Trial Brief In Reference To Role Of Tobacco Manufacturers
Trial Brief In Reference To Role Of Tobacco Manufacturers
JOHN CURRAN LADD (SBN 48149)
MARY ELLEN GAMBINO (SBN 111521)
KATHLEEN A. CLARK (SBN 133770)
ROPERS, MAJESKI, KOHN & BENTLEY
670 Howard Street
San Francisco, California 94105
Telephone: (415) 543-4800
Facsimile: (415) 512-1574
Attorneys for Defendant
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE CITY AND COUNTY OF SAN FRANCISCO
JAMES RAFFERTY and SALLY RAFFERTY,
Plaintiffs,
v.
ABEX CORPORATION, et al.,
Defendants.
CASE NO. 962165
DEFENDANT'S TRIAL BRIEF IN REFERENCE TO ROLE OF TOBACCO MANUFACTURERS
Defendant submits this trial memorandum in response to the Court's request for briefing on the impact of the Legislature's recent amendment to Section 1714.45 of the Civil Code. It is the position of this defendant that: 1) the legislature's adoption of both Senate Bill 49 (the Kopp bill) and of Senate Bill 340 (the Sher bill) overturned prior case law which had misread the intent and effect of the previous version of Section 1714.45; and (2) that the adoption of Senate Bill 49 into law has retroactive effect which (even if prior interpretations of legislative intent had been correct) allows the jury to consider the fault of tobacco manufacturers in allocating fault under Proposition 51 for items of damages caused jointly by smoking and asbestos exposure. American Tobacco v. Superior Court (1989), 208 Cal.App.3d 480 is therefore no longer "good law." Richards v. Owens-Illinois (1997), 14 Cal.App.4th 985, does not apply because the defendants herein will demonstrate that the products and conduct of the tobacco manufacturers bring them outside the narrow scope of protection offered by prior or new Section 1714.45, as properly understood. Defendants are thus free to: (1) offer evidence demonstrating the fault of the tobacco manufacturers in bringing about the damages of which plaintiffs complain herein, under theories of strict liability, negligence, fraud, misrepresentation and/or conspiracy; and (2) seek a verdict form which would allocate a percentage of fault to these manufacturers.
Background
In its most recent session the California Legislature passed two bills which relate to Section 1714.45, the statute adopted in 1987 which limited certain products liability theories as to inherently unsafe / obviously hazardous products, sometimes known as the "napkin act"./ One of these bills (S.B. 49) was signed by the governor and becomes law, with retroactive effect, on January 1, 1998. Both bills demonstrate that a 1989 appellate decision misconstrued the intent and effect of the current version of the statute. The Legislative Digests and the Bills themselves follow.
S.B. 49 Legislative Counsel's Digets
Existing law exempts a manufacturer or seller from liability in a product liability action if (1) the product is inherently unsafe and is known to be unsafe by the ordinary consumer, as specified, and (2) the product is a common consumer product intended for personal consumption, such as sugar, castor oil, alcohol, tobacco, and butter, as specified.
Existing law also states that these provisions do not apply to actions brought by a public entity in specified cases to recover the value of benefits provided to individuals injured by a tobacco-related illness caused by the tortious conduct of a tobacco company, as specified.
This bill would revise these provisions. The bill would delete tobacco from the illustrative list of common consumer products and would also specify that the exemption described above does not exempt the manufacture or sale of tobacco products by tobacco manufacturers from product liability actions. This bill would also declare that there is no statutory bar to tobacco-related personal injury, wrongful death, or other tort claims against tobacco manufacturers by smokers or others, as specified, and that such claims shall be determined on their merits. The bill would also provide that these provisions shall not be construed to grant immunity to tobacco industry research organizations.
The bill also would make a related legislative declaration.
S.B. 49. The Bill as enacted and signed.
Section 1714.45 of the Civil Code is amended/ to read:
1714.45. (a) In a product liability action, a manufacturer or seller shall not be liable if both of the following apply:
(1) The product is inherently unsafe and the product is known to be unsafe by the ordinary consumer who consumes the product with the ordinary
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/ As has been widely reported, Section 1714.45 was adopted in 1987 following a compromise reached at Frank Fat's Restaurant in Sacramento between plaintiffs' lawyers and The Tobacco Institute (represented by two lawyers from Covington & Burling). The napkin on which the statute was written was later framed and hung in the entrance to the restaurant. Following this agreement of the "interested parties", an medical malpractice bill was amended in toto, passed and signed in record time, without committee hearings and without significant legislative history. See, e.g., Kilbourne, George W., The Failure of Tobacco Litigation in Light of Recent Rulings and Settlement Discussions, Mealey's Litigation Report: Tobacco: Vol. 11, #11, page 18 (Oct. 9, 1997). See also American Tobacco Co. v. Superior Court (1989) 208 Cal.App.3d 480, 487 note 3.
