Philip Morris USA, Inc. v. Duignan, Case No. 2D15–5055

• Decision Date: 15 November 2017
• Docket Number: Case No. 2D15–5055
• Parties: PHILIP MORRIS USA, INC.; R.J. Reynolds Tobacco Company; Lorillard Tobacco Company; and Lorillard, Inc., Appellants, v. Kevin DUIGNAN, as personal representative of the Estate of Douglas Clarence Duignan, deceased, Appellee.
• Court: Florida District Court of Appeals

243 So.3d 426

PHILIP MORRIS USA, INC.; R.J. Reynolds Tobacco Company; Lorillard Tobacco Company; and Lorillard, Inc., Appellants,

v.Kevin DUIGNAN, as personal representative of the Estate of Douglas Clarence Duignan, deceased, Appellee.

Case No. 2D15–5055

District Court of Appeal of Florida, Second District.

Opinion filed November 15, 2017

Cathy A. Kamm, Terri L. Parker, Daniel F. Molony, and Razvan Axente of Shook, Hardy & Bacon, L.L.P., Tampa; Geoffrey J. Michael and Daphne O'Connor of Arnold & Porter LLP, Washington, District of Columbia; Gregory G. Katsas of Jones Day (withdrew after briefing), Washington, District of Columbia; and Charles R.A. Morse of Jones Day, New York, New York, for Appellants.

David J. Sales, Daniel R. Hoffman of David J. Sales, P.A., Jupiter; Gary M. Paige, Robert E. Gordon of Gordon & Doner, P.A., Davie; James W. Gustafson, Jr. of Searcy Denney Scarola Barnhart & Shipley, P.A., Tallahassee, for Appellee.

SALARIO, Judge.

Philip Morris USA, Inc. (PM) and R.J. Reynolds Tobacco Company (Reynolds) appeal from a final judgment entered in favor of Kevin Duignan, the personal representative of the Estate of Douglas Clarence Duignan (the Estate).¹ Douglas Duignan smoked cigarettes made by PM and Reynolds and later died of cancer

, which led to the filing of this Engle ²

progeny suit by the Estate. We reverse and remand for a new trial primarily because in responding to a note from the jury concerning the testimony of Dennis Duignan, the decedent's brother and an important witness for the defense, the trial court gave an answer improperly calculated to prevent the jury from requesting a readback of that testimony. With respect to the Estate's claims for fraud by concealment and conspiracy to commit fraud by concealment, we further conclude that the trial court erroneously instructed the jury on the element of detrimental reliance.

The Trial Of This Engle Progeny Case

Background. For the benefit of the reader unfamiliar with tobacco litigation in Florida, Engle progeny cases differ from ordinary product defect or wrongful death cases in that they go to trial with certain factual matters having been conclusively established as a result of the supreme court's decision in Engle v. Liggett Group, 945 So.2d 1246 (Fla. 2006). Engle was a class action brought against several tobacco companies—PM and Reynolds included—on behalf of Florida-resident smokers who developed smoking-related illnesses caused by addiction to cigarettes containing nicotine. Trial verdicts established liability, compensatory damages for the class representatives, and the entitlement to and the amount of punitive damages for the class. The tobacco companies appealed, and the case reached the Florida Supreme Court. The supreme court decertified the class and vacated the punitive damages award—with the result being that individual members of the Engle class must pursue individual damages actions in order to recover for smoking-related illnesses. Id. at 1254.

Although it decertified the class, the supreme court nonetheless held that certain liability findings—so-called Phase I findings—made by the Engle jury could stand and govern in individual actions by Engle class members. Id. at 1254–55. The retained Phase I findings include findings that smoking cigarettes causes certain diseases (including lung cancer

), that nicotine is addictive, that the tobacco companies placed cigarettes on the market that were defective and unreasonably dangerous, that the tobacco companies were negligent, and that the tobacco companies concealed or omitted material information about the health effects and addictive nature of cigarettes and also conspired with one another to do so. Id. at 1257 n.4, 1276–77. To take advantage of these findings in an individual suit, a plaintiff must establish membership in the Engle class by proving that before November 21, 1996, the plaintiff had developed one of the illnesses found by the Engle jury to be caused by smoking and that the plaintiff's illness was caused by an addiction to cigarettes containing nicotine. Id. at 1256, 1277. If an individual plaintiff demonstrates class membership, the retained Phase I findings are taken as conclusively established for purposes of the individual's action. Id. at 1277.

