Myers v. Philip Morris Companies, Inc.

• Decision Date: 05 August 2002
• Docket Number: No. S095213.,S095213.
• Citation: 28 Cal.4th 828,123 Cal.Rptr.2d 40,50 P.3d 751
• Court: California Supreme Court
• Parties: Betty Jean MYERS, Plaintiff and Appellant, v. PHILIP MORRIS COMPANIES, INC., et al., Defendants and Respondents.

123 Cal.Rptr.2d 40

28 Cal.4th 828

50 P.3d 751

Betty Jean MYERS, Plaintiff and Appellant, v. PHILIP MORRIS COMPANIES, INC., et al., Defendants and Respondents.

No. S095213.

Supreme Court of California.

August 5, 2002.

Bourdette & Partners, Philip C. Bourdette and Andre P. Gaston, Visalia, for Plaintiff and Appellant.

Wartnick, Chaber, Harowitz & Tigerman, Harry F. Wartnick, Madelyn J. Chaber, San Francisco; Law Offices of Daniel U. Smith, Daniel U. Smith, Los Angeles, and Ted W. Pelletier for Patricia Henley, Leslie Whiteley and Leonard Whiteley as Amici Curiae on behalf of Plaintiff and Appellant.

Bill Lockyer, Attorney General, Richard M. Frank, Chief Assistant Attorney General, Dennis Eckhart, Assistant Attorney General, and Peter M. Williams, Deputy Attorney General, as Amici Curiae on behalf of Plaintiff and Appellant.

Howard, Rice, Nemerovski, Canady, Falk & Rabkin and H. Joseph Escher III, San Francisco, for Defendant and Respondent R.J. Reynolds Tobacco Company.

Munger, Tolles & Olson, Michael R. Doyen, Fred A. Rowley, Jr., Daniel P. Collins, Los Angeles, and Ronald L. Olsen for Defendant and Respondent Philip Morris Incorporated.

Sedgwick, Detert, Moran & Arnold and Frederick D. Baker, San Francisco, for Defendant and Respondent Brown & Williamson Tobacco Corporation.

William L. Gausewitz for The Alliance of American Insurers, The American Insurance Association, The National Association of Independent Insurers, The National Association of Mutual Insurance Companies and The Reinsurance Association of America as Amici Curiae on behalf of Defendants and Respondents.

Fred Main for California Chamber of Commerce as Amicus Curiae on behalf of Defendants and Respondents.

KENNARD, J.

In 1995, the California Legislature found that "[t]obacco-related disease places a tremendous financial burden upon the persons with the disease, their families, the health care delivery system, and society as a whole," and that "California spends five billion six hundred million dollars ($5,600,000,000) a year in direct and indirect costs on smoking-related illnesses." (Health & Saf.Code, § 104350, subd. (a)(7).) To obtain compensation for the physical and mental suffering and staggering expenses inflicted by tobacco-related illness, users of tobacco products and their families have sought relief in our courts through product liability lawsuits against manufacturers and sellers of tobacco products. In dealing with those lawsuits, courts have not been free to apply ordinary principles of tort law because, as we shall explain, the Legislature has enacted statutes that directly control the extent to which our courts may award damages against tobacco companies in product liability actions.

The statutes at issue are two successive versions of section 1714.45 of California's Civil Code.¹ The first version, which we here sometimes refer to as the Immunity Statute, granted tobacco companies complete immunity in certain product liability lawsuits as of January 1, 1988.² (Added by Stats.1987, ch. 1498, § 3, p. 5778.) The second version, which we here sometimes refer to as the Repeal Statute, rescinded that immunity 10 years later on January 1, 1998. (Stats.1997, ch. 570, § 1.) The United States Court of Appeals for the Ninth Circuit has certified to us a question asking whether the Repeal Statute governs "a claim that accrued after January 1, 1998, but which is based on conduct that occurred prior to January 1, 1998." (Myers v. Phillip Morris Companies, Inc. (9th Cir.2001) 239 F.3d 1029, 1030 (Myers)

.)

Our answer is this: The Immunity Statute applies to certain statutorily described conduct of tobacco companies that occurred during the 10 year immunity period, which began on January 1, 1988, and ended on December 31, 1997. With respect to such conduct, therefore, the statutory immunity applies, and no product liability cause of action may be based on that conduct, regardless of when the users of the tobacco products may have sustained or discovered injuries as a result of that conduct. That statutory immunity was rescinded, however, when the California Legislature enacted the Repeal Statute, which as of January 1, 1998, restored the general principles of tort law that had, until the 1988 enactment of the Immunity Statute, governed tort liability against tobacco companies. Therefore, with respect to conduct falling outside the 10 year immunity period, the tobacco companies are not shielded from product liability lawsuits.

