Weldon J. Carlisle v. Philip Morris, Incorporated

Carlisle v. Philip Morris, Inc.

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN

NO. 3-89-175-CV

WELDON J. CARLISLE, ET AL.,

APPELLANTS

vs.

PHILIP MORRIS, INC., ET AL.,

APPELLEES

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT

NO. 387,233, HONORABLE PETE LOWRY, JUDGE PRESIDING

This appeal presents the question of whether the Federal

Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331-1341

(1982 & Supp. 1990) ("Labeling Act"), preempts state common-law

tort claims for injuries or death allegedly suffered as a result of

smoking cigarettes. Plaintiffs below were two individuals alleging

injuries and two widows alleging wrongful death. (1) Defendants

below were various cigarette manufacturers, wholesalers, and

related entities. (2) In four separate suits, plaintiffs alleged

five causes of action: (1) failure to warn; (2) design defects;

(3) manufacturing defects; (4) affirmative misrepresentation; and

(5) civil conspiracy. After consolidating the four cases, the

trial court granted the defendants' motions for summary judgment on

the ground that the Labeling Act preempted all of the plaintiffs'

claims. Plaintiffs perfected this appeal. We will reverse the

trial court's judgment and remand the cause.

PLAINTIFFS' CLAIMS

Plaintiff Carlisle smoked for over sixty-five years. He

now suffers from laryngeal cancer, which he alleges was caused by

prolonged cigarette smoking. Plaintiff Woods, a cigarette smoker

for fifty-three years, suffers from lung cancer, which he alleges

was caused by prolonged smoking. The deceased spouses of

plaintiffs Rothgeb and Dyer smoked cigarettes for forty-four and

thirty-eight years, respectively; both died from lung cancer, which

those plaintiffs also allege was caused by prolonged cigarette

smoking.

Plaintiffs each alleged the same five theories of

recovery. First, under the doctrine of strict liability, they

alleged a defective design cause of action for marketing "a

defectively designed product; a product which was unreasonably

dangerous as designed, taking into consideration the utility of the

product and the risk involved in its use." Second, also under the

strict liability doctrine, plaintiffs alleged a manufacturing

defect cause of action for marketing "a defective and unreasonably

dangerous product; a product that is dangerous to an extent beyond

that which would be contemplated by the ordinary user of the

product with the ordinary knowledge common to the community as to

the product's characteristics." Third, under both strict liability

and negligence, plaintiffs alleged a failure-to-warn cause of

action for failing "to give adequate warnings of the danger or

adequate instruction for safe use" of cigarettes. Fourth, based on

the RESTATEMENT (SECOND) OF TORTS § 402B, plaintiffs alleged a

misrepresentation cause of action for "affirmatively

misrepresenting to the public that cigarette smoking did not

involve significant health hazards." Fifth, plaintiffs alleged a

cause of action for civil conspiracy , alleging that defendants had

engaged in "both negligent and grossly negligent conduct in concert

. . . in an effort to nullify the overwhelming medical evidence

that cigarette smoking is addictive and causes lung cancer and

death."

Plaintiffs did not contend that defendants violated any

provision of the Labeling Act itself.

Defendants filed motions for summary judgment, arguing

(1) that the Labeling Act preempted all of plaintiffs' claims, and

(2) that plaintiffs' claims were not viable as a matter of

substantive law. The trial court granted summary judgment for

defendants solely on preemption grounds.

MOTION TO STRIKE

Before discussing the merits of the plaintiffs' single

point of error, we address defendants' motion to strike a portion

of plaintiffs' brief. Under the subheading "An Overview of the

Problem," the statement-of-facts section of plaintiffs' brief

contains a lengthy dissertation on the dangers of smoking and the

evils of the tobacco industry. Citing and quoting from a host of

scientific and medical books, pamphlets, and journals -- none of

which is in the record -- plaintiffs' brief sets forth twelve pages

of "facts" interspersed with disparaging comments about the

defendants. It is this portion of plaintiffs' brief that

defendants ask this Court to strike.

It is elementary that, with limited exceptions not

material here, an appellate court may not consider matters outside

the appellate record. Sabine Offshore Service, Inc. v. City of

Port Arthur, 595 S.W.2d 840 (Tex. 1979); Perry v. Kroger Stores,

Store No. 119, 741 S.W.2d 533 (Tex. App. 1987, no writ). That

record consists of the transcript and, where necessary, a statement

of facts. Tex. R. App. P. 50(a). Material outside the record that

is improperly included in or attached to a party's brief may be

stricken. Henslee v. State, 375 S.W.2d 474 (Tex. Civ. App. 1963,

writ ref'd n.r.e.); Humble Oil & Refining Co. v. State, 158 S.W.2d

336, 338 (Tex. Civ. App. 1942, writ ref'd).

Scientific and medical publications such as those

referred to in plaintiffs' brief are outside the record unless they

have been properly submitted to the trial court and included as

part of the evidence. Indeed, in the trial court, statements from

"learned treatises" are admissible only in conjunction with

testimony by an expert witness, "even when the authority of the

publication is otherwise established." Goode, Wellborn, & Sharlot,

Guide to the Texas Rules of Evidence: Civil and Criminal 596

(1988); see Tex. R. Civ. Evid. 803(18).

Accordingly, we grant defendants' motion to strike.

Given the present posture of this appeal, we will not require

plaintiffs to rebrief (3) ; however, in making our decision, we have

not considered the offending portion of their brief.

For their part, defendants here have been guilty of a

similar transgression. Attached as appendices to their briefs are

copies of numerous orders, judgments, and other materials from a

variety of state and federal trial courts purporting to reflect

decisions upholding federal preemption in cigarette cases. As far

as we can tell, these decisions are neither published nor scheduled

for publication. They do not appear in the transcript as part of

the summary judgment evidence. To the extent defendants intend for

such rulings to be legal precedent, the Texas Rules of Appellate

Procedure expressly prohibit the citation of unpublished opinions.

Tex. R. App. P. 90(i). To the extent they are cited merely to show

the existence of such decisions, they constitute facts outside the

record. In either event, those portions of defendants' briefs are

stricken sua sponte .

THE LABELING ACT

In 1964 the Surgeon General of the United States issued

a widely publicized report implicating cigarette smoking as a cause

of lung cancer and other diseases. In 1965 Congress responded to

that report and the growing awareness of the health hazard posed by

cigarettes by passing the Labeling Act. The most salient feature

of the Act was a requirement that warning labels be placed on all

cigarette packages and advertisements. (4)

Substantially amended in 1970 and again by the

Comprehensive Smoking Education Act of 1984, the Labeling Act

contains a declaration of policy, which states that:

It is the policy of the Congress, and the

purpose of this chapter, to establish a comprehensive

Federal program to deal with cigarette labeling and

advertising with respect to any relationship between

smoking and health, whereby--

(1) the public may be adequately

informed about any adverse health effects of

cigarette smoking by inclusion of warning

notices on each package of cigarettes and in

each advertisement of cigarettes; and

(2) commerce and the national

economy may be (A) protected to the maximum

extent consistent with this declared policy

and (B) not impeded by diverse, nonuniform,

and confusing cigarette labeling and

advertising regulations with respect to any

relationship between smoking and health.

15 U.S.C. § 1331 .

The Act also contains a preemption provision, which reads

as follows:

(a) No statement relating to smoking and health, other

than the statement required by section 1333 of this

title, shall be required on any cigarette package.

(b) No requirement or prohibition based on smoking and

health shall be imposed under State law with respect to

the advertising or promotion of any cigarettes the

packages of which are labeled in conformity with the

provisions of this chapter.

15 U.S.C. § 1334 . Other significant sections of the Labeling Act

prohibit cigarette advertising on radio and television (§ 1335),

require manufacturers to provide annually a list of ingredients

added to tobacco in the manufacturing process (§ 1335a), require

the Secretary of Health and Human Services and the Federal Trade

Commission to report to Congress annually concerning various

cigarette-related issues (§ 1337), require the Secretary of Health

and Human Services to carry out a public information program about

the dangers of cigarette smoking (§ 1341), and provide for criminal

penalties for violations of the Act (§ 1338).

PRIOR COURT DECISIONS

Ten reported appellate court opinions, five federal and

five state, have previously addressed the preemptive effect of the

Labeling Act on common-law tort claims for injury from smoking

cigarettes. We will briefly summarize the history and holdings of

each of those cases, in chronological order.

