COM. EX REL FISHER v. Phillip Morris, Inc.

• Decision Date: 09 August 1999
• Citation: 736 A.2d 693
• Parties: COMMONWEALTH of Pennsylvania by D. Michael FISHER, in his official capacity as Attorney General of the Commonwealth of Pennsylvania v. PHILLIP MORRIS, INC.; R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; B.A.T. Industries, PLC.; the American Tobacco Company, Inc., c/o Brown & Williamson Tobacco Corporation; Lorillard Tobacco Company; Liggett Group, Inc.; United States Tobacco Company; the Tobacco Institute, Inc.; the Council for Tobacco Research - U.S.A., Inc.; Smokeless Tobacco Council, Inc.; and Hill & Knowlton, Inc. The County of Allegheny, Appellant.
• Court: Pennsylvania Commonwealth Court

736 A.2d 693

COMMONWEALTH of Pennsylvania by D. Michael FISHER, in his official capacity as Attorney General of the Commonwealth of Pennsylvania v. PHILLIP MORRIS, INC.; R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; B.A.T. Industries, PLC.; the American Tobacco Company, Inc., c/o Brown & Williamson Tobacco Corporation; Lorillard Tobacco Company; Liggett Group, Inc.; United States Tobacco Company; the Tobacco Institute, Inc.; the Council for Tobacco Research - U.S.A., Inc.; Smokeless Tobacco Council, Inc.; and Hill & Knowlton, Inc.

The County of Allegheny, Appellant.

Commonwealth Court of Pennsylvania.

Submitted on Briefs April 14, 1999.

Decided August 9, 1999.

Joel M. Ressler, Harrisburg, Thomas L. VanKirk, Pittsburgh, Reeder R. Fox, Philadelphia, for appellee.

William Pietragallo, II, Kerry A. Fraas, Henry M. Sneath, J. Kerrington Lewis, Pittsburgh, for appellant.

Before COLINS, President Judge, DOYLE, J., McGINLEY, J., SMITH, J., FRIEDMAN, J., KELLEY, J. and LEADBETTER, J.

ORDER

LEADBETTER, Judge.

AND NOW, this 9th day of August, 1999, upon consideration of the praecipe of appellant Allegheny County to discontinue appeals, which is treated as a motion to discontinue, the motion is GRANTED and the above appeals of Allegheny County shall be marked discontinued and ended, with prejudice.

Dissenting opinion by Judge KELLEY.

KELLEY, Judge, dissenting.

I respectfully dissent.

On April 21, 1997, the Commonwealth of Pennsylvania, acting by and through Attorney General D. Michael Fisher, filed the instant complaint in the Court of Common Pleas of Philadelphia County (trial court) asserting various claims for monetary damages and equitable and injunctive relief against the named Defendants. In the complaint, the Attorney General alleged that:

[H]e brings this action pursuant to his authority under 71 Pa.C.S. [sic] § 732-204[¹], 73 Pa.C.S. [sic] § 210-4[²] and 73 Pa.C.S. [sic] § 201-8[³], and in parens patriae[⁴] on behalf of the citizens of Pennsylvania, including its children and adolescents, to protect their health and welfare, and to recover damages which the Commonwealth and its citizens have sustained as a result of the unlawful and concerted action of the defendants, as well as injunctive relief.

Complaint, p. 8. The Attorney General sought both monetary damages and injunctive relief flowing from various claims relating to the manufacturing, sale, distribution or promotion of tobacco products.

On November 23, 1998, forty-six states (including Pennsylvania), the District of Columbia, and five territories executed two agreements, the Master Settlement Agreement (MSA) and the Smokeless Tobacco Master Settlement Agreement (STMSA), to settle the lawsuits filed in these jurisdictions against the Defendants.⁵ The MSA contains detailed formulas outlining the timing and amounts to be paid by the Defendants into an escrow account to then be distributed to each of the settling states, a total of $206,000,000,000.00 to be paid over twenty-five years.⁶ Pennsylvania's share of the initial recovery under the MSA totals $11,260,000,000.00, with the potential for payments of over $500,000,000.00 per year thereafter. This share of the monetary settlement comprises the third largest recovery among the settling states.⁷ In addition, under the MSA the Defendants agreed to make concessions in the business practices, advertising and marketing of tobacco products.⁸

In exchange for this monetary settlement, each of the settling states agreed, inter alia, that the Defendants would be released from liability in the pending lawsuits and thereafter.⁹ To this end, under the terms of the MSA, the settling states agreed to file consent decrees with the appropriate state courts in which the underlying lawsuits had been filed in order to settle those suits.¹⁰

As a result, on December 11, 1998, the Commonwealth and the Defendants filed a joint motion in the trial court requesting approval of the settlement and the consent decrees. Before and after this joint motion was filed, a number of parties filed motions to intervene in the action. These parties included private anti-tobacco activists and organizations, not-for-profit hospitals, and the County of Allegheny (intervenors).

