Products Liability Law Daily $5m punitive damages award reinstated after statute of repose defense excluded
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Thursday, September 1, 2016

$5m punitive damages award reinstated after statute of repose defense excluded

By Kathleen Bianco, J.D.

In a wrongful death action against three tobacco companies arising out of the death of a smoker, a combined $5 million punitive damage award against Philip Morris and R.J. Reynolds was reinstated by a Florida Court of Appeals. The appellate court reinstated the punitive damage award after the Florida Supreme Court quashed the lower court’s decision on the statute of repose defense raised by the tobacco companies and remanded the issue for reconsideration based on application of the decisions in Philip Morris v. Russo, 175 So.3d 681 (Fla. 2015), and Hess v. Philip Morris, 175 So.3d 687 (Fla. 2015) (Philip Morris USA Inc. v. Putney, August 31, 2016, Conner, B.).

Sharon Putney, the daughter and personal representative of the estate of Margot Putney (the deceased smoker), brought suit against three tobacco companies—Philip Morris USA, Inc., R.J. Reynolds Tobacco Company, and Liggett Group LLC—for the wrongful death of her mother. The daughter alleged that her mother’s death was the result of small cell carcinoma of the lung and alleged claims of strict liability, negligence, fraud by concealment, and conspiracy to commit fraud by concealment. She also sought recovery for the estate and for loss of consortium for herself and her two adult siblings; and she sought punitive damages.

Procedural background. Prior to trial, the trial court granted the daughter’s motion for summary judgment and determined that all of the tobacco companies’ affirmative defenses, including the statute of repose, were not viable based on the preclusive findings of Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006). The Engle decision allowed certain jury findings from the class action against the tobacco companies to have res judicata effect in subsequent lawsuits by individual class members seeking damages from the tobacco companies.

The jury returned a verdict finding for the decedent’s estate on negligence, strict liability, and conspiracy to commit fraud by concealment; but it found for the tobacco companies on the fraud by concealment claim. The jury awarded the estate $86,688.96 for medical and funeral expenses and five million dollars to each of the decedent’s three surviving children for loss of consortium. Further, the jury found punitive damages were warranted against R.J. Reynolds and Philip Morris, but not Liggett, on the conspiracy claim and assessed $2.5 million against each of them. After the trial, the trial court denied the tobacco companies’ motion for a judgment in their favor on the conspiracy count, and it denied their motion for remittitur on the consortium award by the jury.

The appellate district court reversed the trial court’s rulings on the remittitur and the statute of repose, finding the consortium awards were excessive because the smoker’s children were grown and thus, were no longer dependent on her. As to the statute of repose, the appellate panel determined that the trial court’s striking of the tobacco companies’ statute of repose defense deprived them of their right to defend that issue and allow the jury to make the determination. The court of appeal also reversed the punitive damages award because it was based on a conspiracy claim, which was now subject to the tobacco companies’ statute of repose defense.

In a subsequent order issued by the Florida Supreme Court, the appellate court’s decision on the statute of repose issue was quashed and remanded for further consideration. In light of the Florida Supreme Court ruling, the appeals court issued an order withdrawing their previous opinion on this matter and substituting a new order in its place.

Statute of repose defense. When the Florida Supreme Court quashed the appellate court’s ruling, it instructed the court to reconsider its decision based upon the Hess and Russo decisions, which held that individual smokers did not have to prove reliance on tobacco companies’ allegedly fraudulent claims during the 12-year statute of repose period governing their fraud actions. Furthermore, the state supreme court’s decision went on to hold that tobacco companies were precluded from raising the fraud statute of repose based on the Phase I findings in Engle, in situations where the claims alleged that the tobacco company had concealed or omitted material information concerning the health effects or addictive nature of smoking cigarettes. Based on this precedent, the appellate court’s justification for overturning the trial court’s ruling on the statute of repose defense fell flat. Accordingly, the appellate court now affirms the trial court’s decision and instructs the trial court to reinstate the punitive damage awards against the two tobacco companies. While the remaining issues addressed in the appellate court’s original decision remained unchanged, the matter was remanded for further proceedings consistent with this opinion.

The case is Nos. 4D10-3606 and 4D10-5244.

Attorneys: Joseph H. Lang, Jr. (Carlton Fields Jordan Burt, P.A.) and Andrew S. Brenner (Boies Schiller & Flexner LLP) for Philip Morris USA Inc. John P. Wiederhold (Wiederhold, Moses, Kummerlen & Waronicki, P.A.) and Gregory G. Katsas (Jones Day) for R.J. Reynolds Tobacco Co. Karen H. Curtis (Clarke Silverglate, P.A.) and Kelly Anne Luther (Torres & Friedman LLP) for Liggett Group LLC. John S. Mills (The Mills Firm, P.A.) for Sharon Putney.

Companies: Philip Morris USA Inc.; R.J. Reynolds Tobacco Co.; Liggett Group LLC

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