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Small v. Lorillard Tobacco Co.

94 N.Y.2d 43 Court N.Y. Decision date 1999-10-26 English

Delivered by Wesley, J.

Contents

Majority

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[720 NE2d 892, 698 NYS2d 615]
Phyllis Small et al., Individually and on Behalf of All Others Similarly Situated, Appellants, v Lorillard Tobacco Company, Inc., et al., Respondents, et al., Defendants. Catherine Zito et al., Individually and on Behalf of All Others Similarly Situated, Appellants, v American Tobacco Company, Inc., et al., Respondents, et al., Defendants. Sharlene Hoberman et al., Individually and on Behalf of All Others Similarly Situated, Appellants, v Brown & Williamson Tobacco Corporation et al., Respondents, et al., Defendants. Rose Frosina et al., Individually and on Behalf of All Others Similarly Situated, Appellants, v Philip Morris, Inc., et al., Respondents, et al., Defendants. Mary A. Hoskins, as Executrix of Edwin P. Hoskins, Deceased, Individually and on Behalf of All Others Similarly Situated, Appellant, v R.J. Reynolds Tobacco Company et al., Respondents, et al., Defendants.
Argued September 14, 1999;
decided October 26, 1999
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POINTS OF COUNSEL
Goodkind Labaton Rudoff & Sucharow, L. L. P., New York City (Martis Ann Brachtl and Louis Gottlieb of counsel), and Henry Monaghan for appellants.
I. Plaintiffs allege valid claims under General Business Law § 349. (Oxman v Amoroso, 172 Misc 2d 773 .) II. The trial court correctly determined that plaintiffs’ fraud and General Business Law § 349 claims are not preempted by the Labeling Act. (Cipollone v Liggett Group, 505 US 504 ; Barnett Bank v Nelson, 517 US 25 ; Laborers Local 17 Health & Benefit Fund v Philip Morris, Inc., 7 F Supp 2d 277 ; Burton v R.J. Reynolds Tobacco Co., 916 F Supp 1102 ; Allgood v R.J. Reynolds Tobacco Co., 80 F3d 168 , 519 US 930 ; Lacey v Lorillard Tobacco Co., 956 F Supp 956 ; Griesenbeck v American Tobacco Co., 897 F Supp 815 ; Wakeland v Brown & Williamson Tobacco Corp., 996 F Supp 1213 ; Castano v American Tobacco Co., 870 F Supp 1425 .) III. These cases satisfy the requirements for class certification under CPLR article 9. (Pruitt v Rockefeller Ctr. Props., 167 AD2d 14 ; Bothwell v Republic Tobacco Co., 912 F Supp 1221 ; Super Glue Corp. v Avis Rent A Car Sys., 132 AD2d 604 ; Weinberg v Hertz Corp., 116 AD2d 1 , 69 NY2d 979 ; Friar v Vanguard Holding Corp., 78 AD2d 83 ; Phillips Petroleum Co. v Shutts, 472 US 797 ; Deposit Guar. Natl. Bank v Roper, 445 US 326 ; Eisen v Carlisle & Jacquelin, 417 US 156 ; Brandon v Chefetz, 106 AD2d 162 ; Stellema v Vantage Press, 109 AD2d 423 .) IV. Plaintiffs are adequate representatives of the class. (O'Brien v City of Syracuse, 54 NY2d 353 ; Matter of Reilly v Reid, 45 NY2d 24 ; Ridge Meadows Homeowners’ Assn. v Tara Dev. Co., 242 AD2d 947 ; Super Glue Corp. v Avis Rent A Car Sys., 132 AD2d 604 ; Julien
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J. Studley, Inc. v Lefrak, 48 NY2d 954 ; Marisol A. by Forbes v Giuliani, 126 F3d 372 .) V. The named plaintiffs’ claims are typical and representative of the claims of the class. (Friar v Vanguard Holding Corp., 78 AD2d 83 ; Branch v Crabtree, 197 AD2d 556 ; Pruitt v Rockefeller Ctr. Props., 167 AD2d 14 ; Burton v R.J. Reynolds Co., 884 F Supp 1515 ; Compact Electra Corp. v Paul, 93 Misc 2d 807 .) VI. The trial court, which is well informed about the factual, legal, procedural and administrative aspects of this litigation, should be given an opportunity to manage these cases as class actions. (Central Wesleyan Coll, v Grace & Co., 6 F3d 177 ; In re School Asbestos Litig., 789 F2d 996 ; In re Antibiotic Antitrust Actions, 333 F Supp 278 .)
Shook, Hardy, Bacon, L. L. P. (Gary R. Long and John K. Sherk, III, of the Missouri Bar, admitted pro hac vice, of counsel), Greenberg Traurig, New York City (Alan Mansfield, Robert J. Kirshenberg and Stephen Saxl of counsel), Deichert Price & Rhoads; Jones, Day, Reavis & Pogue (Harold K. Gordon of counsel) and Chadbourne & Parke, L. L. P., for Lorillard Tobacco Company and others, respondents.
