Eleventh Circuit Affirms Individual’s $41 Million Verdict Against Tobacco Companies

In yet another opinion applying the Florida Supreme Court’s landmark decision in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006), the Eleventh Circuit affirmed denial of motions for judgment as a matter of law against R.J. Reynolds Tobacco Company and Philip Morris USA Inc. in a published opinion upholding multi-million dollar jury verdicts against both defendants. Kerrivan v. R.J. Reynolds Tobacco Co., 2020 WL 1429574 (11th Cir. Mar. 24, 2020).

Plaintiff Kerrivan became an addicted serial smoker at an early age, suffered increasingly serious medical diagnoses as a result, and made repeated unsuccessful attempts to quit. He eventually quit smoking but has required an oxygen tank to assist his breathing ever since. After the jury awarded $15.8 million in compensatory damages and $25.3 million in punitive damages on various fraud and conspiracy claims, the tobacco companies renewed motions for judgment as a matter of law and filed a motion for new trial or remittitur, arguing that the compensatory damages award was excessive, that the punitive damages award was unconstitutional, and that the evidence of reliance was insufficient to support the fraudulent concealment and conspiracy claims. The appeal stemmed from the district court’s denial of such motions.

Focusing in particular on whether the compensatory damage award resulted from passion in determining whether it was excessive, Judge Jill Pryor’s opinion for the court concluded that it was not, unfazed by the fact that the award was higher than those in other Engle progeny cases, which were “simply different.” Nor was it excessive because it was more than what the plaintiff’s counsel requested from the jury.

Analyzing, under State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003), whether the punitive damages award was unconstitutional, the Eleventh Circuit held that the tobacco companies’ conduct was “particularly reprehensible,” finding that they repeatedly concealed evidence that cigarettes containing nicotine were addictive and caused serious health conditions and that they developed “filtered” and “light” products to deceive smokers into believing that these products were safer. These findings demonstrated a “high level of indifference and reckless disregard for the health and safety of smokers.” While the defendants debated whether the correct ratio of punitive-to-compensatory damages was 2:1 or 1.6:1, depending on whether the award should be examined with regard to the defendants individually or collectively, the court noted that the Supreme Court has held that single-digit multipliers are likely to comport with due process and this was a very low single-digit multiplier either way.

On the question of whether Kerrivan presented sufficient evidence of fraudulent concealment under Florida law, the court found evidence of the tobacco industry’s “sustained and pervasive disinformation campaign.” And Kerrivan had presented evidence about advertisements influencing his own decision to switch to filtered cigarettes to cut out the nicotine, the very claim the industry had made in marketing filtered cigarettes. Florida law did not require evidence of reliance on a particular statement of the defendant.

Posted by Keith Emanuel.

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