Opinion
No. ED76054
OPINION FILED: January 18, 2000
APPEAL FROM THE CIRCUIT COURT OF THE CITY OF ST. LOUIS, HON. JIMMIE M. EDWARDS.
W. Bevis Schock, 7777 Bonhomme Avenues, Suite 2300, St. Louis, MO 63105, Attorney for Intervenor Sherry Neel.
Bruce B. Bealke, Hugh E. McNeely, Derald L. Gab, P.C., 625 N. Euclid, Lobby, St. Louis, MO 63108, Counsel for Proposed Intervenors/Appellants Helen Cheeks, et al.
Larry D. Coleman, Esq., Larry Delano Coleman, P.C., Mahogany Plaza, 3200 Gillham Rd., #200, Kansas City, MO 64109, Attorney for Proposed Intervenor/Appellant Margie D. Coleman.
Kenneth C. Brostron, Margaret M. Mooney, Terrance J. Good, Carolyn M. Kopsky, Katherine M. Barrett, Lashly Baer, P.C., 714 Locust Street, St. Louis, MO 63101-1699, Attorneys for Proposed Intervenors/Appellants.
James P. Holloran, Holloran Stewart, 906 Olive Street, Suite 1200, St. Louis, MO 63101, Attorneys for Amicus Curiae Missouri Coalition On Smoking Or Health.
Alan C. Kohn, Lisa A. Pake, Kohn, Shands, Elbert, Gianoulakis Giljum, LLP, One Mercantile Center, 24th Floor, St. Louis, MO 63101, Attorneys for Philip Morris Incorporated.
Frank N. Gundlach, Marshall R. Hoekel, Armstrong Teasdale LLP, One Metropolitan Square, Suite 2600, St. Louis, MO 63102, Attorneys for Brown Williamson Tobacco Corporation.
William J. Newbold, Bruce D. Ryder, Thompson Coburn, LLP, One Mercantile Center, St. Louis, MO 63101, Attorneys for Lorillard Tobacco Company and R.J. Reynolds Tobacco Company.
Arthur L. Smith, Husch Eppenberger, 100 N. Broadway, #1300, St. Louis, MO 63102-2789, Attorney for Respondent British-American Tobacco Co. Ltd.
Stephen M. Schoenbeck, Schoenbeck Schoenbeck Associates, 1010 Market Street, Suite 1300, St. Louis, MO 63101, Attorney for Respondent B.A.T. Industries P.L.C.
Kenneth John Mallin, Bryan Cave, One Metropolitan Square, 211 N. Broadway, #3600, St. Louis, MO 63102-2750, Attorney for Respondent The Council For Tobacco Research-W.S.A. Inc.
Robert H. Hoemeke, Lewis, Rice Fingersh, 500 N. Broadway, Suite 2000, St. Louis, MO 63102-0000, Attorney for Respondent Hill and Knowlton, Inc.
Larry E. Hepler, 103 W. Vandalia, Suite 300, P.O. Box 310, Edwardsville, MO 62025-0510, Attorney for Respondent The Tobacco Institute, Inc.
Richard E. Boyle, 1010 Market Street, Suite 1640, St. Louis, MO 63101, Attorney for Respondent Smokeless Tobacco Council, Inc.
Charles L. Joley, 8 East Washington St., Belleville, IL 62220 Attorney for Respondent United States Tobacco Company.
Michael M. Fay, 1301 Avenue of the Americas, New York, NY 10019-6022, Attorney for Respondent Liggett Group.
Jeremiah W. (Jay) Nixon, Attorney General of Missouri, Paul C. Wilson, Assistant Attorney General, Thomas Strong, Lead Special Assistant Attorney General, The Strong Law Firm, 901 East Battlefield Road, Springfield, MO 65807, Counsel for Respondent, State of Missouri.
Edward D. Robertson, Jr., Mary D. Winter, Anthony L. DeWitt, Special Assistant Attorneys General, Bartimus, Frickleton, Presley, P.C., 122 E. High Street, Suite 300, Jefferson City, MO 65101, Counsel for Respondent, State of Missouri.
Proposed Intervenors appeal the trial court's denial of their motions to intervene in a suit filed by the State of Missouri against several tobacco product manufacturers. The trial court, pursuant to a proposed settlement between Missouri and the Tobacco Defendants, issued a Consent Decree and Final Judgment. The court then entered an Agreed Dismissal Order and Judgment dismissing the State's claims with prejudice.
FACTS
On May 12, 1997, the State of Missouri (hereafter "the State"), through Attorney General Jeremiah (Jay) Nixon, filed suit against several manufacturers of tobacco products, tobacco trade associations and various other affiliated parties (hereafter "Tobacco Defendants"). The State sought to obtain damages, restitution, civil penalties, punitive damages, declaratory, injunctive and other relief in connection with the Tobacco Defendants' marketing and sale of tobacco products to Missourians.
