Case: 15-15633
Date Filed: 12/06/2017
Page: 1 of 65
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT CASE NOS. 15-15633/16-15957 __________________________________________________________________ JUDITH BERGER, Plaintiff-Appellee, v. PHILIP MORRIS USA INC., Defendant-Appellant. __________________________________________________________________ APPELLANT’S REPLY BRIEF / ANSWER BRIEF ON CROSS-APPEAL __________________________________________________________________ On Appeal from the United States District Court For the Middle District of Florida Case No. 3:09-cv-14157-WGY-HTS __________________________________________________________________ INGO W. SPRIE, JR. ARNOLD & PORTER KAYE SCHOLER LLP 250 WEST 55TH ST. NEW YORK, NY 10019 (212) 836-8000 M. SEAN LAANE GEOFFREY J. MICHAEL ARNOLD & PORTER KAYE SCHOLER LLP 601 MASSACHUSETTS AVE, NW WASHINGTON, DC 20001 (202) 942-5000 Counsel for Defendant-Appellant PHILIP MORRIS USA INC.
Case: 15-15633
Date Filed: 12/06/2017
Page: 2 of 65
CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT Pursuant to Eleventh Circuit Rule 26.1, and Eleventh Circuit Rules 26.1-1, 26.1-2, and 26.1-3, undersigned counsel for Appellant certifies that the Certificate of Interested Persons and Corporate Disclosure Statement contained in Appellant’s Brief on Appeal are complete.
/s/ Geoffrey J. Michael Counsel for Defendant-Appellant PHILIP MORRIS USA INC.
C-1
Case: 15-15633
Date Filed: 12/06/2017
Page: 3 of 65
TABLE OF CONTENTS Page CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT...................................................................C-1 TABLE OF AUTHORITIES .................................................................................. iii SUMMARY OF ARGUMENT ................................................................................1 ARGUMENT ............................................................................................................5 I.
II.
PLAINTIFF’S IMPROPER ARGUMENTS ENTITLE PM USA TO A NEW TRIAL...............................................................................................5 A.
Comparing PM USA To A Child Predator Was Wholly Improper And Calculated To Inflame The Jury’s Passions .................5
B.
Plaintiff’s Counsel Improperly Disparaged PM USA’s Defense Of The Case And Injected Personal Opinions Into Closing Argument............................................................................................10
C.
The Trial Court’s Generic Instructions Did Not Eliminate The Risk Of Prejudice Created By Plaintiff’s Counsel’s Comments .......13
THE DISTRICT COURT CORRECTLY GRANTED JUDGMENT AS A MATTER OF LAW ON PLAINTIFF’S FRAUD CLAIMS BASED ON HER FAILURE TO ESTABLISH RELIANCE .....................17 A.
Plaintiff’s Claims Require Proof Of Detrimental Reliance ...............17
B.
Plaintiff’s Testimony Establishes That She Did Not Rely As A Matter Of Law ....................................................................................19
C.
The District Court Correctly Concluded That Plaintiff Could Not Establish Reliance Using Inferences...........................................23 1.
Reliance Cannot Be Inferred Based On The Scope Of Misconduct...............................................................................23
2.
Plaintiff’s Testimony Refutes Any Inference Of Reliance......26
3.
Plaintiff Cannot Establish Reliance Based On Martin ............27 i
Case: 15-15633
Date Filed: 12/06/2017
Page: 4 of 65
D.
Plaintiff Could Not Establish Reliance By Arguing That Peer Pressure Caused Her To Smoke .........................................................31
E.
Plaintiff Cannot Obtain Reversal Based On The Jury Instruction’s Requirement That Plaintiff Prove An “Incomplete Representation” ..................................................................................34
F.
Plaintiff’s Claim For Conspiracy Fails ..............................................38
III.
PLAINTIFF’S USE OF THE ENGLE FINDINGS TO ESTABLISH CERTAIN ELEMENTS OF HER FRAUD CLAIMS VIOLATED DUE PROCESS............................................................................................38
IV.
THE COURT SHOULD AFFIRM THE DISTRICT COURT’S SETTING ASIDE OF THE PUNITIVE DAMAGES AWARD .................41 A.
The District Court Correctly Instructed The Jury That It Could Only Award Punitive Damages Based Upon Plaintiff’s Fraudulent Concealment And Conspiracy Claims.............................42
B.
