# Appendix — Cipollone v. Liggett Group, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1992
- **Citation:** 505 U.S. 504

## Text

Supreme Court, U.S.
FILED

2 DEC 28 1999

No. NIOL, JR.
CLERK

In The

Supreme Court of the United States

—_

October Term, 1990

THOMAS CIPOLLONE, individually and as Executor of the
Estate of Rose D. Cipollone,

Petitioner,
VS.
LIGGETT GROUP, INC., a Delaware Corporation; PHILIP
MORRIS INCORPORATED, a Virginia Corporation; and
LOEW’S THEATRES, INC., a New York Corporation,

Respondents.

APPENDIX

BUDD LARNER GROSS PICILLO
ROSENBAUM GREENBERG & SADE, P.C.
Attorneys for Petitioner
150 John F. Kennedy Parkway, CN 1000
Short Hills, New Jersey 07078-0999
(201) 379-4800

11458
tz * NJ (201) 257-6850¢(800) 3 APPEAL *NY (212) 840-4640°MA (617) 542-1114
Prete ine. DC (202) 783-7288°PA (215) 925-6500*USA (800) 5 APPEAL

TABLE OF CONTENTS

Appendix A — Opinion of the United States Court of
Appeals for the Third Circuit Dated January 5, 1990

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Appendix B — Supreme Court Denial of Certiorari Dated
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Appendix C — Opinion of the United States Court of
Appeals, Third Circuit Dated April 7, 1986......

Appendix D — Opinion of the United States District
Court, District of New Jersey Dated September 20,

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Appendix F — Related Case in Conflict with Cipollone:
Forster, et al. v. R.J. Reynolds Tobacco Co., et al.

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Appendix G — Related Case in Conflict with Cipollone;
Dewey et al. v. R.J. Reynolds Tobacco Co., et al.

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Appendix H — Front Page of Article ‘‘Cigaret Cancer
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APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE THIRD CIRCUIT DATED
JANUARY 5, 1990

Antonio CIPOLLONE, individually and as Executor of the Estate
of Rose D. Cipollone,

v.

LIGGETT GROUP, INC., a Delaware Corporation; Philip Morris
Incorporated, A Virginia Corporation, and Lorillard, Inc., A New
York Corporation.

Appeal of PHILIP MORRIS, INC.

Appeal of LORILLARD, INC.

Appeal of LIGGETT GROUP, INC.

Nos. 88-5732, 88-5570, 88-5771, 88-5784.

United States Court of Appeals,
Third Circuit.

Argued March 28, 1989.
Decided Jan. 5, 1990.

Marc Z. Edell (argued), Cynthia A. Walters, Budd Larner
Gross Picillo Rosenbaum Greenberg & Sade, P.C., Short Hills,
N.J., Alan M. Darnell, Wilentz, Goldman & Spitzer, Woodbridge,
N.J., for appellant Antonio Cipollone.

Thomas E. Silfen (argued), Brown & Connery, Westmont,
N.J., Arnold & Porter, Washington, D.C., Shook, Hardy &

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Appendix A
Bacon, Kansas City, Mo., for appellant Philip Morris, Inc.

Robert E. Northrip (argued), Rhonda E. Fawcett, W. Edward
Reeves, Shook, Hardy & Bacon, Kansas City, Mo., William S.
Tucker, Jr., Stryker, Tams & Dill, Newark, N.J., for appellant
Lorillard, Inc.

Donald J. Cohn (argued), James V. Kearney, Webster &
Sheffield, New York City, Alan S. Naar, Greenbaum, Rowe,
Smith, Ravin, Davis & Bergstein, Woodbridge, N.J., for appellant
Liggett Group, Inc.

Before GIBBONS, Chief Judge, BECKER and NYGAARD,
Circuit Judges.

OPINION OF THE COURT
BECKER, Circuit Judge.
I. INTRODUCTION

This appeal is from a final judgment in a protracted products
liability case in which the plaintiff, Antonio Cipollone, seeks to
hold Liggett Group, Inc., Lorillard, Inc., and Philip Morris, Inc.,
three of the leading firms in the tobacco industry, liable for the
death from lung cancer of his wife, Rose Cipollone, who smoked
cigarettes from 1942 until her death in 1984. Jurisdiction is founded
on diversity of citizenship, 28 U.S.C. § 1332, and New Jersey
law applies. In an earlier opinion in the case, Cipollone v. Liggett
Group, Inc., 789 F.2d 181 (3d Cir. 1986), cert. denied, 479 U.S.
1043, 107 S.Ct. 907, 93 L.Ed.2d 857 (1987), we held that the
Federal Cigarette Labeling and Advertising Act (‘‘Labeling Act’’),
15 U.S.C. §§ 1331-1340 (1982 & Supp. II 1984), which became

3a

Appendix A

effective January |, 1966, preempted claims arising from smoking
after January |, 1966 (hereinafter post-1965) based upon the
cigarette companies’ advertising or promotion of cigarettes or upon
the adequacy of their warnings as to the hazards of smoking.

Following that opinion, which stemmed from an interlocutory
appeal, see 28 U.S.C. § 1292(b), the case proceeded to a four-
month long trial. At the conclusion of the trial, the jury, answering
a series of special interrogatories, returned a verdict in the sum
of $400,000.00 for the plaintiff in his individual capacity on the
breach of express warranty claim. The jury also found the
defendants strictly liable for failing to warn adequately of the
hazards of their products, but returned a verdict in their favor
on that claim because of Mrs. Cipollone’s comparative fault. More
precisely, the jury apportioned 80% of the responsibility for Mrs.
Cipollone’s injuries to her because of its finding that she knew
and appreciated the damages of cigarette smoking and voluntarily
chose to smoke.

Both sides have appealed, raising a plethora of issues. The
prime defendant is Liggett Group, Inc. (‘‘Liggett’’), whose
cigarettes Mrs. Cipollone smoked from 1942 to 1968. The briefs
focus primarily on alleged errors in the district court’s charge
to the jury and on specific jury findings that may have preclusive
effect. Considerable attention was also devoted to ancillary issues:
the viability of the plaintiff’s generic risk-utility theory of liability
(the district court granted summary judgment for the defendants
thereon); the failure of the district court to award plaintiff
prejudgment interest; the district court’s grant to plaintiff of partial
summary judgment on defendants’ statute of limitations defense;
and the effect of our preemption decision on plaintiff’s intentional
tort claims (the district court held them to be preempted).

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Appendix A

The most problematic issue on this appeal lies in the skewing
effect on the trial of our interlocutory preemption decision, which
created an artificial (although legally binding) time constraint on
the determination of causation and liability. Under the aegis of
that decision, the jury was forbidden to consider the effect of
the defendants’ post-1965 conduct and, concomitantly, could only
consider whether a pre-1966 breach of warranty and failure to
warn was the proximate cause of Mrs. Cipollone’s smoking and
death. However, the district court allowed the jury to consider
Mrs. Cipollone’s post-1965 smoking, on the theory that her
post-1965 behavior was relevant to a comparative fault defense.

We conclude that the district court erred in permitting the
jury to make a comparative fault determination based on Mrs.
Cipollone’s post-1965 behavior. Rather, the jury should have been
instructed that Mrs. Cipollone’s post-1965 conduct bore only on
the apportionment of damages, but not on her comparative fault
for her own injuries. Although in some respects the fairest and
most natural approach would be to let the jury consider both
sides’ post-1965 conduct to the extent that it bears on
apportionment of damages, that result would impermissibly
impinge on the immunity from suit afforded the cigarette
companies by the Labeling Act. Still, permitting the defendants
to take advantage of Mrs. Cipollone’s post-1965 conduct to escape
liability altogether, particularly in the face of plaintiff’s allegations
that defendants engaged in post-1965 conduct designed to reassure
smokers, creates an unacceptable imbalance.

The only way to give effect to our preemption decision and
yet ensure fairness in the trial is to limit the evidence going to
Mrs. Cipollone’s comparative fault to her pre-1966 conduct. We
find this result to be consistent with, and indeed compelled by,
the New Jersey Supreme Court decision in Ostrowski v. Azzara,

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Appendix A

111 N.J. 429, 545 A.2d 148 (1988). Thus, Mr. Cipollone is entitled
to a new trial on his failure to warn claim.

Liggett’s appeal on the express warranty claim presents an
abstruse question about the nature of the reliance interest required
by U.C.C. section 2-313, N.J.S.A. § 12A:2-313. The attention
we pay to this issue on appeal is somewhat ironic, given that the
extensive trial focused on other theories of liability, particularly
strict liability. The jury’s verdict for the plaintiff on an express
warranty theory makes our analysis necessary, however.

We conclude that the express warranty charge was flawed
and that that portion of the verdict must also be set aside.
Primarily, the district court erred to the extent that it prevented
Liggett from proving, by a preponderance of the evidence, that
Mrs. Cipollone did not believe the advertisements. The
advertisements constitute an express warranty as long as they
constitute a basis of the bargain, that is, as long as Mr. Cipollone
can prove that Mrs. Cipollone was aware of the advertisements
and as long as Liggett does not prove that she disbelieved them.

We conclude that the district court did not err in barring
a comparative fault defense to the express warranty claim because,
on the facts of this case, it would have been impossible for Mrs.
Cipollone to have known of the dangers of smoking and still have
believed enough in Liggett’s advertisements for them to constitute
a warranty. In essence, the comparative fault issue collapses into
the basis of the bargain issue. We further conclude that the district
court did not err in denying Liggett’s motion for judgment n.o.v.,
because there was sufficient evidence in the record to support
conclusions that a warranty existed and was breached and that
breach of that warranty proximately caused Mrs. Cipollone’s
cancer.

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Appendix A

We reverse the district court’s grant of summary judgment
to defendants on plaintiff’s generic risk-utility claim. Although
our holding on this issue is subject to instant modification by
the New Jersey Supreme Court, which presently has the issue
- before it, we find that the district court improperly granted
defendant’s motion for a directed verdict. Thus, plaintiff still has
live claims against all three defendants in this case; although Mrs.
Cipollone did not smoke cigarettes made by Lorillard and Philip
Morris until after 1965 (hence absolving them from liability on
the breach of express warranty and failure to warn claims), they
remain potentially liable on the risk-utility claim, which does not
implicate advertising, promotion or warnings. We also conclude
that if Mr. Cipollone prevails on an express warranty claim on
retrial, he is entitled to prejudgment interest. We reverse the district
court’s grant of partial summary judgment for the plaintiff on
the statute of limitations issue because we conclude that there
was a genuine issue of material fact as to whether, within the
meaning of the New Jersey discovery rule, Mrs. Cipollone should
have discovered the facts giving rise to her claim earlier. Finally,
we agree with the district court that plaintiff’s intentional tort
claim is preempted by our previous decision.

Il. THE RELEVANT FACTS ADDUCED AT TRIAL

Rose Cipollone was born in 1925 and began to smoke in 1942.
She smoked Chesterfield brand cigarettes, manufactured by
Liggett, until 1955. In her deposition, introduced into evidence
at the trial, she stated that she smoked the Chesterfield brand
to be ‘‘glamorous,’’ to “‘imitate’”’ the ‘‘pretty girls and movie stars’’
depicted in Chesterfield adverstisements, and because the
advertisements stated that Chesterfield cigarettes were ‘‘mild.’’
Mrs. Cipollone stated that she understood the description of
Chesterfield cigarettes as ‘‘mild’’ to mean that the cigarettes were
safe.

a

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Appendix A

Mrs. Cipollone also testified that she was an avid reader of
a variety of magazines, frequently listened to the radio, and often
watched television during the years that she smoked the
Chesterfield brand. Although she could not specifically remember
which Chesterfield advertisements she saw or heard during those
years, Chesterfield advertisements appeared continuously in those
media during that period. Several of these advertisements were
introduced into evidence. The following copy appeared commonly
in Chesterfield magazine advertisements during the year 1952:

PLAY SAFE Smoke Chesterfield.

NOSE, THROAT, and Accessory Organs not
Adversely Affected by Smoking Chesterfields. First
such report ever published about any cigarette. A
responsible consulting organization has reported
the results of a continuing study by a competent
medical specialist and his staff on the effects of
smoking Chesterfield cigarettes. A group of people
from various walks of life was organized to smoke
only Chesterfields. For six months this group of
men and women smoked their normal amount of
Chesterfields—10 to 40 a day. 45% of the group
have smoked Chesterfields continually from one
to thirty years for an average of 10 years each.
At the beginning and at the end of the six-months
period each smoker was given a thorough
examination, including X-ray pictures, by the
medical specialist and his assistants. The
examination covered the sinuses as well as the nose,
ears and throat. The medical specialist, after a
thorough examination of every member of the
group, stated: ‘‘It is my opinion that the ears, nose,

8a

Appendix A

throat and accessory organs of all participating
subjects examined by me were not adversely
affected in the six-month period by smoking the
cigarettes provided.’’

5 J.A. 21, 22 (c. 1952).' The defendants stipulated that Mrs.
Cipollone had seen many of these advertisements.

1. Chesterfield magazine advertisements during this period also contained
the following messages:

Chesterfield contains only ingredients that give you the Best
Possible Smoke—as tested and approved by scientists from
leading universities.

5 J.A. 21 (c. 1952).

[Chesterfield cigarettes contain) PURE, COSTLY
MOISTENING proved by over 40 years of continuous use
in U.S.A. tobacco products as entirely safe for use in the
mouth—chemically pure, far most costly glycerol and pure
sugars which are natural to tobacco—nothing else... .
Scientists from Leading Universitites Make Sure that
Chesterfield Contains Only Ingredients that Give You the Best
Possible Smoke.

