Florida Supreme Court Upholds $2.5 Million Verdict In Engle Tobacco Case

TALLAHASSEE, Fla. - (Mealey's) Florida's Supreme Court on March 14 affirmed, with one dissent, a trial court's application of its landmark decision in Engle v. Liggett Group, Inc. (945 So. 2d 1246 [Fla. 2006]) [enhanced version available to lexis.com subscribers] in a $2.5 million verdict, in the process rejecting tobacco companies' claim that the res judicata effects of Engle are a due process violation (Phillip Morris USA v. James L. Douglas,No. SC12-617, Fla. Sup.).

(Opinion available. Document #04-130320-012Z.)

The court also affirmed the trial judge's inclusion of negligence as a basis for the verdict, reversing a Second District Court of Appeal holding as requiring "causation instructions and findings beyond those required by Engle."

The question certified to the state Supreme Court, which the U.S. Supreme Court has turned down the opportunity to consider, was whether applying the res judicata effect of certain liability findings in the 1999 Engle trial deprives defendants of their 14th Amendment right to a fair trial. The majority said the defendants knew at the time of the class action trial that findings would have preclusive effect on future trials.

On Notice

"The trial plan put the Engle defendants on notice that the Phase I jury would determine whether their cigarettes were defective, whether they had engaged in tortious conduct, and whether they had breached warranties, and that these common liability findings would be used in later phases," the majority said. "As illustrated by hundreds of witnesses, thousands of documents and exhibits, and tens of thousands of pages of testimony, the Engle defendants had notice and the opportunity to defend against all theories of liability for each of the class's claims in the year-long Phase I trial. And, as we held in Engle, the Phase I jury's verdict fully settled all arguments regarding the Engle defendants' conduct."

"As illustrated by the Douglas trial record, which is tens of thousands of pages long, individual plaintiffs do not simply walk into court, state that they are entitled to the benefit of the Phase I findings, prove their damages, and walk away with a judgment against the Engle defendants," the majority said.

No Final Judgment

That the class trial did not result in a final judgment is irrelevant, the majority said.

"When class actions are certified to resolve less than an entire cause of action, the final judgment from the first trial on the common liability issues is entitled to res judicata effect in the subsequent trial on individual issues," the majority said.

The Second District's requirement of a separate causation instruction for negligence and its resulting rejection of that cause of action was a misreading of Engle, the majority said.

"Like the strict liability claim, the Phase I jury already determined that the defendants' conduct subjects them to liability to Engle class members under this negligence theory," the majority said.

The opinion is by Chief Justice Ricky Polston. Justices Barbara J. Pariente, R. Fred Lewis, Peggy A. Quince, Jorge Labarga and E.C. Perry concurred.

Justice Charles T. Canady dissented, saying Finding 3 of the Engle trial jury is "much too slender reed to support the imposition of liability."

"The finding is sufficient to establish that the defendants sold some cigarettes that were defective and unreasonably dangerous," Justice Canady said. "But it is not sufficient to establish that all of the cigarettes sold by the defendants were defective and unreasonably dangerous. Nor is it sufficient to establish that the particular brands of cigarettes consumed by Mrs. [Charlotte] Douglas were defective and unreasonably dangerous."

U.S. Supreme Court

Tobacco companies have petitioned the U.S. Supreme Court to overturn Engle on due process grounds, but the court has thus far denied certiorari, most recently in R.J. Reynolds Tobacco Company and Liggett Group LLC v. Finna Clay (No. 12-272, U.S. Sup.; 2012 U.S. LEXIS 9087) [enhanced version].

According to a plaintiff's brief, Charlotte Douglas was a lifelong smoker of the defendants' cigarettes, having begun as a teen. She developed chronic obstructive pulmonary disease and lung cancer and died in 2008 at age 62.

The case was tried to jury before Hillsborough County Circuit Court Judge Sam D. Pendino pursuant to Engle procedures and, after an eight-day trial, the jury found that Douglas was a member of the Engle class and that each of the defendants was liable for her death. A verdict of $4 million of past damages and $1 million of future damages was reduced by the trial judge based on apportionment of fault. The companies appealed to the Second District Court of Appeal, which affirmed (No. 2D10-3236, Fla. App., 2nd Dist.) the verdict based only on strict liability.

After the ruling, Philip Morris USA said it plans to seek further review.

"We are reviewing the court's decision and considering all of our options," said Murray Garnick, senior vice president and associate general counsel, Altria Client Services, speaking on behalf of Philip Morris USA. "We believe that the court ruled incorrectly in allowing individual plaintiffs to use the general findings from the prior Engle case to prove their strict liability and negligence claims without showing that any wrongful conduct actually caused their injuries."

Counsel

Philip Morris is represented by David Boies of Boies, Schiller & Flexner in Armonk, N.Y., Raoul G. Cantero of White & Case in Miami, Gary L. Sasso of Carlton Fields in Tampa, Fla., Leah A. Sevi of Carlton Fields in Tallahassee and Lauren R. Goldman of Mayer Brown in New York. R.J. Reynolds is represented by Gregory G. Katsas of Jones Day in Washington, D.C. Liggett Group is represented by Kelly Anne Luther of Kasowitz, Benson, Torres & Friedman and Karen H. Curtis of Clarke Silverglate, both in Miami.

Douglas is represented by Howard M. Acosta of St. Petersburg, Fla., Steven Brannock, Celene H. Humphries and Tyler K. Pitchford of Brannock & Humphries in Tampa and Bruce Denson and Kent Whittemore, both of St. Petersburg.

Amici Engle plaintiff firms are represented by John S. Mills and Courtney Brewer of The Mills Firm in Tallahassee.

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