The Tobacco Defendants are as follows: American Tobacco Company, Inc.; American Brands, Inc.; Brown and Williamson Tobacco Corp.; B.A.T. Industries, P.L.C.; Batus Holdings, Inc.; British American Tobacco Holdings, Ltd.; British American Tobacco Company, Ltd.; Liggett Myers, Inc.; Liggett Group, Inc.; The Brooke Group, Ltd.; Lorillard Tobacco Company, Inc.; Lorillard Corporation; Loews Corporation; Philip Morris, Inc.; Philip Morris Companies, Inc.; R.J. Reynolds Tobacco Company; United States Tobacco Company; The Council for Tobacco Research U.S.A., Inc.; The Tobacco Institute, Inc.; Smokeless Tobacco Council, Inc.; and Hill and Knowlton, Inc.
On October 2, 1998, a group of 34 entities that operate hospitals in Missouri, including seven political subdivisions and twenty-seven not-for-profit corporations, filed a motion to intervene in this action as a matter of right under Supreme Court Rule 52.12(a) or, in the alternative, as a matter of discretion under Supreme Court Rule 52.12(b). The movants asserted common-law tort claims to recover actual damages in the amount of their past and future unreimbursed costs for providing healthcare for Medicaid and indigent patients allegedly suffering from tobacco-related illnesses, as well as punitive damages. On November 2, 1998, the trial court denied this initial Motion to Intervene. The court found that, because the State was not suing for unreimbursed costs, the movants did not have an interest in the State's litigation and could not intervene. Movants did not appeal the trial court's denial of this First Motion to Intervene.
On November 23, 1998, Attorney General Nixon signed an agreement entitled The Master Settlement Agreement (hereafter "MSA") in which he settled Missouri's suit against the Tobacco Defendants. The MSA provides that the participating Tobacco Defendants, together with other tobacco manufacturers that might subsequently agree to the MSA, will make annual payments into an escrow account for the benefit of Missouri and the other settling states. The record reflects that Missouri's estimated share of these funds through the year 2025 will be $6.7 billion.
In addition to the cash settlement, the MSA grants various forms of injunctive relief requests against the Tobacco defendants. In particular, the MSA permanently enjoins the Tobacco defendants from targeting Missouri's youth or using cartoons in their advertising and severely limits tobacco advertisements and sponsorships in sporting events, concerts and other similar activities. The MSA further bans outdoor and transit tobacco advertisements and the sale or distribution of tobacco brand-name merchandise. The MSA also mandates that the settling states and the Tobacco Defendants establish a national foundation in order to achieve two agreed upon goals: to reduce youth tobacco use and to prevent diseases associated with tobacco use.
After the execution of the MSA, six distinct categories of potential plaintiffs filed motions to intervene. They argued that the settlement entered into between the Attorney General and the Tobacco Defendants and approved by the trial court would release or impair and impede their individual lawsuits against the Tobacco Defendants. The trial court denied all the motions to intervene and entered a Consent Decree and Judgment. Four of those groups (hereafter referred together as "Proposed Intervenors") appeal the trial court's denial of their motions. Upon the motion of one of the proposed intervenors, this court consolidated three of these appeals into one. Later, this court, sua sponte, consolidated another appeal with the original three.
St. Louis County filed a motion to intervene on December 4, 1998, and the City of Kansas City and Jackson County filed a similar motion on December 14, 1998. These parties have not appealed from the order denying their motions to intervene.
STANDARD OF REVIEW
The four groups of Proposed Intervenors all appeal the trial court's denial of their motions to intervene as a matter of right under Rule 52.12(a). The denial of a motion for leave to intervene as a matter of right will be sustained by the appellate court unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law.
Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.banc 1976); Borgard v. Integrated Nat. Life Ins. Co., 954 S.W.2d 532, 535 (Mo.App.E.D. 1997).
ANALYSIS
Rule 52.12(a) governs intervention of right and states in pertinent part:
Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of this state confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction that is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
In the absence of an authorizing statute, a party seeking intervention of right pursuant to Rule 52.12(a) must file a timely motion and show three elements: 1) an interest relating to the property or transaction which is the subject of the action; 2) that the applicant's ability to protect the interest is impaired or impeded; and 3) that the existing parties are inadequately representing the applicant's interest. The burden is on the proposed intervenor to establish the presence of all three elements required for intervention of right. Should the proposed intervenor satisfy these three requirements, the right to intervene is absolute and the motion may not be denied. However, if even one of the elements is not met, the motion to intervene may be denied.
Timmerman v. Timmerman, 891 S.W.2d 540, 542 (Mo.App.E.D. 1995).
Augspurger v. MFA Oil Co., 940 S.W.2d 934, 937 (Mo.App.W.D. 1997).
Bogard v. Integrated National Life Insurance, 954 S.W.2d 532, 535 (Mo.App.E.D. 1997).
In Re Matter of Estate of Potashnick, 841 S.W.2d 714, 719 (Mo.App.E.D. 1992).
Proposed Hospital Intervenors
On November 30, 1998, a group of over 50 private not-for-profit hospitals, political subdivisions and governmental entities, (hereafter "Hospitals") filed a motion to intervene in this action as a matter of right under Supreme Court Rule 52.12(a) or, in the alternative, as a matter of discretion under Supreme Court Rule 52.12(b). This class of proposed intervenors is comprised of two distinct groups. The first group consists of public, governmental entities that provide public healthcare and exist solely by the authority granted by Missouri constitutional or statutory law. Included in this group are the City of St. Louis and certain county hospitals, among others. The second group is made up of private hospitals. These private hospitals are not political subdivisions of the state, but are organized pursuant to the laws governing for-profit and not-for-profit business organizations.
