EngleUpdate2004

UPDATE -- ENGLE TRIAL

Apparently the tobacco companies continue to refuse responsibility for their actions, and to try to slow the pace of lawsuits against them, while their consumers and their families suffer, and die.

Updated April 18, 2008
Web Editor's note: Susan and Stanley Rosenblatt worked without any payment for years on the Engle case, a landmark case discussed further in this web site, and at the Tobacco Product Liability Project site. Although the Florida Supreme Court first said the class action was acceptable, they later reversed this, but as this article notes, they left intact the findings of the courageous jury, so future Florida cases do not have to spend time and money proving that nicotine is addictive, and tobacco products kill consumers.

EXCERPTS from The Daily Business Review, April 18, 2008, headlined, Tobacco Litigation: "Court awards Rosenblatts $218M for work in overturned smokers’ class action", writer, Billy Shields.

Miami-Dade Circuit Judge David C. Miller awarded $218 million in legal fees Tuesday to Stanley and Susan Rosenblatt for years of work they put into now-defunct class action litigation against the nation’s biggest cigarette markers.

“I find it very reasonable,” Miller said from the bench, referring to fee calculations estimating they worked for 77 hours a week on average at an hourly rate of $274. “These are reasonable and conservative hours.”

“In fact, in some firms that would not have been acceptable billing,” he joked before a courtroom packed with at least 200 people.

Tobacco attorney Robert Heim, a partner with Dechert in Philadelphia, told Miller “it would be wrong under common fund law” to award fees to the Rosenblatts, saying a guardian ad litem should be appointed to administer a fund “to protect the interests of the class.”

The fees would come out of a common “guaranteed fund” of about $800 million that Big Tobacco put up as collateral in 2001 to appeal the record $145 billion punitive verdict the Rosenblatt’s won against cigarette makers. The verdict was later thrown out by the Florida Supreme Court along with a class certification order uniting sick smokers in a single lawsuit.

Miller still must determine how to distribute the rest of the $800 million fund.

Rosenblatt railed against Big Tobacco as he argued Tuesday before Miller for fees in the case dating back to 1994. The two-year trial marked the first time tobacco executives acknowledged in court that smoking causes illness and is addictive.

“For close to half a century, there were all these high-priced lawyers saying, ‘Ah, it’s all about willpower. It’s not addictive,” he said. Describing the industry’s legal tactics, Rosenblatt said, “There’s a word in Yiddish. It’s chutzpah.”

Given the industry track record in the case, an appeal is assured.

Plaintiffs and attorneys from around the state whom Rosenblatt had never met took the podium to recommend that Miller grant him fees.

“It was just incredibly gratifying,” he said. “We were impressed.”

The plaintiffs largely belong to the roughly 8,000 lawsuits dubbed “the Engle progeny,” the offspring of the famous class action filed on behalf of Miami Beach pediatrician Howard Engle. The case became known as Engle v. Liggett as it moved through the courts.

A line to speak in support of the Rosenblatts’ fee request ran out of the room. Many people at the hearing were visibly ill or relatives of deceased smokers.

Gene Anthony Hitchens, for example, came to the hearing with an oxygen tank and tubes running to his nose. He carried the tank with him when he spoke before the judge.

Tobacco lawyers argued the Rosenblatts had no right to the money because the punitive award was overturned and because the fund might be used for punitive awards in the Engle spinoffs.

“Much of the case, including the entire $145 billion class-wide punitive damages award, has been resolved in defendants’ favor and the ultimate benefit of the litigation to class members is yet to be determined,” Heim wrote for the industry in opposition to attorney fees.

The fee petition put the people in the room in a bit of an awkward position. The Rosenblatts stumped for their own role in starting litigation that other attorneys are pursuing now, and the Engle progeny attorneys supported them.

“I don’t see the problem. He worked hard,” said Carl Grant of Fort Lauderdale. His father George smoked for most of his life and died in 1983 from emphysema and heart disease. “It ain’t no free ride. They earned it.”

New Engle lawyers, including the ostentatious Willie Gary, agreed.

