Court Opinion

ID: 74736
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:55:01+00
Date Added: 2024-06-11T11:50:34.109005
License: Public Domain

PUBLISH

             IN THE UNITED STATES COURT OF APPEALS
                                                                            FILED
                        FOR THE ELEVENTH CIRCUIT                     U.S. COURT OF APPEALS
                                                                       ELEVENTH CIRCUIT
                                                                         AUGUST 22, 2000
                       -------------------------------------------
                                                                        THOMAS K. KAHN
                                    No. 99-13476                             CLERK
                      --------------------------------------------
                      D. C. Docket No. 97-03351-CV-P-W

UNITED FOOD AND COMMERCIAL WORKERS UNIONS,
EMPLOYERS HEALTH AND WELFARE FUND, individually
and on behalf of all United Food and Commercial
Workers Union Health and Welfare Funds,

                                                        Plaintiffs-Appellants,

    versus

PHILIP MORRIS, INC.,
R J REYNOLDS TOBACCO COMPANY,
BROWN & WILLIAMSON TOBACCO CORPORATION,
B.A.T. INDUSTRIES P.L.C.,
LORILLARD TOBACCO COMPANY, INC.,
ET AL,

                                                        Defendants-Appellees.

             ----------------------------------------------------------------
                  Appeal from the United States District Court
                       for the Northern District of Alabama
             ----------------------------------------------------------------
                                  (August 22, 2000)
Before EDMONDSON and BIRCH, Circuit Judges, and SHAPIRO*, District
Judge.

EDMONDSON, Circuit Judge:

       Plaintiff, the United Food and Commercial Workers Unions and Employers

Health and Welfare Fund, is an employee health and welfare benefit plan organized

under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001

et seq. Defendants are eight manufacturers of tobacco products, three tobacco

industry trade groups, one public relations firm associated with the tobacco

industry, three distributors of tobacco products, and several individuals involved in

the tobacco industry. Plaintiff brought suit – under Alabama law – against

Defendants, seeking to recover certain costs allegedly incurred by Plaintiff due to

tobacco-related illnesses.1 The district court dismissed Plaintiff’s complaint, and

Plaintiff appeals. We affirm.

   *
      Honorable Norma L. Shapiro, U.S. District Judge for the Eastern District of Pennsylvania,
sitting by designation.
   1
    Plaintiff originally brought suit in an Alabama state court. Defendants removed the suit to
federal district court pursuant to 28 U.S.C. § 1441.

                                                2
                                                 I.

       According to Plaintiff’s complaint,2 Defendants for more than forty years have

conspired to conceal from the public the medical risks and addictive nature of tobacco

products. Plaintiff alleges that Defendants have conducted an advertising campaign

specifically designed to mislead and misinform the public about the health

consequences of tobacco use. And, Plaintiff claims that Defendants actively have

concealed scientific research documenting the health risks of tobacco use and the

addictiveness of tobacco. Plaintiff asserts that, as a result of Defendants’ acts, many

participants in Plaintiff’s health care plan became afflicted with tobacco-related

illnesses and that some died from such illnesses. Plaintiff, consequently, incurred

substantial losses (1) because of Plaintiff’s obligation to provide medical treatment to

plan participants afflicted with tobacco-related illnesses and (2) because of reduced

contributions from plan participants afflicted with such illnesses. Plaintiff’s complaint

seeks monetary damages for those losses.

       Plaintiff’s complaint set out claims – under Alabama law – for antitrust

violations, fraud, conspiracy, breach of assumed duty, and unjust enrichment.

   2
     For the purposes of this appeal, we must accept the truth of Plaintiff’s factual allegations.
See Blackston v. State of Ala., 30 F.3d 117, 120 (11th Cir. 1994).

                                                 3
Defendants moved the district court to dismiss Plaintiff’s complaint for failure to state

a claim. In the light of Defendants’ motion to dismiss, Plaintiff abandoned the

antitrust and unjust enrichment claims; Plaintiff, however, argued that the claims for

fraud, conspiracy, and breach of assumed duty stated claims under Alabama law.

Plaintiff also sought leave to amend the complaint to add a claim for intentional

interference with contract.

