Walker v. R.J. Reynolds Tobacco Co.

• Decision Date: 31 October 2013
• Docket Number: 12–14731.,Nos. 12–13500,s. 12–13500
• Citation: 734 F.3d 1278
• Court: U.S. Court of Appeals — Eleventh Circuit
• Parties: Alvin WALKER, as Personal Representative of the Estate of Albert Walker, Plaintiffs–Appellees, v. R.J. REYNOLDS TOBACCO COMPANY, individually and as successor by merger to the Brown & Williamson Tobacco Corporation and the American Tobacco Company, a foreign corporation, Defendant–Appellant. George Duke, III, as Personal Representative of the Estate of Sarah Duke, Plaintiff–Appellee, v. R.J. Reynolds Tobacco Company, individually and as successor by merger to the Brown & Williamson Corporation and the American Tobacco Company, a foreign corporation, Defendant–Appellant.

734 F.3d 1278

Alvin WALKER, as Personal Representative of the Estate of Albert Walker, Plaintiffs–Appellees,

v.R.J. REYNOLDS TOBACCO COMPANY, individually and as successor by merger to the Brown & Williamson Tobacco Corporation and the American Tobacco Company, a foreign corporation, Defendant–Appellant.

George Duke, III, as Personal Representative of the Estate of Sarah Duke, Plaintiff–Appellee,

v.R.J. Reynolds Tobacco Company, individually and as successor by merger to the Brown & Williamson Corporation and the American Tobacco Company, a foreign corporation, Defendant–Appellant.

Nos. 12–13500, 12–14731.

United States Court of Appeals, Eleventh Circuit.

Oct. 31, 2013.

Kenneth S. Byrd, Kathryn E. Barnett, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, Lydia Jenna Strom, Norwood Wilner, Richard Lantinberg, Stephanie J. Hartley, Janna M. Blasingame, The Wilner Firm PA, Jacksonville, FL, Charles Easa Farah, Jr., Eddie Easa Farah, Farah & Farah, PA, Jacksonville, FL, Jennifer Gross, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, Jahan Crawford Reza Sagafi, Sarah Robin London, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA, for Plaintiffs–Appellees.

John F. Yarber, Jason Todd Burnette, Stephanie Ethel Parker, Jones Day, Atlanta, GA, Jeffrey S. Bucholtz, King & Spalding, LLP, Washington, DC, Paul D. Clement, Bancroft, PLLC, Washington, DC, Gregory G. Katsas, Jones Day, Washington, DC, Charles Richard Allan Morse, Jones Day, New York, NY, Jeffrey Alan Yarbrough, Robert B. Parrish, Moseley Prichard Parrish Knight & Jones, Jacksonville, FL, for Defendant–Appellant.

Appeals from the United States District Court for the Middle District of Florida. D.C. Docket No. 3:09–cv–10104–RBD–JBT.

Before PRYOR and HILL, Circuit Judges, and HALL,^* District Judge.

PRYOR, Circuit Judge:

We sua sponte vacate and reconsider our original opinion in this matter. We substitute the following opinion for our original opinion.

This appeal by R.J. Reynolds Tobacco Company of money judgments in favor of the survivors of two smokers requires us to decide whether a decision of the Supreme Court of Florida in an earlier class action is entitled to full faith and credit in federal court. Florida smokers and their survivors filed in state court a class action against the major tobacco companies that manufacture cigarettes in the United States. In the first phase of the class action, a jury decided that the tobacco companies breached a duty of care, manufactured defective cigarettes, and concealed material information, but the jury did not decide whether the tobacco companies were liable for damages to individual members of the class. The Supreme Court of Florida approved the jury verdict, but decertified the class going forward. Engle v. Liggett Grp., Inc., 945 So.2d 1246, 1254 (Fla.2006). Members of the class then filed individual complaints in federal and state courts. The Supreme Court of Florida later ruled that the findings of the jury in the class action have res judicata effect for common issues decided against the tobacco companies and in favor of the smokers and that the only unresolved issues in the individual lawsuits filed afterward involve specific causation and damages. Philip Morris USA, Inc. v. Douglas, 110 So.3d 419, 432 (Fla.2013). R.J. Reynolds argues that the application of res judicata in later suits filed by individual smokers violates its constitutional right to due process of law because the jury verdict in the class action is so ambiguous that it is impossible to tell whether the jury found that each tobacco company acted wrongfully with respect to any specific brand of cigarette or any individual plaintiff. After the district court ruled that giving res judicata effect to the findings of the jury in the class action does not violate the rights of the tobacco companies to due process, two juries awarded money damages to the survivors of two smokers in their suits against R.J. Reynolds. Because R.J. Reynolds had a full and fair opportunity to be heard in the Florida class action and the application of res judicata under Florida law does not cause an arbitrary deprivation of property, we affirm the judgments against R.J. Reynolds and in favor of the survivors of the smokers.