All of the entities proposing to intervene are as follows: City of St. Louis; The Board of Trustees of North Kansas City Hospital; Phelps County Regional Medical Center; Hermann Area District Hospital; Scotland County Memorial Hospital District; The New Liberty Hospital District of Clay County Missouri; Lincoln County Memorial Hospital; Nevada City Hospital d/b/a Nevada Regional Medical Center; Cass Medical Center; Pike County Memorial Hospital; Western Missouri Medical Center; Truman Medical Center, Inc.; Jefferson Memorial Hospital Assoc.; Alexian Brothers of St. Louis, Inc. d/b/a Alexian Brothers Hospital; Baptist Medical Center; The Grand River Health System Corp. d/b/a Hedrick Medical Center; Health Midwest Development Group d/b/a Lafayette Regional Health Center; Lee's Summit Community Hospital; Medical Center of Independence, Inc.; Menorah Medical Center, Inc.; Mineral Area Osteopathic Hospital, Inc. d/b/a Mineral Area Regional Medical Center; Park Lane Medical Center; Research Medical Center; Trinity Lutheran Hospital; St. John's Regional Health Center; St. John's Regional Medical Center; St. Anthony's Medical Center; St. John's Mercy Medical Center; St. John's Mercy Hospital; St. Luke's Episcopal-Presbyterian Hospitals; SSM Health Care Central Region; SSM Arcadia Valley Hospital; SSM DePaul Health Center; SSM St. Joseph Health Center; SSM St. Joseph Hospital West; SSM St. Mary's Health Center — St. Louis; SSM St. Mary's Health Center — Jefferson City; St. Joseph Hospital — Kirkwood; St. Francis Hospital and Health Services — Maryville; Saint Francis Medical Center; Saint Luke's Hospital of Kansas City; Saint Luke's Northland Hospital Corp.; St. Luke's Hospital of Trenton d/b/a Wright Memorial Hospital; St. Louis University Hospital; Heartland Regional Medical Center; Hannibal Regional Hospital; Ozarks Medical Center; Lester E. Cox Medical Centers; Saint Joseph Health Center; St. Mary's Hospital of Blue Springs; and Dexter Memorial Hospital.
On November 16, 1998, prior to the execution of the MSA, the hospitals filed their own separate lawsuit against the Tobacco defendants seeking unreimbursed healthcare costs they incurred in treating smoking-related illnesses suffered by Missouri's medically indigent and Medicaid recipients. Hospitals' motion to intervene sought a declaratory judgment to determine whether the MSA affected their claims against the Tobacco Defendants and if so, whether they were entitled to any of the settlement proceeds.
On March 5, 1999, the trial court issued its Order and Judgment, in which it denied the Hospitals' motion to intervene. The trial court, in its order, declined to "conclude at this time, based on this record, that the Proposed Intervenors have or do not have a claim upon the subject matter of the action . . ." but found that the Hospitals' "interests and rights were not prejudiced by the [MSA] . . . except to the extent the State has the power, by contract, statute or otherwise to bind the Proposed Intervenors."
On appeal, Hospitals contend the trial court erred in denying them the right to intervene under Rule 52.12(a). We disagree. We find that Hospitals have failed to establish the second element necessary for intervention as a matter of right — that the MSA impairs or impedes the Hospitals' ability to protect their interests.
In support of their argument, Hospitals point to the possibility that the MSA may someday be employed by the Tobacco Defendants as a complete defense in later suits. Hospitals point to various sections in the MSA which they claim will release the Hospitals' claims and give the Tobacco Defendants a complete defense to their claims.
The MSA describes those parties which are bound by the MSA as follows:
(pp) "Releasing Parties" means each Settling State and any of its past, present and future agents, officials acting in their official capacities, legal representatives, agencies, departments, commissions and divisions; and also means, to the full extent of the power of the signatories hereto to release past, present, and future claims, the following: . . . (2) persons or entities acting in parens patriae, sovereign, quasi-sovereign, private attorney-general, qui tam, taxpayer, or any other capacity whether or not any of them participate in this settlement, (A) to the extent that any such person or entity is seeking relief on behalf of or generally applicable to the general public in such Settling State or the people of the State, as opposed solely to private or individual relief for separate and distinct injuries, or (B) to the extent that any such entity (as opposed to an individual) is seeking recovery of health care expenses (other than premium or capitation payments for the benefit of present or retired state employees) paid or reimbursed, directly or indirectly, by a Settling State.
Section XII (b) of the MSA further states:
If a Releasing Party (or any person or entity enumerated in subsection II(pp), without regard to the power of the Attorney General to release claims of such person or entity) nonetheless attempts to maintain a Released Claim against a Released party . . . The Released Party may offer the release and covenant as a complete defense.
Thus, the Hospitals claim they have an interest in the State's suit and that interest will be impaired or impeded because the MSA might someday be used as a defense in their future claims against Tobacco Defendants. Proposed Hospital Intervenors argue in their brief that they have "a legally protectable interest in obtaining declaratory relief" to determine the MSA's impact upon their potential claims. It is undisputed that Appellants have a right to seek declaratory judgment in order to determine the effect of the MSA on their claims. However, Hospitals also claim that they have a right to have their declaratory action heard in this case by way of intervention of right.
