European Community v. Rjr Nabisco, Inc., No. 00-CV-06617.

CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
Writing for the CourtGaraufis
Citation150 F.Supp.2d 456
PartiesTHE EUROPEAN COMMUNITY Plaintiff, v. RJR NABISCO, INC., et al., Defendants. Department of Amazonas, et al. Plaintiffs, v. Philip Morris Companies, Inc., et al., Defendants.
Decision Date16 July 2001
Docket NumberNo. 00-CV-02881 (NGG)(VVP).,No. 00-CV-06617.

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150 F.Supp.2d 456
THE EUROPEAN COMMUNITY Plaintiff,
v.
RJR NABISCO, INC., et al., Defendants.
Department of Amazonas, et al. Plaintiffs,
v.
Philip Morris Companies, Inc., et al., Defendants.
No. 00-CV-06617.
No. 00-CV-02881 (NGG)(VVP).
United States District Court, E.D. New York.
July 16, 2001.

Page 457

COPYRIGHT MATERIAL OMITTED

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Krupnick Campbell Malone Roselli, Buser Slama Hancock Mcnelis, Liberman & Mckee, P.A., Kevin A. Malone, Carlos A. Acevedo, Fort Lauderdale, FL, Speiser, Krause, Nolan & Granito, John J. Halloran, Frank H. Granito III, Kenneth P. Nolan, Frank H. Granito, Jr., New York

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City, Sacks & Smith, L.L.C., John K. Weston, Andrew B. Sacks, Philadelphia, PA, for Plaintiffs.

Edward Farrell, Principe de Vergara 17, Piso 8, Madrid, Spain, for the European Community.

Arnold & Porter, Craig A. Stewart, New York City, Irvin B. Nathan, Kitty A. Behan, Christopher D. Mann, Evelina J. Norwinski, Washington, DC, for Philip Morris Incorporated, Philip Morris International, Inc., Philip Morris Products, Inc., Philip Morris Latin American Sales Corporation, and Philip Morris Duty Free, Inc.

Cravath, Swain & Moore, Ronald S. Rolfe, Max R. Shulman, Dan Rotterstreich, New York City, for British American Tobacco (Investments) Limited and British American Tobacco (South America) Ltd.

Simpson Thacher & Bartlett, Mary Elizabeth McGarry, New York City, for B.A.T. Industries, Inc.

Kirkland & Ellis, Peter A. Bellacosa, Marjorie Press Lindblom, New York City, David M. Bernick, Jonathan C. Bunge, Chicago, IL, for Brown & Williamson Tobacco Corporation and Batus Tobacco Services, Inc.

Jones, Day, Reavis & Pogue, Mark R. Seiden, New York City, William T. Plesec, North Point, Cleveland, OH, Timothy J. Finn, Christopher F. Dugan, Washington, DC, for RJR Nabisco, Inc., R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco International, Inc., Nabisco Group Holdings Corp., R.J. Reynolds Tobacco Holdings, Inc., and RJR Nabisco Holdings Corp.

Sullivan & Heard, C. Stephen Heard, Jr., New York City, for Japan Tobacco Inc.

MEMORANDUM AND ORDER

GARAUFIS, District Judge.


Now before this court are Defendants' motions to dismiss the complaints in the above-captioned cases, and to deconsolidate those cases; and a motion by the European Community to amend its complaint. For the reasons set forth below, Defendants' motion to de-consolidate the cases is granted; Defendants' motion to dismiss the complaint filed by the European Community is granted; Japan Tobacco, Inc.'s motion to dismiss is denied as moot; and the European Community's motion to amend its complaint is denied. The Defendants' motion to dismiss the complaint filed by the Departments of the Republic of Colombia will be decided in a separate memorandum and order, to be issued at a later date.

I. Introduction

The above-captioned cases, which are distinct and have been consolidated for administrative purposes including the resolution of the motions now before this court, have been brought by the European Community1 (the "EC Case") and by numerous political subdivisions of the Republic of Colombia2 (the "Amazonas Case") against

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major tobacco product manufacturers. The Defendants in the EC Case include Philip Morris Companies, Inc. and several of its affiliates3 (collectively "Philip Morris"), RJR Nabisco, Inc.,4 several companies related to R.J. Reynolds Tobacco Company,5 and Japan Tobacco, Inc. (collectively "RJR").6 The Defendants in the Amazonas case include Philip Morris Companies, Inc. and several of its affiliates7 (collectively "Philip Morris"), BAT Industries P.L.C. and several of its affiliates,8 and Brown & Williamson Tobacco Corporation9 (collectively "BAT").

