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Supreme Court, New York County, New York.

Phyllis SMALL et al., Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. LORILLARD TOBACCO COMPANY, INC., et al., Defendants.

Mary A. HOSKINS, as Executrix of Edwin P. Hoskins, Deceased, et al., Plaintiffs, v. R.J. REYNOLDS TOBACCO COMPANY et al., Defendants.

Sharlene HOBERMAN et al., on Behalf of the Estate of Lewis Hulse, Deceased, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. BROWN & WILLIAMSON TOBACCO CORPORATION et al., Defendants.

Rose FROSINA et al., Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. PHILIP MORRIS, INC., et al., Defendants.

Catherine ZITO et al., Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. AMERICAN TOBACCO COMPANY, INC., et al., Defendants.

Decided: October 28, 1997

Goodkind, Labaton, Rudoff & Sucharow (Martis Ann Brachtl, Louis Gottlieb and Brian Stuart Campf, of counsel), for plaintiffs. Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel (Alan Mansfield, of counsel), and Shook, Hardy & Bacon, L.L.P. (Gary R. Long, of counsel), for Lorillard Tobacco Company, Inc., and another, defendants. Debefoise & Plimpton (Harry Zirin, of counsel), for Council for Tobacco Research-USA, Inc., defendant. Seward & Kissel (Anthony R. Mansfield, of counsel), for Tobacco Institute, Inc., defendant. Jones, Day, Reavis & Pogue (Mark Belasic and Harold K. Gordon, of counsel), for R.J. Reynolds Tobacco Company and another, defendants. King & Spalding (Stefan W. Engelhardt, of counsel), and Chadbourne & Parke, L.L.P. (Daniel J. O'Neil and Gretchen N. Werwaiss, of counsel), for Brown & Williamson Tobacco Corporation and others, defendants. Simpson, Thacher & Bartlett (John J. Kenney, of counsel), for B.A.T. Industries P.L.C., defendant. Dechert, Price & Rhoads (Robert A. Cohen, of counsel), for Philip Morris, Inc., and another, defendants.

The motions pending before this Court are hereby consolidated for purposes of disposition1 .

In these consumer protection/fraud actions brought by cigarette smokers against the manufacturers of cigarettes, plaintiffs seek to certify two proposed classes:  a damages class comprised of “all residents of the State of New York ․ who, on or after June 19, 1980, became or continued to be nicotine dependent 2 ” and an injunctive class of persons “who have smoked cigarettes manufactured by the manufacturing defendants and who bought those cigarettes in New York.”   Since the relevant facts have been set forth at length in this court's memorandum decision dated October 28, 1997, denying defendants' motions to dismiss, what follows is a summary of the pertinent facts.

Plaintiffs allege that defendants knowingly concealed and misrepresented information about the addictive nature of nicotine, and manipulated the levels of nicotine in their cigarettes with intent to defraud cigarette smokers and purchasers, causing them to buy defendants' cigarettes.   They assert claims for fraud, fraudulent concealment, conspiracy, concerted action, aiding and abetting, and violation of New York's General Business Law (“GBL”) §§ 349 and 350.   On behalf of all similarly situated persons, they seek to recover the return of the purchase price spent on the defendants' cigarettes and punitive damages.

CPLR § 901(a) provides that the class action method may be used if:

1) the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;

2) there are questions of law or fact common to the class which predominate over any question affecting only individual members;

3) the claims or defenses of the representative parties are typical of the claims or defenses of the class;

4) the representative parties will fairly and adequately protect the interest of the class;  and

5) a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

 Whether to certify a class action is vested in the discretion of the trial court.  (Askey v. Occidental Chemical Corp., 102 A.D.2d 130, 477 N.Y.S.2d 242 [4th Dept.1984] ).   The movant bears the burden of proving that all of the prerequisites of CPLR § 901(a) have been met.   Generally, the prerequisites of CPLR § 901(a) are to be liberally construed, since the state's policy favors the maintenance of class actions3 .  (Brandon v. Chefetz, 106 A.D.2d 162, 168, 485 N.Y.S.2d 55 [1st Dept.1985] ).   The court must also consider the five factors enumerated in CPLR § 902, but consideration of those factors are not triggered until the prerequisites of CPLR § 901(a) have been met.  (2 Weinstein-Korn-Miller, N.Y. Civ. Prac. ¶ 902.06).   If there is any doubt in deciding whether or not to certify a class, the court should err in favor of allowing the class action.  (Super Glue v. Avis Rent-A-Car System, Inc., 132 A.D.2d 604, 517 N.Y.S.2d 764 [2nd Dept.1987];  Brandon v. Chefetz, supra, 106 A.D.2d 162, 485 N.Y.S.2d 55 [1st Dept.1985] ).

