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WITHERSPOON v. PHILIP MORRIS INC.

May 1, 1997

JESSE WITHERSPOON, JR., Individually and as Personal Representative of the Estate of his wife, JULIE ANNE WITHERSPOON, Plaintiff,
v.
PHILIP MORRIS INCORPORATED, Defendant.


JUNE L. GREEN, United States District Court Judge


The opinion of the court was delivered by: GREEN

Before the Court are Defendant's Motion to Dismiss Counts I through III and V through IX of Plaintiffs' Complaint with prejudice for failure to state a claim and Motion to Strike portions of Plaintiffs' Complaint. For the reasons stated below, the motion to dismiss is granted for Counts II, III, VI and IX. Plaintiff is granted leave to amend Counts I and V to plead satisfactorily fraud by nondisclosure and to amend the prayer for relief. Furthermore, Plaintiff is granted leave to amend the Complaint to satisfy the short and plain pleading requirement.

 I. BACKGROUND

 Plaintiff is a widower, suing Defendant cigarette manufacturer in tort on behalf of himself and his deceased wife ("Decedent"). Plaintiff claims the actions of Defendant caused his wife's death and his resulting emotional distress. Plaintiff alleges Decedent smoked cigarettes manufactured by Defendant for more than 38 years. (Compl. P 12). According to Plaintiff, Decedent became addicted to cigarettes and was unable to quit, despite suffering ongoing health problems beginning in the early 1960's. (Id. P 14). Prior to her death in 1994, Decedent suffered from chronic obstructive pulmonary disease, hypertension, asthma, and emphysema. (Id. P 15). Plaintiff describes the cause of Decedent's death on November 28, 1994, as a stroke brought on by respiratory failure caused by emphysema. (Id.) Plaintiff claims Defendant is responsible for the death and suffering resulting therefrom. Plaintiff alleges this is due to the claimed scientifically proven link between cigarette smoking and illnesses such as those suffered by Decedent. Plaintiff alleges that nicotine is highly addictive, that Defendant is aware of that, and that Defendant manipulates nicotine levels in cigarettes in order to profit from increased sales generated by such addiction.

 Plaintiff pleads fraud, constructive fraud, intentional infliction of emotional distress, negligence, violation of the District of Columbia's consumer protection statute, breach of express and implied warranties, strict liability for product defect, and wrongful death as the bases of Defendant's liability.

 The case was originally filed in the Superior Court for the District of Columbia on August 13, 1995, whereafter Defendant removed the case to federal court based on diversity of citizenship. 28 U.S.C. § 1332(a)(1). District of Columbia law applies. Defendant has elected to challenge the Complaint's adequacy by these motions before filing an Answer.

 Defendant seeks dismissal of Count I (fraud), Count II (constructive fraud), Count III (intentional infliction of emotional distress), Count V (violation of the District of Columbia's consumer protection statute), Count VI (breach of express warranty), Count VII (breach of implied warranty), Count VIII (strict liability) and Count IX (equitable relief) for failure to state a claim. The standard for dismissal here is given in Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957), which states that a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff could not prove any set of facts in support of his claims that would entitle him to relief. Any favorable inferences supporting such allegations must be given to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). "However, legal conclusions, deductions, or opinions couched as factual allegations are not given a presumption of truthfulness." 2A Moore's Federal Practice, § 12.07, at 63 (2d ed. 1986)(footnote omitted).

 A. Count I Fraud

 Defendant requests that this claim be dismissed for failure to state a claim either under the common law definition of fraud or pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. For the reasons discussed below, Defendant's motion to dismiss the count is denied, and Plaintiff is given leave to amend the count to state a claim for fraud adequately.

 The elements of common law fraud are: "(1) a false representation, (2) in reference to a material fact, (3) made with knowledge of its falsity, (4) with the intent to deceive, and (5) action is taken in reliance upon the representation." Bennett v. Kiggins, 377 A.2d 57, 59 (D.C. 1977), cert. denied, 434 U.S. 1034, 54 L. Ed. 2d 782, 98 S. Ct. 768 (1978). "Nondisclosure or silence . . . may constitute fraud [as well]." Id. In addition to the elements of common law fraud, Federal Rule of Civil Procedure 9(b) requires that "[in] all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity."

