, even assuming arguendo that Black Smokers could properly premise a S 1985(3) cause of action on a violation of SS 1981 and 1982, they have failed to state a claim under SS 1981 and 1982.

I. FACTS

In their Second Amended Complaint, Black Smokers allege that the defendants have unlawfully targeted African-Americans with billboard, magazine, and other types of advertising in order to promote the sale to and consumption by African-Americans of various mentholated tobacco products. It is not disputed that the tobacco industry has designed certain menthol cigarettes specifically to appeal to African-American consumers, including R.J. Reynolds' "Uptown," a high tar, high nicotine menthol cigarette.¹ Black Smokers contend, and defendants do not dispute, that medical research has demonstrated that mentholated tobacco products pose greater health risks than non-mentholated ones, including an increased incidence of cancers of the lung and pharynx. It is not disputed that, although African-Americans account for only 10.3% of the U.S. population, they account for a significantly greater share of menthol cigarette smokers. Black Smokers cite reports fixing the percentage of African-American menthol smokers at, variously, 31%, 61.5% and 66%. Apparently relying upon the 31% figure, defendants claim that a significant majority (69%) of menthol cigarette smokers are not African-Americans and that Black Smokers admit that fact. In addition to the allegation of racially targeted marketing, Black Smokers also charge defendants with "intentional racial discrimination" and a "conspiracy of deception and misrepresentation against the African American public."

Black Smokers also accuse defendants of "a massive conspiracy to mislead the Black American public regarding the safety of menthol tobacco products." Black Smokers identify three courses of conduct underlying the purported conspiracy: "(1) acting in concert to represent falsely that their menthol tobacco products are safe for African Americans to use; (2) engaging in a concerted campaign to saturate the African American community with dangerous, defective and hazardous tobacco products, which Tobacco Industry knew caused harm, in violation of the civil and constitutional rights of African Americans; and (3) misrepresenting, suppressing, distorting, and confusing the truth about the health dangers of mentholated tobacco products." Notwithstanding these allegations, Black Smokers apparently concede in their opening appellate brief that African-Americans demonstrated their preference for menthol cigarettes before defendants initiated targeted advertising. In their reply brief and at oral argument, however, Black Smokers denied making such a concession and asserted that defendants created the African-American preference for menthol cigarettes. Black Smokers did not allege in their opening appellate brief that defendants interfere with the right of African-Americans to purchase non-menthol cigarettes or that menthol cigarettes are not marketed and sold to persons other than African-Americans. However, in their reply brief and at oral argument, Black Smokers made the surprising statement that they "do not concede that Black Americans are free to purchase non-menthol cigarettes."

Black Smokers do not contend that the menthol cigarettes marketed and sold to African-Americans are themselves different from those sold to whites or other persons. Additionally, Black Smokers do not aver that African-Americans receive information about menthol cigarettes that differs in any respect from the information provided to others. However, in their reply brief and at oral argument, Black Smokers made another surprising claim --that while defendants suggest to African-Americans in advertising that menthol cigarettes are healthier than...