“When I think of the jobs they’ve done for the people, it gives new meaning to the words ‘hard work,’” he told Miller.

The work they did was to lay the groundwork for much of the litigation against the tobacco industry in Florida. And while the verdict was tossed and the class disbanded, the findings of the jury in the case the Rosenblatt’s litigated can be used for future cases.

Despite decertifying the class, The Florida Supreme Court upheld the findings of the Miami jury in the original Engle case that will guide individual smoker cases going forward. Juries in individual Engle progeny cases will be advised to accept as proven that nicotine is addictive and smoking causes cancer and more than a dozen other illnesses.

Future juries considering damages also will be told tobacco companies were negligent, placed defective and unreasonably dangerous products on the market and defrauded consumers by misleading them.

But cigarette makers are not going to accept the findings as mere givens when the individual cases go to trial. Defense attorneys around the state look at the jury findings as being open for interpretation.

Attorneys representing smokers insist tobacco attorneys have employed creative stalling tactics to allow sick smokers to die before their cases can be heard, a charge tobacco attorneys dismiss.

Miller said he wants to expedite the proceedings.

“Justice delayed is justice denied,” he said.

October, 2007 -- Decision handed down from the United States Supreme Court, rejecting tobacco industry pleas to "prevent smokers in potentially thousands of Florida lawsuits from taking advantage of jury findings against the industry." [Bloomberg] Two articles from the media are excerpted below.

EXCERPTS from Bloomberg, October 1, 2007, headlined, "Tobacco Companies Rejected by Court on Florida Suits"; writer Greg Stohr.

Altria Group Inc.'s Philip Morris USA and other cigarette makers lost a U.S. Supreme Court bid to prevent smokers in potentially thousands of Florida lawsuits from taking advantage of jury findings against the industry.

The justices, without comment, today left intact the Florida Supreme Court's conclusion that the 1999 jury verdict would apply to future lawsuits. The jury found that cigarette makers withheld information about smoking risks and put unreasonably dangerous products on the market.

Philip Morris and Reynolds American Inc.'s R.J. Reynolds Tobacco unit face dozens of Florida lawsuits that seek to use the verdict as a starting point. Smokers and their family members have until January to file additional suits.

"We're expecting in the tens of thousands to be filed by the deadline," said Ed Sweda, a senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston .

The cigarette makers contended in an appeal filed in Washington that the lower court ruling "promises to serve as a catalyst" for those lawsuits. "Plaintiffs' lawyers have begun blanketing Florida with solicitations, telling prospective litigants that the scales are now tipped decidedly in their favor," the appeal argued.

The appeal stems from a case that at one point threatened the tobacco industry with a $145 billion punitive damage award. The Florida Supreme Court ruled that a state appeals court was correct to overturn the award and that the case couldn't go forward as a class action on behalf of 700,000 people.

At the same time, the state court said many of the jury findings would apply to individual cases. At the Supreme Court, the cigarette makers said those findings were so "generalized" that their use in future cases would violate the U.S. Constitution's due process clause.

The tobacco companies didn't contest the application of two of the jury's findings, that cigarettes are addictive and cause 23 diseases.

The smokers' lawyers, Susan and Stanley Rosenblatt, urged the Supreme Court not to grant a hearing, saying the justices "should not prejudge" how the jury findings might be applied in later lawsuits.

The appeal also contended that the Florida court cleared the way for smoker claims that are barred under a federal cigarette- labeling law.

Philip Morris and R.J. Reynolds filed the appeal along with Brown & Williamson Holdings Inc., Loews Corp.'s Lorillard Tobacco Co. and Vector Group Ltd.'s Liggett Group LLC. R.J. Reynolds acquired Brown & Williamson's U.S. operations in 2004.

The U.S. Chamber of Commerce and the business-backed Product Liability Advisory Council supported the tobacco companies at the high court.

EXCERPTS from The Richmond (Virginia) Times-Dispatch, October 2, 2007, headlined, "Supreme Court rejects tobacco plea; Decision opens door to suits claiming Fla. smokers were misled"; staff and wire reports, contributing writer, John Reid Blackwell.

