Case No. SC12-2151

Fourth District Case No. 4D09-2666

IN THE SUPREME COURTSTATE OF FLORIDA

PHILIP MORRIS USA INC.,

Defendant/Petitioner,

v.

ELAINE HESS, as personal representativeof the Estate ofSTUART HESS, deceased,

Plaintiff/Respondent.

ON DISCRETIONARY REVIEW FROM A DECISION

OF THE FOURTH DISTRICT COURT OF APPEAL

BRIEF ON JURISDICTION OF PETITIONERPHILIP MORRIS USA INC.

Andrew S. BrennerFL Bar No. 978663

Patricia MelvilleFL Bar No. 475467

Luis E. SuarezFL Bar No. 390021

BOIES, SCHILLER & FLEXNER LLP

100 SE Second Street, Suite 2800Miami, FL 33131Phone: (305) 539-8400Facsimile: (305) 639-1307E-mail: abrenner@bsfilp.com

Joseph H. Lang, Jr.FL Bar No. 59404

CARLTON FIELDS

4221 W. Boy Scout Blvd.Suite 1000Tampa, FL 33607Phone: (813) 229-4253Facsimile: (813) 229-4133E-mail: jlang@carltonfields.com

Counselfor PetitionerPhilip Morris USA Inc.

TABLEOFCONTENTS

Page

STATEMENT OF THE CASE .................................................................................1

SUMMARY OF THE ARGUMENT........................................................................5

ARGUMENT ............................................................................................................6

I. THE FOURTH DISTRICT'S RULING REGARDING THEPRECLUSIVE EFFECT OF THE ENGLE PHASE IFINDINGS CONFLICTS WITH ENGLE ITSELF. ............................ 6

II. THE FOURTH DISTRICT'S RULING ON LEGALCAUSATION CONFLICTS WITH THIS COURT'SDECISIONS IN ENGLE AND WEST.................................................. 7

III. THE FOURTH DISTRICT RELIED ON DECISIONS THATARE PENDING BEFORE THIS COURT...........................................9

CONCLUSION....................................................................................................... 10

CERTIFICATE OF SERVICE................................................................................11

CERTIFICATE OF COMPLIANCE ...................................................................... 12

APPENDIX

TABLE OF CITATIONS

Page(s)Cases

Bagwell v. Bagwell,14 So. 2d 841 (Fla. 1943).......................................................................................6

Engle v. Liggett Group, Inc.,945 So. 2d 1246 (Fla. 2006)...............................................................................1, 7

Fayerweather v. Ritch,195 U.S. 276 (1904)...............................................................................................7

Jaimes v. State,51 So. 3d 445 (Fla. 2010)....................................................................................... 6

Jollie v. State,405 So. 2d 418 (Fla. 1981)................................................................................. 6, 9

PhiHp Morris USA, Inc. v. Hess,95 So. 3d 254 (Fla. 4th DCA 2012)................................................... 1, 2, 3, 4, 8, 9

Philip Morris USA, Inc. v. Douglas,83 So. 3d 1002 (Fla. 2d DCA 2012)..........................................................1, 4, 5, 9

Pub. Health Trust ofDade Cnty. v. Menendez,584 So. 2d 567 (Fla. 1991).....................................................................................7

R.J. Reynolds Tobacco Co. v. Brown,70 So. 3d 707 (Fla. 4th DCA 2011)........................................................... 1, 4, 5, 9

Steadman v. Liberty Mut. Ins. Co.,932 So. 2d 1034 (Fla. 2006)...............................................................................6, 9

Sun State Roofing Co. v. Cotton States Mut. Ins. Co.,400 So. 2d 842 (Fla. 2d DCA 1981)...................................................................... 7

Wallace v. Dean,3 So. 3d 1035 (Fla. 2009).......................................................................................6

West v. Caterpillar Tractor Co.,336 So. 2d 80 (Fla. 1976)................................................................................... 1, 8

Statutes

§ 95.031(2), Fla. Stat.................................................................................................3

Constitutional Provisions

Art. V, § 3(b)(3), Fla. Const. .....................................................................................6

11

STATEMENT OF THE CASE

The ruling of the Fourth District Court ofAppeal in this Engle progeny case

implicates two express and direct conflicts that warrant the Court's exercise of

jurisdiction. First, the Fourth District's ruling that "'the Engle findings

preclusively establish the conduct elements' of claims brought in a post-Engle

action" (Philip Morris USA, Inc. v. Hess, 95 So. 3d 254, 258 (Fla. 4th DCA 2012)

(quoting R.J. Reynolds Tobacco Co. v. Brown, 70 So. 3d 707, 715 (Fla. 4th DCA

2011))) misapplies, and thus conflicts with, this Court's decision in Engle v.

Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006) (per curiam). Second, the Fourth

District's ruling that plaintiff Elaine Hess established the legal causation elements

of her strict-liability and negligence claims (Hess, 95 So. 3d at 258-59) conflicts

with this Court's decisions in Engle and West v. Caterpillar Tractor Co., 336 So.

