Grisham v. Philip Morris U.S.A.

• Decision Date: 29 March 2005
• Docket Number: No. 03-55780.,No. 03-56018.,03-55780.,03-56018.
• Citation: 403 F.3d 631
• Parties: Leslie J. GRISHAM, Plaintiff-Appellant, v. PHILIP MORRIS U.S.A., a corporation; Brown & Williamson Tobacco Company Corp., individually and as successor to the American Tobacco Company and its predecessor in interest, British American Tobacco Industries, PLC, Defendants-Appellees. Maria Cannata, Plaintiff-Appellant, v. Philip Morris USA, Inc., aka Philip Morris; Brown & Williamson Tobacco Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

403 F.3d 631

Leslie J. GRISHAM, Plaintiff-Appellant, v. PHILIP MORRIS U.S.A., a corporation; Brown & Williamson Tobacco Company Corp., individually and as successor to the American Tobacco Company and its predecessor in interest, British American Tobacco Industries, PLC, Defendants-Appellees.

Maria Cannata, Plaintiff-Appellant, v. Philip Morris USA, Inc., aka Philip Morris; Brown & Williamson Tobacco Corporation, Defendants-Appellees.

No. 03-55780.

No. 03-56018.

United States Court of Appeals, Ninth Circuit.

March 29, 2005.

Frances M. Phares, Esq., Baum Hedlund, Los Angeles, CA, Martin Louis Stanley, Esq., Santa Monica, CA, for Plaintiff-Appellant.

Daniel U. Smith, Esq., Law Office of Daniel U. Smith, Kentfield, CA, Murray R. Garnick, Sheila B. Scheuerman, Arnold & Porter LLP, Washington, DC, Maurice A. Leiter, Esq., Arnold & Porter LLP, Daniel P. Collins, Esq., Ralph A. Campillo, Esq., Sedgwick Detert Moran & Arnold, Amy W. Schulman, Fred D. Heather, Esq., Piper Rudnick, LLP, Los Angeles, CA, for Defendant-Appellee.

Before: FARRIS, D.W. NELSON, and GOULD, Circuit Judges.

ORDER

PER CURIAM:

We certify to the California Supreme Court the questions set forth in Part II of this order. The answers to the certified questions depend upon California law, and the answers may be determinative of the outcome of the present appeals. We find no clear controlling precedent in the decisions of the California Supreme Court. The answers provided by the California Supreme Court to the certified questions will be followed by this court.

All further proceedings in these cases are stayed pending final action by the California Supreme Court, and these cases are withdrawn from submission until further notice from this court. If the California Supreme Court accepts the certified questions, the parties shall file a joint report six months after the date of acceptance and every six months thereafter, advising us of the status of the proceedings.

I. CAPTION AND COUNSEL

A. The captions of the cases are as follows:¹

MARIA CANNATA, Plaintiff-Appellant

v.

PHILIP MORRIS USA, INC., aka Philip Morris; BROWN & WILLIAMSON TOBACCO CORP., Defendants-Appellees

AND

LESLIE GRISHAM, Plaintiff-Appellant

v.

PHILIP MORRIS USA; BROWN & WILLIAMSON TOBACCO COMPANY CORP., Defendants-Appellees.

Maria Cannata and Leslie Grisham are deemed the petitioners in this request because they appeal the district courts' rulings on these issues.

B. The names and address of counsel for the parties are as follows:

For Maria Cannata: Martin Louis Stanley, 1541 Ocean Avenue, Suite 200, Santa Monica, California 90401.

For Leslie Grisham: Frances M. Phares, Baum Hedlund, 12100 Wilshire Boulevard, Los Angeles, California 90025; Daniel U. Smith, Law Office of Daniel U. Smith, 21 Rancheria Road, Kentfield, California 94904.

For Philip Morris: Murry R. Garnick, Arnold & Porter LLP, 555 12th Street NW, Washington, D.C. 20004-1206; Maurice A. Leiter, Arnold & Porter, 777 South Figueroa Street, Los Angeles, California 90017-5884; Daniel P. Collins, Munger Tolles & Olson, LLP, 355 South Grand Avenue, Los Angeles, California 90071.

For Brown & Williamson: Frederick D. Baker, Ralph A. Campillo, Sedgwick, Detert, Moran & Arnold, 801 South Figueroa Street, Los Angeles, California 90017-5556.

II. QUESTION OF LAW

By this order we certify to the California Supreme Court for decision the dispositive² questions of state law before us: (1) Under California law, can a plaintiff overcome the presumed awareness that he or she knows that smoking causes addiction and other health problems, and so show justifiable reliance?³ (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? Our phrasing of the questions should not restrict the California Supreme Court's consideration of the issues involved. We will accept the decision of the California Supreme Court, which is the highest authority on the interpretation of California law. Aceves v. Allstate Ins. Co., 68 F.3d 1160, 1164 (9th Cir.1995) (holding that the Ninth Circuit is bound to follow the holdings of the California Supreme Court when applying California law).

