Philip Morris USA Inc. v. Cohen

• Decision Date: 31 December 2012
• Docket Number: 4D10–4065.,Nos. 4D10–3534,s. 4D10–3534
• Citation: 102 So.3d 11
• Parties: PHILIP MORRIS USA INC., and R.J. Reynolds Tobacco Company, Appellants, v. Robin COHEN, as Personal Representative of the Estate of Nathan Cohen, Deceased, Appellee.
• Court: Florida District Court of Appeals

102 So.3d 11

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

v.Robin COHEN, as Personal Representative of the Estate of Nathan Cohen, Deceased, Appellee.

Nos. 4D10–3534, 4D10–4065.

District Court of Appeal of Florida, Fourth District.

Sept. 12, 2012.

Rehearing Denied Dec. 31, 2012.

Gordon James, III, Eric L. Lundt and Lenore C. Smith of Sedgwick LLP, Fort Lauderdale, Gregory Katsas of Jones Day, Washington, D.C., and Stephanie E. Parker of Jones Day, Atlanta, GA, for appellant R.J. Reynolds Tobacco Company; Andrew S. Brenner of Boies, Schiller & Flexner LLP, Miami, and Gary L. Sassoof Carlton Fields, Tampa, for appellant Philip Morris USA Inc.

Robert S. Glazier of Law Office of Robert S. Glazier, Miami; Law Office of Gary Paige, P.A., Coral Gables; Trop & Ameen, P.A., Hollywood; and Alvarez Law Firm, Coral Gables, for appellee.

POLEN, J.

In this Engle¹-progeny case, Philip Morris USA, Inc. (“PM USA”) and R.J. Reynolds Tobacco Company (“RJR”), appeal final judgments following jury verdicts, awarding Robin Cohen, as personal representative of the estate of her late-husband Nathan Cohen, $10 million in non-economic compensatory damages and $10 million in punitive damages, from each appellant. The jury found each party one-third responsible for Nathan's death. Based on that apportionment, and after denying appellants' motions for judgment as a matter of law, new trial, and remittitur, the trial court entered final judgment against each appellant for $13,333,333.

In this appeal, appellants contend that (1) the use of the Engle findings to establish elements of appellee's claims violates Florida law and due process; (2) appellee failed to prove legal causation (that a specific defect or tortious act or omission injured Nathan) and the trial court's instruction on causation was erroneous; (3) the trial court erroneously instructed the jury on appellee's fraudulent concealment claim; (4) the trial court abused its discretion in denying appellants' motions for remittitur because the non-economic compensatory damage awards are excessive; and (5) the punitive damage awards are excessive and violate due process.

We summarily reject appellants' first two contentions of error based on our opinion in R.J. Reynolds Tobacco Co. v. Brown, 70 So.3d 707, 717 (Fla. 4th DCA 2011). For the reasons set forth below, we affirm the compensatory damages award but reverse the punitive damages award because the trial court erred by not instructing the jury on the statute of repose in conjunction with appellee's fraudulent concealment claim—the only basis for the punitive damages award.² We approve of the amount of punitive damages awarded by the jury; therefore, the only issue to be decided on remand is appellee's entitlement to the award, which will be resolved when the jury determines whether Nathan reasonably relied on statements or omissions made by appellants within the applicable statute of repose period.

This case proceeded to trial in two phases, as approved by this court in Brown.See Brown, 70 So.3d at 714. After phase I, the jury determined that Nathan was an Engle class member ( i.e., he had been addicted to cigarettes containing nicotine and the addiction was a legal cause of his COPD and lung cancer).

In phase II, the jury determined the issues of legal causation, comparative fault, compensatory damages, and punitive damages. Robin testified that Nathan believed the tobacco industry's reassurances about their products: “He believed that a large company would not do anything to hurt the people,” and continued to smoke “because there was never any proof that it wasn't okay.” She testified that sometime around “the mid '80s,” Nathan became aware of the detrimental health effects of smoking cigarettes. He tried to quit (cold turkey, hypnosis, and classes) but was unsuccessful. Nathan was diagnosed with COPD, and then with small cell lung cancer in 1994.

At the conclusion of phase II, the trial court instructed the jury that because Nathan was an Engle class member, it was bound by the following Engle findings: Appellants were negligent; sold defective cigarettes; concealed material information; and agreed to conceal such information. Appellants requested the following jury instruction:

In determining whether Nathan Cohen reasonably relied to his detriment on a statement by a defendant that omitted material information, you may not consider evidence of alleged statements, concealment or other conduct that occurred before May 5, 1982.

The trial court denied the request. This was error.

The failure to give a requested instruction constitutes reversible error when the complaining party establishes that the requested jury instruction accurately states the applicable law, the facts in the case support giving the instruction, and the instruction was necessary to allow the jury to properly resolve all issues in the case.