1 . Cipollone v. Liggett Group, Inc. , 789 F.2d 181 (3rd

Cir. 1986) (Cipollone I), rev'g 593 F.Supp. 1146 (D.N.J. 1984),

cert. denied , 479 U.S. 1043 (1987), on remand , 649 F.Supp. 664

(D.N.J. 1986), and 683 F.Supp. 1487 (D.N.J. 1988), aff'd in part ,

893 F.2d 541 (3rd Cir. 1990) (Cipollone II).

In Cipollone , the plaintiff sued under strict liability,

negligence, intentional tort, and breach of warranty. In a lengthy

opinion, the district court denied the defendants' motion for

judgment on the pleadings, holding that none of the plaintiffs'

claims were preempted by the Labeling Act. 593 F.Supp. 1146 . The

Court of Appeals for the Third Circuit reversed, concluding that,

although the Act neither expressly preempted such claims nor

"occupied the field" relating to cigarettes and health, nonetheless

such claims "actually conflicted" with the purposes and objectives

of the Act. The court held that the Act preempts "those state law

damage actions relating to smoking and health that challenge either

the adequacy of the warning on cigarette packages or the propriety

of a party's actions with respect to the advertising and promotion

of cigarettes." 789 F.2d at 187 . The appellate court remanded the

cause to the district court for determination of which claims were

preempted by the Act. On remand, the district court concluded that

the plaintiffs' failure-to-warn, fraudulent-misrepresentation,

express-warranty, and conspiracy-to-defraud claims were preempted

to the extent they sought to challenge the defendants' advertising,

promotional, and public relations activities. 649 F.Supp. at 668-75 . On further appeal after trial, the court of appeals affirmed

the district court's preemption ruling, although other aspects of

the district court's judgment were reversed and the cause remanded

for new trial. 893 F.2d at 581-83.

2 . Stephen v. American Brands, Inc. , 825 F.2d 312 (11th

Cir. 1987).

In Stephen , the widow of a deceased smoker sued, at least

in part, on a failure-to-warn theory. The defendant answered that

some of the plaintiff's claims were preempted by the Labeling Act.

The plaintiff moved to strike that defense. The district court

denied the motion, relying on Cipollone I . On appeal, the Court of

Appeals for the Eleventh Circuit affirmed without significant

discussion, adopting the "decision and reasoning" of the Third

Circuit in Cipollone I .

3 . Palmer v. Liggett Group, Inc. , 825 F.2d 620 (1st Cir.

1987), rev'g 633 F.Supp. 1171 (D.Mass. 1986).

In Palmer , the widow of a smoker sued primarily under a

failure-to-warn theory, although the complaint also included

allegations of "negligence in not making cigarettes safer" as well

as breach of implied warranties of merchantability and fitness.

The defendants filed a motion to dismiss all claims based on

failure to warn. The district court denied the motion. The court

expressly disagreed with the Third Circuit's opinion in Cipollone

I , choosing instead to follow the opinion of Judge Sarokin, the

Cipollone trial judge. 633 F.Supp. at 1173 . On appeal, the Court

of Appeals for the First Circuit reversed on "actual conflict"

grounds, holding that permitting such common-law failure-to-warn

claims would "disrupt[] excessively" the "carefully wrought balance

of national interests" struck by Congress in passing the Labeling

Act. 825 F.2d at 626.

4 . Phillips v. R.J. Reynolds Industries, Inc. , 769

S.W.2d 488 (Tenn. Ct. App. 1988).

In Phillips , it appears that a smoker who contracted

Buerger's disease sued solely on a theory of failure to warn. The

trial court granted summary judgment for the cigarette companies on

the basis of preemption. Relying primarily on Palmer , the

Tennessee Court of Appeals affirmed. 769 S.W.2d at 490 .

5 . Roysdon v. R.J. Reynolds Tobacco Co. , 849 F.2d 230

(6th Cir. 1988), aff'g 623 F.Supp. 1189 (D.C. Tenn. 1985).

In Roysdon , a long-time smoker sued on two grounds: that

cigarettes are "defective and unreasonably dangerous" and that the

warnings on cigarette packages and in cigarette advertising are

inadequate. The district court granted the defendant's motion to

dismiss that portion of the complaint resting on inadequate

warnings, on the basis that such claims were preempted by the

Labeling Act. 623 F.Supp. at 1190-91 . The plaintiffs'

"unreasonably dangerous" claim was tried to a jury, following which

the court directed a verdict for defendant on substantive-law

grounds. 623 F.Supp. at 1191-92 . The Court of Appeals for the

Sixth Circuit affirmed, relying on Cipollone I and Palmer .

6 . Forster v. R.J. Reynolds Tobacco Co. , 437 N.W.2d 655

(Minn. 1989), rev'g in part 423 N.W.2d 691 (Minn. Ct. App. 1988).

In Forster , a smoker with inoperable lung cancer and his

wife brought suit in Minnesota state court under theories of strict

products liability, breach of warranty, and negligence. The trial

court, relying on Cipollone I , granted summary judgment for the

defendants on preemption grounds. The Minnesota court of appeals,

rejecting the Cipollone I appeals court decision and relying

instead on the Cipollone district court opinion, reversed the

summary judgment as to all causes of action. 423 N.W.2d at 692-93 .

On further appeal, the Minnesota Supreme Court affirmed in part and

reversed in part. The court held that "any state claim that

questions the adequacy of cigarette advertising or promotion with

respect to smoking and health, or which questions the effect of

that advertising or promotion on the federal label, is preempted."

437 N.W.2d at 660 . On the other hand, the court held that claims

not based on a failure to warn (such as strict liability based on

a risk-utility theory, affirmative misrepresentation, and breach of

warranty) do not conflict with the objectives of the Labeling Act

and are therefore not preempted. Id . at 661-62.

7 . Pennington v. Vistron Corp. , 876 F.2d 414 (5th Cir.

1989).

In Pennington , the widow of a smoker who had died of

cancer of the esophagus sued various cigarette manufacturers,

claiming that the companies had failed to provide adequate warnings

and that cigarettes are unreasonably dangerous per se. The

district court granted summary judgment for the manufacturers on

all counts. On appeal, the court of appeals held that the failure-to-warn claim was preempted by the Labeling Act, but that the other

claim was not. 876 F.2d at 420-23 .

8 . Hite v. R.J. Reynolds Tobacco Co. , 578 A.2d 417 (Pa.

Super. Ct. 1990).

In Hite , the widow of a deceased smoker sued under

theories of defective design and failure to warn. On the basis of

preemption, the trial court dismissed both grounds as to a

manufacturer against which there were no pre-1965 allegations. On

appeal, the Pennsylvania Superior Court held that the failure-to-warn claim was preempted, but that the defective-design claim was

not. 578 A.2d at 420 . Nonetheless, the appeals court affirmed the

dismissal of the defective-design claim on substantive law grounds.

Id . at 420-21.

9 . Dewey v. R.J. Reynolds Tobacco Co. , 577 A.2d 1239

(N.J. 1990), rev'g in part 542 A.2d 919 (N.J. Super. Ct. App. Div.

1988), aff'g 523 A.2d 712 (N.J. Super. Ct. Law Div. 1986).

In Dewey , the widow of a smoker who had died of lung

cancer sued under theories of design defect, failure to warn, and

misrepresentation. The defendants filed a motion to dismiss on the

ground that all claims were preempted by the Labeling Act. The

trial court, believing itself bound by the Third Circuit's ruling

in Cipollone I , dismissed the claims founded on failure to warn and

misrepresentation. 523 A.2d at 716 . However, the court held that

the plaintiff's design defect claim was not preempted, even under

Cipollone I , and denied the motion as to that claim. Id . at 716-18. On appeal, the appellate division of the superior court held

that it was unnecessary to determine whether or not it was bound by

the holding in Cipollone I , because it had concluded, on

independent review, that the trial court's judgment was correct and

should be affirmed. 542 A.2d at 920 . On further appeal, the New

Jersey Supreme Court reversed the preemption-based dismissal,

holding that (1) it was not bound by Cipollone I , and (2) the

Labeling Act did not preempt any of the plaintiff's claims,

including that founded on failure to warn. 577 A.2d at 1243-44 .

10 . Rogers v. R.J. Reynolds Tobacco Co. , 557 N.E.2d 1045

(Ind. Ct. App. 1990).

In Rogers , the widow of a deceased cigarette smoker sued

under three theories: (1) failure to warn, (2) design defect, and

(3) fraud, constructive fraud, and fraudulent concealment. The

trial court granted summary judgment in favor of defendants,

apparently without specifying a basis. Relying on Cipollone I , the

Indiana Court of Appeals held that the plaintiff's post-1965

failure-to-warn and fraud claims were preempted. 557 N.E.2d at

1050-51, 1055 . The court held, however, that the design-defect

claim was not preempted. Id . at 1051.

CONCLUSIVENESS OF LOWER FEDERAL COURT DECISIONS

As discussed above, the five federal courts of appeals

that have written on the preemptive effect of the Labeling Act are

unanimous in their conclusion that common-law failure-to-warn

claims, at least, are preempted. See Pennington , 876 F.2d 414 ;

Roysdon , 849 F.2d 230 ; Palmer , 825 F.2d 620 ; Stephen , 825 F.2d 312 ;

Cipollone , 789 F.2d 181 . This raises the threshold issue of

whether this Court is bound by decisions of lower federal courts on

questions of interpretation of federal statutes. We conclude we

are not.

This Court has held that "[w]hile a decision of a federal

court, other than the Supreme Court, may be persuasive in a state

court on a federal matter, it is, nevertheless, not binding, since

the state court owes obedience to only one federal court, namely,

the Supreme Court." Barstow v. State, 742 S.W.2d 495 , 501 n.2

(Tex. App. 1987, writ denied) (quoting from Moore & Oglebay, The

Supreme Court, Stare Decisis and Law of the Case , 21 Tex. L. Rev.