5 J.A. 26 (c.1952).

AND NOW—CHESTERFIELD FIRST TO GIVE YOU
SCIENTIFIC FACTS IN SUPPORT OF SMOKING. A
responsible consulting organization reports a study by a
competent medical specialist and staff on the effects of
smoking Chesterfields. For six months a group of men and
women smoked only Chesterfield— 10 to 40 day—their normal
amount. 45 percent of the group have smoked Chesterfield
from one to thirty years for an average of ten years each.
(Cont’d)

9a

Appendix A

Television advertisements for the Chesterfield brand were also
introduced into evidence. The Chesterfield cigarette was described
as having ‘‘ingredients that make Chesterfield the best possible
smoke as tested and approved by scientists from ‘eading
universities,’’ 5 J.A. 37 (undated), and being manufactured with
**electronic miracle’’ technology that makes ‘‘cigarettes . . . more
better [sic] and safer for you.’’ 5 J.A. 39 (c. 1955). One
advertisement stated ‘‘[n]ow Chesterfield is the first cigarette to
present this scientific evidence on the effects of smoking—a
medical specialist making regular bi-monthly examinations of
group of people from various walks of life—45% of this group
have smoked Chesterfield’s for an average of over 10 years—
after 8 months, the medical specialist reports that he observed
no adverse effects to the nose, throat and sinuses of the group
who were smoking Chesterfield. I’d say that means real mildness.’’
5 J.A. 36 (undated).

Mrs. Cipollone testified that she frequenily listened to the
radio show ‘‘Arthur Godfrey and His Friends,’’ sponsored by
the Chesterfield brand. The Chesterfield brand was marketed on
the show as follows (text read by Mr. Godfrey):

(Cont’d)
At the beginning and end of the six-months, each smoker
was given a thorough examination including X-rays, and
yeovering the sinuses, nose, ears and throat. After these
examinations, the medical specialist stated ... ‘‘It is my
opinion that the ears, nose, throat and accessory organs of
all participating subjects examined by me were not adversely
affected in the six-months period by smoking the cigarettes
provided.’’

5 J.A. 23 (c. 1952).

10a

Appendix A

[Y]ou saw me read this last week but a lot
of folks didn’t and it’s a very important message—
especially those of you who smoke Chesterfields—
you probably been wonderin’ about this. You hear
stuff all the time about ‘‘cigarettes are harmful
to you’’ this and that and the other thing... .

Here’s an ad, you’ve seen it in the papers—
please read it when you get it. If you smoke it will
make you feel better, really.

‘*Nose, throat and accessory organs not
adversely affected by smoking Chesterfield. This
is the first such report ever published about any
cigarette. A responsible consulting organization has
reported the results of a continuing study by a
competent medical specialist and his staff on the

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Appendix A

Now—here’s the important thing. ‘‘The
medical specialist, after a thorough examination
of every member of the group, stated: ‘It is my
opinion that the ears, nose, throat and accessory
organs of all participating subjects examined by
me were not adversely affected in the six-months
period by smoking the Chesterfield cigarettes
provided.’ ”’

Now that ought to make you feel better if
you’ ve had any worries at all about it. I never did.
I smoke two or three packs of these things every
day. I feel pretty good. I don’t know, I never did
believe they did you any harm and now, we’ve got
the proof. So—Chesterfields are the cigarette for
you to smoke, be they regular size or king-size.

effects of smoking Chesterfield cigarettes. 5 J.A. 156 (Sept. 24, 1952).?

‘*A group of people from various walks of
life was organized to smoke only Chesterfields. For

2. Many similar Arthur Godfrey advertisements were also introduced into
evidence, including the following three:

six months this group of men and women smoked
their normal amount of Chesterfields—10 to 40
a day. 45% of the group have smoked Chesterfields
continually from one to thirty years for an average
of 10 years each.

‘**At the beginning and at the end of the six
- months period each smoker was given a thorough
examination, including X-ray pictures, by the
medical specialist and his assistants. The
examination covered the sinuses as well as the nose,
ears and throat.’’

You know you hear all this applesauce about—you'd
better quit smoking, pal, or you won’t be here long and stuff.

Listen to this. [At this point Mr. Godfrey told his listeners
about the same ‘‘medical’’ study that he had related on
September 24.]

There’s the story. Were not adversely affected.
Chesterfield is the right—[{now addressing Tony Marvin, the
announcer] Will you hold that over there for me?—
Chesterfield—you'’ve been smoking ‘em, gosh, Tony, how
many do you smoke a day?

(Cont'd)

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Appendix A

In 1955, Mrs. Cipollone stopped smoking Chesterfield

(Cont'd)

{Mr. Marvin]: | run about 2% packs a day, Arthur.

(Mr. Godfrey]: 2 packs a day. If he wasn’t so tight,
he’d smoke 3. LAUGHTER. They’re wonderful cigarettes,
in either size, you know, king-size, this size here, or the regular
size, they’re the same tobacco. Go ahead and smok’em and
enjoy’em, they’re wonderful.

5 J.A. 158 (Oct. 1, 1952).

{I have] a client here, the Chesterfield people, Liggett
and Myers are their names. [T]he firm . . . is an honorable
one, a trustworthy one. For years and years and years that
they have been advertising, you never heard them make an
unsubstantiated claim—ever! Certainly, not during the time
that I’ve been with "em. They came out, not so long ago,
with a report by an eminent physician—it’s a good report—|
suppose there are those who wonder about it.

If you believe in me, and over the 23 years I’ve been
in the radio, you know that I have never yet misled you with
advertising. Nobody has been able to buy me enough to do
that. If you believe in me, then you take my work that I know
this—that the Liggett and Myers people don’t make statements
that they can’t substantiate. And when they say that after
this test that they made with the doctor, that after he made
it, he comes up and say, quote—‘It is my opinion that the
ears, nose, throat, and accessory organs of all participating
subjects examined by me, were not adversely affected in the
six-months period by smoking the cigarettes provided.’

And they mean what they say—that specialist said it.
Liggett and Myers have substantiated it. Remember that when

(Cont'd)

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Appendix A

cigarettes and began to smoke L & M filter cigarettes, also made
by Liggett. In response to a question as to why she switched to
the L & M brand, Mrs. Cipollone stated that ‘‘[{w]ell, they were
talking about the filter tip, that it was milder and a miracle it
would keep the stuff inside a trap, whatever.’” When asked why

(Cont'd)
you’re wondering about cigarettes. Smoke Chesterfields—
they’re good.

5 J.A. 161 (Nov. 5, 1952).

[A] medical specialist is making . . . examinations .. .
every two months. Now they’re gone, | think, as far as 8
months. That’s so far, 8 months. What they did was get a
group of people from various walks of life... . And 45%
of this group smoked Chesterfields for an average of over
10 years. After 8 months, the medical specialist reports he
has observed no adverse effects whatever on the noses, the
throat, the sinuses, the ears, or other organs from smoking
Chesterfields.

That’s—that *ems to me to [mean] mildness, real
mildness. You’ve .<en wondering about whether or not
smoking does things to you which you don’t want to do?
Weil, why don’t you smoke Chesterfields. Here’s a guy
watchin’ a lot of people and nothin’ happened to them yet.
We've been smokin ‘em a long time. Of course, we were
always this way.

You can’t judge by us. But they’re good, very fine, and
I never recall seein’ on anybody’s gravestone—He Smoked
Too Much, did you? I never did. So Chesterfield’s for you,
regular or king size.

5 J.A. 171 (Jan. 8, 1953).

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Appendix A

she desired the filter tip, she testified that ‘‘it was the new thing
and I figured, well, go along [,and that] it was better [because
t]he bad stuff would stay in the filter then.’” When asked whether
concern about the ‘‘bad stuff’’ was due to a concern about her
health, she stated ‘‘[nJot really. . . . It was the trend. Everybody
was smoking the filter cigarettes and I changed, too.’’

She also stated that although she could not remember any
specific advertisements, she did ‘‘recall the ads and. . . remember
the tips [and] the messages of a filter, a safer, something to that
effect. . . . That it would filter the nicotine and the tar and the
tobacco[, and t]hat it would be a cleaner and fresher smoke.’’
Mrs. Cipollone also stated that she ‘‘recall[ed] seeing an ad that

said doctors recommend you smoke ... I think it was L &
M’s. .. . [T]hrough advertising, I was led to assume that they
were safe and they wouldn’t harm me... There was lots of

advertising. There was advertising everywhere. There was
advertising in magazines, on billboards, in newspapers.’’

Mr. Cipollone also introduced evidence as to how the L &
M brand was marketed during the years that Mrs. Cipollone
smoked that brand. One series of advertisements that appeared
on television and in magazines at the outset of L & M’s
introduction to the public stated that L & M ‘‘miracle tip’’ filters
were ‘‘just what the doctor ordered!’’; the ‘‘just what the doctor
ordered’’ phrase often appeared in a large bold typescript in
magazine advertisements as ‘‘remov[ing] the heavy particles,
leaving you a Light and Mild smoke.”’

In 1968, Mrs. Cipollone stopped smoking the L & M brand
and started smoking the Virginia Slims brand, manufactured by
Philip Morris. She stated that she switched ‘‘because it was very
glamorous and very attractive ads and it was a nice looking

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Appendix A

cigarette. That persuaded me.’’ In the 1970’s, Mrs. Cipollone
switched to the Parliament brand, also manufactured by Philip
Morris. She testified that this brand was advertised as having a
**recessed’”’ filter and that she thought that this made it healthier.
In 1974, she changed from the Parliament to the True brand,
a cigarette manufactured by Lorillard, Inc. (‘‘Lorillard’’) and
advertised as low tar, upon the advice of her doctor, who had
told her son to stop smoking.

From 1942 until the early 1980’s, Mrs. Cipollone smoked
between one pack and two packs of cigarettes per day. The only
exception to this pattern was that, at the urging of her husband,
Mrs. Cipollone substantially reduced her smoking during her first
pregnancy in the 1940’s. In 1981, Mrs. Cipollone was diagnosed
as having lung cancer, but even though her doctors advised her
to stop smoking, she was unable to do so. Mrs. Cipollone
continued to smoke until June of 1982 when her lung was removed.
Even after that, she smoked occasionally, in secret. She testified
that she was ‘‘addicted’’ to cigarette smoking and that it was
terribly difficult for her to give it up. She stopped smoking in
1983 after her cancer had spread widely and she had become
terminally ill. Mrs. Cipollone died on October 21, 1984.

Evidence was also introduced on the subject of Mrs.
Cipollone’s awareness of the health consequences of smoking
cigarettes. Some of that evidence has already been alluded to:
she switched to the L & M brand in part because she thought
that brand safer than the Chesterfield brand, and she later switched
to the Parliament and True brands out of concern for her health.
In addition, from the beginning of the Cipollones’ marriage in
1947, Mr. Cipollone repeatedly told his wife that she should stop
smoking because it was unladylike and bad for her health. When

reports linking smoking with cancer and heart disease began to

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Appendix A

appear in ‘he media, Mr. Cipollone repeatedly brought them to
his wife’s attention. Other members of the Cipollone family also
told her that cigarette smoking was dangerous to her health and
could cause cancer. After January 1, 1966, every package of
cigarettes purchased by Mrs. Cipollone bore the Congressionally
mandated warning labels. ;

There is also evidence that Mrs. Cipollone feared that her
cigarette smoking would damage her health. When she developed
a bad cough, her concern about the possible effect of smoking
on her health led her, apparently prior to 1966, to make novenas
to Saint Jude asking his intercession on her behalf to prevent her
from developing cancer. There is also evidence, however, that
Mrs. Cipollone disbelieved the reports linking cigarette smoking
to cancer and other health problems. As explained above, there
is evidence that she read the cigarette companies’ advertisements,
understood them as representing that the cigarettes were safe, and
thus, as she put it “‘was led to assume that [the cigarettes that
I purchased] wouldn’t harm me.”’ She stated that she had often
read cigarette company or Tobacco Institute statements, reported
in articles about the health consequences of smoking or reproduced
in advertisements, stating that the link between smoking and
disease has not been proven. She also testified that because she
found it so difficult to stop smoking, she “‘[mjaybe . . . didn’t
want to believe’’ the reports that she heard that smoking caused
cancer or other diseases and that she ‘“‘didn’t believe’’ that her
smoking would cause her to contract lung cancer. In addition,
Mrs. Cipollone stated that she believed that ‘‘[t]obacco companies
wouldn’t do anything that was really going to kill you.”’

IIl. PROCEDURAL HISTORY

On August 1, 1983, Mr. and Mrs. Cipollone filed a complaint

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Appendix A

in the district court for the District of New Jersey, founded on
diversity of citizenship, seeking damages against Liggett, Philip
Morris and Lorillard for the suffering and monetary loses resulting
from Mrs. Cipollone’s lung cancer. The complaint alleged that
the lung cancer resulted from Mrs. Cipollone’s smoking of
Cigarettes manufactured by the named defendants.

On May 31, 1985, following Mrs. Cipollone’s death, and suing
in his capacity as Mrs. Cipollone’s executor and on his own behalf,
Mr. Cipollone filed a third amended complaint, upon which the
case was tried. The third amended complaint included damages
claims against each defendant based on the following theories
of liability:’

1. Strict liability in tort (and negligence) on the theory that
the defendants’ failed to warn adequately (or negligently failed
to warn adequately) of the health effects of smoking (‘‘the failure
to warn claim’’);

2. Strict liability in tort on the theory that the defendants
marketed defectively designed cigarettes rather than alternatively
designed, safer cigarettes (‘‘the design defect claim’’);

3. Strict liability in tort on the theory that the health risks
of the defendants’ cigarettes exceeded their social utility (“‘the
generic risk-utility claim’’);

4. Breach of express warranty regarding the health effects
of smoking (‘‘the express warranty claim’’);

3. The third amended complaint contained 14 counts; we have therefore

summarized the salient points.