2d 80 (Fla. 1976).1

Moreover, the Fourth District's decision relied on Brown, 70 So. 3d 707, and

Philip Morris USA, Inc. v. Douglas, 83 So. 3d 1002 (Fla. 2d DCA 2012). See

Hess, 95 So. 3d at 258, 259. This Court therefore possesses discretionary

jurisdiction over this case for the additional reason that the Court has accepted

1 This Court is currently considering the question whether the Engle Phase Ifindings establish the conduct elements of progeny plaintiffs' claims, as well as thestandard for proving legal causation in Engle progeny cases, in Philip Morris USA,Inc. v. Douglas, No. SC12-617.

1

jurisdiction in Douglas, see No. SC12-617, and is currently considering whether to

accept jurisdiction in Brown, see No. SC11-2201.2

Plaintiff sued Philip Morris USA Inc. ("PM USA") seeking to recover

damages for the death of her husband, Stuart Hess, a longtime smoker diagnosed

with lung cancer. Hess, 95 So. 3d at 256-57. Plaintiff asserted claims for strict

liability, negligence, and fraudulent concealment. Id. at 256. The trial court ruled

that the Engle Phase I findings conclusively established the conduct elements of

plaintiff's claims. Id. at 257-58.

The case proceeded to trial in two phases. In Phase I, the jury found that Mr.

Hess was a member of the Engle class because he was addicted to cigarettes

containing nicotine and because his addiction was a legal cause of his death. Hess,

95 So. 3d at 257. In Phase II, the jury decided issues of liability, comparative fault,

and damages. Id. at 258. The trial court instructed the jury, with respect to

plaintiff's fraudulent-concealment claim, to determine whether Mr. Hess had relied

2 Plaintiff has separately filed a notice to invoke this Court's discretionaryjurisdiction with respect to the Fourth District's ruling that plaintiff's fraudulent-concealment claim was barred by the statute of repose. See No. SC12-2153. PMUSA and R.J. Reynolds Tobacco Company ("Reynolds") have also invoked thisCourt's discretionary jurisdiction on the same repose issue in Philip Morris USA,Inc. v. Russo, No. SC12-1401. As PM USA and Reynolds explained in theirjurisdictional brief in Russo, filed on November 9, 2012, this case is the bettervehicle for the Court to address the important and recurring repose questionbecause the Fourth District's opinion in this case contains a more extensive andthorough analysis of the repose issue than the Third District's opinion in Russo.Thus, the Court should also take up this case as the lead case on the repose issue.

2

to his detriment on any statements by PM USA that omitted material information

regarding the health effects or addictiveness of smoking cigarettes. Id. at 257. The

trial court also instructed the jury to determine, for purposes ofPM USA's defense

based on the statute of repose for fraud-based claims, § 95.031(2), Fla. Stat.,

whether any such reliance had occurred after May 5, 1982, twelve years prior to

the filing of the Engle complaint. See Hess, 95 So. 3d at 258. The trial court

refused, however, to instruct the jury to make a legal causation determination on

plaintiff's strict-liability and negligence claims, and thus did not require the jury,

on those claims, to find a causal link between PM USA's alleged tortious conduct

and Mr. Hess's injuries. See id.

The jury found that Mr. Hess had relied to his detriment on fraudulent

statements by PM USA, but that he had done so only before May 5, 1982. Hess,

95 So. 3d at 258. The jury awarded $3 million in compensatory damages. Id. It

also found that $5 million in punitive damages were warranted based on plaintiff's

fraudulent-concealment claim. Id. PM USA moved for judgment on the

fraudulent-concealment claim and punitive damages based on the statute of repose

because the jury found that Mr. Hess had not relied on any fraudulent statement by

PM USA within the actionable twelve-year period. Id. The trial court denied that

motion. Id. In entering final judgment, the trial court reduced the compensatory

damages award to $1.26 million based on Mr. Hess's comparative fault. Id.

3

On appeal, the Fourth District affirmed the trial court's ruling that the Engle

Phase I findings established the conduct elements of plaintiff's claims. Hess, 95

So. 3d at 258. Offering no independent analysis of this issue, the Fourth District

relied on its prior holding that "'the Engle findings preclusively establish the

conduct elements' of claims brought in a post-Engle action," and that Engle

progeny plaintiffs are therefore "not required to relitigate these elements." Id.

(quoting Brown, 70 So. 3d at 715). The Fourth District also held that plaintiff had

established the legal causation elements of her strict-liability and negligence

claims. Id. at 258-59. Although the court acknowledged that the jury was not

asked to make a finding of legal causation on either of those claims, it held that

legal causation had been established because PM USA stipulated that its cigarettes

caused Mr. Hess's lung cancer. Id. at 259 (citing Douglas, 83 So. 3d at 1010).

Finally, the Fourth District held that plaintiff's fraudulent-concealment claim, as

well as her request for punitive damages based on that claim, was barred by the

statute of repose because the jury found that Mr. Hess did not rely on any allegedly

fraudulent statements by PM USA within the twelve-year period preceding the

filing ofEngle. Id. at 260-61. The Fourth District therefore reversed the judgment

on the fraudulent-concealment claim and the punitive damages award. Id. at 261.

4

SUMMARY OF THE ARGUMENT

The Court has jurisdiction over this case because the Fourth District's

interpretation of the preclusive effect of the Engle Phase I f"mdings conflicts with

this Court's decision in Engle. Contrary to the Fourth District's ruling, Engle did

not direct courts entertaining progeny cases to abandon the longstanding Florida

rule that issue preclusion applies only to issues actually decided in a prior

proceeding.