Plaintiffs in these cases seek recovery against major tobacco product manufacturers and related entities for damages sustained as a result of three separate conspiracies, all related to the smuggling of contraband cigarettes into the EC and Colombia, as follows:

1. a conspiracy involving, in the EC Case, RJR and various co-conspirators, including RJR's distributors, shippers, currency dealers, smugglers, lobbyists, customers, agents, consultants and others to smuggle RJR's tobacco products into the EC and the territories of various EC Member States and to launder the proceeds of drug trafficking; BAT is alleged to head a similar conspiracy with the same objective in the Amazonas Case.

2. a conspiracy involving, in the EC Case, Philip Morris and various co-conspirators, including Philip Morris's distributors, shippers, currency dealers, smugglers, lobbyists, customers, agents, consultants and others, to smuggle Philip Morris's tobacco products into the EC and the territories of various EC Member States and to launder the proceeds of drug trafficking; Philip Morris is alleged to head a similar conspiracy with the same objective in the Amazonas Case.

3. a conspiracy, in the EC Case, among RJR and Philip Morris employing various means, including fixing the price of smuggled cigarettes, to implement and conceal the first two conspiracies; BAT and Philip Morris are alleged to have launched a similar conspiracy with the same objective in the Amazonas Case.

In each case, Plaintiffs' claim that they are entitled to recover under both the Federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and under various state common law causes of action, including fraud, public nuisance, unjust enrichment, negligence and negligent misrepresentation.

Plaintiffs in both cases allege that the conspiracies described above resulted in the following damages:

1. lost tax revenues derived from the sale of cigarettes that would have been paid if the smuggled cigarettes

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had entered Plaintiffs' territories legally;

2. money and property that Plaintiffs would have obtained with revenues derived from the lawful sale of cigarettes;

3. money spent by Plaintiffs to recover funds lost as a result of Defendants' illegal activities, including money spent to combat cigarette smuggling;

4. illegal profits resulting from Defendants' illegal sale of contraband cigarettes and participation in illegal money laundering;

5. damages resulting from Defendants' creation of a public nuisance.

II. Deconsolidation

This memorandum and order dismissing the EC Complaint disposes of the EC Case only, which was consolidated with the Amazonas Case pursuant to Fed. R.Civ.P. 42(a) on November 27, 2000. (See Nov. 27, 2001 Tr. at 39.) On that date, I explained that the purpose of consolidation was to simplify this complex litigation to the fullest extent practicable; I further emphasized that my decision to consolidate the Amazonas and EC Cases was not final, and that I would revisit the issue as appropriate. (Id.) "[T]he decision to consolidate is discretionary with the court and turns essentially on balancing the time that might be saved against the possible delay or prejudice involved in consolidation." Transeastern Shipping Corp. v. India Supply Mission, 53 F.R.D. 204, 206 (S.D.N.Y.1971); see also Kelly v. Kelly, 911 F.Supp. 66, 69 (N.D.N.Y.1996). Consolidation promoted the fair and efficient resolution of various motions and house-keeping issues that have come up concerning these cases, including the motions to dismiss now before this court. Continued consolidation, however, will delay the resolution of these cases unnecessarily, and the cost of such delay is not outweighed by the fact that the EC and Amazonas Cases to some extent share common legal and factual issues. Defendants' motion for deconsolidation is therefore granted. The Amazonas Case shall re-acquire its original docket number, 00-CV-02881; the EC Case shall retain docket number 00-CV-06617.

III. Standard of Review

In reviewing a motion brought pursuant to Fed.R.Civ.P. 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences from those allegations in the light most favorable to the plaintiff.10 See Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994); Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir.1999). The complaint may be dismissed only if "it appears beyond doubt, even when the complaint is liberally construed, that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Hoover v. Ronwin, 466 U.S. 558, 587, 104 S.Ct. 1989, 80 L.Ed.2d 590 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In deciding such a motion, the "issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir.1996) (internal quotation marks and citations omitted).