I. BACKGROUND

In 1994, six individuals filed a putative class action in a Florida court against the major domestic manufacturers of cigarettes, including R.J. Reynolds, and two tobacco industry organizations. Brown v. R.J. Reynolds Tobacco Co., 611 F.3d 1324, 1326 (11th Cir.2010). The plaintiffs sought more than $100 billion in damages for injuries allegedly caused by smoking cigarettes. Id. Their complaint asserted claims of strict liability, negligence, breach of express warranty, breach of implied warranty, fraud, conspiracy to commit fraud, and intentional infliction of emotional distress. Id. A Florida court of appeals approved the certification of a plaintiff class of all Florida citizens and residents who have suffered or died from medical conditions caused by their addiction to cigarettes and the survivors of those citizens and residents. R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39, 40, 42 (Fla.3d Dist.Ct.App.1996).

The trial court divided the class action in three phases. Phase I of the class action “consisted of a year-long trial to consider the issues of liability and entitlement to punitive damages for the class as a whole.” Engle, 945 So.2d at 1256. During that phase, the jury considered only “common issues relating exclusively to the defendants' conduct and the general health effects of smoking,” id. at 1256, but the jury did not decide whether the tobacco companies were liable to any of the class representatives or members of the class, id. at 1263. In Phase II of the trial, the same jury determined the liability of the tobacco companies to three individual class representatives, awarded compensatory damages to those individuals, and fixed the amount of class-wide punitive damages. Id. at 1257. According to the trial plan, in Phase III of the class action, new juries were to decide the claims of the rest of the class members. Id. at 1258.

In Phase I of the trial, the plaintiffs presented evidence about some defects that were specific to certain brands or types of cigarettes and other defects common to all cigarettes. For example, “proof submitted on strict liability included brand-specific defects, but it also included proof that the Engle defendants' cigarettes were defective because they are addictive and cause disease.” Douglas, 110 So.3d at 423. “Similarly, arguments concerning the class's negligence, warranty, fraud, and conspiracy claims included whether the Engle defendants failed to address the health effects and addictive nature of cigarettes, manipulated nicotine levels to make cigarettes more addictive, and concealed information about the dangers of smoking.” Id. The trial plan called for the jury “to decide issues common to the entire class, including general causation, [and] the Engle defendants' common liability to the class members for the conduct alleged in the complaint.” Id. at 422.

At the conclusion of Phase I, the trial court submitted to the jury a verdict form with a series of questions to be answered “yes” or “no.” The trial court instructed the jury that “all common liability issues would be tried before [the] jury” and that Phase I of the trial “did not address issues as to the conduct or damages of individual members of the Florida class.” The first question on the verdict form asked the jury whether “smoking cigarettes cause [s]” a list of enumerated diseases, and the jury found that smoking causes 20 specific diseases, including various forms of cancer. The second question asked the jury whether “cigarettes that contain nicotine [are] addictive and dependence producing,” and the jury found that cigarettes are addictive and dependence producing.

The jury then answered “yes” to each of the following questions for each tobacco company:

• Did the tobacco company “place cigarettes on the market that were defective and unreasonably dangerous”;

• Did the tobacco company “make a false statement of a material fact, either knowing the statement was false or misleading, or being without knowledge as to its truth or falsity, with the intention of misleading smokers”;

• Did the tobacco company “conceal or omit material information, not otherwise known or available, knowing that the material was false and misleading, or fail[ ] to disclose a material fact concerning or proving the health effects and/or addictive nature of smoking cigarettes”;

• Did the tobacco company “enter into an agreement to misrepresent information relating to the health effects of cigarette smoking, or the addictive nature of smoking cigarettes, with the intention that smokers and members of the public rely to their detriment”;

• Did the tobacco company “enter into an agreement to conceal or omit information regarding the health effects of cigarette smoking, or the addictive nature of smoking cigarettes, with the intention that smokers and members of the public rely to their detriment”;

• Did the tobacco company “sell or supply cigarettes that were defective in that they were not reasonably fit for the uses intended”;

• Did the tobacco company “sell or supply cigarettes that, at the time of sale or supply, did not conform to representations of fact made by [the tobacco company], either orally or in writing”;

• Did the tobacco company “fail[ ] to exercise the degree of care which a reasonable cigarette manufacturer would exercise under like circumstances”;

• Did the tobacco company “engage[ ] in extreme and outrageous conduct or with reckless disregard relating to cigarettes sold or supplied to Florida smokers with the intent to inflict severe emotional distress.”

The final question asked the jury whether “the conduct of [each tobacco company] rose to a level that would permit a potential award or...