This Court also has jurisdiction over this case because the Fourth District's

ruling that plaintiff established the legal causation elements of her strict-liability

and negligence claims conflicts with this Court's decisions in Engle and West. The

Fourth District ruled that legal causation had been established because PM USA

stipulated that its cigarettes caused Mr. Hess's lung cancer. But that stipulation did

not establish that PM USA's allegedly tortious conduct caused Mr. Hess's cancer.

The Fourth District's ruling therefore conflicts with this Court's precedent

requiring tort plaintiffs to demonstrate a causal link between their injuries and the

defendant's tortious conduct. The Court should exercise its discretionary

jurisdiction to ensure that all tort plaintiffs-including Engle progeny plaintiffs-

are held to the legal causation burden imposed by Florida law.

In addition, the Fourth District's decision relied on Brown, 70 So. 3d 707,

and Douglas, 83 So. 3d 1002. This Court therefore also possesses discretionary

5

jurisdiction over this case because the Court has accepted jurisdiction in Douglas,

see No. SCl2-617, and is currently considering whether to accept jurisdiction in

Brown, see No. SC11-2201. See generally Steadman v. Liberty Mut. Ins. Co., 932

So. 2d 1034, 1035 (Fla. 2006); Jollie v. State, 405 So. 2d 418, 420-21 (Fla. 1981)

(per curiam).

ARGUMENT

I. THE FOURTH DISTRICT'S RULING REGARDING THEPRECLUSIVE EFFECT OF THE ENGLE PHASE I FINDINGSCONFLICTS WITH ENGLE ITSELF.

This Court has jurisdiction because the decision below "expressly and

directly conflicts" (Art. V, § 3(b)(3), Fla. Const.) with the decision of this Court in

Engle. The Florida Constitution confers conflict jurisdiction if a district court's

decision arguably misapplies a decision of this Court. Jaimes v. State, 51 So. 3d

445, 446 (Fla. 2010); Wallace v. Dean, 3 So. 3d 1035, 1040 (Fla. 2009). Such a

conflict exists here because, in affirming the trial court's holding that the Engle

Phase I findings automatically established the wrongful conduct elements of

plaintiff's claims, the Fourth District misapplied Engle.

The Engle opinion is best understood as directing the lower courts to apply

standard res judicata principles to progeny cases. Under those well-established

rules, issue preclusion applies only to the "precise facts" that "were determined by

the former judgment." Bagwell v. Bagwell, 14 So. 2d 841, 843 (Fla. 1943). It has

6

never applied where, as here, the prevailing party in the first case proffered

alternative theories and "it is impossible to determine which theory the [first] jury

relied on." Sun State Roofing Co. v. Cotton States Mut. Ins. Co., 400 So. 2d 842,

844 (Fla. 2d DCA 1981). Moreover, the U.S. Supreme Court has long held that

this rule is compelled by federal due process. See Fayerweather v. Ritch, 195 U.S.

276, 299, 307 (1904). At a minimum, the interpretation of Engle's holding

regarding the permissible use of the Engle Phase I findings is subject to reasonable

disagreement, which itself is sufficient to support this Court's jurisdiction. See

Pub. Health Trust ofDade Cnty. v. Menendez, 584 So. 2d 567, 569 (Fla. 1991)

(finding conflicts jurisdiction where statements in a decision of this Court

"reasonably may be read" differently from a district court's decision).

II. THE FOURTH DISTRICT'S RULING ON LEGAL CAUSATIONCONFLICTS WITH THIS COURT'S DECISIONS IN ENGLE ANDWEST.

This Court also has jurisdiction over this case because the Fourth District's

ruling that plaintiff established the legal causation elements of her strict-liability

and negligence claims conflicts with this Court's decisions in Engle and West. In

Engle, this Court identified "legal causation" as one of the "individualized issues"

that progeny plaintiffs must prove in their individual suits. Engle, 945 So. 2d at

1268. This Court's decision in West makes clear that, to establish legal causation,

progeny plaintiffs cannot simply prove that they were injured by smoking the

7

defendant's cigarettes. Rather, they must prove that their injuries were caused by

the defendant's tortious conduct. As this Court held in West, "when the injury is in

no way attributable to a defect, there is no basis for imposing product liability upon

the manufacturer" because "[i]t is not contemplated that a manufacturer should be

made the insurer for all physical injuries caused by his products." 336 So. 2d at 86

(internal quotation marks omitted).

The Fourth District in this case acknowledged that the jury "was not

instructed on legal causation as it pertained to the claims of strict liability and

negligence," and that "the second phase verdict form did not require the jury to

make a legal causation finding on the strict liability or negligence claims." Hess,

95 So. 3d at 258-59. "Despite these failings," the court affirmed the verdict on

these claims because PM USA stipulated that Mr. Hess's "'lung cancer was caused

by smoking [PM USA] cigarettes that contained nicotine'" and that Mr. Hess

"'died of lung cancer.'" Id. at 259.

That ruling conflicts with this Court's decisions in Engle and West. The

stipulations on which the Fourth District relied did not satisfy plaintiff's burden to

prove legal causation on her strict-liability and negligence claims because they

established only that smoking PM USA's cigarettes caused Mr. Hess's injuries.

