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From Products Liability Law Daily, December 19, 2013

$28.6 million damages award against cigarette manufacturer reversed; new trial on damages ordered

By Susan Lasser, J.D.

A Florida district court of appeal has reversed an amended final judgment awarding $28.6 million in damages to the daughter of a smoker who died of lung cancer. The appellate court found that although the cigarette manufacturer was required to pay a remitted amount of the damages awarded by a jury, the manufacturer was the “party adversely affected” under Florida law because it continued to maintain that the remitted damages, while lower, were excessive. As such, the court of appeal concluded that the manufacturer should have had the right to choose a new trial rather than accept the remitted damages award (R.J. Reynolds Tobacco Co. v. Webb, December 17, 2013, Marstiller, S.).

Background. Diane Webb is the personal representative of the estate of her father, James Cayce Horner—a long-time smoker of cigarettes manufactured by R.J. Reynolds Tobacco Company (RJR) who died of lung cancer. Following Horner’s death, Webb filed a wrongful-death action against RJR alleging membership in the class described in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006), and asserting claims for strict liability, fraud by concealment, conspiracy to commit fraud by concealment, and negligence.

After the trial court entered judgment in her favor and against RJR for $79,200,000 ($7.2 million in compensatory damages and $72 million in punitive damages), RJR appealed. The Florida Court of Appeal for the First District vacated the damages award because it concluded that the amount of the compensatory damages suggested the award was a “product of passion” as opposed to being based on evidence of Horner’s illness and death. The appellate court remanded to the trial court with directions to either grant RJR’s motion for remittitur, or hold a new trial on damages.

Webb then requested that the trial court set the remitted award to $4 million in compensatory damages and $25 million in punitive damages. RJR responded with a renewed motion for remittitur, seeking $250,000 or less in compensatory damages and $250,000 or less in punitive damages. The court then ordered the damages remitted to the amounts requested by Webb, but reducing the $4 million compensatory damages amount to $3.6 million based on the jury’s assigning 10 percent comparative fault to Horner. The trial court’s remittitur order stated, “Defendant, R.J. Reynolds Tobacco Company, is not entitled to a new trial on compensatory and punitive damages unless it is at the election of the Plaintiff” and gave Webb 10 days to consent or object to the remittitur. Webb consented, RJR objected, and the trial court entered an amended final judgment for a total $28.6 million in damages. RJR appealed the amended judgment, arguing that the trial court erred as a matter of law by failing to hold a new trial on damages after RJR objected to the remitted damage amounts.

“Party adversely affected” by remittitur. Under Florida law (§768.74, Fla. Stat. (2007)), a trial court (upon a proper motion) can review damages awards “to determine if such amount is excessive or inadequate in light of the facts and circumstances which were presented to the trier of fact.” The statute also provides that “[i]f the party adversely affected by such remittitur or additur does not agree, the court shall order a new trial in the cause on the issue of damages only.” As applied to the current case, the appellate court submitted that the question before it was who was the party adversely affected by the remittitur?

The court of appeal turned to a Florida Supreme Court decision, Waste Management, Inc. v. Mora, 940 So. 2d 1105 (Fla. 2006), for guidance. In Mora, the state high court considered identical language in another Florida statute providing for remittitur or additur in damages actions. The state supreme court stated that the “party affected” by a remittitur was not necessarily the party who received less in damages, and the party affected by an additur was not necessarily the party who had to pay more in damages. According to the supreme court, “a defendant who has a jury award in an excessive amount of damages against the defendant can be a party adversely affected by a trial judge’s remittitur that is too little to cure the excessiveness. Similarly, a plaintiff who has a jury award for inadequate damages on the plaintiff’s behalf is a party adversely affected by a trial judge’s additur that is too little to cure the inadequacy.” The Moracourt ruled that the party that complained about a continued excessiveness or inadequacy in the award (after the remittitur or additur) had the right to choose a new trial rather than the remittur or additur. Additionally, that court stated that it recognized that its decision meant “that only when the parties agree with the trial court’s amount of remittitur or additur will the remittitur or additur be enforced in lieu of a new trial.”

Conclusion. Pursuant to Mora, the Florida Court of Appeal determined that because RJR had objected to the trial court’s remittitur, the cigarette manufacturer was the “party adversely affected” under the statute. As a result, the court concluded that RJR was entitled to a new trial on damages, and that the trial court erred in conferring only on Webb the right to choose between accepting the remittur and proceeding with a new trial. Therefore, the court of appeal reversed the amended final judgment and remanded the matter to the trial court to hold a new trial on damages.

The case number is 1D12-5063.

Attorneys: Charles M. Trippe (Moseley Prichard Parrish Knight & Jones) for R. J. Reynolds Tobacco Co. Steven L. Brannock (Brannock & Humphries) and James W. Gustafson (Searcy Denney Scarola Barnhart & Shipley, PA) for Diane Webb.

Companies: R. J. Reynolds Tobacco Co.

MainStory: TopStory DamagesNews TobaccoProductsNews FloridaNews

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