R.J. Reynolds Tobacco Co. v. Martin

• Citation: 53 So.3d 1060
• Decision Date: 11 February 2011
• Docket Number: No. 1D09–4934.,1D09–4934.
• Parties: R.J. REYNOLDS TOBACCO COMPANY, Appellant,v.Matilde C. MARTIN, as Personal Representative of the Estate of Benny R. Martin, as surviving spouse and on behalf of the estate, Appellee.
• Court: Court of Appeal of Florida (US)

53 So.3d 1060

R.J. REYNOLDS TOBACCO COMPANY, Appellant,

v.Matilde C. MARTIN, as Personal Representative of the Estate of Benny R. Martin, as surviving spouse and on behalf of the estate, Appellee.

No. 1D09–4934.

District Court of Appeal of Florida, First District.

Dec. 14, 2010.Rehearing Denied Feb. 11, 2011.

Charles F. Beall, Jr., and Larry Hill of Moore, Hill & Westmoreland, P.A., Pensacola, for Appellant.Gregory G. Katsas of Jones Day, Washington, D.C., pro hac vice, for Appellant.M. Stephen Turner, and David K. Miller of Broad and Cassel, Tallahassee, and Robert M. Loehr and Matt Schultz of Levin, Papantonio, Thomas, Mitchell, Eschsner & Proctor, P.A., Pensacola, for Appellee.MARSTILLER, J.^*

This is the first so-called “ Engle progeny” case to reach a district court of appeal following the Florida Supreme Court's decision in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla.2006). Engle began as a smokers' class action lawsuit filed in 1994 against cigarette companies and tobacco industry organizations seeking damages for smoking-related illnesses and deaths. The class included all Florida “ ‘citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine.’ ” Id. at 1256. The tobacco company defendants included the appellant in this case, R.J. Reynolds Tobacco Company (“RJR”). In Engle, the supreme court decertified the class, but allowed certain jury findings from the class action to have res judicata effect in any subsequent lawsuits by individual class members seeking damages from the defendants. RJR appeals from a final judgment in one such action, seeking reversal of the compensatory and punitive damage awards.

RJR primarily contends that the trial court gave the findings approved in Engle overly broad preclusive effect and thus relieved the plaintiff below, Matilde Martin, of her burden to prove legal causation on her negligence and strict liability claims. RJR also asserts Mrs. Martin failed to prove the reliance element of her fraudulent concealment claim, and that the punitive damage award is excessive and unconstitutional. For the reasons that follow, we find the trial court correctly applied Engle and Mrs. Martin produced sufficient independent evidence to prove RJR's liability for her husband's death. We conclude further the punitive damage award is neither excessive nor violative of RJR's due process rights.

I. BACKGROUND

A. Engle v. Liggett Group, Inc.

The trial proceedings in the Engle class action were divided into three phases. In Phase I the jury was to consider “common issues relating exclusively to the defendants' conduct and the general health effects of smoking” and the class's entitlement to punitive damages. Phase II would determine whether the three class representatives received compensatory damages and the amount of class punitive damages if entitlement was established. Engle, 945 So.2d at 1256–57. Liability to and compensatory damages for each of the estimated 700,000 class members would be decided in Phase III. Id. at 1258. Phase I concluded with a verdict finding the evidence sufficient to prove strict product liability; fraud and misrepresentation; fraud by concealment; civil conspiracy by misrepresentation and concealment; breach of implied warranty; breach of express warranty; negligence; and intentional infliction of emotional distress. Id. at 1255. The jury also found the class entitled to punitive damages. Id. at 1256–57. In Phase II, the jury awarded $12.7 million in compensatory damages to the class representatives and $145 billion in punitive damages to the entire class. Id. at 1257. Before Phase III proceedings began, the defendants appealed the verdicts.

The appeal went first to the Third District Court of Appeal sub nom. Liggett Group, Inc. v. Engle, 853 So.2d 434 (Fla. 3d DCA 2003), then to the Florida Supreme Court which made the following rulings pertinent to the case before us. First, the court vacated the punitive damage award because, with no compensatory damage award to the class for comparison, the court could not determine whether the punitive damages were unconstitutionally excessive. 945 So.2d at 1264–65, 1276. Second, the court decertified the class for Phase III, finding class treatment infeasible “because individualized issues such as legal causation, comparative fault, and damages predominate,” and allowed class members to file individual lawsuits within one year of the court's mandate. Id. at 1268, 1277. Third, the court “retain[ed] the jury's Phase I findings other than those on the fraud and intentional infliction of emotion [sic] distress claims, which involved highly individualized determinations,” and gave these “common core findings ... res judicata effect” in any subsequent individual actions by class members. Id. at 1269.

