May 23, 1988
CLAIRE E. DEWEY, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF WILFRED E. DEWEY, DECEASED, PLAINTIFF-APPELLANT,
BROWN & WILLIAMSON TOBACCO CORPORATION, DEFENDANT-RESPONDENT, AND R.J. REYNOLDS TOBACCO COMPANY, R.J. REYNOLDS INDUSTRIES, INC., AND AMERICAN BRANDS, INC. (FORMERLY THE AMERICAN TOBACCO COMPANY, INC.), DEFENDANTS. CLAIRE E. DEWEY, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF WILFRED E. DEWEY, DECEASED, PLAINTIFF-RESPONDENT, V. BROWN & WILLIAMSON TOBACCO CORPORATION, DEFENDANT-APPELLANT, AND R.J. REYNOLDS TOBACCO COMPANY, R.J. REYNOLDS INDUSTRIES, INC., AND AMERICAN BRANDS, INC. (FORMERLY THE AMERICAN TOBACCO COMPANY, INC.), DEFENDANTS
On appeal from the Superior Court, Law Division, Bergen County, whose decision is reported at 216 N.J. Super. 347.
Petrella, Baime and Ashbey. The opinion of the court was delivered by Ashbey, J.A.D.
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In this cigarette product liability action, plaintiff sought damages from defendant cigarette manufacturer, Brown & Williamson Tobacco Corporation, for the death of her husband. Judge Lucchi granted defendant's motion for partial summary judgment, dismissing that count of plaintiff's complaint which asserted liability based upon defendant's failure to warn of the dangers of smoking its product, Viceroy cigarettes, but denied the balance of defendant's motion. By leave granted, the parties separately appealed from these rulings. For purposes of this opinion we consolidate these appeals and affirm, substantially for the reasons expressed by Judge Lucchi in his written opinion, reported at 216 N.J. Super. 347 (Law Div.1986), and subject to such modifications as intervening law makes necessary.*fn1
We are first satisfied, as was Judge Lucchi, that plaintiff's cause of action for failure to warn is preempted by the 1965 Cigarette Labeling and Advertising Act, 15 U.S.C.A. sec. 1331 et seq. (Labeling Act) (216 N.J. Super. at 350). We recognize that Judge Lucchi's ruling was grounded in his conviction that he was bound by the federal courts in their interpretation of federal statutes, particularly by the opinion of the Third Circuit in Cipollone v. Liggett Group, Inc., 789 F.2d 181, 185-188
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(3 Cir.1986), cert. den. U.S. , 107, S. Ct. 907, 93 L. Ed. 2d 857 (1987) (216 N.J. Super. at 351-352).
We need not rule, however, on whether Judge Lucchi was bound by the Third Circuit opinion.*fn2 Our independent review convinces us that the Labeling Act does preempt plaintiff's common law action for failure to warn. 15 U.S.C.A. sec. 1334. See Feldman v. Lederle Laboratories, 97 N.J. 429, 460 (1984); Andre v. Union Tank Car Co., Inc., 213 N.J. Super. 51, 65 (Law Div.1985), aff'd 216 N.J. Super. 219 (App.Div.1987).
Any preemption analysis begins with examining whether the preemption is "express." "Express preemption" is defined as created by Congress's declaration to preclude state regulation in the given area, and "implied preemption" occurs when Congress, "through the structure or objectives of federal law, has impliedly precluded state regulation in the area." L. Tribe, American Constitutional Law, sec. 6-25 at 481 n. 14 (2d ed. 1988).
Because all of the cases construing the preemptive effect of the Act have concluded that what is involved is "implied preemption", we consider Professor Tribe's further words apposite.
These . . . categories of preemption are anything but analytically air-tight. For example, even when Congress declares its preemptive intent in express language,
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deciding exactly what it meant to preempt often resembles an exercise in implied preemptive analysis. [ Ibid. ]
The specific preemptive language is:
(a) No statement relating to smoking and health, other than the statement required by [the Act], shall be required on any cigarette package.
(b) 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.A. sec. 1334].