Cigarettes are inherently dangerous products that carry health risks even if they are

not defective. Accordingly, the stipulations did not establish that a defect in PM

8

USA's cigarettes caused Mr. Hess's injuries. Nor did they establish that Mr.

Hess's injuries were caused by PM USA's alleged negligence. Thus, the Fourth

District departed from this Court's precedent in ruling that plaintiff had established

the legal causation elements of her strict-liability and negligence claims simply

because PM USA's cigarettes caused Mr. Hess's injuries.

This Court should exercise its discretionary jurisdiction in this case because

the thousands of plaintiffs with pending Engle progeny cases should not be

excused from the legal causation burden that must be met by every other tort

plaintiff in the State. Under Florida law, tort plaintiffs are required to prove a

causal link between the defendant's allegedly tortious conduct and their injuries.

As this Court made clear in Engle itself, progeny plaintiffs are no exception to that

rule.

III. THE FOURTH DISTRICT RELIED ON DECISIONS THAT AREPENDING BEFORE THIS COURT.

The Fourth District's decision relied on Brown, 70 So. 3d 707, and Douglas,

83 So. 3d 1002. See Hess, 95 So. 3d at 258, 259. This Court therefore possesses

discretionary jurisdiction over this case for the additional reason that the Court has

accepted jurisdiction in Douglas, see No. SC12-617, and is currently considering

whether to accept jurisdiction in Brown, see No. SC11-2201. See generally

Steadman, 932 So. 2d at 1035; Jollie, 405 So. 2d at 420-21.

9

CONCLUSION

PM USA requests that the Court grant review in this case.

Respectfully submitted,

Andrew S. BrennerFL Bar No. 978663

Patricia MelvilleFL Bar No. 475467

Luis E. SuarezFL Bar No. 390021

BOIES, SCHILLER & FLEXNER LLP

100 SE Second Street, Suite 2800Miami, FL 33131Phone: (305) 539-8400Facsimile: (305) 639-1307abrenner@bsf1lp.compmelville@bsfilp.com1suarez@bsfilp.com

By:J6 eph . g, Jr.

FL a o. 59404CARLTON FIELDS

4221 W. Boy Scout Blvd., Suite 1000Tampa, FL 33607Phone: (813) 229-4253Facsimile: (813) 229-4133ilang@carltonfields.comigrayson@carltonfields.comtpaecf@cfdom.net

Counselfor Petitioner Philip Morris USA Inc.

10

CERTIFICATE OF SERVICE

WE HEREBY CERTIFY that a true and correct copy of the foregoing brief

on jurisdiction was served by electronic mail upon the following counsel for

Respondent this 14th day ofNovember, 2012:

Gary M. Paige John S. Millsgaryp216@aol.com imills@mills-appeals.comLAW OFFICE OF GARY PAIGE service@mills-appeals.com

355 Palermo Avenue THE MILLS FIRM

Coral Gables, FL 33134 203 N. Gadsden Street, Suite 1ATallahassee, FL 32301

AndAnd

Adam Tropadamtrop@aol.com Bruce S. Rogowcpeffley@protectingyou.com brogow@rogowlaw.comTROP & AMEEN, P.A. BRUCE S. ROGOW, P.A.

3860 W. Commercial Blvd. 500 East Broward Blvd., Suite 1930Tamarac, FL 33309-3329 Fort Lauderdale, FL 33394

And

Alex Alvarezalex@integrityforjustice.comTHE ALVAREZ LAW FIRM

355 Palermo AvenueCoral Gables, FL 33134

ang, Jr.FL Ba o. 59404

CERTIFICATE OF COMPLIANCE

Pursuant to Florida Rule of Appellate Procedure 9.210(a)(2), counsel for

Petitioner hereby certify that the foregoing brief complies with the applicable font

requirement because it is written in 14-point Times New Roman font.

DATED: November 14, 2012

J h ng, Jr.FL Bar . 59404

12

APPENDIX

APPENDIX

PhiHp Morris USA, Inc. v. Hess,95 So. 3d 254 (Fla. 4th DCA 2012) .............................................................. A l

Philip Morris IJSA, Inc. v. Hess, 95 So.3d 254 (2012)

37 Fla. L. Weekly D1082

12-year statute of repose.

95 So.3d 254

District Court ofAppeal of Florida, Affirmed in part and reversed in part.Fourth District.

PHILIP MORRIS USA, INC., Appellant,v.

Elaine HESS, as Personal Representative of theEstate of Stuart Hess, deceased, Appellee.

No. 4Do9-2666. | May 2, 2012. | Rehearing DeniedSept. 14, 2012.

Attorneys and Law Firms

*255 Miguel A. Estrada of the Law Firm of Gibson, Dunn& Crutcher LLP, Washington, D.C., Patricia A. Melville,Andrew S. Brenner and Luis E. Suarez of Boies Schiller& Flexner LLP, Miami, and Gary L. Sasso of CarltonFields, Tampa, for appellant.

