Ramos v. Philip Morris Companies, Inc.

• Decision Date: 24 March 1999
• Docket Number: No. 98-569, No. 98-397, No. 98-2237., No. 98-513, No. 98-389, No. 98-418
• Citation: 743 So.2d 24
• Parties: Juanita V. RAMOS, et al., Appellants, v. PHILIP MORRIS COMPANIES, INC., et al., Appellees.
• Court: Florida District Court of Appeals

743 So.2d 24

Juanita V. RAMOS, et al., Appellants, v. PHILIP MORRIS COMPANIES, INC., et al., Appellees.

Nos. 98-389, 98-397, 98-418, 98-513, 98-569, 98-2237.

District Court of Appeal of Florida, Third District.

March 24, 1999.

Eric G. Olsen, Jason Beach; Richard Bennett; Lawrence W. Schonbrun, Berkeley; Nicolas J. Gutierrez, Jr., Miami; Alan B. Morrison and Brian Wolfman, Washington, DC; Wechsler Harwood Halebian & Feffer and Samuel K. Rosen and Stuart Wechsler, New York City; Lerner & Pearce and Robert Wayne Pearce, Ft. Lauderdale; Barnow & Goldberg and Gina R. Raith and Ben Barnow, Chicago, IL, for appellants.

Stanley M. Rosenblatt and Susan Rosenblatt, class counsel.

Arno Kutner, Guardian ad Litem, for survivors of the class.

John B. Ostrow, Attorney ad Litem, for absent class members and their survivors.

Carlton, Fields, Ward, Emanuel, Smith & Cutler and Douglas J. Chumbley, Miami; Peter S. Schwedock, Miami; King & Spalding and Mike Russ and Richard A. Schneider; Debevoise & Plimpton and Joseph P. Moodhe and Steven Klugman, New York City; Kenny Nachwalter Seymour Arnold Critchlow & Spector and Michael Nachwalter, Miami; Covington & Burling and James A. Goold, Washington, DC; Kasowitz, Benson, Torres & Friedman and Michael Fay, New York City; Jones, Day, Reavis & Pogue and Hugh R. Whiting, Cleveland, OH; Shook Hardy & Bacon and David Hardy and Edward A. Moss; Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, and David L. Ross and Larry D. Silverman; Coll Davidson Carter Smith Salter & Barkett and Barry R. Davidson, Miami; Clarke, Silverglate, Williams & Montgomery and Mercer K. Clarke, Miami, for appellees.

Kluger, Peretz, Kaplan & Berlin and Abbey L. Kaplan, Miami, as amicus curiae.

John F. Banzhaf, III, for Action on Smoking and Health, as amicus curiae.

Before GERSTEN, GODERICH and SHEVIN, JJ.

SHEVIN, Judge.

The appellants, who are objecting to a class action settlement and attorney's fee agreement between the class representatives and the defendant tobacco companies, seek reversal of orders denying their motions to intervene, and approving the settlement and attorney's fees and costs agreement. We affirm in part and reverse in part.

I. Facts

On October 31, 1991, nonsmoking flight attendants, represented by Norma Broin and others, filed a class action against Philip Morris Companies and other companies ("defendants") that manufacture and sell tobacco products. The trial court granted the defendants' motion to dismiss the class allegations, and this court reversed, see Broin v. Philip Morris Cos., Inc., 641 So.2d 888 (Fla. 3d DCA 1994),

review denied, 654 So.2d 919 (Fla.1995).

On December 30, 1996, notice of the class certification was provided by mail and by publication to over 150,000 current and former flight attendants. The class was defined as "[a]ll non-smoking flight attendants who are or have been employed by airlines based in the United States and are suffering from diseases and disorders caused by their exposure to second hand cigarette smoke in airline cabins." Approximately thirty-three-hundred former and current flight attendants filed exclusion forms, while about ten thousand flight attendants filed voluntary registration forms affirmatively demonstrating their desire to participate in the class action.

On May 7, 1997, the trial court entered an amended order setting a trial plan. Pursuant to this plan the litigation would proceed in two stages: Stage I would focus on common questions, including "generic causation"¹ as to the various disease categories in the Broin complaint; Stage II would focus on remaining issues. There was to be an adjournment between Stage I and Stage II to provide the parties with time to complete discovery. The conclusion of Stage I would not result in a damage award for the class members. Rather, the individual class members were required, upon prevailing in Stage I, to come to court in Miami-Dade County and present evidence, individually, regarding specific causation, exposure levels, reliance, any other remaining liability issues, and damages.