514 , 525 (1943)); accord Turner v. PV Int'l Co., 765 S.W.2d 455,

470 (Tex. App. 1988), writ denied per curiam, 778 S.W.2d 865 (Tex.

1989); Omniphone, Inc. v. Southwestern Bell Tel. Co., 742 S.W.2d

523, 526 (Tex. App. 1987, no writ); Woodard v. Texas Dept. of Human

Resources, 573 S.W.2d 596, 598 (Tex. Civ. App. 1978, writ ref'd

n.r.e.); cf . Summertree Venture III v. FSLIC, 742 S.W.2d 446, 449-50 (Tex. App. 1987, writ denied).

The rationale for this view is well summarized in the

following passage:

[T]he state courts, when adjudicating federal questions,

form an integral part of the national judicial hierarchy

and apply their own law, not that of another sovereign.

In that capacity they occupy exactly the same position as

the lower federal courts, which are coordinate, and not

superior to them. There is no appeal from the state to

the lower federal courts. Instead both are subject to

the reviewing power of the Supreme Court, which furnishes

the unifying principle. Decisions of a lower federal

court are no more binding on a state court than they are

on a federal court not beneath it in the judicial

hierarchy.

Note, Authority in State Courts of Lower Federal Court Decisions on

National Law , 48 Colum. L. Rev. 943 , 946-47 (1948) (footnotes

omitted). These sound principles seem to represent the majority

view among the states. See Annotation, Duty of state courts to

follow decisions of Federal courts, other than the Supreme Court,

on Federal questions , 147 A.L.R. 857 (1943).

In Olson v. Holmes, 571 S.W.2d 211 (Tex. Civ. App. 1978),

writ ref'd n.r.e. per curiam, 587 S.W.2d 678 (Tex. 1979), this

Court, faced with conflicting constructions of a federal statute by

a state court of appeals and a federal court of appeals, opted to

follow the federal court. This Court's opinion stated that,

because we were dealing with rights conferred by federal statute

and regulation, "our determination of the appeal should be governed

by the federal courts' construction of the statute and regulation."

571 S.W.2d at 213 . In so stating, we did not intend to hold that

this Court was absolutely bound by the decisions of lower federal

courts, but only to acknowledge that such decisions are entitled to

due weight and consideration. Therefore, we accord a like meaning

to the Texas Supreme Court's per curiam opinion in Olson , in which

it echoed and approved this Court's "should-be-governed-by"

language. 587 S.W.2d at 679 .

Accordingly, we conclude that, although they have

persuasive value, lower federal court opinions interpreting the

Labeling Act are not conclusive in this appeal.

GENERAL PREEMPTION PRINCIPLES

The supremacy clause of the United States Constitution

provides: "This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof . . . shall be the supreme

Law of the Land . . . any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding." U.S. Const. art. VI, cl.

2. The question whether, pursuant to the supremacy clause, a

particular federal law preempts state action is "largely a matter

of statutory construction." L. Tribe, American Constitutional Law

480 (2d ed. 1988). An examination of congressional intent is

required. Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 299

(1988).

The following passage summarizes the general principles

of preemption:

Federal law may supersede state law in several different

ways. First, when acting within constitutional limits,

Congress is empowered to pre-empt state law by so stating

in express terms. E.g., Jones v. Rath Packing Co. 430 US

519, 525, 51 L Ed 2d 604 , 97 S Ct 1305 (1977). Second,

congressional intent to pre-empt state law in a

particular area may be inferred where the scheme of

federal regulation is sufficiently comprehensive to make

reasonable the inference that Congress "left no room" for

supplementary state regulation. Rice v. Santa Fe

Elevator Corp. 331 US 218, 230 , 91 L Ed 1447 , 67 S Ct

1146 (1947). . . .

As a third alternative, in those areas where Congress has

not completely displaced state regulation, federal law

may nonetheless pre-empt state law to the extent it

actually conflicts with federal law. Such a conflict

occurs either because "compliance with both federal and

state regulations is a physical impossibility," Florida

Lime & Avocado Growers, Inc. v. Paul, 373 US 132, 142-143 , 10 L Ed 2d 248 , 83 S Ct 1210 (1963), or because the

state law stands "as an obstacle to the accomplishment

and execution of the full purposes and objectives of

Congress." Hines v. Davidowitz, 312 US 52, 67 , 85 L Ed

581 , 61 S Ct 399 (1941).

California Federal Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 280-81 (1987). The starting point in any preemption analysis is "the

basic assumption that Congress did not intend to displace state

law." Maryland v. Louisiana, 451 U.S. 725, 746 (1981).

No court has held that the Labeling Act expressly

preempts common-law tort claims by persons injured from smoking

cigarettes; nor has any court held that the Labeling Act so

comprehensively "occupies the field" as to preempt common-law

claims on that basis; nor has any court held that it would be

impossible to comply with both the Labeling Act and any adverse

judgments that might grow out of common-law tort claims. We

likewise decline to find common-law claims preempted on any of

those bases. Accordingly, the issue this Court must decide is

whether the availability of state common-law tort remedies to

persons injured by smoking cigarettes impedes the accomplishment

and execution of the purposes and objectives of the Labeling Act to

such a degree that we should infer a congressional intent to

eliminate such remedies.

PREEMPTION OF DAMAGE AWARDS

More than thirty years ago the Supreme Court, in deciding

whether a claim for damages was preempted, stated that

[o]ur concern is with delimiting areas of conduct which

must be free from state regulation if national policy is

to be left unhampered. Such regulation can be as

effectively exerted through an award of damages as

through some form of preventive relief. The obligation

to pay compensation can be, indeed is designed to be, a

potent method of governing conduct and controlling

policy. Even the States' salutary effort to redress

private wrongs or grant compensation for past harm cannot

be exerted to regulate activities that are potentially

subject to the exclusive federal regulatory scheme.

San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 246-47

(1959). Although Garmon concerned the primary jurisdiction of the

National Labor Relations Board and Garmon's claim was founded on a

statutory -- rather than common-law -- cause of action, the case

firmly established the principle that damage awards can have a

regulatory effect and, where appropriate, damage claims will be

subject to preemption.

In the course of balancing state and federal interests to

protect the primary jurisdiction of the NLRB, the Supreme Court has

recognized numerous exceptions to strict application of the Garmon

preemption doctrine, most notably where the state activity in

question touches interests that are "deeply rooted in local feeling

and responsibility." Garmon , 359 U.S. at 244 ; cf . Brown v. Hotel

and Restaurant Employees, 468 U.S. 491, 502-03 (1984). The Court

has said that "inflexible application of the [ Garmon ] doctrine is

to be avoided, especially where the State has a substantial

interest in regulation of the conduct at issue and the State's

interest is one that does not threaten undue interference with the

federal regulatory scheme." Farmer v. United Brotherhood of

Carpenters, 430 U.S. 290, 302 (1977). Such holdings are

instructive in the present case, though our factual setting is

distinct.

THE PRESUMPTION AGAINST PREEMPTION

As stated previously, the Supreme Court recognizes a

basic presumption against preemption. Maryland v. Louisiana , 451

U.S. at 746 . In matters traditionally regulated by states and

localities, however, that presumption is even stronger: "[When

Congress legislates] in a field which the States have traditionally

occupied . . . we start with the assumption that the historic

police powers of the States were not to be superseded by the

Federal Act unless that was the clear and manifest purpose of

Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230

(1947) (emphasis added). Stated differently, "we are not to

conclude that Congress legislated the ouster of [a state statute]

. . . in the absence of an unambiguous congressional mandate to

that effect." Florida Lime & Avocado Growers, Inc. v. Paul, 373

U.S. 132, 146-47 (1963) (emphasis added). As Professor Tribe has

stated,

As a corollary of the rule that state action will not

lightly be found to be inconsistent with federal policy,

not only are broad and abstract federal goals given scant

preemptive effect, but even congressional goals that are

tightly-stated will be interpreted narrowly when testing

traditional forms of state action for conflict with those

goals.

L. Tribe, supra at 489.

The Labeling Act touches directly on matters of public

health and safety. Therefore, the Act regulates in an area of

traditional state control. See Hillsborough County v. Automated

Medical Laboratories, Inc., 471 U.S. 707, 719 (1985) ("[T]he

regulation of health and safety matters is primarily, and

historically, a matter of local concern.").

Nonetheless, one of the defendants urges us to adopt the

view of the Eleventh Circuit expressed in Taylor v. General Motors

Corp., 875 F.2d 816 (11th Cir. 1989), cert. denied, U.S. ,

110 S.Ct. 1781 (1990):

[I]n contrast to the strong presumption against

preemption that we apply in determining whether the

language of a federal statute or regulation expressly

preempts state law, no such presumption is applicable in

deciding whether state law conflicts with federal law,

even where the subject of the state law is a matter

traditionally regarded as properly within the scope of

the states' rights. See Felder v. Casey , U.S. ,

, 108 S.Ct. 2302, 2306 , 101 L.Ed.2d 123 (1988). . . .