Reinstating Punitive Damages Based On Negligence And Strict Liability Would Violate State Law And The Constitution ................44
C.
PM USA’s Arguments Are Not Barred By Judicial Estoppel ...........49
CONCLUSION.......................................................................................................51 RULE 32 CERTIFICATE OF COMPLIANCE .....................................................53 CERTIFICATE OF SERVICE ...............................................................................54
ii
Case: 15-15633
Date Filed: 12/06/2017
Page: 5 of 65
TABLE OF AUTHORITIES Page(s) Cases Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324 (11th Cir. 2004) .................................................................... 31-32 Alabama v. Blue Bird Body Co., 573 F.2d 309 (5th Cir. 1978) ..............................................................................41 Alan & Alan Inc. v. Gulfstream Car Wash, Inc., 385 So. 2d 121 (Fla. Dist. Ct. App. 1980)..........................................................26 Allstate Ins. Co. v. James, 845 F.2d 315 (11th Cir. 1988) ........................................................................7, 16 Ault v. Lohr, 538 So. 2d 454 (Fla. 1989) .................................................................................45 Berger v. Philip Morris USA, Inc., 101 F. Supp. 3d 1228 (M.D. Fla. 2015).......................................................passim Besett v. Basnett, 389 So. 2d 995 (Fla. 1980) .................................................................................23 Brough v. Imperial Sterling Ltd., 297 F.3d 1172 (11th Cir. 2002) ..........................................................................11 Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980)............................................................................................21 Chicago & N.W. Ry. Co. v. Kelly, 84 F.2d 569 (8th Cir. 1936) ..................................................................................9 Cohen v. Philip Morris USA, Inc., 203 So. 3d 942 (Fla. Dist. Ct. App. 2016)..........................................................17 Daniels v. Twin Oaks Nursing Home, 692 F.2d 1321 (11th Cir. 1982) ..............................................................26, 27, 28 Drummond Co. v. Terrance P. Collingsworth, Conrad & Scherer, LLP, 816 F.3d 1319 (11th Cir. 2016) .................................................................39 iii
Case: 15-15633
Date Filed: 12/06/2017
Page: 6 of 65
Engle v. Liggett Grp., Inc., 945 So. 2d 1246 (Fla. 2006) ........................................................................passim Evers v. R.J. Reynolds Tobacco Co., 195 So. 3d 1139 (Fla. Dist. Ct. App. 2015)........................................................19 Fayerweather v. Ritch, 195 U.S. 276 (1904)............................................................................................41 Friedman v. Am. Guardian Warranty Servs., Inc., 837 So. 2d 1165 (Fla. Dist. Ct. App. 2003)........................................................32 Gilster v. Primebank, 747 F.3d 1007 (8th Cir. 2014) ..............................................................................7 Gov’t of the Virgin Islands v. Toto, 529 F.2d 278 (3d Cir. 1976) ...............................................................................15 Graham v. R.J. Reynolds Tobacco Co., 857 F.3d 1169 (11th Cir. 2017) ..........................................................3, 38, 39, 40 Green House, Inc. v. Thiermann, 288 So. 2d 566 (Fla. Dist. Ct. App. 1974)..........................................................31 Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316 (11th Cir. 2012) ..........................................................................35 Hess v. Philip Morris USA Inc., 175 So. 3d 687 (Fla. 2015) ...........................................................................18, 35 Hilger v. Velazquez, 613 F. App’x 775 (11th Cir. 2015) .......................................................................6 Humana, Inc. v. Castillo, 728 So. 2d 261 (Fla. Dist. Ct. App. 1999)..............................................18, 24, 30 International Resorts, Inc. v. Lambert, 350 So.2d 391 (Ala. 1977)..................................................................................29 Joiner v. McCullers, 28 So. 2d 823 (Fla. 1947) ...................................................................................36
iv
Case: 15-15633
Date Filed: 12/06/2017
Page: 7 of 65