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/ Wherever emphasis appears in quotations herein, it has been added.
knowledge common to the community.
(2) The product is a common consumer product intended for personal consumption, such as sugar, castor oil, alcohol, and butter, as identified in comment i to Section 402A of the Restatement (Second) of Torts.
(b) This section does not exempt the manufacture or sale of tobacco products by tobacco manufacturers and their successors in interest from product liability actions, but does exempt the sale or distribution of tobacco products by any other person, including, but not limited to, retailers or distributors.
(c) For purposes of this section, the term "product liability action" means any action for injury or death caused by a product, except that the term does not include an action based on a manufacturing defect or breach of an express warranty.
(d) This section is intended to be declarative of and does not alter or amend existing California law, including Cronin v. J.B.E. Olson Corp., (1972) 8 Cal. 3d 121, and shall apply to all product liability actions pending on, or commenced after, January 1, 1988.
(e) This section does not apply to, and never applied to, an action brought by a public entity to recover the value of benefits provided to individuals injured by a tobacco-related illness caused by the tortious conduct of a tobacco company or its successor in interest, including, but not limited to, an action brought pursuant to Section 14124.71 of the Welfare and Institutions Code. In such an action brought by a public entity, the fact that the injured individual's claim against the defendant may be barred by a prior version of this section shall not be a defense. This subdivision does not constitute a change in, but is declaratory of, existing law relating to tobacco products.
(f) It is the intention of the Legislature in enacting the amendments to subdivisions (a) and (b) of this section adopted at the 1997-98 Regular Session to declare that there exists no statutory bar to tobacco-related personal injury, wrongful death, or other tort claims against tobacco manufacturers and their successors in interest by California smokers or others who have suffered or incurred injuries, damages, or costs arising from the promotion, marketing, sale, or consumption of tobacco products. It is also the intention of the Legislature to clarify that such claims which were or are brought shall be determined on their merits, without the imposition of any claim of statutory bar or categorical defense.
(g) This section shall not be construed to grant immunity to a tobacco industry research organization.
SEC. 2. The Legislature hereby finds and declares that to the extent that the common law rules as to product liability actions with respect to tobacco were superseded by the version of Section 1714.45 of the Civil Code added by Chapter 1498 of the Statutes of 1987, this act restores those common law rules with respect to the manufacture or sale of tobacco products by tobacco manufacturers and their successors in interest.
S.B. 340 Legislative Counsel's Digest
Existing law provides that in a product liability action, a manufacturer or seller is not liable if the product is a common consumer product intended for personal consumption, such as, among other things, tobacco, is inherently unsafe, and is known to be unsafe by the ordinary consumer, as specified.
This bill would state that the above-described provision of existing law does not apply to specified actions against a tobacco company, its successor-in-interest, or a tobacco industry research organization, and make a related statement of legislative intent. The bill would state that it does not constitute a change in, but is declaratory of, existing law, that it relates to liabilities as to tobacco products only, and that the provisions of the bill are severable.
S.B. 340 as Adopted
SECTION 1. Section 1714.455 is added to the Civil Code,/ to read:
1714.455. (a) Section 1714.45 does not apply to any action, including product liability actions, against a tobacco company, its successor-in-interest, or a tobacco industry research organization brought by a party who did not voluntarily consume the product.
(b) Section 1714.45 does not apply to any action brought by any party against a tobacco company, its successor-in-interest, or a tobacco industry research organization for fraud, misrepresentation, or conspiracy.
(c) It is the expressed intent of the Legislature that Section 1714.45 never applied to prohibit or limit either of the following actions:
(1) Any action brought by any party against a tobacco company, its successor-in-interest, or a tobacco industry research organization for fraud, misrepresentation, or conspiracy.
(2) Any action, including a product liability action, against a tobacco company, its successor-in-interest, or a tobacco industry research organization brought by a party who did not voluntarily consume the product.
(d) The decision of American Tobacco v. Superior Court (1989), 208 Cal. App. 3d 480, misinterpreted the intent of the Legislature as it relates to tobacco products to the extent that the court construed Section 1714.45 of the Civil Code as providing an unqualified immunity and as altering or amending California law existing on January 1, 1988. Accordingly, this section does not constitute a change in, and is declaratory of, existing law.