875 F.2d at 826 .

We think Taylor paints with too broad a brush. First,

the case cited as support for the proposition, Felder v. Casey , 487

U.S. 131 (1988), in fact provides no support. The Court in Felder

did not hold, or even imply, that no presumption against preemption

existed in conflict-preemption cases. The Wisconsin Supreme Court

had ordered dismissal of a plaintiff's civil rights action, brought

under 42 U.S.C. § 1983 (1981), for failure to comply with

Wisconsin's 120-day notice-of-claim statute. 408 N.W.2d 19 . The

Wisconsin court reasoned, in part, that the notice requirement

advanced "the State's legitimate interests in protecting against

stale or fraudulent claims, facilitating prompt settlement of valid

claims, and identifying and correcting inappropriate conduct by

governmental employees and officials." 487 U.S. at 137 . In

responding to this argument, the United States Supreme Court merely

quoted the following rule:

Under the Supremacy Clause of the Federal Constitution,

"[t]he relative importance to the State of its own law is

not material when there is a conflict with a valid

federal law," for "any state law, however clearly within

a State's acknowledged power, which interferes with or is

contrary to federal law, must yield." Free v. Bland, 369

US 663, 666 , 8 LEd2d 180 , 82 SCt 1089 (1962).

487 U.S. at 138 . Like Felder , Free v. Bland, 369 U.S. 663 (1962),

was a case in which actions authorized by federal law directly

conflicted with state law. In Free , federal law authorized

survivorship provisions in United States Savings Bonds. Texas

community property law, however, had been held to disallow any

agreement to a survivorship provision with regard to community

property. See Hilley v. Hilley, 342 S.W.2d 565 (Tex. 1961). A

more direct conflict can hardly be imagined.

We agree wholeheartedly that, as a practical matter,

where a right expressly granted by federal law is conditioned or

limited by state law, or an action expressly authorized by federal

law violates state law, the "relative importance to the State of

its own law is not material." Logic and the supremacy clause

dictate this result. Not all conflict-preemption cases involve

such direct and unmistakable conflicts, however. Indeed, the

Supreme Court has recognized a distinction between, on the one

hand, "impossibility" cases such as Florida Avocado Growers and

"outright or actual conflict" cases such as Free and, on the other

hand, "obstacle" or "frustration" cases such as Hines v.

Davidowitz, 312 U.S. 52 (1941). See Louisiana Public Service

Comm'n v. FCC, 476 U.S. 355, 368-69 (1986). The latter category of

cases can present very difficult statutory-construction and policy

questions. The congressional objective may be difficult to

ascertain. Or, the congressional enactment may have multiple

objectives, some more important than others. The effect of state

law on congressional objectives may be quite mild. Or, the overall

effect of state law may be difficult to predict, particularly in

the instance of multiple congressional goals. It is in such close

and difficult cases that a presumption against preemption seems to

us most appropriate:

By declining to infer preemption in the face of

congressional ambiguity, the Court is not interposing a

judicial barrier to Congress's will in order to protect

state sovereignty -- an interposition that would violate

Garcia [v. San Antonio Metropolitan Transit Authority,

469 U.S. 528 (1985)] -- but is instead furthering the

spirit of Garcia by requiring that decisions restricting

state sovereignty be made in a deliberate manner by

Congress, through the explicit exercise of its lawmaking

power to that end.

L. Tribe, supra at 480.

In addition, the Supreme Court itself obviously does not

follow the Taylor court's interpretation of Felder . In California

v. ARC America Corp., 490 U.S. , 104 L.Ed.2d 86 (1989), a case

decided after Felder , the Court expressly recognized that

"[a]ppellees' only contention [in this case] is that state laws

permitting indirect purchaser recoveries pose an obstacle to the

accomplishment of the purposes and objectives of Congress." 104

L.Ed.2d at 95 . Nonetheless, the Court held that:

In this case, in addition, appellees must overcome the

presumption against finding pre-emption of state law in

areas traditionally regulated by the States. See

Hillsborough County v. Automated Medical Laboratories,

Inc. 471 US 707, 716 , 85 LEd2d 714 , 105 SCt 2371 (1985).

When Congress legislates in a field traditionally

occupied by the States, "we start with the assumption

that the historic police powers of the States were not to

be superseded by the Federal Act unless that was the

clear and manifest purpose of Congress." Rice v. Santa

Fe Elevator Corp. 331 US 218, 230 , 91 LEd 1447 , 67 SCt

1146 (1947).

Id . at 94.

We conclude, therefore, that the present case requires

application of the "heightened" presumption against preemption

described in the foregoing cases.

DISCUSSION: PREEMPTION BY THE LABELING ACT IN THE PRESENT CASE

We have identified six factors that lead us to conclude

that the Labeling Act does not reflect a clear, manifest, and

unambiguous congressional intent to preempt the common-law tort

claims alleged by the plaintiffs in the present case: (1) The

"frustrating" effect of such claims on congressional goals is

speculative; (2) Avoiding diverse labeling regulations is the

secondary goal of the Act; the primary goal -- informing the public

of the hazards of cigarette smoking -- would arguably be enhanced

by permitting common-law tort claims; (3) A holding that the

plaintiffs' claims are preempted would leave them without any

remedy for the defendants' allegedly tortious conduct; (4) Congress

could easily have expressly preempted common-law tort claims, but

did not do so; (5) The legislative history of the Labeling Act

gives no indication that Congress intended to preempt common-law

tort claims; and (6) The Comprehensive Smokeless Tobacco Health

Education Act of 1986 evinces congressional intent that common-law

tort claims not be preempted.

We note initially that the defendants' strongest case for

preemption lies with failure-to-warn claims. Indeed, Pennington ,

Forster , and Hite , while concluding that failure-to-warn claims are

preempted, determined that claims based on other legal theories are

not. Accordingly, in the following discussion we will, where

appropriate, focus our analysis on failure-to-warn claims, with the

understanding that we consider claims based on other theories to be

even stronger against preemption.

1. Speculative conflict

The "obstacle" standard for determining whether state law

"actually conflicts" with federal law was enunciated in Hines v.

Davidowitz, 312 U.S. 52, 67-68 (1941):

In the final analysis, there can be no one crystal clear

distinctly marked formula. Our primary function is to

determine whether under the circumstances of this

particular case, [the state] law stands as an obstacle to

the accomplishment and execution of the full purposes and

objectives of Congress. 20

20 Cf. Savage v. Jones, 225 US 501, 533 , 56 L ed 1182,

1195, 32 S Ct 715 : ". . . If the purpose of the act

cannot otherwise be accomplished -- if its operation

within its chosen field else must be frustrated and its

provisions be refused their natural effect -- the state

law must yield to the regulation of Congress within the

sphere of its delegated power."

Defendants argue that permitting claims such as those

alleged by the plaintiffs will frustrate the "uniformity" goal

stated in section 1331 of the Labeling Act:

[That] commerce and the national economy may be (A)

protected to the maximum extent consistent with this

declared policy [of informing the public of the health

hazards of cigarette smoking] and (B) not impeded by

diverse, nonuniform, and confusing cigarette labeling and

advertising regulations with respect to any relationship

between smoking and health.

15 U.S.C. § 1331 . We disagree. By awarding damages, courts do not

compel any behavior, other than requiring a particular defendant to

pay compensation to a particular plaintiff:

A damages award . . . requires only payment -- it is not

an injunction requiring the defendant to incorporate into

its advertising a fixed legend different from the

federally required label. The labeling acts do not

prohibit a manufacturer from warning of undisclosed

health risks. The only prohibition is against a state

agency passing a law requiring cigarette companies to use

a different label.

Garner, Cigarette Dependency and Civil Liability: A Modest

Proposal , 53 S. Cal. L. Rev. 1423 , 1454 (1980).

We are mindful that a damages award may motivate a

defendant to change his future behavior voluntarily, but what the

nature of that change will be is purely speculative. A cigarette

manufacturer that was required to pay a damages award because it

had failed to adequately warn of the hazards of smoking cigarettes

would have several options. For example, the manufacturer could

choose to increase the safety of its product. Or, it could choose

simply to absorb the expense of any damage awards, either by

raising prices or by decreasing its profit margin. As Justice

Blackmun stated in his dissent in Silkwood v. Kerr-McGee Corp., 464

U.S. 238 (1984),

When a victim is determined to be eligible for a

compensatory award, that award is calculated by reference

to the victim's injury. Whatever compensation standard

a State imposes, whether it be negligence or strict

liability, a [nuclear] licensee remains free to continue

operating under federal standards and to pay for the

injury that results.

464 U.S. at 264 (Blackmun, J., dissenting). Or, the manufacturer

could include additional health information in cigarette packages

without changing the package and advertisement warnings. Finally,

the manufacturer could, of course, choose to increase the strength

of its warning. As noted by the district court in Cipollone I ,

which course the producer of a defective product takes "depends

upon a complex combination of economics, morality and psychology."

593 F.Supp. at 1156 .

In light of the manufacturers' options and the variables

that influence their choices, it is simply not clear that common-law damage awards against cigarette manufacturers would result in

the "diverse, nonuniform, and confusing cigarette labeling and

advertising regulations" Congress sought to avoid through the

Labeling Act. We conclude, therefore, that the potential conflict

asserted by defendants is too speculative to warrant preemption.

