TOBACCO CONTROL LAWS

Blue Cross and Blue Shield of New Jersey v. Philip Morris USA

Twenty health insurance plans filed suit against defendant tobacco companies seeking to recover costs of providing health care to plan subscribers as a result of medical conditions causally connected to, or exacerbated by, tobacco use. On appeal of the trial court's denial of defendants' motion for judgment as a matter of law, the Appellate Court held that health care cost recovery claim was improper because it failed to name the identities and claims of its insureds for whom it sought recovery. Regarding plaintiff's claim for damages on its own behalf, the Court held: (1) the plaintiff did not lack standing to sue under the consumer protection statute; (2) the jury properly conditioned liability on defendants' fraudulent misrepresentations, as opposed to defendants' failure to warn; (3) sufficient evidence existed to support the jury's verdict; (4) sufficient evidence existed to support the jury's assessment of damages; (5) the defendants' rights to a jury trial were not violated by the presence or absence of certain types of evidence; and (6) the defendants' due process rights were not violated by the use of aggregate, rather than individualized, evidence of harm. The court delayed resolution of the remaining issues on appeal pending the return of certification of two questions to the New York Court of Appeals. 

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Blue Cross and Blue Shield of New Jersey, Inc., et al. v. Philip Morris USA, Incorporated, et al., 344 F.3d 211, United States Court of Appeals, Second Circuit (2003).

  • United States
  • Sep 16, 2003
  • United States Court of Appeals, Second Circuit
View Case History

Parties

Plaintiff

  • BCBSD, Inc., (d/b/a Blue Cross Blue Shield of Delaware)
  • Blue Cross and Blue Shield of Florida, Inc., and its affiliates, Health Options, Inc. and Capital Group Health Services of Florida, Inc., (d/b/a Capital Health Plan)
  • Blue Cross and Blue Shield of New Jersey, Inc., now known as Horizon Healthcare Services, Inc, (d/b/a Blue Cross Blue Shield of New Jersey, Horizon Blue Cross Blue Shield, Horizon Blue Cross Blue Shield of New Jersey, and Horizon BCBSNJ), and its subsidiary, Horizon Health Care of New Jersey, Inc. (d/b/a Medigroup of New Jersey, HMO Blue and Horizon HMO)
  • Blue Cross and Blue Shield of North Carolina, and its subsidiaries Personal Health Plan of North Carolina, Inc. and Health Maintenance Organization of North Carolina
  • Blue Cross and Blue Shield of Vermont
  • Blue Cross Blue Shield of Georgia, Inc., and it affiliates HMO Georgia, Inc.
  • Blue Cross Blue Shield of Mississippi, A Mutual Insurance Company, and its affiliate HMO of Mississippi, Inc.
  • Bluecross and Blueshields of Massachusetts, Inc.
  • Bluecross Blue Shield of Michigan, and its subsidiary, Blue Care Network of Michigan Incorporated
  • California Physicians' Services, (d/b/a Blue Shield of California) and its affiliate, CareAmerica Life Insurance Company
  • Carefirst of Maryland, Inc., and its subsidiary Free State Health Plan Inc.
  • Empire Blue Cross and Blue Shield
  • Excellus, Inc., and its subsidiaries, The Finger Lakes Companies, Inc., (and its subsidiaries, Finger Lakes Health Insurance Company, Inc. and Finger Lakes Medical Insurance Company, Inc.), Excellus of Central New York, Inc. (and its subsidiary Excellus Health Plan, Inc.) and Upstate Holding Company, Inc. (and its subsidiary, Utica-Watertown Health Insurance Co., Inc.)
  • Group Hospitalization & Medical Services, Inc., d/b/a CareFirst BlueCross BlueShield and subsidiary
  • HealthNow New York, Inc., (d/b/a Blue Cross and Blue Shield of Western New York, Blue Shield of Northern New York)
  • Louisiana Health Service & Indemnity Company, Inc., (d/b/a Blue Cross and Blue Shield of Louisiana)
  • Mountain State Blue Cross & Blue Shield, Inc., and its subsidiary, Parker Benefits, Inc., (d/b/a Super Blue HMO)
  • New Hampshire-Vermont Health Service, (d/b/a Blue Cross Blue Shield of New Hampshire) and its subsidiaries, Matthew Thornton Health Plan, Inc., Matthew Thornton Insurance, Inc. and Health Initiatives, Inc.
  • Trigon Insurance Company, (d/b/a Trigon Blue Cross Blue Shield) and its affiliates, Physicians Health Plan, Inc., Healthkeepers, Inc., Priority Health Care, Inc., Peninsula Health Care, Inc., and Trigon Administrators, Inc.

Defendant

  • B.A.T. Industries P.L.C.
  • British American Tobacco Co.
  • Brown & Williamson Tobacco Corporation
  • Counsel for Tobacco Research-USA, Inc.
  • Hill and Knowlton, Inc.
  • John Doe, Unknown Corporations A-Z
  • Liggett & Myers, Inc.
  • Liggett Group, Inc.
  • Lorillard Tobacco Company
  • Philip Morris USA Incorporated
  • R.J. Reynolds Tobacco Company
  • The Smokeless Tobacco Council, Inc.
  • Tobacco Institute, Inc.
  • United States Tobacco

Legislation Cited

Related Documents

None

Type of Litigation

Health Care Cost Recovery
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.

Tobacco Control Topics

Contents and Disclosures Measures
Measures for testing, measuring, regulating, or disclosing the contents and emissions of tobacco products. (See FCTC Arts. 9 and 10)
Packaging and Labeling Measures
Measures to regulate the marketing on tobacco packages. This includes both bans on false, misleading, deceptive packaging, as well as required health warnings on packaging. (See FCTC Art. 11)
Advertising, Promotion and Sponsorship
Measures restricting any form of direct or indirect tobacco advertising, promotion and sponsorship. (See FCTC Art. 13)

Substantive Issues

Right to Judicial Protection
This is the right to access the court system and have the courts enforce your rights.
Right to Procedural Due Process
A violation of the right to procedural fairness. For example, a party may claim that a government agency did not consult with public or stakeholders when issuing regulations.
Consumer Protection Violation

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.

Industry-Perpetrated Fraud
The tobacco industry may have perpetrated a fraud upon the public or the courts by presenting false information or deliberately hiding known-facts.
Procedural Defect
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

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