Admittedly, section 1334 does not expressly prohibit state tort actions which are predicated on asserting that the cigarette manufacturer's required warning on the package is inadequate. In construing the congressional meaning, we look to the nature of the subject. Tort claims are an area traditionally reserved to the states. We acknowledge the presumption against preemption. The United States Supreme Court has repeatedly emphasized that, "'the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.'" Puerto Rico Dep't of Consumer Affairs v. Isla Petroleum Corp., U.S. , , 108 S. Ct. 1350, 99 L. Ed. 2d 582, (1988), quoting Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 715, 105 S. Ct. 2371, 2376, 85 L. Ed. 2d 714 (1985).
On the other hand, although the extent of the preemption in the Act requires statutory construction, the fact of preemption is express. Not only does the Act say that no "State law" may require a different cigarette warning, it also says that one object of the Act is to prevent "diverse, nonuniform, and confusing cigarette labeling and advertising regulations," 15 U.S.C.A. sec. 1331. Our task, therefore, is to construe this specific preemptive language and to give effect to the Congressional intent there expressed. Cf. California Federal Sav. & Loan Ass'n. v. Guerra, 479 U.S. 272, , 107 S. Ct. 683, 697, 93 L. Ed. 2d 613, 632-633 (1987) (Scalia, J., concurring). Is the term
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"State law" in the Act intended to be limited to state statutes or state regulations? We think not.*fn3
Substantial federal authority construing the preemption provisions accords with Cipollone and is persuasive on this point. See Palmer v. Liggett Group, Inc., 825 F.2d 620 (1 Cir.1987); Stephen v. American Brands, Inc., 825 F.2d 312 (11 Cir.1987); Gunsalus v. Celotex Corp., 674 F. Supp. 1149, 1159 (E.D.Pa. 1987). Much of the analysis focuses on the Congressional scheme, implying preemption because the objectives of the federal law are so clear that a contrary result would present an obstacle to their attainment, a principle of ascertaining implied preemptive congressional intent. As the Palmer court said,
It is these policies [health protection and trade protection], and more importantly, the balance fixed between them that is our focus. The language of sec. 1331 even measures the relative weight of the policies: the federal warning should protect commerce "to the maximum extent" consistent with its health policy. Thus, we consider now the effect of the introduction of a state tort claim into this congressionally calibrated system. As discussed earlier, Congress ran a hard-fought, bitterly partisan battle in striking the compromise that became the Act. It is inconceivable that Congress intended to have that carefully wrought balance of national interests superseded by the views of a single state, indeed, perhaps of a single jury in a single state. Contrary to the District Court's view, we therefore hold that a suit for damages on a common law theory of inadequate warning -- if the warning given complies with the Act -- disrupts excessively the balance of purpose set by Congress, and is thus preempted. [ Palmer v. Liggett Group, Inc., supra, 825 F.2d at 626].
Respecting the specific preemption language, we are also satisfied that upholding plaintiff's challenge to the federally mandated warning is necessarily in conflict with the Act's express terms. Either the federally prescribed warning is adequate under our law or it is not. As the Palmer court further said,
We agree. It is clear to us that the preservation of plaintiff's failure to warn claim is necessarily in conflict with the Act's express limitations on conflicting state law and with the Congressional purpose of preventing diversity in the cigarette labeling requirements of the several states.*fn4
Although we also agree with Judge Lucchi that plaintiff's submissions were otherwise sufficient to withstand defendant's summary judgment motion, we consider more discussion necessary concerning the viability of plaintiff's remaining cause of action. In support of its contention that plaintiff had no remaining cause of action, defendant first urged that it was entitled to summary judgment because the Labeling Act precluded any theory of liability, in addition to precluding one based upon a failure to warn. Judge Lucchi reasoned that a manufacturer's strict liability for product defect consequences can take one of three forms: manufacturing defect, design defect or inadequate warning. See Feldman v. Lederle Laboratories, supra, 97 N.J. at 449; cf. N.J.S.A. 2A:58C-2. He found plaintiff's claim to be that defendant's cigarettes were defective in design, i.e., designed so as to be not reasonably fit, safe and suitable for human use at the time they were placed in the stream of commerce. Suter v. San Angelo Foundry & Machine Co., 81 N.J. 150, 169 (1979); N.J.S.A. 2A:58C-2. Judge Lucchi said,
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. . . A design defect claim would not have the effect of frustrating Congress's objective in enacting the federal statute and does not conflict with the act's two-fold purpose of providing warning to the public and protecting national economic interests. For these reasons we hold that plaintiff's claim of design defect based upon factors other than inadequate warning is not preempted by the act. [216 N.J. Super. at 356].
