More on Grishman v. Philip Morris and the UCL's statute of limitations

In Grisham v. Philip Morris U.S.A., Inc., ___ Cal.4th ___ (Feb. 15, 2007), the plaintiffs sued several tobacco companies for physical and economic injuries resulting from their addiction to cigarettes and resulting health problems. One of the plaintiffs sought, among other theories of recovery, restitution under the UCL of money she paid to buy defendants’ cigarettes, arguing that the tobacco companies fraudulently concealed cigarettes’ addictive properties and unlawfully marketed cigarettes to minors. Slip op. at 5. (The complaint also included several other causes of action.) She argued that as a result of the defendants’ unlawful and fraudulent conduct, she was “compelled by the addiction to devote a steady stream of her income to the purchase of cigarettes.” Id. at 5, 20. The opinion describes this as a “novel” claim. Id. at 10.

The Supreme Court had to determine whether the face of the complaint demonstrated that the UCL claim was barred by the statute of limitations. Id. at 1-3, passim. For purposes of its analysis, it assumed that the “discovery rule” applied to UCL claims:

We assume for purposes of this discussion that the delayed discovery rule applies to unfair competition claims. We note that this point is currently not settled under California law (compare Snapp & Associates Ins. Services, Inc. v. Robertson (2002) 96 Cal.App.4th 884, 891 [discovery rule does not apply] with Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1295 [discovery rule “probably” applies]), and we do not address it.

Because the Court assumed the discovery rule applied, the rest of its discussion is almost academic. Until it is conclusively resolved one way or the other whether the discovery rule applies to UCL claims, the best practice for plaintiffs is to include delayed discovery allegations (if they are needed), and to allege the facts the Supreme Court says are required (if such facts exist). In this case, the Supreme Court held:

[A]lthough there is no reason to judicially create a special presumption of awareness that smoking cigarettes is addictive, a plaintiff who alleges that accrual of this cause of action is delayed because of delayed discovery of her addiction must plead facts explaining the delay.

Slip op. at 2. In other words:

[I]f a plaintiff’s cause of action depends upon delayed discovery of his or her addiction to tobacco in order to be timely, he or she must plead facts showing an inability to have discovered that addiction, such as reasonable reliance on tobacco company misrepresentations.

Id. at 16 (emphasis added.) The Court determined that the plaintiff’s UCL claim was time-barred because her complaint “admits actual or at least constructive knowledge that she was addicted to cigarettes long before filing the complaint.” Id. at 2; see also id. at 16-17. The Court concluded:

We … conclude from the face of the complaint that Grisham knew or should have known of her tobacco addiction and the economic injury it was causing her by at least 1993-1994, outside the limitations period. (Bus. & Prof. Code, § 17208 [unfair competition law claim must be brought within four years of accrual].)

Id. at 17.

The second half of the opinion discusses whether the plaintiff’s tort claim for physical ailments resulting from her cigarette addiction accrued at the same time her UCL claim did. Id. at 17-27. The Court held that it did not, and that the UCL claim is “a qualitatively different type of action.” Id. at 27. To quote from the opinion once more:

We need not resolve whether and under what circumstances two different physical injuries arising out of the same wrongdoing can give rise to two separate lawsuits, or whether the two injuries in the present case can be conceived of as invading two different primary rights. Here, what is alleged are two different types of injury, one serious physical injury or injuries, the other an economic injury, giving rise to two different types of action. The economic injury was a more or less immediate result of Grisham’s addiction to cigarettes, whereas her physical injuries occurred after many years of smoking. The addictiveness of a product is distinct from its capacity to cause serious physical injury, as demonstrated by the fact that other addictive products are not associated with the same harmful consequences. (See Juliano, Is Caffeine a Drug of Dependence? (Feb. 2001) Psychiatric Times [as of Feb. 15, 2007] [caffeine documented as commonly creating significant physical and psychological dependence].)

….

We therefore conclude that Grisham’s discovery of her alleged unfair competition cause of action and related causes of action for economic injury based on smoking addiction did not start the statute of limitations running on her tort causes of action based on later-discovered appreciable physical injury. Rather, these latter causes of action did not begin to accrue until the physical ailments themselves were, or reasonably should have been, discovered.

Slip op. at 24, 27.