 The number of potential class members in each of these proposed class actions will likely exceed one million.   An exact number of class members need not be specified to satisfy the numerosity requirement.   (Robidoux v. Celani, 987 F.2d 931, 935 [2nd Cir.1993] ).   It must be shown only that joinder is impracticable based on all the circumstances surrounding a case.  (Friar v. Vanguard Holding Corp., 78 A.D.2d 83, 91, 434 N.Y.S.2d 698 [2nd Dept.1980];  Robidoux v. Celani, supra, 987 F.2d at 936;  Weinberg v. Hertz Corp., 116 A.D.2d 1, 499 N.Y.S.2d 693 [1st Dept.1986], aff'd 69 N.Y.2d 979, 516 N.Y.S.2d 652, 509 N.E.2d 347 [1987];  2 Weinstein-Korn-Miller, N.Y. Civ. Prac. ¶ 901.9).   Because here the potential claimants are dispersed throughout the state of New York, their potential recovery is small, and many are not likely to bring individual actions for nominal economic damages, joinder would be impracticable.  (See, Robidoux v. Celani, supra, 987 F.2d at 936).   Therefore, the numerosity requirement has been satisfied.

 Much of defendants' remaining argument in opposition to class certification centers on the lack of common predominate issues involved, since, according to them, plaintiffs and each potential class member will have to prove they suffer an actual addiction to cigarettes in order to recover the relief being sought.   They further contend that many subjective factors must be considered to determine actual addiction, and for that reason, the description of the proposed classes as comprised of those addicted purportedly lacks any certainty, or an objective standard by which the members can be easily identified.   Defendants further contend that to demonstrate reasonable reliance, plaintiffs' claims will require individual proof that each member heard or read the alleged misrepresentations made by defendants, and inquiry into what each member knew about the addictive propensities of nicotine.   Citing the Fifth Circuit's opinion in Castano v. American Tobacco Co., 84 F.3d 734 [5th Cir.1996], where a nationwide class of allegedly “nicotine-dependent” persons was decertified on appeal, defendants finally argue that use of the class action method to adjudicate these claims would be unmanageable, and therefore, not the superior method.

 Commonality is established, under CPLR § 901(a)(2), when the activity complained of involves one set of operative facts from which plaintiffs' claims arise.  (Green v. Wolf, 406 F.2d 291, 299-300 [2nd Cir.1968], cert. denied, 395 U.S. 977, 89 S.Ct. 2131, 23 L.Ed.2d 766 [1969];  Friar v. Vanguard Holding Corp., supra 78 A.D.2d at 99, 434 N.Y.S.2d 698).   Existence of some common scheme or single plan by which the defendants have acted is enough to find that a class action is appropriate.   (See, Roberts v. Heim, 670 F.Supp. 1466 [N.D.Cal.1987], affd. in part mdfd. in part, 857 F.2d 646 [9th Cir.1988] ).  “It is unnecessary that every question be common to each member of the class;  all that is required is that common questions predominate over individual ones.”  (Gilman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 93 Misc.2d 941, 944, 404 N.Y.S.2d 258 [Sup.Ct.N.Y.County 1978] ).   Generally, in deciding whether the predominance requirement has been met, the issue of liability is controlling.   Individual questions of damages can be determined in subsequent proceedings.  (Dura-Bilt Corp. v. Chase Manhattan Corp., 89 F.R.D. 87, 93 [S.D.N.Y.1981] citing, Sargent v. Genesco Inc., 75 F.R.D. 79 [M.D.Fla.1977];  Brady v. LAC Inc., 72 F.R.D. 22 [S.D.N.Y.1976] ).

In Castano, the court found that common issues did not predominate over individual issues where damages for personal injuries to smokers nationwide were being sought in one action under a host of nine different legal theories.   In addition to the factual issues that may have resulted at trial, the court was concerned that the laws of all fifty states would need to be applied in deciding the merits of the case.   The court reasoned that a trial would have become unmanageable, and that the class action method was not suitable to adjudicate novel claims that were based upon addiction as an injury.

