Opinion ID: 74912
Heading Depth: 4
Heading Rank: 4

Heading: The Issues Involving the Other State Law Claims

Text: The issues we have discussed so far, which relate to the statute of limitations, the rule of repose, and the AEMLD, involve unsettled and potentially dispositive state law questions upon which we need guidance. There are other state law issues in this case which we are reasonably confident that we can decide based upon settled Alabama law. For that reason, we would not bother the Alabama Supreme Court with these issues if they were the only state law issues in the case. However, since we are certifying the other state law questions anyway, we think it prudent to set out our understanding of state law on these other points and invite the Alabama Supreme Court to correct our view on them if that view is wrong.
18 The defendants contend that Spain’s negligence and wantonness claims are merged into his AEMLD claim as a matter of Alabama law because those claims are based on the same underlying allegations and theory, which is that cigarettes are unreasonably dangerous. In Veal v. Teleflex, Inc., 586 So.2d 188 (Ala. 1991), the Court held that the trial court did not err when it instructed the jury only on the plaintiff’s AEMLD claim and refused to instruct the jury on negligence and wantonness. The court stated that the substance of plaintiff’s complaint “was that it placed into the stream of commerce a product that was unreasonably dangerous for its intended use” and that constituted an AEMLD claim. See id. at 190-91; accord Wakeland, 996 F. Supp. 1217-18. In light of Veal, and because the only allegation in the complaint’s counts for negligence and wantonness that are not in the AEMLD count is that the “[d]efendants negligently designed, manufactured, sold, marketed and/or failed to warn about cigarettes that were unreasonably dangerous . . ., ” we are convinced that the negligence and wantonness claims in this case merge into the AEMLD claim.13 13 We do note that Veal involved a negligent or wanton design claim, but it did not also involve, as the present case does, a negligent or wanton failure to warn claim. See Tillman v. R.J. Reynolds Tobacco Co., 89 F. Supp.2d 1297, 1299-1300 (S.D. Ala. 2000)(characterizing cases cited by plaintiff involving negligent or wanton failure to warn claims as “inapposite” to that case which involved a negligent or wanton design claim), appeal docketed, No. 00-10963 (11th Cir. Feb. 18, 2000). 19
The defendants contend that Spain’s implied warranty of merchantability claim must fail because Spain alleges only that cigarettes are unreasonably dangerous and defectively designed, manufactured and marketed, and not that they were commercially unfit or unsuitable for smoking. The defendants argue that Spain’s allegations constitute a products liability claim, instead of a breach of implied warranty of merchantability claim. Ala. Code § 7-2-314, which governs the implied warranty of merchantability, provides as follows: Unless excluded or modified (Section 7-2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Ala. Code § 7-2-314(1). In order to be merchantable, goods must be fit “for the ordinary purposes for which such goods are used.” See Allen, 624 So.2d at 1068. As we read Spain’s complaint, his theory is that the cigarettes were unfit for the ordinary purpose for which they are used because they caused cancer, making them unreasonably dangerous and not merchantable. The Alabama Supreme Court rejected a similar claim and stated that “[s]uch an argument ignores the clear distinction between causes of action arising under tort law and those arising under the [Uniform Commercial Code] as adopted in Alabama.” Shell v. Union Oil Co., 20 489 So.2d 569, 571 (Ala. 1986) (no claim for breach of warranty regarding product containing benzene, a carcinogen known to cause leukemia, when product was in conformance with specifications; such a claim is instead an AEMLD action). Unless the Alabama Supreme Court tells us differently, we are convinced that the complaint does not state a claim for breach of an implied warranty of merchantability.14 d. Conspiracy The defendants contend that Spain’s conspiracy count cannot stand, because it is based on claims of alleged fraudulent suppression and fraudulent misrepresentation of information about smoking risks that are themselves not viable.15 They argue that those claims are not viable, because Alabama imposes no duty to disclose facts that are already known and the risks of smoking were common knowledge.16 14 Spain abandoned his express warranty claim at oral argument. 15 Spain’s conspiracy claim also appears to be premised in part on failure to warn claims. If the Alabama Supreme Court holds that the failure to warn claims survive the defendants’ state law arguments and defenses, so that they potentially could be a basis for Spain’s conspiracy count, we will have to decide whether the failure to warn claims are preempted by the Labeling Act and thus could not be a basis for Spain’s conspiracy count. 16 The defendants also contend that Spain does not allege with the specificity required by Federal Rule of Civil Procedure 9(b) the fraudulent misrepresentation made to Carolyn. Additionally, the defendants argue that the complaint is devoid of an allegation that Carolyn relied on any statements of the defendants, much less reasonably relied to her detriment. 21 “[A] conspiracy itself furnishes no cause of action. The gist of the action is not the conspiracy but the underlying wrong that was allegedly committed. If the underlying cause of action is not viable, the conspiracy claim must also fail.” Allied Supply Co., Inc. v. Brown, 585 So.2d 33, 36 (Ala. 1991) (internal citations omitted). Therefore, to the extent Spain’s conspiracy claim is premised on claims of fraudulent suppression and fraudulent misrepresentation, those claims must be viable for his conspiracy claim to be. Under Alabama law, a fraudulent suppression claim requires a plaintiff to show: (1) that the defendant had a duty to disclose an existing material fact; (2) that the defendant suppressed that existing material fact; (3) that the defendant had actual knowledge of the fact; (4) that the defendant’s suppression of the fact induced the plaintiff to act or to refrain from acting; and (5) that the plaintiff suffered actual damage as a proximate result of acting or not acting. Ex Parte Household Retail Services, 744 So. 2d 871, 879 (Ala. 1999). Under Cantley, there is no state law duty to disclose facts other than through advertising or promotion. See Cantley, 681 So.2d at 1061-62. Consequently, unless the Alabama Supreme Court tells us differently, we are convinced that the fraudulent suppression claim fails and the conspiracy claim should be dismissed to the extent it relies on the fraudulent suppression claim. A fraudulent misrepresentation claim requires a plaintiff to show: 22 (a) that the defendant made a false misrepresentation concerning a material fact; (b) which (1) the defendant either knew was false when made, or (2) was made recklessly and without regard to its truth or falsity, or (3) was made by telling the plaintiff that the defendant had knowledge that the representation was true while not having such knowledge; (c) which the plaintiff justifiably relied upon; and (d) damage to the plaintiff proximately resulting from his reliance. Ex Parte Household Retail Services, 744 So. 2d at 877 (internal marks and citations omitted). The Alabama Supreme Court’s answer to the question we are certifying it about whether cigarettes are unreasonably dangerous under the AEMLD may resolve the issue of whether Spain has a valid fraudulent misrepresentation claim. If that Court concludes cigarettes are not unreasonably dangerous as a matter of Alabama law, we are convinced that Spain will be unable to establish Carolyn’s justifiable reliance and as a result, his fraudulent misrepresentation claim will fail and his conspiracy claim should be dismissed to the extent it relies on the fraudulent misrepresentation claim. That conclusion is, of course, subject to revision if the Alabama Supreme Court tells us that the state law premises for it are mistaken.