The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
EUGENE FORD )
)
Plaintiff, )
)
v. ) CASE NO. 4:20CV1551 HEA
)
R.J. REYNOLDS TOBACCO CO., )
& SCHNUCK MARKETS, INC. )
)
Defendants. )
OPIINION, MEMORANDUM AND ORDER
This matter is before the Court on Defendant R.J. Reynolds Tobacco Co.’s,
motion to dismiss Counts I, II, III, & IV pursuant to Fed. R. Civ. P. 12(b)(6) or in
the alternative a more definite statement under Fed. R. Civ. P. 12(e), [Doc. No.
12]. Plaintiff brings claims for strict products liability, (design defect)(Count I),
negligent design, (Count II), fraudulent concealment, (Count III), and concealment
fraud conspiracy, (Count IV), and strict liability, (Count V). For the reasons set
forth below, the motion will be granted in part and denied in part.
Facts and Background
Plaintiff initially filed a Petition in the 22nd Judicial Circuit Court of the
City of St. Louis, Missouri on September 19, 2020, alleging that he developed lung
cancer as the result of smoking cigarettes manufactured by Defendant R.J.
Reynolds and sold by Defendant Schnuck Markets. Plaintiff brought claims for
strict products liability, negligent design, fraudulent concealment, and concealment
fraud conspiracy against Defendant R.J. Reynolds, (RJR). Plaintiff brought a single
claim for strict products liability against Defendant Schnuck Markets.
Defendant R.J. Reynolds removed the case to this Court on October 29,
2020, invoking the Court’s diversity jurisdiction under 28 U.S.C. § 1332. Although
Schnuck Markets is a resident of Missouri, R.J. Reynolds argued that complete
diversity still existed because Schnuck Markets was fraudulently joined. The Court
denied Plaintiff’s motion to remand and dismissed Schnuck Markets as a defendant
on January 27, 2021.
Plaintiff began smoking cigarettes in the early 1970’s when he was around
age of fifteen. Initially he only smoked intermittently, limited Winston cigarettes
that he “confiscated” from his father. After about a year of smoking sporadically,
Plaintiff was able to buy his own cigarettes. He switched brands to Kool menthol
cigarettes at 16. Plaintiff continued to smoke for almost 50 years, smoking
Winston, Kool and Salem cigarettes.
Throughout his years of smoking, Plaintiff has seen and heard public
statements made by the cigarette industry, including RJR, Brown and Williamson,
and the Tobacco Institute, denying that smoking causes cancer and other rare
diseases. They made these statements despite the fact that cigarettes contain
potentially dangerous ingredients. Additionally, throughout his years of smoking,
Plaintiff saw advertisements that promoted cigarettes as “cool” and used
misleading euphemisms. Plaintiff does not claim that the cigarettes he purchased
did not contain the federally mandated warning, but rather alleges that the public
statements and advertisements made by the cigarette industry caused confusion and
ultimately lead him to believe that cigarettes were not yet proven to cause cancer
or other serious illnesses.
Standard for Review
The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules
of Civil Procedure is to test the legal sufficiency of the complaint. When
considering a Rule 12(b)(6) motion, the Court must assume the factual allegations
of the complaint to be true and construe them in favor of the plaintiff. Neitzke v.
Williams, 490 U.S. 319, 326–27, 109 S. Ct. 1827, 104 L. Ed. 2d 338 (1989). The
Court is not bound to accept as true a legal conclusion couched as a factual
allegation. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
To survive a Rule 12(b)(6) motion to dismiss, the complaint “must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Twombly, 550 U.S. at
570). Although “specific facts are not necessary,” the plaintiff must allege facts
sufficient to “give fair notice of what the ... claim is and the grounds upon which it
rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Twombly, 550 U.S.
544, 555 (2007)).
A plaintiff’s obligation to provide the “grounds” of his “entitlement to
relief” requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Twombly, 550 U.S. at 555. A complaint
“must contain either direct or inferential allegations respecting all the material
elements necessary to sustain recovery under some viable legal theory.” Id. at 562.
