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Lorillard

State of South Carolina, Plaintiff, Vs. Brown & Williamson Tobacco Corporation, Defendants. Defendants' Memorandum in Opposition to Motion to Intervene. 97-Cp-40-1686

Date: 05 Feb 1998
Length: 14 pages
86302004-86302017
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spider_lor 86302004_2017

Fields

Author
Cecil, C.S.
Daniel, C.J.
Davis, D.W.
Epps, C.B. III
Farnsworth, J.
Howard, E.G.
Robinson, L.W.
Stepp, R.E.
Todd, M.P.
Wall, M.H.
White, D.B.
Area
LEGAL DEPT. FILE/BASEMENT GMP
Type
PLEA, PLEADING
Recipient (Organization)
SC Court Common Pleas County Richland
Named Person
Aksamit, P.
Berkeley
Condon, C.M.
Named Organization
Amer, American Tobacco
Bw, Brown & Williamson
Congress
Ctr, Council for Tobacco Research
Medicaid
PM, Philip Morris
RJR, R.J.Reynolds
SC
Supreme Court
Tax Commission
TI, Tobacco Inst
US Tobacco
Usdc Greenville SC
Document File
86301685/86302045/State of South Carolina V. B&W Court Papers - Volume III Opened 980206
Date Loaded
07 Jan 2002
Request
R1-027
Litigation
Feda/Produced
Characteristic
EXTR, EXTRA
Site
N14
Master ID
86301686/2044

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Author (Organization)
Bw, Brown & Williamson
Ctr, Council for Tobacco Research
Gibbes Gallivan
Glenn Murphy
Hunton Williams
Lor, Lorillard
Mcnair Law Firm
Nelson Mullins
Ogletree Deakins
PM, Philip Morris
RJR, R.J.Reynolds
Sowell Todd
TI, Tobacco Inst
US Tobacco
UCSF Legacy ID
isk44c00