See English v. General Elec. Co., U.S. , 110 L.Ed.2d 65, 81

(1990) ("[P]reemption is ordinarily not to be implied absent an

'actual conflict.'"); Rice v. Norman Williams Co., 458 U.S. 654,

659 (1982) ("The existence of a hypothetical or potential conflict

is insufficient to warrant the pre-emption of the state statute.");

Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440, 446

(1960) ("[T]his Court's decisions . . . enjoin seeking out

conflicts between state and federal regulation where none clearly

exists.").

2. Secondary goal

The Third Circuit in Cipollone stated that the Labeling

Act represented "a carefully drawn balance between the purposes of

warning the public of the hazards of cigarette smoking and

protecting the interests of national economy." 789 F.2d at 187 .

The First Circuit in Palmer stated that, although the Act had two

"policies," it had "only one purpose: to strike a fair, effective

balance between these two competing interests." 825 F.2d at 626.

Our reading of the Act and its legislative history reveals no such

delicate balance.

The primary purpose of the Act is to inform the public of

the hazards of cigarette smoking. The legislative history of the

Act indicates plainly that "[t]he principal purpose of the bill is

to provide adequate warning to the public of the potential hazards

of cigarette smoking . . . ." 1965 U.S. Code Cong. & Admin. News

2350. (5) The policy of protecting commerce and the economy is

secondary, being protected only to the extent "consistent with this

declared policy," i.e., the policy of informing the public.

Instead of treating "these two competing interests"

equally, Congress subordinated the economic interests of

the tobacco industry and the national economy to the more

pressing interests of public health and information.

Thus, state tort actions cannot disrupt excessively a

carefully drawn balance of purpose that is, in fact, no

balance at all.

Comment, Inadequate Warning Claims Preempted by Cigarette Labeling

Act: Palmer v. Liggett Group, Inc. , 34 Loy. L. Rev. 419 , 430

(1988).

Moreover, holding common-law claims preempted would

remove the motivation for cigarette manufacturers to voluntarily

include additional health information and/or warnings in or on

cigarette packages and advertisements. That sort of disincentive

would actually hinder the Act's primary purpose of achieving wide

dissemination of such information. We find it difficult to believe

that Congress would have built such a contradiction into the Act.

In response to a similar contention, the Court of Appeals for the

District of Columbia Circuit stated:

[I]f we are to adopt [the cigarette manufacturers']

analysis, we must conclude that Congress legislated to

curtail the potential flow of information lest the public

learn too much about the hazards of smoking for the good

of the tobacco industry and the economy. We are loathe

[sic] to impute such a purpose to Congress absent a clear

expression.

Banzhaf v. FCC, 405 F.2d 1082 , 1089 (D.C. Cir. 1968), cert. denied,

396 U.S. 842 (1969).

3. No Remedy .

The Labeling Act provides no federal remedies,

administrative or otherwise, for persons who claim to have been

harmed as a result of cigarette manufacturers' tortious conduct.

Thus, preemption in the present case would leave the plaintiffs

without a remedy.

The United States Supreme Court has generally been

unwilling to permit such a result. For example, in United

Construction Workers v. Laburnum Construction Corp., 347 U.S. 656

(1954), a labor case, the Court used the following words to

distinguish an earlier ruling:

In [Garner v. Teamsters C. & H. Local Union, 346 U.S. 485

(1953)], Congress had provided a federal administrative

remedy, supplemented by judicial procedure for its

enforcement, with which the state injunctive procedure

conflicted. Here Congress has neither provided nor

suggested any substitute for the traditional state court

procedure for collecting damages for injuries caused by

tortious conduct. For us to cut off the injured

respondent from this right of recovery will deprive it of

its property without recourse or compensation. To do so

will, in effect, grant petitioners immunity from

liability for their tortious conduct. We see no

substantial reason for reaching such a result.

347 U.S. at 663-64 (footnote omitted). The plaintiff in Linn v.

United Plant Guard Workers, 383 U.S. 53 (1966), another labor case,

sought damages for malicious libel. In concluding that state

common-law remedies were not preempted, the Court stressed that the

"inability [of the National Labor Relations Board] to provide

redress to the maligned party[] vitiates the ordinary arguments for

pre-emption." Id . at 64; see also Farmer , 430 U.S. at 298 . Thus,

even in the area of labor law, where the interests of the federal

government have long been recognized as preeminent, the Supreme

Court has been reluctant to preempt state common-law tort claims.

The Supreme Court has taken a similar view outside the

labor law context. In Silkwood , the Court held that a state

common-law tort claim was not preempted by the Atomic Energy Act,

notwithstanding that less than a year earlier, in Pacific Gas &

Elec. Co. v. State Energy Resources Conservation & Dev. Comm'n, 461

U.S. 190 (1983), the Court had held that, with narrow exceptions,

the federal government had "occupied the entire field of nuclear

safety concerns." 461 U.S. at 212-13 . Justice White, writing for

the Silkwood majority, stated that the failure of Congress to

expressly preempt state-law remedies

takes on added significance in light of Congress' failure

to provide any federal remedy for persons injured by such

conduct. It is difficult to believe that Congress would,

without comment, remove all means of judicial recourse

for those injured by illegal conduct. See Construction

Workers v. Laburnum Corp., 347 US 656, 663-664 , 98 LEd

1025 , 74 SCt 833 (1954).

464 U.S. at 251 (emphasis added). In dissent, Justice Blackmun

echoed this dim view of leaving injured persons without a remedy:

Because the Federal Government does not regulate the

compensation of victims, and because it is inconceivable

that Congress intended to leave victims with no remedy at

all , 7 the pre-emption analysis established by Pacific Gas

comfortably accommodates -- indeed it compels -- the

conclusion that compensatory damages are not pre-empted

whereas punitive damages are.

7 . . . The absence of federal regulation governing the

compensation of victims of nuclear accidents is strong

evidence that Congress intended the matter to be left to

the States.

464 U.S. at 263-64 (Blackmun, J., dissenting) (emphasis added).

In the context of this discussion, the distinction

between common-law remedies and statutory remedies may also be

significant. Common-law tort remedies reflect a recognition, often

of many centuries' duration, that a person injured by wrongful

conduct is entitled to some sort of remedy against the tortfeasor

to compensate for his injuries. They reflect a conclusion that

society ought, for the good of the whole, to formally sanction and

assist in enforcing such remedies. To take from an injured person

all such remedies, without any replacement, threatens the very

foundation of our legal system: "[T]he refusal to redress an

otherwise actionable wrong creates disrespect for the law and

encourages the victim to take matters into his own hands." Linn ,

383 U.S. at 64 n.6. To infer that Congress set out to eliminate

such remedies without even commenting on their elimination would be

even more perilous.

Statutory remedies, on the other hand, while representing

the conclusion of a legislature that certain conduct should be

compensable, do not carry the sanction of ancient societal

expectations. Indeed, legislatures have been known to create

relatively fleeting rights: here today, gone tomorrow. Moreover,

in the context of state and federal relations, it is significant

that the purpose of a legislatively created cause of action is more

likely to be regulation of conduct than compensation of victims.

Although the purpose of a state law is not a major factor to be

considered in deciding preemption questions, Perez v. Campbell, 402

U.S. 637, 651-52 (1971), it cannot be ignored, Pacific Gas &

Electric , 461 U.S. at 216 .

At least one federal court of appeals has held that a

full-blown balancing of state and federal interests, presumably

similar to that required before Garmon -preemption may be applied,

is appropriate in the present analysis:

A decision about preemption on that ground [,i.e.,

frustration of federal purpose] requires the court

independently to consider national interests and their

putative conflict with state interests. While preemption

under a theory of express or implied preemption is

essentially a matter of statutory construction,

preemption under a frustration of federal purpose theory

is more an exercise of policy choices by a court than

strict statutory construction.

Abbot v. American Cyanamid Co., 844 F.2d 1108, 1113 (4th Cir.

1988). While we express no disagreement with this conclusion, the

present case does not demand a determination of the issue. A

holding of preemption would leave plaintiffs, allegedly injured by

the tortious conduct of defendants, without a remedy. If, by our

inquiry into the Labeling Act, we are truly seeking congressional

intent, we cannot ignore a consequence of such import.

4. Congressional silence

Smokers who have developed lung cancer and other diseases

have been suing cigarette manufacturers under state tort law since

at least as far back as the 1950's. See Comment, The Product

Liability of the Tobacco Industry: Has Cipollone v. Liggett Group

Finally Pierced the Cigarette Manufacturers' Aura of

Invincibility? , 30 B.C.L. Rev. 1103, 1117-26 (1989). The Supreme

Court has held, as early as 1959, that damage awards can have a

regulatory effect and that damage suits under state law are subject

to being preempted by federal statutes. See Garmon , 359 U.S. at

247 . The Supreme Court has been stating since at least 1947 that,

in areas traditionally regulated by the states, such as health and

safety, courts will presume that preemption of state law was not

intended unless the contrary is shown to be the "clear and manifest

purpose of Congress." Rice , 331 U.S. at 230 . We must presume that

Congress was aware of such lawsuits and judicial decisions when it

passed and later amended the Labeling Act.