The U.S. Supreme Court yesterday rejected a request by Philip Morris USA and other tobacco companies to consider making it harder for smokers to prove the industry misled them.

The case arose out of a class-action lawsuit on behalf of 700,000 Florida residents suffering from illnesses they say were caused by their addiction to cigarettes.

In July 2006, the Florida Supreme Court dismissed a $145 billion punitive-damages award against the tobacco companies for injuring smokers, saying that recognizing the huge class of victims was inappropriate. But it upheld multimillion-dollar compensatory awards on behalf of two smokers.

The jury in the case found, among other things, that tobacco companies withheld information about the risks of smoking. And in the part of its ruling most troubling to the industry, the Florida Supreme Court said the findings against the companies could be used in individual suits by former members of the class.

The U.S. Supreme Court's decision makes it more likely that former class-action members in Florida will file individual lawsuits by a January deadline, said Ed Sweda, a senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston.

"There is much greater clarity for the individual plaintiffs and their lawyers in Florida now that they have a clear green light to go forward with these cases," Sweda said.

Philip Morris USA ... said it would vigorously defend against any individual lawsuit.

July 6, 2006 -- Decision handed down from Florida Supreme Court
Statement from the Tobacco Product Liability Project, TPLP:
"Few expected the $145 billion punitive damages award to survive appeal. Yet the real key to understanding the decision lies in the Court's use of the Latin phrase res judicata, meaning that the issue has been judged. The Court's findings that cigarette manufacturers are negligent and that their products are defective, unreasonably dangerous, addictive, and the cause of 16 major diseases will carry over to individual claims for compensatory and punitive damages by upwards of 100,000 class members. At trial, these class members will need only prove individual medical causation and reliance on any acts of fraud that may be alleged. We expect tens of thousands of streamlined cases to be filed in Florida by this time next year."

"Here is what the [Florida Supreme] Court gave to the cigarette companies in today's decision:

1) elimination of $145 billion punitive damages award (which 95% of people paying attention to this case expected);
2) decertification of the class in one year; and
3) reversal of one of the three individual representative class member's compensatory damages award because the claim was barred by the statute of limitations (saving the defendants all of around $7 million).

"Here is what the Court handed the defendants [the tobacco industry] in terms of a defeat today:

1) reversal of appeals court decision and restoring punitive damages as an option in cigarette cases in Florida, including those of potentially hundreds of thousands of class members;
2) reversal of appeals court and allowing to stand all of the findings of general liability against the defendants including liability for:

a) negligence;
b) defective and unreasonably dangerous products;
c) addictive products;
d) strict liability;
e) fraud by concealment;
f) civil conspiracy--misrepresentation;
g) conspiracy--concealment;
h) breach of implied warranty;
i) general causation.
In addition, the Court ruled that cigarette smoking causes the following diseases:
aortic aneurysm, bladder cancer, cerebrovascular disease, cervical cancer, chronic obstructive pulmonary disease, coronary heart disease, esophageal cancer, kidney cancer, laryngeal cancer, lung cancer (specifically, adenocarcinoma, 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.

3) Each of these findings on liability need not be proven at trial by class members who file individual claims in Florida within the year (res judicata). At trial, individual members of the class will need to prove that they smoked a defendant's product, that the smoking caused their specific case of whichever disease is at issue, and that they relied on a defendant's fraudulent claims (but only if fraud is alleged in the complaint claim and it need not be). While the companies can defend these cases, they cannot claim that they were not negligent, that their products are not defective or unreasonably dangerous and addictive, that smoking does not cause the 16 aforementioned diseases, or otherwise deny any of the other findings that the Court determined were binding on these subsequent cases."

Past events:

"On May 12, 2004, the Florida Supreme Court agreed to review the decision of the Third District Court of Appeals. On October 6, 2004, the Florida Supreme Court will hear 20 minutes of arguments from each side. The smokers' briefs are due to the Court by June 7, 2004 and the tobacco companies' briefs are due 20 days after they receive the petitioner's brief." from the Background and Analysis provided by Tobacco Products Liability Project (TPLP) and excerpted from tobacco.neu.edu.