As a result, Engle class members opting to sue individually do not have to prove up the following matters found by the Phase I jury (“ Engle findings”): (1) [generic causation] that smoking cigarettes causes aortic aneurysm, bladder cancer, cerebrovascular disease, cervical cancer, chronic obstructive pulmonary disease, coronary heart disease, esophageal cancer, kidney cancer, laryngeal cancer, lung cancer, pregnancy complications, oral cavity/tongue cancer, pancreatic cancer, peripheral vascular disease, pharyngeal cancer, and stomach cancer; (2) [addiction/dependence] that cigarettes containing nicotine are addictive or dependence producing; (3) [strict liability] that the defendants placed cigarettes on the market that were defective and unreasonably dangerous; (4) [fraud by concealment] the defendants concealed or omitted material information, not otherwise known or available, knowing the material was false or misleading, or failed to disclose a material fact, concerning or proving the health effects or addictive nature, or both, of smoking cigarettes; (5) [civil conspiracy-concealment] that the defendants agreed to conceal or omit information regarding the health effects of cigarette smoking or the addictive nature of cigarettes intending that smokers and the public would rely to their detriment; (6) [breach of implied warranty] that the tobacco company defendants sold or supplied cigarettes that were defective; (7) [breach of express warranty] that the tobacco company defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to representations of fact made by the defendants; and (8) [negligence] the tobacco company defendants failed to exercise the degree of care which a reasonable cigarette manufacturer would exercise under like circumstances. Id. at 1276–77. The supreme court noted, however, that the Phase I jury did not consider whether class members relied on the defendants' statements or omissions or whether class members were injured by the defendants' conduct. Therefore Phase I yielded no determination as to the defendants' liability to any individual class member. Id. at 1263.

B. Martin v. R.J. Reynolds Tobacco Co.

Benny Martin was a long time smoker of Lucky Strike, a brand of cigarettes manufactured and sold by RJR, who contracted lung cancer and died in 1995.¹ His widow sued RJR as an Engle class member seeking damages for her husband's death.² A jury trial proceeded on five claims: strict liability; fraud by concealment; conspiracy to commit fraud; negligence; and punitive damages. The parties filed a Joint Pretrial Memorandum admitting several facts which required no proof at trial, including that every Lucky Strike Benny Martin smoked contained nicotine, nicotine in cigarettes is addictive, and smoking cigarettes causes lung cancer.

The trial judge instructed the jury, in pertinent part, as follows:

This action has been brought as a part of a case known as the Engle class action. The first issue for your determination ... is whether Benny Martin was a member of the Engle class. Certain findings from that action are binding upon you, the Court and the parties. The findings may not be denied or questioned, and they must carry the same weight they would have if you had determined them yourselves. The established findings are: Finding one, is that cigarettes are addictive. Finding two, is that cigarettes cause lung cancer.

If you find that Benny Martin is a member of the Engle class, certain other findings are binding upon you, the Court and the parties. The findings may not be denied or questioned, and they must carry the same weight they would have if you had determined them yourselves. Those established findings are: Finding three, is that R.J. Reynolds Tobacco Company was negligent. Finding four, is that R.J. Reynolds Tobacco Company placed cigarettes on the market that were defective and unreasonably dangerous. Finding five, is that R.J. Reynolds Tobacco Company conspired with other companies to conceal or omit information regarding the health effect [sic] of cigarettes or their addictive nature or both. Those companies include Phillip Morris, Leggett, Lorillard, Brown & Williamson Tobacco Corporation, individually, and as successors to the American Tobacco Company, the Council for Tobacco Research, USA, Inc., and the Tobacco Institute. Finding six, is that R.J. Reynolds Tobacco Company, in furtherance of that conspiracy, concealed or omitted material information, not otherwise known or available, knowing that material was false or misleading, or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both.

* * *

The findings that I have described to you do not establish that R.J. Reynolds Tobacco Company is liable to Mrs. Martin, nor do they establish whether Benny Martin was injured by R.J. Reynolds Tobacco Company's conduct or the degree, if any, to which R.J. Reynolds Tobacco Company's product was the sole or contributing cause of Benny Martin's death. The...