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IV. The EC Complaint

A. RJR's Involvement in Smuggling

Plaintiff alleges, in general terms, that RJR has been actively involved in smuggling contraband cigarettes into the EC and numerous countries outside of the EC for many years; that RJR's smuggling activity spans the globe, and includes conduct and effects in the Eastern District of New York and throughout New York State; that RJR entered into an agreement with its distributors, customers, agents, consultants and other co-conspirators to participate in a common scheme to smuggle contraband cigarettes into the EC; that RJR conspired with Philip Morris to promote and conceal its and Philip Morris's smuggling activities by means including, inter alia, fixing the price of contraband cigarettes; and that RJR agreed with its co-conspirators to commit tortious acts in order to conduct its smuggling scheme. Plaintiff further alleges that it has suffered economic harm, in the forms described supra, as a result of Defendants' participation in cigarette smuggling.

Plaintiff alleges that each of the named RJR Defendants participated in the conception and execution of RJR's conspiracy to smuggle cigarettes into the EC....

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31 practice notes
  • Republic of Colombia v. Diageo North America Inc., No. 04-CV-4372 (NGG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • June 19, 2007
    ...has been reached on the merits in the litigation abroad"); European Community v. RJR Nabisco, Inc. (hereinafter, "RJR Nabisco"), 150 F.Supp.2d 456, 476 (E.D.N.Y.2001) (Garaufis, J.) ("international comity is not at issue because there is no need for this court to defer to the legislative or......
  • Canyon County v. Syngenta Seeds, Inc., No. 06-35112.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • March 21, 2008
    ...city's loss of its right to collect sales taxes may qualify as injury to its business or property); Eur. Cmty. v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 492-93 (E.D.N.Y.2001) (concluding that foreign government's claim for lost tax revenues and increased law enforcement costs "are, at bottom......
  • Resqnet.Com, Inc. v. Lansa, Inc., No. 01 Civ.3578(RWS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 13, 2005
    ...54, 70 (E.D.N.Y.1994) (citing Panzella v. Skou, 471 F.Supp. 303, 305 (S.D.N.Y.1979)); see also European Cmty. v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 502-03 (E.D.N.Y.2001) (citing Saxholm AS v. Dynal, Inc., 938 F.Supp. 120, 123 Likewise, the party opposing a motion to amend bears the burde......
  • City of New York v. Cyco.Net, Inc., No. 03 CV 383 DAB.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 27, 2005
    ...department of revenue's RICO action against retailer who filed false state sales tax returns); European Community v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 493-500 (E.D.N.Y.2001)(governmental agency suffered injury to business or property, through loss of cigarette tax revenues and increased......
  • Request a trial to view additional results
31 cases
  • Republic of Colombia v. Diageo North America Inc., No. 04-CV-4372 (NGG).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • June 19, 2007
    ...has been reached on the merits in the litigation abroad"); European Community v. RJR Nabisco, Inc. (hereinafter, "RJR Nabisco"), 150 F.Supp.2d 456, 476 (E.D.N.Y.2001) (Garaufis, J.) ("international comity is not at issue because there is no need for this court to defer to the legislative or......
  • Canyon County v. Syngenta Seeds, Inc., No. 06-35112.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • March 21, 2008
    ...city's loss of its right to collect sales taxes may qualify as injury to its business or property); Eur. Cmty. v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 492-93 (E.D.N.Y.2001) (concluding that foreign government's claim for lost tax revenues and increased law enforcement costs "are, at bottom......
  • Resqnet.Com, Inc. v. Lansa, Inc., No. 01 Civ.3578(RWS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 13, 2005
    ...54, 70 (E.D.N.Y.1994) (citing Panzella v. Skou, 471 F.Supp. 303, 305 (S.D.N.Y.1979)); see also European Cmty. v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 502-03 (E.D.N.Y.2001) (citing Saxholm AS v. Dynal, Inc., 938 F.Supp. 120, 123 Likewise, the party opposing a motion to amend bears the burde......
  • City of New York v. Cyco.Net, Inc., No. 03 CV 383 DAB.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • January 27, 2005
    ...department of revenue's RICO action against retailer who filed false state sales tax returns); European Community v. RJR Nabisco, Inc., 150 F.Supp.2d 456, 493-500 (E.D.N.Y.2001)(governmental agency suffered injury to business or property, through loss of cigarette tax revenues and increased......
  • Request a trial to view additional results

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