Federal Circuits, Sixth Circuit (August 31, 2000)
Docket number: 99-3952
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U.S. Code - Title 15: Commerce and Trade - 15 USC 1334 - Sec. 1334. Preemption
U.S. Supreme Court - Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)
Appeal from the United States District Court for the Northern District of Ohio at Akron. No. 99-00796--David D. Dowd, Jr., District Judge.[Copyrighted Material Omitted]
Chris T. Nolan, Peter D. Janos, PERANTINIDES & NOLAN, CO., Akron, Ohio, for Appellant.Robert C. Weber, Dennis L. Murphy, JONES, DAY, REAVIS & POGUE, Cleveland, Ohio, Jeffrey J. Jones, JONES, DAY, REAVIS & POGUE, Columbus, Ohio, Mary M. Bittence, Diane P. Chapman, BAKER & HOSTETLER, Cleveland, Ohio, Thomas J. Frederick, Matthias A. Lydon, Julie Soloway, Joseph J. Zaknoen, WINSTON & STRAWN, Chicago, Illinois, for Appellees.Before: KEITH, MERRITT, and COLE, Circuit Judges.OPINIONR. GUY COLE, JR., Circuit Judge.Plaintiff-Appellant John J. Glassner, individually and as executor for the estate of Ella J. Glassner, appeals the district court's decision dismissing his wrongful death action against Defendants-Appellees R. J. Reynolds Tobacco Co. and Philip Morris, Inc., ("Defendants")1 for failure to state a claim upon which relief could be granted pursuant to Fed. R. Civ. P. 12(b)(6). Glassner's eight-count Complaint originally was filed in the Summit County Court of Common Pleas and subsequently was removed to the United States District Court for the Northern District of Ohio based upon diversity jurisdiction; it alleges the following: Fraud/Deceit (Count I); Conspiracy (Count II); Negligence (Count III); Strict Liability (Count IV); Negligent Misrepresentation (Count V); Consumer Fraud (Count VI); Malicious Conduct (Count VII); and Survivorship (Count VIII). Glassner appeals the district court's decision, assigning error to the court's determination that (1) the Ohio Product Liability Act ("OPLA"), Ohio Rev. Code §§ 2307.71-2307.79, bars his claims for negligence, strict liability, negligent misrepresentation, and malicious conduct (Counts III, IV, V, and VII) based upon the "common knowledge" doctrine; (2) Ohio law bars his common law fraud claim (Count I) on the ground that, because the health risks associated with smoking are common knowledge, any reliance on Defendants' alleged misrepresentations or concealment of those risks is not justifiable; and (3) because his common law fraud claim fails as a matter of law, his derivative conspiracy claim (Count II) also must fail. Glassner does not appeal the district court's dismissal of his consumer fraud and survivorship claims (Counts VIand VIII), and therefore, those issues are not before us.For the reasons that follow, we AFFIRM the decision of the district court.BACKGROUNDPlaintiff's decedent, Ella J. Glassner, began smoking Defendants' tobacco products in 1969. The Complaint alleges that "[a]s a direct and proximate result of decedent's reliance on Defendants' misrepresentations, omissions and concealments, the Plaintiff's decedent, Ella Glassner, age 67, died on March 8, 1997." Although the Complaint does not indicate Ella Glassner's cause of death, it alleges that Defendants knew their tobacco products caused various smoking-related diseases and sought to "mislead, confuse, and conceal from the public the true dangers associated with smoking cigarettes." Glassner alleges that Defendants "engaged in an ongoing conspiracy to actively misrepresent, omit and conceal the truth about nicotine in order to sustain the addictions of existing cigarette smokers and to hook thousands of new smokers every day, including Plaintiff's decedent . . . . Not only did the Tobacco Industry know, misrepresent, omit, and conceal that nicotine is an addictive drug, Plaintiff and other cigarette consumers are informed and believe that the Tobacco Industry . . . manipulates and controls the levels of nicotine in these products to create and sustain the addiction."DISCUSSIONWe review de novo a district court's dismissal for failure to state a claim upon which relief can be granted. See Sistrunk v. City of Strongsville, 99 F.3d 194, 197 (6th Cir. 1996). To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a "complaint must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988) (internal quotations and citation omitted).We must treat as true all of the well-pleaded allegations of the complaint. All allegations must be construed in the light most favorable to the plaintiff. In order for a dismissal to be proper, it must appear beyond doubt that the plaintiff would not be able to recover under any set of facts that could be presented consistent with the allegations of the complaint.Bower v. Federal Express Corp., 96 F.3d 200, 203 (6th Cir. 1996) (citations omitted). Furthermore, under Rule 9(b) of the Federal Rules of Civil Procedure, a complaint alleging fraud must allege with particularity those circumstances constituting fraud. See VanDenBroeck v. CommonPoint Mortgage Co., 210 F.3d 696, 701 (6th Cir. 2000).When federal jurisdiction is based upon diversity of citizenship under 28 U.S.C. 1332, as is the case here, we are bound by the substantive law of the state in which the action originally was brought. See Erie R.R. v. Tomkins, 304 U.S. 64, 78 (1938). Neither party disputes the district court's determination that OPLA governs Glassner's claims of negligence, strict liability, negligent misrepresentation, and malicious conduct (Counts III, IV, V, VII). Further, neither party disputes that Glassner's fraud/deceit claim (Count I) is governed by Ohio common law. Before we address the question of whether Glassner stated a claim upon which relief can be granted under either OPLA or Ohio common law, however, it is necessary to consider whether any or all of Glassner's claims are preempted by federal law.I. PreemptionIn 1965, Congress enacted the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. 