Eleventh Circuit Restores $20m Punitive-Damages Verdict Against Philip Morris

The Eleventh Circuit last week reinstated a $20.76m punitive-damages verdict against tobacco giant Philip Morris, ruling that the district court had abused its discretion in ordering a new trial on the plaintiff’s intentional tort claims.  Cote v. R.J. Reynolds Tobacco Co., 2018 WL 6167395 (11th Cir. Nov. 26, 2018).  The court also affirmed the denial of Philip Morris’s motions for a new trial and for judgment as a matter of law as to the plaintiff’s other claims.

This case forms part of the court’s rapidly-developing line of Engle-progeny cases.  These cases stem from the Florida Supreme Court’s decision that, although a group of smokers could not obtain damages as a class, they were entitled to rely in subsequent litigation upon various jury determinations, including that:

  • smoking causes certain diseases;
  • nicotine is addictive;
  • various tobacco companies were both negligent and strictly liable;
  • the tobacco companies had concealed material information about the health risks and/or addictiveness of smoking; and
  • the plaintiffs were entitled to punitive damages.

Engle v. Liggett Grp., 945 So. 2d 1246 (Fla. 2006).

The plaintiff in this case was Judith Berger, a forty-year smoker who died of lung disease while her appeal was pending.  She had sued under theories of strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal.  The jury found in her favor on all claims, awarding $6.25m in compensatory damages (reduced to $3.75m for contributory negligence) and $20.76 in punitive damages on the two fraudulent-concealment claims.  The trial court granted Philip Morris’s post-trial motion for judgment as a matter of law on the fraudulent-concealment claims and both sides appealed.

Writing for the court, Judge Susan Webber Wright of the Eastern District of Arkansas, sitting by designation, quickly rejected Philip Morris’s arguments that giving preclusive effect to the Engle jury findings is inconsistent with the Due Process Clause and that the findings are pre-empted by federal law.  Judge Wright noted that the Eleventh Circuit has already rejected these arguments.  (For our discussion of these cases, see here and here.)  The court also affirmed the denial of Philip Morris’s motion for a new trial based on statements in the plaintiff’s closing argument.  According to the court, these did not merit a new trial because they either were proper, were subject to effective curative instructions, or were insufficiently prejudicial to Philip Morris.

The Eleventh Circuit reversed the trial court’s judgment as a matter of law on the fraudulent-concealment claims.  Given the preclusive effect of the Engle jury findings, to prevail on these claims, Mrs. Berger needed only to establish that she had relied to her detriment on the fraud and that it was the legal cause of her injuries.  The court held that under Florida law, a reasonable juror could infer reliance because Mrs. Berger had produced evidence that she was exposed to the tobacco companies’ advertising campaigns and had harbored a misapprehension about the health effects and addictiveness of smoking.  Accordingly, the court ordered that the jury’s verdict be reinstated.

Posted by Nick Boyd.

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