Xavier v. Philip Morris U.S. Inc.

• Decision Date: 18 April 2011
• Docket Number: No. C 10–02067 WHA.,C 10–02067 WHA.
• Citation: 74 UCC Rep.Serv.2d 390,787 F.Supp.2d 1075
• Parties: Burt XAVIER and James Franklin, individually and on behalf of themselves and all others similarly situated, Plaintiffs,v.PHILIP MORRIS USA INC., a Virginia corporation, Defendant.
• Court: U.S. District Court — Northern District of California

787 F.Supp.2d 1075

74 UCC Rep.Serv.2d 390

Burt XAVIER and James Franklin, individually and on behalf of themselves and all others similarly situated, Plaintiffs,

v.PHILIP MORRIS USA INC., a Virginia corporation, Defendant.

No. C 10–02067 WHA.

United States District Court, N.D. California.

April 18, 2011.

David Bricker, Waters Kraus Paul, El Segundo, CA, Jennifer Lynn McIntosh, Sundeep Ravindra Patel, Waters Kraus Paul, San Francisco, CA, Charles S. Siegel, Waters & Kraus LLP, Dallas, TX, Steven J. Phillips, Victoria E. Phillips, Levy Phillips and Konigsberg, LLP, New York, NY, for Plaintiffs.Tammy Beth Webb, Ina Doung–May Chang, Michael Kevin Underhill, Shook Hardy & Bacon L.L.P., San Francisco, CA, Gary R. Long, John K. Sherk, III, Shook Hardy & Bacon LLP, Kansas City, MO, Gregory P. Stone, Munger Tolles & Olson LLP, Los Angeles, CA, for Defendant.

ORDER DENYING JUDGMENT ON THE PLEADINGS, PARTIALLY GRANTING SUMMARY JUDGMENT, AND DENYING CLASS CERTIFICATION

WILLIAM ALSUP, District Judge.

INTRODUCTION

In this putative class action seeking medical monitoring for heavy smokers, defendant Philip Morris USA Inc. moves for judgment on the pleadings as to two claims and also moves for summary judgment on the entire action. At the same time, plaintiffs Burt Xavier and James Franklin move for class certification. For the reasons stated below, defendant's motion for judgment on the pleadings is Denied, defendant's motion for summary judgment is Granted in part and Denied in part, and plaintiffs' motion for class certification is Denied.

STATEMENT

Plaintiffs Burt Xavier and James Franklin seek to represent a state-wide class of asymptomatic Marlboro smokers and recent quitters who are more than fifty years old and have at least a twenty-pack-year smoking history (Compl. ¶ 2). Plaintiffs define the unit “pack-year” as the product of the number of cigarette packs smoked per day and the number of years the smoking habit has continued. Thus, a twenty-pack-year smoking history could mean a pack a day for twenty years, or two packs a day for ten years, and so on—at least 146,000 individual cigarettes ( id. ¶ 68).

This action differs from the typical tobacco action because plaintiffs do not seek compensatory or punitive damages for personal injury or wrongful death. Instead, the action seeks medical monitoring for healthy smokers in the form of low-dose CT scanning of the chest. According to plaintiffs, this scan is a new, largely unavailable technology that is safer than x-rays and far better at detecting lung cancer in its early stages. Early diagnosis dramatically improves survival odds. This action also differs from the typical medical monitoring action, because plaintiffs do not seek money to pay for screening by providers already operating in the medical market. Instead, they want Philip Morris to supply the chest scans themselves by establishing and funding a court-supervised screening program. Plaintiffs propose that the program would provide outreach, information, ongoing testing, notice of results, counseling, record keeping, and administration ( id. ¶¶ 74–81).

Plaintiffs contend that Philip Morris acted wrongfully because its Marlboro cigarettes delivered excessive amounts of carcinogens. According to plaintiffs, Philip Morris could have designed its cigarettes differently such that the cigarettes would have delivered the same enjoyment characteristics ( e.g., nicotine, flavor, taste, and emotional effects) while delivering a significantly smaller amount of cancer-causing agents ( id. ¶ 53). For example, plaintiffs allege that the tobacco blend Philip Morris used in its Marlboro cigarettes needlessly contained the Burley variety of tobacco, which “is known to be relatively high in nitrogen, and as such, contains relatively high amounts of nitrosamines, including tobacco-specific nitrosamines, which are known to be carcinogenic” ( id. ¶ 63–66). Philip Morris also could have, it is said, increased the “resistance to draw” in its cigarettes, which would have prevented “compensatory smoking”—the phenomenon that smokers unconsciously tend to take deeper, more intense puffs when smoking cigarettes that are “lighter” than those to which they are accustomed ( id. ¶¶ 55–59). The alternative cigarette design plaintiffs propose would represent “at least a six to sixty-fold decrease in carcinogenicity” as compared to “the least lethal Marlboro” otherwise available (Dkt. No. 74 at 3; Compl. ¶ 60–61).

