# Opposition Brief — Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2000
- **Citation:** 528 U.S. 1105

## Text

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Nos. 99-545, 99-642, 99-7p1 Wer” CO US |

IN THE oo

Supreme Court of the Hnited States

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42 U.S.C. § 1395y(b)(2) (Medicare Secondary
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42 U.S.C. § 2651 et seg. (Medical Care
ctncithaint Bao,’ ETT ePIC CE 19

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PAGE
Pub. L. No. 91-452, § 904(a), 84 Stat. 947 ............ 13n.*
Other Authorities:
2 Dobbs, Law of Remedies §§ 8.1(1), (3)
(2d od. 1999)... ..05icg Ree eee enane 19n.*

JURISDICTION

All three Petitions include precisely the same assertions
concerning jurisdiction in the courts below. See Petitions at 1.
However, the grounds for jurisdiction Petitioners asserted in
the district courts were not all identical. In addition, in Labor-
ers Local, the Court of Appeals took jurisdiction pursuant to
28 U.S.C. § 1292(b), not § 1291. See 7 F.Supp.2d 294 (certi-
fying order); Order (2d Cir. July 14, 1998) (granting leave to
appeal) (LL Pet. 54a, 58a).

STATEMENT

In all three cases Petitioners (union health and welfare
funds) are seeking “to recover money expended ... to provide
medical treatment to their participants and beneficiaries who
have suffered and are suffering from tobacco-related ill-
nesses.” Laborers Local Compl. 97 (LL Ct. App. JA41-42).*
See also Steamfitters Compl. 97 (Stm. Ct. App. JA12) (same
allegation); Oregon Laborers Compl. 96 (OL Ct. App. Excpt.
CR120,p.5) (plaintiffs “seek to recover the tobacco-related
benefit costs incurred by them”). As all three Courts of
Appeals have held — unanimously — in the cases at bar, such
claims by medical expense payors for recovery of money
expended to treat injuries incurred by others must be dis-
missed as a matter of law because the injury alleged is a
remote, indirect and derivative consequence of the personal
injuries of the individual smokers and thus is not proximately
caused by defendants’ alleged acts. See pp. 2-3, 6-10, infra.

. Citations in the form “LL Ct. App. JA__” and “Stm. Ct. App.
JA__” are to the Joint Appendices submitted to the Second Circuit in
Laborers Local and to the Third Circuit in Steamfitters, respectively.
Citations in the form “OL Ct. App. Excpt. __” are to Plaintiffs-Appel-
lants’ Excerpts of Record submitted to the Ninth Circuit in Oregon
Laborers. Respondents will provide the Court with copies of the mate-
rials cited (or any other part of the records below) should the Court so
request.

Petitioners devote pages to allegations of defendants’
wrongdoing; many of these allegations do not even appear in
the complaints in the cases at bar, but are instead taken from
other sources. These allegations — which defendants would
have contested had these cases proceeded beyond Rule
12(b)(6) motions — do not in any way alter the legal bar cor-
rectly found dispositive by all three Courts of Appeals.*

REASONS FOR DENYING THE WRIT

The decisions below are correct and do not conflict with
any decisions of other Courts of Appeals, decisions of this
Court, or decisions from state courts of last resort. Review by
this Court is not warranted.

I. THERE IS NO CONFLICT AMONG THE COURTS
OF APPEALS.

Four Courts of Appeals have to date considered claims by
plaintiff union funds against tobacco companies to recover
medical expenses paid to treat personal injuries of fund par-
ticipants allegedly caused by smoking. All four Courts of
Appeals have unanimously and correctly held that such claims
must be dismissed because the injury alleged is remote, indi-
rect and derivative, and the complaints therefore failed to
allege an injury proximately caused by defendants’ alleged
wrongdoing. Thus, in the three of these four cases that are the
subject of the present Petitions:

¢ The Second Circuit unanimously held that “the eco-
nomic injuries alleged in plaintiffs’ complaint are
purely derivative of the physical injuries suffered by
plan participants and therefore too remote as a matter
of law,” and directed the district court to dismiss the

as Petitioners’ Statements contain many other errors, including var-
ious inaccurate characterizations of the opinions of the courts below.
Erroneous assertions of law are addressed infra.

Saw =

3

complaint. Laborers Local v. Philip Morris, 191 F.3d
229, 244 (LL Pet. 25a) (2d Cir. 1999), r’hg and r’hg en
banc denied (Aug. 6, 1999). Rehearing en banc was
denied in an order which stated that no judge “has

requested that a vote be taken thereon.” Order (Aug. 6,
1999).

* The Third Circuit, holding that the “necessary proxi-
mate-cause connection is missing,” unanimously
affirmed dismissal of the complaint. Rehearing en banc
was denied. Steamfitters vy. Philip Morris, 171 F.3d 912,
934 (Stm. Pet. 37a) (3rd Cir. 1999), r’hg and r’hg en
banc denied (Apr. 29, 1999).

* The Ninth Circuit unanimously held that plaintiff union
funds’ “RICO and antitrust claims are ‘too remote’
from defendants’ alleged wrongdoing to allow recov-
ery” and affirmed dismissal of the complaint. No peti-
tion for rehearing or rehearing en banc was filed.
Oregon Laborers v. Philip Morris, 185 F.3d 957, 964
(OL Pet. 9a) (9th Cir. 1999).

Most recently, the Seventh Circuit also unanimously affirmed
dismissal of claims by union funds for the recovery of med-
ical expenses and directed dismissal of similar claims by var-
ious Blue Cross entities on the grounds, inter alia, that “(t)he
injury for which the plaintiffs seek compensation is remote
indeed.” International Bhd. of Teamsters v. Philip Morris,
Inc., and Arkansas Blue Cross v. Philip Morris, Inc. (joint
opinion) 1999 WL 103471] at *6 (7th Cir. Nov. 15, 1999).

The lack of a conflict among the Courts of Appeals on the
question presented strongly indicates that review should be
denied. This conclusion is further confirmed by the fact that,
as discussed below, there is no conflict with decisions of this
Court (see Point II, infra), or with decisions of Courts of
Appeals in other contexts (see Point III.A, infra). Further-
more, asserted conflicts with decisions of federal district
courts or state trial courts would not warrant the grant of cer-

a eT a Fen

tiorari — even apart from the fact that Petitioners misdepict
the weight of the authority and the pertinence of decisions
from those courts. See Points III.B & III.C, infra.*

Il. THERE IS NO CONFLICT BETWEEN THE DECI-
SIONS BELOW AND ANY DECISION OF THIS
COURT.

There is no conflict between the Courts of Appeals deci-
sions rejecting union fund claims and decisions of this Court.
To the contrary: as all four Courts of Appeals have unani-
mously recognized, dismissal of the funds’ claims to recover
medical expenses paid to treat fund participants follows inex-
orably from this Court’s precedents barring claims for remote
and indirect injuries. As this Court observed in Holmes v.
SIPC, 503 U.S. 258, 266 n.10 (1992), a tortious act will often
cause “ripples of harm” extending to various persons. For
example, an insurance company may suffer loss when an
insured is injured, or an employer may incur costs when an
employee is harmed. However, long-standing principles of
law bar persons who suffer indirect and derivative injuries by
virtue of their contractual or other legal relationships with
direct victims of wrongdoing from recovering in their own
right from the tortfeasor; rather, a plaintiff in the position of
the union funds must pursue its recovery through subrogation,
standing in the shoes of the directly injured victim.

