It’s been almost 5 years since the Florida Supreme Court issued its grand compromise decision in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006).  As contemplated by that decision, many individual suits have been filed by Engle class members.  Some have been tried to a verdict or have been dismissed, and are now on appeal.  Can it be long before the Florida Supreme Court is compelled to step in to definitively resolve the next round of Engle issues?  

The District Courts of Appeal have recently been grappling with the thorny issues resulting from the Court’s decision to decertify the class, but allow class members to take advantage of 8 findings made by the Engle jury by way of res judicata

The 1st DCA gave an early interpretation of how to apply Engle in R.J. Reynolds Tobacco Co. v. Martin, decided in December 2010, in upholding a $28.3 million judgment in favor of a deceased smoker’s widow.  The Florida Supreme Court denied review in Martin in July. (RJR v Martin_07-19-2011_Order_Denying Review.pdf). 

Although the 11th Circuit had earlier offered its own thoughts on Engle, Martin stood as the only state appellate court decision on this score.  That changed on September 21, 2011, when the 4th DCA weighed in on Engle in R.J. Reynolds Tobacco Co. v. Brown, expressing some (but in my view, not much) disagreement with the 1st DCA’s application of it.  The tobacco industry defendants, which can’t be too happy with Engle or its aftermath, are no doubt chomping at the bit to use any disagreement among the DCAs to convince the Supreme Court to take up the case. 

Although it’s dangerous to try to read tea leaves, the differences between Martin and Brown, understood in context, don’t seem to me to be the type of conflict that would ordinarily win review, particularly while the issues are still percolating in the other Districts.  On the other hand, the defendants may take a bit more hope from Chief Judge May’s stinging concurrence in Brown, which questioned whether Engle can be applied as written without violating due process, an implication that could give the justices more of an impetus to address these issues sooner rather than later. 

And the Supreme Court will undoubtedly be asked to take up some of the other issues percolating in the Engle progeny cases, such as the Constitutionality of the statute passed after the State’s settlement with the Tobacco industry, which reduces the bonds that industry defendants must post for appeals.  In addition, although the 3rd DCA has yet to take up the core issue addressed in Martin and Brown, last week in Rey v. Phillip Morris, Inc., it interpreted Engle (and applied traditional conspiracy principles) to hold that any class member can sue Lorillard, Liggett, and Vector Group for their role in the conspiracy to conceal information, even though the class member didn’t smoke those companies’ cigarettes, and can take advantage of the Engle findings.  The Supreme Court will no doubt be asked to review that decision as well.      

So I have no doubt that the court will wade back into this controversy sooner or later.  The question is which one.

More details below.

A Brief History of Engle:

The Florida Supreme Court originally took up Engle on appeal from a $145 billion verdict issued by a Miami jury against the major U.S. Tobacco producers to a class of Floridians who alleged that they were addicted to nicotine and suffered personal injuries as a result of smoking the defendants’ cigarettes. 

By that time, the 3rd DCA has issued two seemingly contradictory decisions on class certification.  In the first, R.J. Reynolds Tobacco Co. v. Engle, 672 So. 2d 39 (Fla. 3d DCA 1996), the court, reviewing the trial court’s decision to certify the class on appeal from a non-final order (unlike its federal counterpart, Rule 23(f), which is discretionary, Fla. R. App. P. 9.130(a)(3) allows an appeal as of right from a decision certifying a class), but scaled back the class to include only Florida residents and citizens.  The Florida Supreme Court denied review.

On remand, the trial court bifurcated the trial, with the jury to decide in Phase I whether the defendants were liable for punitive damages to the class. In Phase II-A whether the defendants were liable to the representative plaintiffs individually for compensatory damages for their personal injuries. In Phase II-B, the jury was asked to decide the amount of punitive damages the defendants should pay to the class as a whole.  The jury awarded $12.7 million to the individual plaintiffs, and $145 billion to the class as punitive damages. 

Phase III was supposed to be individual compensatory damages trials for the class members.  Before that happened, the defendants appealed.  This time, despite having upheld class certification in the earlier appeal, the 3rd DCA found that the class certification was improper, decertified the class, and reversed the jury’s verdict. 

This time the Supreme Court accepted discretionary review, and in a fractured decision (with the majority’s decision consisting of a per curium opinion with which by 2 justices concurred along with 2 separate opinions partially concurring with them) partially reversed the 3rd DCA. 

The majority held that it was proper to certify the class in the first instance, but that the case could proceed as a class action only through Phase I.  It then created a unique procedure for the case to ultimately be resolved.  The court gave individual class members one year to file individual suits, and said that certain of the Engle jury’s findings would be “given res judicata effect in any subsequent trial between individual class members and the defendants.”

These were the findings:

1 (that smoking cigarettes causes aortic aneurysm, bladder cancer, cerebrovascular disease, cervical cancer, chronic obstructive pulmonary disease, coronary heart disease, esophageal cancer, kidney cancer, laryngeal cancer, lung cancer (specifically, adenocarinoma, large cell carcinoma, small cell carcinoma, and squamous cell carcinoma), complications of pregnancy, oral cavity/tongue cancer, pancreatic cancer, peripheral vascular disease, pharyngeal cancer, and stomach cancer),

2 (that nicotine in cigarettes is addictive),

3 (that the defendants placed cigarettes on the market that were defective and unreasonably dangerous),

4(a) (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 or addictive nature of smoking cigarettes or both),

5(a) (that the defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information 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 said defendants), and

8 (that all of the defendants were negligent).