Undoubtedly a claim which turns on proof of actual addiction would involve far too many subjective factors 4 and present many of the same manageability concerns cited in Castano (supra) to warrant class action treatment.   However, unlike Castano and the other “mass tort” cases relied upon by defendants 5 , here liability will not depend on whether cigarettes cause a particular plaintiff disease or personal injury.   Rather, the central issue is whether plaintiffs and the class members can recoup the money they spent in a transaction that was purportedly riddled with fraudulent activities.

 It is well established in New York that fraud vitiates any transaction, and a plaintiff is entitled to recover the consideration parted with in a transaction based upon fraud.  (Stauss v. Title Guarantee & Trust Co., 284 N.Y. 41, 29 N.E.2d 462 [1940];  Clearview Assoc. v. Clearview Gardens First Corp., 8 Misc.2d 470, 168 N.Y.S.2d 432 [1957] ).   Additionally, proof that defendant engaged in deceptive practices and that plaintiff has been injured by reason thereof is the kind of evidence which supports a claim for violation of GBL § 349.  (Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 623 N.Y.S.2d 529, 647 N.E.2d 741 [1995] ).   Odd as it may seem, the health consequences of smoking then become irrelevant to proving defendants' liability.   Although the addictive nature of cigarettes may be an issue in proving fraud or deceptive practices, liability will depend upon the circumstances surrounding transactions involving the sale of cigarettes.   In this regard, the plaintiffs and potential class members are all commonly situated.   Each purchased defendants' cigarettes while the defendants were allegedly engaging in a pattern of fraudulent activities.   Each defendant purportedly conspired to conceal the addictive nature of cigarettes, manipulated the levels of nicotine in their cigarettes, and misrepresented relevant information to the public.   Exposure to the fraud and deceptive practices and purchase of defendants' cigarettes are the common factors which define the class.   The issue of actual nicotine dependence is a red herring because damages are to be measured by the cost of the cigarettes purchased, not by the harm the plaintiffs suffered from smoking.

 The defendants' assertion that the class definition is inadequate because there is no objective criteria for determining whether a class member is “addicted” is therefore misplaced.   This court is not limited by plaintiffs' requested class description.  (Robidoux v. Celani, supra, 987 F.2d at 937 [2nd Cir.1993] ).   It is within the court's discretion to redefine the class, and it may do so in a broad fashion and then permit members to exclude themselves from the class (See, CPLR § 903;  3 Weinstein-Korn-Miller, N.Y. Civ. Prac., ¶ 903.1).   While plaintiffs' requested class description fails to state an objective criteria by which the court and individual smokers can make a prima facie determination as to whether they are class members, common to all class members of both the damages and injunctive classes, and the named plaintiffs is that they purchased and smoked defendants cigarettes.   A class description based upon these factors eliminates any distinction between the two classes, and many of the individual issues that might otherwise exist.   Thus, this court will consider certification of one class comprised of persons who purchased and smoked defendants' cigarettes, rather than a class comprised of those who are nicotine dependent.

Plaintiffs have submitted some evidence which would support all class members' claims that each defendant, as a member of the alleged conspiracy, adopted standard policies and procedures whereby the same fraudulent methods were used to sell cigarettes to plaintiffs and the class members.   Differences in brands, design changes, and variety of tar and nicotine levels may not create individual issues at trial because defendants were allegedly aware of and manipulated the amount of nicotine that is needed in any cigarette to keep a normal smoker addicted.   Any individual issues of reliance are subordinate to the common class-wide issues, because proof that defendants engaged in a coordinated scheme of fraudulent activities is sufficient at the class certification stage to raise a presumption that the common issues are predominate.  (Brandon v. Chefetz, supra, 106 A.D.2d 162, 485 N.Y.S.2d 55;  Stellema v. Vantage Press, Inc., 109 A.D.2d 423, 492 N.Y.S.2d 390 [1st Dept.1985] ).