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0 Greenville, South Carolina, on October 29, 2997Y They filed an Amended Complaint on December 3, 1997, adding additional plaintiffsY On December 5, 1997, Intervenors moved to intervene into this case under Rules 19 and 20, SCRCPY The case brought by the Attorney General seeks the recovery of Medicaid and other '°publicIy-funded health care" benefits paid on behalf of South Carolina residents who have suffered aIieged smoking-related diseases.u There is no allegation either in the Greenville Amended Complaint, the Motion to Intervene or in the supporting Memorandum that any of the Intervenors are or were recipients of Medicaid or other publicly funded health care benefits. The Motion to Intervene also focuses on the alleged harm that would befall the Intervenors if the proposed national settlement {"Proposed Resotution"} now pending before Congress, and which the Attorney General supports, were enacted into law. Yet, the Proposed Resolution is e 2J . Patty Aksamit, et ai. v. Brown & Williamson Tobacco Corporation, Civil Action IVo. 6- 97-3636-21. 37 Although the Amended Complaint in the Greenville action and the Amended Complaint in this case are comparable in certain respects, they are by no means identical. For example, the Greenville Amended Complaint does not assert claims for unjust enrichment/restitution, indemnity, voluntary assumption of a special duty, statutory penalties for UTFA violations, violations of the South Carolina Antitrust Act or aiding and abetting. Nor does the Greenville Amended Complaint seek injunctive relief. In addition, the defendants in the two cases are not identical. !1 In their supporting memorandum ("Intervenors' move under Rules 19, 20 and 24. e 51 Am 11 Compl 00 . . . ~ ca 0 -2- N 0 a tn
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not alleged `an interest relating to the property ... which is the subject of the action' - Medicaid or other publicly funded medical payments. Rule 24(a)(2), SCRCP. Additionally, the centerpiece of the Intervenors' proposed intervention, their oppo to the Proposed Resolution (as well as the settlements with individual states), is simply not at issue in this case. "An interest that is collateral to the action or.contingent upon the future occurrence of a sequence of events is insufficient" as an interest upon which to base ederal Praccice I 24.Q3[2][a]{3d ed. 1997). . In this action, the Proposed Resotuti is -- its enactment by Congress in its present form - and therefore an objection to its enactment is tasa The Proposed Resolution Is Not An Issue In This Action Parties attempting to intervene as of right must allege that they are "so situated that the disposition of the action may as a practical matter impair or impede [their] ability to protect [their] interest." Rule 24(a)(2), SCRCP. Federal courts have interpreted the federal version of the South Carolina intervention statute to require 'a practical impairment of the ability to protect an interest and not a practical impairment of the ability to assert an interest." TPI Corp. v. Merchandise Mart of South Carolina Inc., 61 F.R.D. 684, 688 (B.S.C. 1974). The Intervenors' concerns about the terms of the Proposed Resolution and the settlements of other unrelated medical care reimbursement actions fail to demonstrate that their ability either $' (...continued) protect that interest, unless the applicant's interest is adequately represented by existing PartFes•" -4-
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STATE OF SOUTH CAROLINA ) IN THE COURT OF COMMON PLEAS ) 97-CP-40-1586 COUNTY OF RICHLANI3 } State of South Carolina, By Charles M. ). Condon, Attorney General, ) } Plaintiff, ) ) vs. ) } Brown & Williamson Tobacco Corporation, et al., ) ) Defendants. ) DEFENDAN TS' ME4iORANDUM IN OPPOSITION TO MOTION TO INTERVENE This memorandum is submitted by certain defendants'-' in response to the Motion To Intervene filed by Patty Aksamit and others {"Intervenors"} on December 5, 1997. Defendants oppose the Motion to Intervene because Intervenors have not alleged a proper basis to intervene under Rule 24, SCRCP. L INTRODUCTIOt+I Intervenors, claiming to represent a class of individuals seek%ng to recover damages for alleged smoldng-related illnesses, filed a Complaint in the United States District Court in '-r Philip Morris Incorporated, Philip Morris Companies Inc., Lorillard, Inc., Lorillard Tobacco Company, R.7. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, individually and as successor by merger to The American Tobacco Company, United States Tobacco Company, The Council for Tobacco Research - U.S.A., Inc. (CTR), and Tobacco Institute, Inc. {"Defendants"}. Tobacco Institute, Inc., joins in this Memorandum without waiving any challenge to personal jurisdiction as set forth in its Rule 12(b)(2) motion.
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and all others similarly situated°§` despite the fact that the class they purport to represent has not been, and should not be, certified by the federal court before which their case is pending. When asked by the Court during the hearing on January 8, 1998, for the Defendants' position on the proposed intervention, counsel responded that Defendants opposed the motion as then pled. Intervenors' pleadings have not changed since then. Likewise, Defendants' II. INT'F:RYEiVt)I25 MAY NOT IN'TERVENE OF RIGHT A. In this ot Alleged An Interest In The State Medicaid Or Other At LSsite in 'f'his ACteotl edicaid or other publicly funded medical expenses paid on behalf of individuals for alleged smoking-related illnesses. But, the Intervenors have not alleged that they are the recipients or beneficiaries of such funds. Instead, the Intervenors, although not certified as class representatives, purportt to represent "ja]ny and all persons who have been addicted to, lrarmed, or killed by tobacco products that were designed, tested, manufactured, distributed andtor siald by any of the defendants with in [sic] the geographic territory of the State of South Carolina."2 Because the Intervenors have not pled that they are Medicaid or other public health care recipients, they cannot meet the threshold requirement for intervention of righ0` The Intervenors simply have sr Motion To Intervene at 3. '-' Greenville Am. Compl. I 28(a). ~ Rule 24(a)(2) provides for intervention of right, °when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to (continued...) -3-
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Julianne Farnsworth, Esquire MCNAIR LAW FIRM, P.A. NationsBank Tower, 18th Floor Post Office Box 11390 Calumbia, SC 29211 (803) 794-1804
