Craft v. Philip Morris Companies, Inc., No. ED 85142.

• Court: Court of Appeal of Missouri (US)
• Writing for the Court: Kathianne Knaup Crane
• Citation: 190 S.W.3d 368
• Parties: Dayna CRAFT, individually and on behalf of all others similarly situated, Plaintiff/Respondent, v. PHILIP MORRIS COMPANIES, INC., and Philip Morris Incorporated, Defendants/Appellants.
• Decision Date: 16 August 2005
• Docket Number: No. ED 85142.

Page 368

190 S.W.3d 368 Dayna CRAFT, individually and on behalf of all others similarly situated, Plaintiff/Respondent,
v.
PHILIP MORRIS COMPANIES, INC., and Philip Morris Incorporated, Defendants/Appellants. No. ED 85142. Missouri Court of Appeals, Eastern District, Division Two. August 16, 2005. Motion for Rehearing and/or Transfer to Supreme Court Denied September 22, 2005. Application for Transfer Denied May 30, 2006.

Page 369

COPYRIGHT MATERIAL OMITTED

Page 370

COPYRIGHT MATERIAL OMITTED

Page 371

COPYRIGHT MATERIAL OMITTED

Page 372

COPYRIGHT MATERIAL OMITTED

Page 373

Stephen M. Tillery, Korein Tillery, Mark I. Bronson, Newman Bronson & Wallis, St. Louis, MO, Stephen A. Swedlow, Robert L. King, Swedlow & King, LLC, Chicago, IL, Gerson H. Smoger, Smoger & Associates, P.C., Oakland, CA, for respondent.

Alan C. Kohn, Robert F. Murray, Kohn, Shands, Elbert, Gianoulakis & Giljum, LLP, St. Louis, MO, Robert C. Heim, Judy L. Leone, Dechert LLP, Philadelphia, PA, Ezra D. Rosenberg, Ronni E. Fuchs, Dechert LLP, Princeton, NJ, for appellants.

Bruce D. Ryder, Thompson Coburn LLP, St. Louis, MO, Jonathan Bach, Stephen Wieder, Kronish Lieb Weiner & Hellman LLP, New York, NY, for Amicus Curiae National Association of Manufacturers.

Michael Ferry, Gateway Legal Services, Inc., St. Louis, MO, F. Paul Bland, Jr., Trial Lawyers for Public Justice, Washington, D.C., Mark Gottlieb, Tobacco Control Resource Center, Inc., Boston, MA, for Amicus Curiae National Association of Consumer Advocates, Trial Lawyers for Public Justice, Tobacco Control Legal

Page 374

Consortium, Campaign for Tobacco-Free Kids.

KATHIANNE KNAUP CRANE, Judge.

Plaintiff cigarette consumers filed this case as a class action to recover damages and other relief under the Merchandising Practices Act (MPA), section 407.025 RSMo (2000), against defendant cigarette manufacturers on claims arising out of defendants' marketing of "light" cigarettes. The trial court entered an order certifying a class under the MPA. After hearing defendants' motion for reconsideration, the trial court entered a new order certifying a class under the MPA, defining the class as follows:

All residents of Missouri who purchased and consumed Defendants' Marlboro Lights cigarettes, in Missouri, at any time between the five years immediately preceding the filing of the Petition in this suit through the date the Court originally certified this suit as a class action (December 31, 2003), but who do not have a claim for personal injury resulting from the purchase or consumption of cigarettes.

Defendants appeal from this order. We strike those portions of the class action certification order that go to the merits of the case and affirm as so modified.

FACTUAL AND PROCEDURAL BACKGROUND

On February 14, 2000, Missouri residents Jackie Bauer and Ed Ratliff (collectively, "plaintiffs") filed a class action petition in the Circuit Court of the City of St. Louis to recover damages and other relief under the MPA and the common law against Philip Morris USA Inc. (PMUSA) (formerly known as Philip Morris Incorporated) and Altria Group, Inc. (formerly known as Philip Morris Companies, Inc.) (collectively, "defendants") on behalf of themselves and Missouri residents who had purchased Marlboro Lights ("Lights").

In their allegations common to all counts, plaintiffs alleged that PMUSA falsely represented that Lights delivered lower tar and nicotine but failed to disclose that Lights contained ventilation holes that diluted the tar and nicotine per puff, as measured by the industry standard testing apparatus; failed to disclose that defendants intentionally manipulated the design and content of Lights in order to maximize nicotine delivery; failed to disclose that the defendants intended to fool the machine tests with these design changes; and failed to disclose that the design changes increased the harmful effects of tar.

Ms. Bauer and Mr. Ratliff alleged that they were longtime consumers of Lights, who were not aware of the misrepresentations until early 2000. Ms. Bauer and Mr. Ratliff sought to represent a class of all Missouri residents who purchased Lights from 1971 until the date of trial who did not have a personal injury claim resulting from the purchase or consumption of cigarettes.

