Court of Appeal slashes $16.2M from smoker award

Tobacco company should have been allowed to present statute of repose defense

By Pat Murphy
The Daily Record Newswire
 
A Florida appeals court has overturned a jury’s award of $16.2 million in punitive damages to a now-deceased cigarette smoker, concluding that Philip Morris should have been allowed to present a statute of repose defense to the smoker’s fraud-based conspiracy claim.

Last week, the Florida Court of Appeal (4th District) ruled that a jury must decide whether long-time smoker Ellen Tate relied on a deceptive statement or omission about the dangers or addictiveness of cigarettes after May 5, 1982 — the key date in Florida’s so-called “Engle” product liability cases against the tobacco industry.

“Although the record in this case contains evidence which arguably could support a jury’s finding that the plaintiff relied upon a coconspirator’s deceptive statement or omission after May 5, 1982, the trial court’s entry of partial summary judgment on the statute of repose defense deprived Philip Morris of its right to defend on that issue and have the jury make that determination,” wrote Judge Carole Y. Taylor in Wednesday’s decision in Philip Morris USA v. Kayton.
Tate had started smoking as a young teen in the late 1950s. She sued Philip Morris for strict liability, negligence, and conspiracy to commit fraudulent concealment after being diagnosed with chronic obstructive pulmonary disease.

Her case was tried in accordance with the procedures established by the Florida Supreme Court in 2006 in Engle v. Liggett Group. The state supreme court set Nov. 21, 1996, as the cut-off date for Engle class inclusion, and allowed all class members to proceed with individual lawsuits if filed within one year of its decision.

In Engle litigation, Florida’s twelve-year statute of repose is measured from the date of the original Engle complaint — making May 5, 1982 the critical date on this issue.

In 2010, a Broward County jury awarded the 64-year-old Tate $8 million in compensatory damages and $16.2 million in punitive damages. The punitive award was based on Tate’s fraud-based conspiracy claim. Tate died after the verdict, so whatever Philip Morris eventually has to pay will go to her estate.

Before trial, Philip Morris raised the statute of repose defense with respect to Tate’s claim for conspiracy to commit fraudulent concealment. According to the tobacco giant, Tate waited too long to bring her claim because she did not rely on a conspirator’s deceptive statement or omission after May 5, 1982.

The trial court struck Philip Morris’ statute of repose defense based on generalized Engle findings, but the court of appeal here held that the statute of repose is an individualized defense that can only be adjudicated based on the particular circumstances of each plaintiff’s case. Accordingly, Philip Morris gets a new trial on that issue alone.

The news is not all bad for Tate’s estate. The appellate court upheld the jury’s award of $8 million in compensatory damages.

Moreover, the full $16.2 million punitive award is in line to be restored should the jury on remand find in favor of the estate on the statute of repose question.
That’s because the appeals court rejected Philip Morris’ alternate argument that the award of punitive damages was excessive.

“[T]he evidence established that Philip Morris and its conspirators were aware of the crippling illnesses that their products could cause but chose to manufacture a controversy to protect their bottom line,” Judge Taylor wrote. “The reprehensibility of the tobacco companies’ misconduct cannot be understated, so the award was not proportionally unreasonable when viewed in light of the ‘malice, outrage, or wantonness of the tortious conduct.’”