(e) This section does not limit the application of Section 1714.45 to product liability actions arising from the sale or distribution of tobacco products by a retailer, distributor, or any person other than a tobacco company, its successor-in-interest, or a tobacco industry research organization.
(f) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. SEC. 2. It is the express intent of the Legislature in enacting this act to clarify the application of Section 1714.45 of the Civil Code as it relates to liabilities which may arise from the manufacture of tobacco products, and only as to tobacco products, because of the special harms created by those products.
Discussion
It is well-established that a Court should consider a declaration of legislative intent in resolving ambiguous statutory language, including the declarations of a session of the legislature years subsequent to the legislature which adopted the original bill in question.
"'[A]lthough construction of a statute is a judicial function, where a statute is unclear, a subsequent expression of the Legislature bearing on the intent of the prior statute may be properly considered in determining the effect and meaning of the prior statute.'" 7 Witkin, Summary of California Law; Constitutional Law (4th edition, 1988) at page 151, citing and quoting from Tyler v. California (1982) 134 Cal.App.3d 973, 977 (discussed below).
"'[S]ubsequent legislation interpreting a statute [adopted by a prior legislature] cannot change its meaning and effect. It merely supplies an indication of legislative intent which, though not binding
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/ Note that S.B. 340 (unlike S.B. 49) did not amend the pre-existing statute. S.B. 340 apparently assumed that S.B. 49 would amend the statute. S.B. 340 would have added a new section to the Code to clarify the prior section.
on the courts, may be considered together with other factors in arriving at the true intent existing at the time the statute was enacted. For example, an expression by the legislature in a later statute or reenactment, concerning an ambiguity in a prior act and declaring the intent of such prior act, is a factor which may properly be considered in correctly ascertaining the true meaning and effect of the prior act; and if the subsequent legislative expression of intent is accepted by the courts upon such consideration, there is no problem of retroactivity since the meaning of the act under interpretation has always been the same.'" 58 Cal.Jur.3d 579-80 (1980).
In Tyler v. State of California (1982) 134 Cal.App.3d 973, 977, cited by Witkin, supra, the Court affirmed the granting of the State's demurer to a Complaint which challenged the State Controller deduction of a taxpayer's child support obligations from a tax refund otherwise due to the taxpayer-parent. The taxpayer had overpaid his 1979 taxes by $321. The State Controller refused to refund this overpayment since the same taxpayer owed the State $1,644 for delinquent child support. See 134 Cal.App.3d at 975. The issue turned on the interpretation of a prior statute which had been subject to judicial interpretation in a 1977 Court of Appeal opinion. Id. at 975-76. The 1980 Legislature amended the statute in question to support the Controller's position, including express findings that the 1977 opinion had "created some confusion" requiring the amendment as a clarification and declaration of the existing law. Id. at 976-77. In this context, remarkably parallel to the situation presently before this Court, the Court of Appeal gave the 1980 "clarification" its intended effect, even though the tax year in question was the year prior to the new enactment./
As the Court of Appeal recognized in its 1989 interpretation of the 1988 "napkin act", the original Section 1714.45 is remarkable in its ambiguity. "[T]his poorly drafted statute is on its face amenable to two diametrically opposed interpretations....[It] seems almost calculated to defy exegesis." American Tobacco Co. v. Superior Court (1989) 208 Cal.App.3d 480, 485, 487. American Tobacco gave an extraordinarily over-broad interpretation to C.C. Section 1714.45 as "innuniz[ing] manufacturers of .. tobacco from product liability suits." In this respect, the decision has been expressly disavowed in S.B. 340, impliedly disavowed by S.B. 49 and very carefully not affirmed by the Supreme Court in Richards, as discussed below. The holding mandated the trial court to grant a defense judgment on the pleadings, dismissing the tobacco manufacturers from personal injury and wrongful death claims involving smokers. Even though the statute on its face cited tobacco products only as examples of "common consumer product[s]", the Court read the statute as creating an irrebuttable presumption that cigarettes were both common consumer / ________________________
City of Sacramento v. Public Employees' Retirement System (1994) 22 Cal.App.4th 786, 797-99, quoted Tyler with approval. However, where the prior statute was unambiguous and created vested rights, the Court declined to be governed by the declaration of intent. The Court noted that the subsequent legislature's declaration of intent was entitled to "deference" only where the prior statute was ambiguous. The prior statute here (the 1988 "napkin" statute) is patently ambiguous and did not create vested rights. Indeed, American Tobacco stated that "this poorly drafted statute is on its face amenable to two diametrically opposed interpretations..." 208 Cal.App.3d at 485.
products and "known to be unsafe by the ordinary consumer". The Court purported to base this wide interpretation despite the admitted lack of significant legislative history and in the face of the apparently inconsistent declaration that the 1988 statute was intended as merely declarative of existing law. See id. at 487 and note 3, 489. The American Tobacco Court did not expressly address the issue of whether section 1714.45 immunized tobacco manufacturers only from suits based on Barker v. Lull style strict liability theories, or also from theories based on negligence, fraud, misrepresentation, or conspiracy.