An interest necessary for intervention as a matter of right does not include a mere consequential, remote or conjectural possibility of being affected as a result of the action, but must be a direct claim upon the subject matter such that the intervenor will either gain or lose by direct operation of the judgment. A declaratory judgment is not available to adjudicate hypothetical or speculative situations which may never come to pass. To be ripe for declaratory judgment, a justiciable controversy must exist.
Matter of Estate of Potashnik, 841 S.W.2d 714, 719 (Mo.App.E.D. 1992); Bunting v. McDonnell Aircraft Corp., 522 S.W.2d 161, 169 (Mo.banc 1975).
Farm Bureau Town and Country Ins. Co. v. Angoff, 909 S.W.2d 348, 352 (Mo.banc 1995); See also, Ferrell v. Mercantile Trust Co., N.A., 490 S.W.2d 397, 399-400 (Mo.App. 1973).
The mere possibility that the MSA may someday be offered as a defense is not grounds for intervention. The language of the MSA, in anticipation of separate litigation, contemplates that it may be offered as a complete defense, not that it will be a complete defense. At this juncture it cannot be determined if such anticipated defenses may be employed or will be valid. The validity of the release entered into between the State and the Tobacco Defendants and its applicability to the various proposed Hospital Intervenors is properly litigated in their lawsuit against the Tobacco Defendants, not here. That separate case provides the proposed hospital intervenors a sufficient and wholly adequate forum in which to test the question of whether the MSA created a valid defense to their claims.
Hospitals do not cite, nor can this court find, any case in which it has been held that a party has a right to have a declaratory judgment action heard by intervention in a case where the issues raised in the petition for declaratory judgment can be fully and adequately adjudicated in a separate action. "There is nothing in our statutes which authorizes that intervention may be so used by strangers to a pending action that it may there become a vehicle by means of which such strangers may urge claims or contentions which have a proper and available forum elsewhere."
State ex rel. Farmers Mutuals Auto Ins. Co. v. Weber, 273 S.W.2d 318, 323 (Mo.banc 1954).
The Hospitals raise numerous issues of fact and law which are not common to the issues settled by the existing parties to this lawsuit. The main action is a settlement of disputed questions of liability, causation and damages. Conversely, Hospitals, in effect, seek an adjudication determining their rights on each of these issues. Additionally, Hospitals seek to inject new issues not raised by the existing parties: the constitutional and statutory authority of the Attorney General to bind by law, contract or otherwise, a multitude of parties who may or may not have an interest in the lawsuit. These issues will also require a trial on the merits.
The proper forum for Hospitals' declaratory judgment action is in their pending case against the Tobacco Defendants, not here. The settlement and MSA will not impair or impede the Proposed Hospital Intervenors' right to institute such an action.
Furthermore, Hospitals have filed a lien in the Circuit Court of the City of St. Louis, pursuant to Section 430.230, RSMo 1994, against any recovery by the State for costs the hospitals claim they incurred in treating Medicaid and indigent patients with tobacco-related illnesses. Hospitals may enforce their lien for a share of the settlement funds through a separate suit. As such, Hospitals have the ability to protect any interest they have and it cannot be said that Hospitals' interests, if any, are impaired or impeded by the MSA.
See Mercantile Bank of Lake of the Ozarks v. Jones, 890 S.W.2d 392, 394 (Mo.App.W.D. 1994).
The MSA is a complex, 157-page document designed to dispose of as many claims as possible in 52 jurisdictions. While the MSA is complicated because it attempts to comprehensively dispose of these claims under varying state constitutions and statutes, nowhere is it suggested in the MSA that the Attorneys General have the power to settle any claims on behalf of private entities or individuals. Parties who choose to resolve litigation through settlement may not dispose of the claims of a third party. None of the terms of the MSA can be read to suggest, nor do any of the parties contend, that the MSA releases the purely private claims of the Private Hospital Intervenors.
All fifty states and two U.S. Territories have signed or agreed to sign the MSA.
Firefighters v. City of Cleveland, 478 U.S. 501, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986).
The MSA before us is only a settlement between Missouri's Attorney General, including the entities for which he has the power to release, and the Tobacco defendants — nothing more. The MSA states only that it releases parties "to the full extent of the power of the signatories hereto to release . . . claims [of] any Settling State's subdivisions . . ." To the extent that the Attorney General has no power to release such claims, they clearly are not released. The MSA leaves the question of exactly who is bound by the MSA open, anticipating that a further judicial determination may be necessary. However, such determination need not be made in this case. Instead, it is more properly determined in the Hospitals' suit against the Tobacco Defendants.
It may be that in the future, certain of the proposed hospital intervenors will be deemed to have been released by the MSA. If such release is determined to be legitimate and binding, that is to say if the Attorney General had the power to release the parties and such parties were in fact "releasing parties" according to the language of the MSA, then the MSA will likely act as a valid defense to a claim made by such a "released party." To attempt to answer whether or not each and every one of the more than fifty various proposed hospital intervenors will be bound by the MSA and in what respect would be pure speculation on our part. Furthermore, claiming a right to intervene in a lawsuit for the purpose of declaring the validity of a potential defense in a separate pending suit pushes the concept of a "direct and immediate interest" well beyond its intended limits.