I. The Court below correctly found that class certification was inappropriate. (Duffy v Wetzler, 80 NY2d 890 ; Cutler v Travelers Ins. Co., 76 NY2d 768 ; Suffolk Hous. Servs. v Town of Brookhaven, 48 NY2d 652 ; Ross v Amrep Corp., 42 NY2d 856 ; Matter of Istim, Inc. v Chemical Bank, 78 NY2d 342 ; Best v Yutaka, 90 NY2d 833 ; Weinberg v Hertz Corp., 69 NY2d 979 ; Matter of 43rd St. Second Ave. Corp. v City of New York, 83 NY2d 776 ; Majauskas v Majauskas, 61 NY2d 481 ; State of New York ex rel. Lehman v Lehman, 70 NY2d 674 .) III. The Court below properly held that plaintiffs’ claims are preempted by the Labeling Act. (Cipollone v Liggett Group, 505 US 504 ; Lacey v Lorillard Tobacco Co., 956 F Supp 956 ; Allgood v R.J. Reynolds Tobacco Co., 80 F3d 168 ; Sonnenrich v Philip Morris Inc., 929 F Supp 416 ; Teltronics Servs. v Anaconda-Ericsson Inc., 587 F Supp 724 , 762 F2d 185 ; Griesenbeck v American Tobacco Co., 897 F Supp 815 ; Burton v R.J. Reynolds Tobacco Co., 916 F Supp 1102 ; Mendelson v Trans World Airlines, 120 Misc 2d 423 ; Goldberg v Manhattan Ford Lincoln-Mercury, 129 Misc 2d 123 ; Porr v NYNEX Corp., 230 AD2d 564 .) III. The fraudulent concealment and deceptive trade practices claims, while preempted by the Labeling Act, were also properly dismissed because, absent any allegation of injury which is distinct from the alleged deception, they are insufficient as a matter of law. (Vermeer Owners v Guterman, 78 NY2d 1114 ; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20 .)
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Simpson Thacher & Bartlett, New York City (Roy L. Reardon, Mary Elizabeth McGarry and Joseph M. McLaughlin of counsel), for B.A.T. Industries P. L. C., respondent.
I. B.A.T. Industries was deprived of the basic due process right to be heard when the Supreme Court denied its jurisdiction motion without holding a hearing on the issues presented or allowing it to respond to new allegations on which the court relied. (Soto v Correa, 20 AD2d 694 ; Saylor v Bastedo, 623 F2d 230 ; Bank of Am. Natl. Trust Sav. Assn. v Herrick, 233 AD2d 351 ; Benson v Syntex Labs., 161 Misc 2d 822 ; Cato Show Print. Co. v Lee, 84 AD2d 947 ; New Is. Investors v Wynne, 251 AD2d 560 ; Skyline Agency v Ambrose Coppotelli, Inc., 117 AD2d 135 ; World-Wide Volkswagen Corp. v Woodson, 444 US 286 ; Carlino v Cook, 126 AD2d 597 .) II. Conspiracy jurisdiction violates due process and should not be adopted or ratified by this Court. (International Shoe Co. v Washington, 326 US 310 ; Keeton v Hustler Mag., 465 US 770 ; Rush v Savchuk, 444 US 320 ; Hanson v Denckla, 357 US 235 ; Magic Toyota v Southeast Toyota Distribs., 784 F Supp 306 ; American Tel. & Tel. Co. v Compagnie Bruxelles Lambert, 94 F3d 586 ; Sher v Johnson, 911 F2d 1357 ; Insolia v Philip Morris Inc., 31 F Supp 2d 660 ; Iron Workers Local Union No. 17 Ins. Fund v Philip Morris Inc., 23 F Supp 2d 796 .) III. The Supreme Court erred by finding jurisdiction based on allegations of an intra-corporate conspiracy, a conspiracy that cannot exist as a matter of law. (Heller & Co. v Novacor Chems., 726 F Supp 49 , 875 F2d 856 ; Pebble Cove Homeowners’ Assn. v Fidelity N. Y., 153 AD2d 843 ; Copperweld Corp. v Independence Tube Corp., 467 US 752 ; Maltz v Union Carbide Chems. & Plastics Co., 992 F Supp 286 ; Pizza Mgt. v Pizza Hut, 737 F Supp 1154 ; Cresser v American Tobacco Co., 174 Misc 2d 1 ; Keeton v Hustler Mag., 465 US 770 ; Burger King Corp. v Rudzewicz, 471 US 462 ; Insolia v Philip Morris Inc., 31 F Supp 2d 660 ; Laborers Local 17 Health & Benefit Fund v Philip Morris, Inc., 26 F Supp 2d 593 .) IV. The Supreme Court erred by failing to apply conspiracy jurisdiction in accord with New York’s applicable evidentiary standards. (Lamarr v Klein, 35 AD2d 248 ; Lehigh Val. Indus. v Birenbaum, 527 F2d 87 ; Merkel Assocs. v Bellofram Corp., 437 F Supp 612 ; Chrysler Capital Corp. v Century Power Corp., 778 F Supp 1260 ; Koch v United States, 814 F Supp 1221 ; Socialist Workers Party v Attorney Gen. of U. S., 375 F Supp 318 .) V. B.A.T. Industries’ lack of contacts with New York render the exercise of jurisdiction over it a violation of due process. (World-Wide Volkswagen Corp. v Woodson, 444 US 286 ; Black Riv. Assocs. v Newman, 218 AD2d 273 ; Asahi
