Grisham v. Philip Morris U.S.A., Inc.

• Citation: 151 P.3d 1151,54 Cal.Rptr.3d 735,40 Cal.4th 623
• Decision Date: 15 February 2007
• Docket Number: No. S132772.,S132772.
• Court: United States State Supreme Court (California)
• Parties: Leslie J. GRISHAM et al., Plaintiffs and Appellants, v. PHILIP MORRIS U.S.A., INC. et al., Defendants and Respondents.

54 Cal.Rptr.3d 735

40 Cal.4th 623

151 P.3d 1151

Leslie J. GRISHAM et al., Plaintiffs and Appellants, v. PHILIP MORRIS U.S.A., INC. et al., Defendants and Respondents.

No. S132772.

Supreme Court of California.

February 15, 2007.

Baum, Hedliund, Aristei & Guilford, Baum Hedlund, Frances M. Phares, Michael

L. Baum, J. Clark Aristei, Los Angeles; Law Offices of Daniel U. Smith and Daniel U. Smith, Kentfield, for Plaintiff and Appellant Leslie Grisham.

Brayton Purcell, Alan R. Brayton, Gilbert L. Purcell, Lloyd F. LeRoy, Novato, and Nance F. Becker, San Francisco, for Nikki Pooshs as Amicus Curiae on behalf of Plaintiff and Appellant Leslie Grisham.

Arkin & Glovsky and Sharon J. Arkin, for Consumer Attorneys of California's Amicus Curiae on behalf of Plaintiff and Appellant Leslie Grisham.

Law Offices of Martin L. Louis and Martin L. Stanley, Beverly Hills, for Plaintiff and Appellant Maria Cannata.

Munger, Tolles & Olson, Daniel P. Collins, Daniel B. Levin, Los Angeles; Arnold & Porter and Murray R. Garnick, for Defendant and Respondent Philip Morris USA Inc.

Jones Day, Elwood Lui, Peter N. Larson, San Francisco, Paul G. Crist; Sedgwick, Detert, Moran & Arnold, Frederick D. Baker, San Francisco, Ralph A. Campillo, Los Angeles; and Maurice Leiter, Los Angeles, for Defendant and Respondent Brown & Williamson Holdings, Inc.

Daniel J. Popeo, Richard A. Stamp; Zacks Utrecht & Leadbetter and Paul F. Utrecht, San Francisco, for Washington Legal Foundation as Amicus Curiae on behalf of Defendants and Respondents.

Hugh F. Young, Jr., and Harvey M. Grossman, for The Product Liability Advisory Council, Inc., as Amicus Curiae on behalf of Defendants and Respondents.

MORENO, J.

In the context of two lawsuits against tobacco companies by smokers Leslie J. Grisham and Maria Cannata, the Ninth Circuit Court of Appeals asks us to resolve two questions:¹ (1) For the purpose of the statute of limitations period applicable under California law to a personal injury action alleging injury arising from smoking tobacco, are persons presumed to have been aware by 1988 that smoking causes addiction and other health problems? If California law recognizes such a presumption, under what circumstances is it rebuttable? (2) Under California law, if a plaintiff seeks damages resulting from an addiction to tobacco, does an action for personal injury accrue when the plaintiff recognizes that he or she is addicted to tobacco, if the plaintiff has not yet been diagnosed with an injury stemming from tobacco use? (Grisham, supra, 403 F.3d at p. 633.)

The answers to these questions are better understood in the factual context in which these two cases arise. As will be explained below, Grisham essentially alleges two types of claims: one for physical injury in the form of respiratory and other ailments caused by smoking, and another for economic injury² that resulted from becoming addicted as a minor to cigarettes, and continually being compelled by the addiction to purchase them. As to this second type of claim, we conclude that although there is no reason to judicially create a special presumption of awareness that smoking cigarettes is addictive, a plaintiff who alleges that accrual of this cause of action is delayed because of delayed discovery of her addiction must plead facts explaining the delay. As we shall see, Grisham's complaint admits actual or at least constructive knowledge that she was addicted to cigarettes long before filing the complaint.

We also conclude that, assuming Grisham's economic injury claim or claims are time barred, that bar does not extend to her causes of action based on physical injury from smoking that manifested itself after the economic injury claim was or should have been discovered. We reject the proposition advanced by defendants, based on Soliman v. Philip Morris, Inc. (9th Cir.2002) 311 F.3d 966 (Soliman), that the statute of limitations should have commenced on the physical injury claims as soon as Grisham discovered or should have discovered she was addicted to cigarettes.

As also explained below, we conclude that Cannata has not alleged that her reliance on defendants' misrepresentations continued into the limitations period, although we express no opinion on the continuing viability of her conspiracy claim based on continuing wrong.