SynopsisBackground: Personal representative of cigarettesmoker's estate brought action against tobaccomanufacturer for strict liability, negligence, andfraudulent concealment. The Seventeenth Judicial CircuitCourt, Broward County, Jeffrey E. Streitfeld, J., enteredjudgment on jury's verdict in favor of personalrepresentative's favor, denied manufacturer's motion forjudgment as matter of law on claim for fraudulentconcealment, and reduced compensatory damages awardby percentage of smoker's comparative negligence.Manufacturer appealed, and personal representativecross-appealed reduction ofdamages.

Holdings: The District Court of Appeal, Damoorgian, J.,held that;

although prior determination in Engle v. Liggett Group,Inc. conclusively established conduct-based elements ofclaims for strict liability and negligence, personalrepresentative was required to prove that smoker'saddiction to cigarettes containing nicotine was legal causeof death;

trial court's error in failing to instruct jury that it had tofind that cigarette smoker's addiction to cigarettescontaining nicotine was legal cause of lung cancer anddeath on claims for strict liability and negligence washarmless;

prior determination in Engle that tobacco companiesconcealed or omitted material information concerninghealth effects or addictive nature of cigarettesconclusively established conduct-based elements of claimfor fraudulent concealment in instant case; and

claim for fraudulent concealment was ban·ed by

Bruce S. Rogow, Cynthia E. Gunther of Bruce S. Rogow,P.A., Fort Lauderdale, Gary M. Paige and Adam Trop ofPaige, Trop & Ameen, P.A., Hollywood, and *256 AlexAlvarez of The Alvarez Law Firm, Coral Gables, forappellee.

Opinion

DAMOORGIAN, J.

Philip Morris USA, Inc. ("PM USA") appeals the trialcourt's final judgment entered in favor of Elaine Hess, assurviving spouse and personal representative of the estateof her deceased husband, Stuart Hess. PM USA raisesthree issues on appeal. First, it contends that the trial courterred in denying its motion for judgment as a matter oflaw on the fraudulent concealment claim because it wasbarred by the statute of repose. Next, it argues that thetrial court misapplied the Engle' findings. Lastly, itsubmits that the trial court erred in denying its motion toremit the punitive damages award because it wasexcessive under federal and Florida law. Mrs. Hess crossappeals the trial court's final judgment to the extent itreduced the compensatory damages award based on thecomparative fault of the decedent Mr. Hess. She arguesthat the substance of her action was the intentional tort offraudulent concealment, precluding application of thecomparative fault statute. See § 768.81(3)-(4), Fla. Stat.(1993). We affirm with respect to the application of theEngle findings. We reverse the denial of PM USA'smotion for judgment as a matter of law on the fraudulentconcealment claim, upon which the punitive damagesaward was based. Because we reverse for entry ofjudgment in PM USA's favor on the fraudulentconcealment claim, PM USA's argument on appealregarding the denial of its motion for remittitur isrendered moot as is Mrs. Hess's issue on cross appealregarding the trial court's reduction of the compensatorydamages award

Weniav,Next ©2012 or on He rs No claim to orioim! US Govemment Worss. ''

Philip Morris USA, Inc. v. Hess, 95 So.3d 254 (2012)

37 Fla. L. Weekly D1082

The instant case commenced as one of the Engle progenycases. See Engle v. Liggett Group, Inc., 945 So.2d 1246(Fla.2006). By way of background, Mrs. Hess filed acomplaint against PM USA for strict liability, negligence,conspiracy to commit fraud, and fraudulent concealment,seeking to recover damages for the death of her husband,a longtime smoker.3 The complaint admitted that Mr.Hess bore some measure of fault for his smoking-relatedinjuries and death.

The case proceeded to trial in two phases and in themanner we approved in RJ. Reynolds Tobacco Co. v.Brown, 70 So.3d 707 (Fla. 4th DCA 2011). Id. at 714. Inthe first phase, the jury was required to determine whetherMr. Hess was a member of the Engle class, i.e. whetherhe was addicted to PM USA's cigarettes, and, if so, washis addiction a legal cause of his death. Mrs. Hesspresented substantial evidence of Mr. Hess's smokinghistory and medical background, as well as experttestimony regarding his addiction in this phase.Testimony also indicated that Mr. Hess's cigarette ofchoice was PM USA's Benson & Hedges brand.'Furthermore, she presented evidence regarding thetobacco companies' strategy to conceal the *257 addictivenature of nicotine from smokers. Pursuant to the parties'stipulations, the jury was instructed that (i) cigarettescontaining nicotine are addictive; (ii) smoking cigarettescauses lung cancer; (iii) Mr. Hess's lung cancer wascaused by PM USA's cigarettes containing nicotine; and(iv) Mr. Hess died of lung cancer. At the conclusion ofthis phase, the jury found that Mr. Hess was addicted tocigarettes containing nicotine, and his addiction was thelegal cause ofhis death.

In the second phase of trial, limited testimony waspresented to the jury from Mrs. Hess and her son, DavidHess, regarding Mr. Hess's exposure to cigaretteadvertising, his knowledge of the health risks posed bysmoking, and the emotional loss they suffered as a resultof Mr. Hess's death in 1997 at the age of 55. At theconclusion of evidence in this phase, the trial courtinstructed the jury that the strict liability, negligence, andfraudulent concealment Engle f'mdings were binding onit? It also explained to the jury that the complaint hadadmitted Mr. Hess bore some measure of responsibilityand instructed that his behavior was "a concurring legalcause in combination with acts or omissions of PhilipMorris USA of his smoking related injuries and death."The trial court also instructed:

The conduct of Stuart Hess and Philip Morris USAmay be considered a legal cause if it directly and innatural and in continuance (sic) sequence produces or

contributes substantially to producing the loss so that itcan reasonably be said that but for that conduct, theloss would not have occurred. Accordingly, you mustassign some percentage of responsibility on yourverdict form to Mr. Hess.