This standard “simply calls for enough fact[s] to raise a reasonable expectation that
discovery will reveal evidence of [the claim or element].” Id. at 556. The issue is
not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled
to present evidence in support of [her] claim.” Twombly, 550 U.S. at 556.
Discussion
Defendant argues that Plaintiff’s claims should be dismissed for failure to
state a claim under Fed. R. Civ. P. 12(b)(6). First Defendant argues that Plaintiff’s
design defect claims are impliedly preempted or in the alternative fail to state a
claim because they do not identify a specific design defect, but rather rely on the
fact that all cigarettes are harmful. Second, Defendant argues that Plaintiff’s fraud
claims must be dismissed because they are merely refashioned failure to warn
claims which are preempted by the Federal Cigarette Labelling and Advertising
Act.
Counts I and II-Design Defect and Negligent Design
Preemption
In Count I and II, Plaintiff alleges that the cigarettes designed and
manufactured by Defendant and its predecessors in interest were in an
unreasonably dangerous and defective condition to users. Plaintiff specifically
alleges that the use of flue-cured tobacco and manipulation of the amount of
nicotine in the cigarettes were design choices that rendered the cigarettes
unreasonably dangerous. Defendant, relying on Food & Drug Admin. v. Brown &
Williamson Tobacco Corp., 529 U.S. 120 (2000), argues that these claims are
preempted because the United States Supreme Court has recognized that cigarettes
are a legal product and a “ban on tobacco products would plainly contradict
congressional policy.” Brown & Williamson, 529 U.S. at 139. Plaintiff challenges
Defendant’s characterization of his claim, arguing that his claim attacks specific
design choices rather than cigarettes more generally and therefore would not result
in a functional ban of cigarettes as contemplated in Brown & Williamson. Plaintiff
also argues that regardless of the characterization of the claims, they are not
preempted. He relies in part on Graham v. R.J. Reynolds Tobacco Co., 857 F.3d
1169, 1190 (11th Cir. 2017), which emphasized that Brown & Williamson did not
address the states’ power to regulate tobacco or preemption.
Chief Judge Sippel recently addressed this very issue in Andrews v. R.J.
Reynolds Tobacco Company, Cause Number: 4:20CV1583 RWS (E.D. Mo.
August 6, 2021) Judge Sippel found Plaintiff’s design defect claims are not
preempted.
The issue in Brown & Williamson, was whether the Food and Drug
Administration had authority under the Food, Drug, and Cosmetic Act, to
regulate tobacco products. Food & Drug Admin. v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 120 S. Ct. 1291, 146 L. Ed. 2d 121 (2000).
The Supreme Court analyzed the history of tobacco legislation and the
implications of FDA regulation and concluded that regulation by the FDA
would require it to ban the sale of tobacco, which would contradict
congressional intent to allow their sale but inform consumers of the risk.
Brown & Williamson, 529 U.S. at 137. The Court did not address whether
states could ban tobacco and did not consider the issue of state sovereignty.
Since Brown & Williamson was decided in 2000, some courts have
determined that design defect claims that would result in functional bans on
tobacco products are preempted based on the Supreme Court’s interpretation
of congressional intent in Brown & Williamson. But others have not. In
2009, the Ninth Circuit indicated in dicta that such preemption is
unwarranted. The Ninth Circuit stated in Hunter v. Phillip Morris USA that
the plaintiff’s product liability claim did not “present an obstacle to the
congressional policy concerning the regulation of tobacco.” Hunter v. Philip
Morris USA, 582 F.3d 1039, 1048 (9th Cir. 2009). The Ninth Circuit noted
that since the Supreme Court issued its decision in Brown & Williamson,
Congress had repealed the provision of the Agricultural Adjustment Act of
1938 that had articulated a federal policy in support of the sale of tobacco.