Excerpts from earlier articles on the Engle Trial in Florida

Excerpts from news article from the May 13, 2004, Sun Sentinel

Excerpts from The Miami Herald, February 28, 2006

February, 2006 -- Still waiting for decision from the Florida Supreme Court.

Excerpts from The Miami Herald, February 28, 2006, headlined, Key doctor in tobacco lawsuit unlikely to outlast payout, writer Elinor J. Brecher

Dr. Howard Engle, longtime Miami Beach pediatrician, has always been angry about something.

In the 1950s and '60s, angry about segregation, he defied convention and ran an integrated medical practice.

In the '70s, mad about drugs in the schools, he stormed before the Dade County School Board with a shocking tale of students offering to sell him dope.

In the '80s, outraged about teenage promiscuity, he blasted off in the newspaper about irresponsible parents and inadequate sex education.

In 1994, furious about his own nicotine habit and the cigarette companies' strategies to hook kids, he became the lead plaintiff in a landmark class-action lawsuit against the tobacco industry.

Sixteen years later, waiting for ultimate resolution in the case, he's still livid with the industry, and himself.

''Goddammit! I'm an addict!'' snaps Engle, 86, firing up a Marlboro Medium. ``It's not very pleasant to admit.''

In November 2004, Florida's high court heard an appeal in the case. Miami lawyers Stanley and Susan Rosenblatt asked justices to reverse an appellate court ruling that overturned a Miami jury's 1999 verdict and punitive damage judgment.

A favorable ruling in Engle et al. vs. R.J. Reynolds Tobacco Co. et al. would put at least 300,000 sick Florida smokers back on track for a record-breaking $145 billion verdict against the industry that they claim ruined their health.

The jury, which heard 157 witnesses over two years, concluded that the industry had intentionally misled smokers about the dangers of smoking.

The case went twice to the Third District Court of Appeals in Miami, which initially upheld, then overturned, the smokers' class certification, nullifying the award.

''I would assume they'd rule in a reasonable time,'' Engle mused recently at the Venetian Islands home he and his artist wife, Brooke, built 54 years ago, 'but I don't know what `reasonable' is in a case like this.''

What he does know is that even if the court reinstates the award, he probably won't live to benefit from it.

''I hope my [three] children will get something,'' said Engle, who suffers from respiratory diseases, which he blames on more than six decades of smoking, and lymphoma.

Engle, wrapped in a cotton kimono, makes no apologies for his smoking. He says he last tried to quit two years ago and managed for two months.

''Rough as hell,'' he said.

Then he was diagnosed with a malignant tumor.

``I said the hell with it. I enjoyed smoking; I'm going to smoke. I'm going to get cancer of the lung? I already have a couple of cancers.''

Engle, who retired in 2001 after having treated some Miami Beach families for three generations, got involved with the lawsuit because eight of the Rosenblatts' nine children were his patients.

''We'd see him in his office, and in a very embarrassed way, he'd go into his room and smoke,'' recalls Stanley Rosenblatt, a malpractice/personal-injury lawyer. 'I'd say to him, `What is your problem? You're in the health business!' ''

When Engle asked to join the case, Susan, who handles appeals, thought him the ideal class representative: ``a brilliant man who spent his entire life helping people and healing people and in the process, doing a number on himself.''

To some, he seemed a hero; to others, a fool.

''I put myself in the middle of the target and took a lot of bumps because of it,'' Engle said. ''I got a lot of negative reaction, from patients, friends, fellow physicians,'' in part because the Rosenblatts have sued doctors.

But last month, the American Academy of Pediatrics honored Engle with a special achievement award for his fight against tobacco as a childrens' health issue.

Dr. Julius Richmond, U.S. surgeon general during the Jimmy Carter administration and a smoking opponent, calls the academy's honor ``a long overdue recognition.''

He and Engle have known each other since the 1940s, when both were pediatrics residents in Chicago.

Through Engle, Richmond became a star plaintiffs' witness.

Now, like many of the plaintiffs, he ''waits each week with bated breath'' for the Supreme Court's ruling.

''It's a very important case in so many ways,'' said Richmond, 89, of West Palm Beach.