18a

Appendix A

5. Fraud and misrepresentation in the advertising and
promotion of cigarettes from 1940 to 1983 (‘‘the fraudulent
misrepresentation claim’’);

6. Conspiracy to defraud the public regarding the health
effects of smoking (‘‘the conspiracy to defraud claim’’);

The defendants moved for summary judgment on the ground
that the plaintiff’s claims were preempted by the Federal Cigarette
Labeling and Advertising Act, Pub.L. No. 89-92, 79 Stat. 282
(1965) (codified as amended at 15 U.S.C. §§ 1331-1340 (1982 &
Supp. II 1984)), a statute enacted in 1965 in the wake of the
Surgeon General’s historic report on the hazards of cigarette
smoking. The Act required health warnings, as set forth in the
statute and subsequently strengthened by statutory amendments,
to be placed on cigarette packages. The effective date of the statute
was January |, 1966. See Pub.L. No. 89-92, § 11, 79 Stat. at 284.

The district court held that the statute did not have preemptive
effect, but certified the preemption question for interlocutory
review by this court pursuant to 28 U.S.C. § 1292(b) (1982). We
assumed jurisdiction over the appeal and concluded that the Act
impliedly preempted some of the plaintiff’s claims, holding as
follows:

[T]he 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. . . .
[Where the success of a state law damage claim
necessarily depends on the assertion that a party
bore the duty to provide a warning to consumers

19a

Appendix A

in addition to the warning Congress has required
on cigarette packages, such claims are preempted
as conflicting with the Act.

789 F.2d at 187 (footnote omitted). We remanded the case to
the district court so that it might determine which claims were
preempted.

The district court interpreted our decision as preempting the
plaintiff’s failure to warn, express warranty, fraudulent
misrepresentation, and conspiracy to defraud claims to the extent
that they sought to challenge the defendants’ advertising,
promotional and public relations activities after January |, 1966.
See 649 F.Supp. 664, 669, 673-75 (D.N.J.1986). Because Mrs.
Cipollone did not smoke cigarettes manufactured by Philip Morris
or Lorillard before January 1, 1966, the district court granted
judgment on the pleadings on the failure to warn and express
warranty claims as to those defendants. However, the district court
held that the plaintiff’s design defect and risk-utility claims were
not preempted. See id. at 669-72.

In another pretrial ruling, the district court struck the
plaintiff’s generic risk-utility claim on the ground that it was barred
through the retroactive application of the New Jersey Products
Liability Act, 1987 N.J.Sess.Law Serv. ch. 197, 188-93 (West)
(codified at N.J.S.A. §§ 2A:58C-1 to -7 (West 1987)). See
Dist.Ct.Op. 1-6 (Oct. 27, 1987).

After five years of discovery and numerous pretrial motions,
the case proceeded to trial! on plaintiff’s failure to warn, design
defect, express warranty, fraudulent misrepresentation, and
conspiracy claims, and on defendants’ comparative fault and

‘ statute of limitations defenses. On April 21, !988, at the close

20a

Appendix A

of plaintiff’s proofs, the district court struck the design defect
claim on the ground that plaintiff had failed to present sufficient
evidence that defendants’ failure to market an alternatively
designed cigarette when it became feasible to do so in the mid-1970s
was a proximate cause of Mrs. Cipollone’s illness and death. See
683 F.Supp. 1487, 1493-95 (D.N.J.1988). This ruling has not been
challenged on appeal.

As a result of the district court’s rulings, jury deliberations
were limited to the fraudulent misrepresentation claim against each
defendant, the conspiracy to defraud claim against each defendant,
the failure to warn claim agai.ist Liggett, and the express warranty
claim against Liggett. The district court also took the defendants’
statute of limitations defense from the jury by granting partial
summary judgment for the plaintiff on this issue. See Dist.Ct.Op.
(Dec. 21, 1987).

After a four-month trial, the jury deliberated for four and
one half days and returned its verdict in the form of answers to
special interrogatories. See Fed.R.Civ.P. 49a). The interrogatories
and the jury’s answers are as follows:

1. Has plaintiff proven all of the elements necessary to
establish fraudulent misrepresentation or concealment by
defendant Liggett, prior to 1966, of material facts concerning
significant health risks associated with cigarette smoking?

Yes
No X

2. Has plaintiff proven all of the elements necessary to
establish fraudulent misrepresentation by defendant Philip Morris,
prior to 1966, of material facts concerning significant health risks

2la

Appendix A
associated with cigarette smoking?

Yes
No X

3. Has plaintiff proven all of the elements necessary to
establish fraudulent misrepresentation by defendant Lorillard,
prior to 1966, of material facts concerning significant health risks
associated with cigarette smoking?

Yes
No X

4. Was there a conspiracy prior io 1966 to fraudulently
misrepresent and/or conceal material facts concerning significant
health risks associated with cigarette smoking?

Yes
No X

5. If you answered ‘‘yes’’ to question #4, were any of the
defendants members of that conspiracy?

Liggett Group, Inc. Yes No
Philip Morris Incorporated Yes No
Lorillard, Inc. Yes No

6. If you answered ‘‘yes’’ to question number 5, has plaintiff
proven all of the elements necessary to establish fraudulent
misrepresentation or concealment, prior to 1966, by any member

' of the conspiracy?

Appendix A

Yes
No

7. Should Liggett, prior to 1966, have warned consumers
regarding health risks of smoking?

Yes X
No

8. If you answered ‘‘yes’’ to question 7, was that failure to
warn prior to 1966 a proximate cause of all or some of Mrs.
Cipollone’s smoking?

Yes X
No

9. If you answered ‘‘yes’’ to question 8, was such smoking
a proximate cause of Mrs. Cipollone’s lung cancer and death?

Yes X
No

10. If you answered ‘‘yes’’ to question 9, did Mrs. Cipollone
voluntarily and unreasonably encounter a known danger by
smoking cigarettes?

Yes X
No

11. If you answered ‘‘yes’’ to quesiion 10, was this conduct
by Mrs. Cipollone a proximate cause of her lung cancer and death?

Yes X
No

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Appendix A

12. If you answered ‘‘yes’’ to question 11, what is the
percentage of responsibility for Mrs. Cipollone’s injuries
attributable to each of the following parties:

Mrs. Cipollone 80%
Liggett Group, Inc. 20%

(NOTE: The sum of these precentages must equal 100%].

13. Did Liggett make express warranties to consumers
regarding the health aspects of its cigarettes?

Yes X
No

14. If you answered ‘‘yes’’ to question 13, did any Liggett
products used by Mrs. Cipollone breach that warranty?

Yes X
No

15. If you answered ‘yes’? to question 14, was Mrs.
Cipollone’s use of these products a proximate cause of her lung

cancer and death?

Yes X
No

16. If you answered ‘‘yes’’ to any of the following questions:
1, 2, 3, 6, 9 or 15, what damages did Mrs. Cipollone sustain?

$ none

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Appendix A

17. If you answered ‘‘yes’’ to any of the following questions:
1, 2, 3, 6, 9, or 15, what damages did Mr. Cipollone sustain?

$400 ,000
18. If you answered ‘‘yes’’ to any of the following questions:

1, 2, 3, 6, or 9, is plaintiff entitled to punitive damages against
one or more of the defendants?

Yes
No X

19. If you answered ‘‘yes’’ to question 18, to what amount
is plaintiff entitled?

$

20. If you awarded a sum under question 19, what amount
of this total is attributable to each of the following parties?

Liggett Group, Inc. _ S$
Philip Mo Incorporated 5S
Lorillard, Inc. $

[NOTE: these amounts should add up to the total awarded
under question 19.]

As the answers to the interrogatories indicate, the jury rejected
the fraudulent misrepresentation claims and the conspiracy to
defraud claims against all defendants. As to the failure to warn
claim against Liggett, the jury concluded that Liggett breached
its duty to warn of the health hazards of smoking before 1966,
that this breach was a proximate cause of Mrs. Cipollone’s

25a

Appendix A

smoking, and that Mrs. Cipollone’s smoking was a proximate
cause of her death. No damages were awarded on the failure to
warn claim, however, because New Jersey’s comparative fault law
bars a plaintiff from recovering damages if she is more than 50%
at fault for the injury, and the jury found that Mrs. Cipollone
“‘voluntarily and unreasonably encounter[ed] a known danger by
smoking cigarettes’’ and in so doing bore 80% of the responsibility
for her injuries. As to the express warranty claim, the jury found
that Liggett had breached an express warranty made to consumers.
The jury awarded Mr. Cipollone $400,000 to compensate him
for damages that he sustained from Liggett’s breach of warranty;
the jury awarded Mrs. Cipollone’s estate no damages on the breach
of warranty claim.

On June 29, 1988, the plaintiff moved for a new trial on
the limited issue of Mrs. Cipollone’s damages and to amend the
judgment to include prejudgment interest pursuant to New Jersey
Rule 4:42-11(b). On July 1, 1988, Liggett moved for judgment
n.o.v. and, in the alternative, for a new trial on account of alleged
error in the district court’s jury instructions on express warranty
and its special interrogatories. On August 24, 1988, the district
court denied all of the post-trial motions. See 693 F.Supp. 208
(D.N.J.1988). The defendants and Mr. Cipollone filed timely
notices of appeal.

In its appeal, Liggett contends that the district court made
the following prejudicial errors in its jury instructions: (1) it failed
to instruct the jury that Mrs. Cipollone’s nonreliance on the Liggett
advertisements would preclude her recovery on the express
warranty claim; (2) it failed to the instruct the jury that a buyer’s
actual knowledge of a warranty-breaching condition bars recovery
on an express warranty claim under the doctrine of assumption

' of risk or contributory fault; and (3) it erroneously instructed

26a

Appendix A

the jury in several respects on the failure to warn claim, most
significantly by failing to impose a but-for causation requirement.

Liggett also contends that the district court erred in failing
to grant its motion for judgment n.o.v. on the express warranty
claim on the grounds that (1) the jury’s finding that Mrs. Cipollone
‘*voluntarily and unreasonably encounter[ed] a known danger by
smoking cigarettes’’ established lack of proximate causation as
a matter of law; (2) the plaintiff offered no evidence that Mrs.
Cipollone’s lung cancer was proximately caused by any claimed
breach of express warranty; and (3) the evidence cannot support
a finding that any Liggett advertisement made a warranty covering
health effects in the future from forty years of smoking. Liggett
also contends that the district court erred by granting plaintiff
partial summary judgment on defendant’s affirmative defenses
based on the statute of limitations.

In his appeal, Mr. Cipollone contends that (1) the district
court’s jury charge and interrogatories on the failure to warn issue
erroneously and unfairly allowed the jury to consider Mrs.
Cipollone’s post-1965 smoking in determining her percentage of
comparative fault; (2) the district court erred in applying the New
Jersey Products Liability Act to strike the risk-utility claim; (3)
the district court’s refusal to award prejudgment interest
contravenes New Jersey Court Rule 4:42-11(b); and (4) the district
court erred in applying our preemption decision to the intentional
tort claims (i.e. the fraudulent misrepresentation and conspiracy
to defraud claims). Mr. Cipollone also announced that if the
verdict in his favor on the breach of express warranty claim and
his contention that he is entitled to prejudgment interest were
upheld, he would not press his other contentions.

In its protective cross-appeal, Philip Morris contends that

27a

Appendix A

Mr. Cipollone’s intentional tort claims are preempted, and that,
in any event, these claims are mooted by the jury’s findings. In
its protective cross-appeal, Lorillard asserts that, in view of Mr.
Cipollone’s concession that he would be satisfied to accept the
breach of express warranty verdict plus prejudgment interest, our
assumption of jurisdiction over Mr. Cipollone’s appeal relative
to the claims against it and Philip Morris would violate the ‘‘case
or controversy’’ requirement of Article III of the United States
Constitution.‘ Lorillard also contends that the intentional tort
claims are preempted by the Labeling Act.

4. We find this contention to be without even colorable merit and dispose
of it summarily. Unlike the plaintiffs in Granfied v. Catholic University of
America, 530 F.2d 1035 (D.C.Cir.), cert. denied, 429 U.S. 821, 97 S.Ct. 68,
50 L.Ed.2d 81 (1976), we think that there is no question regarding Mr. Cipollone’s
‘““wholehearted contrariety,’’ 530 F.2d at 1045, to the defendants’ position.
Neither do we find applicable the mootness concerns motivating the decision
in In re Coordinated Pretrial Proceedings in Petroleum Products, Antitrust
Litigation, 830 F.2d 198 (Emerg.Ct.App.), cert. denied, 484 U.S.969, 108 S.Ct.
466, 98 L.Ed.2d 405 (1987). In Petroleum Products, a pending decision before
the Ninth Circuit—over which the Emergency Court of Appeals had no
control—might have mooted, as a matter of law, the proceedings before, or
decision of, that court. See id. at 202-04. Here, by contrast, we address the
intentional tort claims simultaneously with our rejection of Mr. Cipollone’s
position on the express warranty claim. Thus, we have no reason to believe
that Mr. Cipollone’s position lacks, or will lack, ‘‘wholehearted contrariety”’
to Lorillard’s on the intentional tort claims. Moreover, the fact that plaintiff
is willing to settle for less than he might get does not mean that his position
is not contrary to the defendants. For all of these reasons, we have no problem

* finding a case or controversy under Article III.

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Appendix A

1V. SHOULD MRS. CIPOLLONE’S POST-1965 CONDUCT
HAVE BEEN CONSIDERED IN DECIDING HER
COMPARATIVE FAULT ON THE FAILURE TO WARN
CLAIM?’ \

The New Jersey Comparative Fault Act, N.J.S.A. 2A:15-5.1,
States that:

Contributory negligence shall not bar recovery in
an action by any person .. . to recover damages
for negligence resulting in death or injury to person
or property, if such negligence was not greater than
the negligence of the person against whom recovery
is sought .. . . Any damages sustained shall be
diminished by the percentage sustained of
negligence attributable to the person recovering.