In addition, Hospitals have adequately preserved the necessary issues and are in no danger of being found to have waived any objection to the MSA. If it is later determined that the Attorney General wrongfully attempted to release some or all of the Proposed Hospital Intervenors, then they will not be without a remedy. The MSA specifically contemplates that some "releasing parties" may obtain valid and enforceable judgments against tobacco manufacturers who are "released parties." Section XII (b)(2)(B) of the MSA provides:
(B) Judgments . . . against a Released Party . . . shall, upon payment of judgment, give rise to an immediate and continuing offset against the full amount of such Original Participating Manufacturer's share . . . of the applicable Settling State's Allocated Payment, until such time as the judgment is fully credited on a dollar-for-dollar basis.
Thus, the only party who would be impaired by such a judgment is the settling state who would have to grant an offset to that tobacco manufacturer in the amount of the judgment entered and paid. Should a party who is not a "releasing party" according to that term's definition in the MSA sue one of the released tobacco manufacturers, then that manufacturer will be responsible for paying any judgment recovered against it without the right to an offset.
Finally, Hospitals challenge the Attorney General's power to bind them as well as the validity of the MSA itself. Hospitals contend the MSA amounts to a governmental taking and a violation of their constitutional rights because the State has settled certain of the political sub-divisions' alleged claims without their consent. The State contends the protections afforded individual persons under the Fifth Amendment Takings Clause do not apply with equal force when a state takes property from one of its political subdivisions.
Williams v. Mayor and City Council of Baltimore, 289 U.S. 36, 40, 53 S.Ct. 431, 432, 77 L.Ed. 1015 (1933); State ex rel. Mehlville Fire Protection Dist. v. State Tax Com'n of Missouri, 695 S.W.2d 518, 521 (Mo.App.W.D. 1985).
These arguments were not made to the trial court and, therefore, are not properly before us. Constitutional questions must be raised at the first opportunity in the trial court or they are waived. Furthermore, these are substantive issues which should be raised in the Hospitals' pending suit, rather than in this case. For the above reasons, we decline to rule on these issues.
Lemay Bldg. Corp. v. Director of Revenue, 889 S.W.2d 835, 837 (Mo.banc 1994).
In conclusion, the MSA in no way presently bars or precludes the Hospitals from continuing their own lawsuit, including an action for declaratory judgment, against the Tobacco Defendants. Their motion to intervene for declaratory relief lacks the second required element for intervention, that is the MSA does not impair or impede Hospitals' claimed interests. The trial court correctly denied their motion to intervene.
Proposed Intervenor Neel
On December 15, 1998, Sherry Neel (hereafter "Neel") filed a motion to intervene in this action as a matter of right under Supreme Court Rule 52.12(a) or, in the alternative, as a matter of discretion under Supreme Court Rule 52.12(b). Neel claims, as a taxpayer and smoker, that she has an interest in the settlement, that without her intervention there will be no protection of the interests of the taxpayers, and that portions of the settlement dealing with attorney's fees violate the Missouri Constitution.
The MSA provides that the reasonable attorney's fees of Missouri's outside counsel, Tom Strong, will be paid by the Tobacco Defendants. The model fee agreement provides that these fees will be paid directly to Strong and not to the State. These amounts will be paid over and above any amounts received by the State in the MSA. In her motion to intervene, Neel claims the attorney fees that are to be paid by the Tobacco Defendants should be paid into the Missouri treasury to be distributed by the General Assembly.
On March 5, 1999, the trial court denied Proposed Intervenor Neel's motion to intervene. The trial court found Neel had no interest in the State's lawsuit and thus could not intervene. The trial court further determined that a ruling on the issues raised by Neel would be premature and conjectural.
The type of "interest" required to intervene as of right in an action must be a direct and immediate claim to, and having its origin in, the demand made or proceeds sought or prayed by one of the parties to the original action. It must be such an immediate and direct claim upon the very subject matter of the action that the would-be intervenor will either gain or lose by the direct operation of the judgment that may be rendered therein. Neel has not established an immediate and direct interest in the suit at hand. Neel's claims are ancillary to the subject matter of this lawsuit.
Whitehead v. Lakeside Hosp. Ass'n, 844 S.W.2d 475, 478-79 (Mo.App. 1992).
Id. at 479.
Furthermore, Neel has not demonstrated to this court that her interest, assuming one exists, is impaired or impeded. Nothing in the proposed settlement of this lawsuit precludes Neel from filing a separate lawsuit against the State, or anyone else, alleging the various violations upon which she now seeks intervention. In fact, a separate lawsuit alleging almost identical arguments for which Neel now seeks intervention has been filed. That suit, Kinder and Jamerson v. Nixon and Strong, WD56802, is currently pending in the Western District of the Missouri Court of Appeals and constrains us from commenting on the merits of Neel's allegations. However, it is clear that Ms. Neel is able to independently pursue her claims regardless of the MSA's approval and that any interest she might have is not impaired or impeded by the MSA.