Tobacco lawyers repeatedly questioned him about addiction: Why, if so many people can quit smoking, is it not simply a matter of will?

``I'd say, `You don't understand that [some] people in the depth of addiction can't quit. . . . In the pattern of chemical addiction, there's a good deal of variability.''

And Howard Engle is one of the unlucky ones.

'His situation was very precarious. . . . He told me how motivated he had been because he was so incensed about [the companies'] behavior.''

He began smoking at the University of Wisconsin Medical School, to mask cadaver smells, and never paid for cigarettes because representatives of ``R.J. Reynolds and Chesterfield stood on street corners passing out these little five-cigarette packs. They'd come to the anatomy lab and give us cigarettes.''

By the time he'd finished a two-year stint in the army and started practice, Engle realized he was addicted, ''even after getting a master's degree in pathology and doing autopsies and seeing carcinoma of the lung,'' which had killed his father at 53.

In those days, South Florida hospitals and many doctors' offices were segregated. Not Engle's.

The hospital's CEO, Steven Sonenreich, 52, has known him for 30 years and ``always knew that his bark was much larger than his bite. And after he got finished barking, we'd have a good chuckle.''

What Engle never cared about was money, according to Sonenreich, even though the tobacco attorneys repeatedly accused him of joining the suit just to cash in.

Now, Engle wishes he'd cared a bit more. The doctor who ''never turned anybody away because they couldn't afford it,'' whose name is linked to the largest civil damage verdict in American history, is living on Social Security.

''I had built up a very nice pension fund, but I didn't think I'd live this long, and I've spent it all,'' Engle said. ``Now we're selling antiques.''

May 12, 2004

Almost exactly one year after decertification, Florida Supreme Court gives smokers' class a second chance.
Arguments to take place while industry is defending $300 billion federal RICO trial in DC.

CASE BACKGROUND

A national class action on behalf of sick smokers and the estates of those who died as a result of smoking-caused disease was filed on May 5, 1994 by attorneys Stanley and Susan Rosenblatt. On October 31, 1994, the trial court in certified the nationwide class. The tobacco company defendants appealed the class certification and on January 31, 1996, the Third District Court of Appeals in Florida affirmed the class certification but narrowed the class to citizens and residents of Florida (see 672 So. 2d 39). The tobacco company defendants again appealed, this time to the Florida Supreme Court and on October 2, 1996, the state's high court rejected the appeal.

The case proceeded to trial with a trial plan calling for three phases:

1) determination of general liability;

2) determination of compensatory damages for a selection of representative class members and, if such liability is found, determination of punitive damages for the whole class; and

3) determination of compensatory damages for all class members on an individual basis.

The first phase of the trial began in October of 1998 and resulted in a verdict for the plaintiff on July 7, 1999. The jury found that smoking cigarettes could cause 20 diseases or medical conditions, including lung cancer, heart disease and emphysema; that cigarettes are addictive; and that the tobacco companies' conduct rose to the level that would permit the potential award of punitive damages.

While the jury took a break after ten months of work, tobacco companies challenged the trial plan which called for the jury to determine a lump sum punitive damages award for the entire class if defendant liability was established for any of the representative class members in the next trial phase. On September 3, 1999, a panel of the Third District Court of Appeals including two of the three judges who would issue the decertification order on May 21, 2003, agreed with the tobacco companies and voided the trial plan. The same panel reconsidered and, on October 20, 1999, the Third District Court of Appeals denied the tobacco companies' motion and retained the trial plan with its lump sum punitive damages provisions.

The same jury of six returned for the next part of the trial. The second phase of the trial began on November 1, 1999 and was divided into two parts. In the first, three individual class members' claims for damages were tried as if they were separate individual cases. During this portion of the trial, the tobacco companies filed a desperation motion to the Florida Supreme Court called an an Extraordinary Writ Under the All Writs Power motion to urge the state's high court to void the trial plan or decertify the class. The Florida Supreme Court rejected this motion and let the trial plan and class certification stand on December 27, 1999.