As this Court set forth in Holmes, the rule barring claims
for remote and indirect injuries springs from that aspect of the
common law doctrine of proximate cause that “demand[s]” a
“direct relation between the injury asserted and the injurious
conduct alleged.” 503 U.S. at 268. This “requirement” of
direct injury (“one of [the] central elements” of proximate
causation) (id. at 269) is articulated in no fewer than four
decisions by this Court. Thus, in 1877, in Mobile Life Ins. Co.
v. Brame, 95 U.S. 754, this Court barred a life insurer’s

° A chart describing the disposition of union fund and other pri-
vate payor cases in federal courts is appended to this brief. See RAI.

attempt to recover directly against the murderer of its insured,
explaining:

The relation between the insurance company and [the
insured] was created by a contract between them, to
which [the murderer] was not a party. The injury
inflicted by him was upon [the insured], against his per-
sonal rights; that it happened to injure the plaintiff was
an incidental circumstance, a remote and indirect result,
not necessarily or legitimately resulting from the act of
killing. (/d. at 758-59.)

This Court added that: “we are not cited to any case in this
country or Great Britain where a different doctrine has been
held.” Jd. at 759. Thereafter, in United States v. Standard Oil,
332 U.S. 301, 311-16 (1947), this Court held that the Gov-
ernment did not have a direct right of action under the com-
mon law to recover from a tortfeasor medical expenses
incurred by the Government as a result of tortious injury toa
soldier. This Court made clear that no such cause of action
existed, and declined to create one.

The settled common law bar to recovery for remote injuries
has been expressly applied and incorporated by this Court
into the antitrust laws, Associated General Contractors v.
California State Council, 459 U.S. 519, 531-33 (1983)
(“AGC”), and RICO, Holmes, 503 U.S. at 268-71. In AGC, the
Court held that Congress intended common law principles of
proximate causation, directness of injury, and certainty of
damages to apply to antitrust damages litigation. See 459 U.S.
at 532-333. This Court in AGC illustrated the rule barring
remote and indirect claims with an example drawn from the
facts of the seminal case of Anthony v. Slaid, 52 Mass. 290
(Mass. 1846). See 459 U.S. at 532 n.25. Anthony, who had
contracted to support a town’s poor, sued for his increased
medical expenditures after defendant’s wife assaulted a pau-
per. The Massachusetts Supreme Judicial Court unanimously
denied recovery, concluding that the injury to Anthony —

6

notwithstanding the intentional nature of the tort — was “too
remote and indirect.” 52 Mass. at 291.

Thereafter, in 1992, in Holmes, this Court held that RICO
likewise adopted the common law “demand” for a “direct
relation between the injury asserted and the injurious conduct
alleged.” 503 U.S. at 268. The Court held that SIPC — which
stood in the shoes of customers of two different broker-deal-
ers — was not entitled to pursue RICO claims against an
insider whose stock manipulation had caused the failure of the
broker-dealer, which had in turn caused the customers’ loss.
While the manipulation caused cognizable harm to the broker-
dealer, this Court held “the link is too remote between the
stock manipulation alleged and the customers’ harm.” Id. at
271 (emphasis added).

The injury alleged by the Petitioner funds — payment of
medical expenses to treat personal injuries suffered by fund
participants allegedly injured by smoking (see p. 1, supra) —
falls squarely within a category of injuries which for over
150 years has been held to be remote, indirect and derivative.
Under long-settled law, any such claim must be asserted, if at
all, by way of subrogation, whereby the third-party payor
“steps into the shoes” of the injured individual and is subject
to whatever defenses may be asserted against that individual.
See, e.g., Laborers Local, 191 F.3d at 233 (LL Pet. 4a); Inter-
national Bhd. of Teamsters, 1999 WL 1034711 at *3 (7th Cir.
Nov. 15, 1999) (“insurers or other third-party providers of
assistance and medical care ... may recover only to the extent
their contracts subrogate them to the victim’s rights.”).

Petitioners claim that their injuries came about through
“two separate causal chains.” The first “causal chain” sup-
poses that defendants directed their alleged wrongful acts at
the funds themselves, thus supposedly preventing the funds
from taking steps to reduce their medical costs by, for exam-
ple, discouraging smoking by their members. The second
“causal chain” supposes that defendants “withheld accurate
information and safer cigarettes from smokers,” thus resulting

7

in increased costs to the funds from their Participants’ smok-
ing-related illnesses. Stm. Pet. 9 (emphasis added); see also
Oregon Laborers, 185 F.3d at 962 (OL Pet. 4a); Laborers
Local, 191 F.3d at 239 (LL Pet. 16a).

Nevertheless, under each of these theories, the injury to the -
funds only occurred because fund Participants smoked,
became ill, and incurred medical costs which the funds paid
pursuant to their plan contracts. Thus, as the Second, Third
and Ninth Circuit decisions at bar have all recognized, on
each of the funds’ “causal chains,” injury to the funds is an
indirect and remote consequence of fund participants’ per-
sonal injuries. See Laborers Local, 191 F.3d at 239 (LL Pet.
16a) (funds’ “damages are entirely derivative of the harm suf-
fered by plan participants as a result of using tobacco prod-
ucts”); Steamfitters, 171 F.3d at 927 (Stm. Pet. 24a) (injury to
funds came about through injury to smokers); Oregon Labor-
ers, 185 F.3d at 963 (OL Pet. 8a) (“all of plaintiffs’ claims
rely on alleged injury to smokers”). In concluding that the
funds’ alleged injury was too remote and indirect as a matter
of law, the Second, Third and Ninth Circuit decisions at bar —
far from “creat[ing] a new requirement for ‘direct’ injury,” as
Petitioners argue (LL Pet. 4; Stm. Pet. 4; OL Pet. 4) — prop-
erly applied AGC, Holmes and this Court’s other precedents
to the particular factual framework in these cases.*

. Petitioners argue to this Court (as they did to all the Courts of
Appeals) that their first theory — which they label the “one-link causal
chain” — does not suffer from any problem of remoteness because, under
this theory, the funds “were directly lied to, defrauded, and deprived of
the benefits of new and safer tobacco products. The effect of defendants’
misconduct on [Petitioners] was not mediated through any effect on a
third party.” LL Pet. 19; Stm. Pet. 19: OL. Pet. 18. But Petitioners are
simply wrong, for the proximate Cause/indirectness analysis looks at the
relation between the injury alleged and defendants’ misconduct. See, e€.g.,
Holmes, 503 U.S. at 268 (“demand for some direct relation between the
injury asserted and the injurious conduct alleged”) (emphasis added):
AGC, 459 U.S. at 535 (court must evaluate “the relationship between”
“the plaintiff's harm” and “alleged wrongdoing”) (emphasis added). As
noted in the text, the Courts of Appeals are in agreement that the funds’

Indeed, the injury alleged by Petitioners is even more
remote and indirect than the injuries held not actionable in
AGC and Holmes. In those cases, plaintiffs’ injuries were
impermissibly remote and indirect, but plaintiffs at least were
deemed to be asserting an injury separate from that of the
directly injured party. Not so here. Here, the funds’ injuries
all derive from the fact that the funds were called upon to pay
the medical expenses of their directly injured participants. As
the Second Circuit recognized in Laborers Local, the funds’
injury, however characterized, is “entirely derivative of the
harm suffered by plan participants as a result of using tobacco
products.” Laborers Local, 191 F.3d at 239 (LL Pet. 16a).

