Engle v. Liggett Group, Inc.
2006 Fla. LEXIS 2952, 945 So. 2d 1246, 2006 WL 3742610 (2006)
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Rule of Law:
In a mass tort class action, a lump-sum punitive damages award for an entire class violates due process if awarded before the total compensatory damages for the class have been determined. However, after decertifying the class for individual proceedings on causation and damages, common liability findings established in a class-wide trial may be preserved and given res judicata effect in the members' subsequent individual lawsuits.
Facts:
- Dr. Howard Engle and other Florida residents who were smokers suffered from various diseases, including lung cancer, coronary heart disease, and chronic obstructive pulmonary disease (COPD).
- These smokers alleged their illnesses were caused by their addiction to nicotine in cigarettes manufactured and sold by Liggett Group, Inc., Philip Morris, and other tobacco companies ("Tobacco").
- The smokers claimed that Tobacco had long been aware that smoking caused deadly diseases and that nicotine was a highly addictive substance.
- The class further alleged that Tobacco intentionally concealed this information from the public, made false and misleading statements about the safety of their products, and engaged in a conspiracy to misrepresent the health effects of cigarettes.
- The smokers alleged they relied on Tobacco's misrepresentations and omissions, which caused them to begin or continue smoking, ultimately leading to their diseases and injuries.
Procedural Posture:
- Dr. Howard Engle and others filed a class action lawsuit in a Florida state trial court against Liggett Group, Inc. and other tobacco companies.
- The trial court certified a nationwide class of smokers in 1994.
- On interlocutory appeal by the tobacco companies, the Florida Third District Court of Appeal affirmed class certification in 1996 but limited the class to Florida residents only.
- The trial court established a three-phase trial plan.
- In Phase I (1999), a jury returned a verdict for the class on common issues, including negligence and product defect, and found the defendants' conduct warranted entitlement to punitive damages.
- In Phase II (2000), the same jury awarded $12.7 million in compensatory damages to three individual class representatives and a lump-sum of $145 billion in punitive damages for the entire class.
- The trial court entered a final judgment on the verdicts.
- The tobacco companies (appellants) appealed to the Third District Court of Appeal, which in 2003 reversed the judgment and ordered the class decertified.
- The Engle Class (petitioners) sought review from the Supreme Court of Florida.
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Issue:
Does a trial plan in a smokers' class action, which determines common liability issues and a lump-sum punitive damages award for the entire class before individual members prove causation and compensatory damages, violate due process and the requirements for class actions?
Opinions:
Majority - Per Curiam
Yes, this trial plan violates due process with respect to the punitive damages award and is unworkable for final adjudication, but certain common findings from the initial phase can be preserved for individual actions. The $145 billion punitive damages award is vacated because it violates due process; its reasonableness cannot be evaluated without a prior determination of the total compensatory damages for the class, as required by the guideposts in State Farm v. Campbell. Furthermore, the Phase I finding of entitlement to punitive damages was premature because liability, which requires proof of individual causation and reliance, had not yet been established, contrary to the precedent in Ault v. Lohr. While the lower appellate court erred in retroactively decertifying the class under the law of the case doctrine, the class must be decertified prospectively because individualized issues such as causation, comparative fault, and damages predominate, making a class-wide Phase III unfeasible. As a pragmatic solution, the jury's Phase I findings on common issues—that smoking causes certain diseases, nicotine is addictive, the defendants were negligent, and their products were defective—are given res judicata effect for former class members who file individual lawsuits within one year.
Concurring in part and dissenting in part - Lewis, C.J.
Partially yes. While the majority is correct on most points, it errs by striking the jury's Phase I finding on entitlement to punitive damages. Under this Court's precedent in Ault v. Lohr, a finding of liability based on a breach of duty is a sufficient predicate for determining entitlement to punitive damages, even without a specific compensatory award. The Phase I findings on common issues constituted such a finding of liability. The majority's decision to invalidate the entitlement finding inflicts serious harm on the utility of class actions in cases involving egregious corporate misconduct.
Concurring in part and dissenting in part - Wells, J.
Yes, and the entire class action was improper from its inception. While concurring in the decertification and the vacating of the punitive damages award, the majority's decision to preserve any of the Phase I jury findings creates harmful and confusing precedent. This case was never suitable for class action treatment due to the overwhelming predominance of individual issues like causation, reliance, and comparative fault, a conclusion reached by the vast majority of courts nationwide that have considered tobacco litigation. Furthermore, the trial plan's bifurcation of the defendant's negligence (Phase I) from the plaintiff's comparative negligence (to be tried by a different jury in Phase III) violates the defendants' constitutional right to a jury trial under Article I, Section 22 of the Florida Constitution.
Analysis:
This landmark decision created a unique hybrid approach to mass tort litigation in Florida by decertifying the class while preserving key liability findings for future individual suits. This ruling gives res judicata effect to the Phase I verdict, creating a new framework for the thousands of 'Engle progeny' cases, where individual plaintiffs proceed with a significant advantage, having several elements of their claims already established. The decision effectively broke the logjam of tobacco litigation in Florida, facilitating individual recovery while reinforcing the due process principle that massive punitive damages cannot be awarded in a vacuum, untethered to a determination of total actual harm.