Yet, when Congress decided to include an express

preemption provision in the Labeling Act, it made no mention of

preempting damage suits or awards. All courts, including the five

federal courts of appeals cited above, agree that the Labeling Act

does not expressly preempt common-law claims. Given the "drastic

clarity" with which Congress can speak when it so desires, and

considering that in section 1334 of the Act it spoke with some

clarity about other areas of preemption, its failure to speak on

the subject of common-law claims is significant. Even in Hines ,

the Supreme Court recognized that "where the Congress, while

regulating related matters, has purposely left untouched a

distinctive part of a subject which is peculiarly adapted to local

regulation, the state may legislate concerning such local matters

which Congress could have covered but did not." 312 U.S. at 68

n.22. Although there may be "manifest dangers in trying to discern

the tune when listening to the sounds of Congressional silence

. . . the benefit of the doubt in our Federal system is tilted

against Federal pre-emption of state law: the symphonic tie

normally goes to the plaintiffs." L. Tribe, Federalism With Smoke

and Mirrors , The Nation 788, 788-89 (June 7, 1986).

5. Legislative history

Although reliance on legislative history to discern

congressional intent is "a step to be taken cautiously," Piper v.

Chris-Craft Indus., Inc., 430 U.S. 1, 26 (1977), the legislative

history of the Labeling Act is significant for our purposes in at

least three respects. First, in virtually every congressional

discussion, statements about preemption are couched in terms of

"laws" or "regulations" in the sense of legislative enactments,

rather than "regulation" in a broader sense. During the 1965

debates, for example, House Report No. 449 described congressional

fear that "a multiplicity of State and local regulations pertaining

to labeling of cigarette packages could create chaotic marketing

conditions and consumer confusion." 1965 U.S. Code Cong. & Admin.

News 2350, 2352. In 1969 the Senate Commerce Committee stated the

following in Senate Report No. 91-566:

In some instances, counties or municipalities exercise

their authority over advertising by local ordinances, or

regulations, or even occasionally by resolution. In

order to avoid the chaos created by a multiplicity of

conflicting regulations, however, the bill preempts State

requirements or prohibitions with respect to the

advertising of cigarettes based on smoking and health.

This preemption is intended to include not only action by

State statute but by all other administrative actions or

local ordinances or regulations by any political

subdivision of any State.

1970 U.S. Code Cong. & Admin. News 2652, 2663. In addition,

individual statements by senators, congressmen, and other

interested parties seem to reflect the same focus. See the

numerous examples cited by the district court in Cipollone I , 593

F.Supp. at 1159-61 .

Second, the congressional reports, debates, and

discussions touching on the preemption issue contain no mention

whatsoever of preempting common-law tort claims. In light of the

strong presumption against preemption, such silence is telling.

"[T]he conspicuous absence [in congressional debates] of any

reference to the preemption of state common law claims . . .

evidences Congress' intention to preclude only state and local

legislatures from passing conflicting labeling laws." Comment,

Common Law Claims Challenging Adequacy of Cigarette Warnings

Preempted Under the Federal Cigarette Labeling and Advertising Act

of 1965: Cipollone v. Liggett Group, Inc. , 60 St. John's L. Rev.

754 , 762 n.32 (1986).

Finally, even the discussions that mention common-law

claims do so in the context of considering the effect of the Act on

a defendant's "assumption of the risk" defense in a tort action:

MR. MACKAY: I would like to ask you this as a lawyer.

Would not the presence of the type of warning suggested

in these bills greatly strengthen the hand of a defendant

in a tort case?

MR. ELLENBOGEN: In the long run it might do so, because

those cases that I have read -- and I have not made a

real study of this particular thing -- but the Green

case, for example, is based, I believe, on the implied

warranty of fitness, and there being no notice of the

health hazard to the consumer.

Hearings on H.R. 2248, 3014, 4007, and 4249 Before the House

Committee on Interstate and Foreign Commerce , 89th Cong., 1st.

Sess. 176 (1965) (statement of Theodore Ellenbogen, Acting

Assistant General Counsel of the Department of Health, Education,

and Welfare). See also Cipollone I , 593 F.Supp. at 1162-63 . The

very existence of debate over the effect of the Act on substantive

defenses is inconsistent with the notion that Congress intended to

preempt common-law claims.

6. Smokeless Tobacco Act

Also worthy of note on the issue of congressional intent

is the passage in 1986 of the Comprehensive Smokeless Tobacco

Health Education Act, 15 U.S.C. §§ 4401-4408 (Supp. 1990)

(Smokeless Tobacco Act). The legislative history of that Act

indicates that its passage was spurred by the recent resurgence of

smokeless tobacco products. Not surprisingly, it was patterned

after the Labeling Act: "[The Smokeless Tobacco Act], for the most

part, simply extends the provisions of P.L. 98-474, the

Comprehensive Smoking Education Act of 1984, to include smokeless

tobacco products." 1986 U.S. Code Cong. & Admin. News 7, 11.

Although patterned after the Labeling Act, the Smokeless

Tobacco Act contains some significant differences from its source.

Chief among these, for our purposes, is the presence in the

preemption section of the following provision: "Nothing in this

chapter shall relieve any person from liability at common law or

under State statutory law to any other person." 15 U.S.C.

§ 4406 (c).

Although an analysis of the various differences between

the two Acts seems to us a highly problematic inquiry, two

conclusions can readily be drawn. First, although the Smokeless

Tobacco Act does not contain an express statement of purpose, as

the Labeling Act does, logic compels the conclusion that their

purposes are parallel, if not identical: (1) to inform the public

about the dangers of tobacco product use, and (2) to protect

commerce as much as possible, consistent with the primary objective

of informing the public of health hazards, by preventing diverse

labeling regulations. Second, by expressly providing that state

common-law claims were not preempted, Congress indicated its belief

that such claims would not unduly frustrate its goal of preventing

diverse labeling regulations:

The existence of a savings clause in the Smokeless

[Tobacco] Act could be helpful to either side of the

preemption debate. The more reasonable interpretation of

this legislation, however, is that it expresses the

ongoing, unchanging, undiminished intent of Congress not

to preclude common-law causes of action for failure to

warn against the tobacco industry.

Comment, Preemption of Recovery in Cigarette Litigation: Can

Manufacturer Be Sued for Failure to Warn Even Though They Have

Complied with Federal Warning Requirements? , 20 Loyola L.A.L. Rev.

867, 918-19 (1987).

FLAWS OF PRIOR CIGARETTE CASES

The cases holding common-law tort claims to be preempted

by the Labeling Act have been justifiably criticized. In the

leading case, Cipollone I , the court of appeals disregarded

legislative history, ignored the fact that preemption would leave

the plaintiff without a remedy, and gave little weight to the

heightened presumption against preemption. 789 F.2d 181 . Of that

court's treatment of the preemption issue, Professor Tribe has

stated:

The Third Circuit [in Cipollone I ], in reading Congress'

preemption language expansively, apparently found that

Congress meant to exempt the tobacco industry from the

choice, faced by manufacturers in virtually every other

industry, among increasing product safety, increasing

warnings, or paying damages to injured consumers. That

holding seems hard to square with Silkwood and with the

Supreme Court's admonition that there is an overriding

presumption that "Congress did not intend to displace

state law."

L. Tribe, supra at 490-91 (footnotes omitted). That critical view

has generally been echoed by other commentators. See Comment,

supra , 30 B.C.L. Rev. 1103 (1989); Comment, supra , 20 Loy. L.A.L.

Rev. 867 (1987); Edell & Walters, The Doctrine of Implied

Preemption in Products Liability Cases -- Federalism in the

Balance , 54 Tenn. L. Rev. 603 (1987) (in fairness, we note that the

authors of this article have represented plaintiffs in several

lawsuits against cigarette manufacturers); Comment, supra , 60 St.

John's L. Rev. 754 (1986).

Finally, Judge Gibbons, the Chief Judge of the Third

Circuit, wrote in a concurring opinion to Cipollone II that

I believe that our interlocutory ruling [in Cipollone I ]

on the preemptive effect of the Labeling Act, to the

extent that we reached a definitive ruling, was wrong as

a matter of law, and should be overruled by the court in

banc. . . . Thus, while I join in Part XII [the

preemption section] of the opinion of the court, I do so

only because this panel is bound by what I believe to be

an erroneous opinion of the Court.

893 F.2d at 583. In light of the number of courts that have

followed the preemption holding of Cipollone I , Judge Gibbons's

comments are tinged with irony.

The decision in Palmer is likewise flawed. While Third,

Fifth, Sixth, and Eleventh Circuit panels incorrectly ignored the

consequence of leaving their respective plaintiffs without any

remedy, in Palmer the First Circuit brushed aside the plaintiff's

"no remedy" argument with two statements that are unsatisfactory,

at best. First, the court stated that, unlike the activities in

Silkwood and Laburnum , "cigarette smoking, at least initially, is

a voluntary activity." 825 F.2d at 627. Among other vices, this

statement -- without any support -- erroneously discounts the

possibility that smoking cigarettes could be shown to be addictive.

