Up in Smoke – District Court Vacates $20,760,000 Punitive Damages Verdict in Florida Tobacco Lawsuit

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On April 23, 2015, the United States District Court for the Middle District of Florida vacated a $20,760,000 punitive damages award that had been levied against international tobacco manufacturer Philip Morris USA, Inc. by a Florida jury earlier this year. The lawsuit, Berger v. Philip Morris USA, Inc., Case No. 3:09-cv-14157, is one of thousands of individual suits that remain from the Engle v. Liggett Group Inc. class action lawsuit that was decertified by the Florida Supreme Court in 2006. As one of the Engle progeny, the jury in Berger was instructed to accept certain findings of fact made in Engle and apply those findings to the individual circumstances of the Plaintiff, Judith Berger, to determine whether Philip Morris should be held liable under various theories of liability for Ms. Berger’s congestive obstructive pulmonary disease (“COPD”).

In September of 2013, the jury in Berger found in favor of Ms. Berger and awarded a verdict of $27,010,000.14 against Philip Morris. A substantial portion of the award was $20,760,000 in punitive damages, which were based upon Ms. Berger’s claims that Philip Morris had fraudulently concealed the negative health effects and/or addictive nature of smoking cigarettes. After the verdict had been rendered, Philip Morris made a post-trial motion for judgment as a matter of law on Ms. Berger’s fraudulent concealment and conspiracy to fraudulently conceal claims. The court granted this motion, vacating the $20,760,000 in punitive damages and, by extension, conditionally granting Philip Morris’ motion for a new trial on the two claims at issue.

First, the court found that the evidence at trial had “amply confirmed the tobacco companies’ decades-long fraudulent conduct,” which the court said Philip Morris was “actively and deeply complicit.” Despite this evident wrongdoing, which was described as “frightfully inhumane, vile, and unconscionable,” the court reasoned that the punitive damages award was not warranted unless Ms. Berger had proven that she detrimentally relied upon Philip Morris’ conduct. After a thorough analysis of the evidence, the court found that evidence of such detrimental reliance was absent from proof at trial. The only expert witness who offered any testimony on the issue based his opinions about Ms. Berger’s addiction on Ms. Berger’s testimony that she decided to smoke because of peer pressure, the easy availability of cigarettes, and the pleasure she got from smoking. The expert also based his opinions on testimony that Ms. Berger had never seen a cigarette advertisement before she began smoking and had not paid attention to such advertising at any time thereafter.

Having found that the expert’s testimony did not give rise to any inference of reliance on the part of Ms. Berger, the court reasoned that Ms. Berger’s “claim of reliance rises or falls on her own testimony.” While Ms. Berger testified that she was generally aware of the health risks of smoking, she said she was completely unaware of the tobacco industries “faux research” downplaying such dangers. Thus, the court was left with the conclusion that the tobacco industry’s misinformation, which did exist, had no effect on Ms. Berger’s decision to continue smoking. Without any effect on her actions, the court held that there was no evidence of detrimental reliance, dooming her fraudulent concealment and conspiracy claims. While the remainder of the jury’s verdict is still intact, though substantially discounted by the jury’s finding that Ms. Berger was 40% at fault for her injuries, Philip Morris has won a substantial victory in the most recent chapter of this country’s ongoing tobacco litigation saga.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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