The Florida Supreme Court has eradicated a primary defense used by tobacco companies to fight its liability in the "Engle progeny lawsuits" brought against them in two decisions issued on April 2, 2015.
The Florida Supreme Court justice Peggy A. Quince ruled that Tobacco company defendants are now “precluded as a matter of law from asserting the fraud statute of repose defense in Engle progeny cases.” According to Florida law, the statute of repose in the Engle progeny cases consists of the 12-year period prior to the date the first Engle lawsuit was filed.
The first lawsuit was filed on May 5, 1994. In order for the plaintiffs to make a claim asserting fraudulent concealment claims for punitive damages, they were required to prove that they detrimentally relied on the tobacco companys' actions denying and omitting facts about the addictive nature of nicotine and smoking related diseases and cancers caused by cigarette smoking, during the repose period of May 5, 1982 through May 5, 1994.
These cases are a part of the Engle class, a group of Florida smokers who filed a class action lawsuit against the tobacco industry in 1994. After decertifying the class, the Florida Supreme Court ruled that each of the class members, known as the “Engle Progeny,” could file individual lawsuits against the tobacco industry. The individual members were permitted to use the jury findings from the class action ruling, maintaining a res judicata effect for individual member’s case holding that:
The supreme court opinions were issued on appeal from a Fourth District Court case, Elaine Hess v. Philip Morris USA Inc. and a Third District Court case, Philip Morris USA Inc., et al. v. Tina Russo, which disagreed as to whether Engle plaintiffs were required to show a detrimental reliance on the tobacco companies statements during the statute of repose period in order to recover on fraudulent concealment claims for punitive damages.
The Supreme court opinions overruled the Fourth District Court decision in the Hess case and affirmed the Third District Court decision in the Russo case, clarifying that the language of the statute regarding the “date of the commission of the alleged fraud” refers to the date of an act or omission of the “defendant’s wrongful conduct,” but does not require evidence that the smoker detrimentally relied on the conduct during the 1982-1994 period of repose, according to the court opinions.
Prior to these rulings, the tobacco companies were able to use the statute of repose as a defense against fraudulent concealment claims for punitive damages if the plaintiff could not prove they detrimentally relied on the tobacco companies statements during the 12-year repose period.
Plaintiffs are now only required to show that the tobacco companies engaged in the wrongful conduct during the 12-year repose period, which has already been cemented as a core jury finding made in the class action trial, maintaining a res judicata effect for class member’s individual cases.
Plaintiff cases in the Fourth District that lost on fraudulent concealment claims under the now over ruled Hess case will likely be retried under the new ruling. On the same day that the Supreme Court opinions were issued, a Fort Lauderdale judge declared a mistrial in the Ryan v. R.J. Reynolds Tobacco Co. stating that the Supreme Court’s decision “completely throws an unexpected ringer into the case because the lawyers have already presented their arguments.”
Since the Engle class decertification resulted in individual plaintiff lawsuits, it is estimated that there have been at least 87 findings for the plaintiff and at least 41 for the tobacco companies.
Phillip Morris asserts that they have “valid defenses to the litigation pending against [them], as well as valid basis for appeal of adverse verdicts” which will be “vigorously defended,” according to a 2014 Security and Exchanges Commission (SEC) regulatory filing.
The preclusion of the statute of repose defense will now make it much easier for plaintiffs to recover punitive damages because instead of being required to show they relied on statements only during the 12 year period, they are not only required to show they relied on the statements at any time in their lives.
Many of the plaintiffs began smoking at a young age when the public’s awareness of the detrimental effects of cigarette smoking were not widely available, as opposed to information that was available about the dangers of smoking after May 5, 1982.