MIAMI – A Florida appellate court panel, citing state Supreme Court precedent, has reversed fraud claims lodged against the Philip Morris tobacco company and reduced a prior $2.4 million damages jury verdict award to the estate of a deceased smoker, down to $1.7 million.
Florida Third District Court of Appeal judges Kevin Emas, Monica Gordo and Fleur J. Lobree issued a decision to that effect on June 19, reducing the damages award handed down by a jury to plaintiff Brenda Chadwell, as personal representative of the estate of her husband, James L. Chadwell.
Lobree authored the Court’s opinion in this case.
“Plaintiff pursued a wrongful death action against Philip Morris asserting claims for strict liability, negligence, fraudulent concealment and conspiracy to fraudulently conceal. At trial, Philip Morris asked Mrs. Chadwell and other family members several questions relating to Mr. Chadwell’s reliance on any statements or advertising from Philip Morris that influenced his decision to smoke cigarettes. Philip Morris argued that plaintiff was required to establish that Mr. Chadwell made an affirmative statement that he detrimentally relied on statements, advertisements, or representations made by Philip Morris and/or any other Engle v. Liggett Grp., Inc. defendant. Philip Morris added that Mr. Chadwell could not have been affected by its concealment or false advertising because there were warnings on the cigarette packages. The evidence showed that Mr. Chadwell did not state that he smoked Marlboro cigarettes because of any of Philip Morris’s advertisements; he did not mention seeing, reading or hearing Philip Morris’s statements; he never stated that cigarette companies withheld information from him, and he did not mention or discuss cigarette advertisements. The record shows, however, that Mr. Chadwell was a collector of Marlboro memorabilia and merchandise and only smoked Marlboro cigarette,” Lobree said.
“The jury returned a verdict in favor of plaintiff, finding Philip Morris was 70% at fault and Mr. Chadwell was 30% at fault, and awarded $2.4 million in damages to plaintiff. The jury also found that punitive damages were warranted against Philip Morris. However, in the Phase II proceeding, the jury did not award any punitive damages. Thereafter, the trial court denied all post-trial motions and entered a final judgment in favor of plaintiff in the amount of $2.4 million.”
In its appeal, Philip Morris raised the following issues on appeal to this Court: 1) The plaintiff failed to present evidence that Mr. Chadwell was exposed to and relied on any detrimental statement made by Philip Morris that concealed or omitted information; and 2) The jury instruction on the fraud counts, relating to the reliance requirement, was incorrect.
This Court initially affirmed the trial court’s ruling, concluding that the special jury instructions provided to the jury on fraud and reliance sufficiently instructed the jury on the need to prove reliance not merely on omissions, but on misleading statements and concealed material information as well.
The Supreme Court of Florida granted discretionary review, quashed this Court’s opinion, and remanded the case for reconsideration in light of its decision in Prentice v. R.J. Reynolds Tobacco Co. (Prentice II), as applicable to the plaintiff’s counts for civil conspiracy to fraudulently conceal and fraudulent concealment.
“Prior to Prentice II, Engle conclusively established that the tobacco companies agreed to conceal, omit and misinterpret information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment. Until Prentice II, a jury in an Engle progeny case was permitted to infer reliance based on evidence of the smoker’s own history coupled with the tobacco industry’s pervasive advertising without the need to prove that a smoker relied on any specific tobacco company statement,” Lobree stated.
“In Prentice II, the Florida Supreme Court ‘resolve[d] a district court conflict over what proof is required to prevail on the reliance element of [an Engle plaintiff’s] fraudulent concealment and conspiracy claims – a disagreement that had led to divergent jury instructions in Engle progeny cases.’ Since Prentice II, in order to prevail on fraudulent concealment and conspiracy to conceal claims, an Engle plaintiff can no longer prove the reliance element by inference from well-known and pervasive tobacco ad campaigns. Now, an Engle plaintiff must present direct evidence that the smoker specifically relied on a tobacco company’s statement, or a category of statements, to support an alleged concealment claim against an Engle defendant (or a co-conspirator for an alleged conspiracy claim), and that the statement(s) relied upon concealed or omitted material information about the health effects or addictiveness of smoking cigarettes. Prentice II further specified that an Engle plaintiff must introduce evidence that draws ‘a causal connection running from an Engle defendant’s [qualifying misleading] statement or statements, to the plaintiff’s beliefs about the health effects or addictiveness of smoking cigarettes, to the plaintiff’s injury.”
Lobree explained that “Prentice II makes clear that the plaintiff cannot now rely solely on the pervasive disinformation campaign waged by the tobacco companies in general, and Philip Morris specifically, to establish detrimental reliance” and that “Prentice II concluded that a jury instruction that does not require a finding of reliance on a statement is erroneous and prejudicial because it could reasonably mislead a jury into finding liability based on mere nondisclosure, without connecting that nondisclosure to [the smoker’s] injury” – thus, Prentice II renders most Florida precedent on proof of reliance for Engle-progeny cases obsolete.
