Blue Cross and Blue Shield of New Jersey v. Philip Morris, Inc.
A health care provider and insurer brought an action against several major tobacco manufacturers for fraud under the Racketeer Influenced and Corrupt Organizations Act (RICO). In particular, plaintiffs claimed that the defendant tobacco companies' denial that smoking caused disease led to an increase in the health care costs of the plaintiffs' subscribers, and ultimately, of the plaintiffs themselves. The plaintiffs therefore sought recovery of their healthcare expenditures. The defendants argued that the plaintiffs did not suffer economic harm because they "passed on" higher costs to their subscribers in the form of higher premiums. The plaintiffs requested that the Court exclude such evidence as unrelated to RICO actions. The Court found that the plaintiffs could seek recovery of health care costs and that the evidence related to "[passing] on" costs was appropriate to examine.
Blue Cross and Blue Shield of New Jersey, Inc. v. Philip Morris, Inc., 138 F.Supp.2d 357 (E.D.N.Y. 2001).
United States
Apr 30, 2001
United States District Court, Eastern District of New York
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.
An individual or organization may seek civil damages against a tobacco company based on the claim that the use of tobacco products causes disease or death. Some of these cases will relate to general tobacco products, while others will relate to specific subcategories of tobacco products--for example, light or low products, menthol or other flavored products. Additionally, there may be cases relating to exposure to secondhand smoke.
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 tobacco industry may have perpetrated a fraud upon the public or the courts by presenting false information or deliberately hiding known-facts.
Type of Tobacco Product
None
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"This is a difficult and significant case. It will last forty to fifty trial days with scores of expert and lay witnesses, many statistical studies, and thousands of documents. Each juror, despite an exhaustive voir dire by questionnaire and oral examination to eliminate those with prejudicial preconceptions, will have some pretrial view on health care, insurance, and the tobacco industry. Inevitably, some will entertain views that the insurance companies are able to recoup their costs through increasing premiums — and, in turn, this information may skew calculations of liability and damages. Although outside the traditional scope of relevancy, admitting evidence of pass on in the form of higher premiums and pass back through future lower premiums to dispel them as factors to be considered during deliberation is likely to have the positive effect of ensuring that the jury makes lawful findings, without conscious or unconscious formulations distorting the verdict. A charge on their irrelevance in deciding damages will be given. Having observed this responsible and dedicated jury during selection and over some fifteen trial days, the court is convinced that in this case the benefits of the proposed course outweigh its risks."
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.
A health care provider and insurer brought an action against several major tobacco manufacturers for fraud under the Racketeer Influenced and Corrupt Organizations Act (RICO). In particular, plaintiffs claimed that the defendant tobacco companies' denial that smoking caused disease led to an increase in the health care costs of the plaintiffs' subscribers, and ultimately, of the plaintiffs themselves. The plaintiffs therefore sought recovery of their healthcare expenditures. The defendants argued that the plaintiffs did not suffer economic harm because they "passed on" higher costs to their subscribers in the form of higher premiums. The plaintiffs requested that the Court exclude such evidence as unrelated to RICO actions. The Court found that the plaintiffs could seek recovery of health care costs and that the evidence related to "[passing] on" costs was appropriate to examine.