Joy v. Brown & Williamson Tobacco Corp., 1998 WL 35229355 (M.D. Fla. May 8, 1998) ...................................................32 Kovach v. McLellan, 564 So. 2d 274 (Fla. Dist. Ct. App. 1990)..........................................................33 Krulewitch v. United States, 336 U.S. 440 (1949)............................................................................................15 In re Lambrix, 776 F.3d 789 (11th Cir. 2015) ............................................................................28 Lassitter v. Int’l Union of Operating Eng’rs 349 So. 2d 622 (Fla. 1976) .................................................................................45 Liggett Grp., Inc. v. Engle, 853 So. 2d 434 (Fla. Dist. Ct. App. 2003)..........................................................24 Lorillard Tobacco Co. v. Alexander, 123 So. 3d 67 (Fla. 3d Dist. Ct. App. 2013).......................................................36 Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2000)............................................................................................21 M/I Schottenstein Homes, Inc. v. Azam, 813 So. 2d 91 (Fla. 2002) ...................................................................................23 Marlo Invs., Inc. v. Verne, 227 So. 2d 58 (Fla. Dist. Ct. App. 1969)............................................................26 McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008) ...............................................................................27 Morgan v. Canaveral Port Auth., 202 So. 2d 884 (Fla. Dist. Ct. App. 1967)..........................................................24 Morgan v. W.R. Grace & Co.-Conn., 779 So. 2d 503 (Fla. Dist. Ct. App. 2000).............................................. 23-24, 31 Nash v. United States, 54 F.2d 1006 (2d Cir. 1932) ...............................................................................15
v
Case: 15-15633
Date Filed: 12/06/2017
Page: 8 of 65
Neff v. Kehoe, 708 F.2d 639 (11th Cir. 1983) ............................................................................28 New Hampshire v. Maine, 532 U.S. 742 (2001)............................................................................................51 Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla. 1960) ...........................................................................30, 31 Paniello v. Smith, 606 So. 2d 626 (Fla. Dist. Ct. App. 1992)..........................................................26 Parker v. Allen, 565 F.3d 1258 (11th Cir. 2009) ..........................................................................12 Peterson v. Willie, 81 F.3d 1033 (11th Cir. 1996) ..............................................................................6 Philip Morris USA Inc. v. Allen, 116 So. 3d 467 (Fla. Dist. Ct. App. 2013)............................................................8 Philip Morris USA Inc. v. Douglas, 110 So.3d 419 (Fla. 2013) ..................................................................8, 17, 24, 30 Philip Morris USA Inc. v. Duignan, -- So. 3d ---, 2017 WL 5471866 (Fla. Dist. Ct. App. 2017)...................29, 37, 38 Philip Morris USA, Inc., v. Naugle, 2011 WL 1494195 (Fla. Dist. Ct. App.) .............................................................19 Philip Morris USA Inc. v. Putney, 199 So. 3d 465 (Fla. Dist. Ct. App. 2016)..........................................................37 Philip Morris USA, Inc. v. Tullo, 121 So. 3d 595 (Fla. Dist. Ct. App. 2013)........................................................6, 7 Philip Morris USA v. Williams, 549 U.S. 346 (2007)............................................................................................48 Poulos v. Caesars World Inc., 379 F.3d 654 (9th Cir 2004) ...............................................................................27
vi
Case: 15-15633
Date Filed: 12/06/2017
Page: 9 of 65
Prickett v. United States, 111 F. Supp. 2d 1191 (M.D. Ala. 2000), aff’d, 268 F.3d 1066 (11th Cir. 2001) ......................................................................................................27, 28 R.J. Reynolds Tobacco Co. v. Calloway, 201 So. 3d 753 (Fla. Dist. Ct. App. 2016) (en banc)....................................11, 37 R.J. Reynolds Tobacco Co. v. Gafney, 188 So. 3d 53 (Fla. Dist. Ct. App. 2016)......................................................12, 17 R.J. Reynolds Tobacco Co. v. Martin, 53 So. 2d 1060 (Fla. Dist. Ct. App. 2010)...................................................passim R.J. Reynolds Tobacco Co. v. Robinson, 216 So. 3d 674 (Fla. Dist. Ct. App. 2017)..........................................................11 Reed v. Gen. Motors Corp., 773 F.2d 660 (5th Cir. 1985) ..............................................................................15 Robinson v. Tyson Foods, Inc., 595 F.3d 1269 (11th Cir. 2010) ..........................................................................49 Slitor v. Elias, 544 So. 2d 255 (Fla. Dist. Ct. App. 1989)..........................................................31 Smith v. Vining, 407 So. 2d 1048 (Fla. Dist. Ct. App. 1981)........................................................45 Soffer v. R.J. Reynolds Tobacco Co., 106 So. 3d 456 (Fla. Dist. Ct. App. 2012), rev’d, 187 So.3d 1219 (Fla. 2016)...............................................................................................42, 49, 50 Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219 (Fla. 2016) .........................................................................43, 49 Standard Jury Instructions – Civil Cases No. 96-1, 689 So. 2d 1042 (Fla. 1997)...........................................................................................................45 Stanley v. Marceaux, 991 So. 2d 938 (Fla. Dist. Ct. App. 2008)..........................................................30 State Farm v. Campbell, 538 U.S. 408 (2003)............................................................................................46 vii