Meanwhile, the plaintiffs were presenting the jury with evidence proving that the defendant tobacco companies were liable for injuries to the three representative class members. This phase of the trial resulted in a verdict establishing tobacco company liability for the injuries to the three representative class members on April 7, 2000. $6.9 million in compensatory damages were awarded to lung cancer victim Mary Farnan, a 44-year-old nurse, and to the husband of Angie Della Vecchia, a longtime smoker who died of lung cancer last summer at the age of 53. Despite questions about the statute of limitations, the jury awarded plaintiff Frank Amodeo, a throat cancer victim and 60-year-old clockmaker $5.7 million. This verdict opened the door to the second part of the second phase

On July 14, 2000, a jury in the Engle class action trial issued a jaw-dropping punitive damages verdict against the tobacco industry totaling approximately $145 billion. The verdict broke down among tobacco companies as follows: Philip Morris Inc. - $73.9 billion; R.J. Reynolds Tobacco Co. - $36.2 billion; Brown & Williamson Tobacco Corp. - $17.5 billion; Lorillard Tobacco Co. - $16.2 billion; and Liggett Group Inc. - $790 million.

The trial judge, Robert Kaye, denied the defendants' post-trial motions and issued a final judgment on November 6, 2000.

On May 21, 2003, a panel of the Third District Court of Appeals unanimously decertified the class and reversed the punitive and compensatory damage awards. The Court also ruled that punitive damages were unavailable to all plaintiffs suing the tobacco defendants under the and Master Settlement Agreements. Plaintiffs asked the full Third District to review the panel's decision, but that request was rejected. That left the smokers with one last hope of reviving the case: by appealing to the Florida Supreme Court.

On May 12, 2004, the Florida Supreme Court agreed to review the decision of the Third District Court of Appeals. On October 6, 2004, the Florida Supreme Court will hear 20 minutes of arguments from each side. The smokers' briefs are due to the Court by June 7, 2004 and the tobacco companies' briefs are due 20 days after they receive the petitioner's brief.

Analysis of Third District Court of Appeals Decision.

The Third District Court of Appeals' decision showed a surprising lack of regard to prior decisions of the Third District as well as some very dubious conclusions that will likely invite review by the Florida Supreme Court or an en banc review by the other appeals judges in the District..

Decertification:

The first and most obvious question raised by the decision is: why review and modify the class certification in 1996 and then wait for the longest civil trial in history to take place and then nearly another three years after that to come to the realization that individual issues among class members pose a problem?

For a class action to be approved, common issues among class members must predominate over individual issues. The Court points to issues involving the fact that some residents are transient and, therefore, questions about whether or another state's laws could apply to particular class members' claims could arise. The Court notes that there were differences in how the jury regarded the proportion of fault attributed to the three representative class members themselves and that each of the representative class members' illness and experience was different. Of course! These are not new issues that became apparent since the class was certified. The Court was well aware that the state hosts more part-time residents than other states. The Court knew that everyone's experience with smoking-caused disease was not identical in 1996. The Court could certainly anticipate that a jury might regard the proportion of fault attributed to the different class members differently. In fact, that is precisely why this trial plan called for a third phase to settle individual issues for each class member. Surely that approach is more efficient than holding separate full trials for each and every class member. It took a year in the first phase of the trial for both sides to present the underlying issues that apply to every class member. Why go through that same exercise thousands of times? But this is precisely what the Court suggests is the better approach. The truth is that there simply aren't enough attorneys and court rooms available to try each individual case fully and that such an approach would deny the vast majority of the members of the class an opportunity to be heard.

The strangest rationale for decertifying the class nearly three years after the trial is cited on page 14 of the decision where the Court says, "it would further be unjust to bind absent class members to a negative decision where the class representative's [sic] claims present different individual issues than those of the absent members." The strange thing about this is that it simply did not happen and the jury found that the individual class representatives' claims were sufficiently proven to establish defendant liability. Perhaps one might consider it considerably more unjust to absent class members as well as class representatives to spend two years trying the case and then ruling that the entire process was a waste of the time, money, and emotional investment staked in the trial.