In regard to the fraudulent concealment claim, the trialcourt instructed the jury:

You must determine whether Stuart Hess relied to hisdetriment on any statements made by Philip MorrisUSA that omitted material information. If the greaterweight of the evidence does not support the Plaintiff'sclaim on this issue, then your verdict should be for theDefendant on this claim.

Relating to that claim, Stuart Hess' reliance to hisdetriment on any statements by Philip Morris USA thatomitted material information is a legal cause of loss if itdirectly and in natural and continuance (sic) sequenceproduces or contributes substantially to producing suchloss so that it can reasonably be said that but for StuartHess' reliance, the loss would not have occurred.

In order to be regarded as a legal cause of loss, StuartHess' reliance on omitted statements to his detrimentneed not be the only cause. Stuart Hess' reliance onomitted statements to his detriment may be a legalcause of loss ... even though it operates in combinationwith the act of another, some natural cause or someother cause.

The verdict form in this second phase directed the jury asfollows:

By answering the following questions, you willdetermine the damages that ELAINE HESS and DAVIDHESS sustained as a result of the incident in question.In determining the amount of damages, do not makeany reduction *258 because of the fault of the parties.The Court, in entering judgment, will make anappropriate reduction ofthe damages awarded.

It then asked the jury to (i) state the percentage ofresponsibility it charged to PM USA and Stuart Hess; (ii)state the amount of damages sustained by Mrs. Hess dueto pain and suffering and the loss of her husband'scompanionship and protection; (iii) state the amount ofdamages sustained by David Hess due to pain andsuffering and the loss of parental companionship,instruction and guidance; (iv) determine whether Mr.Hess had relied to his detriment on any statement by PMUSA omitting material information, which caused orcontributed to his injury and death; (v) choose the timeperiod during which he relied on such; (vi) determinewhether punitive damages were warranted against PM

WesnawNext © 2012 Thomson Reuters No e aim to or dna U.S Govemment Works. 2

Philip Morris USA, Inc. v. Hess, 95 So.3d 254 (2012)

37 Fla. L Weekly D1082

USA by clear and convincing evidence; and (vii) if liability and negligence. Moreover, the second phasepunitive damages were warranted, to assign a total verdict form did not require the jury to make a legalamount. It did not ask the jury to retum findings on any causation finding on the *259 strict liability or negligenceother element of Mrs. Hess's claims. claims. This aspect of legal cause is directed at the loss,

injury, or damage claimed by the plaintiff.The jury returned a verdict of $3 million in compensatorydamages, presumably on all three claims. It determined N Despite these failings, we affirm the final judgment onMr. Hess was 58% responsible and PM USA was 42% the strict liability and negligence claims due to certainresponsible. It also found Mr. Hess had relied on PM stipulations made by PM USA. In the first phase of trial,USA's statements only before May 5, 1982, and found pursuant to the parties' stipulations, the trial courtpunitive damages were warranted on the fraud by instructed the jury that "Stuart Hess' lung cancer wasconcealment claim in the amount of $5 million. Before caused by smoking Philip Morris USA cigarettes thatentering its final judgment, the trial court sua sponte contained nicotine" and "Stuart Hess died of lungreduced the compensatory damage award to $1.26 million cancer." In addition, the jury was later instructed that PMbased on the comparative fault assigned to Mr. Hess. USA's cigarettes were "defective and unreasonably

dangerous" and PM USA was "negligent in failing toPM USA moved for judgment as a matter of law on the exercise the degree of care that a reasonable manufacturerfraudulent concealment claim, upon which the punitive would exercise under like circumstance." The particulardamages award was based. It argued that in light of the stipulations found here coupled with the accepted Englejury's finding that PM USA did not defraud Mr. Hess findings concerning PM USA's conduct obviated the needwithin the twelve years prior to the filing of the Engle to provide strict liability and negligence causationcomplaint, the fraudulent concealment claim and the instructions in the second phase and submit thosepunitive damages award were barred by the statute of questions to the jury, as would otherwise be requiredrepose. Without explanation, the trial court denied the pursuant to Brown. See Brown, 70 So.3d at 717, 718.motion. It also denied PM USA's motion to remit the Under these specific circumstances, the causationpunitive damages award. This appeal and cross-appeal instructions necessary for consideration of the causes offollows. action and subsequent jury findings on that element were

not required. Cf' Philip Morris USA v. Douglas, 83 So.3dWe first address PM USA's issue with the trial court's 1002 (Fla. 2d DCA 2012) (affirming the final judgment