The Comparative Fault Act can apply to strict liability actions
if the plaintiff’s conduct can be found to constitute contributory
negligence. See Suter v. San Angelo Foundry & Machine Co.,
81 N.J. 150, 164, 406 A.2d 140, 147 (1979). Thus, if Mrs. Cipollone
were more that 50% responsible for her own smoking, as the jury
found her to be, plaintiff would be barred from recovering under
his failure to warn claim. As we have noted, the interplay between
New Jersey’s comparative fault scheme and the preemptive effect
of the Labeling Act produced an anomalous situation at trial.
The district court did not distinguish between Mrs. Cipollone’s
pre-1966 and post-1965 conduct when instructing the jury to
consider the degree to which she was at fault pursuant to New

5. Although Mr. Cipollone was prepared to forego pursuit of this claim
in the event that his breach of express warranty verdict was upheld, that has
not happened. See infra Part VI.

29a

Appendix A
Jersey comparative fault law.*

The wording of special verdict interrogatories 10, 11, and
12 was to the same effect,’ permitting the jury to consider Mrs.

6. The district court instructed the jury as follows:

Defendant, Liggett, has the burden to prove by a
preponderance of the believable evidence that Rose Cipollone
had a complete understanding and apprec.ation of the nature
and extent of the health risks of cigarette smoking, and further
that her use of cigarettes was voluntary and unreasonable. _. .

in determining whether Rose Cipollone should be held
responsible for her injuries, you must consider the cigarettes
which Rose Cipollone smoked and the health risks which they
have alleged to have. If you have determined that the use
of those cigarettes involved any significant health risk, you
must then decide whether Rose Cipollone had knowledge and
appreciation of those risks and, having such knowledge and
appreciation, voluntarily and unreasonably proceeded to
encounter those risks by smoking cigarettes and by failing
to quit smoking. . .

If you decide that by continuing to smoke Rose Cipollone
voluntarily and unreasonably encountered a known risk, you
must then decide whether that conduct was a proximate cause
of Rose Cipollone’s injuries. However, if you find that she
did not do so voluntarily or acted reasonably then defendants
have not met their burden as to this defense.

2 J.A. 108-10.

7. Imterrogatory 10 asked whether ‘“‘Mrs. Cipollone voluntarily and

unreasonably encounter(ed] a known danger by smoking cigarettes.’’
Interrogatory |! aked whether ‘‘this conduct by Mrs. Cipollone [was] a proximate
cause of her lung cancer and death."’ Interrogatory 12 asked the jury to apportion

* responsibility between Mrs. Cipollone and Liggett based upon its answers to

the preceding questions 10 and |1. See supra at 554.

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Appendix A

Cipollone’s fault to the extent it believed that she acted
unreasonably in continuing to smoke after 1965. However, the
court instructed the jury not to consider Liggett’s post-1965
conduct. Mr. Cipollone contends that the jury instructions were
inconsistent with Ostrowski v. Azzara, 111 N.J. 429, 545 A.2d
148 (1988), in which the New Jersey Supreme Court held that
once a legal wrong has occurred, plaintiff’s conduct after that
time bears only on mitigation of damages (even if some of
plaintiff’s injuries have not yet manifested themselves). Such
conduct does not, however, bear on whether plaintiff’s
comparative fault falls above or below the 50% threshold.

Mr. Cipollone also contends that the district court’s jury
instructions were asymmetrical and unfair because they permitted
the jury to use Mrs. Cipollone’s post-1965 conduct to bar her
claim even though the post-1965 marketing practices of the
defendant were free from scrutiny. He points out that the jury
was required to bar Mrs. Cipollone’s failure to warn claim in
its entirety if it believed that she was 80% responsible for her
injury in light o’ her smoking from 1942 to 1983 even if it believed
that Liggett’s failure to warn was, for example, 67% responsible
for Mrs. Cipollone’s smoking from 1942 to 1966.

Because the facts and reasoning of Ostrowski are so important
to our resolution of the issue of Mrs. Cipollone’s post-1965
conduct, we recount them in some detail. Mrs. Ostrowski was
a patient whose diabetes, poor diet, and cigarette smoking caused
her to have severe blood circulation problems. She went to her
podiatrist to complain of soreness in her left toe. After several
visits, and after considering her representation (which proved to
be false) that she had seen her internist regarding her diet and
insulin dosage, the podiatrist recommended that the toe nail on
the sore toe be removed to allow drainage. After the surgery,

3la

Appendix A

the plaintiff continued to smoke, despite advice that she should
stop (because smoking greatly increases the blood circulation
problems caused by diabetes). Several weeks after the surgery,
it became clear that the blood flow to the toe was insufficient
to heal the toe; the plaintiff was left with a non-healing, pre-
gangrenous wound. Mrs. Ostrowski had to undergo three different
by-pass surgeries to increase blood circulation to the toe. The
last operation involved a vein transplant from one leg to another.

Mrs. Ostrowski sued the podiatrist, contending that the
podiatrist was negligent in her initial decision to remove the toe
nail, that the toe nail should not have been removed, and that
her subsequent problems with her leg were proximately caused
by the podiatrist’s negligence. The podiatrist contended that the
plaintiff was at fault in both her pre-surgery and post-surgery
conduct and that this conduct contributed to her injuries. The
jury found that the podiatrist had acted negligently in removing
the plaintiff’s toenail but found that plaintiff’s fault, based on
both her pre- and post-surgery conduct, exceeded that of the
podiatrist (51% to 49%). The plaintiff’s recovery was therefore
barred by the trial court under New Jersey comparative fault law
because her fault exceeded 50%.

The Appellate Division of the Superior Court affirmed, but
the Supreme Court of New Jersey reversed. Because the podiatrist’s
negligence was in performing the toe surgery, the Court
conceptualized the plaintiff's behavior after treatment had begun
but before the toe surgery as relevant to comparative fault.
However, the Court concluded that her post-surgery behavior was
relevant only to avoidable consequences.* On remand, the jury

8. Avoidable consequences is the name given to the damage that plaintiff
causes to herself by breaching her duty to mitigate damages.

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Appendix A

was instructed to arrive at two percentage figures regarding
plaintiff's conduct: first, the degree to which her conduct after
treatment had begun was responsible for the toe surgery, and
second, the degree to which her conduct after treatment had
begun—considering her conduct both before and after the toe
surgery—was responsible for her ultimate injury, the bypass
surgery. If the first percentage (the plaintiff’s fault for the toe
surgery) was less than the physician’s fault for the toe surgery,
the plaintiff would recover. Her recovery, however, would be offset
by the second percentage times the damages suffered (which reflects
plaintiff’s total responsibility for her ultimate injury).° If the first
percentage was greater than the physician’s fault for the surgery,
plaintiff's recovery would be barred by the Comparative Fault Act.

The Court distinguished between the plaintiff’s conduct before
and after the toe surgery on the ground that ‘‘[a]voidable
consequences . . . come[ ] into action when the injured party’s
carelessness occurs after the defendant’s legal wrong has been
committed”’ but “‘[cjontributory negligence . . . comes into action
when the injured party’s carelessness occurs before defendant’s
wrong has been committed or concurrently with it.’’ 111 N.J. at

9. An example may help to clarify. Suppose the jury finds that the plaintiff
suffered $100,000 in damages from the bypass surgery. Suppose also the jury
finds that, after plaintiff had begun treatment with the podiatrist, her conduct
before the toe surgery was 10% responsible for her ultimate injury (the first
percentage), but that her conduct before and after the toe surgery combined
were 80% responsible (the second percentage). Thus the podiatrist’s conduct
(before the toe surgery) must have been 20% responsible for the ultimate injury.
On these facts, even though the plaintiff's total conduct was more responsibie
for her injury than the podiatrist’s (80% versus 20%), she would recover, because
her conduct before the toe surgery was less responsible for her ultimate injury
than the podiatrist’s conduct during that time (10% versus 20%). However,
her ultimate recovery would be only $20,000 (because the podiatrist was only
20% responsible for the ultimate injury).

33a

Appendix A

438, 545 A.2d at 152.'° In explaining why it thought that the jury
should arrive at two percentages to measure plaintiff’s fault, the
Court reasoned that ‘‘it would be the bitterest irony if the rule
of comparative negligence, designed to ameliorate the harshness
of contributory negligence, should serve to shut out any recovery
to one who would otherwise have recovered under the law of
contributory negligence [because her contributory conduct was
relevant to avoidable consequences rather than contributory
negligence].’’ Jd. at 441-42, 545 A.2d at 154.

The court held that the plaintiff’s conduct before treatment
had begun was irrelevant to both the comparative fault and
avoidable consequence injuries, under the doctrine that the
“* ‘defendant “‘must take the plaintiff as he finds him.’’ ’ ’’ Jd.
at 438, 545 A.2d at 152 (citation omitted). Nevertheless, the Court
made clear that the plaintiff’s conduct before treatment had begun
was not totally irrelevant to the case: that conduct was relevant
to determining what damages were a proximate result of the
defendant’s negligence, because, as we have noted, some of the
damage to the plaintiff’s leg could have been caused not by the
defendant’s negligence but by the plaintiff’s pre-treatment
condition. See id. at 448, 545 A.2d at 157.''

10. The Court noted, however, that this timeline approach to dividing the
plaintiff's conduct into that relevant to contributory fault and that relevant
to avoidable consequences will not work in every case. See 111 N.J. at 438
n. 2, 545 A.2d at 152 n. 2 (citing Waterson v. General Motors Corp., 111 N.J.
238, 544 A.2d 357 (1988), which found that failure to use a seat belt, although
not a cause of the automobile accident that resulted in injury, was a cause of
avoidable consequences).

11. The Court also noted that ‘‘it is often difficult to determine how much

of the plainuff’s injury is due to the preexisting condition and how much the

(Cont'd)

34a
Appendix A

We agree with Mr. Cipollone’s contention that it is
appropriate to conceptualize our preemption decision as imposing
an automatic cut-off date for imposition of liability. We further
agree with Mr. Cipollone that, in light of the preemption decision,
the doctrines set out in Ostrowski should have been applied in
this case. As Liggett emphasizes throughout its brief, its post-1965
marketing oractices could not form the basis for any tort or
warranty claim as a matter of law; hence, Liggett’s arguably
tortious conduct was completed as of January 1, 1966. Therefore,
Mrs. Cipollone’s post-1965 conduct should have been considered
as relevant to avoidable consequences, possibly reducing her
damages but not foreclosing liability.

We reject Liggett’s contention that ‘application of plaintiff’s
interpretation of Ostrowski would require this court to hold that
the case overruled the New Jersey Supreme Court’s [product
liability] decisions in Suter v. San Angelo Foundry & Machine
Co., 81 N.J. 150, 406 A.2d 140 (1979); Maiorino v. Weco Products
Co., 45 N.J. 570, 214 A.2d 18 (1965) and Cintrone v. Hertz Truck
Leasing, 45 N.J. 434, 212 A.2d 769 (1965).”’ Liggett’s Br. at 43
n. 50. Liggett’s argument apparently is that the instant case is
no different from the typical toxic tort case in which there may
be a significant interval between the time of defendant’s wrongful
act (the sale of or exposure to the defective product) and the time
plaintiff’s injury from use of the product manifests itself.
Therefore, according to Liggett, all of the plaintiff’s pre-injury
conduct should bear on comparative fault. Our preemption
decision renders this analogy inapposite, however. In the more

(Cont'd)

aggravation is caused by the defendant’’ and that the defendant should bear
the burden of separating the two so that any damage not separable is borne
by the defendant. 111 N.J. at 439, 545 A.2d at 152.

35a

Appendix A

typical case, the jury considers all of the defendant’s pre-injury
conduct also. Because that cannot happen here, we find it unfair
and impermissible for the jury to consider Mrs. Cipollone’s
comparative fault during the period (1966-1981) for which Liggett’s
conduct is unjudgable.

We have no way of knowing how much of the 80% fault
that the jury ascribed to Mrs. Cipollone is attributable to her
pre-1966 smoking and how much to her post-1965 smoking. The
judgment entered on the jury verdict in Liggett’s favor on the
failure to warn claim must therefore be reversed (the error is
obviously not harmless) and the case remanded for new trial on
that issue.

We do not dispute Liggett’s contention that we could analyze
the case differently. However, we believe that the artificial cut-
off so skews the normal balance that only the Ostrowski avoidable
consequences analysis can mitigate the unfairness and disruption
to state tort law wrought by our preemption decision. We
acknowledge that the retrial must proceed, to some extent, with
an artificial distinction between conduct before and after January
1, 1966, and that the expert witnesses will face a difficult task
on allocating the consequence of pre-1966 and post-1965 conduct.
However, that result is forced upon us by the circumstances. This
will not be the first time, nor the last, that a legal construct will
have constrained a trial. We are confident that the extremel: able
lawyers and the distinguished trial judge in whose hands this case
rests will do justice.

On retrial, the jury should be asked whether Liggett’s pre-1966

36a

Appendix A

failure to warn caused Mrs. Cipollone to smoke cigarettes.'? The
jury must consider the relative degrees to which Mrs. Cipollone
and Liggett were at fault for Mrs. Cipollone’s pre-1966 smoking.
If Mrs. Cipollone is thought to have been more than 50% at fault
than Liggett for her pre-1966 smoking, then the failure to warn
claim ends there, and Mrs. Cipollone’s recovery is barred on that
claim. If, however, the jury finds that Mrs. Cipollone’s pre-1966
fault for her smoking is 50% or less (and that that smoking was
a proximate cause of her cancer), the jury must then consider
the issue of avoidable consequences, considering Mrs. Cipollone’s
conduct both before and after January 1, 1966. The jury may
not evaluate the propriety of the defendant’s cigarette marketing
practices after 1965,because the defendants have been absolved
from liability for otherwise tortious and unfair marketing practices
by the Labeling Act.