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Metal Indus. Co. v Superior Ct., 480 US 102 ; United States v First Natl. City Bank, 379 US 378 ; Laborers Local 17 Health & Benefit Fund v Philip Morris, Inc., 26 F Supp 2d 593 .)
Debevoise & Plimpton, New York City (Harry Zirlin and Steven Klugman of counsel), for Council for Tobacco Research-U.S.A., Inc., respondent.
I. Plaintiffs fail to state a cause of action against Council for Tobacco Research (CTR) for fraudulent concealment. (Morin v Trupin, 711 F Supp 97 ; Mobil Oil Corp. v Joshi, 202 AD2d 318 ; East End Owners Corp. v Roc-East End Assocs., 128 AD2d 366 ; Wall St. Transcript Corp. v Ziff Communications Co., 225 AD2d 322 ; Nallan v Helmsley-Spear, Inc., 50 NY2d 507 ; Heard v City of New York, 82 NY2d 66 .) II. Plaintiffs fail to state a cause of action against CTR under section 349 of the General Business Law. (Matter of Freeman, 34 NY2d 1 ; Genesco Entertainment v Koch, 593 F Supp 743 ; New York Pub. Interest Research Group v Insurance Information Inst., 161 AD2d 204 ; Zauderer v Office of Disciplinary Counsel, 471 US 626 ; Bolger v Youngs Drug Prods. Corp., 463 US 60 ; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20 .) III. Count four (civil conspiracy) and count five (concerted action/aiding and abetting) fail to state a cause of action against CTR. (Rastelli v Goodyear Tire & Rubber Co., 79 NY2d 289 ; Alexander & Alexander v Fritzen, 68 NY2d 968 ; Lindsay v Lockwood, 163 Misc 2d 228 ; Satin v Satin, 69 AD2d 761 ; Zucker v Katz, 708 F Supp 525 ; Fisher v Bristol Myers, 224 AD2d 657 ; Schwartz v Society of N. Y. Hosp., 199 AD2d 129 ; Wiener v Lazard Freres & Co., 241 AD2d 114 .) IV. Plaintiffs’ claims cannot be maintained as class actions. (State of New York v Peerless Ins. Co., 67 NY2d 845 ; Vermeer Owners v Guterman, 169 AD2d 442 , 78 NY2d 1114 .)
Seward & Kissel, L. L. P., New York City (Jack Yoskowitz and Anthony Mansfield of counsel), for Tobacco Institute, Inc., respondent.
I. The Court below properly dismissed plaintiffs’ fraudulent concealment claim against Tobacco Institute (TI) because TI has no duty of disclosure to plaintiffs. (Morin v Trupin, 711 F Supp 97 ; Wall St. Transcript Corp. v Ziff Communications Co., 225 AD2d 322 ; Mobil Oil Corp. v Joshi, 202 AD2d 318 ; Beasock v Dioguardi Enters., 130 Misc 2d 25 ; Howard v Poseidon Pools, 133 Misc 2d 50 , 134 AD2d 926 ; Heard v City of New York, 82 NY2d 66 ; Gunsalus v Celotex Corp., 674 F Supp 1149 ; East End Owners v Roc-East End Assocs., 128 AD2d 366 .) II. Plaintiffs’ General Business Law § 349 claim against TI was properly dismissed because TI neither manufac
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tures nor sells any product, and because plaintiffs were not injured by any TI statement. (New York Pub. Interest Research Group v Insurance Information Inst., 161 AD2d 204 ; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20 ; Genesco Entertainment v Koch, 593 F Supp 743 .) III. Dismissal was proper for the additional reason that the relief sought by plaintiffs — recovery of money paid to purchase cigarettes — is not available against TI as a nonmanufacturer trade association. IV. TI cannot be found liable on a conspiracy theory.
Eliot Spitzer, Attorney General, New York City (Deon J. Nossel and Preeta D. Bansal of counsel), pro se, amicus curiae.
I. The Court below erred in narrowly construing the injury requirement for consumer actions under General Business Law § 349. (Sager v Freidman, 270 NY 472 ; Cayuga Harvester v Allis-Chalmers Corp., 95 AD2d 5 ; Karlin v TVF Am., 93 NY2d 282 ; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20 .) II. Denial of class certification by the Court below should be vacated. (Super Glue Corp. v Avis Rent A Car Sys., 132 AD2d 604 ; Weinberg v Hertz Corp., 116 AD2d 1 , 69 NY2d 979 .)