Id. In 2017, the Eleventh Circuit, in an en banc decision, “conclude[d] that
federal tobacco laws do not preempt state tort claims based on the
dangerousness of all the cigarettes manufactured by the tobacco companies.”
Graham v. R.J. Reynolds Tobacco Company, 857 F.3d 1169, 1186 (11th Cir.
2017) cert. denied, 138 S. Ct. 646 (2018). In its decision the Eleventh
Circuit noted that a state “may employ its police power to regulate cigarette
sales and to impose tort liability on cigarette manufacturers” unless there is a
“clear and manifest purpose of Congress” to supersede such “historic police
power.” Graham, 857 F.3d at 1191. It also examined laws related to tobacco
regulation and determined that there was no indication that “Congress
created a regulatory scheme that does not tolerate tort liability based on the
dangerousness of all cigarettes manufactured by the tobacco companies but
tolerates tort actions based on theories with a more limited scope. Id. at
1188.
This Court agrees with Chief Judge Sippel that the reasoning in Graham is
persuasive. When considering preemptions, Courts begin “with the assumption that
the historic police powers of the States [are] not to be superseded by the Federal
Act unless that was the clear and manifest purpose of Congress.” Altria Grp., Inc.
v. Good, 555 U.S. 70, 77 (2008). Here, the Defendant asks the Court to find that
state law is impliedly preempted because it conflicts with Congress’s clear policy
in favor of the sale of cigarettes. But in 2004, Congress repealed the provision of
the Agricultural Adjustment Act of 1938 that had articulated federal policy in
support of the marketing of tobacco. See AMERICAN JOBS CREATION ACT
OF 2004, PL 108–357, October 22, 2004, 118 Stat 1418, Title VI Fair and
Equitable Tobacco Reform, § 611(a). As discussed in detail in Graham, the
statement of purpose in the Labeling Act, 15 U.S.C. § 1331, does not reflect a
federal objective to preserve cigarette sales. Graham, 857 F.3d at 1187–88.
Additionally, the enforcement of state products liability laws does not create an
obstacle to the accomplishment and execution of the purposes and objectives of
Congress. Graham, 857 F.3d at1187-88.
Additionally, even if the logic in Brown & Williamson applied, the
Plaintiff’s design defect claim would not result in a functional ban on cigarettes.
Defendant argues that the Plaintiff’s claim based on flue-cured tobacco, nicotine
manipulation, and the addition of flavors apply to all cigarettes, but the Plaintiff is
challenging specific design choices regarding flavor additions and nicotine levels.
See McCracken v. R.J. Reynolds Tobacco Co., No. CV 17-4495, 2018 WL
2304041, at *5–6 (E.D. Pa. May 21, 2018); Bougopoulos v. Altria Grp., Inc., 954
F. Supp. 2d 54, 61 (D.N.H. 2013). Moreover, for Plaintiff’s design defect claim to
succeed, Plaintiff must also establish causation. Therefore, “[s]tate common law
only affords a remedy to individuals who can establish that tobacco products rather
than their own negligence or disregard of the inherent risks of tobacco caused them
to suffer injuries.” Richardson v. R.J. Reynolds Tobacco Co., 578 F. Supp. 2d
1073, 1078 (E.D. Wis. 2008).
Federal law does not impliedly preempt Plaintiff's claims.
Failure to State a Design Defect Claim Under Missouri Law
Plaintiff states a claim for strict products liability under Missouri Law.
Defendant argues Plaintiff fails to state a claim for a design defect under both the
strict products liability and negligent design theories because he did not plead a
specific design flaw or causation and because he failed to meet the basic pleading
standards under Fed. R. Civ. P. 8. As discussed earlier, Plaintiff specifically
alleged design defects based on nicotine manipulation and the use of additive
flavors to make the cigarettes more addictive and easier to smoke.