We agree with Judge Lucchi's analysis. Nothing in the history or wording of the Labeling Act suggests that cigarette manufacturers were to be insulated by Congress from the consequences of their conscious avoidance of inexpensive measures known to them to have the capacity to lessen or remove known health risks incidental to the consumption of their product.*fn5
On appeal, defendant also claims, however, that plaintiff's design-defect cause has been eliminated by the July 1987 enactment of a New Jersey Products Liability Law, N.J.S.A. 2A:58C-1 et seq. (Products Liability Law).*fn6 Judge Lucchi's opinion preceded this amendment. Based upon the then applicable law, he said,
At this juncture of the litigation, we cannot say that the minds of reasonable men could not differ on whether the risks posed by cigarettes outweigh their utility. We believe therefore that plaintiff should be accorded the opportunity to carry her burden of producing sufficient evidence on the risk-utility factors to establish whether cigarettes are a defective product. In pursuing her claim for design defect, plaintiff need not prove the existence of alternative, safer designs since a jury may conclude that the risks posed by cigarette use outweighs their utility. . . . Plaintiff will be entitled to offer, as part of the risk-utility analysis, proof of the "state-of-the-art" respecting cigarette manufacture (i.e. that defendant had the technological expertise to minimize the unavoidable dangers attendant to cigarette smoking). [216 N.J. Super. at 357-358.]
While this appeal was pending, Judge Sarokin, in an unpublished opinion of October 27, 1987 (Cipollone v. Liggett Group,
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Inc., No. 83-2864 (D.N.J. Oct. 27, 1987) [available on WESTLAW, 1987 WL 14666], reconsideration denied (D.N.J. Dec. 28, 1987) [available on WESTLAW, 1987 WL 31763],*fn7 reviewed the effect of the Products Liability Law in a similar context. In a ruling upon which defendant relies, he said that a risk-utility theory of product liability no longer applied in New Jersey to cases asserting a cause of action based upon the harm caused by cigarette smoking.*fn8
Our analysis leads us to conclude that the risk-utility analysis requires a modification in this case, not dismissal. By section 8 of the Products Liability Law,*fn9 the Legislature declared its intention to subject pending cases to what it had determined was the existing common law of product liability. N.J.S.A. 2A:58C-3a(2) of the Products Liability Law reads as follows:
In any product liability action against a manufacturer or seller for harm allegedly caused by a product that was designed in a defective manner, the manufacturer or seller shall not be liable if:
(2) The characteristics of the product are known to the ordinary consumer or user, and the harm was caused by an unsafe aspect of the product that is an inherent characteristic of the product and that would be recognized by the ordinary person who uses or consumes the product with the ordinary knowledge common to the class of persons for whom the product is intended, except that this paragraph shall not apply to industrial machinery or other equipment used
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in the workplace and it is not intended to apply to dangers posed by products such as machinery or equipment that can feasibly be eliminated without impairing the usefulness of the product. . . .
The relevant legislative committee statements said that N.J.S.A. 2A:58C-3a(2) was based upon and codified sec. 402A of 2 Restatement, Torts 2d (1965) comment i, which represented existing law. (See Senate Judiciary Committee Statement Senate Committee Substitute for Senate, No. 2805; Assembly Insurance Committee Statement to Senate, No. 2805.) Section 402A reads:
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.
Comment i explains the term "unreasonably dangerous" in section 402A, which has been replaced in New Jersey by the more understandable phrase, not "reasonably suitable, safe and fit for the purposes for which [the] goods have been sold." Suter v. San Angelo Foundry & Machine Co., supra, 81 N.J. at 169.
i. Unreasonably dangerous. The rule stated in this Section [402A] applies only where the defective condition of the product makes it unreasonably dangerous to the user or consumer. Many products cannot possibly be made entirely safe for all consumption, and any food or drug necessarily involves some risk of harm, if only from over-consumption. Ordinarily sugar is a deadly poison to diabetics, and castor oil found use under Mussolini as an instrument of torture. That is not what is meant by "unreasonably dangerous" in this Section. The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. . . .
The comment then gives three examples of the difference between a product known to be dangerous and one which is adulterated.