Petitioners argue that the Second, Third and Ninth Circuits
erroneously applied the requirement of direct injury in a “for-
malistic” way and downplayed a multi-factor remoteness
analysis, which, Petitioners assert, must be applied anew on
an ad hoc basis in each case. LL Pet. 14-23; Stm. Pet. 13-24;
OL Pet. 12-21. But, to the contrary: all three Courts of
Appeals explicitly analyzed and assessed the AGC/Holmes
“factors” in light of the funds’ allegations, and concluded that
these factors supported dismissal. See Laborers Local, 191
F.3d at 239-41 (LL. Pet. 17a-20a); Oregon Laborers, 185 F.3d
at 963-66 (OL Pet. 8a-14a); Steamfitters, 171 F.3d at 923-34
(Stm. Pet. 16a-37a). Given that all three Courts of Appeals
did analyze these policy considerations in concluding that dis-
missal was required, these cases simply do not provide an
opportunity to address the question whether such analysis was
in fact required. Thus:

¢ All three Courts of Appeals stressed the difficulty
inherent in “ascertain[ing] the amount of [the funds’]
damages attributable to the violation, as distinct from
other, independent factors.” Holmes, 503 U.S. at 269.
See Laborers Local, 191 F.3d at 239-40 (LL Pet. 17a-
18a) (“incredibly speculative . . . virtually impossible

alieged injury is derivative of smokers’ persona! injuries on both of the
funds’ causal theories.

- + . tO prove with any certainty”; requires “sheerest
sort of speculation”); Steamfitters, 171 F.3d at 930, 933
(Stm. Pet. 29a, 35a) (“highly speculative and complex”;
“tortured path . . . to the Funds’ increased expendi-
tures”; “this causation chain is much too speculative
and attenuated”); Oregon Laborers, 185 F.3d at 965
(OL Pet. 13a) (speculativeness of claims “weigh[s]
heavily, if not dispositively, in favor of barring plain-

tiffs’ actions”).

* The concern that “recognizing claims of the indirectly
injured would force courts to adopt complicated rules
apportioning damages among plaintiffs removed at dif-
ferent levels of injury from the violative acts, to obvi-
ate the risk of multiple recoveries” (Holmes, 503 U.S.
at 269) likewise supports dismissal here, as all three
Courts of Appeals recognized. See Laborers Local, 191
F.3d at 240-41 (LL Pet. 18a-19a); Steamfitters, 171 F.3d
at 933 (Stm. Pet. 35a-36a); Oregon Laborers, 185 F.3d
at 965-66 (OL Pet. 14a).

* The Second and Ninth Circuits correctly recognized
that lawsuits by smokers (or by the funds in subroga-
tion of individual smokers) were available to remedy
losses arising from any personal injuries inflicted on
smokers, thus satisfying “the general interest in deter-
ring injurious conduct” (Holmes, 503 U.S. at 269):

“The Funds may still bring a subrogation action to
recover the medical costs paid out for the individ-
ual smokers, and the smokers themselves have suf-
ficient independent incentive to pursue their own
causes of action for such additional types of injuries
as pain and suffering. Although these will not be
RICO claims, they will remedy the harm done by
defendants’ alleged misconduct.” Laborers Local,
191 F.3d at 241 (LL. Pet. 20a).

10

“The existence of the smokers, who are more direct
victims of the alleged wrongful conduct and who
can be counted on to vindicate the injury caused by
defendants’ alleged wrongful conduct, weighs heav-
ily in favor of barring plaintiffs’ actions.” Oregon
Laborers, 185 F.3d at 964 (OL Pet. 10a-11a).*

Petitioners also argue that the Courts of Appeals erred by
failing to recognize that “(t]he purpose of these factors is to

” Petitioners claim that review by this Court is required because
of supposed “conflicts” in the AGC/Holmes policy factor analysis that
each Court of Appeals concluded required dismissal of Petitioners’
claims. See LL Pet. 11; OL Pet. 9-10. But, as the text accompanying this
footnote shows, any differences between the Courts’ analyses are greatly
outweighed by the agreements and, in any event, the ultimate result in
each case was the same. Any such differences in analysis as may exist
fall far short of “conflicts” requiring this Court’s review.

In addition, it is respectfully submitted that AGC and Holmes do nc’
require that the “factors” discussed therein — which Holmes described
as “reasons” for the “directness of relationship” “requirement” (503 U.S.
at 269 (emphasis added)) — be applied anew in every case, even in cat-
egories of cases in which the principles of proximate causation are long-
settled, as they are here. See pp. 4-6, supra. Although, as this Court
observed in AGC, 459 U.S. at 536, and in Holmes, 503 U.S. at 272, n.20,
a black-letter rule cannot be announced that would dictate the result of
“every case,” that does not mean that no black-letter rule can ever be
articulated that would require dismissal in any case. For example, it is
uniformly settled that a corporate shareholder may not bring a “direct”
claim to recover for diminution to the value of his shares occasioned by
injury to the corporation. Thus, there is no need in each attempted
“direct” suit by a shareholder to engage in a case-by-case analysis of the
policy factors; rather, it is well-settled that the shareholder’s only recourse
lies in bringing a derivative suit on behalf of the corporation. Nor should
there be any need to engage in an.ad hoc review of the policy factors here
where another well-settled rule likewise applies to require dismissal, to
wit, “plaintiffs who are obligated to pay the medical expenses of another
may not recover against the tortfeasor who caused the damage.” Labor-
ers Local, 191 F.3d at 237 (LL Pet. 12a). However, as noted in the text,
given that here all three Courts of Appeals did in fact analyze the policy
“factors” in concluding that dismissal was required, it makes no difference
here whether such an analysis was in fact “required.”

SE Retell 2 teat Btn Cah gs,

1]

identify which of several possible plaintiffs will be given
Standing to sue fora RICO [or antitrust] violation.” LL Pet.
14; Stm. Pet. 13; OL Pet. 13. In other words, Petitioners argue
that some plaintiff must always be given Standing to bring a
federal treble damages suit under RICO or the antitrust laws
for every injury, no matter how remote, indirect, and deriva-
tive that injury is. But Petitioners’ “best plaintiff” theory is
unfounded, and was unanimously (and properly) rejected.
AGC specifically observed that “there is a point beyond which
[a] wrongdoer should not be held liable” for the “ripples of
harm” flowing from a violation of the antitrust laws, and
explicitly rejected any contention that there must always be
a plaintiff with standing to bring a federal Statutory treble
damages suit for every injury: “Congress did not intend the
antitrust laws to provide a remedy in damages for all injuries
that might conceivably be traced to an antitrust violation.”
459 U.S. at 534 (emphasis added). To like effect. Holmes
explains that the doctrine of proximate cause is a “judicial
tool[ ] used to limit a person’s responsibility for the conse-
quences of that person’s own acts.” 503 US. at 268 (empha-
sis added). Moreover, as noted above, individual smokers can
bring suit to remedy any personal injuries suffered (and the
funds, standing in the shoes of their Participants, may pursue
subrogation claims to recover medical expenses paid to treat
particular individual smokers) — albeit (as all parties agree)
such claims would not be federal RICO or antitrust claims
because such personal injury claims would not Satisfy the
injury to “business or property” requirement for suit under
those statutes.*

Indeed, Petitioners’ “best plaintiff” theory turns Congres-
sional intent on its head. The inability of those directly
injured (i.e., individual smokers) to sue under RICO or the

* See, e.g., Stm. Pet. 2, 20 (“Smokers cannot bring RICO and
antitrust claims because they ... cannot satisfy the ‘business Or property’
requirement”); LL Pet. 3 (funds are “only plaintiffs ... legally able to
assert these RICO claims”) (emphasis in original), 19-20: OL Pet. 3, 18.