In addition, Proposed Intervenor Neel's action is not ripe for judicial determination until such time as the Tobacco Defendants and Strong conclude their contract and payment is due. At this point, any ruling on this issue would be purely conjectural and advisory. The trial court correctly denied Neel's Motion for Leave to Intervene under Rule 52.12(a). Point denied.
In her second point, Neel contends the trial court abused its discretion in denying her motion for permissive intervention under Rule 52.12(b). Neel argues that her claim and the main action have a question of law or fact in common. In response to her point, the State contends the court's decision on a motion for permissive intervention is not a final judgment, and therefore is not reviewable on appeal.
See, Ratermann v. Ratermann Realty Inv. Co., 341 S.W.2d 280, 286 (Mo.App. 1960); Julian v. Automobile Club Inter-Insurance Exchange, 728 S.W.2d 321, 321-322 (Mo.App.E.D. 1987); Grissom v. Grissom, 886 S.W.2d 47, 53 (Mo.App.W.D. 1994); In the Interest of S.R.L., 984 S.W.2d 558, 559 (Mo.App.S.D. 1999).
Even if reviewable on appeal, we may only review for abuse of discretion. Here, we find no abuse of discretion in the trial court's denial of permissive intervention. Judicial discretion is abused only where "the trial court's ruling is clearly against the logic of the circumstances then before the court and is so arbitrary and unreasonable as to shock the sense of justice and indicate a lack of careful consideration; if reasonable people can differ about the propriety of the action taken by the trial court, then it cannot be said that the trial court abused its discretion." We cannot say the trial court abused its discretion in denying permissive intervention after settlement where Neel has the ability to file her own lawsuit independently challenging the attorney's fees and further, many of the identical issues are actually pending in another suit. Point denied.
Meyer v. Meyer, 842 S.W.2d 184, 188 (Mo.App.E.D. 1992).
Newman v. Ford Motor Co., 975 S.W.2d 147, 151 (Mo.banc 1998).
Proposed Intervenor Coleman
On December 28, 1998, Proposed Intervenor Margie Coleman (hereafter "Coleman") filed a Motion for Leave to Intervene and a Petition in Intervention. Margie Coleman is the surviving spouse of Elvis Coleman who died of complications associated with tobacco-related illness and disease. Coleman sought to intervene in this case on the basis that the MSA would preclude her action against the Tobacco Defendants for the wrongful death of her husband. On March 26, 1999, the trial court issued its Order and Judgment denying Coleman's Motion for Leave to Intervene, finding that Coleman had failed to establish that the MSA would impair or impede her individual cause of action.
Coleman contends she is entitled to intervene in this suit pursuant to Rule 52.12(a)(1) because "a statute of this state confers an unconditional right to intervene." Coleman avers that section 537.080, RSMo 1994, the wrongful death statute, confers such a right. She relies on language of subsection (2) which provides that only one action may be brought against any one defendant for the death of one person.
Coleman raises this issue for the first time on appeal. Nowhere in her motion to intervene did she ever argue an unconditional right to intervene based on the wrongful death statute. An issue that was never presented to or decided by the trial court is not preserved for appellate review. In any event, the wrongful death statute does not provide her with an unconditional right to intervene. The State never asserted a cause of action against the Tobacco Defendants for wrongful death and thus, section 537.080 does not apply.
Zundel v. Bommarito, 778 S.W.2d 954, 957 (Mo.App.E.D. 1989).
In addition, Coleman argues she is entitled to intervene under Rule 52.12(a)(2). We agree with the trial court that she is not entitled to intervene because nothing in the MSA would impair or impede her individual cause of action. The MSA, in the section entitled "Releasing Parties," describes in detail the various parties to which the MSA applies and expressly excludes "[those parties seeking] individual relief for separate and distinct injuries . . ." The MSA does not purport to settle any individual claims against the Tobacco Defendants and by its terms excludes the release of private causes of action against the Tobacco Defendants from its scope. The MSA states that it does not have any effect on the rights of individuals seeking "private or individual relief for the separate and distinct injuries" such as Coleman. Thus, Coleman is not precluded from bringing her action by the MSA. Accordingly, Coleman's ability to protect her interest in her wrongful death action has not been impaired or impeded and she fails to satisfy the second requisite element to intervene as of right. The trial court did not err in denying Coleman's Motion for Leave to Intervene. Point denied.
The State has also filed a motion for sanctions against Coleman for frivolous appeal which was taken with the case. "A `frivolous appeal' is one which presents no justiciable question and is so readily recognizable as devoid of merit on the face of the record that there is little prospect for success." While we have found no error in the trial court's action or judgment, we do not believe that Coleman's appeal was devoid of merit on the face of the record or that there was any bad faith or lack of sincerity which prompted her to bring this appeal. "The remedy provided in Rule 84.19 is both drastic and unusual and should accordingly be reserved for those rare and unusual situations where its application is warranted." This is not such a situation. Therefore, we deny the State's motion for damages based on the alleged frivolous nature of Coleman's appeal.
Means v. Sears, Roebuck Co., 550 S.W.2d 780, 789 (Mo. banc 1977).
Id.
