Nilo D. Tuazon v. R.J. Reynolds Tobacco Company, a Foreign Corporation

433 F.3d 1163, 2006 U.S. App. LEXIS 579, 2006 WL 51186
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 11, 2006
Docket04-35618
StatusPublished
Cited by188 cases

This text of 433 F.3d 1163 (Nilo D. Tuazon v. R.J. Reynolds Tobacco Company, a Foreign Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Nilo D. Tuazon v. R.J. Reynolds Tobacco Company, a Foreign Corporation, 433 F.3d 1163, 2006 U.S. App. LEXIS 579, 2006 WL 51186 (9th Cir. 2006).

Opinion

McKEOWN, Circuit Judge.

This case calls for us to decide whether R.J. Reynolds Tobacco Company (“Reynolds”), a North Carolina-based corporation that has operated in Washington for more than half a century, may be sued in Washington for its alleged participation in a worldwide conspiracy to deny the addictive and harmful effects of smoking. Nilo D. Tuazon was diagnosed with a chronic lung disorder in 2003 in his native Philippines. The same year, Tuazon established residence in Washington state and brought suit against Reynolds for its alleged conduct that led to his current illness. Reynolds appeals the district court’s denial of its motion to dismiss for lack of personal jurisdiction and on grounds of forum non conveniens.

Background

Nilo D. Tuazon, who was born and lived in the Philippines, started smoking Salem cigarettes at age seventeen and smoked continually for more than forty years. Ten to fifteen years ago, Tuazon began to experience a chronic cough that left him weak and dizzy, a condition he suspected was smoking-related. Drawing on his own background as a lawyer and businessman, Tuazon began researching cases brought against tobacco companies in the United States.

Tuazon was diagnosed with chronic obstructive pulmonary disorder in 2003. Later that year, he immigrated to the United States on a petition supported by his daughter, a U.S. citizen, and settled with cousins in Renton, Washington. Soon after his arrival, doctors confirmed his diagnosis. Tuazon’s treatment continues under the supervision of doctors in the Seattle area.

Reynolds, originally incorporated in New Jersey in 1899, maintains its headquarters in North Carolina. Reynolds has been licensed to do business in Washington since 1940 but has no manufacturing or production facilities in the state. Since at least 1998, Reynolds has maintained an office and up to forty full-time employees in the state.' This presence has allowed Reynolds to do substantial business in Washington. From 1998-2002, Reynolds enjoyed a privileged position in the Washington market; it sold between 2.5 and 3 million cigarettes to distributors in Washington annually, generating $145-240 million in net sales each year. Also during this period, Reynolds’ market share in Washington was 29-31%, while its national market share was 23-24%. This dominant sales position resulted from a long history of targeting Washington consumers with marketing and advertising campaigns. Since at least 1949, Reynolds has advertised in purely local publications, including the Seattle Times, the Spokane Spokesman Review, and the Tacoma News-Tribune.

Over time, Reynolds’ efforts in Washington expanded to include political activity, more extensive market analysis, and spon *1168 sored research at the University of Washington. By the 1970s and 80s, Reynolds was conducting sophisticated market research, including focus groups and direct telephone surveys of smokers in several Washington cities, and providing hundreds of thousands of dollars to the University of Washington to support research into the health-related effects of smoking. In the 1990s, Reynolds organized local opposition to city and state legislation that would have banned or limited smoking and cigarette advertising. More recently, Reynolds identified Washington as a priority market and launched renewed efforts targeted at Washington consumers, spending more than $200,000 in local advertising and giving away more than 200,000 packs of free promotional cigarettes each year.

In addition to its domestic operations, Reynolds has been active overseas through a former affiliate, R.J. Reynolds International, Inc. In the Philippines, Reynolds licensed Fortune Tobacco International, Ltd. (“Fortune Tobacco”) to distribute Reynolds brand cigarettes, including Tuazon’s preferred brand, Salem.

Tuazon’s complaint alleges that Reynolds participated in a global conspiracy to suppress information regarding the addictive and health-related effects of cigarettes. The litigation of similar claims has a long and well-known history in the United States over the past decade. See, e.g., Strawser v. Atkins, 290 F.3d 720, 725 (4th Cir.2002) (“In the 1990s, nearly all the states sued major tobacco companies for harm arising from the deliberate concealment of the health risks posed by tobacco.”). 1 Tuazon alleges that the conspiracy involving major tobacco companies originated in the United States and, by the 1970s, had moved abroad. Working through affiliates and subsidiaries, such as the Asian Tobacco Council, the Philippines Tobacco Institute, and Fortune Tobacco, Tuazon claims that Reynolds was able to suppress information regarding tobacco’s addictive and corrosive health effects. As a result, Tuazon continued smoking for decades despite growing health problems and warnings from friends and family.

Reynolds moved to dismiss Tuazon’s complaint for lack of personal jurisdiction and on grounds of forum non conveniens. The district court denied the motion and Reynolds now appeals. The district court certified the question for immediate appeal and we granted Reynolds permission to appeal the district court’s order.

Analysis

I. Personal Jurisdiction

We review de novo a district court’s decision to exercise personal jurisdiction. Dole Food Co. v. Watts, 303 F.3d 1104, 1108 (9th Cir.2002). Tuazon bears the burden of showing that jurisdiction is appropriate. Id. (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.1990)). Where, as here, the decision was based on written submissions only, without an evidentiary hearing, Tuazon must only make a prima facie showing of facts that would support jurisdiction. Id. (citing Caruth v. Int’l Psychoanalytical Ass’n, 59 F.3d 126, 128 (9th Cir.1995)).

Exercise of in personam jurisdiction over an out-of-state defendant is limited by the Due Process Clause of the Fourteenth Amendment. Helicopteros *1169 Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (citing Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878)). The cornerstone of the due process inquiry is an analysis of the defendant’s contacts with the selected forum. The famous International Shoe case requires “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

A court may exercise specific jurisdiction where the suit “arises out of’ or is related to the defendant’s contacts with the forum and the defendant “purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Burger King Corp. v. Rudzewicz,

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433 F.3d 1163, 2006 U.S. App. LEXIS 579, 2006 WL 51186, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nilo-d-tuazon-v-rj-reynolds-tobacco-company-a-foreign-corporation-ca9-2006.