United Food & Commercial Workers Unions, Employers Health & Welfare Fund v. Philip Morris, Inc. , 223 F.3d 1271 ( 2000 )

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,
v.
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.
No. 99-13476.
United States Court of Appeals,
Eleventh Circuit.
Aug. 22, 2000.
Appeal from the United States District Court for the Northern District of Alabama. (No. 97-03351-CV-P-W),
Sam C. Pointer, Jr., Judge.
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.
I.
****
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.
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. 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
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
Plaintiff has not appealed the district court's dismissal of the fraud claim.
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, 203 Ala. 179, 82 So. 429, 430 (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 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, 183 Ala. 382, 62 So. 816, 819 (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, 260 Ga. 391, 394 S.E.2d 345, 346-47 (1990) (same).
We conclude that, under Alabama's law of proximate cause, Plaintiff's claims must fail. In City of
Birmingham v. Crow, 267 Ala. 243, 101 So.2d 264 (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
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).
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
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 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
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, 267 Ala. 245, 101 So.2d 259, 261 (1958) (affirming denial of city's motion to
intervene as plaintiff in suit against tortfeasor); City of Birmingham v. Walker, 267 Ala. 150, 101 So.2d
250, 258-59 (1958) (same). In this case, Plaintiff expressly disavows any right of subrogation.
6
The Alabama Supreme Court has cited Anthony with approval. See Comm'rs' Court of Butler County
v. McCann, 23 Ala. 599 (1853) (finding Anthony "quite persuasive").
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
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 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.
borrowed largely from the general common law of proximate cause. See Holmes v. Securities Investor
Protection Corp., 503 U.S. 258, 112 S.Ct. 1311, 1318, 117 L.Ed.2d 532 (1992).
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.