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2 1988), relied upon so heavily by Intervenors, the Tax Com taxpayer's suit, both as of right and pe reason that the Commission sought inte . A t, 368 S.C.2d 72 (Ct. App. petitioned to intervene in a e appellate court, the main y legal precedent that may result from the r.ase." Id. at 26[, 36$ S.E.2d at 74. The court then noted that even assuming the interest asserted by the Commission would be impaired or impeded and further assuming that the Commission would be "bound by a judgment" entered in the case, the Commission's interest would be adequately represented by the existing parties. Id. 'I'he court therefore rejected the 's contention that it was entitled to intervene of right. Likewise, the Commissi 1 argument for permissive intervention was rejected because it had no 'cause of action or defense it could bring or assert.' Id. at 262, 368 S.E.2d at 76. Similarly, Intervenors have asserted . only an interest in avoiding Pe mces of the Proposed Resolution and have not advanced a claim related to the Proposed Resolution.'-°' Accordingly, Intervenors assert no interest at all, let alone a common interest, in thi the State will not adequately represent. D. Intervention Will Not Promote Judicial Economy Intervenors contend that Berkeley Electric Coog. v_ T 394 S.E.2d 712 (1990), mandates liberal interpretation of ttorney General or 2 S.C. 186, ention rules where "judicial economy will be promoted by the declaration of the rights of all parties who may be affecteri." L' The only justiciable interests or claims advanced by the Intervenors are those set forth the Greenville Amended Complaint. Those claims should be adjudicated by the federal court, not this Court. -6-
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circumvent the application of class certification procedures by the filed their claims. Accordingly, the Motion to Ineervene should be denied. Douglas W. Davis, Esquire Cynthia S. Cecil, Esquire HUNTON & WILLIAMS Riverfront Plaza, Fast Tower 951 East Byrd Stret Richmond, VA 23219-4074 (804) 788-8200 GLENN MURPHY GRAY & STEPP, L.L.P. 1901 AAssembly Street, Suite 390 Post Office Box 1550 Columbia, SC 29202-1550 (803) 765-1100 Robert E. Stepp Elizabeth fii. Howard La.ura W. Robinson Daniel B. White, Esquire GIBBES, GAIS.IVAN, WHITE & BOYD, P.A. 330 East Coffee Street Post Office Box 10589 Greenville SC 29603 (864) 271-9580
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i to protect or assert an interest will be impaired or impeded by this action. The United States Congress is considering the Proposed Resolution - not this Court. It is not an issue in this case, nor is any claim of its constitutionality - if it were enacted - ripe for this Court's consideration. If the Proposed Resolution is ultimately enacted and if it ultimately contains the provisions to which the Intervenors object, the Intervenors can then file an action challenging the legislation, but this is not the basis for intervention now 9' C. Intervenors Have Alleged No Common Interest That The Ecisting Parties Will Not Adequatety Represent The Intervenors' allegation that the parties will not protect their interests is irrelevant. The interest the Intervenors have asserted in their Motion to Intervene relates to their opposition to the Proposed Resolution. As,just noted, that "interest" cannot be vindicated c e Attorney General seeks no relief in this Court regarding the Proposed Resolution, and there is no relief this Court can grant in that regard. That the Attorney General's continued support of the Proposed Resolution may, according to Intervenors, have an adverse impact on their rights is In ?' Although the Intervenors have characterized the impact of the Proposed Resolution on their claims, the effect of the enactment of that proposed legislation is not an issue before this Court. Moreover, while the Proposed Resolution would prohibit claims from being pursued as class actions, this provision would not impair the Intervenors' rights as a practical matter. The courts (especially the federal courts where Intervenors' case is pending) have generally concluded that such actions are not appropriate to litigate mass tort actions of this type. See, e.g., Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. I946)(decertifying a nationwide class of smokers claiming injury from addiction noting the myriad factual differences among smoker's choices and the resulting legal consequenoes of those differences); Arch v. American Tobacco Co., No. 96-5903, 1997 FU.S. Dist. L.MS 7890 (E.D. Pa. June 3, I997)(denying certification of a class of smokers claiming personal ies holding that "the individual issues raised not only predominate over the common issues but overwhelm the common issues"). -5-
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See Intervenors' Mem. at 7. Intervenors, however, fail to recogni of Bcrklev's liberality ntial premise - judicial economy - is missing. Intervenors have class action in federal court. Before cation there, Intervenors seek to intervene as a efass into this case, which does not purport to be a class action (although the State seeks to tecover Medicaid or other medical assistance payments made on behalf of thousands of individuals). Intervenors seek to litigate here an issue that is simply not before either this Court or the federal district court in Greenville. sideration of "the pragmatic consequences of a decisi or deny intervention." Berkelev, 302 S.C. at 189, 394 S.E.2d at 714. Intervenors seek to impose on this already complex case the overlay of a satellite class action to litigate an issue that is not before the Court. It is difficult to see the economy to be achieved by permitting interYentio III. INTERVENORS' ALTERNATIVE REQUEST FOR PERMISSIVE INTERVESPPIt3N SHOULD BE REJECTED BECAUSE OF T'HE ABSENCE OF -COihL4It)NALITY BETWEEN THEIR CLAIhiS AND THE STATE'S CLAIMS Permissive intervention is only appropriate where the claims of the party attempting to intervene have a "question of law or fact in common" with the action into which intervention is sought. Rule 24(b)(2), SCRCP. Indeed, the Intervenors agree that "[a] mere general interest in the subject matter of the litigation is not sufficient." See Intervenors' Mem. at 10 (quoting South Carolina Tax Comm'n v. Union County Treasurer, 295 S,C. 257, 261, 368 S.E.2d 72, 75 (Ct. App. 1988)). -7-
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0 Mark H. Wall, Esquire OGLETREE, DEAKINS, NASH, SMOAK & STEWART, L.L.P. 177 Meeting Street, Suite 310 Post Office Box 1808 Charleston, SC 29402 (803) 853-1300 BY: Monteith P. Todd, Esquire SOWELL, TODD, LAFFI'1'TE, BEARD & WATSON, I,.L.C. 1301 Gervais Street, Suite 901 Post Office Box 11449 Columbia, SC 29211 (803) 424-1400 BY:_If I~AAAa 1 Y` f~` 3IGt`G~ da Attorneys for Lorillard, Inc. ~ Tobacco Company Carl B. Epps, III, Esquire Christopher I. Daniel, Esquire NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P. 1330 Iady Street, Third Floor Post Office Box 11070 Colambia, SC 29211 (803) 799-2000 a CC£) COrpora21oY1, as successor by merger to The American Tobacco Company -11-

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