On Appeal From the United States District Court for the District of New Jersey, D.C. Civil No. 83-2864.
Gibbons, Chief Judge, Becker, and Nygaard, Circuit Judges. Gibbons, Chief Judge, concurring.
This appeal is from a final judgment in a protracted products liability case in which the plaintiff, Antonio Cipollone, seeks to hold Liggett Group, Inc., Lorillard, Inc., and Philip Morris, Inc., three of the leading firms in the tobacco industry, liable for the death from lung cancer of his wife, Rose Cipollone, who smoked cigarettes from 1942 until her death in 1984. Jurisdiction is founded on diversity of citizenship, 28 U.S.C. § 1332, and New Jersey law applies. In an earlier opinion in the case, Cipollone v. Liggett Group, Inc., 789 F.2d 181 (3d Cir. 1986), cert. denied, 479 U.S. 1043, 107 S. Ct. 907, 93 L. Ed. 2d 857 (1987), we held that the Federal Cigarette Labeling and Advertising Act ("Labeling Act"), 15 U.S.C. §§ 1331-1340 (1982 & Supp. II 1984), which became effective January 1, 1966, preempted claims arising from smoking after January 1, 1966 (hereinafter post-1965) based upon the cigarette companies' advertising or promotion of cigarettes or upon the adequacy of their warnings as to the hazards of smoking.
Following that opinion, which stemmed from an interlocutory appeal, see 28 U.S.C. § 1292(b), the case proceeded to a four-month long trial. At the conclusion of the trial, the jury, answering a series of special interrogatories, returned a verdict in the sum of $400,000.00 for the plaintiff in his individual capacity on the breach of express warranty claim. The jury also found the defendants strictly liable for failing to warn adequately of the hazards of their products, but returned a verdict in their favor on that claim because of Mrs. Cipollone's comparative fault. More precisely, the jury apportioned 80% of the responsibility for Mrs. Cipollone's injuries to her because of its finding that she knew and appreciated the damages of cigarette smoking and voluntarily chose to smoke.
Both sides have appealed, raising a plethora of issues. The prime defendant is Liggett Group, Inc. ("Liggett"), whose cigarettes Mrs. Cipollone smoked from 1942 to 1968. The briefs focus primarily on alleged errors in the district court's charge to the jury and on specific jury findings that may have preclusive effect. Considerable attention was also devoted to ancillary issues: the viability of the plaintiff's generic risk-utility theory of liability (the district court granted summary judgment for the defendants thereon); the failure of the district court to award plaintiff prejudgment interest; the district court's grant to plaintiff of partial summary judgment on defendants' statute of limitations defense; and the effect of our preemption decision on plaintiff's intentional tort claims (the district court held them to be preempted).
The most problematic issue on this appeal lies in the skewing effect on the trial of our interlocutory preemption decision, which created an artificial (although legally binding) time constraint on the determination of causation and liability. Under the aegis of that decision, the jury was forbidden to consider the effect of the defendants' post-1965 conduct and, concomitantly, could only consider whether a pre-1966 breach of warranty and failure to warn was the proximate cause of Mrs. Cipollone's smoking and death. However, the district court allowed the jury to consider Mrs. Cipollone's post-1965 smoking, on the theory that her post-1965 behavior was relevant to a comparative fault defense.
We conclude that the district court erred in permitting the jury to make a comparative fault determination based on Mrs. Cipollone's post-1965 behavior. Rather, the jury should have been instructed that Mrs. Cipollone's post-1965 conduct bore only on the apportionment of damages, but not on her comparative fault for her own injuries. Although in some respects the fairest and most natural approach would be to let the jury consider both sides' post-1965 conduct to the extent that it bears on apportionment of damages, that result would impermissibly impinge on the immunity from suit afforded the cigarette companies by the Labeling Act. Still, permitting the defendants to take advantage of Mrs. Cipollone's post-1965 conduct to escape liability altogether, particularly in the face of plaintiff's allegations that defendants engaged in post-1965 conduct designed to reassure smokers, creates an unacceptable imbalance.
