This Note examines a recent wave of litigation commenced by pension funds and insurance companies against tobacco companies.  It further explores the legal backdrop of those suits—specifically, the murky area of “derivative injuries” in tort law. This Note seeks to develop a framework for analyzing such injuries that balances the goals of tort law while providing some analytical clarity at the same time. Applying this framework to the specific litigation under consideration, this Note concludes that the federal courts of appeal were wrong in dismissing the Funds’ claims in toto, while certain district courts were also wrong in not dismissing some of the claims.