application of the Engle findings. We reject PM USA's on a strict liability claim based on the Phase I finding thatvarious arguments regarding the application of the cigarettes were "defective and unreasonably dangerous"findings. This Court recently addressed the scope of and the jury's determination that Mrs. Douglas' diseasesapplication of the Engle findings in the Engle progeny were legally caused by her smoking cigarettescases. See Brown, 70 So.3d at 717-18. In Brown, we manufactured by Tobacco).stated that "the Engle findings preclusively establish theconduct elements" of claims brought in a post-Engle W Turning to the fraudulent concealment claim, the Firstaction. Id. at 715. Therefore, despite PM USA's urging, District in RJ. Reynolds Tobacco Co. v. Martin, 53 So.3dplaintiffs are not required to relitigate these elements. See 1060 (Fla. Ist DCA 2010), explained that in order toid. at 717, 718. However, we further recognized that prevail on such a claim:establishing membership in the Engle class does notsatisfy a plaintiff's burden of proving legal causation on [P]laintiffs ha[ve] to prove [1] theindividual claims. Id at 715. With respect to the strict tobacco companies concealed orliability and negligence claims, we concluded in Brown failed to disclose a material fact;that the trial court properly instructed the jury on legal [2] the companies knew or shouldcausation and submitted the relevant questions to the jury. have known the material factId. As such, we affirmed the final judgment because there should be disclosed; [3] thewas no error in the trial court's application of the Engle companies knew their concealmentfindings. Id at 718. of or failure to disclose the material

fact would induce the plaintiffs toTo find that Mr. Hess was a member of the Engle class, act; [4] the tobacco companies hadthe jury was required to find that his addiction to a duty to disclose the material fact;cigarettes containing nicotine was a legal cause of his and [5] the plaintiffs detrimentallydeath. However, unlike Brown, the jury was not instructed relied on the misinformation.on legal causation as it pertained to the claims of strict

West!awNext ©2ü12 Thomson Routers. No claim to origina! U S Govemment Works.

Philip Morris USA, Inc. v. Hess, 95 So.3d 254 (2012)

37 Fla. L. Weekly D1082

/d. at 1068 (citations omitted). In response to Question element necessary for its creation occurs beyond the time4(a), the Engle jury determined that Tobacco "concealed period established by the statute." WRH Mortg., Inc. v.or omitted material information not othenvise known or Butler, 684 So.2d 325, 327 (Fla. 5th DCA 1996). Theavailable knowing that the material was false or Fifth District in Butler further stated that "[t]he period ofmisleading or failed to disclose a material fact concerning time established by a statute of repose commences on thethe health effects or addictive nature of smoking date of an event specified in the statute. At the end of thatcigarettes or both." See Engle, 945 So.2d at 1277. We time period, the cause of action ceases to exist." Id.hold this Engle finding established the conduct elements (citations omitted); see also Carr v. Broward County, 505of a fraudulent concealment cause of action, i.e. that PM So.2d 568, 570 (Fla. 4th DCA 1987) (also discussing howUSA knowingly concealed material information with the a statute of repose will "prevent the accrual of a cause ofpurpose of inducing reliance. Engle did not relieve action where the final element necessary for its creationplaintiffs of the burden of proof with respect to the occurs beyond the time period established by theelement of reliance in a fraud based claim. See Engle, 945 statute"), approved, 541 So.2d 92 (Fla.1989).So.2d at 1263. Therefore, in accordance with Engle andour recent opinion in Brown, trial courts must instruct the W M "On its face, section 95.031(2) clearly bars [a] fraudjury on the remaining elements of a fraudulent claim to the extent that it is based on fraudulent conductconcealment claim-reliance and damages-and allow committed more than twelve years before the institutionthe jury to make those determinations based upon the of this action." Shepard v. Philip Morris, Inc., 1998 WLevidence presented. The trial court in this instance did 34064515, at *4 (M.D.Fla. Apr.28, 1998). As notedinstruct the jury regarding reliance with respect to the earlier, "a claim of fraudulent misrepresentation and/orfraudulent concealment *260 claim, and the jury was concealment requires proof of detrimental reliance on arequired to make a finding as to reliance and damages. material misrepresentation." Soler v. Secondary Holdings,Accordingly, we find no error in the application of the Inc., 771 So.2d 62, 69 (Fla. 3d DCA 2000) (citingEngle findings with respect to the fraudulent concealment Johnson v. Davis, 480 So.2d 625, 627 (Fla.1985)). Theclaim. Engle class action was commenced on May 5, 1994.

Engle v. RJ Reynolds Tobacco, No. 94-08273, 2000 WLHowever, we must address whether in light of the 33534572, at * 5 (Fla.Cir.Ct. Nov. 6, 2000). Thus, any

jury's finding that Mr. Hess relied on PM USA's fraud committed before May 5, 1982 is barred by thestatements only before May 5, 1982, the fraudulent statute of repose. See Puchner v. Bache Halsey Stuart,concealment claim was barred by the statute of repose. Inc., 553 So.2d 216, 218 (Fla. 3d DCA 1989) ("BecauseThis Court reviews a trial court's application of a statute Pulchner filed suit in August of 1982, any fraudof repose de novo because it involves an issue of law. committed before August of 1971 is barred by the statuteInmon v. Air Tractor, Inc., 74 So.3d 534, 537 (Fla. 4th ofrepose.").DCA 2011) (citation omitted).

