By Kathleen Bianco, J.D.
An amended statute allowing fluctuating interest rates could not be retroactively applied to a $25 million damage award against a tobacco company entered in 2010, the Florida Supreme Court ruled. (Townsend v. R.J. Reynolds Tobacco Co., June 9, 2016, Lewis, J.).
On April 21, 2010, a final judgment was entered awarding Lyantie Townsend, $5,508,000.00 in compensatory damages and $40,800,000.00 in punitive damages. The total sum of $46,308,000.00 would bear interest at a rate of 6% per annum from April 29, 2010. In 2012, an amended final judgment was entered awarding Townsend $5,508,000.00 in compensatory damages and $20,000,000.00 in punitive damages. The trial court ordered that the total sum of $25,508,000.00 would "bear interest as provided by law from April 29, 2010." R.J. Reynolds Tobacco Co. asked the trial court to determine the rate of interest payable on the judgment, arguing that the rate of post-judgment interest that should apply to the interest accrued after the effective date of a 2011 amendment to a state statute establishing an annual fluctuating interest rate should be the interest provided for in that amendment. The trial court denied the tobacco company’s request, finding that the 2011 amendment to the interest rate statute did not contain any language indicating a clear intent for its provision to apply to judgments entered prior to its enactment.
On appeal by the tobacco company, a divided panel of the state appellate court reversed the trial court ruling and remanded the action with instructions to apply the 2011 amendment’s interest rate to the interest accrued after the date of the statute’s amendment. However, notwithstanding its own conclusions as to the intent of the legislature, the appellate court recognized that the issues raised were of great public importance. As such, the panel certified the following question to the state supreme court:
DOES THE LANGUAGE OF SECTION 55.03(3), FLORIDA STATUTES (1998), PROVIDE THAT THE LEGISLATURE INTENDED TO ABANDON THE COMMON LAW RULE THAT POST-JUDGMENT INTEREST RATES CHANGE ON EXISTING JUDGMENTS WHEN THE LEGISLATURE CHANGES THE RATES SUCH THAT THE 2011 AMENDMENTS TO SECTION 55.03, FLORIDA STATUTES DO NOT APPLY TO A JUDGMENT ENTERED PRIOR TO JULY 1, 2011?
The Florida Supreme Court reviewed the decision, rephrased the certified question as follows:
DOES THE 2011 AMENDMENT TO SECTION 55.03(3), FLORIDA STATUTES, APPLY TO A JUDGMENT ENTERED BETWEEN OCTOBER 1998 AND JUNE 30, 2011?
The court answered the rephrased question in the negative and quashed the appellate court’s ruling.
Post-judgment interest rate. Upon a review of the language of the state statutes governing post-judgment interest from 1998 and 2011 and the common law, a majority of the state supreme court concluded that a 2010 amendment to the 1998 statute created a substantive right to a fixed rate of interest for the life of a judgment. The majority opinion rejected the tobacco company’s contention that the version of the statute in effect when the judgment was awarded only applied until such time as the legislature changed the standard. Furthermore, the court rejected as unfounded the tobacco company’s argument that the 2010 amendment could not create a vested interest in a fixed rate of interest because it would bind the hands of future Legislatures. The court reasoned that the very passage of the 2011 amendment disproved this contention because through that enactment any judgments rendered after the effective date of the 2011 amendment were subject to a variable rate of interest. Based on these conclusions, the state supreme court held that the 2011 amendments to the statute governing the imposition of post-judgment interest did not divest a judgment holder of the right to a fixed rate of interest on a judgment obtained prior to the enactment of the 2011 changes.
The case is No. SC15-722.
Attorneys: Tracy Sue Carlin (Brannock & Humphries) and Gregory David Prysock (Morgan & Morgan, PA) for Lyantie Townsend. Charles Franklin Beall, Jr. (Moore, Hill & Westmoreland, P.A.) and Gregory George Katsas (Jones Day) for R.J. Reynolds Tobacco Co.
Companies: R.J. Reynolds Tobacco Co.
MainStory: TopStory DamagesNews TobaccoProductsNews FloridaNews
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