Philip Morris USA, Inc. v. Russo

• Decision Date: 02 April 2015
• Docket Number: No. SC12–1401.,SC12–1401.
• Parties: PHILIP MORRIS USA, INC., et al., Petitioners, v. Tina RUSSO, etc., Respondent.
• Court: Florida Supreme Court

175 So.3d 681

PHILIP MORRIS USA, INC., et al., Petitioners

v.Tina RUSSO, etc., Respondent.

No. SC12–1401.

Supreme Court of Florida.

April 2, 2015.

Rehearing Denied Sept. 25, 2015.

William Patrick Geraghty, Frank Cruz–Alvarez, and Alexandria Bach Lagos of Shook, Hardy & Bacon L.L.P., Miami, FL; Raoul G. Cantero, III of White & Case LLP, Miami, FL; Gregory George Katsas of Jones Day, Washington, DC; Benjamine Reid, Alina Alonso Rodriguez, and Olga Marie Vieira of Carlton Fields Jorden Burt, P.A., Miami, FL; and Lauren R. Goldman and Scott A. Chesin of Mayer Brown LLP, New York, NY, for Petitioners.

Philip Maurice Gerson and Edward Steven Schwartz of Gerson & Schwartz, P.A., Miami, FL, for Respondent.

Opinion

QUINCE, J.

Philip Morris USA, Inc. (“PM USA”) and R.J. Reynolds Tobacco Company (“R.J. Reynolds”), seek review of the decision of the Third District Court of Appeal in Frazier v. Philip Morris USA Inc., 89 So.3d 937 (Fla. 3d DCA 2012),¹ on the ground that it expressly and directly conflicts with the decisions of the Fourth District Court of Appeal in Philip Morris USA, Inc. v. Hess, 95 So.3d 254 (Fla. 4th DCA 2012), quashed, 175 So.3d 687, No. SC12–2153, 2015 WL 1472319 (Fla. Apr. 2, 2015), Philip Morris USA, Inc. v. Naugle, 126 So.3d 1155 (Fla. 4th DCA 2012), opinion withdrawn, and superseded on reh'g, Philip Morris USA, Inc. v. Naugle, 103 So.3d 944 (Fla. 4th DCA 2012), review denied, 135 So.3d 289 (Fla.2014), and Philip Morris USA Inc. v. Cohen, 102 So.3d 11 (Fla. 4th DCA 2012), and with this Court's decision in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla.2006), on questions of law. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons that follow, we approve the Third District's decision in Frazier to the extent of its conclusion pertaining to the statute of repose and disapprove Naugle and Cohen.

FACTS AND PROCEDURAL HISTORY

In December 2007, Ms. Frazier filed a complaint against PM USA and R.J. Reynolds in the Eleventh Judicial Circuit in and for Miami–Dade County, alleging that her smoking of the defendants' cigarettes proximately caused her to develop chronic obstructive pulmonary disease

(COPD).² Ms. Frazier brought claims of strict liability-defective design, negligent design, fraud by concealment, and civil conspiracy-fraud by concealment. Punitive damages were sought in her fraud by concealment and civil conspiracy-fraud by concealment claims. The defendants each raised statutes of limitations and statutes of repose defenses in their answers.

The testimony offered at trial included that Ms. Frazier started smoking in 1945, when she was fourteen or fifteen years old. Ms. Frazier smoked Winston cigarettes but switched to the Carlton brand of cigarettes because it advertised that it had the lowest tar and nicotine in its cigarettes. Ms. Frazier then switched to Parliaments because that brand advertised “the recessed filter” in its cigarettes, which she thought was better for her. In relying on advertising and believing that it was better for her, Ms. Frazier made a final switch to Benson & Hedges Ultra Lights. Ms. Frazier testified that the advertisements were “influential,” and that the “tobacco company” did not tell her that it was hazardous, which she relied on. Ms. Frazier stated that the correctness of the warning displayed on the cigarette packages was “controversial” because “there wasn't any definite information.”

Ms. Frazier admitted that she was aware that cigarettes were addictive in 1963, and by the mid–1970s, she was aware that smoking could cause lung cancer

, COPD, and emphysema. In 1991, Ms. Frazier was informed that she had an asthma attack. In that same year, Ms. Frazier's pulmonologist's impression was that she suffered from tobacco addiction with underlying COPD. In 1992, Ms. Frazier quit smoking. The pulmonologist testified that Ms. Frazier's first “real” documented COPD was in 1993, when Ms. Frazier was told that she had COPD and emphysema. According to her physician, Ms. Frazier's cigarette smoking was the cause of her disease. Ms. Frazier underwent a lung transplant

in 2003.

