Thursday, February 19, 2009
A Florida jury yesterday awarded $8,000,000 ($3 million compensatory plus $5 million punitive damages) to the family of a smoker who died of lung cancer. The case, Hess v. Philip Morris, was the first of 8,000 individual cases that may go to trial in Florida in the wake of the Florida Supreme Court's 2006 rejection of a statewide class action in Engle v. Liggett Group.
In the Engle class action, a jury had found the defendant tobacco companies liable for $145 billion in punitive damages. The Florida Supreme Court (here's that court's decision) found that the class action should not have been certified on punitive damages, but held that certain factual findings on liability would be given issue preclusive effect in subsequent individual trials against the defendants. I believe Florida remains one of the few states that clings to the traditional requirement of mutuality for issue preclusion, but the Engle decision did not actually condone nonmutual use of the trial findings. Rather, it concluded that although certain issues were so individualized that they required decertification of the class on remand, the common liability issues were suitable for classwide determination and thus could stand. The Florida Supreme Court put it this way: "Individual plaintiffs within the class will be permitted to proceed individually with the findings set forth above given res judicata effect in any subsequent trial between individual class members and the defendants, provided such action is filed within one year of the mandate in this case." In other words, despite the decertification of the class, the individual class members would be treated as parties entitled to use the favorable findings on liability.
If yesterday's verdict is any indication of how the remaining trials will go, the defendants' appellate "victory" in Engle offers them scant protection from the prospect of multi-billion dollar liability in Florida. The irony is that after defeating class cert in Engle, the defendants may eventually find themselves wishing to negotiate a settlement class action to resolve the remaining claims.
Here's an excerpt from yesterday's Bloomberg.com report by Jef Feeley and Mort Lucoff:
Altria Group Inc., the biggest U.S. cigarette maker, must pay $8 million to the family of a smoker who died of lung cancer, a Florida jury ruled in the first of 8,000 individual cases to go to trial in the state. A state court jury in Fort Lauderdale ruled today Altria’s Philip Morris USA unit is liable for $3 million in compensatory damages and $5 million in punitive damages over Stuart Hess’s 1997 death. ...
The verdict is the first in thousands of lawsuits filed after the Florida Supreme Court refused to reinstate a $145 billion punitive-damages verdict awarded by a Miami jury to a statewide class of smokers in 2006. Florida’s high court, which ruled the smokers can’t sue as a group, extended the time for individual smokers to sue and allowed them to rely in their individual cases on factual findings by the Miami jury, including that cigarettes are addictive and cause cancer. ...
The 8,000 cases pending in the state are split up among cigarette makers including Altria, Reynolds American Inc. and Vector Group Ltd. The cases are slated to be tried in courthouses across the state in coming months and years.