Association of Washington Public Hospital Districts v. Philip Morris Inc.

79 F. Supp. 2d 1219, 1999 U.S. Dist. LEXIS 19408, 1999 WL 1211841
District Court, W.D. Washington·Decided December 13, 1999·No. C98-1675Z·Published·Cited by 11 cases

Opinion

ORDER

ZILLY, District Judge.

Plaintiffs are Public Hospital Districts in counties throughout Washington State, and the trade association of these hospital districts (collectively, the “plaintiffs”). Defendants are tobacco companies and related entities associated with the tobacco manufacturers (collectively, the “defendants”). Plaintiffs have brought federal and state claims against defendants for the unreimbursed health care costs associated with treating patients with smoking-related illnesses. This matter comes before the Court on the defendants’ motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), docket no. 34. The Court heard oral argument on October 15, 1999, and took the matter under advisement. The Court has considered the briefs of the parties and the oral argument of counsel and now GRANTS defendants’ motion to dismiss for the reasons stated in this order.

BACKGROUND

Plaintiffs, political subdivisions of the State of Washington, are required by law to provide medical care and services for the residents of their districts. RCW 70.44.003. Each plaintiff alleges that it was required by law to provide unreim-bursed health care services to patients who have suffered from tobacco-related diseases. Second Amended Complaint (“SAC”), ¶¶1 and 17; RCW 70.170.060. Plaintiffs allege that defendants engaged in deceptive acts and conspired to perpetuate smoking and nicotine addiction in the United States. Plaintiffs further allege that the tobacco companies have forced the public hospitals and others to bear the cost of such care. Plaintiffs seek to recover the unreimbursed portion of this cost, SAC at ¶¶ 1-10, as well as other equitable and injunctive relief.

Plaintiffs seek recovery under various legal theories including federal antitrust violations, RICO violations, fraudulent misrepresentation, fraudulent concealment, breach of a special duty to disclose health hazards, unjust enrichment, conspiracy, violations of the Washington Consumer Protection Act, and public nuisance. Defendants have moved pursuant to Fed. R.Civ.P. 12(b)(6) to dismiss plaintiffs’ claims for several reasons, including, but *1222 not limited to: (1) plaintiffs’ claims are too remote and wholly derivative of injuries to unnamed smoker-patients; and (2) plaintiffs’ losses are in fact expenses which the plaintiffs had a duty to incur. Defendants’ memo in supp., docket no. 35, at 1.

Plaintiffs here bring claims similar to other plaintiffs who have unsuccessfully sought recovery for injuries that derive from the treatment of smokers’ illnesses. In Oregon Laborers-Employers Health & Welfare Trust Fund v. Philip Morris, Inc., 185 F.3d 957 (9th Cir.1999), petition for cert. filed, 68 U.S.L.W. 3274 (U.S. Oct. 12, 1999) (No. 99-642) the Ninth Circuit affirmed the dismissal of the plaintiff union trusts’ claims for failure to state a claim. In that case, -the Court concluded that plaintiffs’ claims were “too remote” from defendants’ alleged wrongdoing to allow recovery. Id. at 964. In other words, there was no showing of a direct link between the alleged misconduct of many of the same defendant tobacco companies and the alleged damage to the union trusts. Three other Circuits have reached the same result. See Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc., 191 F.3d 229 (2d Cir.1999), petition for cert. denied, — U.S. -, 120 S.Ct. 799, — L.Ed.2d - (1999); Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912 (3d Cir.1999), petition for cert. filed, 68 USLW 3251 (U.S. Jan. 10, 2000); Int’l Bhd. of Teamsters, Local 734 Health & Welfare Trust Fund v. Philip Morris, Inc., 196 F.3d 818 (7th Cir.1999). This Court has dismissed similar derivative actions by third party payors of medical costs. Regence Blueshield v. Philip Morris, Inc., 40 F.Supp.2d 1179 (W.D.Wash.1999), appeal docketed, No. 99-35204 (9th Cir. March 1, 1999); see also Int’l Bhd. of Teamsters, 196 F.3d 818 (dismissing claims by Blue Cross and Blue Shield, consolidated with trust fund suits). Plaintiffs in these cases asserted the same federal, state statutory, and common law claims now alleged in the present case.