12

antitrust laws for their medical expenses because personal
injuries are not injuries to “business or property” is hardly a
point in favor of allowing the funds to sue under these federal
statutes for those same injuries. This would flout Congress’
policy determination not to permit recovery of personal injury
damages, including medical expenses, in RICO or antitrust
treble damage actions — no matter by whom asserted. See
Laborers Local, 191 F.3d at 241 (LL Pet. 20a) (“the lack of a
RICO damages remedy for even direct personal injuries ...
actually weighs heavily against RICO standing for parties
(such as the Funds) alleging harms that are purely contingent
on personal injuries suffered by others”) (emphasis added);
Oregon Laborers, 185 F.3d at 964 (OL Pet. 9a-11a).

Petitioners’ argument that there is a conflict between the
three Courts of Appeals decisions from which they seek cer-
tiorari and certain other decisions of this Court (LL Pet. 4,
16-17; Stm. Pet. 4, 15-16; OL Pet. 4, 14-15) is also manifestly
without merit. None of the cases Petitioners cite held that a
plaintiff can sue under RICO or the antitrust laws for injuries
arising as a consequence of prior injuries to another (to say
nothing of indirect injuries resulting from treating or com-
pensating the first-injured person for his injury). Thus:

¢ In Blue Shield v. McCready, 457 U.S. 465 (1982), the
plaintiff was directly injured as a participant (buyer) in
the market for psychotherapy services. See AGC, 459
U.S. at 540 n.44; see also Steamfitters, 171 F.3d at 926;
Oregon Laborers, 185 F.3d at 967.

* In NOW vy. Scheidler, 510 U.S. 249 (1994), the only
issue on which certiorari was granted was whether an
economic motive was required for a RICO claim (id. at
252), and the only standing issue addressed by this
Court was the “threshold” issue whether plaintiffs had
jurisdictional or Article III standing — which requires
only injury-in-fact and not the proximate cause require-
ment of “direct injury” that bars plaintiffs’ claims here
(id. at 255-56).

13

Allied Tube v. Indian Head, 486 U.S. 492 (1988)
(which limited certiorari to an issue of Noerr-Pen-
nington immunity, id. at 499 n. 3), and American Soc 'y
Mech. Eng’rs v. Hydrolevel, 456 U.S. 556 (1982), con-
ceri injuries to competitors caused by influencing stan-
dard-setting bodies to promulgate certain standards and
issue interpretations of such standards: in neither case
did the Court address any issue of direct injury/proxi-
mate cause.

Illinois Brick v. Illinois, 431 U.S. 720 (1977), simply
recognizes a narrow exception to the separate “direct
purchaser rule” of the antitrust laws for cost-plus con-
tracts.

Basic Inc. v. Levinson, 485 U.S. 224 (1988), which
upheld a presumption of reliance on public misrepre-
sentations in Rule 10b-5 actions, did not concern RICO
or the antitrust laws or the issue of proximate causa-
tion.

Although this Court in Sedima v. Imrex, 473 U-S. 479,
497 (1985), noted generally that “RICO is to be read
broadly,” the case did not involve any issue of standing
to pursue RICO claims for remote and indirect injuries.
And thereafter in Holmes, this Court squarely held that
Congress intended to require direct injury in RICO
actions. 503 U.S. at 265-68. As this Court stated,
“[a]llowing suits by those injured only indirectly”
would actually “ ‘undermine{ } the effectiveness of tre-
ble-damage suits.’ ” Holmes, 503 U.S. at 274 (empha-
sis added), quoting AGC, 459 U.S. at 545.*

*

The funds, quoting Pub. L. No. 91-452, § 904(a), 84 Stat. 947,

argue that RICO “shall be liberally construed to effectuate its remedial
purposes.” LL Pet. 12; Stm. Pet. 11; OL Pet. 10. But this does not mean
that there is standing under RICO to assert claims for remote and indirect
injuries, as the Court made clear in Holmes in rejecting the identical
argument that § 904(a) required a finding that SIPC had standing. See 503
U.S. at 274.

14

For all these reasons, the decisions of the Courts of Appeals
faithfully apply settled principles set forth in this Court's
cases. Review therefore should be denied.

Finally, Petitioners’ assertion that Beck v. Prupis, No. 98-
1480, cert. granted, 119 S.Ct. 2046 (1999), argued Nov. 3,
1999, raises a “related” question concerning “the proper inter-
pretation of the [Holmes] proximate cause factors” (OL Pet.
2; LL Pet. 2) is without merit. The issue in Beck, as stated by
the Eleventh Circuit, was whether “a plaintiff bringing a civil
RICO conspiracy claim [must] prove that the overt act (in fur-
therance of the conspiracy) by which he was injured was an
‘act of racketeering.’ ” 162 F.3d 1090, 1093 (11th Cir. 1998).
This was also the “Question Presented” in Petitioner Beck’s
brief to this Court. See 1999 WL 543861 at *i. This is a dif-
ferent issue from that presented by Petitioners here.

Ill. PETITIONERS’ OTHER CLAIMS OF CONFLICT
ARE WITHOUT MERIT.

A. There is no conflict with the other Courts of
Appeals decisions in other contexts that Peti-
tioners rely upon.

As noted, there is unanimous agreement between the Courts
of Appeals to have addressed Petitioners’ claims and no con-
flict with decisions of this Court. The Courts of Appeals deci-
sions in other contexts relied on by Petitioners (see LL Pet.
17-19; Stm. Pet. 16-19; OL Pet. 15-18) do not remotely cre-
ate a conflict, much less a conflict warranting review by this
Court:

¢ Blue Cross v. Marshfield Clinic, 65 F.3d 1406 (7th Cir.
1995), involving an antitrust claim by a Blue Cross
payor who was overcharged by a seller of medical
services (the clinic), is “inapposite,” as the Seventh
Circuit itself made plain in its recent decision in /nter-

15

national Bhd. of Teamsters v. Philip Morris. See 1999
WL 1034711 at *7 (7th Cir. Nov. 15, 1999).*

* Steele v. Hospital Corp., 36 F.3d 69, 71 (9th Cir. 1994),
held that patients could not sue under RICO based on
overcharges to their insurance company because the
patients had suffered no financial loss. The Oregon
Laborers funds argued to the Ninth Circuit that Steele
supported their position (see Plaintiffs-Appellants’ Mar.
1, 1999 Br. at 27), but the Ninth Circuit obviously did
not agree. But, even assuming arguendo that an over-
charged insurance company would have had a RICO
claim against an overcharging seller of medical services
(which was not at issue in Steele), that scenario is not
germane here (for the same reason that Marshfield is
“inapposite”). In any event, even if (contrary to fact)
one hypothesized conflicts within the Ninth Circuit,
such conflicts would not warrant grant of certiorari.
See Wisniewski v. United States, 353 U-S. 901, 902
(1957).

