Wright v. Brooke Group Ltd.

• Decision Date: 29 September 2000
• Docket Number: No. C99-3090.,C99-3090.
• Citation: 114 F.Supp.2d 797
• Parties: Robert A. WRIGHT and Deeann K. Wright, Plaintiffs, v. BROOKE GROUP LIMITED; Liggett & Myers, Inc.; Liggett Group Inc.; Philip Morris Incorporated (Philip Morris U.S.A.); Philip Morris Companies, Inc.; R.J. Reynolds Tobacco Company; RJR Nabisco, Inc., Defendants.
• Court: U.S. District Court — Northern District of Iowa

114 F.Supp.2d 797

Robert A. WRIGHT and Deeann K. Wright, Plaintiffs, v. BROOKE GROUP LIMITED; Liggett & Myers, Inc.; Liggett Group Inc.; Philip Morris Incorporated (Philip Morris U.S.A.); Philip Morris Companies, Inc.; R.J. Reynolds Tobacco Company; RJR Nabisco, Inc., Defendants.

No. C99-3090.

United States District Court, N.D. Iowa, Central Division.

September 29, 2000.

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E. Ralph Walker, David J. Darrell and Harley C. Erbe of Walker Law Firm, Des Moines, IA, for Plaintiff.

Robert A. VanVooren and Thomas Waterman of Lane & Waterman, Davenport, IA, Timothy E. Congrove and Patrick Sullivan of Shook, Hardy & Bacon, L.L.P., Kansas City, MO, for Defendant Philip Morris, Inc.

Richard R. Chabot of Sullivan & Ward, P.C., Des Moines, IA, for Defendants The Brooke Group, Ltd., Liggett & Myers, Inc., and Liggett Group Inc.

Steven L. Nelson, of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, IA, and Todd Kennard of Jones, Day, Reavis & Pogue, Cleveland, OH, for Defendant R.J. Reynolds Tobacco Co.

MEMORANDUM OPINION AND ORDER REGARDING CERTAIN DEFENDANTS' MOTION TO DISMISS

BENNETT, Chief Judge.

                TABLE OF CONTENTS
                I. INTRODUCTION .............................................................803
                 II. STANDARDS FOR MOTION TO DISMISS ..........................................804
                III. LEGAL ANALYSIS ...........................................................805
                     A. Negligence and Strict Liability Claims ................................805
                        1. Design defect claims ...............................................805
                           a. What test is used in Iowa to determine whether or not a
                product is unreasonably dangerous? ............................806
                           b. Does Comment i of § 402A of the Restatement (Second) of
                Torts bar Mr. Wright's design defect claims? ..................809
                           c. The "common knowledge" doctrine .................................810
                           d. Is the risk of addiction a "lesser included risk" of the risks of
                smoking? ......................................................812
                           e. Will the court take judicial notice that the risks of smoking
                are "common knowledge?" .......................................815
                        2. Failure to warn claims .............................................818
                

                B. Express Warranty, Fraudulent Misrepresentation and Fraudulent
                Nondisclosure Claims ................................................819
                        1. Does the common knowledge doctrine bar Mr. Wright's fraudulent
                misrepresentation and fraudulent nondisclosure claims? ...........819
                        2. Does the common knowledge doctrine bar Mr. Wright's express
                warranty claim? ..................................................822
                     C. Federal Preemption ....................................................822
                        1. Does the Labeling Act preempt Mr. Wright's post-1969 fraudulent
                nondisclosure and failure to warn claims? ........................825
                           a. Fraudulent nondisclosure claim ..................................825
                           b. Failure to warn claim ...........................................826
                     D. Manufacturing defect claim ............................................827
                     E. Claim for Breach of Implied or Express Warranties .....................828
                        1. Implied warranty of merchantability ................................828
                        2. Express warranty claim .............................................828
                        3. Does Mr. Wright's failure to notify defendants of the alleged
                breach of warranty preclude his warranty claims? .................829
                     F. Claim for Breach of Special Assumed Duty ..............................830
                     G. Fraud Claims ..........................................................832
                        1. Mr. Wright's fraudulent misrepresentation claim ....................833
                        2. Mr. Wright's fraudulent nondisclosure claims .......................834
                     H. Civil Conspiracy Claim and Loss of Consortium Claim ...................835
                        1. Mr. Wright's civil conspiracy claim ................................836
                        2. Mrs. Wright's loss of consortium claim .............................838
                 IV. CONCLUSION ...............................................................838
                

Over 23 centuries ago, Aristotle wrote: "Thus every action must be due to one or other of seven causes: chance, nature, compulsion, habit, reasoning, anger, or appetite." ARISTOTLE'S RHETORIC, Bk. I, ch. 10. The ultimate resolution of the rising tide of tobacco litigation may some day prove the wisdom of Aristotle's observation. However, this Motion to Dismiss presents initial vexing legal questions that must be resolved by interpreting more mundane issues of Iowa law on the lengthy journey to that final resolution.