Case: 15-15633
Date Filed: 12/06/2017
Page: 10 of 65
Taylor v. Am. Honda Motor Co., 555 F. Supp. 59 (M.D. Fla. 1982).......................................................................33 United States Dep’t of Justice v. Landano, 508 U.S. 165 (1993)............................................................................................26 United States v. Azmat, 805 F.3d 1018 (11th Cir. 2015) ..........................................................................10 United States v. Brown, 983 F.2d 201 (11th Cir. 1993) ............................................................................44 United States v. Collins, 78 F.3d 1021 (6th Cir. 1996) ..........................................................................9, 10 United States v. Lopez, 590 F.3d 1238 (11th Cir. 2009) ............................................................................7 United States v. Mazzone, 782 F.2d 757 (7th Cir. 1986) ................................................................................9 United States v. Morris, 568 F.2d 396 (5th Cir. 1978) ..............................................................................12 United States v. Pedron, 284 F. App’x 598 (11th Cir. 2008) .....................................................................11 United States v. Roy, 855 F.3d 1133 (11th Cir. 2017) ..........................................................................44 United States v. Smith, 700 F.2d 627 (11th Cir. 1983) ..............................................................................9 United States v. Wood, 486 F.3d 781 (3d Cir. 2007) .................................................................................7 W.R. Grace & Co. v. Waters, 638 So. 2d 502 (Fla. 1994) .................................................................................45 Whittenburg v. Werther Indus., 561 F.3d 1122 (10th Cir. 2009) ....................................................................16, 17
viii
Case: 15-15633
Date Filed: 12/06/2017
Page: 11 of 65
Wilson v. NHB Indus., Inc., 219 F. App’x 851 (11th Cir. 2007) .....................................................................16 Winn-Dixie Montgomery, Inc. v. Henderson, 395 So.2d 475 (Ala. 1981)............................................................................28, 29 Other Authorities Eleventh Circuit, Civil Pattern Jury Instr. (2013)....................................................13 U.S. Const. Amend VII......................................................................................41, 49
ix
Case: 15-15633
Date Filed: 12/06/2017
Page: 12 of 65
SUMMARY OF ARGUMENT The Court should order a new trial based on the improper arguments made by Plaintiff’s counsel during closing. If the Court does not order a new trial, it should decline to reinstate the verdict in Plaintiff’s favor on her fraud claims and punitive damages. 1.
Plaintiff’s improper arguments – including the incendiary comparison
of PM USA to a predatory stranger stalking children – were calculated to impair the jury’s calm and dispassionate consideration of the case.
It is absurd for
Plaintiff to suggest now that comparing PM USA to perhaps the most reviled type of criminal was “innocuous” or “immaterial.” Pl. Br. at 3. Nor is there any basis for Plaintiff’s suggestion that this was a “fair comment” on the evidence. Id. Even assuming the evidence supported Plaintiff arguing that PM USA marketed cigarettes to youths, that would not justify portraying PM USA as a child predator – just as another appellate court held that even though tobacco plaintiffs may make arguments to the jury about the addictiveness of cigarettes, that cannot justify analogizing tobacco companies to heroin dealers. The prejudice from this inflammatory comparison was compounded by additional improper arguments charging PM USA’s counsel with attempting to “rewrite history” through its defense of the case, characterizing PM USA’s defense as an extension of historical “distraction” or “doubt” science, and maligning defense counsel as willing to “do
Case: 15-15633
Date Filed: 12/06/2017
Page: 13 of 65
anything to create doubt.” Such attacks on a defendant’s right to defend itself and contest liability have been roundly condemned by the courts as improper, unfairly prejudicial, and warranting a new trial. Plaintiff’s suggestion that the prejudice created by her counsel’s inflammatory arguments was cured by the trial court’s instruction that “statements by counsel ‘are not evidence’” (Pl. Br. at 28) is meritless. Taken to its logical end, Plaintiff’s contention would immunize almost all improper argument, because such an instruction is given as a matter of routine. Moreover, far from neutralizing Plaintiff’s improper arguments, the trial court reinforced Plaintiff’s inflammatory child-predator analogy by overruling PM USA’s objection. And Plaintiff’s claim that the jury’s verdict reflects no prejudice is belied by its massive award of over $20 million in punitive damages. 2.