Vv. DID THE DISTRICT COURT OTHERWISE ERR IN
INSTRUCTING THE JURY ON THE FAILURE TO
WARN CLAIM?

Liggett contests several facets of the district court’s jury charge
on the failure to warn claim. Had the verdict on the failure to
warn claim not been set aside on the grounds set forth in Part
IV, we would have had to address these arguments in connection
with Liggett’s contention that the jury’s answers to interrogatories
7, 8 and 9, in which it found that Liggett’s failure to warn was
a proximate cause of Mrs. Cipollone’s injuries, should be set aside.
We nonetheless discuss most of these issues because they are

12. As is indicated by the jury’s answer to special interrogatory number
7, Liggett owed a duty to warn consumers of the health effects of smoking
prior to 1966. This issue should not be re-tried; the existence of this duty has
been properly established. See infra at 560.

37a

Appendix A
important for a proper retrial.

First, Liggett contends that it was under no duty to warn
of the dangers of cigarettes because their dangers were commonly
understood. We find that there is no basis for so holding as a
matter of law, and that as a matter of fact the jury found
otherwise.'?

Liggett next argues that (1) the district court erred in
instructing the jury on Liggett’s duty to disclose the results of
its scientific tests and (2) the district court’s use of the word
“‘obviousness’’ confused the jury. We find both of these
contentions to be without merit. Under New Jersey law, Liggett
had a duty to conduct research, and to disclose significant dangers
discovered as a result of that restarch. See Feldman v. Lederle
Laboratories, 97 N.J. 429, 453-55, 479 A.2d 374, 386-88 (1984).
Moreover, there was nothing confusing about the district court’s
use of the word ‘‘obvious.’’ The jury had no reason to think that
it might be deciding an ‘‘open and obvious’’ danger case, see,
e.g., Shaffer v. AMF, Inc., 842 F.2d 893 (6th Cir.1988), and
therefore it could not have been prejudically confused. '*

13. The district court’s charge instructed the jury to:

consider the extent to which ordinary consumers prior to 1966
were aware that cigarette smoking posed sign.. -ant health
risks. . . The obviousness of a product’s danger—as measured
by such general consumer knowirdge, not by a particular
plaintiff's knowledge—is one element to be considered in
order for you to determine whether u duty to warn exists.

2 J.A. 105-06.

14. Liggett also contends that the factors listed by the district court as

"relevant to determining whether a duty to warn exists were superfluous and

prejudicial. We find this argument to be frivolous.

38a

Appendix A

Liggett’s more substantial contention has to do with the
district court’s instruction on causation, which defines proximate
cause'’ as follows:

a cause which necessarily set the other causes in
motion and was a substantial contributing factor
in bringing about the injury. Proximate cause is
defined as a cause which naturally and probably
led to and might have been expected to produce
the result complained of.

2 J.A. 91-92. The district court also instructed the jury that ‘‘there
may be two or more concurrent and directly cooperative and
efficient proximate causes of an injury’’ if the defendant was ‘‘a
substantial contributing factor’’ in the plaintiff’s injuries. 2 J.A.
93.

It is not exactly clear what fault Liggett finds with this
instruction. Liggett claims that: ‘‘Plaintiff was required to prove
that ‘but for’ Liggett’s claimed failure to warn Mrs. Cipollone
would not have been injured—that had Liggett provided a warning
prior to 1966 Mrs. Cipollone would have quit smoking or never
started smoking, and by doing so, Mrs. Cipollone would have
avoided lung cancer in 1981.’’ Liggett Br. at 50. There are three
possible interpretations of Liggett’s objection.

First, Liggett may be arguing that, even if plaiggiff proves
by a preponderance of the evidence that the totality of Liggett’s

15. As the district court carefully instructed, this case involves two distinct
causal inquiries: first, whether Liggett’s violation of legal norms caused Mrs.
Cipollone to smoke, and second, whether the cigarettes that Mrs. Cipollone
smoked as a result of Liggett’s violations proximately caused her cancer.

39a

Appendix A

violation of legal norms—its failure to warn and breach of
warranty—was a ‘‘but for’’ cause of Mrs. Cipollone’s lung cancer,
the jury could not find for the plaintiff with respect to any
individual Liggett violation unless the plaintiff demonstrated by
a preponderance of the evidence that that individual violation
caused Mrs. Cipollone’s lung cancer. This bifurcation of Mr.
Cipollone’s lawsuit into two independent claims might allow
Liggett to escape liability for the totality of its wrongful conduct.
We find this argument untenable.

As a substantive matter, Liggett is liable if its behavior
proximately caused Mrs. Cippolone’s cancer. For pleading
purposes, Mr. Cipollone divided Liggett’s conduct up into different
pre-established legal categories, i.e. a tort-based failure to warn
claim and a contract-based express warranty claim. Although the
elements of proof necessary to prove liability under these two
legal theories differ, the procedural pleading and proof
requirements do not transform Mr. Cipollone’s allegations into
two completely different lawsuits. Thus, Mr. Cipollone does not
have to prove that each legal violation proximately caused his
wife’s cancer. He need only prove that the totality of Liggett’s
wrongful behavior, which as doctrinal matter is divided into a
tort and contract claim, proximately caused her cancer.

Second, Liggett may be arguing that Mrs. Cipollone’s conduct
would have caused her cancer no matter what Liggett did, and
that therefore Liggett’s conduct cannot be considered the cause
of Mrs. Cipollone’s injury. This argument is plainly inconsistent
with the established jurisprudence of concurrent causation. The
**substantial factor’’ test has traditionally been used in concurrent
Cause cases, i.e. cases in which there are two or more causes each

40a

Appendix A

of which is sufficient to cause the injury.'* See Keeton et al.,
Prosser and Keeton on The Law of Torts 266-68 (Sth ed. 1984).
Our preemption decision makes this case quite comparable to a
concurrent cause situation. Liggett’s pre-1966 behavior might have
been enough, by itself, to cause Mrs. Cipollone’s cancer, and its
post-1965 behavior might also have been enough to cause the
cancer. Thus, just as it is unfair to let one tortfeasor completely
escape liability for his fire merely because another tortfeasor caused
another fire, so it is unfair to let Liggett completely escape liability
for its pre-1966 behavior merely because its post-1965 behavior
(or that of its codefendants), which was immunized from scrutiny
at the trial, might also have caused enough damage, by itself,
to kill her.

Third, Liggett may be arguing that Mr. Cipollone had to
prove, to a greater certainty than the district court’s instruction
required, that Liggett’s failure to warn caused her injuries. Under
this theory, the fact that the defendant’s conduct might have been
a substantial factor in causing Mrs. Cipollone’s cancer would not
be enough; rather, Mr. Cipollone would have had to prove, by
a preponderance of the evidence, that if Liggett had not breached
its warranty and if it had warned consumers of the dangers of
smoking, Mrs. Cipollone would not have contracted cancer. In
other words, Liggett argues that plaintiff had to prove that ‘‘but

16. For example, two fires merge and the combined fire destroys the
plaintiff's property, although either fire would have done so alone. See Anderson
v. Minneapolis, St. Paul & Sault Ste. Marie Ry., 146 Minn. 430, 179 N.W.
45 (192u). In such a case, one has to assign responsibility to either fire or no
liability would be assigned because each defendant could prove, individuaily,
that plaintiff's property would have been destroyed even if he had acted non-
tortiously. Thus, liability is assigned even though each defendant’s conduct could
be seen as irrelevant to the ultimate outcome.

4la

Appendix A

for’’ Liggett’s conduct, the injury would not have occurred.'’ We
find this argument to be inconsistent with New Jersey law.

Liggett cites Campos v. Firestone Tire and Rubber Co., 98
N.J. 198, 485 A.2d 305 (1984), which it claims rejected the
substantial factor test and instead require a ‘‘but for’’ test in failure
to warn situations. In Campos, the New Jersey Supreme Court

17. Some decisions and commentators have used statistics to elaborate on
the meaning of ‘‘but for” causation, see, e.g., In re Agent Orange Prod. Liab.
Litig., 597 F.Supp. 740, 833-42 (E.D.N.Y. 1984), Orloff, Theories of Cancer
and Rules of Causation, 27 Jurimetrics 255 (Spring 1987). This approach defines
“but for’’ causation as at least a 50% chance that the defendant’s conduct
caused the injury in question. It is not clear to us that this is the instruction
that Liggett is requesting. Nor is it clear to us that this is the only way to define
““but for’’ causation. The leading hornbook on Torts states that “‘(the] question
of [causation in] ‘fact’ is one upon which all the learning, literature and lore
of the law are largely lost. It is a matter upon which lay opinion is quite as
competent as that of the most experienced court. For that reason, in the ordinary
case, it is peculiarly a question for the jury.’’ Keeton, et al., Prosser and Keeton
on The Law of Torts 264-65 (Sth ed. 1984). By seeking to define causation
more numerically (i.e., at least 50% probability), the statistics-oriented
commentators may be advocating a substantive change that New Jersey would
not endorse. We are not convinced that when a jury determines that ‘‘but for’’
a defendant’s conduct, the injury would not have occurred, it is determining
that the chances of that injury being the result of defendant’s conduct are 50%
or greater. Traditionally, jury instructions have been in words, not numbers.
Prosser and Keeton seems to suggest that a jury’s determination of causation
defies numerical analysis, and New Jersey may want to keep it that way. Thus,
with some trepidation, but with considerable support, we offer the following
discussion of causation without an airtight definition of what ‘‘but for’’ causation
is. For purposes of the discussion, it is sufficient that the reader recognize that
a ‘‘but for’’ test requires more direct linkage between defendant's conduct and
the injury than does the “‘substantial factor’’ instruction given by the district
court. See also Calabresi, Concerning Cause and the Law of Torts: An Essay

’ for Harry Kalven, Jr., 43 U.Chi.L.Rev. 69, 84-91 (1975).

42a

Appendix A

found that the plaintiff had the burden of proving that a proper
warning would have prevented the injury caused by a tire assembly
explosion. The plaintiff was arguably aware of the need to protect
himself by keeping the tire in a safety cage, but he reached into
the cage and was injured when the assembly exploded. The court
quoted with approval from an article by Dean Keeton:

If the basis for recovery under strict liability is
inadequacy of warnings or instruction about
dangers, then plaintiff would be required to show
that an adequate warning or instruction would have
prevented the harm.'*

However, the court in Campos did not reverse the jury’s
verdict for the plaintiff. Instead, it remanded noting that ‘‘there
may be some question whether plaintiff sustained his burden of
proving causation, see Brown v. United States Stove Co., [98 N.J.
155, 484 A.2d 1234 (1984)].’’ Campos, 98 N.J. at 211, 485 A.2d
at 312. Brown seems to endorse a substantial factor test: ‘‘a
tortfeasor will be held answerable if its ‘negligent conduct was
a substantial factor in bringing about the injuries.’ ’’ Brown, 98
N.J. at 171, 484 A.2d at 1243 (citations omitted). Thus, although
the language quoted from Deen Keeton’s article in Campos
Suggests that New Jersey might endorse a ‘‘but for’’ test in failure
to warn cases, the citation to Brown indicates to the contrary.
Subsequent New Jersey cases interpreting Campos also indicate
to the contrary.

In Hull v. Getty Refining & Marketing Co., 202 N.J.Super.

18. Keeton, Products Liability—Inadequacy of Information, 48 Tex.L.Rev.
398, 414 (1979).

43a

Appendix A

461, 467, 495 A.2d 445, 448 (App.Div.1985), and Vallillo v.
Muskin Corp., 212 N.J.Super. 155, 159-60, 514 A.2d 528, 530
(App.Div.1986), the New Jersey Superior Court cited Campos
to support a substantial factor test. Determining proximate
causation requires determining ‘‘whether [the] breach of a duty
enforceable within strict product liability against any defendant
constituted a substantial factor in the causation of plaintiff’s
accident.’” Hull, 202 N.J.Super. at 467, 495 A.2d at 448.
Describing why it was overturning a plaintiff’s verdict (not
remanding, as the court did in Campos ‘‘[a] jury could have
determined that the lack of a proper warning to rely on the cage’s
protection and to keep his arm out of the cage was at least a
factor materially contributing to the happening of the accident.’’
212 N.J.Super. at 160, 514 A.2d at 530. In the case at bar, a
jury could determine that Liggett’s violations constituted a factor
materially contributing to her injury.

New Jersey has also used the substantial factor test in
nonfeasance situations. In Evers v. Dollinger, 95 N.J. 399, 471
A.2d 405 (1984), the New Jersey Supreme Court held that it was
error to enter judgment for a doctor who failed to operate on
a tumor for seven months. The court reasoned that, although
the doctor’s conduct did not cause the cancer, the seven-month
delay could have been a substantial factor in causing the condition
from which the plaintiff eventually suffered. In Hake v.
Manchester Township, 98 N.J. 302, 486 A.2d 836 (1985), the same
court held that plaintiff could establish causation in a wrongful
death action by showing that defendant’s negligent conduct
negated a substantial possibility that plaintiff might have been
saved after attempting to kill himself. Neither of these was a
concurrent causation case and in neither case would defendant’s

. conduct by itself have caused the injury. Yet, each defendant’s

conduct substantially increased the probability of the plaintiff’s

44a

Appendix A

injury. In such situations the New Jersey courts have allowed
recovery.

