Bifolck v. Philip Morris USA Inc.

• Decision Date: 12 May 2020
• Docket Number: No. 3:06-cv-1768 (SRU),3:06-cv-1768 (SRU)
• Citation: 459 F.Supp.3d 386
• Court: U.S. District Court — District of Connecticut
• Parties: Vincent J. BIFOLCK, as Executor of the Estate of Jeanette D. Bifolck, and Individually, Plaintiff, v. PHILIP MORRIS USA INC., Defendant.

459 F.Supp.3d 386

Vincent J. BIFOLCK, as Executor of the Estate of Jeanette D. Bifolck, and Individually, Plaintiff,

v.PHILIP MORRIS USA INC., Defendant.

No. 3:06-cv-1768 (SRU)

United States District Court, D. Connecticut.

Signed May 12, 2020

David S. Golub, Marilyn J. Ramos, Jonathan M. Levine, Sarah Arnold Ricciardi, Silver, Golub & Teitell LLP, Stamford, CT, for Plaintiff.

Christopher V. Cotton, Pro Hac Vice, Ruth Anne French-Hodson, Pro Hac Vice, Scott D. Kaiser, Pro Hac Vice, Terrence J. Sexton, Pro Hac Vice, Shook, Hardy & Bacon, L.L.P., Kansas City, MO, Curtis L. Perry, Pro Hac Vice, Shook, Hardy & Bacon LLP, Tampa, FL, Drew Alan Hillier, Francis H. Morrison, III, John M. Tanski, Axinn, Veltrop & Harkrider LLP, Hartford, CT, Frank P. Kelly, Pro Hac Vice, Shook, Hardy & Bacon, LLP, San Francisco, CA, Geoffrey J. Michael, Pro Hac Vice, Arnold & Porter Kaye Scholer LLP, Washington, DC, John M. Lyons, Pro Hac Vice, Shook, Hardy & Bacon, L.L.P., Philadelphia, PA, Martin Scott Michelman, Shook, Hardy & Bacon, L.L.P., Houston, TX, for Defendant.

ORDER

Stefan R. Underhill, United States District Judge

In 2000, at the age of 42, Jeanette Bifolck died from lung cancer. She had been addicted to Marlboro cigarettes ("Marlboros") from the early 1970s to 1997 and to Marlboro Lights ("Lights") from 1997 until her death. In 2006, Jeanette's husband, Vincent Bifolck ("Bifolck"), sued Philip Morris USA Inc. ("PM USA") as executor of his late wife's estate and individually and asserted that PM USA had negligently designed Marlboros and Lights in violation of the Connecticut Product Liability Act ("CPLA"). On the eve of trial, Bifolck asked me to give preclusive effect to six issues that were purportedly decided against PM USA in a federal RICO case against numerous cigarette manufacturers in the District of Columbia that concluded in 2006. See United States v. Philip Morris USA, Inc., et al. , 449 F. Supp. 2d 1 (D.D.C. 2006) (" DOJ "). The DOJ case was a bench trial that lasted nine months and resulted in a nearly 1,000-page opinion.

I declined to give those six issues preclusive effect because I felt that the issues in the two cases were not identical and that it would be impossible to say that any of the particular issues had been "necessary" to the DOJ court's determination. So, this case went to trial in fall 2017, and the jury reached a defense verdict. On appeal, the Second Circuit disagreed with my decision not to give preclusive effect to one particular issue because the issue was identical to an issue resolved in DOJ , and the issue was necessary to the DOJ court's judgment. But the Second Circuit did not vacate the judgment. It only remanded for me to consider an additional factor that I had not yet adequately considered: whether it would be unfair to apply nonmutual offensive issue preclusion. See Bifolck v. Philip Morris USA Inc. , 936 F.3d 74, 86 (2d Cir. 2019).

The parties have briefed the issue, and I held a hearing on January 17, 2020. The parties then submitted post-hearing briefing. In my view, it would have been unfair to apply nonmutual offensive issue preclusion, and so I adhere to my prior ruling for that reason.

I. Standard of Review

In attempting to invoke nonmutual offensive issue preclusion ("NMOIP"), a plaintiff seeks to "preclude a defendant from relitigating an issue the defendant has previously litigated and lost to another plaintiff." Faulkner v. Nat'l Geographic Enters., Inc. , 409 F.3d 26, 37 (2d Cir. 2005) (citing Parklane Hosiery Co. v. Shore , 439 U.S. 322, 329, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) ). Courts are "war[y]" of applying NMOIP because doing so is "detailed, difficult, and potentially dangerous." Bifolck , 936 F.3d at 84 (citing Jack Faucett Assocs. v. Am. Tel. & Tel. Co. , 744 F.2d 118, 124 (D.C. Cir. 1984) (internal quotation marks omitted)).

Before a court may apply NMOIP, a court must make a two-part inquiry. In part one, a court must satisfy itself that the plaintiff has shown that the issue on which he or she seeks preclusive effect satisfies four elements. See id. at 79–80. Those four elements are:

- Identicality : the issues in both proceedings must be identical.