This particular Engle progeny case proceeded to trial on an amended complaint which alleged that before November 21, 1996, Douglas Duignan developed lung cancer

as a result of having been addicted to cigarettes containing nicotine. It asserted claims for strict liability, negligence, fraud by concealment, and conspiracy to commit fraud by concealment and sought compensatory and punitive damages. The Estate acknowledged that Douglas Duignan bore some responsibility for his smoking and asked for an apportionment of fault and damages on his nonintentional tort claims—i.e., the claims for strict liability and negligence.

The trial evidence. The trial court held a two-phase trial. The first phase was to determine the issues of Engle class membership, comparative fault, legal causation on the Estate's fraud and conspiracy claims, and the Estate's entitlement—if any—to punitive damages. The Estate presented evidence that Douglas Duignan began smoking at fourteen and had become a regular smoker by his midteens. It also presented evidence that he exhibited behaviors consistent with nicotine addiction, that he made several unsuccessful attempts to quit smoking, and that he smoked light and filtered cigarettes because he believed them to be safer alternatives. In 1992, when he was forty-two years old, doctors discovered a cancerous tumor in Douglas Duignan's lung and later found that there was cancer

elsewhere in his body. He died thereafter.

As to the fraud and conspiracy claims, the Estate put on evidence that PM and Reynolds, together with many other tobacco companies, conspired over several decades to conceal what they knew about the addictive properties and health effects of smoking cigarettes. This included evidence of tobacco company advertising that depicted cigarette smoking as glamorous and even healthy, the tobacco companies' creation of a false controversy in the public debate designed to prolong doubt as to the addictive properties and health effects of cigarette smoking, the promotion of the idea that smoking light and filtered cigarettes reduced the risks associated with smoking, and internal tobacco company documents showing what the tobacco companies actually knew about nicotine addiction and smoking-related disease.

PM and Reynolds' defense, in contrast, focused substantially on a theory that Douglas Duignan smoked because he liked smoking rather than because he was addicted to nicotine or because he was misinformed about the risks. This theory put the following items at issue: (1) Engle class membership (Douglas Duignan's affinity for smoking, rather than his addiction to cigarettes, was the legal cause of his cancer

), (2) legal causation on the fraud and conspiracy claims (he knew the material health risks of smoking and did not rely on any concealed or omitted facts), and (3) comparative fault (his decision to keep smoking was his own).

PM and Reynolds put on evidence that significant information about the adverse consequences of cigarette smoking generally was known to the public and specifically was known to Douglas Duignan from the time he began smoking. They also offered the testimony of Dennis Duignan, who lived in Washington State. Although he did not appear in person at trial, portions of his deposition testimony were read to the jury as evidence by the parties, with the trial lawyers playing the parts of questioner and witness. Dennis Duignan testified that he and his brother referred to cigarettes using slang terms including "cancer

sticks" and "coffin nails." He further testified about a conversation with his brother that occurred sometime in the 1970s, during which Douglas Duignan said that his doctor had told him "that if he didn't quit smoking, he'd be dead in five years." When Dennis Duignan asked his brother whether he planned to quit, Douglas Duignan replied that he did not plan to quit because he liked smoking. The Estate questioned both the veracity of this testimony and the timing of the conversation. Both sides addressed it in opening statements and closing arguments.

The instructions on fraud and concealment. At the close of the trial, the jury was instructed to determine whether Douglas Duignan was a member of the Engle class and, if he was, that it "must accept [certain] previously determined matters as true ... just as if you had determined them yourselves." A finding that Douglas Duignan was a member of the Engle class coupled with the preclusive effect of the retained Phase I findings on strict liability and negligence resolved the Estate's claims for strict liability and negligence, with the exception of the issues of comparative negligence and damages, as to which the jury was also instructed.

As relevant to the claims for fraud and conspiracy, the jury was instructed that the retained Phase I findings conclusively established both that PM and Reynolds each "concealed or omitted material information" about the adverse effects of smoking and also that they "entered into an agreement" with other tobacco companies "to conceal or omit information" regarding those matters. Those findings alone did not resolve the claims for fraud and conspiracy, however, and the jury was required to determine legal causation, which centered on the issue of detrimental reliance.

PM and Reynolds requested an instruction that required the jury to find that Douglas Duignan detrimentally and reasonably relied on "a statement" by each of them (with respect to the fraud claim) and by a member of the conspiracy (with respect to the conspiracy claim) and that such reliance was the cause of his cancer

. The trial court rejected that instruction and gave the jury a different special instruction concerning...