In light of these cases, we conclude that the district court
did not erroneously instruct the jury as to the proximate cause
requirement in Mr. Cipollone’s failure to warn claim. The district

court should again give a ‘‘substantial factor’’ charge on retrial.'*

VI. DID THE DISTRICT COURT ERR IN FAILING TO
INSTRUCT THE JURY THAT MRS. CIPOLLONE’S
NONRELIANCE ON LIGGETT’S SAFETY
ADVERTISEMENTS WOULD PREVENT HER FROM
RECOVERING ON HER EXPRESS WARRANTY
CLAIM?

We turn now to another major area of dispute between the
Parties, one that implicates the conceptual basis of express warranty
law. Mr. Cipollone brought his express warranty claim under
U.C.C. § 2-313(1), which provides:

19. We note that, notwithstanding our preemption decision, if plaintiff
argues an addiction theory, a jury might be able to consider Mrs. Cipollone’s
post-1965 smoking as well as her pre-1966 smoking for purposes of determining
whether Liggett’s tortious conduct caused Mrs. Cipollone’s injury. If the jury
believes that Liggett’s pre-1966 conduct proximately caused Mrs. Cipollone to
smoke cigarettes pre-1966 and that Mrs. Cipollone became addicted as a result
of that smoking, then those post-1965 cigarettes smoked as a result of the
addiction should be considered in discerning whether Liggett’s conduct
proximately caused Mrs. Cipollone’s lung cancer. The Surgeon General has
recently concluded that ‘‘[s}cientists in the field of drug addiction now agree
that nicotine, the principal pharmacologic agent that is common to all forms
of tobacco, is a powerfully addicting drug.’’ U.S. Dep’t Health & Human Serv.,
The Health Consequences of Smoking: Nicotine Addiction—A Report of the
Surgeon General (1988)—.

4Sa

Appendix A

(1) Express warranties by the seller are created
as follows:

(a) Any affirmation of fact or promise made
by the seller to the buyer which relates to the goods
and becomes part of the basis of the bargain creates
an express warranty that the goods shall conform
to the affirmation or promise. (b) Any description
of the goods which is made part of the basis of
the bargain creates an express warranty that the
goods shall conform to the description.

N.J.S.A. § 12A:2-313(1) (emphases added). With respect to this
issue, the district court gave the following instructions to the jury:

[P}laintiff must prove . . . that Liggett, prior to
1966, made one or more of the statements claimed
by the plaintiff and that such statements were
affimations of fact or promises by Liggett .. .
[and] that such statements were part of the basis
of the bargain between Liggett and consumers like
Rose Cipollone ... .

The law does not require plaintiff to show that
Rose Cipollone specifically relied on Liggett’s
warranties.

Ordinarily a guarantee or promise in an
advertisement or other description of the goods
becomes part of the basis of the bargain if it would
naturally induce the purchase of the product and
no particular reliance by the buyer on such
Statement needs to be shown. However, if the

46a

Appendix A

evidence establishes that the claimed statement
cannot fairly be viewed as entering into the bargain,
that is, that the statement would not naturally
induce the purchase of a product, then no express
warranty has been created.

4 J.A. at 232-34.

Liggett contends that this interpretation of ‘‘part of the basis
of the bargain’’ is flawed because the jury should also have been
instructed that Mrs. Cipollone’s nonrsliance on the advertisements
would preclude those advertisements from becoming ‘‘part of the
basis of the bargain.’’ Liggett argues that the express warranty
verdict must therefore be set aside. Although our interpretation
of the precise meaning of ‘‘reliance’’ differs somewhat from
Liggett’s, we agree.*°

20. Initially, we emphasize that a representation made by a seller is not
an express warranty if i is made in such a manner that both the seller and
the buyer should understand to be a representation upon which the buyer will
not rely. “*{A}ll descriptions by merchants must be read against the applicable
trade usages. .. ."’ N.J.S.A..§ 12A:2-313 U.C.C. Comment 5. A representation
made in a manner that is generally recognized not to be a basis upon which
purchasers make a decision to purchase goods cannot be a warranty when read
against ‘‘applicable trade usages.’’ This requirement is in accord with the
traditional common law ‘‘puffing’’ exception in the law of contracts. See H.
Hunter, Modern Law of Contracts: Breach and Remedies 44.02(3), at 4-7 to
4-8 (1986 & Supp.1989). But Liggett has not contended, and we do not think
it could, that its advertisements to consumers are generally recognized as not
forming the basis upon which cigarette purchasing decisions are made. If such
were the case, Liggett would not have spent millions of dollars on advertising.

47a

Appendix A
A.

Authority on the question whether reliance is a necessary
element of section 2-313 is divided. Although a few courts have
held that reliance is not a necessary element of séction 2-313,”'
the more common view has been that it is, and that either a buyer
must prove reliance in order to recover on an express warranty
or the seller must be permitted to rebut a presumption of reliance
in order to preclude recovery.** Some treatise writers support this
interpretation.*» No New Jersey couri or panel of this court has
squarely addressed the question. **

21. See, e.g., Winston Indus., Inc. v. Stuyvesant Ins. Co., 317 S0.2d 493
(Civ.App.Ala.) (purchaser permitted to sue under § 2-313 for breach of a
warranty that he never received), cert. denied, 294 Ala. 775, 317 So.2d $00 (1975).

22. See, e.g., Royal Typewriter Co. v. Xerographic Supplies Corp., 719
F.2d 1092, 1101 (11th Cir. 1983) (**Absence of reliance will negate the existence
of an express warranty.’’); Scaringe v. Holstein, 103 A.D.2d 880, 477 N.Y.S.2d
903 (1984) (notice that shift did not work demonstrated that plaintiff could
not have relied on an alleged warranty that the used car was in “‘excellent
condition’); Indust-Ri-Chem Lab., Inc. v. Par-Pak Co., 602 S.W.2d 282, 293
(Tex.Ct.App. 1980) (‘‘Obviously, if the buyer knows that a representation of
the seller is untrue, that representation cannot be a part of the basis of the
bargain.’’).

23. See, e.g., 1 J. White & R. Summers, Uniform Commercial Code § 9-5,
at 448, 455 (3d ed. 1988); W. Hawkland, Uniform Commercial Code Series
§ 2-313:05, at 299-300 (1983 & Supp.1987). Professor White has written an
amicus brief on this issue, consistent with his treatise position, on behalf of
Lorillard, Philip Morris, R.J. Reynolds, American Tobacco Co. and Brown
& Williamson Tobacco Co.

24. In their briefs, the parties discuss five New Jersey and Third Circuit
cases: Jackson v. Muhlenberg Hospital, 96 N.J.Super. 314, 232 A.2d 879 (Law
(Cont'd)

48a

Appendix A

The history of section 2-313(1)(a), although informative, fails

(Cont'd)

Div. 1967), rev'd on other grounds, $3 N.J. 138, 249 A.2d 65 (1969) (per curiam);
Collins v. Uniroyal, Inc., 126 N.J.Super. 401, 315 A.2d 30 (App. Div.1973)
(per curiam), aff'd, 64 N.j. 260, 315 A.2d 16 (1974) (per curiam); Gladden
v. Cadillac Motor Car Division, 83 N.J. 320, 416 A.2d 394 (1980); Pritchard
v. Liggett & Myers Tobacco Co., 350 F.2d 479 (3d Cir.1965); and Henry Heide,
Inc. v. WRH Products Co., 766 F.2d 105 (3d Cir.1985). We discuss Gladden
and Pritchard in the text. See infra at 566. We do not find the other cases
to be particularly helpful.

In Jackson, the Superior Court held that a hospital patient who contracted
hepatitis from infected blood supplied by a bicod bank could sue the blood
bank for its breaci. of express warranty to the hispital. Mr. Cipollone stresses
the sentence stating that ‘“‘the patient ... probably never saw the label
[constituting the warranty] on the container of blood [that infected her].’’ 96
N.J.Super. at 330, 232 A.2d at 888. The case, however, is inapposite because
the patient in that case was suing not under section 2-313 but under N.J.S.A.
§ 12A:2-318, which permits third party beneficiaries to sue for breach of express
warranty. Jackson did not say that the Aospital’s reliance was irrelevant, yet
that is the operative question. That a third party beneficiary may sue for breach
of express warranty even if she did not rely on the affirmation of fact does
not imply that the affirmation would constitute a warranty even if the buyer
had not relied on it.

In Collins, the Superior Court heid that a tire manufacturer's effort to
limit a breach of express warranty remedy to replacement of the tires was
unconscionable and hence unenforceable. The limitation on remedy was
contained in a written warranty that also guaranteed the tires against ‘‘road
hazards.’’ The court did not discuss the meapiig of *‘the basis of the bargain’”’
but focused on the unconscionability of the remedy limitation. The Superior
Court deemed one of the tire manufacturer's advertisements relevant to the
case, in part because ‘‘the advertisement helped to explain the scope and intent
of the ‘road hazard’ part of the warranty."’ 126 N.J.Super. at 408, 315 A.2d at 34.

(Cont'd)

49a

Appendix A

to give a clear answer as to whether reliance is required. Section

(Cont'd)

Mr. Cipollone contends that Collins supports his position that reliance is
not an element of section 2-313 because the court never discussed whether the
buyer relied on the written warranty; the court merely stated that ‘‘[t}he warranty

. . Was given to [the buyer] at the time he bought the tires."’ /d. at 405, 315
A.2d at 33. Despite Mr. Cipollone’s request, we decline to base our decision
on the New Jersey Superior Court’s failure to discuss an issue.

Liggett contends that Collins supports its position because the Superior
Court, immediately before its discussion about the advertisements stated that
“*(t}he jury could have inferred ... that [the buyer had] relied’’ on the
advertisement. /d. at 408, 315 A.2d at 34. We hesitate to place too much weight
on this remark for three reasons.

First, as noted above, the Superior Court did not discuss the relevance
of the buyer’s reliance, it merely noted that the jury could have inferred that
the buyer had relied and then continued win its discussion in a new sentence
that began, ‘‘More importantly, the advertisement helped to explain the scope
and intent of the ‘road hazard’ part of the warranty... .’’ /d.

Second, the issue in Collins that the Superior Court discussed was whether
the remedy limitation was unconscionable; that the buyer’s reliance on an
advertisement making broad claims about the safety of the product was thought
relevant to the issue of unconscionability does not necessarily imply that the
buyer’s nonreliance on a reasonable advertisement would have precluded the
advertisement from becoming part of the manufacturer’s express warranty.

Third, the New Jersey Supreme Court in its short per curiam opinion
affirming the Superior Court further muddied the waters. In a statement obliquely
favorable to Mr. Cipollone’s position, the Supreme Court addressed the issue
in terms of what would be ‘‘the natural reliance and the reasonable expectation
of the purchaser flowing from the warranty,"’ 64 N.J. at 263, 315 A.2d at 18,
thus suggesting, as Mr. Cipollone argues, that the significant factor is what
a purchaser would reasonably infer from the affirmation of fact or promise

’ rather than what the purchaser in the case-at-bar actually inferred, and hence

(Cont'd)

50a

Appendix A

2-313(1)(a) is an adaption of section 12 of the Uniform Sales Act.*°
A comparison of the two sections reveals that they are

(Cont'd)

relied on. However, the Supreme Court also discussed what ‘‘the purchaser
of a tire buying it because’ of the warranty would think, id. (emphasis added),
hence suggesting that reliance had some role to play in discerning whether the
warranty was unconscionable.

In light of all of these offsetting considerations, we do not believe that
Collins is helpful in analyzing the issue before us.

In Heide, the issue was whether a chemical company’s specification sheet,
which listed several physical properties of the company’s plastic, constituted
an express warranty. This court analyzed the issue as follows:

The facts as stipulated show that the . . . sheet was not the
basis of any bargain between [the chemica! company and the
manufacturer. The chemical company] gave no express
warranty in this case that the [plastic] would conform to the

. . Sheet, and thus [the plaintiff] cannot be the beneficiary
of any such warranty.

766 F.2d at 112. The court did not say why it was holding that the sheet did
not constitute an express warranty. The word ‘‘reliance’’ enters the opinion
only through a recital of the chemical company’s contention. /d. We therefore
glean little guidance from Heide.

25. Section 12 of the Sales Act provides:

Any affirmation of fact or any promise by the seller relating
to the goods is an express warranty if the natural tendency
of such affirmation or promise is to induce the buyer to
purchase the goods, and if the buyer purchases the goods
relying thereon. No affirmation of the value of the goods,
nor any statement purporting to be a statement of the seller’s
opinion only shall be construed as a warranty.

Sla

Appendix A

substantially the same except for the replacement of section 12’s
express reliance requirement with section 2-313(1)(a)’s basis of
the bargain requirement. The district court reasoned that the
omission of the word ‘‘reliance from section 2-313(1)(a), in light
of section 12’s use of that word, implied that reliance was no
longer an element of express warranties. See 693 F.Supp. at 213.
Liggett contends that ‘if U.C.C. § 2-313 wrought the radical
change in New Jersey warranty law that the trial court has read
into it,’’ then ‘‘{o]ne would think that the New Jersey Study
Comments would have at least made reference to it.’’ Liggett Br.
at 19. We note in this regard that the New Jersey Study Comment
One to section 12A:2-313 states that ‘‘[t]his section of the Code
is comparable to Section 12 of the Sales Act (N.J.S.A. 46:30-18),
except that it characterized the warranties of sample and
description as express warranties.’’ There is no reference to the
reliance issue.

Liggett argues that reliance must have some place in the ‘‘basis
of the bargain’’ determination. Thus, even if reliance should be
assumed, based on what ‘‘would reasonably induce the purchase
of a product,”’ a defendant must have the opportunity to prove
non-reliance. The position finds some support in the U.C.C.:
comments. U.C.C. Official Comment,3 states:

In actual practice affirmations of fact made by
the seller about the goods during a bargain are
regarded as part of the description of those goods;
hence no particular reliance on such statements
need be shown in order to weave them into the
fabric of the agreement. Rather, any fact which
is to take such affirmations, once made, out of
the agreement requires clear affirmative proof. The
issue normally is one of fact. (Emphasis added.)