OPINION OF THE COURT

These consolidated appeals encompass five proposed class action suits. They are brought by plaintiffs alleging that defendants individually and collectively deceived them about the addictive properties of cigarettes and fraudulently induced them to purchase and continue to smoke cigarettes.

The trial court determined that class certification was a statutorily authorized method to adjudicate the multiplicity of claims. After the court found that plaintiffs pleaded valid causes of action against defendants and that their claims were not preempted by the Federal Cigarette Labeling and Advertising Act ( 15 USC § 1331 et seq.), it denied without prejudice defendant B.A.T. Industries’ motion to dismiss for lack of personal jurisdiction.[1]

The Appellate Division decertified the classes. It also concluded that certain claims were preempted by the Federal Act, and dismissed the remaining causes of action. In granting

1 B.A.T. is a British-based company with a subsidiary, Brown & Williamson Tobacco Corporation, operating in the United States.

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leave to appeal, the Appellate Division certified the usual question to us: “Was the order of this Court, which reversed the orders of the Supreme Court, properly made?” We answer yes, and affirm the Appellate Division order.

L

Five class actions on behalf of New York consumers were filed against defendant tobacco companies and two other entities, the Council for Tobacco Research and the Tobacco Institute. In each of the suits, plaintiffs sought to represent a class of New York residents who, on or after June 19, 1980,[2] became or continued to be nicotine dependent as a result of buying and smoking cigarettes in New York that were manufactured by defendants.

