Cigarettes and asbestos are two products that refuse to phase out of products liability cases. And, in the case of cigarette smoking, that long litigation history recently came back to haunt R.J. Reynolds Tobacco Company
in an appeals court in Florida in the case of R.J. Reynolds Tobacco Co. v. Martin
, 2010 WL
5074839 (Fla. Ct. App. Dec. 14, 2010).
A little background. In 1994, a class action was filed against cigarette companies, including R.J. Reynolds, seeking damages for smoking-related illnesses and deaths. The class was eventually decertified by the Florida Supreme Court in Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla. 2006). The case didn’t die there, though; as the Court in Martin stated, the Florida Supreme Court “allowed certain jury findings from the class action to have res judicata effect in any subsequent lawsuits by individual class members seeking damages from the defendants.”
The Engle trial was divided into three phases. During Phase I, the jury was asked to consider “common issues relating exclusively to the defendants’ conduct and the general health effects of smoking” and entitlement to punitive damages. Phase II dealt with whether the three class representatives received compensatory damages and the amount of class punitive damages they would receive, if the jury found entitlement to punitive damages during Phase I. Phase III would deal with liability to and compensatory damages for the remaining class members.
During Phase I, the jury found evidence to prove several claims against the tobacco defendants, and it also concluded that there was sufficient evidence for an award of punitive damages. Following Phase II, the jury awarded $12.7 million to the class representatives, and $145 billion in punitive damages to the class. (Note: yes, we said billion, with a “b.”) The defendants appealed before Phase III began.
The Martin case was the first to consider the appeal of the preclusive effect of the Phase I findings as to individual class members. At the trial phase of Martin, the jury awarded Plaintiff $5 million in compensatory damages (later reduced to $3.3 million based on apportionment of fault) and $25 million in punitive damages. On appeal, the Court framed the issues as follows:
RJR primarily contends that the trial court gave the findings approved in Engle overly broad preclusive effect and thus relieved the plaintiff .
. . of her burden to prove legal causation on her negligence and strict
liability claims. RJR also asserts [Plaintiff] failed to prove the reliance
element of her fraudulent concealment claim, and that the punitive damage award
is excessive and unconstitutional.
The Court of Appeals affirmed the trial court’s use of the Phase I findings from Engle, stating that during Phase I of Engle, “the jury considered and determined specific matters related to the defendants’ conduct” and that, in trying to minimize the preclusive effect of the Engle decision, “[R.J. Reynolds] urges an application of the supreme court’s decision that would essentially nullify it.” The Martin court also declined to follow an Eleventh Circuit decision in Brown v. R.J. Reynolds Tobacco Co., 576 F. Supp. 2d 1328 (M.D. Fla. 2008), stating that “we find it unnecessary to distinguish between [issue preclusion and claim preclusion] or to define what the supreme court meant by ‘res judicata.'”
The decision goes on to discuss several related issues, but the damage was done primarily by this holding, which is just dangerous. As mentioned earlier, tobacco and asbestos are two products with long histories in the courts. True, Engle specifically discussed, considered, and ruled that class members who were purported members of the decertified class action could use the findings later as they brought individual suits and it is possible that the issue will stay relatively contained and limited to those cases. However, the Engle and Martin decisions also crack the door just enough to give plaintiffs the idea that they can reach back years, if not decades, to discover findings against defendants that may benefit them if their own court allows them to use the findings for their own advantages.
Unfortunately, there is also a huge potential incentive to trial courts to use these prior findings as well. Here in South Carolina, and probably across the nation, court systems are struggling to keep pace with long dockets and reduced budgets, and it would be very easy for a court to cut corners, save time, and rely on prior findings against a defendant who routinely comes before it. Strangely, this approach could backfire–in jurisdictions where past holdings rule, plaintiffs will race to file their claims there, creating just the problem the courts sought to avoid.