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Foster v. State

United States District Court, D. Minnesota

December 21, 2016

Sheila Foster, on behalf of herself and all others similarly situated, Plaintiff,
v.
State of Minnesota, Lori Swanson, in her official capacity as Minnesota General, and Myron Frans, in his official capacity as Commissioner of Minnesota Management and Budget, Defendants.

          Patrick W. Michenfelder, Esq. and Throndset Michenfelder Law Office, LLC, and Daniel C. Hedlund, Esq. and Gustafson Gluek, PLLC, counsel for plaintiff.

          Oliver J. Larson, Minnesota Attorney General's Office, counsel for defendants.

          ORDER

          David S. Doty, Judge

         This matter is before the court upon the motion to dismiss by defendants. Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is granted.

         BACKGROUND

         This putative class action arises from plaintiff Sheila Foster's claim that she is entitled to a share of the proceeds from the settlement between the State of Minnesota and various tobacco companies. In 1994, the state, through its attorney general, and Blue Cross and Blue Shield of Minnesota, sued Philip Morris and other tobacco companies, alleging violations of Minnesota's consumer protection statutes. Compl. ¶¶ 13-14. In 1998, the parties settled. Id. ¶ 15. The settlement agreement, in part, required the tobacco companies to pay the state over $100 million each year in perpetuity. Id. In turn, the state agreed to release “all claims of the State of Minnesota relating to the subject matter of th[e] action which have been or could have been asserted by the State of Minnesota.”[1] Id. ¶ 17. There is no indication in the record, nor do the parties contend, that any portion of the settlement proceeds has ever been distributed to individuals. Rather, the settlement payments are deposited into the state's general fund, which is managed by Minnesota Management and Budget. Id. ¶ 16.

         In 2011, the National Cancer Institute announced that “light” cigarettes are as unhealthy as regular cigarettes. Id. ¶ 19. Soon thereafter, Gregory Curtis filed a putative class action in Minnesota state court, alleging that Philip Morris defrauded consumers by falsely marketing “light” cigarettes as a safer alternative to regular cigarettes. Id. ¶¶ 20-22. The district court certified the class, but later granted summary judgment to Philip Morris, concluding that the 1998 Settlement Agreement released and barred the class claims. Curtis v. Atria Grp., Inc., 813 N.W.2d 891, 897 (Minn. 2012). The Minnesota Court of Appeals affirmed the class certification, but reversed the grant of summary judgment. Id. The Minnesota Supreme Court then reversed the latter determination, agreeing with the district court that the 1998 Settlement Agreement released and barred the claims. Id. at 904. The court dismissed the complaint in its entirety and held that the issue of whether the district court properly certified the class was moot. Id.

         In February 2014, Sheila Foster - named plaintiff in this case - and Kristen Harne filed a class action complaint in Ramsey County against the State, the Minnesota Attorney General, and the Commissioner of Minnesota Management and Budget. Compl. Ex. B. In that case, which the court will refer to as Harne to avoid confusion, the plaintiffs alleged that because their claims were released by the State in the 1998 Settlement Agreement, as determined in Curtis, the defendants owe them a portion of the settlement proceeds. Id. ¶¶ 27-29, 32. The Harne plaintiffs asserted that the defendants' failure to compensate them constituted a taking of private property without just compensation under the Minnesota Constitution and the Fifth Amendment of the United States Constitution. Id. ¶¶ 44-61. The district court dismissed the case, concluding that the claims were time barred and that, in any event, no taking had occurred. Compl. Ex. C. The Minnesota Court of Appeals affirmed on the basis of the statute of limitations and the Minnesota Supreme Court denied review. Id. Exs. D, E.

         On July 28, 2016, Foster filed the instant case on behalf of herself and other similarly situated against the same defendants named in Harne.[2] Foster's allegations are nearly identical to those she raised in Harne, but here she only brings a claim under the Fifth Amendment. Defendants now move to dismiss.

         DISCUSSION

         I. Standard of Review

         To survive a motion to dismiss for failure to state a claim, “‘a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff [has pleaded] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Although a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. Twombly, 550 U.S. at 555. “[L]abels and conclusions or a formulaic recitation of the elements of a cause of action” are not sufficient to state a claim. Iqbal, 556 U.S. at 678 (citation and internal quotation marks omitted).

         The court does not consider matters outside the pleadings under Rule 12(b)(6). Fed.R.Civ.P. 12(d). The court may, however, consider matters of public record and materials that are “necessarily embraced by the pleadings.” Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation and internal quotation marks omitted).

         II. ...


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