Plaintiffs allege that defendants used deceptive commercial practices to sell their cigarettes to New Yorkers and that they would not have bought these cigarettes had they known that nicotine is an addictive drug; that the tobacco companies controlled the level of nicotine in their cigarettes to cause or maintain nicotine addiction; and, that the companies secretly used chemicals to enhance the addictive propensities of nicotine. Plaintiffs also assert that the companies suppressed research indicating that nicotine is addictive. They seek only the reimbursement of the purchase cost of cigarettes that they claim they would not have bought, but for defendants’ fraudulent and deceptive practices.[3]

In each case, plaintiffs’ lawyers moved to certify the class of addicted smokers alleged in the various complaints. In considering the requirements for class certification pursuant to CPLR 901 (a), the trial court determined that “a claim which turns on proof of actual addiction would involve far too many

2 Plaintiffs acknowledge that this date corresponds to the date that General Business Law § 349 — New York’s consumer fraud statute — was amended to give individuals who are injured by reason of any violation of this section a private right of action to enjoin the unlawful act or practice and/or an action to recover damages or $50, whichever is greater (General Business Law § 349 M).

3 Plaintiffs’ original five causes of action were: (1) fraud/fraudulent concealment; (2) violations of General Business Law § 349; (3) violations of General Business Law § 350; (4) civil conspiracy; and (5) concert of action/ aiding and abetting. Plaintiffs are not appealing the dismissal of their claims brought under General Business Law § 350, for affirmative fraudulent misrepresentations and for injunctive relief. They therefore appeal only their claims of common-law fraudulent concealment, General Business Law § 349, civil conspiracy, and concert of action/aiding and abetting.

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subjective factors” (Small v Lorillard Tobacco Co., 175 Misc 2d 294 , 300). The court concluded that issues regarding addiction are not part of the claims presented because “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” (id., at 301). The court sua sponte eliminated the need to prove an individual’s nicotine áddiction; redefined the proposed class definition to include plaintiffs and potential class members who purchased defendants’ cigarettes while the defendants were allegedly engaging in a pattern of fraudulent activities; and,, as redefined, certified the classes. Plaintiffs have accepted the court-modified class definition for purposes of the litigation and their appeal to this Court.

In a separate order, the trial court also determined that plaintiffs pleaded fraud with sufficient particularity and that their claims were not preempted by the Federal Labeling Act (Small v Lorillard Tobacco Co., 176 Misc 2d 413 ). The court also denied without prejudice defendant B.A.T.’s motion to dismiss for lack of personal jurisdiction.

The Appellate Division reversed both orders on a composite appeal of the entire matter (Small v Lorillard Tobacco Co., 252 AD2d 1 ). After analyzing the requirements of CPLR 901 (a), the Court held that class certification was not justified under the statutory criteria. It also determined that plaintiffs’ claims were preempted by the Federal statute, insofar as they allege fraudulent concealment and failure to warn of the dangers of nicotine. While it concluded that plaintiffs’ claims alleging affirmative misrepresentation were not preempted by the Federal statute, the Court nonetheless dismissed those claims because they were not pleaded with the required specificity.[4]

IL

As a threshold matter, this Court must determine the breadth of its power to review the Appellate Division order decertifying the classes. Whether a lawsuit qualifies as a class action matter is a determination made upon a review of the statutory criteria as applied to the facts presented; it ordinarily rests within the sound discretion of the trial court (CPLR 901; see also, Brown v State of New York, 250 AD2d 314 , 320). The Appellate Division, as a branch of Supreme Court, is vested

4 The Appellate Division also dismissed the complaint against B.A.T. based on the insufficiency of plaintiffs’ complaint. Since we are affirming, there is no need to address or resolve B.A.T.’s jurisdictional issues.

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with the same discretionary power and may exercise that power, even when there has been no abuse of discretion as a matter of law by the nisi prius court (O’Connor v Papertsian, 309 NY 465 , 471).

The Appellate Division stated in its order granting leave to appeal and in its order of reversal that its ruling was made on the law; in deciding the appeal, however, it also undertook an exercise of its discretion (see, e.g., Brown v City of New York, 60 NY2d 893 , 894). Our approach to this case is to review whether the Appellate Division abused its discretion as a matter of law (see, Weinberg v Hertz Corp., 69 NY2d 979 , 981, citing Herrick v Second Cuthouse, 64 NY2d 692 , 693; Brady v Ottoway Newspapers, 63 NY2d 1031 , 1032-1033).