Lump Sum Punitive Damages:

The other glaring inconsistency involves the Court's ruling on the lump sum punitive damages which it describes as "the cart before the horse." The point of a lump sum punitive damages finding was that this jury had heard more about the tobacco company defendants than any other jury had ever heard and would, therefore, have the requisite knowledge of the underlying facts to determine the appropriate sanction. A judge or jury hearing the individual claims of class members in the third phase of the trial would not have the time to hear the full sordid tale of tobacco industry deceit multiplied by the tens of thousands of class members.

Two of the three judges on this panel were on the three judge panel that ruled that lump sum punitive damages were unlawful in September of 1999 only to reverse themselves the following month. Now, once again, the Third District Court of Appeals has flip-flopped on this issue. One can only speculate as to why the Third District Court of Appeals would give the green light to the trial plan in 1999 (and the Florida Supreme Court would decline to intervene when asked) only to reverse itself a second time more than three years later. The only thing that has changed since 1999 is that the jury has since issued its verdict on punitive damages and this court clearly dislikes the number of zeros in that verdict.

Punitive Damages:

In the punitive damages phase of the trial, the tobacco companies declined to put on any expert witnesses to explain to the jury what they could afford to pay out in punitive damages. Instead, they submitted their audited financial statements that asserted that their combined net was just over $8 billion. The plaintiffs, on the other hand, presented industry experts who suggested that the defendants' ability to pay was much greater than their declared net worth. For example, under the terms of the Master Settlement Agreement (MSA), the industry will pay about about $6 billion this year to 46 states. Four other states, including Florida, will receive higher per capita payments under their own settlements with the tobacco defendants that predate the MSA. Advertising and promotion expenses industry-wide for this year are expected to be in the $6-8 billion range. Tobacco companies pay dividends to their shareholders that amount to billions of dollars per year. These are telltale signs that the companies' ability to pay far exceeds their declared net worth. The jury saw through the smokescreen of the financial statements and found the plaintiffs' experts to be more credible. The Court strongly disagreed.

But instead of reducing the punitive damages awarded by the jury as is often the practice when such awards are reviewed on appeal, the Court instead came to the remarkable conclusion that the State of Florida's 1997 settlement with the tobacco industry barred punitive damages awards against tobacco companies in any future Florida proceeding. The Court wrote at page 64 that, "as a matter of law, Florida's Settlement and Release . . . preclude the plaintiffs' punitive-damages claims here." This conclusion is sharply at odds with the language of the settlement agreements themselves and raise the question: why did the Third District Court of Appeals permit a trial plan calling for punitive damages to go forward in 1999 if all punitive damages claims against the tobacco industry were settled in 1997 or 1998? If that is what the court supervising the trial court believed, then why send tens of thousands of class members on a wild goose chase?

The Court cites to a few land use, zoning, and nuisance cases that were resolved by state action. Rulings in these cases restrict private civil litigation of the same issues. One would be hard-pressed to find a less analogous set of cases. The claims of the sick class members or their survivors involve lung cancer, emphysema, bladder cancer, kidney cancer, heat disease, stomach cancer, and the other included conditions are not nuisance or zoning claims and most certainly were not settled or released by the State of Florida.

The State of Florida sued the tobacco companies to recover Medicaid program costs of treating indigent smokers whose medical treatment was necessitated as a result of smoking cigarettes under provisions of statutes including the Third Party Liability Act and the Florida Racketeering and Corrupt Organizations Act. The State of sought punitive damages from the tobacco defendants. On August 25, 1997, the State entered into a Settlement Agreement with the tobacco industry defendants and, as part of the agreement, released all of the claims of the State and its counties, municipalities, public hospitals, universities, and other public entities. The rights on individuals or classes of individuals were not affected in any way.

The Court maintains that the trial court committed a reversible error by instructing the jury not to consider the Florida Settlement Agreement or the Master Settlement Agreement (MSA) with 46 states in regard to the issue of punishment and deterrence. However, the Florida Settlement Agreement is very clear on this point. It states in section VI(c): "neither this Settlement Agreement nor any evidence of negotiations hereunder, shall be offered or received in evidence in this Action, or any other action or proceeding, for any purpose other than in an action or proceeding arising under this Settlement Agreement." Likewise, the MSA contains a nearly identical provision at section XVIII(f): "Neither this Agreement nor any public discussions, public statements or public comments with respect to this Agreement by any Settling State or Participating Manufacturer or its agents shall be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Agreement."