I. Factual Background

The cases are in federal court via diversity jurisdiction, and arise from physical and monetary injuries suffered by plaintiffs Maria Cannata and Leslie Grisham as the alleged result of smoking cigarettes manufactured and marketed by defendants, Philip Morris U.S.A., Inc. and Brown & Williamson Tobacco Corporation. (Hereafter sometimes Philip Morris.) Both cases come to the Ninth Circuit on a motion to dismiss and, like the Ninth Circuit, we will assume the truth of the facts asserted in the complaints. (Grisham, supra, 403 F.3d at p. 634, fn. 5.)

A. Grisham's Complaint

Grisham began smoking in 1962-1963 as a young teenager. At the time she began smoking, she was unaware of the increased, risk of developing emphysema from smoking, or the increased risk of developing, as she did, persistent and chronic periodontitis and gingivitis. She was induced to start smoking by the advertising and representations of cigarette manufacturers, including defendants. (Grisham, supra, 403 F.3d at p. 634, fn. 5.)

Grisham attempted to quit smoking unsuccessfully on a number of occasions. One such occasion was during a period in 1993 and 1994. As she states in her complaint: "Plaintiff, while still smoking, joined Nicotine Anonymous, to help her overcome her nicotine addition. One suggestion plaintiff received was to give up her regular brand of cigarettes and switch to a less desirable brand of cigarettes that were not as satisfying, but were low in tars and nicotine. For several months, on the basis of that suggestion, plaintiff stopped smoking Merit 100's and began smoking Carlton's, which were advertised as lower in tars and nicotine. Plaintiff smoked Carlton cigarettes for approximately four to six months. Plaintiff then attempted, unsuccessfully, to quit smoking by obtaining a prescription for Nicorette gum. The Nicorette gum did not control the nicotine addiction and plaintiff began smoking again in mid-1994."

Grisham was diagnosed with the beginning stages of irreversible emphysema on or about March 28, 2001. Shortly thereafter, in April 2001, she was diagnosed with persistent and chronic periodontitis and gingivitis, leading to loss of teeth and facial disfigurement. She alleges that had she been aware of the true facts regarding the magnitude of the health risks and extent to which cigarettes were addictive, and that nicotine levels were manipulated by defendants and other cigarette manufacturers to foster the addiction, she would not have started smoking.

Grisham filed suit on March 15, 2002, within a year of her diagnosis for emphysema and persistent and chronic periodontitis and gingivitis. She alleged (1) negligence, (2) strict liability, (3) false representation, (4) deceit/fraudulent concealment, (5) unfair competition and business practices, (6) negligent false and misleading advertising, (7) intentional false and misleading advertising, (8) civil conspiracy and breach of express warranty.

Throughout her complaint, Grisham alleges that her addiction to cigarettes was a key link in the causal chain that led to her physical injuries. For example, in her civil conspiracy cause of action, she alleges that she "has now developed the irreversible beginning stages of emphysema, she has suffered from painful chronic and persistent periodontitis and gingivitis, as well as suffered alveolar bone loss which has led to the disfiguring loss of teeth, all of which was caused by plaintiffs addiction to smoking."

In at least one of Grisham's causes of action, however, she alleges that addiction caused not physical but economic injury.

In her cause of action for "Unfair Competition/Unlawful Business Practices" she states: "As a result of the point of sale targeting of youth and minor smokers, at least 90% of adult smokers, including plaintiff, began purchasing the cigarettes to which they became addicted while under the age of 18[,] [i]n reliance upon the representations and inducements of the point of sale targeting of minor smokers by the cigarette manufacturers, including defendants...."

"As a result of the continuing course of conduct of the defendants, and each of them, as outlined above, defendants have been unjustly enriched from the years-long sales of addictive cigarettes, first to minors and youths, including plaintiff, to addict and ensure to the said defendants, and each of them, an ongoing flow of profits throughout the years, as the addicted smokers continued to purchase cigarettes. The true amount of unjust enrichment gained from the ongoing and continuing purchase of cigarettes by addicted smokers who began smoking as minors is as yet unknown to Plaintiff, who requests leave to amend this Complaint to conform to proof at the time of trial."

B. The Cannata Complaint

Marie Cannata began smoking as a minor sometime before 1969. Cannata believed, and was induced to start smoking by, the representations of the defendants that smoking did not cause emphysema, lung problems, cardio-obstructive pulmonary disease, or any other problems. She states that "[b]ecause plaintiff began smoking before there was substantial public information concerning the negative effects of smoking, she justifiably relied on the misrepresentations put forth by the ... defendants." The complaint further states that Cannata "just came to the realization that advertisements and cigarette company statements relating to safety of smoking were false."

Cannata further states that had she "known the true facts concerning the magnitude of the health risks of smoking, the addictive nature of nicotine, the intentional manipulation of nicotine levels in cigarettes, or the...