CPLR 901 (a) sets forth the criteria a court must consider in deciding to certify a class action:

“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 questions 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 interests of the class; and
“5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”

In reviewing the number of potential claims, the Appellate Division agreed with the findings of the trial court that each of the five classes would contain at least one million members (CPLR 901 [a] [1]). It then turned its attention to CPLR 901 (a) (2) and determined that individual issues would predominate throughout the classes. Notwithstanding Supreme Court’s removal of addiction as an element of plaintiffs’ pleaded theory of their cases, the Appellate Division found that individual proof of addiction remains at the core of proving “injury,” for a claim under General Business Law § 349. The Appellate Division also noted that the dangers of smoking had been well documented and were generally known to the public. According to

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the Court, this widely available information foreclosed any presumption of reliance and required individualized inquiry into whether each class member was unaware of that information with regard to their causes of action for false advertising under section 350 of the General Business Law and common-law fraud.

The Appellate Division also concluded that the proposed class actions would be unmanageable because of the individual issues of damages with respect to each of the five million plaintiffs. Moreover, because the named plaintiffs’ individual claims failed to establish the elements of reliance and causation, the Appellate Division determined that they were inadequate to represent a putative class of all persons who purchased and smoked cigarettes in New York. Thus, plaintiffs’ claims were not “typical” of the class (CPLR 901 [a] [3]). We are persuaded that the Appellate Division did not abuse its review and adjudicative powers in these respects, nor did it commit legal error in this regard.

The Appellate Division next considered whether the named representative parties would fairly and adequately protect the interests of the classes (CPLR 901 [a] [4]). The Court concluded that plaintiffs had limited their claim for damages to the purchase price of cigarettes in order to shape a legally de minimis theory of the case:

“[Plaintiffs] limit[ed] their claims to losses incurred after 1980, even though defendants have allegedly been defrauding the public since the 1950’s, for no other apparent reason than to make this a ‘negative value’ suit where each member’s damages are so small that only a class action would be worth the expense of litigation” (Small v Lorillard Tobacco Co., 252 AD2d 1 , 11, supra).

Moreover, the Appellate Division recognized a tension between the claims selected by the named plaintiffs and those of absent class members. The Court reasoned that the injury (the purchase price of cigarettes that they would not have otherwise purchased) of the redefined classes and the limitation of claims to losses incurred after 1980 could in effect preclude all New York smokers from bringing other possibly substantial claims for personal injury and emotional distress based on nicotine addiction. Because the named plaintiffs limited their theory in these significant ways, the Court concluded that plaintiffs’ claims inadequately represented a putative class of all persons

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who purchased and smoked cigarettes in New York. The Appellate Division did not abuse its discretion nor did it commit an error of law in this regard.

Lastly, the Appellate Division examined the difficulties likely to be encountered in the management of the class actions (CPLR 901 [a] [5]). The Court considered how a trial on the merits would be conducted and determined that the proposed class actions would be unmanageable because of the individualized nature of many of the issues. The Court expressed concern over the potential litigation logjam that would render the actions unmanageable.

In sum, within the range of this Court’s review powers, we are satisfied that the Appellate Division properly weighed the relevant statutory factors and correctly fulfilled its intermediate appellate court role and powers. No cogent basis has been presented upon which this Court should disturb that Court’s decertification-of-classes ruling.

IIL

Since plaintiffs cannot proceed as class representatives, this Court must next resolve whether they can move forward on the remaining individual causes of action.

Section 349 (a) of the General Business Law encompasses deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this State. Section 349 governs consumer-oriented conduct and, on its face, applies to virtually all economic activity (Karlin v IVF Am., 93 NY2d 282 , 290). Generally, claims under the statute are available to an individual consumer who falls victim to misrepresentations made by a seller of consumer goods through false or misleading advertising (Genesco Entertainment v Koch, 593 F Supp 743 , 751).