* Mid Atlantic Telecom v. Long Distance Servs., 18 F.3d
260 (4th Cir. 1994), which involved a RICO claim
alleging that a competitor’s fraudulently low rates
forced plaintiff to lower its own rates and caused loss
of customers, is likewise irrelevant. The Fourth Circuit
observed that “Mid Atlantic’s injuries, as alleged, are
not derivative of any losses suffered by its former cus-

. Petitioners argue that the decisions of the four Courts of Appeals
rejecting cl. as by payors of the medical expenses of others to treat
injuries inflicted upon such others by a tortfeasor mean that “fraudulent
overbilling or anticompetitive price-fixing by a cancer medicine supplier
would not be actionable by the payor.” LL Pet. 13: Stm. Pet. 12-13; OL
Pet. 12. But Petitioners are wrong and their hypothetical is not to the
point: in the hypothetical (as in Marshfield) there may be a direct injury
resulting from the wrongful acts of the medical supplier; however, the
hypothesized suit is not against a tortfeasor alleged to have caused the
injury to the patient requiring that he be treated by the “cancer
medicine.”

16

tomers. Rather, it claims distinct and independent
injuries.” Id. at 264 (emphasis added).

¢ Finally, Petitioners’ footnote citations (LL Pet. 18 n.5;
Stm. Pet. 17 n.7; OL Pet. 16 n.4) include: Third Circuit
cases which Steamfitters explicitly ruled were not on
point (see 171 F.3d at 923, 931-32 (Stm. Pet. 15a-16a,
30a-32a)); Second Circuit cases which Laborers Local
addressed and explicitly concluded were examples of
direct injury (see 191 F.3d at 237-39 (LL Pet. 13a-15a));
and a Seventh Circuit case (Jn re EDC, Inc., 930 F.2d
1275 (7th Cir. 1991) which that Court pointed out in
International Bhd. of Teamsters is “inapposite” (1999
WL 1034711 at *7). The other cases in Petitioners’
footnote are not on point and, in any event, are all from
Circuits in which appeals of dismissals of substantially
identical union fund cases are now pending (i.e., in the
Fifth, Eighth, Ninth, Tenth and Eleventh Circuits).

B. Conflicts among the district courts would not
warrant the grant of certiorari and, in any event,
the district courts have overwhelmingly rejected
medical expense recovery suits by union funds
and other private payors.

Even if one hypothesized a split among the federal district
courts in these cases, such a split would not warrant exercise
of this Court's certiorari jurisdiction. But, in any event, Peti-
tioners misrepresent the weight of the authority in union fund
and other private payor cases in federal district courts. See LL
Pet. 25-27; Stm. Pet. 26-29; OL Pet. 22-25. The federal dis-
trict courts have overwhelmingly rejected these suits. To date,
16 federal district courts have dismissed the RICO and federal
antitrust claims in such suits as a matter of law. See RA2-4,
infra. In addition, in other federal district courts RICO and
federal antitrust claims have been voluntarily dismissed by
plaintiffs. See RA4-5, infra. By contrast, of those federal dis-
trict courts that thus far have decided motions to dismiss,

17

RICO and federal antitrust claims survive today in only two.
See RAS-6, infra.*

C. Conflicts with district court or state trial court
decisions in cases brought by states or state
attorneys general would not warrant the grant of
certiorari and, in any event, there is no conflict.

Petitioners’ repeated reliance on cases brought by states or
State attorneys general is misplaced. Only two of the decided
cases brought by states or state attorneys general against the
tobacco companies — the Texas and Puerto Rico suits (Texas
v. American Tobacco Co., 14 F.Supp.2d 956 (E.D. Tex. 1997);
Rosello v. Brown & Williamson, No. 97-1910 (JAF), slip op.
(D.P.R. Aug. 10, 1998)) — asserted federal RICO or antitrust
claims. Both courts relied on the state’s invocation of So-
called “quasi-sovereign” or parens patriae authority in allow-
ing these cases to continue, decisions with which Respondents
disagree but concepts which obviously are not applicable in
suits by union funds. See Laborers Local, 191 F.3d at 244 (LL
Pet. 25a); Steamfitters, 171 F.3d at 934 n.18 (Stm. Pet. 37a).
In addition, the court in the Texas suit dismissed the State’s
federal antitrust claims and essentially deferred ruling upon
the sufficiency of the federal RICO claim. Texas, 14 F. Supp.2d

° Of these two district courts, one (in Utah) certified its order for
appeal under § 1292(b); on November 22, 1999, the Tenth Circuit granted
leave to appeal. Only one federal judge, Judge Weinstein in the Eastern
District of New York, has both refused to dismiss the cases before him
(National Asbestos and New Jersey Blue Cross) and refused to certify.
See RA6, infra. As the Seventh Circuit observed in International Bhd of
Teamsters, Judge Weinstein’s denial of defendants’ motions to dismiss “is
a thinly disguised refusal to accept and follow the second Circuit’s hold-
ing [in Laborers Local].” 1999 WL 1034711 at *8. As to two other cases
Petitioners rely upon, in Arkansas Blue Cross the Seventh Circuit has
now reversed and instructed the district court to dismiss the case (id. at
*9), and although the court in Jron Workers denied 12(b)(6) dismissal of
federal RICO and antitrust claims, it subsequently dismissed the antitrust
claim on summary judgment and granted a directed verdict on the RICO
claim. See RA1, 3, infra.

18

at 969-70. The other decisions in state cases cited by Peti-
tioners — all of which were brought in the plaintiff states’
own courts — alleged only state law claims and are almost
entirely decisions of state trial courts.* Thus the cases
brought by the states cannot support the grant of certiorari to
review the dismissal by the Courts of Appeals of the union
funds’ RICO and federal antitrust claims.

Nor is the settlement of the state cases relevant. As the Sec-
ond Circuit observed (describing decisions of other courts in
cases brought by states and state attorneys general): “in gen-
eral, state cases are often distinguishable on the issue of prox-
imate causation given the state’s unique role relative to
protection of its citizens, statutes governing Medicaid recoup-
ment, and certain state statutes that permit states to maintain
actions on behalf of their citizenry.” Laborers Local, 191 F.3d
at 244 (LL Pet. 25a). See also Steamfitters, 171 F.3d at 934
n.18 (Stm. Pet. 37a).

° The first state action filed in state court was brought in 1994 by
the Mississippi Attorney General in a chancery court in Pascagoula, Mis-
sissippi. Texas filed its suit in the Texarkana Division of the Eastern Dis-
trict of Texas federal court, where only one judge sat.

Although Petitioners fail to mention it, in all three cases in which the
issue reached a state's highest court, each state Supreme Court ruled that
medical expense payors do not have an independent direct cause of action
at common law, but can only proceed (if at all) through subrogation. See
lowa vy. Philip Morris, Inc., 577 N.W.2d 401, 407 (Iowa 1998); Agency
for Health Care v. Associated Indus., 678 So.2d 1239, 1248 (Fla. 1996)
(holding that state did not possess independent cause of action prior to
1994 anti-tobacco statute), cert. denied, 520 U.S. 1115 (1997); Minnesota
v. Philip Morris, 551 N.W.2d 490, 495 (Minn. 1996) (dismissing Blue
Cross’ special duty claim as “simply too remote”; allowing certain state
statutory claims to survive because specific state statutes involved assert-
edly overcame remoteness bar). Thus, the three highest state courts to
reach these issues — like the four federal Courts of Appeals — recog-
nized that “direct” claims by medical expense payors are barred under
traditional common law principles (which, as noted, this Court has
applied to private actions under the federal antitrust laws and RICO, see
pp.5-6, supra).