Under Missouri law, “[a] manufacturer is liable under a strict liability
product defect claim “if the product was in an unreasonably dangerous defective
condition when put to a reasonably anticipated use, and the plaintiff was damaged
as a direct result of such defective condition as existed when the product was sold.”
Smith v. Brown & Williamson Tobacco Corp., 275 S.W.3d 748, 791 (Mo. Ct. App.
2008) (quoting Richcreek v. Gen. Motors Corp., 908 S.W.2d 772, 775 (Mo. Ct.
App. 1995); § 537.760. To prove a claim of strict products liability for defective
design, a plaintiff must prove that “(1) the defendant sold a product in the course of
its business; (2) the product was then in a defective condition, unreasonably
dangerous when put to a reasonably anticipated use; (3) the product was used in a
manner reasonably anticipated; and (4) plaintiff was damaged as a direct result of
the defective condition that existed when the product was sold.” Engel v. Corrigan
Co.-Mech. Contractors, Inc., a Div. of Corrigan Bros., Inc., 148 S.W.3d 28, 30
(Mo. Ct. App. 2004) (citation omitted). “The core concern in strict tort liability law
is safety. Therefore, the primary inquiry in a design defect case is whether the
product—because of the way it is designed—creates an unreasonable risk of
danger to the consumer or user when put to normal use.” Nesselrode v. Exec.
Beechcraft, Inc., 707 S.W.2d 371, 375 (Mo. 1986) (internal citations removed). In
Missouri, “the concept of unreasonable danger, which is determinative of whether
a product is defective in a design case, is presented to the jury as an ultimate issue
without further definition.” Id.
Plaintiff alleges that Defendant manipulated the amount of nicotine and used
added flavors to make the cigarettes more addictive and easier to inhale. This is
sufficient at this stage to state a claim for design defect. Defendant’s motion as to
Counts I and II will be denied.
Counts III and IV
In Count III, Plaintiff alleges Defendant fraudulently concealed information
that Defendant had a duty to disclose. In Count IV, Plaintiff alleges Defendant
conspired with other cigarette manufacturers and the Tobacco Institute and
Counsel for Tobacco Research to conceal material information from consumers.
Defendant argues that Plaintiff’s fraud claims are repackaged failure to warn
claims and are therefore preempted by the Federal Cigarette Labeling and
Advertising Act. Defendant also argues that it did not have a duty to disclose,
Plaintiff’s fraud claims are time-barred, and fail to meet the heightened pleading
standard under Fed. R. Civ. P. 9(b). Plaintiff argues that his claims are not based
on a “duty ‘based on smoking and health,’” but on a duty not to deceive or commit
fraud and therefore are not preempted. He also argues that his claim satisfies Fed.
R. Civ. P. 9(b).
Preemption
Plaintiff’s claims for fraudulent concealment and fraud concealment
conspiracy are partially preempted. The Federal Cigarette Labeling and
Advertising Act preempts state law claims “based on smoking and health … with
respect to the advertising or promotion of any cigarettes the packages of which are
labeled in conformity with the provisions of this Act.” Pub.L. 91–222, 84 Stat.
87, as amended, 15 U.S.C. § 1331-1340. Based on this statute, in Cipollone v.
Liggett Group, Inc., the Supreme Court held that fraudulent concealment claims
are preempted by the Federal Cigarette Labelling and Advertising Act, but only to
the extent that they do not rely on a duty to disclose facts through channels other
than advertising or promotion. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 527–
29, 112 S. Ct. 2608, 120 L. Ed. 2d 407 (1992). Accordingly, the Plaintiff’s claim
regarding fraudulent concealment is partially preempted. It is preempted to the
extent it alleges Defendant has a duty to disclose information regarding the health
and safety of cigarettes via advertising or promotion.