S2a

Appendix A

Moreover, comment 8 states that ‘‘all of the statements of the
seller [become part of the basis of the bargain] unless good reason
is shown to the contrary.’’ (Emphasis added.) The plain language
of these comments supports Liggett’s opposition, at least to the
extent it indicates that a defendant must be given some opportunity
to show that the seller’s statements were not meant to be part
of the basis of the bargain.

This court has interpreted comment 3 before, in another
tobacco case, Pritchard v. Liggett & Myers Tobacco Co., 350
F.2d 479 (3d Cir.1965) (applying Pennsylvania law). In a footnote
to a concurring opinion, Judge Freedman stated the following:

The comment by the drafters of the [U.C.C.]
make it clear that what was formerly described as
reliance [under § 12 of the Uniform Sales Act] is
now absorbed as a factor which is made a basis
of the bargain. Comment 3 to § 2-313 states that
where a statement is made during a bargain no
particular evidence of reliance need be shown, but
that it remains a question of fact whether evidence
introduced by the defendant is sufficient to show
non-reliance.

350 F.2d at 41 n. 7 (Freedman, J., concurring).** Pritchard
therefore reads the last sentence in comment 3 (‘‘[A]ny fact which
is to take such affirmations, once made, out of the agreement
requires clear affirmative proof.’’) as qualifying the sentence that
precedes it (“‘{NJo particular reliance need be shown.’’) In other

26. The court explicitly noted that Judge Freedman’s concurrence
represented ‘‘the majority view on the question of reliance,’’ Pritchard, 350
F.2d at 487.

53a

Appendix A

words, even though ‘‘no particular reliance need be shown,”’’ the
seller can ‘‘take [an] affirmation . . . out of the agreement’’ by
showing that the buyer did not rely.

This interpretation of comment 3 appears consistent with that
of the New Jersey Supreme Court. In Gladden v. Cadillac Motor
Car Division, 83 N.J. 320, 416 A.2d 394 (1980), the Court held
that a manufacturer’s attempted limitation of its damages for
breach of its express warranty could be given no effect in light
of the ‘‘linguistic maze’’ of the warranty. See id. at 333, 416 A.2d
at 401. The Court cited Comment 3, stating that ‘‘[pjarticular
reliance on such statements of description or quality need not
be shown.”’ Jd. at 325, 416 A.2d at 396. The Court thus expressly
rejected the view that the plaintiff has the burden of proving
reliance on the seller’s affirmation of fact, promise or description.
Nonetheless, the statement that ‘‘particular reliance need not be
shown,’’ made in the context of a discussion about Comment
3, does not imply that a defendant cannot defeat a warranty claim
by showing that the affirmation of fact, promise or description
was not part of the basis of the bargain. We believe that Gladden
States not that reliance is irrelevant, but only that the plaintiff
need not prove reliance.

A final argument in suppert of a reliance requirement is found
in the amicus brief. Without a reliance requirement, one runs
the risk of draining the term ‘‘basis of the bargain’’ of all meaning,
because the buyer’s subjective state of mind becomes completely
irrelevant. The district court instructed the jury that a statement
could be considered part of the basis of the bargain if it ‘‘would
naturally induce the purchase of the products.’’ This instruction
is completely objective and would permit a buyer to sue for breach

- Of express warranty even if the seller’s warranties were

advertisements made in another state or country, and even if the

S4a

Appendix A

buyer did not hear of the claims in these advertisements until the
day that she walked into an attormey’s office to bring suit for
personal injury. It strains the language to say that a statement
is part of the ‘‘basis’’ of the buyer’s ‘‘bargain,’’ when that buyer
had no knowledge of the statement’s existence.

The above arguments notwithstanding, it is possible to read
the ‘‘basis of the bargain’’ requirement as requiring some subjective
inducement of the buyer, without requiring a reliance finding.
Requiring that the buyer re/y on an advertisement, whether by
imposing this burden initially on the buyer bringing suit, or by
allowing the seller to rebut a presumption of reliance, puts a heavy
burden on the buyer—a burden that is arguably inconsistent with
the U.C.C. as a whole, with other comments to section 2-313
in particular, and with several commentators’ suggestions in this
area.”’

The reliance requirement does not comport well with U.C.C.
Official Comment 7 to section 2-313. Comment 7 states that ‘‘[i]f
language is used after the closing of the deal . . . the warranty
becomes a modification, and need not be supported by
consideration if it is otherwise reasonable and in order... .’’
N.J.S.A. § 12A:2-313 U.C.C. Comment 7. If a post-closing
promise—on which, by definition, a seller cannot rely in deciding

27. See, e.g., Shanker, The Seller’s Contractual Obligation Under U.C.C.
2-313 to Tell the Truth, 38 Case W.Res.L.Rev. 40 (1987-88); Heckman,
“*Reliance’’ or ‘‘Common Honesty of Speech’’: The History and Interpretation
of Section 2-313 of the Uniform Commercial Code, 38 Case W.Res.L.Rev. |
(1987-88); Coffey, Creating Express Warranties Under the U.C.C.: Basis of
the Bargain—Don’t Rely on It, 20 U.C.C.L.J. 115 (1987); Lewis, Toward a
Theory of Strict ‘‘Claim’’ Liability; Warranty Relief for Advertising
Representations, 47 Ohio St.L.J. 671 (1986).

55a

Appendix A

to make a purchase—can create a warranty, then it is difficult
to see why a pre-closing promise can create a warranty only if
relied upon.

Additionally, a reliance requirement seems inconsistent with
U.C.C. Official Comment 4 to section 2-313. Comment 4 states
that ‘‘the whole purpose of the law of warranty is to determine
what it is that the seller has in essence agreed to sell.’’ N.J.S.A.
§ 12A:2-313 U.C.C. Comment 4. Reliance is irrelevant to what
a seller agrees to sell.**

In light of these seemingly inconsistent mandates on the
reliance question, some might argue that it is foolish to try to
reconcile what is patently inconsistent. We reject this suggestion
however, because we find it feasible to reconcile the competing
arguments, and we believe that the New Jersey Supreme Court
would want us to try. We believe that the most reasonable
construction of section 2-313 is neither Liggett’s reliance theory,
which fails to explain how reliance can be relevant to ‘‘what a
seller agreed to sell,’’ or the district court’s purely objective theory,

28. For example, imagine a tire merchant describing a tire to three different
prospective purchasers, each listening to his sales talk at the same time. The
seller guarantees that the tire will (1) be safe for use even in heavily loaded
vehicles; (2) last at least 20,000 miles; and (3) be the same style tire sold with
a Rolls Royce. The first purchaser buys the tire relying on the seller’s safety
warranty. The second buys the tire relying on the seller’s durability warranty.
The third buys the tire relying on the seller’s style warranty. None of the
purchasers communicates to the seller the reason why he or she is purchasing
one of the tires, although the reason for the purchase is communicated to the
buyer’s spouse, who will later come forward to testify truthfully regarding what
the buyer relied on when making the purchase. It is implausible that each buyer
has a different warranty, and that the second buyer, but not the first or third

* buyers, can sue if the tire wears out before 20,000 miles.

56a

Appendix A

which fails to explain how an advertisement that a buyer never
even saw becomes part of the ‘‘basis of the bargain.’’ Instead,
we believe that the New Jersey Supreme Court would hold that
a plaintiff effectuates the ‘‘basis of the bargain’’ requirement of
section 2-313 by proving that she read, heard, saw or knew of
the advertisement containing the affirmation of fact or promise.”’
Such proof will suffice ‘‘to weave’’ the affirmation of fact or
promise ‘‘into the fabric of the agreement,’’ U.C.C. Comment
3, and thus make it part of the basis of the bargain.*® We hold
that once the buyer has become aware of the affirmation of fact
or promise, the statements are presumed to be part of the ‘‘basis
of the bargain’’ unless the defendant, by ‘‘clear affirmative proof,’’
shows that the buyer knew that the affirmation of fact or promise
was untrue. We believe that by allowing a defendant to come
forward with proof that the plaintiff did not believe in the
warranty,’' we are reconciling, as the New Jersey Supreme Court

29. The burden that we place on the plaintiff stems in part from the fact
that this case involves neither a written warranty delivered to the purchaser
in connection with a sale nor an oral affirmation of fact or promise made to
the purchaser in person by the seller. In both of those situations there is no
question that the plaintiff has knowledge that the alleged warranty exists.

30. This interpretation of section 2-313 is also consistent with decisions
of courts that have held that section 2-313 does ‘‘not . . . require a strong showing
of reliance.”’ Sessa v. Riegle, 427 F.Supp. 760, 766 (E.D.Pa.1977), aff'd, 568
F.2d 770 (3d Cir.1978). Because the district court’s decision in Sessa was affirmed
by judgment order, and not by a reported opinion, the decision is not binding
precedent on this Court. See Third Circuit IOP Chapter 8C.

31. If the defendant proves that the buyer did not believe in the warranty,
the plaintiff should then be given the opportunity to show that the buyer
nonetheless relied on the warranty. It is possible to disbelieve, but still rely on,
the existence of a warranty. In this sense, the buyer can ‘‘buy’’ a lawsuit. Thus,

(Cont'd)

57a

Appendix A

would want us to, the U.C.C. comments, the U.C.C. case law,
and traditional contract principles, which serve as the background
rules to the U.C.C.”

As indicated above, Comment 4 and Comment 7, as well
as the largely dominant objective theory of contracts, militate

(Cont'd)

if the buyer disbelieved the warranty, but could prove that she was relying on
it when she bought the product for stipulated damages—for example, a refund—
or economic damages—the difference between ‘‘the value of the goods accepted
and the value of the goods would have had if they had been warranted,’’ U.C.C.
§ 2-714. Such a buyer could not recover consequential damages, however. She
would be barred by both U.C.C. § 2-715 (‘*[I}f [the injured person] discover(s]
the defect prior to his use, the injury would not proximately result from the
breach of warranty.’’), and traditional contract principles, under which a buyer
has a duty to mitigate damages and cannot recover for damages that she ‘‘could
have avoided without undue risk, expense or humiliation,’’ Restaternent (Second)
of Contracts § 350(1) (1965).

Other courts have noticed the distinction between knowledge and reliance
as well. See Royal Business Machines v. Lorraine Corp., 633 F.2d 34, 44 (7th
Cir.1980) (‘*The situation of the parties, their knowledge and reliance, may be
expected to change .. . . "’ (emphasis added)). We emphasize that we are not
adopting Liggett’s rebuttable presumption of reliance theory. Reliance only comes
into play if, after the defendant has proved non-belief, the plaintiff then tries
to prove reliance despite non-belief, the burden is on the plaintiff to prove reliance
despite non-belief and if she meets that burden she can collect economic damages.

32. N.J.S.A. 12A:1-103 states:

Unless displaced by the particular provisions of this Act, the
principles of law and equity, including the law merchant and
the law relative to capacity to contract, principal and agent,
estoppel, fraud, misrepresentation, duress, coercion, mistake,
bankruptcy or other validating or invalidating cause shall
supplement its provisions.

58a

Appendix A

in favor of interpretation of express warranty that ignores the
buyer’s subjective state of mind. Under the extreme version of
this theory apparently adopted by the district court, all the buyer
should have to show is what the seller agreed to sell. In other
words, an express warranty would be created when a seller makes
statements to the public at large that would induce a reasonable
buyer to purchase the product, even if the actual buyer never heard
those statements.’’ We find this result untenable, however. First,
as mentioned above, this interpretation drains all substantive
meaning from the phrase ‘‘basis of the bargain,’’ and would allow
a seller to collect even if that seller was unaware of the warranty
until she walked into her attorney’s office to file suit. Second,
this interpretation is difficult, if not impossible, to square with
other comments to the U.C.C. As discussed above, Comment
3 states that ‘‘no particular reliance on such statements need be
shown. . . . Rather, any fact which is to take such affirmations,
once made, out of the agreement requires clear affirmative proof.”’
Comment 8 states that ‘‘all of the statements of the seller [become
part of the basis of the bargain] unless good reason is shown to
the contrary.’’ Clearly, both Comment 3 and Comment 8 envision
some mechanism for overcoming the presumption that the seller’s
statements, even if heard by the actual buyer, are a basis of the
bargain.

Much of the case law supports this ‘‘belief’’ principle. A

33. The district court’s interpretation of the ‘‘basis of the bargain’”’
requirement is also objective in the weaker sense that in order to constitute
an express warranty, a seller’s statements must ‘‘nafuraily’’ induce the purchase
of the product,’’ 4 J.A. 234 (emphasis added). To that extent, we agree with
the district court. However, for reasons explained in the text, we do not believe
that either New Jersey or the drafters of the U.C.C. intended the buyer's
awareness of, or belief in, the statements to be completely irrelevant.

59a

Appendix A

Statement in the bill of sale that the goods are new does not
constitute an express warranty when both the buyer and the seller
knew that the statement was false. See Coffee v. Ulysses Irrigation
Pipe Co., 501 F.Supp. 239 (N.D. Tex.1980) When a buyer has
operated trucks before and knows that they need repairs, he cannot
sue in express warranty on the seller’s statement that the trucks
were in good condition. See Janssen v. Hook, | Ull.App.3d 318,
272 N.E.2d 385 (1971). ‘‘The same representation that could have
constituted an express warranty early in the series of transactions
might not have qualified as an express warranty in a later
transaction if the buyer had acquired independent knowledge as
to the fact asserted.’’ Royal Business Machines v. Lorraine Corp.,
633 F.2d 34, 44 (7th Cir.1980). See also Overstreet v. Norden
Laboratories, Inc., 669 F.2d 1286, 1291 (6th Cir.1982) (‘‘[A]
statement known to be incorrect cannot be an inducement to enter
a bargain.’’); Wendt v. Beardmore Suburban Chevrolet, Inc., 219
Neb. 775, 782, 366 N.W.2d 424, 429 (1985) (Car dealer’s statement
were not a basis of the bargain when plaintiff suspected that the
car had been in an accident and had his mechanic inspect it.).

