Liggett Group Inc. v. Engle, Nos. 3D00-3400, 3D00-3208, 3D00-3215, 3D00-3206, 3D00-3210, 3D00-3207, 3D00-3212, 2003 WL 21180319 (Fla. App. 3 Dist. May 21, 2003)(Engle).
This month's issue of the IICLE Civil Litigation FlashPoints focuses on the recent opinion of the District Court of Appeal of Florida in Engle. In Engle, six individuals filed a class action complaint in 1994 against the tobacco industry seeking damages for injuries allegedly caused by smoking. Engle, at *1. The plaintiffs sought over $100 billion in compensatory damages based on theories of strict liability, negligence, breach of express warranty, breach of implied warranty, fraud, conspiracy to commit fraud, and intentional infliction of emotional distress. Id. The class was certified in October 1994 as a nationwide class action with the class defined as All United States citizens and residents, and their survivors, who have suffered, presently suffer or have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine. Id. In 1996, the class was reduced to include Florida smokers only. Id.
In February 1998, the trial court divided the case into three phases. Engle, at *1:
Phase 1 consisted of a year long trial on liability and entitlement to punitive damages. The jury returned a verdict for the class on all counts in Phase 1. Id.
Phase 2 involved a determination of the compensatory damages for the three eventual class representatives. In Phase 2, the jury awarded the three class representatives $12.7 million in compensatory damages and awarded the entire class a punitive damage award of $145 billion without allocation of that amount to any class member. Id.
Phase 3, which has not yet occurred, centers on new juries deciding the individual liability and compensatory damage claims for each class member. Engle, at *3.
After the completion of Phase 2, the tobacco industry appealed the compensatory and punitive damage awards. On May 21, 2003, the District Court of Appeal of Florida issued its written opinion reversing the results of Phases 1 and 2. Id.
The first issue addressed by the Florida appellate court was the certification of the Florida class. Citing precedent from other jurisdictions, the court noted that many other courts that have addressed the issue have determined that certification of smokers™ cases is unworkable and improper. Engle, at *3. The court found that the plaintiff smokers™ claims were uniquely individualized and cannot satisfy the ˜predominance™ and ˜superiority™ requirements imposed by Florida™s class action rules. Engle, at *4. The Florida appellate court found that individualized issues such as affirmative defenses, liability, damages, choice of law outweighed the common nucleus of facts concerning the defendants™ conduct. Engle, at *4 *8. Accordingly, the court decertified the class action. Id.
The next issue addressed by the Florida appellate court was the issue of the $145 billion punitive damage award. The court reversed the punitive damage award based on the facts that the award: (1) improperly required the defendants to pay punitive damages for theoretical injuries to hundreds of thousands of class members, without a determination that defendants are liable for such injuries; (2) precluded the constitutionally required comparison of punitive damages and compensatory damages; and (3) eliminated the jury™s discretion to assess punitive damages based upon the individual class members™ varying circumstances. Engle, at *8. Given the three phase structure of the trial, and the fact that the decision whether to award punitive damages was made in the first phase, the court found that no compensatory damage award had been made prior to the decision to award punitive damages. Without this prior assessment, it is impossible to determine whether punitive damages bear a ˜reasonable™ relationship to the actual harm inflicted on the plaintiff . . . Engle, at *9.
In reversing the jury™s verdict, the Florida appellate court also determined that the $145 billion punitive damage award was excessive. The court specifically noted that the $145 billion punitive award will extract all value from the defendants and put them out of business, in violation of established Florida law that prohibits bankrupting punitive awards. Engle, at *12. The court also noted that the punitive award was roughly 18 times the defendants™ proven net worth. Id.
The Florida appellate court also found that plaintiffs™ counsel had made improper race-based appeals. Engle, at *13. In support of its ruling, the court specifically cited plaintiffs™ counsel™s remarks regarding the law being used as an instrument of oppression and exploitation and plaintiffs™ counsel™s appeals to the jury to fight unjust laws with comparisons to Martin Luther King and Rosa Parks. Engle, at *14.
Finally, the Florida appellate court found that the punitive damage claims brought by the class were barred by the releases contained in both the Florida Settlement Agreement which resolved the State of Florida™s litigation against the tobacco industry and also in the Master Settlement Agreement and other settlement agreements, which resolved the litigation brought by all of the other 49 states against the tobacco industry. Engle, at *20. The Florida appellate court found that the punitive damage claims in Engle were based on the same alleged facts as the punitive damage claims in the prior state actions against the tobacco industry. Id.
In sum, future plaintiffs pursuing actions against the tobacco industry should keep the Engle opinion in mind in drafting their complaints and planning their strategy.