The only way to give effect to our preemption decision and yet ensure fairness in the trial is to limit the evidence going to Mrs. Cipollone's comparative fault to her pre-1966 conduct. We find this result to be consistent with, and indeed compelled by, the New Jersey Supreme Court decision in Ostrowski v. Azzara, 111 N.J. 429, 545 A.2d 148 (1988). Thus, Mr. Cipollone is entitled to a new trial on his failure to warn claim.
Liggett's appeal on the express warranty claim presents an abstruse question about the nature of the reliance interest required by U.C.C. section 2-313, N.J.S.A. § 12A:2-313. The attention we pay to this issue on appeal is somewhat ironic, given that the extensive trial focused on other theories of liability, particularly strict liability. The jury's verdict for the plaintiff on an express warranty theory makes our analysis necessary, however.
We conclude that the express warranty charge was flawed and that that portion of the verdict must also be set aside. Primarily, the district court erred to the extent that it prevented Liggett from proving, by a preponderance of the evidence, that Mrs. Cipollone did not believe the advertisements. The advertisements constitute an express warranty as long they constitute a basis of the bargain, that is, as long as Mr. Cipollone can prove that Mrs. Cipollone was aware of the advertisements and as long as Liggett does not prove that she disbelieved them.
We conclude that the district court did not err in barring a comparative fault defense to the express warranty claim because, on the facts of this case, it would have been impossible for Mrs. Cipollone to have known of the dangers of smoking and still have believed enough in Liggett's advertisements for them to constitute a warranty. In essence, the comparative fault issue collapses into the basis of the bargain issue. We further conclude that the district court did not err in denying Liggett's motion for judgment n.o.v., because there was sufficient evidence in the record to support conclusions that a warranty existed and was breached and that breach of that warranty proximately caused Mrs. Cipollone's cancer.
We reverse the district court's grant of summary judgment to defendants on plaintiff's generic risk-utility claim. Although our holding on this issue is subject to instant modification by the New Jersey Supreme Court, which presently has the issue before it, we find that the district court improperly granted defendant's motion for a directed verdict. Thus, plaintiff still has live claims against all three defendants in this case; although Mrs. Cipollone did not smoke cigarettes made by Lorillard and Philip Morris until after 1965 (hence absolving them from liability on the breach of express warranty and failure to warn claims), they remain potentially liable on the risk-utility claim, which does not implicate advertising, promotion or warnings. We also conclude that if Mr. Cipollone prevails on an express warranty claim on retrial, he is entitled to prejudgment interest. We reverse the district court's grant of partial summary judgment for the plaintiff on the statute of limitations issue because we conclude that there was a genuine issue of material fact as to whether, within the meaning of the New Jersey discovery rule, Mrs. Cipollone should have discovered the facts giving rise to her claim earlier. Finally, we agree with the district court that plaintiff's intentional tort claim is preempted by our previous decision.
II. THE RELEVANT FACTS ADDUCED AT TRIAL
Rose Cipollone was born in 1925 and began to smoke in 1942. She smoked Chesterfield brand cigarettes, manufactured by Liggett, until 1955. In her deposition, introduced into evidence at the trial, she stated that she smoked the Chesterfield brand to be "glamorous," to "imitate" the "pretty girls and movie stars" depicted in Chesterfield advertisements, and because the advertisements stated that Chesterfield cigarettes were "mild." Mrs. Cipollone stated that she understood the description of Chesterfield cigarettes as "mild" to mean that the cigarettes were safe.