Current medical research apparently supports the possibility of

such an addictive effect. (6) That addictive property, if shown to

exist, could transform what was initially a voluntary activity into

an involuntary one, effectively placing a prospective plaintiff in

exactly the same position as the plaintiffs in Silkwood and

Laburnum . (7) Indeed, the failure to warn of cigarettes' addictive

nature could be the essence of a plaintiff's complaint. (8) In such

a case, the fact that the plaintiff's smoking may have been

"initially" voluntary would be immaterial. Most importantly,

however, the statement in Palmer inserts into the preemption

decision a consideration that properly goes only to the merits of the case: by dismissing smoking as a "voluntary activity," the

First Circuit held the plaintiff's claim preempted because, at

least in part, he had "assumed the risk." This is improper

preemption analysis. The voluntariness of the plaintiff's actions

and the impact of that determination on the defendant's liability

are issues for resolution on the merits of the case, not as part of

the preemption decision.

Next, the Palmer court opined that "[t]he Supreme Court

has often left parties without a remedy by finding state common law

preempted." Cited as authority for this proposition were Chicago

& North Western Transportation Co. v. Kalo Brick & Tile Co., 450

U.S. 311 (1981), and Farmers Union v. WDAY, 360 U.S. 525 (1959).

Neither case supports the stated proposition. In Kalo Brick ,

extensive administrative remedies were available to an aggrieved

party. Indeed, the Supreme Court felt compelled to state in its

opinion that "[o]ur decision today does not leave a shipper in

respondent's position without a remedy if it is truly harmed." 450

U.S. at 331 . In WDAY , federal law expressly prohibited the

censorship of certain political speeches broadcast over the radio.

The Court held that the statute's absolute prohibition gave radio

stations immunity from libel claims arising out of such political

speeches, i.e., common-law libel claims were preempted. Otherwise,

the Court noted, the federal statute "would sanction the

unconscionable result of permitting civil and perhaps criminal

liability to be imposed for the very conduct the statute demands of

the licensee." 360 U.S. at 531 . We note initially that a person

harmed by libelous remarks contained in such a speech would still

have a cause of action against the maker of the speech and,

therefore, would not be left without a remedy. Moreover, the

statute in WDAY had the effect of mandating specific conduct, not

merely minimum conduct. (9) WDAY was, therefore, a case in which it

was not possible to comply with both the federal statute and state

tort law. We agree that it is appropriate in such "impossibility"

cases to infer congressional intent to preempt state damage claims

of all types. However, the proposition that the Supreme Court has

"often left parties without a remedy" by preempting state common-law tort claims in frustration-of-purpose cases is both incorrect

and contrary to a healthy balance of state and federal sovereignty:

[T]he [Supreme] Court is not in the practice of denying

aggrieved parties any avenue of relief; it simply finds

it acceptable to deprive them of one avenue when another

is available. The Palmer court, on the other hand, has

denied the plaintiffs their only avenue of relief, in

contravention of the language in Silkwood and other

cases. Instead of reaching to find preemption, courts

who are about to deny plaintiffs their only avenue for

compensation in an area traditionally controlled by state

law should carefully scrutinize federal law to find

unambiguous congressional intent to usurp the province of

the state.

Comment, supra , 34 Loy. L. Rev. at 431.

PREEMPTION CONCLUSION

We agree with the Minnesota Court of Appeals in Forster

that "if there is a need to immunize the tobacco industry from tort

liability, that decision must be made by Congress in an unambiguous

mandate and not by the courts." 423 N.W.2d at 701 (emphasis in

original). We agree with the district court in Cipollone I that

"Congress intended that . . . whatever tension exists between

federal regulation of cigarette labeling and advertising and state

common law claims be tolerated." 593 F.Supp. at 1168 . And we

agree with the Supreme Court of New Jersey in Dewey that "had

Congress intended to immunize cigarette manufacturers from

packaging, labeling, misrepresentation, and warning claims, it knew

how to do so with unmistakable specificity." 577 A.2d at 1251 .

We do not find in the Labeling Act and its legislative

history, either expressly or by necessary implication resulting

from conflict with state law, the clear, manifest, and unambiguous

expression of congressional intent needed to require preemption of

the common-law tort claims alleged here. The trial court's summary

judgment was improper.

MERITS OF PLAINTIFFS' CLAIMS

One of the defendants, R.J. Reynolds Tobacco Company,

urges that, in the event this Court concludes that one or more of

the plaintiffs' causes of action are not preempted, we should

nonetheless affirm the trial court's judgment on the ground that

the pleadings and summary judgment evidence show conclusively that

none of the plaintiffs' claims is viable under substantive Texas

law. We decline to address this question, however, for the reasons

stated below.

In the trial court, defendants moved for summary judgment

on two alternative grounds: (1) preemption, and (2) substantive

product liability and first amendment law. The trial court's

order, however, expressly recited that summary judgment was being

granted "on the basis that all of the claims asserted by the

plaintiffs . . . for the post-1965 era are preempted by the

provisions of the Cigarette Labeling and Advertising Act . . . and

the Supremacy Clause of the United States Constitution."

A rule often followed by appellate courts is that "[i]n

reviewing the judgment of the trial court where there are no

findings of fact and conclusions of law requested or filed, the

judgment must be upheld on any legal theory that finds support in

the evidence." Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex.

1984). Before 1978, a similar rule was followed in the review of

summary judgments:

[I]f it affirmatively appears from the pleadings,

admissions, depositions and affidavits that there is no

issue as to any material fact upon which the outcome of

the litigation depends, then summary judgment is the

proper remedy even though it be granted upon a ground

different from that specified in the motion.

In re Price's Estate, 375 S.W.2d 900 , 903-04 (Tex. 1964); see also

Phil Phillips Ford, Inc. v. St. Paul Fire & Marine Ins. Co., 465

S.W.2d 933 (Tex. 1971); Trigg v. Blakemore, 387 S.W.2d 465 (Tex.

Civ. App. 1965, writ ref'd n.r.e.).

In 1978, however, Rule 166a of the Texas Rules of Civil

Procedure was amended to require that a motion for summary judgment

"state the specific grounds therefor," and that "[i]ssues not

expressly presented to the trial court by written motion, answer or

other response shall not be considered on appeal as grounds for

reversal." Tex. R. Civ. P. 166a(c). In construing the effect of

the 1978 amendments to Rule 166a, the Texas Supreme Court has

expressed a strong concern that, in an appeal from a summary

judgment, issues to be reviewed by the appellate court must have

been actually presented to and considered by the trial court. City

of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 675-77 (Tex.

1979). Under Clear Creek and its progeny, a summary judgment can

be neither reversed nor affirmed on any ground not specifically

presented in the motion for summary judgment. Dhillon v. General

Accident Ins. Co., 789 S.W.2d 293, 295 (Tex. App. 1990, no writ);

Houston Lighting & Power Co. v. Wheelabrator Coal Services Co., 788

S.W.2d 933, 936 (Tex. App. 1990, no writ). Since 1978, therefore,

the rule stated in In re Price's Estate and similar cases is no

longer good law.

What, then, of a summary judgment order that expressly

states the ground on which it is granted, when the underlying

motion contained other independent grounds on which summary

judgment was sought? We conclude that the ground specified in the

judgment is the only one on which the summary judgment can be

affirmed, for the following reasons. First, where a party has

sought summary judgment on grounds A and B, a judgment expressly

granting summary judgment on ground A, without mentioning ground B,

can only be construed to mean that the trial court did not consider

ground B. To construe it otherwise would be to permit and

encourage an inference that is neither warranted by the record nor

in keeping with the spirit of Rule 166a(c). Accordingly, we

conclude that the trial court in the present case did not consider

defendants' "substantive-law" argument in deciding to grant the

summary judgment. (10) Having reached this conclusion, it appears

obvious that a ground not considered by the trial court is

functionally identical to one not presented to the trial court; we

can conceive of no reason to treat them differently.

Second, the following rule has, in the last ten years,

become well established:

Where a trial court enters a summary judgment order that

does not specify the particular ground on which it is

based , the party appealing must show that each

independent argument alleged in the motion for summary

judgment is insufficient to support the trial court's

order.

Insurance Co. of North America v. Security Ins. Co., 790 S.W.2d

407, 410 (Tex. App. 1990, no writ) (emphasis added). It is

significant that (1) every opinion citing this rule has taken care

to include the phrase emphasized above, indicating a unanimity of

thought that the rule applies only when the summary judgment order

does not specify the ground on which it is based; and (2) the rule

has arisen since 1978, indicating that its formulation may well

have been in response to the 1978 amendments to Rule 166a and to

the supreme court's 1979 opinion in Clear Creek . See Kyle v. West

Gulf Maritime Ass'n, 792 S.W.2d 805, 807 (Tex. App. 1990, no writ);

Law v. Law, 792 S.W.2d 150, 151 (Tex. App. 1990, writ denied); Rabe

v. Guaranty Nat'l Ins. Co., 787 S.W.2d 575, 576 (Tex. App. 1990,

writ denied); Tucker v. Atlantic Richfield Co., 787 S.W.2d 555, 558

(Tex. App. 1990, writ denied); Dyer v. Shafer, Gilliland, Davis,

McCollum & Ashley, Inc., 779 S.W.2d 474, 478-79 (Tex. App. 1989,

writ denied); Freedman v. Briarcroft Property Owners, Inc., 776

S.W.2d 212, 218 (Tex. App. 1989, writ denied); Tilotta v. Goodall,

752 S.W.2d 160, 161 (Tex. App. 1988, writ denied); FDIC v. Attayi,

745 S.W.2d 939, 942 (Tex. App. 1988, no writ); Netterville v.

Interfirst Bank, 718 S.W.2d 921, 922 (Tex. App. 1986, no writ);

McCrea v. Cubilla Condominium Corp., 685 S.W.2d 755, 757 (Tex. App.

