International Brotherhood of Teamsters Local 734 Health & Welfare Trust Fund v. Phillip Morris, Inc.

34 F. Supp. 2d 656, 1998 U.S. Dist. LEXIS 19308, 1998 WL 849528
CourtDistrict Court, N.D. Illinois
DecidedDecember 1, 1998
Docket97 C 8113, 97 C 8114
StatusPublished
Cited by12 cases

This text of 34 F. Supp. 2d 656 (International Brotherhood of Teamsters Local 734 Health & Welfare Trust Fund v. Phillip Morris, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Brotherhood of Teamsters Local 734 Health & Welfare Trust Fund v. Phillip Morris, Inc., 34 F. Supp. 2d 656, 1998 U.S. Dist. LEXIS 19308, 1998 WL 849528 (N.D. Ill. 1998).

Opinion

MEMORANDUM OPINION AND ORDER

MANNING, District Judge.

I. Introduction

The court is addressing a question of first impression in the Seventh Circuit: whether health and welfare funds may bring an action for economic damages incurred due to increased medical costs stemming from their members’ consumption of tobacco products. The plaintiffs International Brotherhood of Teamsters Local 734 Health & Welfare Trust Fund and Central States Joint Board Health & Welfare Trust Fund (the Funds) are “employee welfare benefit plans” and “employee benefit plans” as defined under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1002(1) et seq. They have brought this instant action against the defendants — cigarette manufacturers, retailers, advertisers, and assorted trade associations — claiming, inter alia, that the defendants engaged in a nationwide conspiracy to:

• conceal the addictiveness and harmfulness of tobacco products;
• misrepresent the harmfulness and addictiveness of tobacco products;
• knowingly disseminate false statements regarding the addictiveness and harmfulness of tobacco products;
• not compete based on claims as to the health or safety of tobacco products;
• suppress the development and marketing of safer, less-addictive cigarettes;
• manipulate the nicotine content and potency to maintain and assure addiction.

The defendants 1 move to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(6), claiming the Funds have failed to state a cause of action for which relief can be granted. The Funds’ ten-count complaints 2 raise claims for: (1) violations of federal and state antitrust law (count I); (2) violation of a special duty (count IV); (3) strict liability (count V); (4) negligence (count VI); (5) breach of express and implied warranties (count VII); (6) consumer fraud and misrepresentation (counts II, III, and IX); (7) unjust enrichment (count VIII); and (8) conspiracy (X). Alternatively, the defendants move to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(7) for failure to join indispensable parties — the individual union members who were allegedly injured, in fact, by the defendants’ tobacco products. For the reasons set forth below, the defendants’ motion to dismiss is granted and the case is hereby dismissed with prejudice. The court declines to address the defendants’ joinder argument as it is moot.

II. Background

In their complaints, the Funds allege that the tobacco industry and its related public relations consultants, trade associations, and research committees have engaged in a nationwide conspiracy dating back to the 1940s, when tobacco researchers allegedly discovered, but concealed, evidence indicating a causal relationship between tobacco products and lung cancer. The Funds allege that the tobacco industry denied the allegations, dismissing them as being part of a “health scare” and then expressly warranted to the public, through direct advertising campaigns, that cigarettes and tobacco products had no adverse effects on consumers’ health. The alleged conspiracy gathered full steam in 1953 after the so-called “Big Scare” caused by the publication of the Dr. Ernest L. Wyn- *660 der’s report which indicated that the lung cancer was more common among smokers and that there was a direct correlation between the risk of lung cancer and those who smoked.

Due to the growing negative publicity, the Funds allege that the tobacco industry created the Tobacco Industry Research Committee (TIRC) which was responsible for perpetrating a nationwide propaganda campaign which falsely misrepresented the health effects of cigarette products and intentionally concealed the allegedly lethal effects of tobacco products. As part of its alleged campaign, TIRC published a “Frank Statement to Cigarette Smokers” (“The Frank Statement”), appearing in 448 newspapers nationwide. The Frank Statement denied the reports which linked smoking to lung cancer and thereby, according to the Funds, assumed a special duty to the public by promising to engage in medical research “into all phases of tobacco use and health.”

The Funds claim that, notwithstanding its arguable pledge to protect consumer health, the tobacco industry continued its campaign for profit at the expense of consumer protection and the public health by agreeing to suppress market research into safer alternative products while simultaneously manipulating tobacco’s nicotine content to hook new consumers.

III. Standard of Review for a Motion to Dismiss

In ruling on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the court must assume the truth of all facts alleged in the complaint, construing the allegations liberally and viewing them in the light most favorable to the plaintiff. See e.g. McMath v. City of Gary, 976 F.2d 1026, 1031 (7th Cir.1992); Gillman v. Burlington N. R. Co., 878 F.2d 1020, 1022 (7th Cir.1989). Dismissal is properly granted only if it is clear that no set of facts which the plaintiff could prove consistent with the pleadings would entitle the plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Kunik v. Racine County, Wis., 946 F.2d 1574, 1579 (7th Cir.1991), citing Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).

The court will accept all well-pled factual allegations in the complaint as true. Miree v. DeKalb County, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977). In addition, the court will construe the complaint liberally and will view the allegations in the light most favorable to the nonmoving party. Craigs, Inc. v. General Elec. Capital Corp., 12 F.3d 686, 688 (7th Cir.1993). However, the court is neither bound by the plaintiffs’ legal characterization of the facts, nor required to ignore facts set forth in the complaint that undermine the plaintiffs’ claims. Scott v. O’Grady, 975 F.2d 366, 368 (7th Cir.1992), cert. denied,

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34 F. Supp. 2d 656, 1998 U.S. Dist. LEXIS 19308, 1998 WL 849528, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-brotherhood-of-teamsters-local-734-health-welfare-trust-ilnd-1998.