Mrs. Cipollone also testified that she was an avid reader of a variety of magazines, frequently listened to the radio, and often watched television during the years that she smoked the Chesterfield brand. Although she could not specifically remember which Chesterfield advertisements she saw or heard during those years, Chesterfield advertisements appeared continuously in those media during that period. Several of these advertisements were introduced into evidence. The following copy appeared commonly in Chesterfield magazine advertisements during the year 1952:
PLAY SAFE Smoke Chesterfield.
NOSE, THROAT, and Accessory Organs not Adversely Affected by Smoking Chesterfields. First such report ever published about any cigarette. A responsible consulting organization has reported the results of a continuing study by a competent medical specialist and his staff on the effects of smoking Chesterfield cigarettes. A group of people from various walks of life was organized to smoke only Chesterfields. For six months this group of men and women smoked their normal amount of Chesterfields -- 10 to 40 a day. 45% of the group have smoked Chesterfields continually from one to thirty years for an average of 10 years each. At the beginning and at the end of the six-months period each smoker was given a thorough examination, including X-ray pictures, by the medical specialist and his assistants. The examination covered the sinuses as well as the nose, ears and throat. The medical specialist, after a thorough examination of every member of the group, stated: "It is my opinion that the ears, nose, throat and accessory organs of all participating subjects examined by me were not adversely affected in the six-month period by smoking the cigarettes provided."
5 J.A. 21, 22 (c. 1952).*fn1 The defendants stipulated that Mrs. Cipollone had seen many of these advertisements.
Television advertisements for the Chesterfield brand were also introduced into evidence. The Chesterfield cigarette was described as having "ingredients that make Chesterfield the best possible smoke as tested and approved by scientists from leading universities," 5 J.A. 37 (undated), and being manufactured with "electronic miracle" technology that makes "cigarettes . . . more better [sic] and safer for you." 5 J.A. 39 (c. 1955). One advertisement stated "now Chesterfield is the first cigarette to present this scientific evidence on the effects of smoking -- a medical specialist making regular bi-monthly examinations of a group of people from various walks of life -- 45% of this group have smoked Chesterfield's for an average of over 10 years -- after 8 months, the medical specialist reports that he observed no adverse effects to the nose, throat and sinuses of the group who were smoking Chesterfield. I'd say that means real mildness." 5 J.A. 36 (undated).
Mrs. Cipollone testified that she frequently listened to the radio show "Arthur Godfrey and His Friends," sponsored by the Chesterfield brand. The Chesterfield brand was marketed on the show as follows (text read by Mr. Godfrey):
You saw me read this last week but a lot of folks didn't and it's a very important message -- especially those of you who smoke Chesterfields -- you probably been wonderin' about this. You hear stuff all the time about "cigarettes are harmful to you" this and that and the other thing . . . .
Here's an ad, you've seen it in the papers -- please read it when you get it. If you smoke it will make you feel better, really.
"Nose, throat and accessory organs not adversely affected by smoking Chesterfield. This is the first such report ever published about any cigarette. A responsible consulting organization has reported the results of a continuing study by a competent medical specialist and his staff on the effects of smoking Chesterfield cigarettes.
"A group of people from various walks of life was organized to smoke only Chesterfields. For six months this group of men and women smoked their normal amount of Chesterfields -- 10 to 40 a day. 45% of the group have smoked Chesterfields continually from one to thirty years for an average of 10 years each.
"At the beginning and at the end of the six months period each smoker was given a thorough examination, including X-Ray pictures, by the medical specialist and his assistants. The examination covered the sinuses as well as the nose, ears and throat."
Now -- here's the important thing. "The medical specialist, after a thorough examination of every member of the group, stated: 'It is my opinion that the ears, nose, throat and accessory organs of all participating subjects examined by me were not adversely affected in the six-months period by smoking the Chesterfield cigarettes provided.'"
Now that ought to make you feel better if you've had any worries at all about it. I never did. I smoke two or three packs of these things every day. I feel pretty good. I don't know, I never did beliee they did you any harm and now, we've got the proof. So -- Chesterfields are the cigarette for you to smoke, be they regular size or king-size.