Plaintiffs allege that Philip Morris was able to manufacture such an alternative cigarette but chose not to do so as “the consequence of an egregious conspiracy and so-called ‘gentleman's agreement’ among American cigarette manufacturers to refrain from marketing such products” in order to preserve more profitable market shares (Compl. ¶ 73; Dkt. No. 74 at 4). Plaintiffs also allege that Philip Morris deceptively withheld from consumers information relating to the technological feasibility of producing such a safer alternative cigarette (Compl.¶¶ 91–107).

Based on these factual allegations, plaintiffs filed a class action complaint in May 2010 enumerating six claims for relief: (1) violation of the California Unfair Competition Law, Cal. Bus. & Prof.Code § 17200; (2) violation of the Consumer Legal Remedies Act, Cal. Civ.Code § 1750; (3) breach of implied warranty, Cal. Com.Code § 2314; (4) strict liability design defect; (5) negligent design and testing; and (6) medical monitoring. A motion to dismiss the first and last claims was granted, leaving only the middle four (Dkt. No. 39).

This action is one of several “identical” actions against Philip Morris being prosecuted in different states by different plaintiffs but the same core counsel (Dkt. No. 47 at 2, n.3). So far, these actions have achieved mixed results. The New York action was dismissed, partially on the pleadings and partially on summary judgment. In the Massachusetts action, a class has been certified for a merits trial on a limited set of claims. The Florida action is in its infancy.¹ Both sides lean heavily upon favorable findings in these other actions as proof that they should prevail on the instant motions. While the existence and progress of these other actions is noteworthy, their outcomes are not binding on the instant action, and all issues raised in this action must be decided independently based on the law that applies here in California. This order follows full briefing and a hearing on all three motions.

ANALYSIS

Each of the three motions will be considered in turn.

1. Defendant's Motion for Judgment on the Pleadings.

Pursuant to FRCP 12(c), Philip Morris moves for judgment on the pleadings as to plaintiffs' fourth and fifth claims for relief—strict liability design defect, and negligent design and testing. “A judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleading as true, the moving party is entitled to judgment as a matter of law.” Fajardo v. County of Los Angeles, 179 F.3d 698, 699 (9th Cir.1999). The parties have fought their Rule 12(c) war on two fronts: (1) what standard of causation applies to the claims in question; and (2) whether the complaint adequately pleads such causation. Because the parties' disagreement over the applicable causation standard runs through all three motions, careful attention to that issue is warranted.

A. Applicable Causation Standard.

The parties agree that “proximate causation” is an element of plaintiffs' design-defect claims, but they interpret this element differently. Defendants argue that it requires but-for causation, whereas plaintiffs argue that defendants' alleged misconduct must be only a substantial factor contributing to the alleged harm (Br. 3–5; Opp. 7–9). Neither side is entirely correct.

In product-liability actions, “California has definitively adopted the substantial factor test of the Restatement Second of Torts for cause-in-fact determinations.” Rutherford v. Owens–Illinois, Inc., 16 Cal.4th 953, 968, 67 Cal.Rptr.2d 16, 941 P.2d 1203 (1997). Plaintiffs emphasize the California Supreme Court's guidance that “[t]he substantial factor standard is a relatively broad one, requiring only that the contribution of the individual cause be more than negligible or theoretical.” Id. at 978, 67 Cal.Rptr.2d 16, 941 P.2d 1203. This gloss is lifted from the asbestos context, in which the problems of concurrent independent causes and unidentifiable tortfeasors have required specialized legal treatment. As such, it does not tell the whole story.

When California adopted the Second Restatement's “substantial factor” test, the phrase “substantial factor” was hailed as a grammatical improvement, assuaging concern that lay jurors misinterpreted the phrase “proximate cause” to mean “the cause that is spatially or temporally closest to the harm.” Thus, “the ‘substantial factor’ test subsumed the ‘but for’ test.” Mitchell v. Gonzales, 54 Cal.3d 1041, 1052, 1 Cal.Rptr.2d 913, 819 P.2d 872 (1991). The “substantial factor” test California adopted from the Second Restatement applies the traditional “but for” cause in most circumstances, but provides an exception for use if concurrent independent causes are present. Viner v. Sweet, 30 Cal.4th 1232, 1239–40, 135 Cal.Rptr.2d 629, 70 P.3d 1046 (2003).

For purposes of this analysis, concurrent independent causes “are multiple forces operating at the same time and independently, each of which would have been sufficient by itself to bring about the harm.” Id. at 1240, 135 Cal.Rptr.2d 629, 70 P.3d 1046. For example, if two gunmen shot the same victim at the same time, each bullet might be a sufficient independent cause of the victim's death. The harm alleged in this action is plaintiffs' increased risk of lung cancer, which plaintiffs' claim entitles them to relief in the form of medical monitoring. Apart from defendants' alleged misconduct, no other independent event or circumstance is alleged to be a...