COMMENTARY

Mark Gottlieb, Senior Staff Attorney for the Tobacco Products Liability Project (TPLP) at Northeastern University School of Law, notes:

"The decision of the Florida Supreme Court to review last year's appeals court ruling is good news not just for class members, but for anyone who cares about justice. As the Petitioner noted in her prior request for review, over 86% of the Appellate Opinion was authored by the tobacco industry, representing approximately 59 pages of the 68 page Opinion through an almost verbatim replication of tobacco's appellate briefs, without a single attribution. That decision reversed prior decisions of the same court without sufficient explanation and eliminated punitive damages for all plaintiffs suing tobacco companies in on the basis of the industry's settlement with the state, something no other court has done. But then again, no other court has ever appeared to do the bidding of Big Tobacco more clearly that the Third District Court of Appeals in its decision of May 22, 2003. The pressure on the tobacco industry will be tremendous this autumn as it fights to keep the class decertified while simultaneously defending a massive $280 billion federal racketeering trial in ."

Edward L. Sweda, Senior Attorney for TPLP added:

"I am especially pleased that the Florida Supreme Court will have the opportunity to reverse the baseless contention of the 3^rd District Court of Appeal that the 1998 Master Settlement Agreement and the 1997 settlement with the State of Florida constitute a shield to protect tobacco companies from being assessed punitive damages for their long, sordid history of reprehensible misconduct."

EXCERPTS from The Sun Sentinel, May 13, 2004, headlined, Court to review $145 billion verdict against 5 largest tobacco companies, writer, Ann W. O'Neill

The [Florida] Supreme Court's decision to review the case was seen as a significant development in the first class action tobacco suit in the nation to be decided by a jury. The punitive damages awarded in the case were the largest in American legal history.
"We're very pleased," said Ed Sweda, senior attorney for the Tobacco Products Liability Project at Boston's Northeastern University.

"If the Florida Supreme Court had done the opposite, the case would have died today."

The reaction on Wall Street was not as positive. The news sent tobacco stocks falling. Altria Group Inc. and R.J. Reynolds both saw prices drop; Altria was down 6.7 percent per share, the largest dip since March 2003. R.J. Reynolds' share prices declined 5.6 percent.

A year ago, a three-judge panel reversed the verdict on the grounds it was unconstitutional and violated Florida law because it would bankrupt the tobacco companies.

The appeals judges called the trial "fundamentally unfair" and blamed the huge award on a runaway jury and the plaintiffs' lawyer's inflammatory arguments. At times lawyer Stanley Rosenblatt compared the actions of the tobacco companies to slavery and the Holocaust.

The appeals court determined that the differences among the estimated 300,000 to 700,000 plaintiffs outweighed any similarities, and ruled they did not qualify for a class action lawsuit.

Rosenblatt and his wife, Susan, attorneys for the plaintiffs, appealed to the state Supreme Court. Accusing the appeals court of "judicial plagiarism," they argued that the judges lifted large portions of the tobacco lawyers' brief, incorporating them into a scathing 68-page opinion.

They also asserted that the opinion by Judges David Gersten, Mario Goderich and David Levy insulted jurors when it compared them to lemmings run amok. The Supreme Court did not say why it had granted the Rosenblatts' request to be heard.

Arguments in the case, known as Engle vs. Liggett, are scheduled for the first week in October.

The case takes its name from Howard Engle, a Miami Beach pediatrician with emphysema who agreed to be the lead plaintiff in a lawsuit filed in Miami-Dade Circuit Court in 1994.

The Rosenblatts and the tobacco company lawyers could not be immediately reached. But Stanley Rosenblatt told the Bloomberg business wire service he has no intentions of settling. Several tobacco company lawyers told the wire service they expect the Supreme Court to reject the verdict.

Updated 3 October 2007