On January 13, 1999, the trial court issued four orders that are the basis of the instant appeals. On that date, the trial court issued orders: approving and entering the proposed agreed order of dismissal with prejudice submitted by the Commonwealth and the Defendants; approving and entering the consent decrees under the terms outlined in section XIII of the MSA and the STMSA; and denying the intervenors' petitions to intervene. The instant appeals were filed from these orders, and the appeals were consolidated and set for expedited review by this Court's order dated March 3, 1999.

However, on May 17, 1999 the County of Allegheny filed a praecipe to discontinue its appeals. This praecipe to discontinue is the basis of the above order of this Court discontinuing and ending the appeals with prejudice. I respectfully dissent with respect to the majority's order discontinuing the above-captioned appeals for two reasons.

The first basis for my dissent is my belief that the pleading filed in this court requesting discontinuance of the appeals does not comport with the relevant rules governing these types of pleadings, and does not demonstrate the good cause required for discontinuance. Pa.R.A.P. 1973(a) states, in pertinent part, that "[a]n appellant may discontinue an appeal or other matter as to all appellees as of course at any time prior to argument, or thereafter by leave of court upon application..." (emphasis added). Thus, Rule 1973 only allows an appellant to discontinue an appeal after argument by leave of court upon application. Marino v. Marino, 411 Pa.Super. 424, 601 A.2d 1240 (1992); Lowrey v. East Pikeland Township, 143 Pa.Cmwlth. 440, 599 A.2d 271 (1991), petition for allowance of appeal denied, 530 Pa. 635, 606 A.2d 904 (1992). The application to discontinue must comply with the provisions of Pa.R.A.P. 123(a), stating with particularity the grounds on which it is based, and the grounds for the relief demanded by the application. Id. Failure to conform to the requirements for relief enunciated in Pa.R.A.P. 123(a) will result in the denial of the application. Id.

Based on the foregoing, it is clear that the praecipe to discontinue that was filed in this case was properly treated as an application to discontinue under Rule 1973(a). However, it is also clear that the instant application to discontinue does not comport with the requirements of Pa. R.A.P. No. 123(a) as required by Lowrey.

In addition, I believe that the instant application to discontinue should only be granted upon a showing of good cause for discontinuance. As the Superior Court has previously stated:

We must first address a procedural irregularity which arose at oral argument on this matter. Upon the conclusion of oral argument, [the Appellant] moved to withdraw this appeal... [The Appellant's] motion to withdraw has come too late and we decline to withdraw the case from appeal. [The Appellant] has allowed this case to proceed through extensive briefing, application of the machinery of this court and, finally, oral argument. It was only after oral argument that counsel presented this motion. We will not allow a litigant to avail himself of the full process of the court, and then permit that litigant to remove the case from the court's jurisdiction at the very last possible moment. Thus, we deny [the Appellant's motion] and will consider the appeal on the merits.

Marino, 601 A.2d at 1243. See also, In re Fellman, 412 Pa.Super. 577, 604 A.2d 263, 267-268, n. 3 (1992)

("After this opinion had been prepared, the parties advised the Court that terms of settlement had been agreed upon and requested leave to discontinue the appeal. Because of the lateness of the request, see: [Marino ] and because of the significant policy issue involved... we declined to grant permission to discontinue the appeal.")

In this case, the application to discontinue does not demonstrate any cause, much less good cause, for discontinuing the instant appeals. In addition, because of the enormity of the settlement in this case¹¹, and the profound impact it will have on the substantive rights of the Commonwealth and its various constituents¹² and, ultimately, the citizens of this Commonwealth, these factors dictate that this Court give this matter our full attention and consideration. Based on all of the foregoing, I believe that the instant application to discontinue should be denied. Fellman; Marino; Lowrey.

The second basis for my dissent is my belief that the trial court erred in approving and entering the proposed agreed order of dismissal with prejudice submitted by the Commonwealth and the Defendants, and in approving and entering the consent decrees under the terms outlined in section XIII of the MSA and the STMSA.¹³ As a result, I would reverse its order dismissing with prejudice the complaint filed by Attorney General Fisher on behalf of the Commonwealth of Pennsylvania, and its orders accepting and adopting the consent decrees.

It is true that there is a strong judicial policy in favor of parties voluntarily settling lawsuits. Rothman v. Fillette, 503 Pa. 259, 469 A.2d 543 (1983); Schlosser v. Weiler, 377 Pa. 582, 105 A.2d 331 (1954); Health Care and Retirement Corp. v. Department of Public Welfare, 159 Pa. Cmwlth. 8, 632 A.2d 964 (1993),petition for allowance of appeal denied, 538 Pa. 616, 645 A.2d 1319 (1994). In addition, settlement agreements have many of the attributes of contracts voluntarily undertaken, and must be construed according to traditional principles of contract construction. Avery v. Pennsylvania Labor Relations Board, 97 Pa.Cmwlth. 160, 509 A.2d 888 (1986). Therefore, for a settlement to be enforceable, like any other agreement, it must possess...