Smith v. Hugo, 714 So.2d 467, 468 (Fla. 4th DCA 1998) (citation omitted).

“[A] claim of fraudulent misrepresentation and/or concealment requires proof of detrimental reliance on a material misrepresentation.” Soler v. Secondary Holdings, Inc., 771 So.2d 62, 69 (Fla. 3d DCA 2000) (citing Johnson v. Davis, 480 So.2d 625, 627 (Fla.1985)). Florida's statute of repose requires that any action “founded upon fraud” be filed within twelve years “after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.” § 95.031(2)(a), Fla. Stat. (2007). The Engle case was filed on May 5, 1994; therefore, appellee's fraudulent concealment claim had to be based on conduct that occurred after May 5, 1982—she must prove that Nathan relied upon statements or omissions by appellants made after that date. The jury should have been instructed accordingly.³

Limiting the new trial to the issue of Robin's entitlement to the punitive damage awards will not be confusing or prejudicial. See Purvis v. Inter–County Tel. & Tel. Co., 173 So.2d 679, 681 (Fla.1965) (“The trial court can by proper instructions to the jury and supervision of the trial process avoid any inferences or implications to be drawn from the previous award of damages ... avoiding prejudice to [defendant]”); Griefer v. DiPietro, 625 So.2d 1226, 1229 (Fla. 4th DCA 1993) (reversal for new trial on liability only is appropriate “where the error complained of affects only the issues of liability”).

Although we reverse and remand the punitive damage awards for a determination of entitlement based on the statute of repose, we approve of the amounts awarded by the jury and do not find the awards excessive.

“The purpose of punitive damages is ‘not to further compensate the plaintiff, but to punish the defendant for its wrongful conduct and to deter similar misconduct by it and other actors in the future.’ ” R.J. Reynolds Tobacco Co. v. Townsend, 90 So.3d 307, 312 (Fla. 1st DCA 2012) (quoting Owens–Corning Fiberglas Corp. v. Ballard, 749 So.2d 483, 486 (Fla.1999)). In BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), the Supreme Court identified “three guideposts” for assessing the reasonableness of punitive damages: (1) the degree of reprehensibility of the defendant's conduct; (2) the ratio between the punitive and compensatory damages; and (3) civil and criminal penalties for similar conduct. Townsend, 90 So.3d at 313 (citing Gore, 517 U.S. at 574–85, 116 S.Ct. 1589).

[T]he three criteria a punitive damage award must satisfy under Florida law to pass constitutional muster are: (1) “the manifest weight of the evidence does not render the amount of punitive damages assessed out of all reasonable proportion to the malice, outrage, or wantonness of the tortious conduct”; (2) the award “bears some relationship to the defendant's ability to pay and does not result in economic castigation or bankruptcy to the defendant”; and (3) a reasonable relationship exists between the compensatory and punitive amounts awarded.

Id. (quoting R.J. Reynolds Tobacco Co. v. Martin, 53 So.3d 1060, 1072 (Fla. 1st DCA 2010)) (quoting Engle, 945 So.2d at 1263–64).

We hold that the $10 million punitive damages awards in this case are not “out of all reasonable proportion” ⁴ and will not cause appellants' financial ruin.⁵ “As to the third criterion, the typical measure used to determine whether a ‘reasonable relationship’ exists between the punitive and compensatory damages is the ratio of the awards.” Id. at 314 (citing Gore, 517 U.S. at 580, 116 S.Ct. 1589;Martin, 53 So.3d at 1071–72). “Although there is no bright-line standard, the Florida Supreme Court observed in Engle that ‘[s]ingle-digit [ratios] are more likely to comport with due process, while still achieving the State's goals of deterrence and retribution.’ ” Id. (quoting Engle, 945 So.2d at 1264–65) (quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003)).

In Townsend, “the ratio between the punitive damage award ($40.8 million) and the pre-apportionment compensatory damage award ($10.8 million) [was] 3.7 to 1, which [was] less than the 5 to 1 pre-apportionment ratio [ ] upheld in Martin.” Id. Nevertheless, the First District held that the $40.8 million punitive damage award in Townsend was “constitutionally excessive in view of the substantial $10.8 million compensatory damages award.” Id.

Here, the $10.8 million compensatory damage award—which is substantial by any measure—justifies a lower ratio than 3.7 to 1. Although we find the $40.8 punitive damage award excessive under the Gore and State Farm criteria, a 1 to 1 ratio is unwarranted, however, because the evidence of the extreme reprehensibility and wantonness of RJR's conduct was substantial. See Gore, 517 U.S. at 575, 116 S.Ct. 1589 (noting that “the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct”).

Id. at 315–16.

“The ...