In Richards v. Owens-Illinois, Inc. (Jan. 1997) 14 Cal.4th 985, the Supreme Court (without benefit of the legislative history now available from the 1997 legislature) declined to rule whether on whether American Tobacco was properly decided as to the scope of tobacco manufacturer immunity. The parties to that case apparently assumed that the immunity covered all possible legal theories against tobacco manufacturers. Defendants introduced no evidence of negligence, fraud, misrepresentation or conspiracy. 14 Cal.4th at 1003, note 8. (If required by the Court herein, these Defendants will make an offer of proof on those theories, though it is their position that a Proposition 51 share of fault may be assessed against the tobacco manufacturers even on Barker v. Lull grounds alone.) Richards made only a "narrow holding" that where the scope of immunity granted by Civil Code section 1714.45 would preclude a suit by a plaintiff-smoker against a tobacco company, it would also preclude the assignment of Proposition 51 "fault" to the same manufacturer in an asbestos trial:
"On the narrow issue before us, we therefore conclude that the Court of Appeal erred by reversing the judgment for Richards on grounds that Owens-Illinois should have been allowed to assign "fault" to absent tobacco companies in order to reduce its liability for Richards 'non-economic' damages under Proposition 51. Any and all other issues concerning the proper allocation of legal responsibility for the consequences of smoking are beyond the scope of our decisions, and we express no opinion thereon. ... [W]e do not take any position on the exact parameters of the immunity provided by section 1714.45, or on the correctness of the American Tobacco decision in this regard." 14 Cal.4th at 1003 and note 8.
It is important to note that the Governor's veto of S.B. 340 does not affect the fact that both the bill he signed (S.B. 49) and the bill he vetoed (S.B. 340) clarify the legislative intent of the original Section 1714.45 (i.e., of the statute in effect 1988 to 1997). Both bills make it clear that the legislature repudiated prior judicial interpretation of the intent and effect of the Section.
Finally, it is important to note that sub-sections (d) and (f) of S.B. 49, the bill which the governor signed and which becomes the new Section 1714.45 clearly shows the legislature's intent for the amendment to have retroactive effect:
(d) This section is intended to be declarative of and does not alter or amend existing California law, including Cronin v. J.B.E. Olson Corp., (1972) 8 Cal. 3d 121, and shall apply to all product liability actions pending on, or commenced after, January 1, 1988.
...
(f) It is the intention of the Legislature in enacting the amendments to subdivisions (a) and (b) of this section adopted at the 1997-98 Regular Session to declare that there exists no statutory bar to tobacco-related personal injury, wrongful death, or other tort claims against tobacco manufacturers and their successors in interest by California smokers or others who have suffered or incurred injuries, damages, or costs arising from the promotion, marketing, sale, or consumption of tobacco products. It is also the intention of the Legislature to clarify that such claims which were or are brought shall be determined on their merits, without the imposition of any claim of statutory bar or categorical defense.
Conclusion
The overly broad holding of American Tobacco v. Superior Court (1989), 208 Cal.App.3d 480 has been repudiated by the 1997 Legislature, not once, but twice. Both the original version of 1714.45 and the clarified version are intended merely to recognize that tobacco manufacturers could avoid a verdict based on the consumer expectations test ("prong 1 of Barker v. Lull) if the jury concluded that cigarettes were a common consumer product and were commonly understood to be inherently unsafe. Even were this Court to consider American Tobacco still an accurate judicial interpretation of judicial intent of the 1988 statute, the 1997 amendments are expressly intended to have retroactive intent.
Richards v. Owens-Illinois (1997), 14 Cal.4th 985, continues to be good law to the extent that it merely conjoins the Proposition 51 "fault" issue to the 1714.45 "immunity" issue. What has been clarified by the 1997 Legislature is that Section 1714.45 does not give any absolute form of immunity and does not impact (as to tobacco manufacturers) theories of liability other than, at most, manufacturer's strict liability in tort. This Court should submit a verdict form to the jury which will permit it to allocate a percentage of fault to the tobacco manufacturers with respect to any damages which have been caused in part by smoking.
DATED: November 6, 1997
ROPERS, MAJESKI, KOHN & BENTLEY
By
John Curran Ladd
Attorneys for Defendant
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