I. INTRODUCTION

On October 29, 1999, Robert A. Wright ("Mr. Wright") and DeeAnn K. Wright ("Mrs. Wright") filed a petition in state court, alleging that they have been damaged as a result of Mr. Wright's cigarette smoking. Mr. Wright alleges that he has developed cancer, as well as suffering from other personal injuries, and Mrs. Wright alleges loss of consortium because of Mr. Wright's alleged injuries. Plaintiffs' complaint contains the following nine counts: (1) Negligence; (2) Strict Liability; (3) Breach of Implied Warranty; (4) Breach of Express Warranty; (5) Breach of Special Assumed Duty; (6) Fraudulent Misrepresentation; (7) Fraudulent Nondisclosure; (8) Civil Conspiracy; and (9) Loss of Consortium. On November 26, 1999, defendants removed this case to federal court based on diversity jurisdiction. See 28 U.S.C. § 1441.¹

Thereafter, on January 21, 2000, certain defendants,² Philip Morris Incorporated, R.J. Reynolds Tobacco Company, Brooke Group Ltd., Liggett & Myers, Inc. and Liggett Group Inc.³, filed a Motion to Dismiss plaintiffs' complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendants⁴ assert that all nine of the plaintiffs claims fail as a matter of law because of the following reasons. First, defendants assert that common knowledge of the risks of cigarette smoking bars Mr. Wright's negligence and strict liability design defect and failure to warn claims (Counts I and II) because cigarettes are not unreasonably dangerous under Iowa law and defendants contend they had no duty to warn Mr. Wright of commonly known risks. Second, defendants assert that Mr. Wright's express warranty, fraudulent misrepresentation, and fraudulent nondisclosure claims (Counts IV, VI, and VII) are barred because Mr. Wright could not have justifiably relied on any statements or nondisclosures of defendants in light of the common knowledge of the risks of cigarette smoking and express warnings on cigarette packages and cigarette advertisements. Third, defendants assert that to the extent that Mr. Wright's negligence and strict liability failure to warn and fraudulent nondisclosure claims (Counts I, II, and VII) are based on alleged actions or omissions occurring after 1969, they are preempted by the Federal Cigarette Labeling and Advertising Act (the "Labeling Act"). Fourth, defendants assert that Mr. Wright fails to state a claim that there was a negligent manufacturing defect (Count I), and that there was a breach of implied or express warranties (Counts II and IV), or that there was a breach of special assumed duty (Count V). Fifth, defendants assert that Mr. Wright's fraudulent misrepresentation and fraudulent nondisclosure claims (Counts VI and VII) are not pleaded in accordance with Rule 9(b) of the Federal Rules of Civil Procedure. Sixth, defendants assert that Mr. Wright's civil conspiracy claim (Count VIII) and Mrs. Wright's consortium claim (Count IX) fail, because Mr. Wright's substantive claims fail.

On February 3, 2000, plaintiffs filed a stipulated Motion for Extension of Time, which this court granted, allowing plaintiffs to and including March 15, 2000, in which to file their resistance. Plaintiffs complied, filing their resistance on March 15, 2000, and asking this court to deny, in its entirety, defendants' Motion to Dismiss. Defendants, thereafter, filed a reply, to which the plaintiffs, after seeking permission from this court, filed a surreply.

On July 19, 2000, the court heard oral arguments on defendants' Motion to Dismiss. Plaintiffs were represented by E. Ralph Walker, David J. Darrell and Harley C. Erbe of Walker Law Firm, Des Moines, Iowa. Defendant Philip Morris, Inc., was represented by Robert A. VanVooren and Thomas Waterman of Lane & Waterman, Davenport, Iowa, and Timothy E. Congrove and J. Patrick Sullivan of Shook, Hardy & Bacon, L.L.P., Kansas City, Mo. Defendants The Brooke Group, Ltd., Liggett & Myers, Inc., and Liggett Group Inc. were represented by Richard R. Chabot of Sullivan & Ward, P.C., Des Moines, Iowa. Defendant R.J. Reynolds Tobacco Co., was represented by Steven L. Nelson of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, Iowa, and J. Todd Kennard of Jones, Day, Reavis & Pogue, Cleveland, Ohio.

II. STANDARDS FOR MOTION TO DISMISS

The issue on a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) is not whether a plaintiff will ultimately prevail, but whether the plaintiff is entitled to offer evidence in support of his or her claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); United States v. Aceto Agric. Chem. Corp., 872 F.2d 1373, 1376 (8th Cir.1989). In considering a motion to dismiss under Rule 12(b)(6), the court must assume that all facts alleged in the plaintiff's complaint are true, and must liberally construe those allegations. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Gross v. Weber, 186 F.3d 1089, 1090 (8th Cir.1999) ("On a motion to dismiss, we review the district court's decision de novo, accepting all the factual allegations of the...