1331 et seq., which became effective on January 1, 1966. Section 4 of the Act mandated that all cigarettes sold or distributed in the United States have awarning on the package stating: "CAUTION: CIGARETTE SMOKING MAY BE HAZARDOUS TO YOUR HEALTH." 15 U.S.C. 1333 (1965). Section 5 of the Labeling Act was captioned, "Preemption" and stated: (a) No statement relating to smoking and health, other than the statement required by section 4 of this Act, shall be required on any cigarette package. (b) No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.15 U.S.C. 1334 (1965).The Public Health Cigarette Smoking Act of 1969, which became effective on July 1, 1969, amended the 1965 Act and called for stronger warning labels on cigarette packages, requiring that from then on, the warning had to state that smoking is dangerous to one's health rather than simply stating that smoking may be hazardous. See 15 U.S.C. 1333 (1969). The 1969 Act also modified the preemption provision of the 1965 Act by amending § 5(b) to read as follows:No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.15 U.S.C. 1334(b) (1969).In Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (plurality opinion), the Supreme Court addressed the scope of both the 1965 and 1969 Act insofar as they preempted various state law damages claims. In Cipollone, the plaintiff asserted that the defendant cigarette manufacturers were responsible for the death of his mother, a long-time smoker. The plaintiff alleged that defendants breached express warranties contained in their advertising, failed to warn consumers about smoking's hazards, fraudulently misrepresented those hazards to consumers, and conspired to deprive the public of medical and scientific information about smoking, all in derogation of duties under New Jersey law. See id. at 508. The question before the Cipollone Court was whether the 1969 Act, or its 1965 predecessor, preempted plaintiff's common law claims against the defendants.Cippolone held that the preemptive scope of each Act was governed entirely by the express language contained in Section 5. The Court determined that because each Act contained a provision defining the scope of the preemptory effect of that Act, those provisions must be construed narrowly and matters beyond their reach were not preempted. See id. at 517. The Court concluded that Section 5 of the 1965 Act did not preempt state law damages actions. See id. at 518-20. However, in analyzing the 1969 Act, the Court found that the broad language of Section 5(b), as amended, extended the Act's preemptive reach to include some, but not all, common law damages actions. See id. at 520-21. Ultimately, the Court found it necessary to look beyond the labels attached to plaintiff's common law claims and, instead, to evaluate each claim to determine whether it was in fact preempted by the 1969 Act. See id. at 523.Cippolone recognized that in order to decide whether any claim is preempted, a court must first determine "whether the legal duty that is the predicate of the common law damages action constitutes a 'requirement or prohibition based on smoking and health . . . imposed under State law with respect to . . . advertising or promotion,' giving that clause a fair but narrow reading." Id. at 523-24 (quoting 15 U.S.C. 1334(b)). The Court then analyzed the preemptive effect of the 1969 Act on each of plaintiff's claims, concluding that plaintiff's failure-to-warn claims were preempted to the extentthat they relied on a state law "requirement or prohibition . . . with respect to . . . advertising or promotion." See id. at 524. Thus, the Court held that insofar as claims under a failure-to-warn theory required a showing that the cigarette manufacturers' post-1969 advertising or promotions should have included additional, or more clearly stated, warnings, those claims were preempted. See id. However, the Court held that the Act did not preempt plaintiff's claims that relied on testing or research practices or other actions unrelated to advertising or promotion. See id. at 524-25. The Court also noted, for example, that § 5(b) would not preempt state law obligations to avoid product liability claims arising from manufacturing or design defects. See id. at 523.Cippolone next analyzed the plaintiff's fraudulent misrepresentation claims, the first of which was predicated on a state law prohibition against advertising and promotional statements tending to minimize smoking's health hazards. That claim alleged that the manufacturers' advertising neutralized the effect of the federally mandated warning labels. The Court held that such a fraud claim was preempted because it was inextricably linked to the plaintiff's failure-to-warn theory. See id. at 527-28. However, the Court found that the plaintiff's second fraudulent misrepresentation theory, which alleged false representation and concealment of material facts, was not preempted insofar as those allegations relied on a state law duty to disclose material facts through channels of communication other than advertising and promotions. See id. at 528. Moreover, the Court held that fraud claims based on deceptive advertising also are not preempted because "[s]uch claims are predicated not on a duty 'based on smoking and