Last week, on November 26, 2012, the United States Supreme Court denied cert in one of the thousands of individual cases pending in the aftermath of Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006), where the State of Florida took on the tobacco industry. In R.J. Reynolds Tobacco Co. v. Clay, Case No. 12-272, the precise issue presented on cert was: Whether the lower courts’ preclusion of critical disputed issues absent any determination that those issues had been previously decided, in departure from traditional and heretofore universal preclusion law, violates the Due Process Clause of the Fourteenth Amendment.
The Engle case was originally filed as a state-wide class action against the major domestic cigarette manufactures alleging various tort claims, including strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal. The court divided the class trial into three phases and the jury made generalized findings as to liability against all of the defendants on behalf of all of the class plaintiffs for both compensatory and punitive damages in amounts in excess of $20 million.
On appeal, the Florida Supreme Court affirmed in part and reversed in part. It ruled that the punitive damages award was premature and excessive and that “problems with the three-phase trial plan negated the continued viability of this class action.” See 945 So. 2d at 1262-65, 1267-68. However, even in decertifying the class, the Court specifically chose to retain some of the generalized findings for later “res judicata” use in individual trials by the former class members. In the years following, the lower courts in Florida have been routinely granting preclusive effect to the Engle findings in the individual cases, including the Clay case.
In its cert petition, the defendant in the Clay case, argued that the generalized pre-certification liability findings cannot have a preclusive effect in the individual Clay case because those findings were not specifically tailored to the defendant or the plaintiff in the Clay case and therefore no findings were ever actually made with respect to the liability allegations that Clay had against R.J. Reynolds.
In denying cert, the Supreme Court must have felt comfortable letting the Florida Supreme Court tackle this issue that will ultimately continue to dominate the docket in Florida’s courts. Indeed, this precise issue is pending before the Florida Supreme Court in the case of Philip Morris USA v. Douglas, 83 So. 3d 1002, in which the Court ordered expedited briefing and oral argument earlier this year.
Although these cases are unique in both context and jurisdiction, these latest opinions in the Engle progeny cases appear to be in line with the nationwide class action lessons learned from McReynolds v. Merrill Lynch and Wal-Mart Stores Inc. v. Dukes that mass liability continues to be a risk for all defendants, even after decertification is granted.