Ms. Frazier presented the following testimony relating to the conduct on the part of the tobacco companies. In 1953, when the studies first linked cigarettes and cancer

, the tobacco companies hired scientists who confirmed that cancer rose dramatically as people smoked more cigarettes. In response to public concerns, the tobacco companies issued “A Frank Statement,” wherein claims were made about the safety of cigarette smoking which were reinforced by advertisements and public interviews given by tobacco executives. The companies' publicly made claims were contradicted by their internal research. As early as 1961, the tobacco companies' internal documents reflected the ineffectiveness of filters in removing cancerous components. Tobacco companies knew nicotine was addicting and that smoking causes lung cancer and emphysema.

Ms. Frazier also offered testimony that the head of research at PM USA said in a 1976 interview that the company is “sincere” in its belief that cigarettes are not harmful. The head of the Tobacco Institute testified during a 1978 Congressional subcommittee meeting that smoking is not causing deaths and that science does not know if smoking causes death. A Tobacco Institute spokesperson stated in 1983 that “I don't think that there has been a causal relationship established between cigarette smoking and any other disease.” In 1984, R.J. Reynolds took out advertisements in major newspapers and magazines calling for an open debate regarding smoking's danger, which would show that smoking does not cause cancer

. A tobacco spokesperson stated in 1984 that “[i]t is not known whether cigarettes cause cancer.” After the 1988 Surgeon General's report asserted that nicotine was addicting, the Tobacco Institute released a statement that said “it has not been established that cigarette smoking produces a physical dependence to nicotine.” In 1994, tobacco company executives testified under oath before Congress that nicotine was not addictive and that “it has not been proven that cigarette smoking causes cancer.” In 1999, the tobacco companies admitted that smoking was harmful.

As to the fraudulent concealment and civil conspiracy of fraudulent concealment claims, the jury was instructed that the

defendants concealed or omitted material information not otherwise known or available knowing that the material was false and misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both, and defendants agreed with each other, with other companies, or both to conceal or omit information concerning the health effects or the addictive nature of smoking cigarettes or both.

The defendants requested that the trial judge instruct the jury on section 95.031(2), Florida Statutes (1993), the twelve-year statute of repose governing fraud claims. The proposed language read as follows: “In making your determinations regarding Plaintiff's fraudulent concealment and agreement to conceal claims, you may not consider evidence of alleged concealment, statements, or other conduct before [December 14, 1995/May 5, 1982].”³ The trial court denied the requested instruction on the fraud statute of repose.

The trial court also refused to allow the following question—proposed by the defendants—to appear on the verdict form which pertained to the fraudulent concealment claim:

Please state as to each Defendant whether the Defendant, [after December 14, 1995] [after May 5, 1982], made a statement that concealed or omitted material information concerning the health effects and/or the addictive nature of smoking cigarettes and, if so, whether Ms. Frazier relied on the statement to her detriment such that, but for the statement, she would have acted differently and avoided her injuries.

Instead, the following question was submitted to the jury on the verdict form:

Please state as to each Defendant whether Plaintiff relied to her detriment on a statement by that Defendant that concealed or omitted material information concerning the health effects and/or the addictive nature of smoking cigarettes and, if so, whether Plaintiff relied on the statement to her detriment such that, but for the statement, she would have acted differently and avoided her injuries.

Philip Morris USA Inc. Yes____ No_____

R.J. Reynolds Tobacco Company Yes____ No_____

The verdict form question concerning the conspiracy claim provided as follows:

Please state as to each Defendant whether Plaintiff relied to her detriment on a statement made in furtherance of that Defendant's agreement with others to conceal or omit material information regarding the health effects and/or addictive nature of smoking cigarettes and, if so, whether, but for the statement, she would have acted differently and avoided her injuries.

Philip Morris USA Inc. Yes____ No_____

R.J. Reynolds Tobacco Company Yes____ No_____

The jury found that Ms. Frazier was addicted to cigarettes containing nicotine and that her addiction was a legal cause of her COPD or emphysema

. However, the jury determined that prior to May 5, 1990—which was four years prior to prior to the filing of the Engle class complaint—Ms. Frazier knew or should have known in the exercise of reasonable care that she had been injured and that there was a causal connection between her smoking and her injury. Ms. Frazier's claims were thus barred by the applicable four-year statutes of limitations. As instructed, the jury did not decide the issues of causation, the fraudulent concealment and conspiracy claims, comparative fault, compensatory damages, and the entitlement to punitive damages.

Thereafter, Ms. Frazier moved for a directed verdict on the statutes of limitation defense and for a new trial, contending that the defendants failed to present any evidence that Ms. Frazier was on notice of a causal connection between her smoking and her development of COPD or...