The question is how to apply those findings in the individual cases.  In other words, do the individual plaintiffs need to prove anything other than damages in their own trials?

The 1st DCA Applies Engle

The 1st DCA was the first appellate court to address that issue, in R.J. .Reynolds Tobacco Co. v. Martin, decided in December 2010.  It disagreed with what it understood the 11th Circuit to hold in Brown v. R.J. Reynolds Tobacco Co., 611 F. 3d 1324 (11th Cir. 2010), that the Engle findings were res judicata only in the sense of establishing certain facts, not as establishing certain elements of a cause of action.

Instead, the 1st DCA understood Engle as preclusively establishing elements of causes of action, i.e., the “conduct elements” of class members’ causes of action for negligence and strict liability.  In other words, plaintiffs in the individual cases need only to prove causation and damages.  Thus, the court held that the trial court had properly instructed the jury that if it found that Martin was a member of the Engle class, it was to determine (at least as to the conspiracy to conceal information claim) whether the defendants’ conduct caused his injuries, i.e., whether he relied on their omission of material information to his detriment and if so, whether “it directly and in natural and continuous sequence produce[d] or contribute[d] substantially to” his injuries “so that it can reasonably be said that, but for Benny Martin‟s reliance, the loss would not have occurred.”  The 1st DCA upheld the verdict in favor of the plaintiffs.

The defendants sought discretionary review in the Florida Supreme Court.  That court denied review in July 2011. 

The 4th DCA Weighs In

Now the 4th DCA has weighed in with its own interpretation of Engle, in R.J. Reynolds Tobacco Co. v. Brown, handed down on September 21, 2011.  Does its decision create a conflict that could cause the Supreme Court to weigh in?  Maybe, maybe not. 

To be sure, the 4th DCA characterized its holding as being in tension with the 1st DCA’s decision in Martin, saying that its decision placed it somewhere between the 1st DCA in Martin and the 11th Circuit’s decision in Brown.  But the 4th DCA actually disagreed with the 11th Circuit in the same way that the 1st DCA did. 

Both courts disagreed with the 11th Circuit’s suggestion that the Engle findings only establish facts rather than elements of claims.  In other words, like the 1st DCA, the 4th DCA understood plaintiffs in Engle progeny cases to only be required to prove that they suffered damages, and that the defendants’ conduct caused their damages.

It is really in the 1st DCA’s application of that conclusion to the facts of Martin that appeared to bother the 4th DCA.  The problem with Martin was that although the trial judge gave an instruction on detrimental reliance and causation, it appeared to relate only to the plaintiffs’ civil conspiracy claim.  The decision does not mention similar instructions on the plaintiff’s negligence and strict liability claims. 

The 4th DCA took issue with a passage in Martin where the 1st DCA addressed the defendants’ argument that the trial court should have required the plaintiff to prove causation as to her negligence and strict liability claims.  The 1st DCA rejected the argument by essentially saying that causation as to those claims overlapped with the plaintiff’s proof of class membership; by proving that Martin was addicted to nicotine, and that his addiction was a legal cause of his death, causation was also proven as to the negligence and strict liability claims. 

That instruction, combined with the trial court’s instruction on causation as to the plaintiff’s claim for conspiracy to conceal information, was sufficient for the 1st DCA to uphold the verdict.  By contrast, the 4th DCA would have required an explicit instruction on causation as to each separate cause of action, and if reviewing the instructions given in Martin, may well have reversed. 

Ripe for Supreme Court Review?

So does Brown create a conflict with Martin that’s likely to catch the Supreme Court’s attention.  I’m not so sure.  I’m not convinced that there’s much, if any, conflict at all between these decisions.  Taking the 1st DCA on its own terms, I read the court to be in agreement with the 4th DCA that the plaintiffs must individually prove causation for their claims. 

And I don’t think the 1st DCA would disagree with the 4th that the better practice is to instruct the jury on causation as to each cause of action.  The disagreement is not so much over how trial courts should instruct juries in Engle progeny cases going forward, but in what to do afer the fact with less than perfect jury instructions.  That narrow dispute isn’t the likeliest candidate for the court’s attention.  

On the other hand, the defendants certainly won Chief Judge May’s sympathy.  Her concurring opinion attacks Engle as a serious threat to due process and says outright that the only reason she’s following it is that she has no choice.  It’s the kind of concurrence that could well attract the attention of justices who might be of a similar mind.  

And with each DCA that lends its interpretation to the mix, the jurisprudence matures and becomes more developed, so the Supreme Court has a fuller picture to review.  But with only two DCAs having weighed in so far, and no clear conflict at this point, the Court may well want to let these issues percolate for a while. Indeed, as noted, the 3rd DCA, which has been at the heart of Engle jurisprudence, has yet to really weigh in on how to apply the Supreme Court’s decision.

Engle will undoubtedly end up before the Florida Supreme Court in the not-too-distant future.  But it may not be as soon as the tobacco industry defendants hope.