Although these cases reject, to a certain extent, one traditional
contract principle, that terms should be construed objectively,
they embrace another traditional contract principle, that of looking
at the intention of the parties in light of the surrounding
circumstances. See 3 R. Anderson, Uniform Commercial Code
§ 2-313:36, at 29 (1983 & Supp.1987). The relevant intent is that
the statement be part of the basis of the bargain, and that, ‘‘as
in the case of any contract term, is a question of the intent of
the parties.’’ Jd. at 30.*

34. Although we have emphasized the relevance of a buyer's belief, our

. construction of section 2-213 can be read as simply fleshing out the more

(Cont'd)

Appendix A

Applying our interpretation of section 2-313 to the case at
bar, we conclude that the district court’s jury instructions were
erroneous for two reasons. First they did not require the plaintiff
to prove that Mrs. Cipollone had read, seen, or heard the
advertisements at issue. Second, they did not permit the defendant
to prove that although Mrs. Cipollone had read, seen, or heard
the advertisements, she did not believe the safety assurances
contained therein. We must therefore reverse and remand for a
new trial on this issue.

There is ample evidence from which a jury could conclude
that Mrs. Cipollone saw, read, or heard the advertisements. She
frequently listened to the Arthur Godfrey show, and frequently
read magazines that contained the advertisements. Thus, the
awareness question is not problematic. However, there is also
evidence that family members brought the hazards of smoking
to her attention. Thus Liggett might be able to prove that she
did not believe the advertisements that she saw.

Liggett contends that in light of the jury’s answers to special

commonly discussed reliance requirement with a framework of shifting
presumptions and burdens of proof. Thus, in the context of advertisements
claimed to be warranties, a plaintiff buyer must first prove that she saw the
advertisements. This raises a (rebuttable) presumption of belief, which in turn
raises an irrebuttable presumption of reliance. Next, a defendant seller may
rebut the presumption of reliance, but only by proving that the plaintiff
disbelieved the advertisement. C/. supra note 28. Successfully proving disbelief
creates a new rebuttable presumption by proving reliance directly. See supra
note 31. Whether our holding is read as imposing a “‘belief’’ requirement or
a ‘‘reliance’’ requirement thus is probably just a question of semantics, not
substance.

6la

Appendix A

verdict questions 10 and 12, which addresses Mrs. Cipollone’s
Cigarette use notwithstanding knowledge of the hazard, a new
trial is inappropriate because it is entitled to a verdict in its favor
on the express warranty claim as a matter of law.’* We disagree.
First, as explained above in part IV, the district court’s jury
instructions with respect to questions 10 and 12 did not limit the
inquiry into Mrs. Cipollone’s conduct to the pre-1966 period.
Because the only potential warranties at issue in this case are
Liggett’s pre-1966 advertisements, in order to find no warranties
the jury must find that Mrs. Cipollone disbelieved Liggett’s
pre-1966 advertisements, and it did not have an opportunity to
do so.

Questions 10 and 12 also do not ask specifically whether Mrs.
Cipollone knew that the advertisements were false. The jury’s
answers indicate that Mrs. Cipollone should have known cigarettes
were harmful, despite Liggett’s failure to warn. That does not
mean that she actually knew that cigarettes were harmful, when
Liggett was advertising to the contrary. The jury must be asked
whether she disbelieved the advertisements. This is an inquiry
distinct from (1) whether she should have disbelieved the
advertisements,’* and (2) whether it would have been unreasonable
to smoke had Liggett not been advertising that smoking was safe.
Consequently, Liggett is not entitled to rely on the jury’s answers
to these questions to preclude a new trial on the question whether
its advertisements constituted express warranties.

35. Liggett invokes the doctorine of ‘estoppel by verdict.’’ For the reasons
explained in the text, we do not find that doctrine applicable.

36. We note that if she should have disbelieved the advertisements it is
not likely that the advertisements would naturally induce the purchase of the

_ product.

62a

Appen

Vil. DID THE DISTRICT COUR® IN FAILING TO
INSTRUCT THE JURY THAT COMPARATIVE FAULT
PRINCIPLES APPLY TO AN EXPRESS WARRANTY
CLAIM?

A.

Liggett contends that New Jersey law permits a manufacturer
to assert a comparative fault to an express warranty products
liability suit and that the district court consequently erred in failing
to so instruct the jury. We agree that comparative fault principles
may be applicable in some express warranty cases, but we do not
believe that they are applicable here.

In Cintrone v. Hertz Truck Leasing & Rental Service, 45 N.J.
434, 212 A.2d 769 (1965), the plaintiff alleged that the brakes
on his employer’s leased truck failed, causing an accident. Cintrone
sued the lessor, alleging that the defendant had breached its
‘‘warranty that the vehicle was fit and safe for use. (Whether
the alleged warranty was express or implied was not specified.).’’
Id. at 438, 212 A.2d at 771. The defendant asserted that the
plaintiff could not recover because the problem with the truck’s
brakes was known to the plaintiff before the accident. The New
Jersey Supreme Court held that on the facts of the case the jury
could have concluded that the plaintiff ‘‘with knowledge of the
danger presented by the defective brakes failed to take the care
for his own safety which a reasonably prudent person would have
taken under the circumstances. Therefore, it would have been
improper for the trial court to have removed the defense of
contributory negligence from jury consideration.’’ Jd. at 459, 212
A.2d at 783.

In Maiorino v. Weco Products Co., 45 N.J. 570, 214 A.2d

63a

Appendix A

18 (1965) (per curiam) the New Jersey Supreme Court also held
that contributory fault was a defense to a breach of warranty
suit. In that case, the plaintiff injured himself while attempting
to open the glass container on his newly purchased toothbrush.
The plaintiff sued the manufacturer charging negligence and
breaches of implied warranties of merchantability and fitness of
the product for use. The Supreme Court held that a contributory
fault defense was properly submitted to the jury:

As we pointed out in Cintrone, the authorities
in various jurisdictions are in confusion and
seeming conflict on the subject of availability of
the defense of contributory negligence in products
liability cases based on breach of express or implied
warranty of fitness. The various texts and cases
referred to therein reveal that most jurisdictions
bar plaintiff’s recovery where his misuse or abuse
of the product in combination with a defect in the
product, brings about his personal injury, or where
he continued to use the product with knowledge,
actual or constructive, or its defective condition

Id. at 573, 214 A.2d at 19.

The issue before us, whether comparative fault is available
in an express warranty action, was not addressed in either Cintrone
or Maiorino. Neither of those cases clearly involved express
warranties.’’ The last time we were faced with this issue was in

37. The differences between express and implied warranties are significant
jn this context. Implied warranties involve societal standards imposed by law.
(Cont'd)

64a

Appendix A

a case involving the same defendant and, indeed, many of the
same warranties. In Pritchard v. Liggett & Myers Tobacco Co.,
350 F.2d 479, 485 (3d Cir.1965), interpreting Pennsylvania law,
we found that the doctrine of assumption of risk, in its primary
sense, was available as an affirmative defense in an express
warranty claim.

Crucial to our analysis in Pritchard was the distinction
between primary and secondary assumption of risk. In its primary
sense, assumption of risk involves a voluntary exposure to a known
danger, which negates liability. ‘‘Under this concept recovery is
barred because the plaintiff is assumed to have relieved the
defendant of any duty to protect him.’’ /d. at 484. In its secondary
sense, assumption of risk is synonymous with contributory
negligence—a plaintiff is barred from recovery because of her
departure from reasonable standards of care, despite the negligence
of the defendant. Jd.

In Pritchard, we concluded that assumption of risk in the

(Cont'd)

Express warranties involve standards that the seller promises to deliver. If implied
warranties hold sellers responsible for legally imposed duties of care, it only
seems fair that buyers are held responsible to similar legally imposed standards
of due care. Thus, the New Jersey Supreme Court has held that comparative
fault principles should apply in implied warranty cases. However, the legally
enforced obligation to honor express warranties stems from society’s interest
in enforcing promises. See Spring Motors Distributors, Inc. v. Ford Motor Co.,
98 N.J. 555, 579, 489 A.2d 660, 672 (1985). It is not nearly as clear that what
the buyer does should be relevant in determining whether the law will hold the
seller liable for what it has promised. Thus, because Maiorino involved only
implied warranties and Cintrone did not specify whether there was any express
warranty involved, we do not read those cases to stand for the proposition that
comparative fault principles automatically apply in express warranty cases.

65a

Appendix A

sense of contributory negligence is not available in a breach of
warranty action. We then concluded that ‘‘a person who
voluntarily exposes himself to a danger of which he has knowledge,
or has had notice, assumes the attendant risk.’’ /d. at 485. This
reading is in accord with Dean Prosser’s views:

[T]he plaintiff[’s}] ... failure ... to take
precautions against [the] possible existence [of a
product’s danger does] not. . . bar. . . an action
for breach of warranty . . . . But if he discovers
the defect, or knows the danger arising from it,
and proceeds nevertheless deliberately to encounter
it by making use of the product, his conduct is
the kind of contributory negligence which overlaps
assumption of risk; and on either theory his
recovery is barred.

Prosser, The Fall of the Citadel (Strict Liability to the Consumer),
50 Minn.L.Rev. 791, 838-39 (1966).

We reversed the jury verdict for the defendant in Pritchard
because we found that under the more narrow, primary definition
of assumption of risk, the jury could not have concluded that
the plaintiff voluntarily exposed himself to a known danger. We
found that the jury instructions ‘‘were inadequate and confusing
in that they failed to differentiate between the primary and
secondary concepts [of assumption of risk].’’ 350 F.2d at 486.
In reaching that conclusion we noted that ‘‘the defendant’s
advertisements carried factual affirmations, professedly based on
medical research [and that the advertisements] were calculated
to overcome any fears the potential consumers might have had

_as to the harmful effects of cigarettes, and particularly

Chesterfields. Under the circumstances it is difficult to perceive

66a

Appendix A

how the plaintiff, a cabinetmaker with no scientific background,
could have been charged with notice or knowledge of a danger,
which the defendant, with its professed superior knowledge,
extensively advertised did not exist.”’ Jd. Pritchard, however, which
involves Pennsylvania law, does not control this case.

The New Jersey cases, Cintrone and Maiorino, do not speak
to whether a comparative fault defense is available in an express
warranty action. Even Pritchard’s previous interpretation of
Pennsylvania’s express warranty law indicates that comparative
fault is available only to the extent that a plaintiff voluntarily
exposes herself to a danger of which she had specific knowledge.
In order to answer Liggett’s contention that comparative fault
— in the sense of primary assumption of risk — should be available
as a defense to this express warranty claim, we turn to an analysis
of the warranty involved here.

As is discussed in Part VI, in order to make out a prima
facie express warranty claim, Mr. Cipollone must show that
Liggett’s affirmations were part of the basis of the bargain. As
long as the plaintiff can show that Mrs. Cipollone knew of
Liggett’s affirmations of fact, those affirmations are presumed
to be a basis of the bargain unless Liggett can prove that she
did not believe those advertisements. Arthur Godfrey referred to
the fears about smoking as ‘‘applesauce.’’ 5 J.A. 158.°* If Mrs.
Cipollone believed him, she could not have had the subjective
knowledge about the harms of smoking that would permit a jury

38. Defendant has not argued, nor do we believe that they could argue,
that belief in their advertisements was unreasonable.

67a

Appendix A
to conclude that she voluntarily assumed a known risk.*®

In theory, the comparative fault defense is available to Liggett
to the extent that it can prove that after having believed the
advertisements, Mrs. Cipollone learned that they were untrue and
continued to smoke the cigarettes that the advertisements had
caused her to buy. The court must recognize, however, that any
cigarettes that plaintiff bought after she ceased believing in de-
fendant’s affirmations would not, as a matter of law, be cigarettes
smoked in breach of the warranty. The warranty would not exist
as to those cigarettes because Mrs. Cipollone would not have
believed Liggett’s affirmations when she bought them. Thus,
although it would be theoretically possible for the defendants to
win on a comparative fault defense that did not involve misuse
or abuse, as a practical matter it would be almost impossible.
If the jury finds that the cigarettes that Mrs. Cipollone smoked
in breach of the express warranty proximately caused her cancer,
then it is implicitly finding that she believed the advertisements
when she bought those cigarettes.

If she bought some cigarettes while believing in the
advertisements and then learned that the advertisements were false
and smoked those previously purchased cigarettes anyway, then
she would have been assuming a known risk when she smoked
the previously purchased, warranted cigarettes. We conclude that
under such circumstances, she could be barred, by reason of
contributory fault, from recovering on an express warranty claim.

39. Defendants could prevent Mr. Cipollone’s recovery on the express
warranty claim if, despite finding the warranty, the jury finds that the plaintiff
misused or abused the cigarettes. There is no evidence of misuse or abuse in

. this record, however. Plaintiff was using the cigarettes just as Liggett advertised

that she should.

68a

Appendix A

But that would require a jury finding that it was those specific
cigarettes, bought while believing the advertisements but smoked
after she knew that the ads were false, that caused her cancer.
No reasonable jury could find this unless Mrs. Cipollone bought
vast amounts of cigarettes in bulk, and there is no evidence in
the record that she did.

Liggett’s defense is thus more appropriate in the more typical
U.C.C. case. For instance, if a tire purchaser relied on the
affirmations of the seller, then discovered that the seller’s
affirmation was false, and then used the tire anyway, she could
be barred from recovering on an ex

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0066%3A03. Public record. Not legal advice.