 The fraud count alleges that Defendant both misrepresented and omitted the addictive nature of nicotine in congressional testimony, the mass media and by other communications to Plaintiffs, and that Defendant failed to disclose its intentional manipulation of nicotine levels in cigarettes. Plaintiff alleges that Defendant was aware at least by the early 1960's that nicotine is addictive and cites internal memos of Defendant ranging in time from 1965 to 1980 in support. (Compl. at PP 23-27, 36.) In particular, Plaintiff alleges that a 1965 company memorandum indicates Defendant both knew of nicotine's addictive quality and was attempting to manipulate nicotine amounts in cigarettes. (Id. at P 36.) Plaintiff claims that Defendant's duty to disclose arises because of Defendant's exclusive access to material facts and Plaintiff's inability to discover the addictive nature of nicotine. Plaintiff further claims that he and Decedent reasonably relied on the misrepresentations and omissions of Defendant and began smoking without fear of addiction.

 Plaintiff notes two types of communication used by Defendant: advertisements and congressional testimony. Plaintiff alleges that Defendant omitted the fact of nicotine's addictive nature and its manipulation of nicotine levels in its promotional activities. In addition, the Complaint refers to congressional testimony from 1994 and 1996 where the "Tobacco Companies" denied the addictive nature of nicotine. (Compl. at PP 30-31.) Insofar as quoted statements in the Complaint were made 38 years after Decedent began smoking and immediately prior to her death, Plaintiff has not alleged misrepresentations that could have induced Decedent to begin smoking. Reliance upon such statements is a necessary part of this cause of action.

 With regard to advertisements, however, the Court concludes that fraud by nondisclosure is a viable cause of action. The point of fraud by nondisclosure is that Plaintiff claims to have relied upon what the Defendant did not say for 38 years: that nicotine is addictive and that Defendant manipulated the level of nicotine in its product. The congressional testimony recounted in the Complaint implies that Defendant has never admitted publicly that nicotine is addictive. *fn1" This supports a claim for fraud by nondisclosure.

 In a case decided under Kansas state law, Burton v. R.J. Reynolds Tobacco, Co., 884 F. Supp. 1515 (D. Kan. 1995), the court found that the plaintiff's allegations that the cigarette manufacturer had willfully concealed knowledge of the fact that smoking caused cancer and vascular disease were sufficient to state a claim for fraudulent concealment. The complaint there stated that R.J. Reynolds should have disclosed hazards documented by their own and outside scientific research. An earlier opinion from the same case held that if the defendant had better knowledge of the nature of cigarettes at the time the plaintiff started smoking, it had an obligation to disseminate such information to its consumers. Id. at 1526.

 Though courts in the District of Columbia have not dealt with similar facts alleged by a plaintiff, this case is analogous to the usual fraud by nondisclosure situation. Generally, when defendants raise failure-to-state-a-claim arguments, the plaintiffs have specifically alleged what statements were made. Then the court is faced with deciding if certain information that was left out could constitute a material nondisclosure. See e.g., In re Newbridge Networks Sec. Litig., 926 F. Supp. 1163, 1170 (D.D.C. 1996)(finding plaintiff's allegations that defendant's statements were misleading due to omissions stated an actionable claim and raised questions of fact to be resolved). Here, Plaintiff has not pleaded what incomplete statements were actually made by Defendant. In other nondisclosure cases, plaintiffs alleged those statements that defendants made, but were unable to show that material facts were not disclosed. One District of Columbia case states the claim of fraud by non-disclosure well: "Plaintiffs do not argue that the [allegedly fraudulent] statements were false; instead plaintiffs argue that the statements were so incomplete as to be misleading. That argument raises questions for the finder of fact that may not be resolved in a motion to dismiss." Newbridge, 926 F. Supp. at 1170.

 The court in In re Newbridge Networks Sec. Litig., 767 F. Supp. 275, 282 (D.D.C. 1991)("Newbridge II"), required a plaintiff to allege "what statements were made in what documents or in what context, the time and place of such statements, who made the statements, the manner in which the statements were misleading, and what the defendants obtained as a consequence of the statements." In Newbridge II, the plaintiffs survived a Rule 9(b) challenge on one count by pleading that when the defendant made an announcement that it had been chosen for a huge contract, it committed fraud by not disclosing the existence of structural deficiencies. Id. Plaintiff has alleged the fraudulent concealment of specific facts, including Defendant's knowledge of the nature of nicotine and its manipulation of nicotine levels, but has not specifically alleged where and when positive statements were made from which that information was omitted.

