Philip Morris U.S. Inc. v. Duignan

1

PHILIP MORRIS USA INC. and R.J. REYNOLDS TOBACCO COMPANY, Appellants, v. KEVIN DUIGNAN, as personal representative for the Estate of Douglas Clarence Duignan, Appellee.

No. 2D20-2714

Florida Court of Appeals, Second District

May 5, 2023

Appeal from the Circuit Court for Pinellas County; Thomas M Ramsberger, Judge.

On Remand from the Florida Supreme Court

Geoffrey J. Michael of Arnold & Porter Kaye Scholer LLP Washington, DC; Kenneth J. Reilly of Shook, Hardy & Bacon L.L.P., Miami; and Terri L. Parker of Shook, Hardy &amp Bacon L.L.P., Tampa, for Appellant Philip Morris USA Inc.

Kenneth M. Grose of Jones Day, Columbus, Ohio; Charles R.A. Morse of Jones Day, New York, New York; and Troy A. Fuhrman of Hill, Ward & Henderson, P.A, Tampa, for Appellant R.J. Reynolds Tobacco Company.

David J. Sales and Daniel R. Hoffman of David J. Sales, P.A., Sarasota; Gary M. Paige and Cassandra Lombard of Gordon & Partners, P.A., Davie; and James W. Gustafson, Jr. of Searcy Denney Scarola Barnhart & Shipley, P.A., Tallahassee, for Appellee Kevin Duignan, as personal representative for the Estate of Douglas Clarence Duignan.

MORRIS, CHIEF JUDGE

In this Engle^[1] progeny case on remand from the Florida Supreme Court, we reverse the final judgment and remand for a new trial on punitive damages and for the trial court to reduce the amount of compensatory damages based on the smoker's comparative fault.

I. Background

A. Duignan I

Douglas Duignan died in 1992 from lung cancer at the age of 42. Kevin Duignan, the personal representative of Douglas's estate (the Estate) filed a wrongful death lawsuit against Philip Morris USA Inc. and R.J. Reynolds Tobacco Company (the tobacco companies). The case resulted in a jury verdict in favor of the Estate on its claims of negligence, strict liability, fraud by concealment, and conspiracy to commit fraud by concealment. Philip Morris USA, Inc. v. Duignan (Duignan I), 243 So.3d 426 (Fla. 2d DCA 2017). The jury awarded $6 million in compensatory damages, apportioning 67% fault to the tobacco companies and 33% fault to Douglas. The jury also awarded a total of $6 million in punitive damages. The tobacco company appealed, and this court reversed for a new trial primarily based on the trial court's error relating to the readback of testimony. Id. at 430-31.

This court also addressed a separate issue raised by the tobacco companies that would present itself again on remand. Id. at 438-39.

The tobacco companies argued that the trial court erred in giving a jury instruction that did not require Douglas to have relied on a statement by the tobacco companies for the reliance element of the fraud claims. Id. at 438. This court disagreed with the tobacco companies, holding that "a special jury instruction demanding reliance on 'a statement' was not required." Id. at 443 (emphasis added). This court held that a proper instruction would have "required reliance on either a statement or on a misapprehension as to a concealed or omitted fact." Id. The court found that the jury instruction given was erroneous and misleading because it did not require a finding "that the material information the tobacco companies concealed or omitted was in fact important to [Douglas's] decisions to begin or continue smoking." Id. This court remanded for a new trial on all issues. Id. at 445 (noting that the jury instruction error would, at a minimum, require a new trial on the fraud claims but declining to address whether a new trial would be required on punitive damages because a new trial was required on all issues due to the trial court's error regarding the readback of testimony).

B. Duignan II

On remand, a new trial was held and the trial court instructed the jury in accordance with our holding in Duignan I. At the conclusion of the first phase of the bifurcated trial, the jury returned a verdict in favor of the Estate. The jury specifically found that Douglas was addicted to cigarettes containing nicotine and that such addiction was a legal cause of his lung cancer. Thus, the jury found in favor of the Estate on its claims of negligence and strict liability. See Philip Morris USA, Inc. v. Douglas, 110 So.3d 419, 428-30 (Fla. 2013) (explaining that Engle's Phase I findings established general causation and liability on claims of negligence and strict liability but that each plaintiff must show individual causation by showing that addiction to defendant's products containing nicotine was a legal cause of his injuries); see also Duignan I, 243 So.3d at 432 ("A finding that Douglas Duignan was a member of the Engle class coupled with the preclusive effect of the retained Phase I findings on strict liability and negligence resolved the Estate's claims for strict liability and negligence, with the exception of the issues of comparative negligence and damages ...."). The jury went on to find that the tobacco companies' fault or negligence totaled 70%^[2] and that Douglas's fault or negligence was 30%. Next, the jury found in favor of the Estate on the issues of fraud by concealment and conspiracy to commit fraud by concealment.^[3] Then, the jury awarded $2.75 million in compensatory damages. Last on the verdict form, the jury found that punitive damages are warranted against both tobacco companies. A second phase of trial was conducted on punitive damages, after which the jury awarded a total of $24 million in punitive damages, $12 million against each tobacco company. The trial court entered judgment in the amount of damages awarded by the jury.^[4]

