Philip Morris USA, Other Tobacco Companies Ask Appeals Court to Overturn Engle Verdict

Philip Morris USA and the nation’s other major tobacco companies filed their opening brief appealing the plaintiffs’ verdicts in the Engle action case. The brief was filed with Florida’s Third District Court of Appeal, the state’s intermediate appellate court.

In the brief, the companies made numerous arguments attacking the class certification; the many legal errors made by the Circuit Judge Robert Kaye before, during and after the trial; the improper conduct of plaintiffs’ attorney Stanley Rosenblatt; and the excessiveness of the $145 billion punitive damages award.

“We believe we have provided the appellate court with a clear and persuasive picture demonstrating Philip Morris USA was not given a fair hearing in the trial court,” said William S. Ohlemeyer, Philip Morris Cos. vice president and associate general counsel.

“Any one of these errors should be sufficient basis for the appellate court to reverse this verdict, and we believe the court should go further and order that the Engle class be decertified.”

On July 14, 2000, a Miami jury returned a $145 billion punitive damages verdict in favor of the Engle class. It was, by far, the largest punitive damages award in U.S. history. The punitive verdict followed a decision in April 2000 by the same jury that the companies were responsible for the injuries suffered by three Florida smokers, Frank Amodeo, Mary Farnan and Angie Della Vecchia. The jury awarded these three smokers just over $12.7 million in compensatory damages.

In the brief, the companies argued that the jury should not have been allowed to assess a punitive award in favor of class members who were never identified and for whom liability has not been established.

Indeed, the brief argues, it was improper for Judge Kaye to enter a “final judgment” – which ordered the companies to pay the entire award immediately – before the determination of liability for each class member was completed.

The companies set forth a lengthy recitation of errors that require reversal.

The companies set out in their brief a long list of inflammatory and improper comments by plaintiffs’ counsel, including calls for the jurors to disregard the law and return a verdict based on their own sense of morals and justice.

In other words, Rosenblatt openly invited the jurors to nullify the law. Worse still, the companies said, Rosenblatt attempted to incite racial and religious biases and to manipulate those emotions against the companies.

Specifically, Rosenblatt urged the jurors to subordinate the law to their own "moral, ethical, [and] religious" judgment. He told them in closing arguments that only one such judgment was possible here because – like slavery and the Holocaust – there was just one "side" to whether the companies should be allowed to continue to sell cigarettes:

“You want to be fair, and you say: Right, there's two sides to every question. What's the other side to the Holocaust? What is it? What is the other side to slavery?

“If you admit that you sell a product that causes cancer … and if you also admit it's also addictive, get out of the business. That's the only moral, ethical, religious, decent judgment to make …” (emphasis added).

Judge Kaye allowed Rosenblatt to urge the jurors to put the companies out of business:

“If you sell a product which causes cancer and which is addictive, stop selling it. Stop selling it, because you know it's doing unbelievable harm to your fellow Americans.”

As for the three individual verdicts in favor of plaintiffs Frank Amodeo, Mary Farnan and Angie Della Vecchia, the companies asked the appellate court to set aside each of the awards.

In Amodeo’s case, the companies note that the jury found he was aware of his illness and of his addiction to cigarettes more than four years before the lawsuit was filed, and thus Amodeo was barred from suing by Florida’s statute of limitations.

The companies also argued that the Farnan and Della Vecchia claims should not have been submitted to the jury because neither person was a member of the class. Both Farnan and Della Vecchia were diagnosed with illnesses after Oct. 31, 1994, the date of class certification. Farnan was diagnosed in April 1996, and Ms. Della Vecchia was diagnosed in February 1997.

In the punitive phase of the Engle trial, the phase to determine the amount, if any, of punitive damages, Judge Kaye blocked every attempt by the companies to argue that the need for punishment had been reduced by the companies’ settlements of state Medicaid lawsuits, including the settlement with the state of Florida. The companies said in the brief that Judge Kaye, “with no basis in law … gutted that defense by repeatedly instructing the jury to ignore it.”

Arguing that the class should have been decertified, the companies explained why a class-action trial involving thousands of individual claims is inherently unfair and unjust. The companies detailed how the initial phase of the trial was, in fact, meant solely to overwhelm the jury “with countless allegations unrelated to any class member and presented as if they pertained to the whole class.”

The companies said that Judge Kaye improperly allowed the plaintiffs to “cobble together a fictitious, composite case that appeared stronger than any real case would ever be.”

“The result was an artificial proceeding – not a real trial – that violated defendants' due process rights,” the companies said. “Plaintiffs were thus permitted to present evidence in Phase One on the fictitious premise that such evidence was common to every class member. In this way, plaintiffs were able to make their case on behalf of a non-existent ‘perfect’ plaintiff who smoked every brand of cigarette, saw and relied on every alleged misstatement, and contracted every disease and medical condition at issue.”

The result was a judicial sham. Although it was called a trial, the companies said, it did not approach the fairness that one associates with our court system.

“This was a ‘show trial’ which plaintiffs had virtually no chance of losing, regardless of the facts underlying any and all class members' claims,” said the companies.

Underscoring their argument that tobacco cases revolve around those underlying class members and their individual issues, the companies noted that after a year of trial on the so-called “common issues in Phase One,” it took five months for a jury to hear evidence regarding just three plaintiffs, Amodeo, Farnan and Della Vecchia.

That fact alone, the companies said, demonstrates that in any succeeding trials of the more than 700,000 class members, each individual plaintiff will be required to prove not simply that cigarettes caused them harm, but also that a company’s wrongful conduct (be it negligence, fraud, intentional infliction of emotional distress, etc.) caused his or her injury. In addition, the companies said, affirmative defenses and damages must be litigated separately for each class member.

Throughout the trial, the companies said in their brief, Judge Kaye showed contempt and hostility toward the legal doctrine that requires the Federal Cigarette Labeling and Advertising Act to take precedence over state law.

In particular, Judge Kaye refused to recognize that by complying with the federal law’s requirements, the companies could not be accused of failing to provide additional information to smokers about health risks of smoking. The brief contained several passages, drawn from the trial transcript, describing Judge Kaye’s reaction to arguments raised by lawyers for the companies that federal law controlled the language, placement and effect of health warnings on cigarette packages:

“[The Federal Cigarette Labeling and Advertising Act] makes litigation impossible. And this is – and truth and justice impossible. That's where the problem comes in. Now, we've got to work around it [the federal law]. Now, I have to figure out how to get around it, thank you very much, . . . It's really nonsense. I have so much trouble -- … intellectually accepting that concept [preemption]. . . . Because it is flat-out so wrong in my opinion -- . . . with all due respect for the Supreme Court.

By failing to apply the law, the companies said, Judge Kaye gave the jury free rein to punish defendants for advertising and promotional activity that was subject solely to federal regulation.

The unified Engle brief was filed on behalf of all defendants except Liggett Group Incorporated and Brook Group Limited. Those companies will file their own brief with Florida’s Third District Court of Appeal.

The plaintiffs have 30 days to file their response brief, and the companies are allowed a chance to reply. The court has not set a date for oral argument.

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