American Tobacco Co., Inc. v. Grinnell

• Decision Date: 02 October 1997
• Docket Number: No. 94-1227,94-1227
• Parties: 33 UCC Rep.Serv.2d 331, Prod.Liab.Rep. (CCH) P 14,992, 40 Tex. Sup. Ct. J. 658 The AMERICAN TOBACCO COMPANY, INC., Petitioner v. Jeannie GRINNELL, individually and as independent executrix of the Estate of Wiley Grinnell, Jr., deceased, Wiley and Frances Grinnell, Sr., and Kevin Grinnell, Respondents.
• Court: Texas Supreme Court

Page 420

951 S.W.2d 420

33 UCC Rep.Serv.2d 331, Prod.Liab.Rep. (CCH) P 14,992,

40 Tex. Sup. Ct. J. 658

The AMERICAN TOBACCO COMPANY, INC., Petitioner v. Jeannie GRINNELL, individually and as independent executrix

of the Estate of Wiley Grinnell, Jr., deceased,

Wiley and Frances Grinnell, Sr., and

Kevin Grinnell, Respondents.

No. 94-1227.

Supreme Court of Texas.

Argued Feb. 13, 1996.

Decided June 20, 1997.

Rehearing Overruled Oct. 2, 1997.

Jana F. Lohse, Sam W. Cruse, Houston, Thomas E. Riley, Steven L. Vollins, Thomas E. Bezanson, New York, NY, Hubert Oxford, III, Beaumont, for Petitioner.

David B. Gaultney, Dewey J. Gonsoulin, Beaumont, Jonathan Massey, Washington, DC, Jorge Vega, Harry G. Potter, III, Austin, Lawrence H. Tribe, Cambridge, MA, for Respondents.

CORNYN, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, and GONZALEZ, SPECTOR, BAKER and ABBOTT, Justices, join.

In this wrongful death case, we confront an issue with profound health and public policy consequences: whether "common knowledge" of the health risks of cigarette smoking relieves tobacco companies of any duty to warn smokers of those risks. Applying our usual summary judgment standard, we conclude that the defendant has conclusively established the defense of common knowledge with regard to the general health risks of smoking. We also conclude, however, that the defendant has not conclusively established the common knowledge defense with regard to the addictive nature of cigarettes. Accordingly, we conclude that the defendant is entitled to summary judgment on most, but not all of the plaintiffs' claims, and remand the surviving claims to the trial court for further proceedings.

In 1952, nineteen-year-old Wiley Grinnell began smoking Lucky Strikes, cigarettes manufactured by the American Tobacco Company. Almost a year later, Grinnell changed to Pall Malls, also manufactured by American. After smoking for approximately thirty-three years, Grinnell was diagnosed with lung cancer in July 1985. Shortly thereafter, he filed this lawsuit. He died less than a year later. Grinnell's family continued this suit after his death, adding wrongful death and survival claims. The family alleges that American failed to warn of, and actively concealed, facts that it knew or should have known, including the facts that Grinnell could quickly become addicted to cigarettes and that his smoking could result in injury or death from the cancer-causing ingredients if he used the cigarettes as American intended. They also allege that, even though American knew or should have known that its cigarettes were dangerous and could not be used safely, American represented to consumers that cigarettes were not harmful, dangerous, or capable of causing injury.

The Grinnells assert essentially six interrelated claims: (1) strict liability design, marketing, and manufacturing defect; (2) negligent testing, failure to warn, misrepresentation, and design; (3) affirmative fraudulent misrepresentation and fraudulent concealment; (4) Deceptive Trade Practices Act violations for failure to disclose and deceptive advertising; (5) breach of express and implied warranties; and (6) civil conspiracy. They also assert claims based on violations of sections 321, 389, 519, and 520 of the Restatement (Second) of Torts (1965, 1977). The gravamen of their complaint is that Grinnell began smoking because American did not warn him of the potential dangers of smoking, and once he began smoking he could not stop because he became addicted to cigarettes.