Proposed Intervenors Cheeks and Gatlin
On December 18, 1998, Helen Cheeks and Terry Gatlin (hereafter "Consumers" or "Cheeks/Gatlin") filed a motion to intervene as a matter of right under Rule 52.12(a) or, in the alternative, by permission under Rule 52.12(b). At the same time, Consumers filed a Petition for Order of Restitution and for Appointment of a Receiver, as well as a Motion to Certify as Class Action under Supreme Court Rule 52.09. The motion to intervene alleged, among other things, that Consumers were entitled to intervene in the suit because the Attorney General had sued the Tobacco Defendants under the Missouri Merchandising Practices Act (MMPA) and sought restitution for a violation of the MMPA for consumers. Yet, Consumers contended they would not receive any of the settlement funds unless the trial court allowed them to intervene and then entered an order of restitution.
Sections 407.010, et. seq., RSMO 1994 Cum. Supp. 1998.
On March 5, 1999, the trial court denied Consumers' motion to intervene as of right and motion to certify as a class action. The court also denied permissive intervention and dismissed their petition. The court concluded that Consumers had failed to establish that "they are so situated that the disposition of the action may as a practical matter impair or impede these applicants' ability to protect their interest or impair or impede any of . . . [their] independent, individual causes of action." Moreover, the court noted that Gatlin had availed herself of this remedy and filed a private cause of action under section 407.025, seeking redress for injuries arising from smoking-related illness.
In their first point, Consumers contend the trial court erred in denying them intervention as of right under Rule 52.12(a) because: (1) their motion was timely; (2) they have an interest in the subject matter of the suit because they stand to gain or lose by the judgment; (3) the disposition of the suite impairs their ability to protect their interests under Chapter 407; and (4) the State is not adequately representing their interests because it is opposed to consumer restitution.
Consumers are not entitled to intervention as a matter of right because first, they do not have an interest in the subject matter of the suit, and even if they have an interest, the MSA does not impair or impede their ability to protect that interest.
In arguing they have an interest in the subject matter of the suit, Consumers claim that in its original petition, the State prayed for and sought restitution under section 407.100.4. Since they sought restitution, Consumers contend this gives them an interest in the suit now that it is settled. Consumers further argue they have an interest because once the MSA is approved, they will never have another chance to get any of their damages unless the court orders restitution.
We disagree. First, although the State did initially seek restitution, neither the MSA nor the consent decree contains any provision for restitution. Moreover, under the MSA, the trial court could not order restitution under section 407.100.4 because the court did not find a violation of section 407.020 or any section of the MMPA. In addition, there was no admission of any MMPA violation by the Tobacco Defendants in the MSA. Section 407.100.4, states:
The court, in its discretion, may enter an order of restitution, payable to the state, as may be necessary to restore to any person who has suffered any ascertainable loss . . . which may have been acquired by means of any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful by this chapter.
Because there was no finding or admission of a violation of the MMPA and the decree and settlement agreement does not purport to grant relief to consumers, the trial court could not factually or legally order restitution from the settlement funds.
In addition, neither the MSA nor the consent decree contains any provision for settlement, release or compromise of any individual cause of action under the MMPA. Indeed, the MSA expressly disavows such a purpose. The MSA is based on general damages suffered by the State as a whole, not on individual damages under the MMPA. As a result, the MSA does not bar an individual party from bringing a private civil action to recover actual damages. This suit may also be brought as a class action lawsuit. In addition, the MMPA does not bar Consumers from filing a civil claim outside the MMPA as well. Section 407.120. Neither in the trial court nor in this court have the Tobacco Defendants claimed that the MSA precluded private causes of action.
Section 407.025.1.
Section 407.025.2.
In response, Consumers complain the MSA precludes them from obtaining any restitution out of the settlement funds. The State agrees this statement is true, but only because the MSA itself contains no individual restitution funds. We agree. Consumers may still recover any of their losses under section 407.025. Their argument is premised on the erroneous conclusion that the amount of restitution they would receive under an order pursuant to section 407.100.4 would be greater than their damages in an action under section 407.025. This erroneous conclusion is based on a misunderstanding of the remedies set forth in the MMPA. The MMPA affords different remedies to consumers. First, a person may bring their own private civil action under section 407.025.1 seeking recovery of their actual damages if they have suffered "an ascertainable loss of money or property. . . ." In addition, the Attorney General may seek an injunction to stop the unlawful behavior under section 407.100. In conjunction with granting such an injunction, the trial court may also order restitution to consumers for their "ascertainable loss[es]." The measure of any restitution they would have received if restitution had been awarded is no greater than what it would be in a private MMPA action because both are measured by the consumer's ascertainable loss.
Here, Consumers have lost nothing in the settlement. As a consequence, Consumers have failed to show they have anything to gain or lose by the operation of the MSA and judgment. They may still recover their damages in a separate private civil action under section 407.025. Indeed, Consumers concede such an action is currently pending.
Even so, Consumers continue to argue they do have an interest in the suit and further, it has been impaired and impeded by certain offset provisions of the MSA. Consumers argue that although the MSA does not purport to extinguish individual claims, it is unclear whether the Tobacco Defendants will attempt to claim a credit in the individual suits for sums paid in the MSA. In response, the State expressly states: "The tobacco defendants cannot claim their payment of settlement funds to the State as a credit in a private cause of action under section 407.025 because funds paid under the MSA are not restitution payments and no individual claims have been settled under the MSA." Indeed, as stated above, the MSA makes it clear that it does not encompass private claims.