The district court correctly found that Plaintiff’s fraudulent
concealment and conspiracy claims failed for want of evidence from which a reasonable jury could conclude that she had relied to her detriment on any statement by PM USA that concealed or omitted material information about the health risks or addictive nature of cigarettes.
Plaintiff’s own testimony
demonstrated conclusively that she did not base any of her smoking decisions on any such statement by PM USA (or any other cigarette company). Plaintiff argues that the jury was permitted to infer reliance from the pervasiveness of the tobacco
2
Case: 15-15633
Date Filed: 12/06/2017
Page: 14 of 65
companies’ advertising and “campaign of doubt” – despite her own contrary testimony – based on R.J. Reynolds Tobacco Co. v. Martin, 53 So. 2d 1060 (Fla. Dist. Ct. App. 2010). But federal law controls questions of the sufficiency of the evidence and the permissibility of inferences in this case, and the so-called Martin inference is contrary to federal law. Moreover, no inference of reliance could stand in this case – under either federal precedent or Martin – because both federal and Florida law do not permit an inference at war with the facts. Unlike the deceased smoker in Martin, Plaintiff could, and did, testify as to what she did and did not rely on. She made clear that advertising had no impact on her smoking decisions, that she did not smoke light or filtered cigarettes due to any perceived health benefits, and that she never saw or heard – let alone was influenced by – the statements of any tobacco entity about the health risks or addictiveness of smoking. No inference of reliance could withstand those facts. In the alternative, the Court should affirm the judgment in favor of PM USA on Plaintiff’s concealment and conspiracy claims (or at a minimum require a new trial) for the independent reason that Plaintiff’s use of the Engle findings with respect to those claims violated due process, notwithstanding the Court’s en banc decision in Graham v. R.J. Reynolds Tobacco Co., 857 F.3d 1169 (11th Cir. 2017) (en banc). Graham does not contain a holding on the use of the Engle concealment and conspiracy findings, but supports PM USA’s position by mandating an inquiry
3
Case: 15-15633
Date Filed: 12/06/2017
Page: 15 of 65
into what the Engle jury actually decided. For the reasons set forth below and in the pending appeal in Cheryl Searcy v. R.J. Reynolds Tobacco Co., No. 13-15258 (11th Cir.) (argued Oct. 17, 2014), it is impossible to determine what the Engle jury actually decided about concealment and conspiracy. 3.
Finally, the district court rightly set aside the punitive damages award.
The jury awarded punitive damages based solely upon the fraudulent concealment and conspiracy claims. Because those claims failed as a matter of law, so too did Plaintiff’s claims for punitive damages. The Court should reject Plaintiff’s request to reinstate the punitive damages based on her negligence and strict liability claims. The jury did not even consider these claims in evaluating whether, and if so in what amount, punitive damages were warranted. To the contrary, the jury was expressly instructed that it could award punitive damages based only on conduct underlying Plaintiff’s fraud claims, and that the amount of any such damages must be based on specific fraudulent conduct that caused injury to Plaintiff – and not on conduct underlying the strict liability or negligence claims. Reinstating punitive damages based on these claims would therefore violate the due process requirement that punitive damages be based on the same conduct underlying the finding of liability. It also would deprive PM USA of its constitutional rights to present its defenses to a jury,
4
Case: 15-15633
Date Filed: 12/06/2017
Page: 16 of 65
because PM USA has never had an opportunity to defend itself against punitive damages based on those claims, let alone before a jury. ARGUMENT I.