Statute of Limitations
Defendant next argues that Plaintiff’s fraud claims are barred by the statute
of limitations. “Missouri Revised Statute § 516.120(5) sets a five-year statute of
limitations on claims based on fraud. Subsection (5) further provides that a cause
of action based on fraud shall be “deemed not to have accrued until the discovery
by the aggrieved party, at any time within ten years, of the facts constituting the
fraud.” Wallace v. R.J. Reynolds Tobacco Co., No. 09-01011-CV-W-REL, 2011
WL 13290652, at *1 (W.D. Mo. Sept. 27, 2011); Mo. Rev. Stat. § 516.120(5).
“Missouri courts have consistently interpreted this section to limit the statute of
limitations for fraud to a fifteen year maximum.” Id. (collecting cases). Defendant
argues that the fraud claims are time-barred because they do not allege any
fraudulent conduct taking place after September 19, 2005, 15 years prior to the
filing date. Plaintiff counters by arguing that the alleged the fraud is ongoing.
Plaintiff’s fraudulent concealment claim is time-barred because he does not
allege any fraudulent acts occurring after September 19, 2005. Plaintiff details the
history of the tobacco industry’s position regarding the health of the cigarettes, but
he does not allege any specific concealment or fraudulent statements that occurred
from 2005-2020. See Wallace v. R.J. Reynolds Tobacco Co., No. 09-01011-CV-W-
REL, 2011 WL 13290652, at *1 (W.D. Mo. Sept. 27, 2011). But his concealment
fraud conspiracy claim is not time barred. The Eighth Circuit and Missouri courts
have held that conspiracy claims are not subject to the ten-year discovery period
like fraud claims. Rather they are governed by Mo. Rev. Stat. §516.120. Carr v.
Aubuchon, 969 F.2d 714, 716 (8th Cir. 1992); May v. AC&S, Inc., 812 F. Supp.
934, 943 (E.D. Mo. 1993); Steinhilber v. Thompson, No. 90-0377-CV-W-9, 1991
WL 219393 at *4 (W.D. Mo. 1991); Kansas City v. W.R. Grace & Co., 778
S.W.2d 264, 273 (Mo. App. 1989). The limitation period in conspiracy cases
begins to run upon the “occurrence of the last overt act charged resulting in
damage to the plaintiff.” Kansas City v. W.R. Grace & Co., 778 S.W.2d 264, 273
(Mo. App. 1989). A key element of the limitations period is damages. Rippe v.
Sutter, 292 S.W.2d. 86, 90-91 (Mo. 1956). Thus, when the act giving rise to the
cause of action does not cause damages immediately, the period of limitations will
date from when the resulting damage is sustained and capable of ascertainment.
See Kansas City v. W.R. Grace & Co., 778 S.W.2d 264, 273 (Mo. App. 1989).
Since Plaintiff was not diagnosed with cancer until 2019, the limitations period has
not run.
Federal Rule of Civil Procedure 9(b)
Plaintiff fails to meet the pleading standards required by Fed. R. Civ. P. 9(b).
In order to prevail on his fraudulent concealment claims, Plaintiff must establish
silence or concealment of facts that amounted to actual fraud and “a legal duty to
disclose on the part of the fraud-feasor arising from a relation of trust, from
confidence, inequality of condition, or superior knowledge which is not within the
fair and reasonable reach of the other party.” Mash v. Brown & Williamson
Tobacco Corp., No. 4:03CV0485 TCM, 2004 WL 3316246, at *11 (E.D. Mo. Aug.
26, 2004) (citing VanBooven v. Smull, 938 S.W.2d 324, 328 (Mo. Ct. App. 1997)).
“A plaintiff seeking to recover for fraudulent concealment must show all of the
following: (1) the fact was not within the fair and reasonable reach of the plaintiff;
(2) the plaintiff was unable to discover the concealed information; and (3) plaintiff
exercised reasonable diligence.” Littlefield v. Edmonds, 172 S.W.3d 903, 907 (Mo.
Ct. App. 2005) (citing Keefhaver v. Kimbrell, 58 S.W.3d 54, 60 (Mo. Ct. App.