This court is not unmindful of the fact that the question of whether certain plaintiffs and class members may have been more knowledgeable than others about the harmful and addictive effects of cigarettes may create individual issues at trial.   However, the plaintiffs' allegations of defendants' superior knowledge and fraudulent acts are sufficient if proven at trial to support an inference of fraud, and may shift the burden to them and away from the plaintiffs to show that no deception was practiced.  (See, Gordon v. Bialystoker Center & Bikur Cholim, Inc., 45 N.Y.2d 692, 412 N.Y.S.2d 593, 385 N.E.2d 285 [1978];  Cowee v. Cornell, 75 N.Y. 91 [1878];  Parker v. Parker, 66 A.D.2d 328, 413 N.Y.S.2d 388 [1st Dept.1979];  First Nat. Bank v. Wright, 207 A.D. 521, 202 N.Y.S. 774 [3rd Dept.1924] ).   Moreover, recovery of the economic loss, if any, that resulted from fraud in the transaction is a common predominate element since it has been limited to plaintiffs' cost for the cigarettes they purchased since June 19, 1980.   Additionally, proof of damages need not be mathematically exact.  (Gilman v. Merrill Lynch Pierce, Fenner & Smith, Inc., 101 Misc.2d 655, 659, 421 N.Y.S.2d 794 [Sup.Ct., New York County 1979];  Tobin v. Union News Co., 18 A.D.2d 243, 245-246, 239 N.Y.S.2d 22 [4th Dept.1963] ).   Thus, this is not a basis for denying class certification on the issue of liability.  (Ray v. Marine Midland Grace Trust, 35 N.Y.2d 147, 154, 359 N.Y.S.2d 28, 316 N.E.2d 320 [1974];  Dura-Bilt Corp. v. Chase Manhattan Corp., supra, 89 F.R.D. 87 [S.D.N.Y.1981] ).

 With respect to the requirements of typicality, the claims of all the named plaintiffs are identical to those of the class.   The same course of conduct gives rise to their claims which are based upon the same legal theory.  (See, Super Glue Corp. v. Avis Rent-A-Car System, Inc., supra, 132 A.D.2d at 607, 517 N.Y.S.2d 764;  See also, Friar v. Vanguard Holding Corp., supra, 78 A.D.2d 83, 434 N.Y.S.2d 698).   Likewise, the interests of the named plaintiffs would not be adverse to those of the class.   Contrary to defendants' allegations, certification of a class limited to “expenses-only” and a subsequent decision on the merits will not likely affect separate personal injury claims.   By having excluded proof of actual addiction from the class description, plaintiffs and class members may be free to pursue claims for personal injuries caused by their addiction without being barred under the doctrine of res judicata.  (See, Microsoft Corp. v. Manning, 914 S.W.2d 602, 610 [1995];  Hill v. Western Electric Co., 672 F.2d 381, 387 [4th Cir.1982];  Sullivan v. Chase Investment Services, 79 F.R.D. 246 [N.D.Cal.1978] ).

 As seen through discovery, the briefs, and motions, and the hearing before this court, there is no reason to question the competency of the plaintiffs' attorney.   Thus, the adequacy of representation requirement has been satisfied.  (See, Super Glue Corp. v. Avis Rent-A-Car System, Inc., supra, 132 A.D.2d at 607, 517 N.Y.S.2d 764;  Sanders v. Robinson Humphrey, 634 F.Supp. 1048, 1057 [N.D.Ga.1986] ).

 As to whether the class action remedy is the superior method to adjudicate these claims, upon having reviewed the guidelines of CPLR 902 6 , this court is convinced that the class action mechanism is the only means by which a claim challenging the sales practices of defendants will ever be adjudicated.   The purpose of the class action is to provide “a means of inducing socially and ethically responsible behavior on the part of large wealthy institutions”.   Without the benefit of the class action, these institutions could act with impunity ․ “since, realistically speaking, our legal system inhibits the bringing of suits based upon small claims.”  [cite omitted] (Pruitt v. Rockefeller Ctr. Prop., Inc., supra, 167 A.D.2d at 23-24, 574 N.Y.S.2d 672 [1st Dept.1991] ).   That is true here, more than under any other circumstances.   Because the potential individual recovery is small, the claimants are likely to have little interest in bringing individual actions, particularly since the attorney fees for each separate action would no doubt exceed the individual's recovery.   Although redress for such claims is available in Civil Court, Small Claim Part, defendants have a long-established history of engaging in litigation tactics which make claims against them extremely burdensome and expensive for the plaintiffs.

As for manageability of a trial in these cases, the complexity of the claims has been greatly reduced by limiting the scope of the class to those who have purchased and smoked cigarettes, and the fact that five separate actions have been brought provides this court with more flexibility.   At this juncture, these cases could be tried separately, and if the circumstances warrant later, the cases could be divided into subclasses, decertified or the class amended should these cases become unmanageable.  (Brandon v. Chefetz, supra, 106 A.D.2d 162, 485 N.Y.S.2d 55 [1st Dept.1985] ).