PLAINTIFF’S IMPROPER ARGUMENTS ENTITLE PM USA TO A NEW TRIAL A.
Comparing PM USA To A Child Predator Was Wholly Improper And Calculated To Inflame The Jury’s Passions
It is difficult to image any type of criminal more deeply reviled than a child predator. Plaintiff’s counsel’s comparison of Plaintiff to a “kid [who] accepts candy from a stranger and then gets hurt,” Doc. 125 at 2541,1 cast PM USA in the role of the sinister stranger – a child predator. Plaintiff attempts to minimize the prejudicial impact by mischaracterizing her argument as comparing cigarettes to “harmful candy.” Pl. Br. at 19. But that the analogy compares “cigarettes” to “candy” does not negate the fact that the analogy further compares PM USA to the stranger who “hurt” (i.e., abused or kidnapped) the child. It is preposterous for plaintiff to characterize this incendiary imagery as “innocuous” or “immaterial.” Pl. Br. at 3. Plaintiff’s counsel’s comparison of PM USA with a despised class of
1
References to documents from the record below are cited as “Doc. [trial court docket identification number] at [page number].” References to documents on file in In Re: Engle Progeny Cases, No. 3:09-CV-10000 (M.D. Fla.) are cited as “Engle Doc.__.” Copies of all cited record materials are provided in the appendices filed in this case.
5
Case: 15-15633
Date Filed: 12/06/2017
Page: 17 of 65
criminals likewise was “plainly unwarranted and clearly injurious.” Peterson v. Willie, 81 F.3d 1033, 1036 (11th Cir. 1996). Nor is there any basis for Plaintiff’s contention that this was “fair comment” on the evidence. Pl.’s Br. at 3. Plaintiff points to evidence in the record that PM USA marketed cigarettes to youth. At most, that evidence would permit Plaintiff’s counsel to argue that PM USA marketed to youth; it did not entitle him to compare PM USA to a child predator.
By way of analogy, just because
plaintiffs in Engle progeny cases may have an evidentiary basis to argue that the defendants purposefully marketed products they knew were addictive, that does not permit plaintiffs to inflame the jury by comparing PM USA to a drug dealer selling illegal drugs like heroin. See Philip Morris USA, Inc. v. Tullo, 121 So. 3d 595, 601 (Fla. Dist. Ct. App. 2013) (finding comments comparing PM USA to a drug dealer improper because they “implied that the tobacco companies were as culpable as drug dealers”). This is therefore not a case like Hilger v. Velazquez, 613 F. App’x 775 (11th Cir. 2015), on which Plaintiff relies (Pl. Br. at 20), where this Court refused to reverse because the purported improper comments were all “supported by the evidence in the record.” Id. at 776. Plaintiff acknowledges the parallels between her counsel’s child-predator analogy and the heroin-dealer analogy found to be improper in Tullo. See Pl. Br. at 21 n.1. Plaintiff nevertheless contends that because the Tullo court ultimately
6
Case: 15-15633
Date Filed: 12/06/2017
Page: 18 of 65
did not reverse based on a similar error, neither should the Court here. But the Tullo court did not reverse because the defendants in that case did not object contemporaneously. 121 So. 3d at 601. Here, not only did PM USA object contemporaneously, the trial court overruled PM USA’s objection, which improperly “told the jury they could appropriately consider the argument in the deliberations they were about to begin.” Gilster v. Primebank, 747 F.3d 1007, 1012 (8th Cir. 2014). As this Court has recognized, “[o]verruling an objection connotes a certain approval of the direction of counsel’s argument and refusal to limit its impact through an instruction heightens the possibility that a jury will be persuaded by an improper tone or suggestion within those comments.” Allstate Ins. Co. v. James, 845 F.2d 315, 319 (11th Cir. 1988). There also is no merit to Plaintiff’s suggestion that her comparison of PM USA to a child predator should be excused under the “fair response” or “invited response” rule.
That principle, generally applied in criminal cases,
“entitles a prosecutor to respond to arguments advanced by defense counsel in his or her statement to the jury,” United States v. Lopez, 590 F.3d 1238, 1256 (11th Cir. 2009), and thus “protects comments made in ‘reasonable response to improper attacks by defense counsel,’” United States v. Wood, 486 F.3d 781, 788 (3d Cir. 2007) (emphases added).