health' but rather on a more general obligation--the duty not to deceive." Id. at 528-29 (quoting 15 U.S.C. 1334(b)).In holding that the 1969 Act did not preempt all common law fraud claims, the Cippolone Court reasoned:Congress intended the phrase "relating to smoking and health" (which was essentially unchanged by the 1969 Act) to be construed narrowly, so as not to proscribe the regulation of deceptive advertising. Moreover, this reading of "based on smoking and health" is wholly consistent with the purposes of the 1969 Act. State-law prohibitions on false statements of material fact do not create "diverse, nonuniform, and confusing" standards. Unlike state-law obligations concerning the warning necessary to render a product "reasonably safe," state-law proscriptions on intentional fraud rely only on a single, uniform standard: falsity. Thus, we conclude that the phrase "based on smoking and health" fairly but narrowly construed does not encompass the more general duty not to make fraudulent statements. Accordingly, petitioner's claim based on allegedly fraudulent statements made in respondents' advertisements is not pre-empted by § 5(b) of the 1969 Act.Id. at 529 (footnote omitted).Applying the plurality opinion in Cippolone to the Complaint in the present case is no easy task, as Glassner does not appear to have made any effort whatsoever to limit his claims to those allowed under Cippolone. Based upon our interpretation of Cipollone, however, we find that the Labeling Act does not preempt all of Glassner's OPLA claims, which seem to be based upon both failure-to-warn and design defect theories. To the extent that Glassner alleges failure-to-warn claims based upon some duty owed by Defendants to issue additional or more clearly stated warnings on cigarette packages, his OPLA claims are preempted. Glassner's failure-to-warn claims that do not rely on a state law "requirement or prohibition . . . with respect to . . . advertising or promotion," as well as his claims based upondesign defect, however, are not preempted by the Labeling Act.With regard to his allegations of common law fraud, Glassner does not bother to delineate the bases for his claims, again making it difficult to determine whether preemption applies. Glassner alleges that Defendants "conducted an aggressive marketing and advertising campaign intended to induce foreseeable users to purchase its tobacco product. Such advertising occurred in print media, on television, radio, on billboards and by other means." Glassner also alleges that Defendants misled the public about the hazards of smoking through channels other than advertising and promotion, such as newspaper and magazine articles, press releases, and congressional testimony. Thus, we find that Glassner's claims of fraud based upon fraudulent misrepresentation and concealment are preempted to the extent that they are predicated on a duty to issue additional or clearer warnings through advertising and promotion. However, we find that Glassner's fraud claims premised on a general "duty not to deceive" rather than a "duty based on smoking and health" are not preempted by the Act.2Having addressed the question of preemption with regard to Glassner's state law damages claims, we will address in turn those claims not preempted by the Labeling Act and the propriety of dismissal pursuant to Fed. R. Civ. P. 12(b)(6).II. Ohio Product Liability ActUnder OPLA, a "product liability claim" is defined as:a claim that is asserted in a civil action and that seeks to recover compensatory damages from a manufacturer or supplier for death, physical injury to person, emotional distress, or physical damage to property other than the product involved, that allegedly arose from any of the following: (1) The design, formulation, production, construction, creation, assembly, rebuilding, testing, or marketing of that product; (2) Any warning or instruction, or lack of warning or instruction, associated with that product; (3) Any failure of that product to conform to any relevant representation or warranty.Ohio Rev. Code § 2307.71(M). OPLA claims brought under a theory of design defect are governed by § 2307.75(E) of the statute, which provides:A product is not defective in design or formulation if the harm for which the claimant seeks to recover compensatory damages was caused by an inherent characteristic of the product which is a generic aspect of the product that cannot be eliminated without substantially compromising the product's usefulness or desirability and which is recognized by the ordinary person with the ordinary knowledge common to the community.Ohio Rev. Code § 2307.75(E) (emphasis added). OPLA claims brought under a failure-to-warn theory are governed by § 2307.75(B), which states:A product is not defective due to lack of warning or instruction or inadequate warning or instruction as a result of the failure of its manufacturer to warn or instruct about an open and obvious risk or a risk that is a matter of common knowledge.Ohio Rev. Code § 2307.76(B) (emphasis added). Defendants argue that based upon these provisions, liability under OPLA is barred because the inherent risks of smoking are a matter of common knowledge.A. Common Knowledge DoctrineThis bar to recovery has come to be known as the "common knowledge" doctrine. See Tompkin v. American Brands, 219 F.3d 566, 571-72 (6th Cir. 2000) ("OPLA expressly exempts from liability products whose dangers are regarded as 'common knowledge.'"); Amendola v. R. J. Reynolds Tobacco Co.,Try vLex for FREE for 3 days
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