 In addition, Plaintiff has not fulfilled the "time, place, and content" aspect of Rule 9(b). It is safe to assume that both Plaintiff and Defendant know that Defendant has advertised cigarettes for many years. It is almost as safe to assume that both are aware that Defendant has never advertised nicotine's addictive nature. That is not sufficient, however, to dispel the particularity requirement. Plaintiff must refer to some specific advertisements that he and his Decedent were likely to have seen when they began and continued to smoke. In Burton, the plaintiffs in fact presented over 70 instances of print and television advertisements. 884 F. Supp. at 1527.

 Rule 15(a) of the Federal Rules of Civil Procedure allows parties to amend pleadings freely before responsive pleadings are filed or otherwise upon receiving leave of court. Because this case was removed to federal court by Defendant, and Plaintiff has not yet amended his complaint, he will be given leave to amend the Complaint to cure the Rule 9(b) defect; doing so should satisfy the common law pleading requirements as well. See Philadelphia v. Lead Industries Assoc., 1992 U.S. Dist. LEXIS 5849, No. 90-7064, 1992 WL 98482 at *5 (E.D. Pa. Apr. 23, 1992), aff'd on other grounds 994 F.2d 112 (3d Cir. 1993) (allowing plaintiffs to amend their complaint alleging fraud for failure to disclose knowledge of the dangers of lead paint to meet the federal particularity requirement).

 B. Count II Constructive Fraud

 Plaintiff's Count II fails to state a claim for constructive fraud and must be dismissed. In order to succeed on a constructive fraud claim, Plaintiff must first demonstrate that a confidential relationship exists between him and Defendant. A confidential relationship is defined as a relationship in which one party has gained the "trust and confidence" of the other, enabling the first party to exercise extraordinary influence over the other. Goldman v. Bequai, 305 U.S. App. D.C. 227, 19 F.3d 666, 673-74 (D.C. Cir. 1994). The court in Bequai gave factors to use in determining the relationship: mental capacity, age, education, business knowledge, and the extent to which the alleged victim entrusted her affairs to the other party. Id.

 First, the Complaint itself does not support a cause of action for constructive fraud. There are no allegations of a confidential relationship; in fact Plaintiff's constructive fraud count does not allege any further facts than does his count for fraud and deceit. Despite not alleging how the manufacturer-consumer relationship in this case establishes a confidential relationship in the Complaint, Plaintiff does explain the issue further in his Response to Defendant's Motion to Dismiss ("Response"). Plaintiff describes the 38-year "longstanding" relationship as existing "through her continued use of the product, her continued use of promotional activities offered by defendant[], and by her continued addiction to the products sold by defendant." (Response at P 11.) Plaintiff argues the relationship is confidential because it "far exceeded the normal consumer relationship" due to the length of time, promotional literature mailed, television advertisements, and "personalized mail sent directly to her." (Id.) The Plaintiff appears to be arguing that time plus mail, in a consumer-manufacturer relationship, is by definition one of confidence.

 This characterization simply does not resemble a confidential relationship as defined in Scheve v. McPherson. Cases involving constructive fraud often are based upon business transactions requiring contracts and negotiations between the individual parties, quite a different situation from purchasing cigarettes at a local store. Establishing a confidential relationship is a difficult burden. In Roberts-Douglas v. Meares, 624 A.2d 405 (D.C. App. 1992), the District of Columbia Court of Appeals found that not even clergyman-parishioner relationships are necessarily confidential. In that case the District of Columbia Court of Appeals held that not every clergyman is automatically in a confidential relationship with his parishioners, and that this is true even for regular churchgoers who sit in the pews listening to sermons. "The principal factor leading to a finding of a confidential relationship in many of the reported cases was the existence of continuous influential contacts, generally on a one-to-one basis[.] . . . Sermons by Bishop Meares to his entire flock . . . are not the stuff from which a confidential relationship is derived." Id. at 422. Applying the reasoning in Meares, Plaintiff is only one of millions of consumers and potential consumers targeted by Defendant's advertisements, and even mailings.


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