This rule is inapplicable here because Plaintiff’s
7
Case: 15-15633
Date Filed: 12/06/2017
Page: 19 of 65
argument was not a response to an improper argument and, in any event, was not reasonable. PM USA did not invite Plaintiff’s comments by improperly attempting to “blame the victim.” Pl. Br. at 17-20. As in all Engle progeny cases, Plaintiff’s reasons for smoking were critical to several issues in this case, including comparative fault and class membership, i.e. “whether the plaintiff smoked cigarettes because of addiction or for some other reason (like the reasons of stress relief, enjoyment of cigarettes and weight control argued below).” Philip Morris USA Inc. v. Douglas, 110 So.3d 419, 431-32 (Fla. 2013); see also Philip Morris USA Inc. v. Allen, 116 So. 3d 467, 471-72 (Fla. Dist. Ct. App. 2013) (“[A]ddiction causation, not smoking causation, is key to Engle class membership.” (emphases added)). PM USA properly defended itself by arguing that Plaintiff voluntarily chose to smoke while aware of the risks from an early age. PM USA’s arguments were appropriate and supported by the evidence.
See Doc. 113 at 1312-13
(Plaintiff’s father disapproved of smoking); id. at 1300 (Plaintiff told her doctor that she blamed herself). And Plaintiff’s contention on appeal that PM USA’s arguments were improper, Pl.’s Br. at 17-18, falls particularly flat given that she did not object to them during PM USA’s closing, see Doc. 125 at 2479, 2521. Even if PM USA had made an improper comment during closing, it would not have opened the door for Plaintiff’s counsel to compare PM USA to child
8
Case: 15-15633
Date Filed: 12/06/2017
Page: 20 of 65
predators or to make other incendiary comments. The fair response rule does not authorize counsel to “fight fire with fire,” nor does it “enact the proposition that two wrongs make a right.” United States v. Mazzone, 782 F.2d 757, 763 (7th Cir. 1986). Courts have long recognized that, “[w]hile improper argument by one counsel may elicit a response by his opponent which is also improper, without requiring a reversal, it does not open up the entire field to improper argument.” Chicago & N.W. Ry. Co. v. Kelly, 84 F.2d 569, 574 (8th Cir. 1936) (emphasis added). Here, PM USA’s argument that Plaintiff bore sole responsibility could not conceivably justify Plaintiff’s counsel comparing PM USA to a child predator. Nor do the “fair response” cases cited by Plaintiff support her counsel’s conduct here. In each of these cases, this Court reviewed the district court’s ruling for “clear error” because the defendant had failed to object at trial. Here, as noted above, PM USA did object and its objection was overruled. Further, in each case the alleged improper comments were not nearly as egregious as counsel’s comments here. In United States v. Smith, 700 F.2d 627 (11th Cir. 1983) (cited in Pl. Br. at 20), the comment that a witness “had no reason to lie” was in fair response to defense counsel’s implication that the witness had fabricated evidence. Id. at 634. In United States v. Collins, 78 F.3d 1021 (6th Cir. 1996) (cited in Pl. Br. at 20), the Court rightly found no clear error because, unlike here, the comments were all about the veracity of plaintiff’s witnesses, where “defense
9
Case: 15-15633
Date Filed: 12/06/2017
Page: 21 of 65
counsel made at least 6 attacks on the credibility of . . . the government’s witness, during his closing argument.” Id. at 1040. Finally, Plaintiff cites United States v. Azmat, 805 F.3d 1018, 1045 (11th Cir. 2015) (Pl. Br. at 22), for the unremarkable proposition that “unflattering characterizations of a defendant will not provoke a reversal when such descriptions are supported by the evidence.” Pl. Br. at 21-22. But here, plaintiff’s child-predator analogy was not supported by the evidence, and nothing in Azmat suggests that a lawyer has carte blanche to disparage the opposing party. In short, none of the cases Plaintiff relies on is remotely similar to the circumstances here or otherwise excuses Plaintiff’s counsel’s inflammatory and improper statements. B.
