National Asbestos Workers Medical v. Philip Morris

Decision Date01 November 1999
Docket NumberNo. 98 CV 3287.,No. 98 CV 1492.,No. 97 CV 7658.,98 CV 1492.,98 CV 3287.,97 CV 7658.
PartiesThe NATIONAL ASBESTOS WORKERS MEDICAL FUND, et al., Plaintiffs, v. PHILIP MORRIS, INC., et al., Defendants. Blue Cross and Blue Shield of New Jersey, Inc., et al., Plaintiffs, v. Philip Morris, Incorporated, et al., Defendants. H.K. Porter Company, Inc., Plaintiff, v. The American Tobacco Company, et al., Defendants.
CourtU.S. District Court — Eastern District of New York

Law Offices of Peter G. Angelos, P.C., Baltimore, MD, by E. David Hoskins, David L. Palmer, Kenneth D. Pack, O'Donoghue & O'Donoghue, Washington, D.C., by Sally M. Tedrow, Louis P. Malone, Donald J. Capuano, for plaintiffs The National Asbestos Workers Medical Fund, et al.

Dewey Ballantine LLP, New York City, by Paul J. Bschorr, Vincent R. FitzPatrick, Jr., Jack E. Pace III, Paul B. Carberry, Robert J. Morrow, Dewey Ballantine LLP, Washington, DC, by Martha J. Talley, for plaintiffs Blue Cross, et al.

Orrick, Herrington & Sutcliffe LLP, New York City, by James L. Stengel, Kazan, McClain, Edises, Simon & Abrams, Oakland, CA, by Steven L. Kazan, for plaintiff H.K. Porter Company.

Wachtell, Lipton, Rosen & Katz (in National Asbestos and Blue Cross), New York City, by Herbert M. Wachtell, Steven M. Barna, Kenneth B. Forrest, Barbara Robbins, Peter C. Hein, Arnold & Porter (in National Asbestos and Blue Cross), Washington, DC, by Murray R. Garnick, Winston & Strawn (in National Asbestos), Chicago, IL, by Dan K. Webb, Phillips, Lytle, Hitchcock, Blaine & Huber LLP, Buffalo, NY, by Paul F. Stecker, (in National Asbestos), Sedgwick, Detert, Moran & Arnold (in Blue Cross), San Francisco, CA, by Kevin J. Dunne, Sedgwick, Detert, Moran & Arnold (in Blue Cross), New York City, by James T. Conlon, for defendant Philip Morris, Incorporated.

Kirkland & Ellis (in National Asbestos), New York City, by Marjorie Press Lindblom, Sedgwick, Detert, Moran & Arnold, New York City, by David M. Covey, Kirland & Ellis, Washington, DC, by Kenneth N. Bass, Howard, Rice, Nemerovski, Canady, Falk & Rabkin (in Blue Cross), San Francisco, CA, by Peter J. Busch, for defendant Brown & Williamson Tobacco Corporation.

Greenberg Traurig, LLP (in National Asbestos and Blue Cross), New York City, by Alan Mansfield, Shook, Hardy & Bacon, LLP (in National Asbestos and Blue Cross), Kansas City, MO, by Gary R. Long, for defendants Lorillard Tobacco Company, Lorillard, Inc.

Debevoise & Plimpton (in National Asbestos and Blue Cross), New York City, by Steven Klugman, for defendant Council for Tobacco Research, U.S.A., Inc. Jacob, Medinger & Finnegan, LLP (in National Asbestos and Blue Cross), New York City, by Barry S. Schaevitz, for defendant Smokeless Tobacco Council, Inc.

Howard, Rice, Nemerovski, Canady, Falk & Rabkin (in Blue Cross), San Francisco, CA, by Peter J. Busch, Riker, Danzig, Scherer, Hyland & Perretti, LLP (in National Asbestos), Morristown, NJ, by Alan E. Kraus, Womble Carlyle Sandridge & Rice, PLLC (in National Asbestos), Winston-Salem, NC, by Thomas D. Schroeder, for defendants R.J. Reynolds Tobacco Co., and RJR Nabisco, Inc.

Chadbourne & Parke LLP, New York City, by Thomas J. McCormack, (in Blue Cross), Donald Strauber, (in National Asbestos), for defendant British American Tobacco (Investments) Limited (formerly known as British-American Tobacco Company Limited).

Simpson Thacher & Bartlett (in National Asbestos and Blue Cross), New York City, by Joseph McLaughlin, for defendant BAT Industries P.L.C.

Davis & Gilbert, LLP (in National Asbestos and Blue Cross), New York City, by Bruce M. Ginsberg, for defendant Hill & Knowlton, Inc.

Kasowitz, Benson, Torres & Friedman LLP (in National Asbestos and Blue Cross), New York City, by Michael M. Fay, for defendants Liggest Group Inc., Liggest & Myers, Inc., and Brooke Group Ltd.

Skadden, Arps, Slate, Meagher & Flom, LLP (in Blue Cross), New York City, by Peter J. McKenna, for defendant United States Tobacco Company.

Seward & Kissel, New York City, by Anthony R. Mansfield, for defendant The Tobacco Institute, Inc.

