Brown v. R.J. Reynolds Tobacco Co.

38 F.4th 1313

Donna BROWN, Plaintiff-Appellee,

v.R.J. REYNOLDS TOBACCO COMPANY, individually and as successor by merger to the Brown and Williamson Tobacco Corporation and the American Tobacco Company, et al., Defendants,Philip Morris USA, Inc., Defendant-Appellant.

No. 15-13160

United States Court of Appeals, Eleventh Circuit.

Filed: June 30, 2022

Frederick C. Baker, Robert Turner Haefele, James William Ledlie, Lisa M. Saltzburg, Sara Orpha Couch, Rebecca M. Deupree, Patrick Graham Maiden, Lance V. Oliver, Joseph F. Rice, Elizabeth S. Smith, Elizabeth C. Ward, Motley Rice, LLC, Mt. Pleasant, SC, Nathan David Finch, Motley Rice, LLC, Washington, DC, Mathew Jasinski, Michael J. Pendell, Motley Rice, LLC, Hartford, CT, Donald Alan Migliori, Motley Rice, LLC, Providence, RI, Kathryn E. Barnett, Law Office of Morgan & Morgan, Nashville, TN, Kevin R. Budner, Elizabeth Joan Cabraser, Richard M. Heimann, Sarah Robin London, Robert J. Nelson, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA, Kenneth S. Byrd, Lieff Cabraser Heimann & Bernstein, LLP, Nashville, TN, Charles Easa Farah, Jr., Farah & Farah, PA, Jacksonville, FL, Stephanie J. Hartley, Richard Lantinberg, Janna Blasingame McNicholas, Norwood Wilner, The Wilner Firm, PA, Jacksonville, FL, for Plaintiff-Appellee.

M. Sean Laane, Geoffrey Michael, Judith Bernstein-Gaeta, Andrew W. Beyer, Maura McGonigle, David M. Menichetti, Arnold & Porter Kaye Scholer, LLP, Washington, DC, Thomas W. Stoever, Jr., Arnold & Porter Kaye Scholer, LLP, Denver, CO, Ingo Sprie, Jr., Keri Arnold, Arnold & Porter, LLP, New York, NY, Dana G. Bradford, II, Smith Gambrell & Russell, LLP, Jacksonville, FL, Joshua Reuben Brown, Greenberg Traurig, PA, Orlando, FL, Karen C. Dyer, Boies Schiller & Flexner, LLP, Orlando, FL, Ryan Benjamin Witte, Stephen Neal Zack, Boies Schiller & Flexner, LLP, Miami, FL, Kathleen A. Gallagher, Kate Skagerberg, Beck Redden & Secrest, Houston, TX, Mark Jurgen Heise, Patricia A. Melville, Luis Eduardo Suarez, Heise Suarez Melville, PA, Coral Gables, FL, Peter M. Henk, Shook Hardy & Bacon, LLP, Houston, TX, Brian Alan Jackson, Shook Hardy & Bacon, LLP, Kansas City, MO, Cathy Ambersley Kamm, James B. Murphy, Jr., Terri Lynn Parker, Shook Hardy & Bacon, LLP, Tampa, FL, Shani Rivaux, Pillsbury Winthrop Shaw Pittman, LLP, Miami, FL, for Defendant-Appellant.

Before Jordan, Tjoflat, Circuit Judges, and Beaverstock,^* Chief District Judge.

Tjoflat, Circuit Judge:

In this Engle -progeny¹ case, Donna Brown, a lifelong smoker, sued Philip Morris USA, Inc.,² seeking damages for the injuries she sustained as a result of smoking Philip Morris's cigarettes, specifically her development of peripheral vascular disease ("PVD"), a debilitating disease which eventually required the amputation of both of her legs, among other injuries. A jury returned verdicts against Philip Morris for Brown's claims for strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal, and awarded Brown $8,287,448 in compensatory damages and $9 million in punitive damages.

This appeal turns on whether Brown presented sufficient evidence of her fraud claims. Philip Morris appeals the District Court's denial of its renewed motion for judgment as a matter of law on the fraud claims, arguing that Brown presented insufficient evidence to show that she relied to her detriment on statements made by Philip Morris that concealed material information about the health effects or addictive nature of smoking, or that such reliance was a legal cause of her smoking-related disease. Brown defends the District Court's ruling, and the jury's verdicts, on the ground that, although Florida law now requires her to show that she relied on a particular false statement made by Philip Morris, she presented sufficient evidence of Philip Morris's pervasive disinformation campaign and that she harbored a misapprehension about the health effects and/or addictive nature of smoking, such that a jury can infer her reliance.