On the verdict form in this progeny suit, the jury wasPM USA contends that the statute of repose bars the asked whether Mr. Hess relied to his detriment on anyfraudulent concealment claim because each element of the statement made by PM USA that omitted a material factclaim, including reliance, must have occurred after May before May 5, 1982, after May 5, 1982, or both before5, 1982, twelve years before the filing of the Engle and after May 5, 1982. The jury returned a verdict thatcomplaint. Mrs. Hess responds that the statute of repose Mr. Hess relied to his detriment on an omission by PMsets forth the relevant time period for the statute's USA only before May 5, 1982. Because reliance is anapplication, focusing on the defendant's conduct in element of every fraud claim, *261 and PM USA did notcommitting the alleged fraud. Therefore, Mrs. Hess defraud Mr. Hess within the twelve-year periodcontends that reliance is irrelevant. established by the statute of repose, we hold that the

fraudulent concealment claim and the concealment-basedtsi Florida's statute of repose under section 95.031(2), punitive damages award are foreclosed by the statute ofFlorida Statutes (1993) provides, "[A]ctions for ... fraud repose. Cf Joy v. Brown & Williamson Tobacco Corp.,... under s. 95.11(3) must be begun within 12 years after 1998 WL 35229355, at *5 (M.D.Fla. May 8, 1998)the date of the commission of the alleged fraud, regardless (noting, in a summary judgment context, that plaintiffsof the date the fraud was or should have been pursuing a fraud claim must "adduce [ ] ... proof ofdiscovered." § 95.031(2), Fla. Stat. (1993). "[A] statute of reliance upon a misrepresentation that was committedrepose is a substantive statute which not only bars within the 12-year [statute of repose] period prior to theenforcement of an accrued cause of action but may also filing of the complaint.").prevent the accrual of a cause of action where the final

Wm,Next ©2012 Thomson Reuters. No daim to origma! U S. Govemment Worka

Philip Morris USA, Inc. v. Hess, 95 So.3d 254 (2012)

37 Fla. L. Weekly D1082

In so holding, we reject Mrs. Hess's contention that the ("In claims alleging conspiracy, the critical date fordate of reliance is irrelevant. While Mrs. Hess is correct statute of repose purposes should be the date of the lastthat PM USA's conduct with respect to fraudulent act done in furtherance of the conspiracy.").concealment was preclusively established by Engle, thisalone does not resolve the issue. See Engle, 945 So.2d at Based upon the foregoing, we reverse the judgment and1277. As discussed above, the triggering event set forth in punitive damages award on the fraudulent concealmentthe applicable statute of repose, "the date of the claim and remand for entry of judgment for PM USA oncommission of the alleged fraud", necessarily includes that claim. In all other respects we affirm the finalreliance by the plaintiff. See § 95.031(2)(a), Fla. Stat. judgment.(1993). If it did not, a plaintiff would still be able to seekrecovery from a defendant based on the defendant's AffirmedinpartandReversedinpart.defrauding of third parties after the twelve-year reposeperiod applicable to the plaintiff. Such a reading iscontrary to the intent of a statute of repose. See Nehme v.Smithkline Beecham Clinical Labs., Inc., 863 So.2d 201,208 (Fla.2003) ("The very purpose of a statute of repose POLEN and GROSS, JJ., concur.is to extinguish valid causes of action, sometimes beforethey even accrue.") (citation omitted). Moreover, Mrs. Parallel CitationsHess's reliance on Laschke v. Brown & WilliamsonTobacco Corp., 766 So.2d 1076 (Fla. 2d DCA 2000) is 37 Fla. L. Weekly D1082misplaced because Laschke explained that the date of thelast act done is the critical date in cases of conspiracy, notfraud by concealment, which is at issue here. Id. at 1079

Footnotes1 Engle v. Liggett Group, Inc., 945 So.2d 1246 (Fla.2006).

2 We also note that, based upon our review of the record, any error in the reduction of the compensatory damages award was invitedby Mrs. Hess. See Franqui v. State, 59 So.3d 82, 100 (Fla.20l l) (" '[A] party may not invite error and then be heard to complain ofthat error on appeal.' ") (citation omitted).

3 The conspiracy to commit fraud claim was never submitted to the jury.

4 The Final Judgment and Amended Omnibus Order entered in the Engle class action reflects that Benson & Hedges, the brand Mr.Hess primarily smoked, was named in the Phase I jury findings. Engle v. R.J. Reynolds Tobacco, No. 94-08273, 2000 WL33534572, at *1 (Fla.Cir.Ct. Nov. 6, 2000).

5 These findings were as follows: (3) (strict liability) that Tobacco placed cigarettes on the market that were defective andunreasonably dangerous; (4)(a) (fraud by concealment) that Tobacco concealed or omitted material information not otherwiseknown or available knowing the material was false or misleading or failed to disclose a material fact concerning the health effectsor addictive nature of smoking cigarettes or both; and (8) (negligence) that Tobacco was negligent. See Engle, 945 So.2d at1276-77.

6 We note that while there were also stipulations in Brown, those stipulations did not satisfy the causation elements in the strictliability and negligence causes of action as they did here. See Brown, 70 So.3d at 712.

End of Document ©2012 Thomson Reuters No claim to original U S Govemment Works.

Westäv«Next ©2012 Thomson Reuters No claim to ori nai U S. Governrnent Works. 5