Perez v. Brown & Williamson Tobacco Corp.

• Decision Date: 04 June 1997
• Docket Number: Civil Action No. C-97-070.
• Citation: 967 F.Supp. 920
• Parties: Margarita PEREZ, et al., Plaintiffs, v. BROWN & WILLIAMSON TOBACCO CORP., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

967 F.Supp. 920

Margarita PEREZ, et al., Plaintiffs, v. BROWN & WILLIAMSON TOBACCO CORP., et al., Defendants.

Civil Action No. C-97-070.

United States District Court, S.D. Texas, Corpus Christi Division.

June 4, 1997.

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William R. Edwards, Edwards Terry & Edwards, Corpus Christi, TX, Michael G. Guajardo, Paul L. Smith and Associates, Dallas, TX, Joe M. Pena, San Diego, TX, for Margarita Perez, Sandra Garcia, Cynthia Sanchez.

Paul Edward Stallings, Kathleen A. Gallagher, Vinson and Elkins, Houston, TX, for Brown & Williamson Tobacco Corp., Batus Holdings, Inc.

J. A. Tony Canales, Canales & Simonson, Corpus Christi, TX, John McPherson Pinckney, III, Wells Pinckney and McHugh, San Antonio, TX, Joseph F. Tringali, Simpson Thacher and Bartlett, New York City, for B.A.T. Industries P.L.C.

J. A. Tony Canales, Canales & Simonson, Corpus Christi, TX, Joseph F. Tringali, Simpson Thacher and Bartlett, New York City, for British American Tobacco Co., Ltd.

Darrell Lee Barger, Barger and Moss, Corpus Christi, TX, for Phillip Morris, Inc.

Stephen E. Scheve, Shook Hardy and Bacon, Houston, TX, Walter Cofer, Shook Hardy and Bacon, Kansas City, MO, for Phillip Morris Co., Inc., Lorillard Tobacco Co., Lowes Corp.

Morris Atlas, Atlas and Hall, McAllen, TX, William E. Marple, Jones Day Reavis & Pogue, Dallas, TX, for R.J. Reynolds Tobacco Co.

Morris Atlas, Atlas and Hall, McAllen, TX, D. Scott Wise, Michael S. Kim, Davis Polk and Wardwell, New York City, for RJR Nabisco, Inc.

Tom Arthur Lockhart, Adams and Graham, Harlingen, TX, for UST, Inc., U.S. Tobacc.

Winferd L. Dunn, Jr., Dunn Nutter Morgan and Shaw, Texarkana, AR, Bruce Ginsberg, Davis and Gilbert, New York City, for Hill & Knowlton, Inc.

William Key Wilde, Bracewell and Patterson, Houston, TX, Mark Edwin Lowes, Bracewell & Patterson, Houston, TX, for The Council for Tobacco Research-U.S.A. Inc.

Lea F. Courington, Dallas, TX, Scott W. MacLaren, Gwinn & Roby, Dallas, TX, for The Tobacco Institute, Inc.

Guy H. Allison, The Allison Law Firm, Corpus Christi, TX, Michael S. Sundermeyer, Williams and Connolly, Washington, DC, for Shook, Hardy & Bacon, P.C.

Charles C. Murray, Atlas & Hall, McAllen, TX, for Jesus Ramos, Jesus Ramos, Jr., Across Silva.

ORDER ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS

JACK, District Judge.

On this day came on to be considered Defendants Brown & William Tobacco Corp. ("B & W"), British American Tobacco Company, Ltd. ("British"), Philip Morris, Inc. ("Philip Morris"), R.J. Reynolds Tobacco Company ("RJR"), Lorillard Tobacco Company & Knowlton, Inc. ("H & K"), The Council for Tobacco Research-U.S.A., Inc. ("CTR"), and Shook, Hardy, Bacon, P.C.'s ("Shook Hardy") Motion for Judgment on the Pleadings against Plaintiffs Margarita Perez, Sandra Garcia, and Cynthia Sanchez, as Individuals, Heirs at Law, Statutory Beneficiaries, and Legal Representatives of and on Behalf of the Estate of Gonzalo G. Garcia, Deceased. At the Motion Hearing on April 11, 1997, Defendants Batus Holdings, Inc., Philip Morris Companies, Inc., RJR Nabisco, Inc., Loews Corp., and UST, Inc. announced that they would join in the Motion for Judgment on the Pleadings subject to their objections to the Court's lack of in personam jurisdiction. For the reasons stated herein the Court GRANTS IN PART AND DENIES IN PART said Motion.

I. JURISDICTION

This case was removed to federal court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332.

II. FACTS AND PROCEEDINGS

Plaintiff Margarita Perez is the surviving spouse of Gonzalo Garcia, and Plaintiffs Sandra Garcia and Cynthia Sanchez are the surviving children of Gonzalo Garcia. In the 1950s, Mr. Garcia began smoking "Salem" and "Winston" cigarettes which were designed, manufactured, advertised, marketed, and sold by R.J. Reynolds Tobacco Company ("RJR"). On December 17, 1994, after years of addiction to RJR's cigarettes, Mr. Garcia was diagnosed with throat cancer. In spite of medical treatment and surgery, Mr. Garcia died from his illness on February 19, 1996.