         The district court denied Plaintiff leave to amend the complaint, granted

Defendants’ motion to dismiss, and dismissed the complaint. About the motion for

leave to amend, the district court concluded that amendment would be futile because

Plaintiff’s proffered intentional interference claim failed to state a claim. And, about

the motion to dismiss, the district court concluded that Plaintiff’s complaint failed to

state a claim because, as a matter of law, the alleged fraud, conspiracy, and breach of

assumed duty were not the proximate cause of Plaintiff’s alleged injuries. Plaintiff

appeals the district court’s dismissal of Plaintiff’s conspiracy and breach of assumed

duty claims and the district court’s denial of Plaintiff’s motion for leave to amend.3

   3
       Plaintiff has not appealed the district court’s dismissal of the fraud claim.

                                                   4
                                                II.

       Plaintiff contends on appeal that the claims in the complaint and in Plaintiff’s

proffered amended complaint – for conspiracy, breach of assumed duty, and

intentional interference – state claims under Alabama law. Defendants respond that

all of Plaintiff’s claims, as a matter of law, are barred by the doctrine of proximate

cause. We agree with Defendants and conclude that Plaintiff’s claims fail to state a

claim under Alabama law.4

       A well-established principle of Alabama law is that, to recover in tort, a plaintiff

must establish that the defendant’s misconduct was the “proximate cause” – and not

just the “remote cause” – of the plaintiff’s injuries. See Crum v. Alabama Power Co.,

542 So.2d 1226, 1228 (Ala. 1989) (“The law will consider only the proximate cause

and not the remote cause . . . .”); see also American Surety Co. v. First Nat. Bank of

Montgomery, 82 So. 429, 430 (Ala. 1919) (same). The Alabama Supreme Court has

explained:

       The law cannot undertake to trace back the chain of causes indefinitely,
       for it is obvious that this would lead to inquiries far beyond human
       power and wisdom – in fact, infinite in their scope. It therefore stops at
       the first link in the chain of causation, and looks only to the person who

   4
    We review the district court’s determination that Plaintiff’s claims fail to state a claim de
novo. See Lowell v. American Cyanamid Co., 177 F.3d 1228, 1229 (11th Cir. 1999).

                                                 5
       is the proximate cause of the injury. The general rule is that the damage
       to be recovered must be the natural and proximate consequence of the act
       complained of. “It is not enough if it be the natural consequence; it must
       be both natural and proximate.”

Birmingham Ry., Light & Power Co. v. Ely, 62 So. 816, 819 (Ala. 1913) (citations

omitted). In this respect, Alabama law is consistent with the usual common law rule

of proximate cause. See, e.g., Department of Transp. v. Anglin, 502 So.2d 896, 898-

99 (Fla. 1987) (discussing common law principles of proximate cause); Atlanta Gas

Light Co. v. Gresham, 394 S.E.2d 345, 346-47 (Ga. 1990) (same).

       We conclude that, under Alabama’s law of proximate cause, Plaintiff’s claims

must fail. In City of Birmingham v. Crow, 101 So.2d 264 (Ala. 1958), the Alabama

Supreme Court rejected a claim similar to those asserted by Plaintiff. There, the

defendant negligently injured a municipal police officer. The plaintiff-city paid the

officer’s medical expenses and then sued the defendant to recover the city’s costs.

The court concluded that the city had no direct cause of action against the defendant

for the city’s provision of health care to the injured officer. Id. at 265. We think that

Crow points to the rejection of Plaintiff’s claims in this case.5

   5
      In two other cases decided the same day as Crow, the Alabama Supreme Court made clear
that – absent subrogation – a health-care provider has no cause of action against a defendant who
injures the health-care provider’s ward, causing the health-care provider to incur increased
expenses. See City of Birmingham v. Trammell, 101 So.2d 259, 261 (Ala. 1958) (affirming
denial of city’s motion to intervene as plaintiff in suit against tortfeasor); City of Birmingham v.
Walker, 101 So.2d 250, 258-59 (Ala. 1958) (same). In this case, Plaintiff expressly disavows
any right of subrogation.

                                                 6
       Our conclusion – that Plaintiff’s claims must fail as a matter of law – is

confirmed by an examination of general common law principles. The usual common

law rule is that a health-care provider has no direct cause of action in tort against one

who injures the provider’s beneficiary, imposing increased costs upon the provider.