1985, writ ref'd n.r.e.); Southerland v. Northeast Datsun, Inc.,

659 S.W.2d 889, 891 (Tex. App. 1983, no writ); Thomson v. Norton,

604 S.W.2d 473, 476-77 (Tex. Civ. App. 1980, no writ). The logical

corollary to this rule is, of course, that where a summary judgment

order does specify the ground on which it is based, the party

appealing need not refute other independent grounds that may have

been alleged in the motion.

We are aware of a contrary holding in Veytia v. Seiter,

740 S.W.2d 64 (Tex. App. 1987), aff'd, 756 S.W.2d 303 (Tex. 1988).

In Veytia , as here, summary judgment was sought on two grounds,

federal preemption and substantive law. As here, the trial court's

order specified that summary judgment was being granted on

preemption grounds, apparently without mentioning the substantive-

law argument. After concluding that summary judgment was not

proper on preemption grounds, the appeals court decided that it was

obliged to review the substantive-law ground to see if the summary

judgment could be affirmed on that basis. Concluding that the

substantive-law argument did not support the summary judgment

either, the court reversed the trial court's judgment.

We decline to follow Veytia. First, for its relevant

holding, the court in Veytia relied on In re Price's Estate and

other cases that were clearly undercut by the 1978 amendments to

Rule 166a. Moreover, it did so without any discussion of those

amendments or the supreme court's Clear Creek opinion. Second, the

Texas Supreme Court affirmed the court of appeals' reversal of the

summary judgment in Veytia solely on preemption grounds, without

addressing the substantive-law argument . If the correct rule were

that independent grounds contained in a motion for summary judgment

but not considered by the trial court could nonetheless be a basis

for the affirmance of a summary judgment, then the supreme court in

Veytia would also have been obligated to consider, and reject, the

substantive-law ground before it could affirm the court of appeals'

reversal of the summary judgment.

We conclude, therefore, that the Veytia court incorrectly

decided to review the substantive-law ground to determine if the

summary judgment could be affirmed on that ground. We hold that

where, as here, a summary judgment order specifies the ground or

grounds on which it is based, without expressly ruling on other

independent grounds alleged in the motion, such other grounds may

not, on appeal, form the basis for affirming the summary judgment.

On the basis of that holding, we decline to consider defendants'

substantive-law arguments in this appeal. (11)

CONCLUSION

For the foregoing reasons, the judgment of the trial

court is reversed and the cause is remanded for further

proceedings.

J. Woodfin Jones, Justice

[Before Justices Powers, Jones, and Smith * ; Justice Smith not

participating]

Reversed and Remanded

Filed: February 6, 1991

[Publish]

* Before Earl W. Smith, Justice (retired), Third Court of Appeals,

sitting by assignment. See Tex. Gov't Code Ann. § 74.003 (1988).

1. Weldon J. Carlisle; Gilmer T. Woods; Phyllis T. Rothgeb,

individually and as Administratrix of the Estate of John R.

Rothgeb, deceased; and Nadia Leanora Dyer, individually and as

Administratrix of the Estate of Gerald Wayne Dyer, deceased. For

clarity, these parties, appellants in this Court, will be

referred to herein as "plaintiffs."

2. Philip Morris, Inc.; R. J. Reynolds Tobacco Company; The

American Tobacco Company; Liggett & Myers, Inc.; Liggett & Myers

Tobacco Company; Liggett Group, Inc.; The Tobacco Institute,

Inc.; The Council for Tobacco Research - U.S.A., Inc.; and H. E.

Butt Grocery Company. For clarity, these parties, appellees in

this Court, will be referred to herein as "defendants."

3. Future litigants in this Court should take heed, however.

We will not hesitate, on motion or sua sponte , to require

rebriefing for a flagrant rule violation. Tex. R. App. P. 74(p).

4. The original warning was "Caution: Cigarette Smoking May

Be Hazardous to Your Health." Pub. L. No. 89-92, §4 , 79 Stat.

283 (1965). In 1970 that warning was strengthened to read

"Warning: The Surgeon General Has Determined That Cigarette

Smoking Is Dangerous to Your Health." Pub. L. No. 91-222, § 2 ,

84 Stat. 88 (1970). In 1984, Congress again revised the warning

to require, on a rotational basis, the following:

SURGEON GENERAL'S WARNING: Smoking Causes Lung Cancer,

Heart Disease, Emphysema, And May Complicate Pregnancy.

SURGEON GENERAL'S WARNING: Quitting Smoking Now Greatly

Reduces Serious Risks to Your Health.

SURGEON GENERAL'S WARNING: Smoking By Pregnant Women

May Result in Fetal Injury, Premature Birth, And Low Birth

Weight.

SURGEON GENERAL'S WARNING: Cigarette Smoke Contains

Carbon Monoxide.

15 U.S.C. § 1333 .

5. See also the letter, dated April 7, 1965, from Robert E.

Giles, General Counsel of the Department of Commerce, to

Congressman Oren Harris, Chairman of the House Committee on

Interstate and Foreign Commerce:

One basic objective of each of these bills is

the same -- to protect the health of consumers and

prospective consumers of cigarettes. H.R. 3014 and

H.R. 4007 have the additional stated objective of

protecting commerce and the national economy. While we

would ordinarily strongly support both objectives, we

feel that . . . the proposed means of attaining the

latter objective may be incompatible with the health

protection objective. Under such circumstances we

believe that the public health interest must prevail.

1965 U.S. Code Cong. & Admin. News 2350, 2361.

6. "The Surgeon General now classifies cigarette smoking as

physiologically addictive, as do the National Institute of Drug

Abuse and the American Psychiatric Association." Comment, supra ,

30 B.C.L. Rev. at 1128 n.179.

7. "[M]edical research has determined that nicotine, which

is present in tobacco and cigarette smoke, is an addictive drug

that causes the smoker's inability to quit smoking despite his or

her awareness of its health risks." Comment, supra , 30 B.C.L.

Rev. at 1128 n. 179.

8. See Comment, supra , 30 B.C.L. Rev. at 1128-31; cf .

Crocker v. Winthrop Laboratories, Div. of Sterling Drug, Inc.,

514 S.W.2d 429 (Tex. 1974). A 1981 Federal Trade Commission

report showed that, while 90% of the American public is aware

that cigarettes are hazardous to health, over half of American

adults do not know that cigarette smoking is addictive. See

Comment, supra , 20 Loy. L.A.L. Rev. at 914 (1987).

9. We conclude that the Labeling Act requires only minimum

conduct on the part of cigarette manufacturers. The

congressional goal appears to have been uniform labeling

regulations , not uniform labels. Thus, manufacturers are not

prevented from voluntarily placing stronger warnings on cigarette

packages and advertisements. Cf . Ferebee v. Chevron Chemical

Co., 736 F.2d 1529, 1543 (D.C. Cir.), cert. denied, 469 U.S.

1062 , 105 S.Ct. 545 , 83 L.Ed.2d 432 (1984); Banzhaf v. Federal

Communications Comm'n, 405 F.2d 1082 (D.C. Cir. 1968). " Banzhaf

supports the argument that Congress did not seek to preempt the

flow of information to the public, but only the affirmative

requirement of additional labeling. Nothing short of that is

inconsistent, incompatible, or an obstacle to Congress' purpose

in legislating the Act." Comment, supra , 20 Loy. L.A.L. Rev. at

908.

10. There are, in addition, more explicit indications that

the trial court in the present case did not consider the

defendants' substantive-law ground. The record indicates, albeit

incompletely, that the trial court initially granted a

continuance of the summary judgment hearing in order to allow the

plaintiffs more time for discovery. Subsequently, the defendants

filed a "motion for reconsideration" and convinced the court that

the preemption issue did not require additional discovery. The

trial court then agreed to hear that part of the defendants'

motions that requested summary judgment on preemption grounds.

All defendants except R.J. Reynolds concede this point in their

brief: "[T]he issue whether cigarettes can be found defective or

unreasonably dangerous under Texas state law is not before this

Court."

11. If our earlier preemption discussion has seemed to imply

that the plaintiffs would, in the absence of preemption, have

viable causes of action, such expressions represent merely an

assumption made only for purposes of our preemption decision.

Nothing herein should be taken as an expression of opinion as to

the merits of the plaintiffs' claims.