I. FACTS

The Court of Appeals for the Ninth Circuit described the background of this case as follows: "Betty Jean Myers began smoking cigarettes in 1956 and continued to smoke heavily until 1997. Throughout this period, and until August of 1998, she also worked and lived in environments in which those around her smoked cigarettes. On April 8, 1998, Myers was diagnosed with lung cancer allegedly caused by her exposure to tobacco. On March 4, 1999, Myers filed a complaint in Tulare County Superior Court against Philip Morris and other defendant tobacco manufacturers (collectively, the `Tobacco Manufacturers') alleging several claims, including strict liability, negligence, breach of implied warranties, fraud, and negligent misrepresentation." (Myers, supra, 239 F.3d at p. 1030

.)

The Ninth Circuit's description continues: "After removing this case to the United States District Court for the Eastern District of California, the Tobacco Manufacturers moved, on April 13, 1999, to dismiss Myers's complaint for failure to state a claim. On May 25, 1999, the district court granted the motion to dismiss, with leave to amend, on the ground that Cal. Civ.Code § 1714.45 barred Myers's actions for any injuries incurred prior to January 1998. On June 30, 1999, Myers amended her complaint to allege that she was exposed to secondhand cigarette smoke between January 1, 1998 and April 8, 1998. On July 19, 1999, the Tobacco Manufacturers again moved to dismiss Myers's complaint for failure to state a claim. On October 6, 1999, the district court again dismissed Myers's complaint for failure to state [a] claim, this time without leave to amend, on the grounds that she had conceded that her lung cancer was not caused by her exposure to secondhand smoke after January 1, 1998, and, again, that pre 1998 exposures were not actionable. Myers filed a timely notice of appeal to the Ninth Circuit." (Myers, supra, 239 F.3d at p. 1031

.)

II. BACKGROUND

We start with a review of the Immunity Statute and two California cases that have construed that statute, American Tobacco Co. v. Superior Court (1989) 208 Cal. App.3d 480, 255 Cal.Rptr. 280, a decision of the state Court of Appeal, and Richards v. Owens-Illinois, Inc. (1997) 14 Cal.4th 985, 60 Cal.Rptr.2d 103, 928 P.2d 1181, a decision of this court.

A. The Immunity Statute

Enacted as part of the Willie L. Brown, Jr.—Bill Lockyer Civil Liability Reform Act of 1987, former section 1714.45 (the Immunity Statute) provided in full:

"(a) In a product liability action, a manufacturer or seller shall not be liable if:

"(1) The product is inherently unsafe and the product is known to be unsafe by the ordinary consumer who consumes the product with the ordinary knowledge common to the community; and

"(2) The product is a common consumer product intended for personal consumption, such as sugar, castor oil, alcohol, tobacco, and butter, as identified in comment i to Section 402A of the Restatement (Second) of Torts.

"(b) For purposes of this section, the term `product liability action' means any action for injury or death caused by a product, except that the term does not include an action based on a manufacturing defect or breach of an express warranty.

"(c) This section is intended to be declarative of and does not alter or amend existing California law, including Cronin v. J.B.E. Olson Corp., (1972) 8 Cal.3d 121, [104 Cal.Rptr. 433, 501 P.2d 1153], and shall apply to all product liability actions pending on, or commenced after, January 1, 1988." (Stats.1987, ch. 1498, § 3, pp. 5778-5779, italics added.)

We now discuss the two California decisions that have interpreted the Immunity Statute.

1. American Tobacco Co. v. Superior Court

The state Court of Appeal's 1989 decision in American Tobacco Co. v. Superior Court, supra, 208 Cal.App.3d 480, 255 Cal. Rptr. 280 (American Tobacco), which was authored by Presiding Justice J. Anthony Kline, was the first to construe the Immunity Statute. In that case, the court described the Immunity Statute as the result of a "`peace pact'" or "compromise between parties seeking and opposing comprehensive changes in California tort law who had been locked in a long political struggle that had reached [a] stalemate." (American Tobacco, supra, at pp. 486-487

, 255 Cal.Rptr. 280.) Those involved included major special interest groups such as insurers, physicians, manufacturers, and the plaintiffs lawyers. (Id. at p. 486, 255 Cal.Rptr. 280.)³ The Court of Appeal in American Tobacco characterized the Immunity Statute as so "poorly drafted" that "on its face[, it was] amenable to two diametrically opposed interpretations, each of which conflict[ed] in some way with the words" used by the Legislature. (American Tobacco, supra, at p. 485, 255 Cal. Rptr. 280.) But legislative history, the court noted, indicated that the Immunity Statute's intent was to ensure that "`highcholesterol foods, alcohol, and cigarettes that are inherently unsafe and known to be unsafe by ordinary consumers, [were] not to be subject to product liability lawsuits.' " (American Tobacco, supra, at p. 487, 255 Cal.Rptr. 280, italics added.) In light of that legislative intent, the Court of Appeal in American Tobacco concluded that the statutory immunity was very broad, providing "nearly complete" immunity for manufacturers and sellers of tobacco and the other enumerated products. (Ibid.)

2. Richards v. Owens-Illinois, Inc.

In 1997, some eight years after the Court of Appeal's decision in ...