——— Se ee ee

19

Similarly, the mere filing of suit by the United States
against the tobacco companies (see LL Pet. 4-5; Stm. Pet. 4:
OL Pet. 4) cannot possibly justify certiorari. That lawsuit has
not yet produced a district court decision evaluating its legal
merit, much less appellate review of such a decision. More-
over, two of the three claims asserted (under the Medical Care
Recovery Act and the Medicare Secondary Payer statute)
were not asserted in these union fund cases, and the RICO
claim is brought pursuant to 18 U.S.C. § 1964(a) and (b) and
seeks only equitable relief whereas the focal point of Peti-
tioners’ suits was treble damages pursuant to § 1964(c). See
p. 20, infra.*

° Review of the Courts of Appeals decisions at bar is also unwar-
ranted because there are multiple grounds for affirming the decisions, and
review would not lead to reversal. First, Petitioners’ RICO and antitrust
claims are also barred because medical expenses occasioned by personal
injuries are not injury to “business or property.” 15 U.S.C. § 15; 18
U.S.C. §1964(c); see also Reiter v. Sonotone Corp., 442 U.S. 330, 339
(1979). The medical expenses the funds seek here are an integral com-
ponent of their participants’ personal injury claims (see, e.g., Metro-
North v. Buckley, 521 U.S. 424, 438-39 (1997): 2 Dobbs, Law of
Remedies §§ 8.1(1), (3) (2d ed. 1999)), and accordingly are not “business
or property” injury. See Laborers Local, 191 F.3d at 241 (LL Pet. 19a-
20a); Oregon Laborers, 185 F.3d at 964 and 968 (OL Pet. 9a- 10a, 19a).
To permit the funds to characterize medical expenses for personal injuries
allegedly inflicted upon others as “business or property” injury to them-
selves would sanction a form of legal alchemy which would permit the
existence of insurance to transform state-law claims for personal injuries
into federal antitrust and RICO treble damages claims. There is no basis
for such a result.

Second, Petitioners were not participants in a market that defendants
are alleged to have restrained and thus did not suffer antitrust injury. See
Oregon Laborers, 185 F.3d at 966-67 (OL Pet. 16a-18a). Third, there are
procedural deficiencies in the record below that make these cases
unattractive vehicles for the presentation of plaintiffs’ position. Specif-
ically, the funds’ conclusory allegations of reliance lack the required par-
ticularity. In addition, as a matter of law, the funds cannor plead
justifiable reliance because a plaintiff who is on notice of facts that
should arouse suspicion must make a reasonable investigation to ascer-
tain the truth. Court after court has recognized that the health risks asso-

20

IV. THE FUNDS’ CLAIMS FOR INJUNCTIVE RELIEF
UNDER RICO DO NOT WARRANT THE GRANT
OF CERTIORARI.

The Oregon Laborers Petitioners state that certiorari is
needed to decide whether injunctive relief is available to a
private RICO plaintiff (OL Pet. 25), and the Laborers Local
Petitioners ask the Court to decide whether the Holmes “fac-
tors” apply to their RICO claim for injunctive relief (LL Pet.
27; see also Stm. Pet. 24 n.10 (referencing same issue)). But
Petitioners’ suggestions that these cases present issues con-
cerning injunctive relief under RICO are misleading, and
review by this Court of any such issue is plainly unwarranted
here.

First, the procedural history of these cases makes them
poor vehicles for addressing questions of injunctive relief
under RICO. Thus, the issue of injunctive relief in these cases
is a clear afterthought to Petitioners’ claims for RICO treble
damages. The funds’ Courts of Appeals briefs barely men-
tioned RICO injunctive relief: the Oregon Laborers Peti-
tioners’ Ninth Circuit briefs devoted barely one page (out of
90) to the issue, and the Laborers Local Petitioners’ Second
Circuit brief did not address it at all (their Petition for
Rehearing devoted only a half page to the issue). Moreover,
the Oregon Laborers Petitioners appear to argue (at least in
part) that injunctive relief under § 1964(a) is available to
those private litigants who have standing to sue for damages
under § 1964(c). See OL Pet. 27. But § 1964(c) requires a
plaintiff to show injury to its “business or property” — which
Petitioners cannot do. See p. 19n.*, supra. Thus, here the
issue of whether a private plaintiff ‘may sue for injunctive
relief under RICO is complicated by the threshold issue of
Petitioners’ lack of “business or property” injury. In short,

ciated with smoking are a matter of longstanding common knowledge.
See, e.g., Roysdon v. R.J. Reynolds Tobacco Co., 849 F.2d 230, 236 (6th
Cir. 1988); Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 172 (Sth
Cir. 1996).

sta rereneaieteenrenemetensneninainenieniiainiiliid

21

even were there a fully developed circuit split concerning the
availability of RICO injunctive relief in a suit by a private
plaintiff — and there is not (see below) — these cases are not
appropriate vehicles by means of which to address the issue.

Second, there is no circuit split warranting review. The
Ninth Circuit rejected the funds’ claim for RICO injunctive
relief on the basis of its decision in Religious Technology Ctr.
v. Wollersheim, 796 F.2d 1076 (9th Cir. 1986), cert. denied,
479 U.S. 1103 (1987). See Oregon Laborers, 185 F.3d at 967-
68 (OL Pet. 19a). Wollersheim extensively reviewed the leg-
islative history of 18 U.S.C. §1964 and concluded that injunc-
tive relief under RICO is not available to private litigants.
796 F.2d at 1084-87. A number of Courts of Appeals are in
agreement with the Ninth Circuit’s conclusion. See, e.g., In re
Fredeman Litig., 843 F.2d 821, 828-30 (Sth Cir. 1988): Dan
River, Inc. v. Icahn, 701 F.2d 278, 290 (4th Cir. 1983): Trane
Co. v. O’Connor Securities, 718 F.2d 26, 28-9 (2d Cir. 1983);
see also Kaushal v. State Bank of India, 556 F.Supp. 576,
581-85 (N.D.IIl. 1983). Certain Courts of Appeals have not
expressed a view on the issue. The only example Petitioners
can offer of a Court of Appeals indicating that injunctive
relief is available to a private RICO plaintiff is a one sentence
footnote in Faircloth v. Finesod, 938 F.2d 513,518 n.11 (4th
Cir. 1991) (OL Pet. 26 n.10). In that footnote, a panel of the
Fourth Circuit — without discussion and citing no authority
(in particular, not citing Dan River (op. cit.), an earlier Fourth
Circuit case expressing “substantial doubt” that such relief
was available) — affirmed a permanent injunction issued inci-
dent to an award of treble damages to prevent defendant from
collecting on a note wrongly obtained from plaintiff. See OL
Pet. 26 n.10. This solitary footnote does not establish a circuit
split warranting certiorari.*

- The Third Circuit in Steamfitters states that “circuits are split”
on the issue of injunctive relief for private RICO plaintiffs, and cites
Conkling v. Turner, 18 F.3d 1285, 1296 n.8 (Sth Cir. 1994), for that state-
ment. 171 F.3d at 935 n.20 (Stm. Pet. 39a). But the only Court of Appeals
case Conkling cites as favoring the availability of such relief is Bennett

22

Third, unless the Court first overrules Wollersheim and
other Courts of Appeals and holds that RICO injunctive relief
is available to a private plaintiff, it would obviously be futile
for the Court to address the issue raised by the Laborers Local
Petitioners of whether the Holmes policy considerations apply
in such a suit for injunctive relief. In addition, Petitioners are
asking this Court to decide the applicability of the Holmes
considerations in a private RICO injunction suit on an entirely
clean slate: Petitioners do not identify any court in the coun-
try that has addressed this issue (all the cases Petitioners cite
on this point concern injunctive relief under the antitrust
laws, see LL Pet. 27-30).