To state a claim under the statute, a plaintiff must allege that the defendant has engaged “in an act or practice that is deceptive or misleading in a material way and that plaintiff has been injured by reason thereof’ (Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20 , 25, citing Varela v Investors Ins. Holding Corp., 81 NY2d 958 , 961; Givens, Practice Commentaries, McKinney’s Cons Laws of NY, Book 19, General Business Law § 349, at 565). Intent to defraud and justifiable reliance by the plaintiff are not elements of the statutory claim (Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, supra, at 26). However,

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proof that “a material deceptive act or practice caused actual, although not necessarily pecuniary, harm” is required to impose compensatory damages {id. [emphasis added]).

Plaintiffs argue that the Appellate Division incorrectly held that they must prove that they were addicted to nicotine in order to allege a cognizable injury and harm, as contemplated and prescribed by the statute. According to plaintiffs, addiction is not the injury; rather, plaintiffs assert that defendants’ deception prevented them from making free and informed choices as consumers. Plaintiffs add that had they known that nicotine was addictive, they never would have purchased cigarettes. They posit that consumers who buy a product that they would not have purchased, absent a manufacturer’s deceptive commercial practices, have suffered an injury under General Business Law § 349. We disagree.

Plaintiffs’ definition of injury is legally flawed. Their theory contains no manifestation of either pecuniary or “actual” harm; plaintiffs do not allege that the cost of cigarettes was affected by the alleged misrepresentation, nor do they seek recovery for injury to their health as a result of their ensuing addiction (General Business Law § 349 [h]; Oswego Laborers’ Local 214 Pension Fund v Marine Midland Bank, supra, at 26). Indeed, they chose expressly to confine the relief sought solely to monetary recoupment of the purchase price of the cigarettes. Plaintiffs’ cause of action under this statute, as redefined by the trial court and as embraced by them, thus sets forth deception as both act and injury.

In rejecting plaintiffs’ flawed “deception as injury” theory, the Appellate Division correctly pinpointed that addiction is inescapably the cornerstone of plaintiffs’ legal claims. Because plaintiffs abandoned the addiction component of the legal theory of their cases, they therefore fail to demonstrate that they were “actually harmed” or suffered pecuniary injury by reason of any alleged deception within the meaning of the statute. They cannot have it both ways. Without addiction as part of the injury claim, there is no connection between the misrepresentation and any harm from, or failure of, the product.[5]

5 The Attorney General, who appears as amicus curiae in support of appellants’ position, likens this case to a situation where a distributor asserts that its bottled water is from a pure and pristine mountain stream while in reality, it was only tap water. The Attorney General may be right that a plaintiff might have a claim for the higher price the consumer paid for the product as a result of the misrepresentation in that circumstance. That is *57 not this case. Plaintiffs do not contend that the deception here caused an inflated price.

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Plaintiffs’ failure to present a legally cognizable injury also renders their common-law fraudulent concealment claims insufficient on their face. To make out a prima facie case of fraud, the complaint must contain allegations of a representation of material fact, falsity, scienter, reliance and injury (Vermeer Owners v Guterman, 78 NY2d 1114 , 1116). The circumstances constituting the fraud must be stated in detail (CPLR 3016 [b]).

The flaw in plaintiffs’ statutory claim foretells the inadequacy of the common-law claims: an act of deception, entirely independent or separate from any injury, is not sufficient to state a cause of action under a theory of fraudulent concealment. Thus, plaintiffs’ common-law fraud claims also fail. As a result, there is no independent tort to provide a basis for liability under their concert of action, conspiracy, and aiding and abetting theories. These causes of action must fail as well (Rastelli v Goodyear Tire & Rubber Co., 79 NY2d 289 , 295-297 [concert of action]; Alexander & Alexander v Fritzen, 68 NY2d 968 , 969 [conspiracy]; Restatement [Second] of Torts § 876, comment d [aiding and abetting]).

We do not reach the remaining arguments in this case, as they are unnecessary to the full disposition of this appeal.

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

Judges Bellacosa, Smith, Ciparick, Bracken,[6] Cardona[6] and Lawton[6] concur; Chief Judge Kaye and Judges Levine and Rosenblatt taking no part.

Order affirmed, etc.

6 Designated pursuant to NY Constitution, article VI, § 2.

Cases cited

Statutes and regulations cited