2001)). Additionally, Plaintiff’s complaint must meet the requirements of Fed. R.
Civ. P. 9(b), which mandates a heightened pleading standard for fraud-based
claims. See Drobnak v. Andersen Corp., 561 F.3d 778, 783–84 (8th Cir. 2009). To
satisfy Fed. R. Civ. P. 9(b)’s requirements the complaint “must allege ‘such
matters as the time, place, and contents of false representations, as well as the
identity of the person making the misrepresentations and what was obtained or
given up thereby.’” Id. “Conclusory allegations that a defendant’s conduct was
fraudulent and deceptive are not sufficient to satisfy the rule.” Id. “To determine
whether a party has satisfied Rule 9(b), courts look to ‘the complexity or simplicity
of the transaction or occurrence, the relationship of the parties and the
determination of how much circumstantial detail is necessary to give notice to the
adverse party and enable him to prepare a responsive pleading.” Corval
Constructors, Inc. v. Tesoro Ref. & Mktg. Co., LLC, No. 19CV01277ECTBRT,
2019 WL 5260483, at *7 (D. Minn. Oct. 17, 2019) (quoting Payne v. United
States, 247 F.2d 481, 486 (8th Cir. 1957)).
To the extent the Plaintiff’s fraud claims are not preempted, they fail to
satisfy the heightened pleading standards of Fed. R. Civ. P. 9(b). Although Plaintiff
provides a few specific statements made by tobacco companies and the Tobacco
Institute, most of the allegations made by Plaintiff do not allege specific fraudulent
statements. Plaintiff’s Petition also fails to adequately allege that the concealed
facts were not within his fair and reasonable reach, that he was unable to discover
the concealed information, or that he exercised reasonable diligence. Although
Plaintiff states generally that he has heard, seen, and read about the public
pronouncements made by cigarette companies and the Tobacco Institute, he fails to
indicate when, where or how he heard or saw the statements that allegedly
concealed material information. See In re Gen. Motors Corp. Anti-Lock Brake
Prod. Liab. Litig., 966 F. Supp. 1525 (E.D. Mo. 1997), aff'd sub nom. Briehl v.
Gen. Motors Corp., 172 F.3d 623 (8th Cir. 1999); See also Wallace v. R.J.
Reynolds Tobacco Co., No. 09-01011-CV-W-REL, 2010 WL 11579047, at *3
(W.D. Mo. Aug. 12, 2010); Littlefield, 172 S.W.3d at 907; In re EpiPen Direct
Purchaser Litig., No. 20-CV-0827 (ECT/TNL), 2021 WL 147166, at *7 (D. Minn.
Jan. 15, 2021); Whittington v. Nordam Grp. Inc., 429 F.3d 986, 996 (10th Cir.
2005).
Since Plaintiff failed to plead the fraud claims with the particularity required
under Fed. R. Civ. P. 9(b), both the fraudulent concealment claim and the
concealment fraud conspiracy claims will be dismissed.
PUNITIVE DAMAGES
Plaintiff concedes that his claim for punitive damages is premature under
Mo. Rev. Stat. § 510.261. Thus, the claim for punitive damages will be stricken.
CONCLUSION
For the reasons discussed above, Defendant’s motion to dismiss as to the
Plaintiff's strict products liability claim and negligent design claim (Counts I and
will be denied. The Motion will be granted as to Plaintiffs fraudulent
concealment claim and concealment fraud conspiracy claim (Counts III & IV).
Accordingly,
IT IS HEREBY ORDERED that Defendant’s motion to dismiss, [Doc. No.
DENIED as to Counts I and I.
IT IS FURTHER ORDERED that Motion is GRANTED as to Counts II
and IV.
IT IS FURTHER ORDERED that Counts III and IV are dismissed.
IT IS FURTHER ORDERED that Plaintiff's claim for punitive damages 1s
stricken.
Dated this 11 day of August 2021.
UNITED STATES DISTRICT JUDGE
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