CONCLUSION

For the foregoing reasons, the petitions for writs of cer-
tiorari in Laborers Local, Steamfitters and Oregon Laborers
should be denied.

Dated: November 23, 1999

v. Berg, 685 F.2d 1053, 1064 (8th Cir. 1982); however, Bennett merely
cites to a law review article “without at this time endorsing or rejecting
the opinions there expressed.” Moreover, the argument of the article cited
by the Eighth Circuit in Bennett — an argument relied on by the Oregon
Laborers Petitioners (see OL Pet. 27) — has been criticized by a number
of courts. See, e.g., Sedima v. Imrex Co., 741 F.2d 482, 490 n.20 (2d Cir.
1984) (“a rather remarkable argument”), rev’d on other grounds, 473 U.S.
479 (1985); Kaushal, 556 F.Supp. at 582 & n.17 (“bizarre and wholly
unconvincing” argument ).

* Counsel of Record

23

Respectfully submitted,

: HERBERT M. WACHTELL

Herbert M. Wachtell*

Peter C. Hein

Stephen R. Blacklocks

WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street

New York, New York 10019

(212) 403-1000

David S. Eggert

James Rosenthal

ARNOLD & PORTER

555 Twelfth Street, N.W.
Washington, D.C. 20004-1202
(202) 942-5000

Attorneys for Respondent
Philip Morris Incorporated

Robert H. Klonoff

Paul S. Ryerson

JONES, DAY, REAVIS & POGUE
51 Louisiana Avenue, N.W.
Washington, D.C. 20001

(202) 879-3939

Attorneys for Respondent
R.J. Reynolds Tobacco Company

Peter J. Busch

Henry Joseph Escher III

HOWARD, RICE, NEMEROVSKI,
CANADY, FALK & RABKIN

Three Embarcadero Center, 7th Floor

San Francisco, California 94111

(415) 434-1600

Attorneys for Respondent
R.J. Reynolds Tobacco Company
in 99-642

Kenneth N. Bass

Edward W. Warren
KIRKLAND & ELLIS

655 Fifteenth Street, N.W.
Suite 1200

Washington, D.C. 20005
(202) 879-5000

Attorneys for Respondent
Brown & Williamson Tobacco
Corporation (including as
successor by merger to
Respondent The American
Tobacco Company, Inc.)

Jeffrey S. Nelson

Joseph A. Lanahan

SHOOK, HARDY & BACON L.L.P.
One Kansas City Place

1200 Main Street

Kansas City, Missouri 64105
(816) 474-6550

Attorneys for Respondent
Lorillard Tobacco Company

Peter J. McKenna

Eric S. Sarner

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP

919 Third Avenue

New York, New York 10022

(212) 735-3000

Attorneys for Respondent
United States Tobacco Company

Steven Klugman

Bruce G. Merritt
DEBEVOISE & PLIMPTON
875 Third Avenue

New York, New York 10022
(212) 909-6000

Attorneys for Respondent
The Council for Tobacco
Research — U.S.A., Inc.

Howard M. Klein
William J. O’Brien
CONRAD O’BRIEN GELLMAN
& ROHN, P.C.
Sixteenth Floor
1515 Market Street
Philadelphia, Pennsylvania 19102-1916
(215) 864-9600

Attorneys for Respondent
The Tobacco Institute, Inc.

Wilbur L. Kipnes
SCHNADER HARRISON SEGAL

& LEwis LLP
1600 Market Street, Suite 3600
Philadelphia, Pennsylvania 19103-7286
(215) 751-2336

Attorneys for Respondent
Smokeless Tobacco Council, Inc.
in 99-545

Barry S. Schaevitz

JACOB, MEDINGER & FINNEGAN, LLP
1270 Avenue of the Americas, 31st Floor
New York, New York 10020

(212) 332-7700

Attorneys for Respondent
Smokeless Tobacco Council, Inc.
in 99-79]

Bruce M. Ginsberg

Marc Rachman

DAVIS & GILBERT

1740 Broadway

New York, New York 10019
(212) 468-4800

Attorneys for Respondent
Hill & Knowlton, Inc.

Jay R. Henneberry

Susan St. Denis

CHADBOURNE & PARKE, LLP

601 South Figueroa Street

Los Angeles, California 90017-3706
(213) 892-1000

Attorneys for Respondent
British American Tobacco
(Investments) Limited
(formerly known as British-
American Tobacco Company
Limited) in 99-642

RAI

Appendix

FEDERAL COURT OPINIONS IN SUITS BROUGHT BY
UNION FUNDS AND OTHER PRIVATE PAYORS
ASSERTING RICO AND/OR FEDERAL ANTITRUST
CLAIMS

A.

FEDERAL COURTS DISMISSING RICO AND/OR
FEDERAL ANTITRUST CLAIMS

1. Courts of Appeals

Second Circuit:

Laborers Local 17 Health & Benefit Fund v. Philip Mor-
ris, Inc., 191 F.3d 229 (2d Cir. 1999) (on § 1292(b)
appeal by defendants, reversed denial of 12(b)(6) motion
and directed dismissal of RICO claims; federal antitrust
claims previously dismissed by district court, 7 F Supp.2d
277 (S.D.N.Y. 1998)), r’hg and r’hg en banc denied (2d
Cir. Aug. 6, 1999).

Third Circuit:

Steamfitters Local Union No. 420 Welfare Fund v. Philip
Morris, Inc., 171 F.3d 912 (3d Cir. 1999) (affirmed dis-
missal of RICO and federal antitrust claims), r’hg and
r’hg en banc denied (Apr. 29, 1999).

Seventh Circuit:

International Brotherhood of Teamsters, Local 734
Health & Welfare Trust Fund and Central States Joint
Board Health & Welfare Trust Fund v. Philip Morris,
Inc., and Arkansas Blue Cross & Blue Shield v. Philip
Morris Inc., 1999 WL 1034711 (7th Cir. Nov. 15, 1999)
(suits by union funds and Blue Cross/Blue Shield enti-

ee

RA2

ties;* affirmed or directed dismissal of all claims,
including RICO and federal antitrust claims).

Ninth Circuit:

Oregon Laborers—Employers Health & Welfare Trust
Fund v. Philip Morris, Inc., 185 F.3d 957 (9th Cir. 1999)
(affirmed dismissal of RICO and federal antitrust
claims).

2. District Courts

Allegheny General Hosp. v. Philip Morris, Inc., No.
99-9, slip op. (W.D. Pa. Nov. 4, 1999) (Judge Ambrose)
(RICO and federal antitrust claims by hospital owners
and operators dismissed).

Arkansas Carpenters’ Health & Welfare Fund v. Philip
Morris, Inc., No. LR-C-97-754, slip op. (E.D. Ark. Sept.
28, 1999) (Judge Moody) (RICO and federal antitrust
claims dismissed); notice of appeal filed; appeal volun-
tarily dismissed (8th Cir. Nov. 22, 1999).

Rhode Island Laborers’ Health & Welfare Fund v. Philip
Morris, Inc., 1999 WL 619064 (D.R.I. Aug. 11, 1999)
(Magistrate Judge Lovegreen) (recommending dismissal
of RICO and federal antitrust claims; recommendation
pending with district court).

