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Big Victory at Florida Supreme Court is Bad News for Cigarette Manufacturers

March 18th, 2013

Florida smokers and their families who are suing tobacco companies won a resounding victory on March 14, 2013 when the Supreme Court of Florida upheld its landmark 2006 ruling in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006).

By a vote of 6 to 1, Florida’s highest court ruled in favor of the plaintiff in Philip Morris USA, Inc., et al. v. Douglas, 2013 Fla. LEXIS 440, upholding a $2.5 million award in the death of Charlotte Douglas and explicitly rejecting industry arguments that the Florida Supreme Court’s ruling seven years ago violated the Due Process rights of the companies.

The Engle case originated as a class action and went to trial before a jury; that jury in Phase I of the trial found the defendant companies strictly liable, in that the cigarettes that the defendants manufactured and placed on the market “were defective in many ways including the fact that the cigarettes contained many carcinogens, nitrosamines, and other deleterious compounds such as carbon monoxide.”   While the case ultimately was not allowed to proceed as a class action, the Supreme Court of Florida ruled in 2006 that the members of the class could file their own individual cases (so-called “Engle Progeny” cases) and proceed with those cases relying upon the jury’s Phase I findings of liability, including that smoking caused a variety of specific diseases, that nicotine in cigarettes is addictive, that the tobacco defendants placed cigarettes on the market that were defective and unreasonably dangerous and that all of the Engle defendants were negligent.

The tobacco companies have argued that, despite the fact that they vigorously presented a defense to these claims during the original Engle trial, applying the Phase I findings to the Engle Progeny trials violates their due process rights.  Even though the R.J. Reynolds Tobacco Co. relied on this argument unsuccessfully in the Martin case a year ago, (see http://www.phaionline.org/2012/03/26/supreme-court-rejects-key-tobacco-industry-appeal-leaving-massive-liability-with-no-end-in-sight/ ),  the companies tried again in Douglas.  Commenting on the original Engle trial, the six-member majority in Douglas 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 yearlong Phase I trial.”

That six-member majority also noted that the tobacco defendants “argue that the Phase I findings establish, at most, that some of their cigarette were defective for some unspecified reason and that they engaged in some, unspecified tortious conduct.  This, they claim, requires reversal of the verdict for the plaintiff based on strict liability because the Douglas jury was not instructed (and did not find) a causal connection between a specific defect in the defendants’ cigarettes and the injuries alleged.  We disagree and decline the defendants’ invitation to revisit our decision in Engle.”

The majority clearly recognized and emphatically rejected the industry’s fundamental argument.  “At its core, the defendants’ due process argument is an attack on our decision in Engle to give the Phase I findings res judicata – as opposed to issue preclusion – effect in class members’ individual damages actions.   However, res judicata is the proper term, and we decline the defendants’ invitation to rewrite Engle.”

The decision was bad news for the tobacco industry and its friends on Wall Street.  Pro-industry analyst David J. Adelman of Morgan Stanley admitted that the ruling “was even more pro-plaintiff than we expected and will make it more difficult for the industry to successfully defend these claims.”

After the decision was released, Philip Morris USA announced that “it plans to seek further review” of the Douglas decision.  That means yet another attempt to persuade the Supreme Court of the United States to consider the industry’s appeal that Engle Progeny trials that result in plaintiff verdicts somehow violate the companies’ due process rights.  If the Supreme Court of the United States makes the same decision it made a year ago about an almost identical appeal (Martin), the answer to the tobacco companies will be a final “No.”

-Edward L. Sweda, Senior Attorney for the Tobacco Products Liability Project

 

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