This cause of action was originally filed on December 12, 1996, in the 229th Judicial District Court of Duval County, Texas, as Cause No. 16806. Plaintiffs complaint contains allegations of (1) conspiracy, (2) fraud and misrepresentation, (3) breach of express warranties, (4) breach of implied warranties, and (5) violation of the Texas Deceptive Trade Practices Act.

Defendants CTR, Batus, RJRN and Philip Morris Co. were served on January 7, 1997. On February 5, 1997, Defendants, claiming that the non-diverse Defendants had been fraudulently joined, removed this suit to federal court based on diversity jurisdiction pursuant to 28 U.S.C. §§ 1441, 1446, and 1332. On February 25, 1997, Plaintiffs filed a Motion to Remand. Arguments regarding this Motion were heard at the Initial Pre-Trial Conference on February 26, 1997. The Court found that diversity jurisdiction existed as the non-diverse defendants had been fraudulently joined. Accordingly, the Court denied Plaintiffs' Motion to Remand and dismissed the non-diverse defendants.

On February 27, 1997, Defendants filed a Motion for Judgment on the Pleadings pursuant to Fed.R.Civ.P. 12(c). The Plaintiffs responded on March 18, 1997. Defendants filed a Reply to Plaintiffs' Response on April 8, 1997. On April 11, 1997, a Motion Hearing was conducted at which arguments on Defendants' Motion for Judgment on the Pleadings were heard. On April 21, 1997, Plaintiffs filed a Supplemental Brief in opposition to the Motion for Judgment on the Pleadings. On April 25, 2997, Defendants filed a Supplemental Brief in support of their Motion for Judgment on the Pleadings. The Court now considers the Motion.

III. DISCUSSION

A. Standard of Review

A Rule 12(c) motion is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts. Hebert Abstract Co. v. Touchstone Properties, Ltd., 914 F.2d 74, 76 (5th Cir. 1990) (per curiam). Like a motion for summary judgment, a 12(c) motion should be granted only if there is no issue of material fact and if the pleadings show that the moving parties are entitled to prevail as a matter of law. Smith v. McMullen, 589 F.Supp. 642, 644 (S.D.Tex.1984). A court should dismiss a complaint under Rule 12(c) if it is beyond doubt that plaintiff can prove no set of facts that would entitle him or her to relief. See, United States v. Sherlock, 1996 WL 41845 (E.D.La.1996).

B. Texas Statutory Bar

Texas statutory law protects a manufacturer or seller from liability in products liability actions 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.

Tex.Civ.Prac. & Rem.Code § 82.004(a) (emphasis added). Further, Section 82.001 of the Texas Civil Practice and Remedies Code defines a "products liability action" broadly as

any action against a manufacturer or seller for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories.

Tex.Civ.Prac. & Rem.Code ¶ 82.001(2) (emphasis added). Only actions based on manufacturing defects or breach of express warranties are exempted from the § 82.004(a) bar. Tex.Civ.Prac. & Rem.Code § 82.004(b).

Because jurisdiction over this action is based on diversity of citizenship, this Court is bound to apply the substantive law of the State of Texas. Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Rogers v. Corrosion Prods., 42 F.3d 292, 295 (5th Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 2614, 132 L.Ed.2d 857 (1995). Further, this Court must apply the state law as it currently exists, and may not change that law or adopt innovative theories of recovery. Solomon v. Walgreen Co., 975 F.2d 1086, 1089 (5th Cir.1992) (per curiam).

In ascertaining the law of the forum state, a federal court "is bound to apply the law as interpreted by the state's highest court." Texas Dept. of Housing & Community Affairs v. Verex Assur., Inc., 68 F.3d 922, 928 (5th Cir.1995) (quoting Ladue v. Chevron U.S.A., Inc., 920 F.2d 272, 274 (5th Cir.1991)). "When there is no ruling by the state's highest court, it is the duty of the federal court to determine as best it can, what the highest court of the state would decide." Batts v. Tow-Motor Forklift Co., 66 F.3d 743, 749 (5th Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 1851, 134 L.Ed.2d 951 (1996).

1. Inherently Unsafe and Known to Be Unsafe

The Fifth Circuit has found that "the dangers of cigarette smoking have long been known to the community." Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 172 (5th Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 300, 136 L.Ed.2d 218 (1996) (citing Roysdon v. R.J. Reynolds Tobacco Co., 849 F.2d 230, 236 (6th Cir.1988); Paugh v. R.J. Reynolds Tobacco Co., 834 F.Supp. 228, 230-31 (N.D.Ohio 1993)). Accordingly, this Court concludes that cigarettes are inherently unsafe and are known to be unsafe by ordinary consumers with the ordinary knowledge common to the community. Plaintiffs make two unconvincing arguments urging this Court not to follow the Fifth Circuit's Allgood opinion.

a. Erie Argument

Plaintiffs argue that according to Erie Doctrine, this Court is bound by the holding in Grinnell v. The American Tobacco Co., 883 S.W.2d 791 (Tex.App. — Beaumont 1994, writ granted)...