See, e.g., Anthony v. Slaid, 52 Mass. 290, 290-91 (Mass. 1846) (concluding that

“damage is too remote and indirect” where plaintiff – who had contracted to provide

health care for town’s paupers – sued defendant for assaulting pauper and putting

plaintiff “to increased expense for his care and support”).6

       And, in the specific context of suits brought against tobacco companies by

union health-care funds, our sister circuits uniformly have rejected virtually identical

claims on proximate cause grounds. See, e.g., Laborers Local 17 Health & Benefit

Fund v. Philip Morris, Inc., 191 F.3d 229 (2d Cir. 1999) (dismissing RICO, fraud, and

breach of assumed duty claims); Steamfitters Local Union No. 420 Welfare Fund v.

Philip Morris, Inc., 171 F.3d 912 (3d Cir. 1999) (dismissing RICO and fraud claims);

Texas Carpenters Health Benefit Fund v. Philip Morris, Inc., 199 F.3d 788 (5th Cir.

2000) (dismissing RICO and antitrust claims); International Brotherhood of

Teamsters, Local 734 Health & Welfare Fund v. Philip Morris, Inc., 196 F.3d 818 (7th

   6
     The Alabama Supreme Court has cited Anthony with approval. See Comm’rs’ Court of
Butler County v. McCann, 23 Ala. 599 (Ala. 1853) (finding Anthony “quite persuasive”).

                                            7
Cir. 1999) (dismissing RICO, antitrust, and various state law claims); Oregon

Laborers-Employers Health & Welfare Trust Fund v. Philip Morris, Inc., 185 F.3d

957 (9th Cir. 1999) (dismissing RICO, antitrust, unfair trade practices, fraud,

conspiracy, and breach of assumed duty claims).7

       Plaintiff argues, however, that Alabama law does permit Plaintiff’s claims

because Plaintiff alleges intentional torts and because the requirements of proximate

cause are relaxed for intentional torts under Alabama law. We admit that Crow did

not involve an intentional tort. See Crow, 101 So.2d at 264 (noting that plaintiff

alleged negligence on part of defendant). And, we recognize that the requirements of

proximate cause are relaxed – to some degree – in intentional tort cases under

Alabama law. See Rodopoulos v. Sam Piki Enter., Inc., 570 So.2d 661, 666 (Ala.

1990). But, this relaxation does not appear peculiar to Alabama law; the usual

common law rule seems to be that the strictures of proximate cause are applied more

loosely in intentional tort cases. See Prosser & Keeton on the Law of Torts § 8, at 37

n.27 (5th ed. 1984). Nonetheless, the usual common law rule still forbids claims like

   7
     We recognize that the cases cited involve – in addition to state common law claims –
federal RICO and antitrust claims. Nonetheless, we find these cases instructive. The alleged
conduct underlying the RICO and antitrust claims in those cases is like the alleged conduct
underlying Plaintiff’s claims under Alabama law in this case. And, the principles of proximate
cause in federal RICO and antitrust cases are borrowed largely from the general common law of
proximate cause. See Holmes v. Securities Investor Protection Corp., 112 S. Ct. 1311, 1318
(1992).

                                               8
Plaintiff’s, even where those claims are premised upon intentional torts. See, e.g.,

Anthony, 52 Mass. at 290-91 (finding no proximate cause as matter of law in assault

– an intentional tort – case). We see no strong reason to reach a different result under

Alabama law.8

                                                III.

       Plaintiff’s claims, as a matter of Alabama law, must fail in the light of the

principles of proximate cause. The district court, therefore, did not err in dismissing

Plaintiff’s complaint and in denying Plaintiff leave to amend the complaint. The

judgment of the district court is AFFIRMED.

   8
      Plaintiff also argues that this case is different because, here, Plaintiff sought to allege a
claim for intentional interference with contract. We do not find Plaintiff’s distinction
compelling. We recognize that, when Crow was decided, the Alabama Supreme Court had not
recognized generally a tort of intentional interference with contract. But, we cannot conclude
that the Alabama Supreme Court, in adopting a tort of intentional interference, see Gross v.
Lowder Realty Better Homes and Gardens, 494 So.2d 590, 597 (Ala. 1986) (adopting tort of
intentional interference), intended to overturn sub silentio Crow and Crow’s companion cases.
So, we must give effect to the Alabama Supreme Court’s holding in Crow. And, as we already
have explained, that holding leads to the rejection of Plaintiff’s claims in this case.

                                                  9