The tobacco companies filed this appeal and maintained, among other things, that our decision in Duignan I was wrongly decided. By that time, the First District had reached a different result on the jury instruction issue we decided in Duignan I. In R.J. Reynolds Tobacco Co. v. Prentice (Prentice I), 290 So.3d 963, 966 (Fla. 1st DCA 2019), the First District held that a jury instruction on fraudulent concealment must inform the jury that the plaintiff had detrimentally relied on a statement by the tobacco company, as opposed to a concealment or omission. Prentice I relied on R.J. Reynolds Tobacco Co. v. Whitmire, 260 So.3d 536 (Fla. 1st DCA 2018), which held that an Engle plaintiff must prove that they relied to their detriment on false statements from the tobacco companies. Accordingly, in the second Duignan appeal, this panel wrote only to certify conflict with the First District's decision in Prentice I and two other First District cases that followed. Philip Morris USA Inc. v. Duignan (Duignan II), 338 So.3d 308, 309 (Fla. 2d DCA 2022). We affirmed the judgment without further comment on the other issues raised by the tobacco companies. Id.

C. Prentice II

Meanwhile, the Florida Supreme Court had accepted jurisdiction to review Prentice I. Prentice v. R.J. Reynolds Tobacco Co., No. SC20-291, 2020 WL 4590156, at *1 (Fla. Aug. 11, 2020). In its opinion deciding the case, the supreme court explained the "dispute in clear terms": the tobacco companies argued "that an Engle progeny plaintiff must prove reliance on a statement," whereas the plaintiff argued that it only had to "prove reliance on silence." Prentice v. R.J. Reynolds Tobacco Co. (Prentice II), 338 So.3d 831, 837 (Fla. 2022). The supreme court agreed with the tobacco companies' argument, holding that

to prevail on fraudulent concealment and concealment conspiracy claims, an Engle progeny plaintiff must prove reliance on a statement that was made by an Engle defendant (for a concealment claim) or co-conspirator (for a conspiracy claim) and that concealed or omitted material information about the health effects or addictiveness of smoking cigarettes.

Id.^[5] The court looked to the Engle class case and relied on "class counsel's argument at the Phase I charge conference, the Phase I jury instruction, and the Phase I jury finding." Id. at 839. The court noted that "[t]he reasoning underlying [its] holding [was] straightforward":

The Engle plaintiffs pursued a "fraud by concealment" theory that the tobacco defendants chose to speak and then did so incompletely and misleadingly. It was only through their incomplete statements that the Engle defendants were able to create a false impression in the minds of listeners. Only recipients of the defendants' statements were capable of being deceived by those statements. No statements, no deception, no causation.

Id. at 840. The Prentice II court held that the jury instruction in that case, which did not require a finding of reliance on a statement, was erroneous and prejudicial because it could have reasonably misled the jury "into finding liability based on mere nondisclosure, without connecting that nondisclosure to [the smoker's] injury." Id. at 842. The Prentice II court disapproved of Duignan I and similar cases from the Third and Fourth Districts. Id. at 843.

As a result, the Florida Supreme Court granted review of this panel's decision in Duignan II, quashed the decision, and remanded the case to this court "for reconsideration upon application of" Prentice II. Philip Morris USA, Inc. v. Duignan (Duignan III), 351 So.3d 1092 (Fla. 2022).

II. The Issues on Remand

We now address only the issues presented by Prentice II; we do not disturb the other issues decided in Duignan II. The parties were granted leave to file supplemental briefs on the remand issues. Both parties agree that under Prentice II, error occurred on the fraud claims. They disagree on what relief is warranted and whether the error on the fraud claims requires a new trial on the claims of liability and punitive damages. The tobacco companies argue that this court should order a complete new trial on all claims because the issues are interwoven with the fraud claims. At the very least, the tobacco...