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. . . Good whiskey is not unreasonably dangerous merely because it will make some people drunk, and is especially dangerous to alcoholics; but bad whiskey, containing a dangerous amount of fusel oil, is unreasonably dangerous. Good tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful; but tobacco containing something like marijuana may be unreasonably dangerous. Good butter is not unreasonably dangerous merely because, if such be the case, it deposits cholesterol in the arteries and leads to heart attacks; but bad butter, contaminated with poisonous fish oil, is unreasonably dangerous. [Emphasis added].
Defendant urges on appeal that the application of the comment i limitation on a manufacturer's liability entitles it to summary judgment because decedent was a consumer who expected smoking to be harmful and because, under comment i, cigarettes cannot be considered "unreasonably" dangerous unless they are adulterated, a claim which plaintiff has not asserted.
In general, it is a fair reading of N.J.S.A. 2A:58C-1 et seg., in light of the legislative history, that the Legislature was of the opinion that the principles of comment i were codified as a part of the existing common law and thus applicable to pending cases.*fn10 But, this by no means requires the ruling defendant urges. We first reject the applicability of the comment i example relating to tobacco. We do not agree with defendant
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that it is clear that its product was indisputably "good tobacco." It is a manufactured object, subject to many design variations.
Respecting the consumer-expectation test in general, defendant's reliance upon out-of-context statements of our Supreme Court suggesting that the applicability of a consumer-expectation test precludes the application of a risk-utility test is misplaced. Manufacturers have been held liable upon a plaintiff's showing that a design was defective because it failed to meet a reasonable consumer-expectation of product safety, obviating plaintiff's having to establish risk-utility factors in order to recover. It is in this context that the consumer-expectation-of-safety test in O'Brien v. Muskin Corp., 94 N.J. 169, 182 (1983), was termed by the Supreme Court "[a]nother standard" of product liability. A consumer-expectation-of-safety rationale which expands manufacturer liability is to be distinguished from a consumer-expectation-of-danger defense as asserted in comment i (or reflected in N.J.S.A. 2A:58C-3a(2)).*fn11
We regard the confusion created by plaintiff's risk-utility claim and defendant's consumer-expectation assertions to have obscured the posture of this case. We have no quarrel with defendant's proposition that plaintiff may not recover if a factfinder concludes that the death of her decedent was caused in large measure from exposure to the danger inherent in all cigarettes, a danger acknowledged to be within his contemplation as an ordinary consumer. That proposition, however, does not compel a legal conclusion that there are no facts at issue material to defendant's liability concerning defendant's cigarettes as defendant designed them and decedent smoked them, particularly, as Judge Lucchi said, whether "defendant had the technological expertise to minimize the unavoidable [i.e. inherent] dangers attendant to cigarette smoking." (216 N.J. Super. at 358).
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*fn12 Comment i is a limitation on the imposition of liability despite the exercise of all possible care. It is irrelevant to a claim that plaintiff's decedent's death was caused in a large measure by exposure to a danger not inherent in good tobacco or in, as defendant described them, "well made cigarettes."*fn13 In our view, therefore, comment i, which we accept as relevant, does not entitle defendant cigarette manufacturer to summary judgment in a case which long antedated the Product Liability Law and there is no evidence that the Legislature intended that it should.*fn14
In affirming the interlocutory rulings of Judge Lucchi, we note that the jury instruction necessary to present plaintiff's risk-utility theory must be modified. See Cepeda v. Cumberland Engineering Co., Inc., 76 N.J. 152, 174 (1978). Judge Lucchi listed the seven factors of a risk-utility analysis as they were stated in O'Brien v. Muskin Corp., supra, 94 N.J. at 182. It is axiomatic that not all of those factors should be considered by the jury in every case. Cepeda v. Cumberland Engineering Co., Inc., supra, 76 N.J. at 174. As to those factors concerning which the minds of reasonable people "could not differ on whether the risks posed by a product outweigh its
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utility, or vice versa, then the court [should] make the appropriate determination as a matter of law." O'Brien v. Muskin Corp., supra, 94 N.J. at 186. While the jury should not be asked to compare the risks and utility inherent in cigarette smoking nor to make findings of fact concerning whether decedent was adequately warned of those risks, plaintiff should be permitted to go forward with her cause of action.*fn15
Thus modified, Judge Lucchi's denial of defendant's summary judgment motion is affirmed.