Based upon the forgoing, this court finds plaintiffs have satisfied all of the prerequisites of CPLR 901(a).


ORDERED that each of the actions listed in the caption hereof is from the date of this Order, to be maintained as a class action under Article 9 of the CPLR by the plaintiffs commencing each action for themselves and as representative parties for the following class:

All residents of the state of New York who, on or after June 19, 1980, have smoked cigarettes manufactured by the manufacturing defendants, and who bought those cigarettes in New York.

ORDERED that within ten days of filing of this Order, the plaintiffs shall present a plan for giving notice to the class and proposed form of notice to the class and attached proof of claim designed to meet the requirements of CPLR 904 which shall indicate to the class members that unless they “opt-out” within a fixed time their claims will be barred.   Within ten days thereafter the defendants shall file with the court and serve upon the plaintiffs their suggestions and objections, if any, to the forms of notice and proof of claim submitted;  and it is further

ORDERED that this court hereby retains jurisdiction under Article 9 of the CPLR to correct, modify, annul, vacate, and supplement this Order from time to time before the decision on the merits of the common questions as it may deem proper.


1.   This memorandum decision disposes of the motions for class certification pending in the following actions:  Hoberman v. Brown & Williamson, Index No. 110953/96 (motion seq. # 008);  Small v. Lorillard Tobacco, Index No. 110949/96 (motion seq. # 005);  Frosina v. Philip Morris, Inc., Index No. 110950/96 (motion seq. # 005);  Zito v. American Tobacco, Index No. 110952/96 (motion seq. # 004);  Hoskins v. R.J. Reynolds Tobacco, Index No. 110951/96 (motion seq. # 006).

2.   The plaintiffs seek to define a class member as one who is “nicotine dependent” if he/she meets one of the following criteria:  (1) all New York residents who for three consecutive years usually smoke(d) 16 cigarettes or more per day, and who usually smoke(d) their first cigarette of each day within 30 minutes of awakening;  or (2) all New York residents who have been diagnosed by a health care professional as nicotine-dependent.

3.   Because Article 9 of the CPLR is modeled on Rule 23 of the Federal Rules of Civil Procedure, New York courts have looked to interpretations of Rule 23 for guidance.  (Pruitt v. Rockefeller Ctr. Prop., Inc., 167 A.D.2d 14, 574 N.Y.S.2d 672 [1st Dept.1991];  2 Weinstein-Korn-Miller, N.Y. Civ. Prac. ¶ 901.02).

4.   However, compare, R.J. Reynolds Tobacco Co. et al. v. Engle, 672 So.2d 39 [Fla.Dist.Ct.App.1996], cert. denied, 682 So.2d 1100 [Fla.1996] (where the Florida court upheld order in a products liability action certifying a class of all Florida residents who have suffered medical conditions caused by their addiction to nicotine);  and Broin v. Philip Morris Cos., 641 So.2d 888 [Fla.Dist.Ct.App.1994] (the Florida state court certified on behalf of flight attendants nationwide claiming damages for disease caused by second-hand smoke).

5.   See, Arch v. The American Tobacco Co., Inc., 175 F.R.D. 469 [E.D.Pa.1997] (where plaintiffs assert claims for medical monitoring, negligence and strict product liability);  Barnes v. The American Tobacco Co., Inc., 984 F.Supp. 842 [E.D.Pa.1997] (plaintiffs assert claims sounding in negligence, strict product liability, and intentional exposure to hazardous substances contained in cigarette);  See also, Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90 [W.D.Mo.1997];  Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 [1997];  Georgine v. Amchem Products, Inc., 83 F.3d 610 [3rd Cir.1996] (asbestos);  In re American Medical Systems, Inc., 75 F.3d 1069 [6th Cir.1996] (penile prostheses);  and In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 [7th Cir.1995] (blood derivatives).

6.   CPLR 902 provides that the factors which should be considered in determining whether to certify a class action are:  (1) the interest of members of the class in individually controlling the prosecution or defense of separate actions;  (2) the impracticability or inefficiency of prosecuting or defending separate actions;  (3) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class;  (4) the desirability or undesirability of concentrating the litigation of the claim I the particular forum;  (5) the difficulties likely to be encountered in the management of a class action.


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