5 J.A. 156 (Sept. 24, 1952).*fn2
In 1955, Mrs. Cipollone stopped smoking Chesterfield cigarettes and began to smoke L & M filter cigarettes, also made by Liggett. In response to a question as to why she switched to the L & M brand, Mrs. Cipollone stated that "well, they were talking about the filter tip, that it was milder and a miracle it would keep the stuff inside a trap, whatever." When asked why she desired the filter tip, she testified that "it was the new thing and I figured, well, go along[, and that] it was better [because the] bad stuff would stay in the filter then." When asked whether concern about the "bad stuff" was due to a concern about her health, she stated "not really. . . . It was the trend. Everybody was smoking the filter cigarettes and I changed, too."
She also stated that although she could not remember any specific advertisements, she did "recall the ads and . . . remember the tips [and] the messages of a filter, a safer, something to that effect. . . . That it would filter the nicotine and the tar and the tobacco[, and] that it would be a cleaner and fresher smoke." Mrs. Cipollone also stated that she "recall[ed] seeing an ad that said doctors recommend you smoke . . . I think it was L & M's. . . . Through advertising, I was led to assume that they were safe and they wouldn't harm me. . . . There was lots of advertising. There was advertising everywhere. There was advertising in magazines, on billboards, in newspapers."
Mr. Cipollone also introduced evidence as to how the L & M brand was marketed during the years that Mrs. Cipollone smoked that brand. One series of advertisements that appeared on television and in magazines at the outset of L & M's introduction to the public stated that L & M "miracle tip" filters were "just what the doctor ordered!"; the "just what the doctor ordered" phrase often appeared in a large bold typescript in magazine advertisements. The "miracle tip" was advertised as "remov[ing] the heavy particles, leaving you a Light and Mild smoke."
In 1968, Mrs. Cipollone stopped smoking the L & M brand and started smoking the Virginia Slims brand, manufactured by Philip Morris. She stated that she switched "because it was very glamorous and very attractive ads and it was a nice looking cigarette. That persuaded me." In the 1970's, Mrs. Cipollone switch to the Parliament brand, also manufactured by Philip Morris. She testified that this brand was advertised as having a "recessed" filter and that she thought that this made it healthier. In 1974, she changed from the Parliament to the True brand, a cigarette manufactured by Lorillard, Inc. ("Lorillard") and advertised as low tar, upon the advice of her doctor, who had told her son to stop smoking.
From 1942 until the early 1980's, Mrs. Cipollone smoked between one pack and two packs of cigarettes per day. The only exception to this pattern was that, at the urging of her husband, Mrs. Cipollone substantially reduced her smoking during her first pregnancy in the 1940's. In 1981, Mrs. Cipollone was diagnosed as having lung cancer, but even though her doctors advised her to stop smoking, she was unable to do so. Mrs. Cipollone continued to smoke until June of 1982 when her lung was removed. Even after that, she smoked occasionally, in secret. She testified that she was "addicted" to cigarette smoking and that it was terribly difficult for her to give it up. She stopped smoking in 1983 after her cancer had spread widely and she had become terminally ill. Mrs. Cipollone died on October 21, 1984.
Evidence was also introduced on the subject of Mrs. Cipollone's awareness of the health consequences of smoking cigarettes. Some of that evidence has already been alluded to: she switched to the L & M brand in part because she thought that brand safer than the Chesterfield brand, and she later switched to the Parliament and True brands out of concern for her health. In addition, from the beginning of the Cipollones' marriage in 1947, Mr. Cipollone repeatedly told his wife that she should stop smoking because it was unlady-like and bad for her health. When reports linking smoking with cancer and heart disease began to appear in the media, Mr. Cipollone repeatedly brought them to his wife's attention. Other members of the Cipollone family also told her that cigarette smoking was dangerous to her health and could cause cancer. After January 1, 1966, every package of cigarettes purchased by Mrs. Cipollone bore the Congressionally mandated warning labels.