In several motions for summary judgment, American asserted that it conclusively defeated at least one element of each of the Grinnells' claims and that many of the claims were preempted by federal law. In the first motion, American asserted that the Federal Cigarette Labeling and Advertising Act of 1965 preempted the Grinnells' claims for American's post-1965 activities based on inadequate warnings in advertising and promotional materials. American's second motion asserted that federal law preempted all of the Grinnells' claims based upon post-1965 activity. In its "renewed" motion, American asserted that all of the Grinnells' claims were preempted by the Public Health Cigarette Smoking Act of 1969 or otherwise barred by Texas law. The trial court granted all three motions and dismissed the Grinnells' suit. The court of appeals reversed the trial court's judgment and remanded the entire case. 883 S.W.2d 791.

When reviewing a summary judgment, we follow these well-established rules: (1) The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts must be resolved in favor of the nonmovant. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Summary judgment is proper if the defendant disproves at least one element of each of the plaintiff's claims, Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 476-77 (Tex.1995), or establishes all elements of an affirmative defense to each claim. Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). We first address those claims to which defenses other than federal preemption apply.

I. Common-Law Duties

A. Strict Liability

The Grinnells allege that cigarettes are both defective and unreasonably dangerous under section 402A of the Restatement (Second) of Torts. Specifically, they assert that American's cigarettes are (1) defectively designed because ingredients found in cigarettes cause cancer, addiction, and disease, (2) defectively marketed, because the cigarette packages contain inadequate warnings, and (3) defectively manufactured because cigarettes contain pesticide residue. In his deposition taken one month before his death Grinnell testified that had he known of the dangers inherent in cigarettes he would never have started smoking in the first place.

In Texas, section 402A of the Restatement (Second) of Torts governs claims for strict liability in tort. Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 613 (Tex.1996); McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787, 788-89 (Tex.1967). Section 402A provides:

(1) one who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

RESTATEMENT (SECOND) OF TORTS § 402A (1965). A product may be unreasonably dangerous because of a defect in marketing, design, or manufacturing. Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 382 (Tex.1995); Technical Chem. Co. v. Jacobs, 480 S.W.2d 602, 604-05 (Tex.1972). The Grinnells allege that the cigarettes sold by American were unreasonably dangerous due to each of the three types of defect. We address each of the Grinnells' claims in turn.

1. Marketing Defect

A defendant's failure to warn of a product's potential dangers when warnings are required is a type of marketing defect. Caterpillar, Inc., 911 S.W.2d at 382; Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 377 (Tex.1984). The existence of a duty to warn of dangers or instruct as to the proper use of a product is a question of law. Firestone Steel, 927 S.W.2d at 613; General Motors Corp. v. Saenz, 873 S.W.2d 353, 356 (Tex.1993). Generally, a manufacturer has a duty to warn if it knows or should know of the potential harm to a user because of the nature of its product. Bristol-Myers Co. v. Gonzales, 561 S.W.2d 801, 804 (Tex.1978). Nevertheless, this Court has recognized that there is no duty to warn when the risks associated with a particular product are matters "within the ordinary knowledge common to the community." Joseph E. Seagram & Sons, Inc. v. McGuire, 814 S.W.2d 385, 388 (Tex.1991) (holding that no legal duty exists to warn of the health risks of alcohol consumption because such risks are common knowledge). American argues that it had no duty to warn Grinnell of the risks associated with smoking its cigarettes because the dangers of smoking were common knowledge when Grinnell began smoking in 1952.

Comments i and j to Restatement section 402A incorporate common knowledge into the analysis of whether a product is "unreasonably dangerous" under that section. ¹ Comment i, which defines "unreasonably dangerous," forecloses liability against manufacturers unless a product is dangerous to an extent beyond that which would be contemplated by the ordinary consumer with knowledge common to the community:

Many products cannot possibly be made entirely safe for all consumption, and any food or drug necessarily involves some risk of harm, if only from over-consumption.... That is not what is meant by "unreasonably dangerous" in this Section. The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.... Good tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful; but tobacco containing something like marijuana may be unreasonably dangerous.

RESTATEMENT (SECOND) OF TORTS § 402A cmt. i (1965)(emphasis added). Comment j excuses a seller from the duty to warn about dangers that are generally known and recognized:

In order to prevent the product from being unreasonably dangerous, the seller may be required to give directions or warning, on the container, as to its use.... But a seller is not required to warn with respect to products,...