Massachusetts Laborers’ Health & Welfare Fund v.
Philip Morris, Inc., 62 F.Supp.2d 236 (D. Mass. 1999)
(Judge O’ Toole) (RICO and federal antitrust claims dis-
missed).

Lyons v. Philip Morris, Inc., No. 98-515, slip op. (D.
Minn. Apr. 29, 1999) (Judge Magnuson) (RICO and fed-
eral antitrust claims dismissed); appeal pending.

ws Except where specifically indicated, plaintiffs in the cases listed
herein were union funds.

RA3

Contractors, Laborers, Teamsters & Engineers Health &
Welfare Plan v. Philip Morris, Inc., No. 8:98CV364, slip
op. (D. Neb. Feb. 18, 1999) (Judge Shanahan) (RICO
and federal antitrust claims dismissed).

Laborers’ & Operating Engineers’ Utility Agreement
Health & Welfare Trust Fund for Arizona v. Philip Mor-
ris, Inc., No. CIV 97-1406 PHX SMM (D. Ariz. Feb. 10,
1999) (Judge Sedwick) (RICO and federal antitrust
claims dismissed); appeal pending.

Hawaii Health & Welfare Trust Fund for Operating
Engineers v. Philip Morris, Inc., 52 F.Supp.2d 1196 (D.
Haw. 1999) (Judge King) (RICO and federal antitrust
claims dismissed); appeal pending.

Regence Blueshield v. Philip Morris, Inc., 40 F.Supp.2d
1179 (W.D. Wash. 1999) (Judge Rothstein) (RICO and
federal antitrust claims brought by various Blue
Cross/Blue Shield entities dismissed); appeal pending.

Oregon Laborers-Employers Health & Welfare Trust
Fund v. Philip Morris, Inc., 17 F.Supp.2d 1170 (D.Or.
1998), aff'd, 185 F.3d 957 (9th Cir. 1999) (see RA2.,

supra).

Williams & Drake Co. v. American Tobacco Co., No. 98-
553, slip op. (W.D. Pa. Dec. 21, 1998) (Judge Ambrose)
(RICO and federal antitrust claims brought by self-
insured employer dismissed).

Texas Carpenters Health Benefit Fund v. Philip Morris,
Inc., 21 F.Supp.2d 664 (E.D. Tex. 1998) (Judge Heart-
field) (RICO and federal antitrust claims dismissed):
appeal pending.

Iron Workers Local Union No. 17 Insurance Fund v.
Philip Morris, Inc., 23 F.Supp.2d 771 (N.D. Ohio 1998)
(Judge Gwin) (denying defendants’ motion to dismiss);
29 F.Supp.2d 801 (1998) (summary judgment granted
dismissing federal antitrust claims); bench order (Mar. 5,

RA4

1999) (directed verdict dismissing RICO claims); jury
verdict for defendants (Mar. 22, 1999), finding no fraud.

Seafarers Welfare Plan v. Philip Morris, Inc., 27
F.Supp.2d 623 (D. Md. 1998) (Judge Garbis) (RICO and
federal antitrust claims dismissed); notice of appeal
filed; appeal voluntarily dismissed (4th Cir. Sept. 14,
1998).

New Jersey Carpenters Health Fund v. Philip Morris,
Inc., 17 F.Supp.2d 324 (D.N.J. 1998) (Judge Barry) (fed-
eral antitrust claims dismissed); slip op. (May 11, 1999)
(dismissing RICO claims).

Stationary Engineers Local 39 Health & Welfare Trust
Fund v. Philip Morris, Inc., 1998 WL 476265 (N.D. Cal.
Apr. 30, 1998) (Judge Jensen) (RICO and federal
antitrust claims dismissed); appeal pending.

Steamfitters Local Union No. 420 Welfare Fund v. Philip
Morris, Inc., 1998 WL 212846 (E.D. Pa. Apr. 22, 1998),
aff'd, 171 F.3d 912 (3d Cir. 1999) (see RAI, supra).

Southeast Florida Laborers District Health & Welfare
Trust Fund v. Philip Morris, Inc., 1998 WL 186878 (S.D.
Fla. Apr. 13, 1998) (Judge Ryskamp) (RICO and federal
antitrust claims dismissed); notice of appeal filed; appeal
voluntarily dismissed (11th Cir. Oct. 20, 1998).

VOLUNTARY DISMISSALS OF RICO AND FED-
ERAL ANTITRUST CLAIMS BY PLAINTIFFS

Northwest Laborers-Employers Health & Security Trust
Fund vy. Philip Morris, Inc., No. C97-849WD, slip op.
(W.D. Wash. Dec. 23, 1998) (Judge Dwyer) (denying
motion to dismiss); RICO and federal antitrust claims
voluntarily dismissed (May 25, 1999); 58 F.Supp.2d
1211 (1999) (granting summary judgment dismissing
remaining claims); appeal pending.

RAS

West Virginia Laborers’ Pension Trust Fund v. Philip
Morris, Inc., 1998 WL 964983 (S.D. W. Va. 1998)
(Judge Haden) (denying motion to dismiss); RICO and
federal antitrust claims voluntarily dismissed (June 28,
1999).

Kentucky Laborers District Council Health & Welfare
Trust Fund v. Hill & Knowlton, Inc., 24 F.Supp.2d 755
(W.D. Ky. 1998) (Judge Heyburn) (denying motion to
dismiss some RICO claims, but dismissing other RICO
claims and federal antitrust claims); remaining RICO
claims voluntarily dismissed (Oct. 5, 1999).

B.A.C Local No. 32 Insurance Trust Fund v. Philip Mor-
ris, Inc., No. 97-75675 (E.D. Mich.) (Judge Duggan);
RICO and federal antitrust claims voluntarily dismissed
(Sept. 18, 1998).

COURTS CERTIFYING FOR § 1292(b) APPEAL

Utah Laborers’ Health & Welfare Trust Fund v. Philip
Morris, Inc., No. 2:96CV 829B, slip op. (D. Utah Mar.
30, 1999) (Judge Benson) (denying motion to dismiss
RICO and federal antitrust claims); slip op. (Sept. 3,
1999) (granting motion for § 1292(b) certification);
leave to appeal granted (10th Cir. Nov. 22, 1999).

RA6

COURTS WHICH HAVE NOT DISMISSED RICO
AND FEDERAL ANTITRUST CLAIMS OR CERTI-
FIED PURSUANT TO § 1292(b)

Eastern District of New York (Judge Weinstein) in two
cases: (1) National Asbestos Workers Medical Fund v.
Philip Morris, Inc., 23 F.Supp.2d 321 (E.D.N.Y. 1998)
(denying motion to dismiss RICO claims); and (2) Blue
Cross and Blue Shield of New Jersey v. Philip Morris,
Inc., 36 F.Supp.2d 560 (E.D.N.Y. 1999) (denying motion
to dismiss in case brought by various Blue Cross/Blue
Shield entities). The following orders and decisions were
captioned jointly in both cases: 1999 WL 592669 (Aug.
2, 1999) and 1999 WL 706113 (Sept. 7, 1999) (denying
motions for summary judgment and to dismiss fourth
amended complaint); slip op. (Oct. 13, 1999) and 1999
WL 1000144 (Nov. 1, 1999) (denying § 1292(b) certifi-
cation); Jn re Philip Morris, Inc., No. 99-3058, order (2d
Cir. Oct. 26, 1999) (denying petition for mandamus);
petition for rehearing en banc filed Nov. 8, 1999.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0122%3A2. Public record. Not legal advice.