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From Products Liability Law Daily, September 26, 2013

Damages affirmed in Engle tobacco case on strict liability, negligence claims; but fraud claims reversed because of trial court error

By Susan Lasser, J.D.

In an Engle progeny case relating to the smoking-related death of a 50-year smoker, a Florida court of appeal affirmed judgment and damages awarded against the cigarette manufacturer, R.J. Reynolds Tobacco Company, on the decedent’s representative’s strict liability and negligence claims (Buonomo v. R.J. Reynolds Tobacco Co., September 25, 2013, Stevenson, M.). However, the appellate court reversed the judgment entered in the representative’s favor on the claims for fraudulent concealment and conspiracy to commit fraud by concealment because the trial court’s striking the tobacco company’s statute of repose defense was error. To remedy the error, the court remanded the case for a jury determination on the statute of repose issue. The court of appeal also held that if the jury found in favor of the representative on the statute of repose issue, then the trial court could reinstate the punitive damages award made by the jury, subject to any reduction made by the trial court in the exercise of the discretion afforded it under the applicable 1995 Florida statutes.

Background. Matthew Buonomo began smoking at age thirteen. In 1995, after over fifty years of smoking three packs a day, Buonomo began to suffer from chronic obstructive pulmonary disease (COPD). Prior to his death in 2008, he brought action against R.J. Reynolds Tobacco Company. After his death, his widow and personal representative, Connie Buonomo, was substituted as the plaintiff and the case was tried in 2010. Buonomo asserted claims for strict liability, negligence, fraudulent concealment, and conspiracy to commit fraud by concealment.

As an Engle progeny case (Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006)), the trial proceeded in two phases. In phase I, the jury was asked to determine whether Buonomo was a member of the Engle class—i.e., whether he was addicted to cigarettes, whether his addiction to cigarettes was a legal cause of his COPD, and whether he had COPD prior to November 21, 1996. After the jury resolved these issues in Buonomo’s favor, the trial proceeded to phase II, which required the jury to determine whether Buonomo’s COPD was a legal cause of his death and whether R.J. Reynolds’ negligence and intentional misconduct were a legal cause of Buonomo’s death.

During phase II, the jury heard extensive testimony concerning the tobacco industry’s efforts to conceal the harmful effects of smoking. The trial court instructed the jury to accept the following factual findings established as the result of the Engle case: (1) nicotine is addictive; (2) smoking causes COPD; (3) R.J. Reynolds was negligent; (4) R.J. Reynolds placed cigarettes on the market that were defective and unreasonably dangerous; and (5) R.J. Reynolds concealed and/or omitted material information or failed to disclose material facts concerning the health effects or addictive nature of cigarettes and entered into an agreement to conceal or omit the health effects or their addictive nature with the intent that smokers and the public rely to their detriment on that information.

The jury also heard testimony from Buonomo’s widow, daughters, and granddaughters about his illness and the care he required at the end of his life. The jury returned a verdict in favor of Buonomo, finding: that R.J. Reynolds was guilty of negligence, gross negligence, and intentional misconduct; that R.J. Reynolds’ negligence and intentional misconduct were the legal cause of Buonomo’s COPD and death; and that Buonomo had reasonably relied on R.J. Reynolds’ concealment or omission of material information concerning the health effects and addictive nature of cigarettes. The jury apportioned 77.5 percent of the fault to R.J. Reynolds and 22.5 percent to Buonomo, awarding $405,000 for medical and funeral expenses, $4.83 million for the plaintiff’s past and future pain and suffering and her loss of companionship, and $25 million in punitive damages. On R.J. Reynolds’ motion for remittitur, the trial court reduced the compensatory damages award by the 22.5 percent fault the jury had attributed to Buonomo and reduced the punitive damages to $15,705,000—three times the amount of compensatory damages awarded by the jury.

Punitive damages. In the trial court’s order reducing the punitive damages from $25 million to $15,705,000, the court stated that as a result of section 768.73(1)(a)1. of the Florida Statutes, the punitive damages “must be reduced to three times the compensatory damages awarded.” Buonomo argued that the trial court erred in finding the statute required the reduction of the punitive damages to three times the compensatory damages. The court of appeal agreed, finding that neither the $25 million in punitive damages initially awarded by the jury, nor the reduced amount of $15,705,000 was so excessive as to violate due process. In examining the history of the section, the appellate court held that the Florida statute did not require the reduced award. The court noted that 768.73 did not have a subsection “(1)(a)1.” until after it was amended in 1999. Under the post-1999 version of the statute, a punitive damages award cannot exceed the greater of three times the compensatory damages award or $500,000 unless certain findings are made by the “fact finder.” However, the 1995 version of the statute governed in the current case, and under that version of the statute, the trial court is free to exceed the three-times compensatory cap on punitive damages if “the claimant demonstrates to the court by clear and convincing evidence that the award is not excessive in light of the facts and circumstances which were presented to the trier of fact.” Because of the difference in governing law, the court of appeal remanded the matter to the trial court “to exercise the discretion afforded it by the governing 1995 version of section 768.73.3.”

Statute of repose. R.J. Reynolds asserted a statute of repose defense on the fraudulent concealment and conspiracy to commit fraudulent concealment claims, arguing that Buonomo’s claims were barred because she could not demonstrate detrimental reliance upon any statements made by R.J. Reynolds on or after May 5, 1982, twelve years before the decedent filed suit in the Engle case. Under Florida law, an action for fraud “must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.” The trial court had rejected the defense before trial. The tobacco company argued on appeal that striking of the defense was error, and that the statute of repose is an individualized defense that was not foreclosed by Engle and that should be decided on a case-by-case basis. The court of appeal stated that it has consistently agreed with this argument: that while the conduct elements of the fraudulent concealment and conspiracy to commit fraudulent concealment claims were established by virtue of the Engle decision, an Engle progeny plaintiff still had to prove its individual detrimental reliance upon the defendant tobacco company’s misinformation. The appellate court concluded that while the record contained evidence that was supportive of a finding of such reliance on or after May 5, 1982, the trial court’s ruling precluded a jury determination on the issue, depriving R.J. Reynolds of the defense, and was, therefore, error.

The case number is 4D10-3543.

Attorneys: Bard D. Rockenbach (Burlington & Rockenbach, P.A.) and John Uustal and Todd R. McPharlin (Kelley Uustal PLC) for Connie Buonomo. Gregory G. Katsas and Stephanie E. Parker (Jones Day), Benjamin Reid and Cristina Alonso (Carlton Fields, P.A.,) for R.J. Reynolds Tobacco Co.

Companies: R.J. Reynolds Tobacco Co.

MainStory: TopStory DamagesNews TobaccoProductsNews FloridaNews

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