Greenberg Traurig, New York City, by Alan Mansfield, Stephen L. Saxl, for defendants Lorilard Tobacco Company, Philip Morris Incorporated, R.J. Reynolds Tobacco Company and Council for Tobacco Research-USA, Inc. in H.K. Porter.

Shook, Hardy & Bacon LLP, Kansas City, MO, by Gary R. Long, Gay Tedder, Andrew D. Carpenter, Bracewell & Patterson, LLP, Houston, TX, for defendants Lorillard Tobacco Company and Philip Morris Incorporated in H.K. Porter.

Riker Danzig Scherer Hyland & Perretti, Morristown, NJ, Womble, Carlyle, Sandridge & Rice PLLC, Winston-Salem, NC, for defendant R.J. Reynolds Tobacco Company in H.K. Porter.

Kirkland & Ellis, New York City, by Marjorie P. Lindblom, Peter Bellacosa, for defendant Brown & Williamson Tobacco Corp (individually and as successor by merger to The American Tobacco Company) in H.K. Porter.

Seward & Kissel LLP, New York City, by Donovan Wickline, for defendant The Tobacco Institute, Inc. in H.K. Porter.

MEMORANDUM

WEINSTEIN, Senior District Judge.

                                          TABLE OF CONTENTS
                  I FACTS ........................................................... 143
                    A. Blues ........................................................ 143
                    B. National Asbestos ............................................ 143
                    C. H.K. Porter .................................................. 144
                 II PROCEDURE ....................................................... 144
                    A. Blues and National Asbestos .................................. 144
                    B. H.K. Porter .................................................. 145
                III SECTION 1292(b) CERTIFICATION ................................... 145
                    A. Final Judgment Rule .......................................... 146
                       1. History.................................................... 146
                
                       2. Policies .................................................. 148
                    B. Exceptions ................................................... 152
                       1. Collateral Orders ......................................... 152
                       2. Final Orders Under Rule 54(b) ............................. 153
                       3. Interlocutory Injunctions Under Section 1292(a)(1) ........ 155
                       4. Mandamus .................................................. 157
                       5. Class Certification Orders Under Rule 23(f) ............... 160
                       6. Other Exceptions .......................................... 161
                    C. Interlocutory Orders Under Section 1292(b) ................... 161
                       1. History ................................................... 161
                       2. Discretion of District Court .............................. 162
                          a. Legislative History .................................... 162
                          b. Statutory Design ....................................... 163
                          c. Case Law ............................................... 164
                          d. Relationship to Rule 54(b) ............................. 165
                 IV DEFENDANTS' SECTION 1292(b) CERTIFICATION MOTIONS ............... 166
                  V CONCLUSION ...................................................... 168
                

The defendants in these three separate, though related, cases are the major tobacco product manufacturers and associated entities ("Tobacco"). Following orders denying motions to dismiss in each case, they sought certifications permitting interlocutory appeals. See 28 U.S.C. § 1292(b). Certifications were denied by orders of October 13, 1999; this memorandum explains the reasons for those orders.

Defendants contend that, as a matter of law, the district court must certify under section 1292(b) of title 28 to permit interlocutory appeals from the orders denying their motions to dismiss. An examination of the history, theory and practice of the final judgment rule and its exceptions demonstrates that this position is untenable.

The final judgment rule provides a stout barrier to interlocutory appeals such as the ones defendants now seek. In any particular case, the exceptions permitting an early appeal encourage a dialogue between the trail and appellate courts on the desirability of a departure from the final judgment rule. It is the opinion of this court that interlocutory appeals from its orders denying the motions to dismiss are not desirable.

I. FACTS
A. Blues

In Blue Cross & Blue Shield v. Philip Morris, Inc. ("Blue Cross"), the plaintiffs ("the Blues") are medical provider-insurer Blue Cross plans from across the United States alleging violations of both federal and state law. See Blue Cross and Blue Shield v. Philip Morris, Inc., 36 F.Supp.2d 560 (E.D.N.Y.1999). Federal causes of action are brought under the Racketeer Influenced and Corrupt Organizations Act ("RICO") and federal antitrust statutes. Supplemental state law claims are asserted under various state statutes and commonlaw theories.

B. National Asbestos

In National Asbestos Workers Medical Fund v. Philip Morris, Inc. ("National Asbestos"), the plaintiffs are self-insured ERISA trust funds which provide health care insurance to union workers in the building trades. See National Asbestos Workers Med. Fund v. Philip Morris, Inc., 23 F.Supp.2d 321 (E.D.N.Y.1998). Plaintiffs seek damages to trust assets allegedly caused by Tobacco. Federal causes of action are brought under RICO, ERISA and federal common-law theories of unjust enrichment, restitution, indemnity, and breach of assumed duty.

C. H.K. Porter Company, Inc.

In H.K. Porter Company, Inc. v. American Tobacco Co. ("H.K.Porter"), plaintiff is an asbestos distributor that had previously been sued in extensive litigation for injuries resulting from its products. It has paid substantial sums in both settlements and judgments after trials. It brings this suit under RICO and a number of state law theories, including fraud, contribution, and restitution. Its claim is that some or all of the damages it paid were in fact caused by Tobacco. Among other theories, plaintiff contends that it...

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