There is also evidence that Mrs. Cipollone feared that her cigarette smoking would damage her health. When she developed a bad cough, her concern about the possible effect of smoking on her health led her, apparently prior to 1966, to make novenas to Saint Jude asking his intercession on her behalf to prevent her from developing cancer. There is also evidence, however, that Mrs. Cipollone disbelieved the reports linking cigarette smoking to cancer and other health problems. As explained above, there is evidence that she read the cigarette companies' advertisements, understood them as representing that the cigarettes were safe, and thus, as she put it, "was led to assume that [the cigarettes that I purchased] wouldn't harm me." She stated that she had often read cigarette company or Tobacco Institute statements, reported in articles about the health consequences of smoking or reproduced in advertisements, stating that the link between smoking and disease has not been proven. She also testified that because she found it so difficult to stop smoking, she "maybe . . . didn't want to believe" the reports that she heard that smoking caused cancer or other diseases and that she "didn't believe" that her smoking would cause her to contract lung cancer. In addition, Mrs. Cipollone stated that she believed that "tobacco companies wouldn't do anything that was really going to kill you."
On August 1, 1983, Mr. and Mrs. Cipollone filed a complaint in the district court for the District of New Jersey, founded on diversity of citizenship, seeking damages against Liggett, Philip Morris, and Lorillard for the suffering and monetary losses resulting from Mrs. Cipollone's lung cancer. The complaint alleged that the lung cancer resulted from Mrs. Cipollone's smoking of cigarettes manufactured by the named defendants.
On May 31, 1985, following Mrs. Cipollone's death, and suing in his capacity as Mrs. Cipollone's executor and on his own behalf, Mr. Cipollone filed a third amended complaint, upon which the case was tried. The third amended complaint included damages claims against each defendant based on the following theories of liability:*fn3
1. Strict liability in tort (and negligence) on the theory that the defendants' failed to warn adequately (or negligently failed to warn adequately) of the health effects of smoking ("the failure to warn claim");
2. Strict liability in tort on the theory that the defendants marketed defectively designed cigarettes rather than alternatively designed, safer cigarettes ("the design defect claim");
3. Strict liability in tort on the theory that the health risks of the defendants' cigarettes exceeded their social utility ("the generic risk-utility claim");
4. Breach of express warranty regarding the health effects of smoking ("the express warranty claim");
5. Fraud and misrepresentation in the advertising and promotion of cigarettes from 1940 to 1983 ("the fraudulent misrepresentation claim");
6. Conspiracy to defraud the public regarding the health effects of smoking ("the conspiracy to defraud claim");
The defendants moved for summary judgment on the ground that the plaintiff's claims were preempted by the Federal Cigarette Labeling and Advertising Act, Pub.L. No. 89-92, 79 Stat. 282 (1965)(codified as amended at 15 U.S.C. §§ 1331-1340 (1982 & Supp. II 1984)), a statute enacted in 1965 in the wake of the Surgeon General's historic report on the hazards of cigarette smoking. The Act required health warnings, as set forth in the statute and subsequently strengthened by statutory amendments, to be placed on cigarette packages. The effective date of the statute was January 1, 1966. See Pub.L. No. 89-92, § 11, 79 Stat. at 284.
The district court held that the statute did not have preemptive effect, but certified the preemption question for interlocutory review by this court pursuant to 28 U.S.C. § 1292(b) (1982). We assumed jurisdiction over the appeal and concluded that the Act impliedly preempted some of the plaintiff's claims, holding as follows:
The Act preempts those state law damage actions relating to smoking and health that challenge either the adequacy of the warning on cigarette packages or the propriety of a party's actions with respect to the advertising and promotion of cigarettes. . . . Where the success of a state law damage claim necessarily depends on the assertion that a party bore the duty to provide a warning to consumers in addition to the warning Congress has required on cigarette packages, such claims are preempted as conflicting with the Act.