Consumers' argument assumes they are a "Releasing Party" under the MSA. This term is defined under section II(pp) as:
each Settling State and any of its past, present and future agents, officials acting in their official capacities, legal representatives, agencies, departments, commissions and divisions; and also means, to the full extent of the power of the signatories hereto to release past, present and future claims, the following: (1) an Settling State's subdivisions (political or otherwise, including, but not limited to, municipalities, counties, parishes, villages, unincorporated districts and hospital districts), public entities, public instrumentalities and public educational institutions; and (2) persons or entitles acting a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer, or any other capacity, whether or not any of them participate in this settlement, (A) to the extent that any such person or entity is seeking relief on behalf of or generally applicable to the general public in such Settling State or the people of the State, as opposed solely to private or individual relief for separate and distinct injuries, or (B) to the extent that any such entity (as opposed to an individual) is seeking recovery of health-care expenses (other than premium or capitation payments for the benefit of present or retired state employees) paid or reimbursed, directly or indirectly, by a Settling State.
The MSA, section XII(b), sets out a scheme under which the Tobacco Defendants may seek offsets if a "Releasing Party (or any person or entity enumerated in subsection II(pp), without regard to the power of the Attorney General to release claims of such person or entity) nonetheless attempts to maintain a Released Claim against a Released Party . . . ." Therefore, if Consumers or other persons bringing individual MMPA actions are not a "Releasing Party" filing a "Released Claim," then there is no offset. The definition of "Releasing Party" expressly excludes private individual claims like those of Consumers from its purview. But, as with the Proposed Hospital Intervenors, the MSA contemplates that, if the suing party is not bound by the MSA, then that claim will be paid.
Moreover, the Tobacco Defendants agree that even if a judgment against them in a private MMPA suit would give them a right to a credit under the MSA, "that credit would apply to the judgment against the amounts to be paid to the State, not the other way around." In other words, the party that stands to lose by operation of the MSA under this scenario is the settling state, not the MMPA Plaintiffs. Section XII(b) sets out a scheme for an offset. In the MSA, section XII(b)(2)(B), it states:
Judgments (other than a default judgment) against a Released Party in such an action shall, upon payment of such judgment, give rise to an immediate and continuing offset against the full amount of such Original Participating Manufacturer's share . . . of the applicable Settling State's Allocated Payment, until such time as the judgment is fully credited on a dollar-for-dollar basis.
As such, any offset would apply to payments to the State, not to Consumers, who would receive their entire judgment. Therefore, Consumers ability to recover their judgment is not impaired or impeded. The trial court did not err in denying their motion to intervene as of right.
We further note that Consumers have not appealed the denial of their Motion to Certify as a Class Action.
Consumers also contend the trial court erred in failing to grant their motion for permissive intervention. As discussed above in the context of Neel's appeal, our review, if any, is only for abuse of discretion. Here, we find no abuse of discretion in the trial court's denial of permissive intervention. In the absence of a right to intervene and with the availability of alternative remedies, we are unable to conclude the trial court's decision was arbitrary and unreasonable such that it shocks the sense of justice and indicates a lack of careful consideration. Point denied.
Meyer, 842 S.W.2d at 188.
Newman, 975 S.W.2d at 151.
Finally, the Missouri Coalition on Smoking or Health filed an amicus curiae brief urging this Court to allow Consumers to intervene so that the trial court would have the opportunity to exercise its discretion to order consumer restitution using the cy pres doctrine. Consumers also urge this remedy.
In Missouri, the cy pres doctrine allows a court of equity the power to alter a written trust instrument creating a charitable gift to reflect the donor's intention, so that the charitable gift does not fail. To this court's knowledge, the cy pres doctrine has never been applied in any other situation in Missouri. In the case at hand, we are dealing with a settlement document between multiple parties in a lawsuit and not a charitable trust. As such, the cy pres doctrine has no applicability. We refuse Consumers' and the Coalition's request to extend it. The trial court did not err in refusing to invoke the doctrine of cy pres.
See, Pilgrim Evangelical Lutheran Church of Unaltered Augsburg Confession of St. Louis, Mo. v. Lutheran Church-Missouri Synod Foundation, 661 S.W.2d 833, 840 (Mo.App.E.D. 1983).
CONCLUSION
The Proposed Intervenors in this case have failed to satisfy all three elements necessary to intervene as of right. At minimum, the Hospitals, Neel, Coleman, and Cheeks/Gatlin have failed to establish the second requirement — that their interest, if any, will be impaired or impeded by the settlement of the State's lawsuit against the Tobacco Defendants. Each of the Proposed Intervenors has a wholly adequate forum in which to bring its claims. The trial court did not err in denying their motions to intervene in this case. Nor did the trial court abuse its discretion in denying Neel and Cheeks/Gatlin's motions to intervene by permission.
The judgment is affirmed.
Paul J. Simon, P.J., concurs.
James A. Pudlowski, Sr.J., dissents.