Allegheny General Hospital, et al. v. Philip Morris, Inc., et al.
Plaintiffs, 16 non-profit hospitals tasked under Pennsylvania law with caring for Medicaid and other indigent patients, brought suit against tobacco companies to recover costs, alleging that the defendants had violated Racketeer Influenced and Corrupt Organizations Act (RICO) when they engaged in a conspiracy lasting more than 40 years to manipulate the nicotine content in cigarettes and other tobacco products. The plaintiffs claimed that the defendants deceived and misled the public about the addictive properties of nicotine and the health risks of smoking. As a result, many people used tobacco and developed lung cancer and other tobacco-related illnesses. The Court held that the hospitals lacked quasi-governmental standing; standing to assert antitrust claims; standing to assert RICO claims; proximate cause - required to support fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation and omission, and special duty claims; aiding and abetting; and civil conspiracy claims . The Court also found that the plaintiffs failed to state a claim of public nuisance, that tobacco companies were not unjustly enriched, and that action for indemnity was unavailable.
Allegheny General Hospital, et al. v. Philip Morris, Inc., et al., 228 F.3d 429, United States Court of Appeals, Third Circuit (2000).
United States
Oct 6, 2000
United States Court of Appeals for the Third Circuit
Some jurisdictions allow an individual or organization to initiate an action against another private party who is not following a particular law. For example, a person may sue a restaurant that allows smoking despite a smoke free law. If the plaintiff is claiming the violation of the law caused physical harm, this may also be a personal injury case.
Governments or insurance agencies may seek reimbursement from the tobacco companies for health care costs related to tobacco. The most famous example is the case brought by individual states in the U.S.A. that resulted in the Master Settlement Agreement.
Any violation of a law designed to ensure fair trade, competition, or the free flow of truthful information in the marketplace. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue.
The court might consider procedural matters without touching the merits of the case. These might include: improper joinder, when third parties, such as Health NGOs or government officials, seek to become parties to the suit; lack of standing, where a plaintiff fails to meet the minimum requirements to bring suit; lack of personal jurisdiction, where the court does not have jurisdiction to rule over the defendant; or lack of subject matter jurisdiction, where the court does not have jurisdiction over the issue at suit.
Type of Tobacco Product
None
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"For the record, we believe here that sound public policy argues against proximate cause and standing. When an injury is indirect, remote, and many steps away from the alleged cause, it is unadvisable to allow a case to proceed. See Palsgraf v. Long Island R.R. Co., 162 N.E. 99, 103 (N.Y. 1928) (Andrews, J., dissenting) ("What we do mean by the word `proximate' is that, because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point."). The Hospitals are dangerously close to asserting that they have standing to sue any company that causes a nonpaying patient's disease or illness. For example, could the hospitals sue a group of auto manufacturers for the unreimbursed costs of treating nonpaying patients injured in car accidents, simply by alleging that the manufacturers conspired to keep defective vehicles on the road? See
Assoc. of Wash. Pub. Hosp. Dists., 79 F. Supp. 2d at 1226. We doubt that would be in the interests of
public policy. It is beyond dispute that the Tobacco Companies have engaged in "decades-long marketing of a product that we now know is demonstrably unsafe." Steamfitters, 171 F.3d at 927. At times, courts have ordered compensation. See, e.g., Amy Driscoll, Jurors Call $145 Billion Tobacco Verdict a `Message'; Florida Panel Members Say Record Award Is Firms' Penalty for Lying, Wash. Post, July 16, 2000, at A2 (a Florida jury returns $145 billion verdict in a class action suit against tobacco companies). We express no view on the propriety of such compensation. We simply hold that, due to the remoteness of the Hospitals' injuries, this third-party suit against the tobacco industry may not proceed."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
Plaintiffs, 16 non-profit hospitals tasked under Pennsylvania law with caring for Medicaid and other indigent patients, brought suit against tobacco companies to recover costs, alleging that the defendants had violated Racketeer Influenced and Corrupt Organizations Act (RICO) when they engaged in a conspiracy lasting more than 40 years to manipulate the nicotine content in cigarettes and other tobacco products. The plaintiffs claimed that the defendants deceived and misled the public about the addictive properties of nicotine and the health risks of smoking. As a result, many people used tobacco and developed lung cancer and other tobacco-related illnesses. The Court held that the hospitals lacked quasi-governmental standing; standing to assert antitrust claims; standing to assert RICO claims; proximate cause - required to support fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation and omission, and special duty claims; aiding and abetting; and civil conspiracy claims . The Court also found that the plaintiffs failed to state a claim of public nuisance, that tobacco companies were not unjustly enriched, and that action for indemnity was unavailable.