789 F.2d at 187 (footnote omitted). We remanded the case to the district court so that it might determine which claims were preempted.
The district court interpreted our decision as preempting the plaintiff's failure to warn, express warranty, fraudulent misrepresentation, and conspiracy to defraud claims to the extent that they sought to challenge the defendants' advertising, promotional, and public relations activities after January 1, 1966. See 649 F. Supp. 664, 669, 673-75 (D.N.J. 1986). Because Mrs. Cipollone did not smoke cigarettes manufactured by Philip Morris or Lorillard before January 1, 1966, the district court granted judgment on the pleadings on the failure to warn and express warranty claims as to those defendants. However, the district court held that the plaintiff's design defect and risk-utility claims were not preempted. See id. at 669-72.
In another pretrial ruling, the district court struck the plaintiff's generic risk-utility claim on the ground that it was barred through the retroactive application of the New Jersey Products Liability Act, 1987 N.J. Sess. Law Serv. ch. 197, 188-93 (West) (codified at N.J.S.A. §§ 2A:58C-1 to -7 (West 1987)). See Dist. Ct.Op. 1-6 (Oct. 27, 1987).
After five years of discovery and numerous pretrial motions, the case proceeded to trial on plaintiff's failure to warn, design defect, express warranty, fraudulent misrepresentation, and conspiracy claims, and on defendants' comparative fault and statute of limitations defenses. On April 21, 1988, at the close of plaintiff's proofs, the district court struck the design defect claim on the ground that plaintiff had failed to present sufficient evidence that defendants' failure to market an alternatively designed cigarette when it became feasible to do so in the mid-1970s was a proximate cause of Mrs. Cipollone's illness and death. See 683 F. Supp. 1487, 1493-95 (D.N.J. 1988). This ruling has not been challenged on appeal.
As a result of the district court's rulings, jury deliberations were limited to the fraudulent misrepresentation claim against each defendant, the conspiracy to defraud claim against each defendant, the failure to warn claim against Liggett, and the express warranty claim against Liggett. The district court also took the defendants' statute of limitations defense from the jury by granting partial summary judgment for the plaintiff on this issue. See Dist. Ct.Op. (Dec. 21, 1987).
After a four-month trial, the jury deliberated for four and one half days and returned its verdict in the form of answers to special interrogatories. See Fed.R.Civ.P. 49(a). The interrogatories and the jury's answers are as follows:
1. Has plaintiff proven all of the elements necessary to establish fraudulent misrepresentation or concealment by defendant Liggett, prior to 1966, of material facts concerning significant health risks associated with cigarette smoking?
2. Has plaintiff proven all of the elements necessary to establish fraudulent misrepresentation by defendant Philip Morris, prior to 1966, of material facts concerning significant health risks associated with cigarette smoking?
3. Has plaintiff proven all of the elements necessary to establish fraudulent misrepresentation by defendant Lorillard, prior to 1966, of material facts concerning significant health risks associated with cigarette smoking?
4. Was there a conspiracy prior to 1966 to fraudulently misrepresent and/or conceal material facts concerning significant health risks associated with cigarette smoking?
5. If you answered "yes" to question #4, were any of the defendants members of that conspiracy?
Liggett Group, Inc. Yes No
Philip Morris Incorporated Yes No
6. If you answered "yes" to question number 5, has plaintiff proven all of the elements necessary to establish fraudulent misrepresentation or concealment, prior to 1966, by any member of the conspiracy?
7. Should Liggett, prior to 1966, have warned consumers regarding health risks of smoking?
8. If you answered "yes" to question 7, was that failure to warn prior to 1966 a proximate cause of all or some of Mrs. Cipollone's smoking?
9. If you answered "yes" to question 8, was such smoking a proximate cause of Mrs. Cipollone's lung cancer and death?