United Food and Commercial Workers Unions, Employers Health And Welfare Fund v. Philip Morris, Inc., 223 F.3d 1271 (11th Cir. 2000)

HEALTH FUND HAS NO CLAIM UNDER ALABAMA LAW AGAINST TOBACCO COMPANIES

United Food and Commercial Workers Unions, Employers Health And Welfare Fund v. Philip Morris, Inc.,223 F.3d 1271 (11^th Cir. 2000)-Plaintiff asserted that, as a result of Defendants' acts, many participants became afflicted with tobacco-related illnesses and that some died from such illnesses. Plaintiff, consequently, incurred substantial losses (1) because of Plaintiff's obligation to provide medical treatment to those plan participants and (2) because of reduced contributions from those plan participants. Plaintiffs sought monetary damages for those losses.

Plaintiff set out claims--under Alabama law--for fraud, conspiracy, and breach of assumed duty. Defendants moved to dismiss for failure to state a claim.

The district court dismissed the complaint. The district court concluded that Plaintiff's complaint failed to state a claim because, as a matter of law, the alleged fraud, conspiracy, and breach of assumed duty were not the proximate cause of Plaintiffs’ alleged injuries.

The Eleventh Circuit concluded that, under Alabama's law of proximate cause, Plaintiff’s claims must fail. In City of Birmingham v. Crow, 267 Ala. 243, 101 So. 2d 264 (1958), the defendant negligently injured a municipal police officer. The plaintiff-city paid the officer's medical expenses and then sued the defendant to recover the city's costs. The city had no direct cause of action against the defendant for the city's provision of health care to the injured officer. Id. 101 So. 2d at 265. Crow points to the rejection of Plaintiff's claims in this case.

The usual common law rule is that a health-care provider has no direct claim against one who injures the provider's beneficiary, imposing increased costs upon the provider. See Anthony v. Slaid, 52 Mass. 290, 290-91 (Mass. 1846) (concluding that "damage is too remote and indirect" where plaintiff--who had contracted to provide health care for town's paupers--sued defendant for assaulting pauper and putting plaintiff "to increased expense for his care and support").

In the specific context of suits brought by union health-care funds against tobacco companies, other circuits uniformly have rejected virtually identical claims on proximate cause grounds. Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229 (2^nd Cir. 1999) (dismissing RICO, fraud, and breach of assumed duty claims); Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912 (3^rd Cir. 1999) (dismissing RICO and fraud claims); Texas Carpenters Health Benefit Fund v. Philip Morris, Inc., 199 F.3d 788 (5^th Cir. 2000) (dismissing RICO and antitrust claims); International Brotherhood of Teamsters, Local 734 Health & Welfare Fund v. Philip Morris, Inc., 196 F.3d 818 (7^th Cir. 1999) (dismissing RICO, antitrust, and various state law claims); Oregon Laborers-Employers Health & Welfare Trust Fund v. Philip Morris, Inc., 185 F.3d 957 (9^th Cir. 1999) (dismissing RICO, antitrust, unfair trade practices, fraud, conspiracy, and breach of assumed duty claims).