Laborers Local 17 Health and Benefit Fund v. Philip Morris, Inc.
United States Court of Appeals for the Second Circuit
191 F.3d 229 (2d Cir. 1999)
Laborers Local 17 Health and Benefit Fund (Fund) (plaintiff) was organized to provide healthcare to union members who allegedly suffered harm due to tobacco industry frauds. The Fund alleged its participants were victims of the tobacco industry in that they were fraudulently induced to smoke cigarettes when doing so was bad for their health. The Fund brought suit for fraud against Philip Morris, Inc. (Philip Morris) (defendant) alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), and common law fraud. The Fund sought damages based on the money it expended to provide medical treatment to its participants for their tobacco-related illnesses. It also brought a separate cause of action based on damages inflicted on the Fund’s infrastructure independent of the medical harm suffered by its participants. Specifically, the Fund alleged it suffered monetary losses due to its inability to control costs, to promote the use of safe alternative products among plan participants, and to establish programs to educate its participants not to use tobacco products. The Fund brought suit not as an action subrogated to the original right of its participants to sue Philip Morris directly, but rather for its own monetary expenses and infrastructure losses. The trial court held for the Fund, and Philip Morris appealed.
Rule of Law
Holding and Reasoning (Cardamone, J.)
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