In Count I, plaintiffs sought relief under the MPA.¹ They alleged that they and the proposed class members had entered into transactions with defendants when they purchased Lights and that during these transactions, defendants engaged in unfair or deceptive trade practices by: a) Falsely representing that Lights, when smoked

Page 375

under normal use, contained lower tar and nicotine than regular cigarettes; b) failing to state the material facts that "changes in cigarette design and composition were intended to deliver lowered tar and nicotine levels under machine testing conditions while delivering heightened levels of these compounds when smoked by consumers;" c) "placing vent holes on the filter of light cigarettes that are covered or blocked by the smoker's lips or fingers, under the normal use, thereby negating the represented effects of [Lights];" d) "failing to mark the vent holes or make them visible to the naked eye such that smokers could attempt to correctly smoke the cigarettes to obtain the claimed reduced tar and nicotine;" e) "failing to disclose to consumers that smoking Defendants' cigarettes with the vent holes blocked results in the smoker receiving an increased amount of tar and nicotine;" f) "failing to instruct smokers, on the packaging or elsewhere, on how to correctly smoke the cigarettes to obtain the claimed lower tar and nicotine;" g) "failing to disclose to consumers that the techniques employed by Defendants to purportedly reduce the levels of tar in their Marlboro Lights actually increase the mutagenicity of the tar ingested by the consumer and thereby increase the levels of harmful toxins ingested by the consumer;" h) "manipulating the nicotine levels in their light cigarettes;" and i) failing to inform consumers about "the manipulation of the tobacco in Marlboro Lights by, inter alia, the addition of chemicals as well as Defendants' reasons for such manipulation."

Plaintiffs alleged that they were aggrieved and suffered ascertainable losses because they failed to receive the qualities and economic value of a low tar, low nicotine cigarette. They sought declaratory relief, a refund of the amounts paid to purchase Lights, attorneys' fees, punitive damages, and other equitable relief.²

On March 1, 2001, Ms. Bauer voluntarily dismissed her action without prejudice. On May 22, 2001, Mr. Ratliff moved to add Dayna Craft as a party plaintiff and to amend the caption and petition by interlineation to reflect her status as a party. The trial court granted the motion on May 23, 2001.

On December 10, 2001, Mr. Ratliff and Ms. Craft filed a motion for class certification pursuant to section 407.025.3 RSMo (2000) and Rule 52.08. Defendants filed a memorandum in opposition, along with exhibits.

On July 2, 2002, Mr. Ratliff dismissed his cause of action without prejudice. This leaves Ms. Craft as the sole remaining plaintiff in the case.³

On December 31, 2003, the trial court certified a Rule 52.08(b)(3) class of Missouri residents who had purchased Lights in Missouri since 1971 but who do not have a claim for personal injury relating to smoking. On January 28, 2004, defendants filed a motion for reconsideration. This motion was heard on April 28, 2004. On September 13, 2004, the trial court granted the motion in part and entered a new order limiting the class to those who had purchased Lights in the five years

Page 376

preceding the date of the original class action.

DISCUSSION

I. Introductory Matters

A. Jurisdiction

As an initial matter, we take up plaintiff's challenge to this court's jurisdiction. Plaintiff asserts that the appeal from the class certification order is not timely, for the reason that the appeal had to be taken, if at all, from the initial class certification order, which was not an appealable order when entered. Plaintiff maintains that if the August 28, 2004 amendment to section 512.020 made the initial order appealable, then the notice of appeal had to be filed within ten days of that date to be timely. We disagree.

The right to appeal is statutory. On December 31, 2003, when the initial order certifying a class was entered, class certification orders were interlocutory orders that could not be separately appealed. Ralph v. American Family Mut. Ins. Co., 809 S.W.2d 173, 174-75 (Mo.App.1991). The December 31, 2003 order never became "final," but remained interlocutory. In fact, the order specifically recited that it was "subject to amendment or alteration." A trial court can always revisit and change a class certification order before it renders a decision on the merits. Reinhold v. Fee Fee Trunk Sewer, Inc., 664 S.W.2d 599, 602 (Mo.App.1984).

On August 28, 2004, an amendment to section 512.020 went into effect that added orders granting or denying class action certification to the list of orders that may be appealed. Section 512.020(3) RSMo (2004 Supp.). On September 13, 2004, the trial court entered a new order that granted in part the motion for reconsideration and certified a more restrictively defined class. Defendants filed their notice of appeal ten days later, on September 23, 2004.

Defendants are not appealing from the initial order of December 31, 2003, but from the September 13, 2004 order entered on defendants' motion for reconsideration. This was a class certification order that could be appealed pursuant to section 512.020(3). It is irrelevant that the trial court had entered a prior interlocutory order certifying a class.

Rule 81.04(a) requires a party to file a notice of appeal no later than ten days "after the judgment or order appealed from becomes final." The September 23, 2004 notice of appeal was timely under this rule,...