STEAMFITTERS LOCAL 420 v. PHILIP MORRIS, INC.

No. 98-1426.

171 F.3d 912 (1999)

STEAMFITTERS LOCAL UNION NO. 420 WELFARE FUND; International Brotherhood of Painters and Allied Trades, District Council No. 21 Welfare Fund; International Brotherhood of Electrical Workers, Local Union No. 98, Health & Welfare Fund; Composition Roofers Union Local 30 Combined Health & Welfare Fund; Laborers' District Council Building and Construction Health and Welfare Fund; Carpenters Health & Welfare Fund of Philadelphia and Vicinity; Cement Mason's Union Local No. 592, on behalf of themselves and all others similarly situated, Appellants v. PHILIP MORRIS, INC.; R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; B.A.T. Industries P.L.C.; Lorillard Tobacco Company, Inc.; Liggett & Myers Inc.; The American Tobacco Company; United States Tobacco Company; The Council for Tobacco Research—U.S.A., Inc.; The Tobacco Institute, Inc.; Smokeless Tobacco Council, Inc.; Hill & Knowlton, Inc.

United States Court of Appeals, Third Circuit.

Decided March 29, 1999.


Attorney(s) appearing for the Case

Melvyn I. Weiss, Michael C. Spencer (Argued), Kenneth J. Vianale, Beth A. Kaswan, Joan T. Brown, Milberg, Weiss, Bershad, Hynes & Lerach, LLP, New York, N.Y; Richard B. Sigmond, Thomas H. Kohn, Sagot, Jennings & Sigmond, P.C., Philadelphia, PA; Robert J. Connerton, James R. Ray, John McN. Broaddus, Connerton & Ray, Washington, DC; Perry Weitz, Robert L. Gordon, Jerry Kristal, Mitchell Breit, Karen J. Sabine, Weitz & Luxenberg, P.C., Cherry Hill, NJ; Of Counsel: Professor G. Robert Blakey Professor Einer Elhauge, for Appellants.

Herbert Wachtell (Argued), Steven M. Barna, Peter C. Hein, Stephen R. Blacklocks, Wachtell, Lipton, Rosen & Katz, New York, N.Y., Mary A. McLaughlin, David M. Howard, Aline J. Fairweather, Andrew S. Miller, Kathy E. Ochroch, Dechert, Price & Rhoads, Philadelphia, PA; David S. Eggert, James Rosenthal, Arnold & Porter, Washington, DC, for Appellee Philip Morris Incorporated.

Robert H. Klonoff, Paul S. Ryerson, Paul Reichert, Jones, Day, Reavis & Pogue, Washington, DC; John D. Goetz, Maureen T. Taylor, Jones, Day, Reavis & Pogue, Pittsburgh, PA, for Appellee R.J. Reynolds Tobacco Company.

Edward W. Warren, Kenneth N. Bass, Kirkland & Ellis, Washington, DC, for Appellee Brown & Williamson Tobacco Corporation (including as successor by merger to The American Tobacco Company).

William J. O'Brien, Howard M. Klein, Conrad, O'Brien, Gellman & Rohn, P.C., Philadelphia, PA; Jeffrey S. Nelson, Joseph A. Lanahan, Shook, Hardy, & Bacon, LLP, Kansas City, MO, for Appellee Lorillard Tobacco Company.

J. Kurt Straub, Obermayer, Rebman, Maxwell & Hippel, LLP, Philadelphia, PA, for Appellee Liggett & Myers, Inc.

Stephen J. Imbriglia, Hecker, Brown, Sherry & Johnson, Philadelphia, PA, for Appellee United States Tobacco Company.

Patrick W. Kittredge, Glenn E. Davis, Kittredge, Donley, Elson, Fullem & Embick, LLP, Philadelphia, PA; Steven Klugman, R. Townsend Davis, Jr. Debevoise & Plimpton, New York, N.Y., for Appellee The Council for Tobacco Research-USA, Inc.

William J. O'Brien, Howard M. Klein, Conrad, O'Brien, Gellman & Rohn, P.C., Philadelphia, PA, for Appellee The Tobacco Institute.

Wilbur L. Kipnes, Schnader, Harrison, Segal & Lewis, LLP, Philadelphia, PA, for Appellee Smokeless Tobacco Council, Inc.

Richard L. Kremnick, Blank, Rome, Comisky & McCauley, LLP, Philadelphia, PA; Bruce M. Ginsberg, Marc Rachman, Davis & Gilbert, New York, N.Y., for Appellee Hill & Knowlton, Inc.

Stephanie W. Kanwit, Groom Law Group Chartered, Washington, DC; David Allen, Corina Trainer, UMWA Health & Retirement Fund, Washington, DC; Daniel B. Edelman, Yablonski, Both & Edelman, Washington, DC, for Amicus Curiae United Mine Workers of America Combined Benefit Fund.

Kenneth S. Geller, John J. Sullivan, Mayer, Brown & Platt, Washington, DC; Stephen A. Bokat, Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, DC, for Amicus Curiae Chamber of Commerce of the United States.

Carl R. Schenker, Jr., John H. Beisner, Teresa Kwong, O'Melveny & Myers, LLP, Washington, DC; Hugh F. Young, Jr., Product Liability Advisory Council, Inc., Reston, VA, for Amicus Curiae Product Liability Advisory Council, Inc.

Jan S. Amundson, General Counsel National Association of Manufacturers, Washington, DC, for Amicus Curiae National Association of Manufacturers.

Before: BECKER, Chief Judge, SCIRICA and ROSENN, Circuit Judges.


OPINION OF THE COURT

BECKER, Chief Judge.

This is one of a vast number of cases filed in state and federal courts all over the nation seeking to hold tobacco companies liable for the smoking-related costs incurred by union health and welfare funds. The plaintiff funds allege that they were defrauded by the defendants—tobacco companies and related industry organizations—into paying for their participants' smoking-related illnesses, as well as...

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