The issue presented in this case is whether plaintiffs’ claims are different than the previous unsuccessful claims of the union trusts and third party insurance providers. For the reasons stated in this order, the Court concludes that they are not; the rationale of Oregon Laborers is fatal to plaintiffs’ claims and this case must be dismissed. As in Oregon Laborers, plaintiffs’ claims in this case are derivative of the harm suffered by non-party smokers and the defendants did not proximately cause the injuries alleged.

ANALYSIS

(A) Rule 12(b)(6) Standard

On a motion to dismiss under Rule 12(b)(6) the Court must accept as true all plaintiffs’ allegations and construe those allegations in the light most favorable to plaintiffs. NOW v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 127 L.Ed.2d 99 (1994); Nelson v. City of Irvine, 143 F.3d 1196, 1200 (9th Cir.), cert. denied, — U.S. -, 119 S.Ct. 444, 142 L.Ed.2d 399 (1998). Thus, the complaint should be dismissed for failure to state a claim only if plaintiffs can prove no set of facts which would entitle them to relief.

Free access — add to your briefcase to read the full text and ask questions with AI

Association of Washington Public Hospital Districts v. Philip Morris Inc., 79 F. Supp. 2d 1219, 1999 U.S. Dist. LEXIS 19408, 1999 WL 1211841 (W.D. Wash. 1999).

79 F. Supp. 2d 1219 (Association of Washington Public Hospital Districts v. Philip Morris Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

City of San Jose v. Monsanto Co.
231 F. Supp. 3d 357 (N.D. California, 2017)
Rocha v. Brown & Gould, LLP
101 F. Supp. 3d 52 (District of Columbia, 2015)
Schaefer v. IndyMac Mortgage Services
731 F.3d 98 (First Circuit, 2013)
Long v. Niles Co.
2010 Mass. App. Div. 43 (Mass. Dist. Ct., App. Div., 2010)
Merriam v. NATIONAL UNION FIRE INS. CO. OF PITTS.
580 F. Supp. 2d 838 (S.D. Iowa, 2008)
Allegheny General Hospital v. Philip Morris, Inc.
228 F.3d 429 (Third Circuit, 2000)
Allegheny General Hospital Allegheny Valley Hospital Armstrong County Memorial Hospital Canonsburg General Hospital Carbon- Schuylkill Community Hospital, Inc., D/B/A Miners Memorial Medical Center Chambersburg Hospital Forbes Regional Hospital Hazleton--St. Joseph Medical Center Lehigh Valley Hospital Muhlenberg Hospital Center Northeastern Pennsylvania Corporation, D/B/A Hazleton General Hospital Saint Luke's Hospital of Bethlehem Saint Luke's -- Allentown Campus St. Luke's Quakertown Hospital Saint Vincent Health Center Waynesboro Hospital v. Philip Morris, Inc. R.J. Reynolds Tobacco Company Brown & Williamson Tobacco Corporation B.A.T. Industries, Plc the American Tobacco Company, Inc., C/o Brown & Williamson Tobacco Corporation Lorillard Tobacco Company Liggett Group, Inc. United States Tobacco Company Tobacco Institute, Inc. The Council for Tobacco Research--Usa, Inc. Smokeless Tobacco Council, Inc. Hill & Knowlton, Inc., Allegheny General Hospital Allegheny Valley Hospital Armstrong County Memorial Hospital Canonsburg General Hospital Carbon-Schuylkill Community Hospital, Inc., D/B/A Miners Memorial Medical Center Chambersburg Hospital Forbes Regional Hospital Hazleton--St. Joseph Medical Center Lehigh Valley Hospital Muhlenberg Hospital Center Northeastern Pennsylvania Corporation, D/B/A Hazleton General Hospital Saint Luke's Hospital of Bethlehem Saint Luke's--Allentown Campus St. Luke's Quakertown Hospital Saint Vincent Health Center Waynesboro Hospital, in 99-4024, Armstrong County Memorial Hospital Carbon-Schuylkill Community Hospital, Inc., D/B/A Miners Memorial Medical Center Chambersburg Hospital Hazleton--St. Joseph Medical Center Lehigh Valley Hospital Muhlenberg Hospital Center Northeastern Pennsylvania Corporation, D/B/A Hazleton General Hospital Saint Luke's Hospital of Bethlehem Saint Luke's-- Allentown Campus St. Luke's Quakertown Hospital Saint Vincent Health Center Waynesboro Hospital, in 00-3101, Allegheny General Hospital Allegheny Valley Hospital Canonsburg General Hospital Forbes Regional Hospital, in 00-3102
228 F.3d 429 (Third Circuit, 2000)