Court Opinion

ID: 175945
Source: CourtListenerOpinion
Date Created: 2010-09-25 00:01:55+00
Date Added: 2024-06-11T17:25:37.402145
License: Public Domain

Cite as: 561 U. S. ____ (2010)                              1

                             Opinion in Chambers

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 10A273
                                   _________________

      PHILIP MORRIS USA INC. ET AL. v. GLORIA 

                  SCOTT ET AL. 

                       ON APPLICATION FOR STAY
                             [September 24, 2010]

   JUSTICE SCALIA, Circuit Justice.
   Respondents brought this class action against several
tobacco companies on behalf of all Louisiana smokers.
The suit alleged that the companies defrauded the plain
tiff class by “distort[ing] the entire body of public knowl
edge” about the addictive effects of nicotine. Scott v.
American Tobacco Co., 2004–2095, p. 14. (La. App. 2/7/07)
949 So. 2d 1266, 1277. The Fourth Circuit Court of Ap
peal of Louisiana granted relief on that theory, and en
tered a judgment requiring applicants to pay $241,540,488
(plus accumulated interest of about $29 million) to fund a
10-year smoking cessation program for the benefit of the
members of the plaintiff class. Scott v. American Tobacco
Co., 2009–0461, p. 21–23 (5/5/10) 36 So. 3d 1046, 1059–
1060. (Still to be determined are the allowable attorney’s
fees, which will likely be requested in the tens of millions
of dollars.) The Supreme Court of Louisiana declined
review.     Scott v. American Tobacco Co., 2010–1361
(9/3/10), ___ So. 3d ___. The applicants have asked me, in
my capacity as Circuit Justice for the Fifth Circuit, to stay
the judgment until this Court can act on their intended
petition for a writ of certiorari.
2            PHILIP MORRIS USA INC. v. SCOTT

                     Opinion in Chambers

   A single Justice has authority to enter such a stay, 28
U. S. C. §2101(f), but the applicant bears a heavy burden.
It is our settled practice to grant a stay only when three
conditions are met: First, there must be a reasonable
probability that certiorari will be granted (or probable
jurisdiction noted). Second, there must be a significant
possibility that the judgment below will be reversed. And
third, assuming the applicant’s position on the merits is
correct, there must be a likelihood of irreparable harm if
the judgment is not stayed. Barnes v. E-Systems, Inc.
Group Hospital Medical & Surgical Ins. Plan, 501 U. S.
1301, 1302 (1991) (SCALIA, J., in chambers). I conclude
that this standard is met.
   Applicants complain of many violations of due process,
including (among others) denial of the opportunity to
cross-examine the named representatives of the class,
factually unsupported estimations of the number of class
members entitled to relief, and constant revision of the
legal basis for the plaintiffs’ claim during the course of
litigation. Even though the judgment that is the alleged
consequence of these claimed errors is massive—more
than $250 million—I would not be inclined to believe that
this Court would grant certiorari to consider these fact
bound contentions that may have no effect on other cases.
   But one asserted error in particular (and perhaps some
of the others as well) implicates constitutional constraints
on the allowable alteration of normal process in class
actions. This is a fraud case, and in Louisiana the tort of
fraud normally requires proof that the plaintiff detrimen
tally relied on the defendant’s misrepresentations. 949
So. 2d, at 1277. Accordingly, the Court of Appeal indi
cated that members of the plaintiff class who wish to seek
individual damages, rather than just access to smoking
cessation measures, would have to establish their own
reliance on the alleged distortions. Ibid. But the Court of
Appeal held that this element need not be proved insofar
                 Cite as: 561 U. S. ____ (2010)           3

