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Docket No. 02-7276.
Argued: February 13, 2003.
Decided: December 22, 2004.
Appeal from a judgment of the United States District Court for the Eastern District of New York (Jack B. Weinstein, Judge) denying defendants judgment as a matter of law following a jury verdict finding defendants liable under New York's consumer protection statute, N.Y. Gen. Bus. Law § 349. In an earlier opinion, we reversed in part, and certified two questions to the New York Court of Appeals. See Blue Cross Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 344 F.3d 211 (2d Cir. 2003). That Court recently rendered its opinion. Blue Cross Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 3 N.Y.3d 200, 785 N.Y.S.2d 399, 818 N.E.2d 1140 (2004).
Reversed.
Murray R. Garnick, Arnold Porter, Washington, D.C. (Ursula Henninger, Womble Carlyle Sandridge Rice, Winston-Salem, North Carolina; John B. Williams, Collier, Shannon Scott LLP, Washington, D.C.; Eric M. Kraus, Kimberly S. Penner, Sedgwick, Detert, Moran Arnold, New York, New York; William Allinder, Shook, Hardy Bacon L.L.P., Kansas City, Missouri; Israel Rubin, Alan Mansfield, Stephen Saxl, Greenberg Traurig, LLP, New York, New York; Aaron H. Marks, Leonard A. Feiwus, Kasowitz, Benson, Torres Friedman LLP, New York, New York, on the brief), for Appellants Phillip Morris USA Incorporated, R.J. Reynolds Tobacco Company, Brown Williamson Tobacco Corporation, Lorillard Tobacco Company, Liggett Group, Inc. and Liggett Myers, Inc.
Paul J. Bschorr (Joseph Angland, Kathleen M. Kacsor, and Michael C. Hefter, on the brief), Dewey Ballantine LLP, New York, New York, for Appellee.
Before: WALKER, Chief Judge, NEWMAN and CABRANES, Circuit Judges.
In accordance with the Rules of this Court, 2d Cir. R. 0.14(b), Chief Judge Walker and Judge Newman have been designated to replace the Honorable Ellsworth Van Graafeiland and the Honorable Fred I. Parker, members of this panel who died after oral arguments were heard in this case on February 13, 2003.
Phillip Morris USA Incorporated, R.J. Reynolds Tobacco Company, Brown Williamson Tobacco Corporation, Lorillard Tobacco Company, Liggett Group, Inc. and Liggett Myers, Inc. appeal from a judgment of the District Court denying them judgment as a matter of law following a jury verdict in favor of plaintiff Empire Healthcare, Inc. (d/b/a Empire Blue Cross Blue Shield) ("Empire"). The factual underpinnings of Empire's claims against appellants and other defendants below are set forth in three opinions of the District Court. See Blue Cross Blue Shield of N.J., Inc. v. Philip Morris, Inc., 113 F.Supp.2d 345 (E.D.N.Y. 2000) (granting in part, and denying in part, defendants' motion for summary judgment); Blue Cross Blue Shield of N.J., Inc. v. Philip Morris, Inc., 178 F.Supp.2d 198 (E.D.N.Y. 2001) (denying defendants' motion for judgment as a matter of law and granting plaintiffs' motion for judgment on the jury award); Blue Cross Blue Shield of N.J., Inc. v. Philip Morris, Inc., 190 F.Supp.2d 407 (E.D.N.Y. 2002) (awarding attorneys' fees) (" Blue Cross III"). The jury found that all defendants except British American Tobacco Company, Ltd., were liable under New York's consumer protection statute, N.Y. Gen. Bus. Law § 349. It awarded Empire $17,782,426 on Empire's direct claim under N.Y. Gen. Bus. Law § 349, and $11,829,784 on Empire's subrogated claim to recover payments made on behalf of Empire's insureds under N.Y. Gen. Bus. Law § 349. See Blue Cross Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 344 F.3d 211, 215 n. 3 (2d Cir. 2003). Judgment was entered on both claims, but because the damages for the subrogated claim were subsumed within the damages for the direct claim, Empire's recovery was limited to $17,782,426. Id. The District Court subsequently awarded attorneys' fees to Empire, Blue Cross III, 190 F.Supp.2d 407. In an opinion dated September 16, 2003, we reversed the District Court's judgment on Empire's subrogated claim. See Blue Cross, 344 F.3d at 217-18. We also found that Empire's direct claim "will be actionable only if: (1) the claims are not considered too remote under Section 349, and (2) Section 349 does not require individualized proof of harm to subscribers." Id. at 229. We then certified two questions to the New York Court of Appeals:
1. Are claims by a third party payer of health care costs seeking to recover costs of services provided to subscribers as a result of those subscribers being harmed by a defendant's or defendants' violation of N.Y. Gen. Bus. Law § 349 too remote to permit suit under that statute?
2. If such an action is not too remote to permit suit, is individualized proof of harm to subscribers required when a third party payer of health care costs seeks to recover costs of services provided to subscribers as a result of those subscribers being harmed by a defendant's or defendants' violation of N.Y. Gen. Bus. Law § 349?
Id. We reserved judgment on the award of attorneys' fees, pending the outcome of the certification process. Id. at 228.
The New York Court of Appeals accepted certification on October 30, 2003, see Blue Cross Blue Shield of N.J., Inc. v. Philip Morris USA, Inc., 100 N.Y.2d 636, 769 N.Y.S.2d 196, 801 N.E.2d 417 (2003), and has now rendered its decision, Blue Cross Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 3 N.Y.3d 200, 785 N.Y.S.2d 399, 818 N.E.2d 1140 (2004). It responded to the first question in the affirmative, thereby rendering the second question academic. Id.
In an order entered on November 4, 2004, we requested supplemental briefing from the parties in light of the decision of the New York Court of Appeals. Pursuant to an unopposed request from appellants, we reverse the judgment of the District Court, including the award of attorneys' fees, and remand the case to the District Court with instructions to enter judgment with prejudice in defendants' favor on all of Empire's claims.