III. STATEMENT OF FACTS

These diversity cases arise from physical and monetary injuries suffered by plaintiffs-appellants Maria Cannata and Leslie Grisham as the alleged result of smoking cigarettes manufactured and marketed by defendants-appellees Philip Morris USA, Inc. and Brown & Williamson Tobacco Corporation. In both cases, plaintiffs alleged (1) negligence, (2) strict liability, (3) false representation, (4) deceit/fraudulent concealment, (5) unfair competition and business practices, (6) negligent false and misleading advertizing, and (7) intentional false and misleading advertising.⁴

We summarize the facts as pleaded in both cases.⁵ Both plaintiffs began smoking as minors: Leslie Grisham began in 1962-63; Marie Cannata began sometime before 1969. Cannata Am. Compl. ¶ 39; Grisham Compl. ¶ 28. 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. Cannata Am. Compl. ¶¶ 40, 42. Grisham states that she was induced to begin smoking by defendants' advertisements and promotional campaigns, which she alleges concealed the true risks of smoking. Grisham Compl. ¶ 28. Both plaintiffs allege that if they had been aware of the health risks of smoking, and the addictive nature of nicotine, as well the manipulation of nicotine levels and the intentional targeting of youths by defendants, they would not have begun smoking. Cannata Am. Compl.¶ 43; Grisham Compl. ¶ 34.

Both plaintiffs allege that they were personally unaware that smoking was unhealthy and addictive because the defendants' ongoing conspiracy to defraud the public about the risks of smoking created a medical and scientific controversy as to whether or not cigarettes were truly harmful, and that they believed the defendants' side of this controversy. E.g., Cannata Am. Compl. ¶¶ 4, 28; Grisham Compl.¶¶ 24, 34. Cannata recently became aware that defendants' representations related to the safety of smoking were false, but she could not quit smoking because she was addicted. Cannata Am. Compl. ¶¶ 41-43. Grisham, too, asserts that once she became aware of the health risks associated with smoking, she could not quit because of her addiction. Grisham Compl.¶ 34. She asserts that she unsuccessfully tried to overcome her "nicotine addiction" in 1993, although at that time she had not yet been diagnosed with any injury caused by her tobacco use. Id. at ¶¶ 31, 32, 35.

Cannata asserts that because she began smoking before the availability of substantial public information about the negative effects of smoking, her reliance on the defendants' misrepresentations was justified. Cannata Am. Compl.¶ 42. Grisham asserts that the defendants' concealment of information about the health risks of smoking lead to her physical injuries. Grisham Compl. ¶ 78. Both plaintiffs allege that if they had known of the health risks of smoking, the addictive nature of nicotine, the intentional manipulation of nicotine levels, and the targeting of minors, they would not have started smoking, and that by the time they became aware of these facts, they were addicted to cigarettes. Cannata Am. Compl. ¶ 43; Grisham Compl. ¶¶ 34, 78. Defendants counter that such reliance cannot be justifiable because, under Soliman v. Philip Morris, California law presumes a plaintiff's awareness that smoking causes addiction and other health problems. 311 F.3d 966, 974 (9th Cir.2002).

As a result of defendants' allegedly wrongful conduct, Maria Cannata is dying. Cannata Am. Compl. ¶ 44. She has suffered and continues to suffer from permanent injuries, including emphysema, shortness of breath, other lung damage, and mental and emotional distress. Id. Grisham's use of tobacco has caused her to develop irreversible emphysema as well as disfiguring periodontal disease, including tooth and alveolar bone loss. Grisham Compl. ¶¶ 30-32. Both plaintiffs have incurred monetary injuries from defendants' wrongful conduct, including liability for medical treatment, lost prejudgment interest, lost wages, and other pecuniary losses. Cannata Am. Compl. ¶¶ 45-47; Grisham Compl.¶¶ 37-39. They pray for relief in the form of compensatory and punitive damages, disgorgement of profits, and permanent injunctions preventing the sale of harmful cigarettes, as well as the targeting of minors in cigarette advertising, and related relief. Cannata Am. Compl. ¶¶ 133-46; Grisham Compl. at 67-68, ¶¶ a-n.

The district courts dismissed both complaints on the pleadings. The district court determined that Cannata's claims were time barred under California law because Cannata could not toll the applicable statutes of limitations by alleging an ongoing civil conspiracy.⁶ See Wyatt v. Union Mortgage Co., 24 Cal.3d 773, 786, 157 Cal.Rptr. 392, 598 P.2d 45 (1979) (holding that the statute of limitations does not begin to run until the last overt act pursuant to the conspiracy is completed). Specifically, Cannata could not show an ongoing conspiracy to defraud because she could not show the essential element of justifiable reliance. See Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal.4th 503, 510-11, 28 Cal.Rptr.2d 475, 869 P.2d 454 (1994) (holding that there is no separate cause of action for civil conspiracy, and that to establish such an action, a plaintiff must show some other underlying tort or civil wrong); see also Chicago Title Ins. Co. v. Superior Court, 174 Cal.App.3d 1142, 1151, 220 Cal.Rptr. 507 (1985) ("Justifiable reliance is an essential element of any cause of action for fraud and conspiracy to...