Philip Morris argued that “the trial court erred in denying its motions for directed verdict and to set aside the verdict on plaintiff’s fraud and conspiracy claims because plaintiff adduced insufficient evidence to prove the elements of detrimental reliance and legal cause” – and the appellate court agreed.
“Here, there is testimony that Mr. Chadwell collected Marlboro Man items and only smoked Marlboro cigarettes. However, this testimony alone does not show that Mr. Chadwell relied on a statement or misstatement by Philip Morris to his detriment. Simply receiving promotional products by a rewards program, without more, is insufficient to prove detrimental reliance. The evidence in the record before this Court, including deposition testimony, does not identify Mr. Chadwell’s reliance on any misleading or false statement or collection of statements made by Philip Morris addressing the health effects or addictiveness of smoking cigarettes, which either concealed or omitted material information about the health effects or addictiveness of smoking cigarettes. Plaintiff, on the other hand, argues that Prentice II did not change the nature of reliance, but merely clarified that reliance must be on a statement or statements. She contends that Prentice II does not require reliance on a particular statement, does not require that the statement itself concern the health effects or addictiveness of smoking, and does not require that the statement be verbal or written. Plaintiff asserts that reliance on images conveying a message is sufficient,” Lobree said.
“With that in mind, plaintiff presented evidence that Mr. Chadwell always smoked Marlboro cigarettes, owned a Marlboro hat, and he smoked Marlboro reds, then later switched to ‘lights.’ Mrs. Chadwell testified that most of the children in their high school smoked Marlboros. This does not go to the issue of whether Mr. Chadwell was misled about the health effects of smoking and cannot be counted as ‘reliance’ as set forth in Prentice II. There was, however, passing testimony that Mr. Chadwell switched to filtered cigarettes instead of quitting. Mrs. Chadwell testified that Mr. Chadwell switched from Marlboro filtered to Marlboro light cigarettes because he thought – like she and others did – that light cigarettes with lower tar and nicotine would be better for them. Plaintiff asserts that pursuant to Prentice II, this still satisfies the reliance element of the counts for fraudulent concealment and conspiracy to fraudulently conceal and that this Court should affirm the trial court’s denial of Philip Morris’s motion for a directed verdict on those counts.”
But according to Lobree and her colleagues, the appeals court “disagree[d] that this brief testimony supplies sufficient evidence of reliance.”
Likewise, Lobree and company found the fraud claims are not, in fact, inextricably intertwined with the strict liability and negligence claims.
“Philip Morris contends that it is entitled to a new trial on all claims – negligence, strict liability and conspiracy to fraudulently conceal – arguing that the compensatory damages issues are inextricably intertwined with the fraud claims. In other words, Philip Morris argues that all the issues depend on determining why Mr. Chadwell started to smoke and continued to smoke long enough to develop lung cancer. Philip Morris argues that the intentional tort fraud claims required the jury to determine what part of Mr. Chadwell’s smoking was as a result of his informed choice versus his detrimental reliance, while the comparative fault determination required the jury to weigh the competing reasons why Mr. Chadwell smoked – his own choice or addiction,” Lobree said.
“We also conclude that the strict liability and product liability issues are not inextricably intertwined with the intentional fraud and conspiracy issues. Those verdicts remain intact despite our reversal of the fraud and conspiracy counts, and a new trial on all issues is not warranted.”
The Third District Court of Appeal then reduced the jury verdict award from $2.4 million to $1.7 million.
“Because we are reversing the trial court’s denial of Philip Morris’s motion for a directed verdict on the intentional tort claims of conspiracy and fraud, it follows that plaintiff’s damages on the negligence and strict liability claims must be reduced by Mr. Chadwell’s 30% comparative fault as found by the jury. Here, as we are reversing the trial court’s ruling on the intentional tort claims of fraud and conspiracy to commit fraud, it follows that the plaintiff’s compensatory damage award be reduced accordingly. We thus remand with the instruction that the compensatory damages award be reduced by the percentage of Mr. Chadwell’s comparative fault,” Lobree said.
“Based on the foregoing, we reverse the final judgment in part and remand for entry of a directed verdict in favor of Philip Morris on plaintiff’s fraud and conspiracy claims because plaintiff adduced insufficient evidence to prove the elements of detrimental reliance and legal cause under the Prentice II standard. We affirm the jury verdicts for plaintiff’s negligence and strict liability claims and remand with the instruction that the trial court reduce plaintiff’s damages by Mr. Chadwell’s 30% comparative fault as the jury found in its verdict. We affirm the remainder of the final judgment.”
Florida Third District Court of Appeal case 3D19-0239
Circuit Court for Miami-Dade County Lower Tribunal case 10-17931
From the Florida Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com