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Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc

    Brief Fact Summary. Plaintiffs sued Defendant, a tobacco company, for misleading and concealing the dangers of smoking. Defendant submitted a motion to dismiss. At issue is proximate cause.

    Synopsis of Rule of Law. Proximate cause is an elusive concept, one always to be determined on the facts of each case upon mixed considerations of logic, common sense, justice, policy and precedent. One notion traditionally included in the concept of proximate causation is the requirement that there be some direct relation between the injury asserted and the injurious conduct alleged. A plaintiff who complains of harm flowing merely from the misfortunes visited upon a third person by the defendant’s acts is generally said to stand at too remote a distance to recover.

    Facts. Plaintiffs are responsible to provide health care to their union members. Plaintiffs alleged: (1) Defendant tobacco companies engaged in an advertising campaign designed to mislead the public, and Plaintiffs specifically, as to the true extend of the dangers that smoking poses to good health; (2) that Defendant actively concealed information that would have demonstrated the actual health risks, the addictiveness of nicotine, the effectiveness of various treatments for smoking addiction, and Defendant’s own ability to manufacture less addictive products; and, (3) Plaintiffs spent tens of millions of dollars to provide medical services for participants suffering form cigarette smoking-related diseases. Plaintiffs alleged RICO violations and common law fraud, both of which held the same requirement for proof of proximate cause. Defendant submitted a motion to dismiss.

    Issue. Is the chain of causation linking Defendant’s alleged wrongdoing to Plaintiff’s alleged injuries too remote to permit recovery as a matter of law?

    Held. Yes. Defendant’s motion for summary judgment is granted.
    * Plaintiffs’ standing to sue under RICO requires “a showing that Defendant’s violation not only was the ‘but for’ cause of their injuries, but was the proximate cause as well. Proximate cause is an elusive concept, one always to be determined on the facts of each case upon mixed considerations of logic, common sense, justice, policy and precedent. One notion traditionally included in the concept of proximate causation is the requirement that there be some direct relation between the injury asserted and the injurious conduct alleged. A plaintiff who complains of harm flowing merely from the misfortunes visited upon a third person by the defendant’s acts is generally said to stand at too remote a distance to recover.
    * Plaintiff’s injuries are entirely derivative of the harm suffered by plan participates as a result of using tobacco products. Being purely contingent on harm to third parties, these injuries are indirect. Consequently, because Defendant’s alleged misconduct did not proximately cause the injuries alleged, Plaintiffs lack standing to bring RICO claims against Defendants.
    * The less the direct an injury is, the more difficult it becomes to ascertain the amount of liability of a plaintiff’s damages attributable to the violation. The ultimate question of damages suffered by Plaintiffs is virtually impossible to determine. For the Court to rule otherwise could lead to a potential explosion in the scope of tort liability, which, while perhaps well intentioned, is a subject best left to the legislature.
    * Recognizing claims of the indirectly injured would force courts to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, to obviate the risk of multiple recoveries.
    * The need to grapple with the problems of calculating and apportioning damages was unjustified where directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely.
    * An allegation of specific intent does not overcome the requirement that there must be a direct injury to maintain this action.

    Discussion. In order to maintain an action in fraud, the Plaintiff must prove that Defendant’s wrongdoing was the actually and proximate cause of Plaintiff’s damages. In this case, Plaintiffs failed to prove proximate causation.


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