The trial commenced in June, 1997. The class members called fifty-two witnesses. They rested their case on September 22, 1997. The defendants submitted motions for directed verdict, seeking judgment as to the fraud, misrepresentation, and conspiracy counts, and as to all punitive damage claims. These motions were pending when the parties presented to the trial court their proposed settlement on October 10, 1997. The trial court preliminarily approved the settlement on that date, subject to further consideration at the final settlement hearing. At that point in the trial the defendants had called fourteen witnesses.

The settlement agreement contains many procedural and substantive provisions. The defendants have agreed to: waive the statute of limitations; shift the burden of proof on generic causation as to lung cancer, chronic obstructive pulmonary disease, chronic bronchitis, chronic sinusitis and emphysema; allow the class members to proceed in the venue where they reside or where otherwise proper; provide a copy of the video of the trial, including expert testimony, for use in individual lawsuits; accept service of process by certified mail; not contest personal jurisdiction or service of process; not challenge joinder of defendants in one lawsuit; not assert that any released party is responsible in whole or part for injuries or damages; not assert motions to dismiss challenging legal sufficiency of any claims in individual actions that restate verbatim the counts in the Broin complaint; support Federal legislation that would impose a smoking ban on all international flights; and establish a $300 million settlement fund to endow a foundation to sponsor scientific research for early detection and cure of diseases of flight attendants caused by cigarette smoke, which will be managed and directed by a board of trustees and governed by a trust instrument. The parties have further agreed that individual cases will proceed expeditiously, as long as the settling defendants have at least sixty days notice of any trial in which they are named as defendants; that the survivors of flight attendants will receive the benefits of the settlement; and that the class members will retain their right to bring an action against any party other than defendants. The class members and survivors retain the right to bring individual claims for compensatory damages on any theory of liability other than fraud, misrepresentation, or any other willful or intentional conduct, but the class members have agreed to waive claims for punitive damages. The settlement covers only existing claims; thus, any class member who develops a different disease or medical disorder after January 15, 1997, may still bring an action under any theory of liability. Class counsel advised the court that it would provide continuing assistance in all individual claims without charge, and provided the court with a list of South Florida law firms that have agreed to represent class members for a standard contingent fee, minus a twenty-five percent referral fee that would be waived by class counsel. Subsequent to the settlement, defendants agreed to pay $46 million in attorney's fees and $3 million in costs to class counsel.

The trial court approved the settlement, finding that it was "fair, adequate and reasonable." The court held that there was "no evidence in the record or before this Court which would indicate that there was even the slightest hint of collusion between the parties or their attorneys at arriving at the terms of the settlement."

The court observed that there were substantial risks and weaknesses in the flight attendants' case, particularly in the punitive damage and fraud claims. With regard to these claims, the court found that "Plaintiffs' counsel had a genuine and real reason to fear directed verdict in favor of the Defendants on these Counts." The court held that there was a high likelihood that the jury would not have found generic causation as to all of the 26 diseases and conditions. It further found that there were significant statute of limitations and repose problems for most, and close to all, class members. The court had deferred ruling on this question until after the end of Stage I, but it stated that most class members' claims may have been time barred even if they had prevailed in Stage I. There were possibilities of large delays following Stage I, the court held, as there was already a scheduled adjournment for discovery, and as the defendants had the opportunity to appeal any Stage I victory in favor of the class. Perhaps most significantly, the court found that "[t]aken as a whole, the outcome of this case, in this Court's opinion was far less than 50/50." (emphasis added).

A handful of individuals objected to the settlement. The court noted that the objectors represented only a fraction of one percent of the class members. All of the class representatives approved, and strongly endorsed, the settlement.

The court further approved the attorney's fees, finding that they were reasonable under the criteria enumerated in Kuhnlein v. Department of Revenue, 662 So.2d 309 (Fla.1995). The court found that a multiplier of five was appropriate, and it stated that the $46 million fee is considerably less than a fee based on the lodestar calculation of a reasonable hourly fee times five.

The court, in a separate order, denied the objectors' motions to intervene. In each case the court found either that there was insufficient information to establish that the objectors were class members, or that the motions were untimely. It further found that there was no showing that the class representatives were inadequate to represent the class. This appeal follows.

The objectors that have pursued this appeal are: Angela Williams ("Williams"), Paule Mohr ("Mohr"), Kathleen Miles ("Miles"), Gail Ford and others ("Ford group"), ...