Although in the past, Florida District Courts of Appeal routinely held that evidence of a pervasive disinformation campaign and a plaintiff's subsequent misapprehensions were sufficient to show detrimental reliance, the Florida Supreme Court rejected this approach earlier this year. Prentice v. R.J. Reynolds Tobacco Co. , No. SC20-291, ––– So.3d ––––, –––– – ––––, 2022 WL 805951, at *6–8 (Fla. 2022). In so ruling, the Florida Supreme Court held that Engle -progeny plaintiffs bringing a fraudulent concealment or conspiracy to fraudulently conceal claim must prove reliance on one or more specific statements by an Engle defendant and that the statement or statements on which the plaintiff relied were false or misleading. Accordingly, because Brown relies solely on the evidence of Philip Morris's disinformation campaign to establish her claims, we set aside Brown's jury verdicts for fraudulent concealment and conspiracy to fraudulently conceal due to insufficient evidence. However, we affirm Brown's jury verdicts for her negligence and strict liability claims, and remand the case with the instruction that the District Court reduce Brown's damages by her comparative fault as the jury found in its verdicts.

I.

A.

This lawsuit is one of thousands of progeny suits filed in the wake of the Florida Supreme Court's decision in Engle v. Liggett Group., Inc. (Engle III ), 945 So. 2d 1246 (Fla. 2006). We have previously explored the history of the Engle litigation in depth, and so we describe that procedural history only briefly here.³ In 1994, Florida smokers and their survivors filed a class action against several major domestic cigarette companies, including Philip Morris, seeking compensatory and punitive damages for their smoking-related injuries. Engle III , 945 So. 2d at 1256. They alleged several claims against the tobacco company defendants, including strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal.

The Engle litigation proceeded in three phases. Phase I focused on common issues of liability "relating exclusively to the defendants’ conduct and the general health effects of smoking." Id. The jury rendered a verdict in favor of the plaintiff class on all counts. Id. at 1256–57. Relevant here, the "Phase I findings" included: (1) that smoking cigarettes causes certain diseases, including PVD; (2) that nicotine in cigarettes is addictive; (3) that the tobacco companies placed cigarettes on the market that were defective and unreasonably dangerous; (4) that the defendants concealed or omitted material information, not otherwise known or available, knowing that the material was false or misleading, or failed to disclose a material fact concerning the health effects and/or addictive nature of smoking cigarettes; (5) that the defendants agreed to conceal or omit information regarding the health effects or addictive nature of smoking cigarettes with the intention that smokers and the public would rely to their detriment; (6) that all of the defendants sold or supplied cigarettes that were defective; (7) that all of the defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to representations of fact made by the defendants, and (8) that all of the defendants were negligent. Id. at 1257 n.4, 1276–77. In Phase II, the same jury determined that the tobacco companies were liable to the named class representatives; it awarded compensatory damages to the named plaintiffs and punitive damages to the class as a whole. Id. at 1257. In Phase III, new juries were to decide specific issues of individual liability and damages for the other class members. Id. at 1258.

On discretionary review of the judgments in Phase I and Phase II,⁴ the Florida Supreme Court upheld the class certification with respect to Phases I and II but decertified the class with respect to Phase III "because individualized issues such as legal causation, comparative fault, and damages predominate." Id. at 1268. The Court retained the Phase I findings outlined above, and provided that those findings would have res judicata effect in future proceedings brought by the Engle class members.⁵ We later recognized that the Florida Supreme Court's Engle decision gave the Phase I findings preclusive effect in federal court under the Full Faith and Credit Act, 28 U.S.C. § 1738. See Burkhart v. R.J. Reynolds Tobacco Co. , 884 F.3d 1068, 1091–93 (11th Cir. 2018) (recognizing preclusive effect of the Phase I findings on fraudulent concealment and conspiracy to fraudulently conceal); Graham , 857 F.3d at 1186 (recognizing preclusive effect of the Phase I findings on negligence and strict liability).⁶

Moving forward, Engle class members could initiate individual damages actions against the Engle defendants and the Phase I findings would have res judicata effect in those trials. Engle III , 945 So. 2d at 1269.⁷ With those findings established as a matter of law, the Engle -progeny trials would center on issues of individual causation, comparative fault, and damages.

B.

Brown filed this Engle -progeny suit against Philip Morris in 2007, seeking compensatory and punitive damages related to her development of PVD after decades of smoking cigarettes manufactured by Philip Morris. She alleged she was a member of the Engle class because she was addicted to smoking cigarettes and that addiction was a legal cause of her PVD, and she sought recovery for her injuries—including multiple surgeries and eventually the amputation of both her legs, which left her severely debilitated and unable to work—under theories of strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal. A six-day jury trial on all four claims commenced in January 2015.

i.

Brown began smoking cigarettes when she was fifteen years old. Although she never intended to become a lifelong smoker, by age seventeen she was smoking regularly. In her testimony at trial, Brown explained that...