                     Opinion in Chambers

as the class seeks payment into a fund that will benefit
individual plaintiffs, since the defendants are guilty of a
“distort[ion of] the entire body of public knowledge” on
which the “class as a whole” has relied. Id., at 1277–1278.
Thus, the court eliminated any need for plaintiffs to prove,
and denied any opportunity for applicants to contest, that
any particular plaintiff who benefits from the judgment
(much less all of them) believed applicants’ distortions and
continued to smoke as a result.
   Applicants allege that this violates their due-process
right to “an opportunity to present every available de
fense.” Lindsey v. Normet, 405 U. S. 56, 66 (1972) (inter
nal quotation marks omitted) (quoting American Surety
Co. v. Baldwin, 287 U. S. 156, 168 (1932)). Respondents
concede that due process requires such an opportunity, but
they contend that the intermediate state court’s pro
nouncement means that, as a matter of Louisiana’s sub
stantive law, applicants have no nonreliance defense.
That response may ultimately prove persuasive, but at
this stage it serves to describe the issue rather than re
solve it. The apparent consequence of the Court of Ap
peal’s holding is that individual plaintiffs who could not
recover had they sued separately can recover only because
their claims were aggregated with others’ through the
procedural device of the class action.
   The extent to which class treatment may constitution
ally reduce the normal requirements of due process is an
important question. National concern over abuse of the
class-action device induced Congress to permit removal of
most major class actions to federal court, see 28 U. S. C.
§1332(d), where they will be subject to the significant
limitations of the Federal Rules. Federal removal jurisdic
tion has not been accorded, however, over many class
actions in which more than two-thirds of the plaintiff class
are citizens of the forum State. See §1332(d)(4). Because
the class here was drawn to include only residents of
4             PHILIP MORRIS USA INC. v. SCOTT

                      Opinion in Chambers

Louisiana, this suit typifies the sort of major class action
that often will not be removable, and in which the con
straints of the Due Process Clause will be the only federal
protection. There is no conflict between federal courts of
appeals or between state supreme courts on the principal
issue I have described; but the former seems impossible,
since by definition only state class actions are at issue;
and the latter seems implausible, unless one posits the
unlikely case where the novel approach to class-action
liability is a legislative rather than judicial creation, or the
creation of a lower state court disapproved by the state
supreme court on federal constitutional grounds. This
constitutional issue ought not to be permanently beyond
our review.
   Given those considerations, I conclude applicants have
satisfied the prerequisites for a stay. I think it reasonably
probable that four Justices will vote to grant certiorari,
and significantly possible that the judgment below will be
reversed. As for irreparable harm: Normally the mere
payment of money is not considered irreparable, see
Sampson v. Murray, 415 U. S. 61, 90 (1974), but that is
because money can usually be recovered from the person
to whom it is paid. If expenditures cannot be recouped,
the resulting loss may be irreparable. See, e.g., Mori v.
Boilermakers, 454 U. S. 1301, 1303 (1981) (Rehnquist,
J., in chambers). Here it appears that, before this Court
will be able to consider and resolve applicants’ claims, a
substantial portion of the fund established by their pay
ment will be irrevocably expended. Funds spent to pro
vide anti-smoking counseling and devices will not likely be
recoverable; nor, it seems, will the $11,501,928 fee imme
diately payable toward administrative expenses in setting
up the funded program.
   That does not end the matter. A stay will not issue
simply because the necessary conditions are satisfied.
Rather, “sound equitable discretion will deny the stay
                 Cite as: 561 U. S. ____ (2010)                  5

                     Opinion in Chambers

when ‘a decided balance of convenience’ ” weighs against
it. Barnes, supra, at 1304–1305 (SCALIA, J., in chambers)
(quoting Magnum Import Co. v. Coty, 262 U. S. 159, 164
(1923)). Here, however, the equities favor granting the
application. Refusing a stay may visit an irreversible
harm on applicants, but granting it will apparently do no
permanent injury to respondents. Applicants allege that
similar smoking-cessation measures are freely and readily
available from other sources in Louisiana, and respon
dents have not disputed that. Under those circumstances,
the equitable balance favors issuance of the stay.
   The application for a stay of the execution of the judg
ment of the Court of Appeal of Louisiana, Fourth Circuit,
is granted pending applicants’ timely filing, and this
Court’s disposition, of a petition for a writ of certiorari.

                                                  It is so ordered.