- Actually litigated and decided : the issue in the prior proceeding must have been actually litigated and actually decided.

- Full and fair opportunity : there must have been a full and fair opportunity for litigation in the prior proceeding.

- Necessity : the issue previously litigated must have been necessary to support a valid and final judgment on the merits.

Id. The Second Circuit reviews de novo a district judge's determination on the first part of the NMOIP test. See id. at 80 (citing Faulkner , 409 F.3d at 34 ).

If part one of the NMOIP test is satisfied, the court then must engage in part two of the analysis: a "fairness" inquiry—that is, whether applying NMOIP is either fair or unfair in the particular circumstance. See id. The goal of the fairness inquiry is to "blunt the fear that [applying NMOIP] may be unfair to a defendant or fail to promote judicial economy." Id. at 84 (citing Parklane Hosiery , 439 U.S. at 331, 99 S.Ct. 645 ). There is no mandatory list of factors that a district court must consider when answering this inquiry, but the Second Circuit has noted several that are important:

- Efficiency : whether applying NMOIP would increase the efficiency of the proceedings.

- Inconsistent prior judgments : whether the judgment relied upon as a basis for estoppel is itself inconsistent with one or more previous judgments in favor of the defendant.

- Procedural opportunities : whether the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result.

- Incentive to raise : whether the defendant had little-to-no incentive to raise the issue in the earlier action.

- Type of trial : whether the underlying case was tried before a jury or a judge sitting as a trier of fact.

- Scope and complexity : whether the cases differ in scope or complexity and involve different causes of action.

See id. "The principal virtue" of NMOIP is that "it promotes judicial economy." S.E.C. v. Monarch Funding Corp. , 192 F.3d 295, 303 (2d Cir. 1999). "When the efficiency rationale for collateral estoppel fails ... courts have understandably declined to apply the doctrine." Id. at 304. Trial courts have "broad discretion to determine when" NMOIP "should be applied." Parklane Hosiery , 439 U.S. at 331, 99 S.Ct. 645. The Second Circuit reviews the district judge's determination of the fairness inquiry for abuse of discretion. See Bifolck , 936 F.3d at 80 (citing Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V. , 68 F.3d 1478, 1486 (2d Cir. 1995) ).

II. Background

A. Underlying Action – the DOJ litigation

In August 2006—following seven years of litigation and a nine-month bench trial—Judge Gladys Kessler of the U.S. District Court for the District of Columbia published a nearly 1,000-page decision in DOJ . The DOJ court found that PM USA (and numerous other cigarette manufacturers) had violated the federal RICO laws by "engaging in a lengthy, unlawful conspiracy to deceive the American public about ... the addictiveness of nicotine ... and their manipulation of the design and composition of cigarettes in order to sustain nicotine addiction." DOJ , 449 F. Supp. 2d at 26–27. For over 50 years, Judge Kessler found, the tobacco companies "denied to the public what they recognized internally beginning as early as the 1950s: people smoke primarily because of the pharmacological effects of the drug nicotine." Id. at 858. Still, the tobacco companies "designed their cigarettes with a central overriding objective—to ensure that smokers obtain enough nicotine to create and sustain addiction." Id. at 859.

The DOJ court, limited to forward-looking injunctive remedies, ordered both general injunctive relief and that the defendants make corrective statements to the public. See id. at 938–41. In particular, the DOJ court ordered that the defendants were "permanently enjoined from making, or causing to be made in any way, any material false, misleading, or deceptive statement or representation, or engaging in any public relations or marketing endeavor that is disseminated to the United States public and that misrepresents or suppresses information concerning cigarettes." Id. at 938 ¶ 3. And the DOJ court ordered PM USA (among other defendants) to file a corrective statement concerning "Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery." Id. at 938–39. It took nearly ten years to finalize the precise language in the corrective statements.

Judge Kessler began drafting the corrective statements in 2012. See United States v. Philip Morris USA, Inc., et al. , 907 F. Supp. 2d 1, 8–9 (D.D.C. 2012). At that point, the corrective statements regarding the tobacco companies’ manipulation of cigarette design read, in relevant part:

• "Defendant tobacco companies intentionally designed cigarettes to make them more addictive," and

• "Cigarette companies control the impact and delivery of nicotine in many ways, including designing filters and selecting cigarette paper to maximize the ingestion of nicotine, adding ammonia to make the cigarette taste less harsh, and controlling the physical and chemical make-up of the tobacco blend."

Id. at 9. The D.C. Circuit upheld that language in May 2015 (based on waiver). See United States v. Philip Morris USA Inc., et al. , 801 F.3d 250, 258–61 (D.C. Cir. 2015). In late 2017—two weeks after the trial in this matter concluded—Judge Kessler finalized the corrective statements. See United States v. Philip Morris USA Inc. , 257 F. Supp. 3d 1, 4–5 (D.D.C. 2017). The only difference between the language quoted above from 2012 and the final version from 2017 is that the first bullet point ultimately read:

• "Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA intentionally designed cigarettes to make

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