Plaintiff’s Counsel Improperly Disparaged PM USA’s Defense Of The Case And Injected Personal Opinions Into Closing Argument
Plaintiff’s counsel injected further prejudice into the closing arguments by attacking PM USA for defending itself in the case. Counsel maligned PM USA’s evidence on Plaintiff’s health condition as a supposed extension of historical “distraction” or an attempt to cast “doubt” upon science, Doc. 125 at 2435, and made the scurrilous claim that defense counsel “will do anything to create doubt,” id. at 2528. Counsel also improperly injected his personal opinions into the case, opining that PM USA’s conduct was “sick” and “disgusting,” id. at 2468, and that
10
Case: 15-15633
Date Filed: 12/06/2017
Page: 22 of 65
he did not “think [it’s] a lot to ask” that PM USA make its products “as safe as possible,” id. at 2402-03. Plaintiff incorrectly suggests that Plaintiff’s counsel’s comments disparaging PM USA for defending the case were “permissible ‘remark[s] on the defense strategy’ and not improper” based on the Eleventh Circuit’s decision in United States v. Pedron, 284 F. App’x 598, 600 (11th Cir. 2008). Pl. Br. at 23. The nonprecedential Pedron case relied on by Plaintiff involved a single comment by a prosecutor comparing defense strategy to a “grade school playground tactic.” Id. at 600.
Here, Plaintiff’s counsel’s comments were far more inflammatory,
suggesting that defense counsel had acted improperly throughout its defense of the case. This Court has found similar comments attacking the defendant’s defense of the case improper, as have numerous Florida courts in other Engle progeny cases. See, e.g., Brough v. Imperial Sterling Ltd., 297 F.3d 1172, 1179 (11th Cir. 2002) (finding improper counsel’s arguments maligning the corporate defendant because of its willingness to engage in litigation); R.J. Reynolds Tobacco Co. v. Robinson, 216 So. 3d 674, 681-82 (Fla. Dist. Ct. App. 2017) (“it is improper to disparage an Engle defendant for contesting what is in dispute at trial . . . . Plaintiffs may not denigrate defendants for contesting the very facts that they are, as plaintiffs, required by law to prove”); R.J. Reynolds Tobacco Co. v. Calloway, 201 So. 3d 753, 760 (Fla. Dist. Ct. App. 2016) (en banc) (“[A]n argument that the jury should
11
Case: 15-15633
Date Filed: 12/06/2017
Page: 23 of 65
punish a defendant for defending itself at trial or failing to admit responsibility is well outside the bounds of proper advocacy.”); R.J. Reynolds Tobacco Co. v. Gafney, 188 So. 3d 53, 59 (Fla. Dist. Ct. App. 2016) (“Comments accusing an opposing party’s attorney of wanting the jury to evaluate the evidence unfairly, of trying to deceive the jury, of deliberately distorting the evidence, or of participating in a concerted scheme to do so, have no place in our legal system.”). This Court should do the same. Plaintiff is wrong to assert that her counsel’s comments “were neither expressions of opinion nor prejudicial.” Pl. Br. at 25. Characterizing PM USA’s conduct using terms such as “sick” and “disgusting” – and asserting that he did not “think [something’s] a lot to ask” of the company – clearly conveyed counsel’s personal opinions. Such comments also are plainly prejudicial. “By giving his opinion, an attorney may increase the apparent probative force of his evidence by virtue of his personal influence, his presumably superior knowledge of the facts and background of the case, and the influence of his official position.” United States v. Morris, 568 F.2d 396, 401 (5th Cir. 1978); see also Parker v. Allen, 565 F.3d 1258, 1273 (11th Cir. 2009) (“During a trial, counsel have a duty to refrain from commenting on their personal views on . . . the evidence.”). Nor is there any basis for Plaintiffs suggestion that the Court should overlook her counsel’s improper arguments because they were counterbalanced by supposedly improper
12
Case: 15-15633
Date Filed: 12/06/2017
Page: 24 of 65
argument by defense counsel. As discussed above, this Circuit does not subscribe to such a “two wrongs make a right” calculus, supra at 8-9, and even if it did, Plaintiff points to no comparable statements by PM USA’s counsel.2 C.
The Trial Court’s Generic Instructions Did Not Eliminate The Risk Of Prejudice Created By Plaintiff’s Counsel’s Comments
Plaintiff contends that any error should be ignored because the trial court instructed the jury that “statements by counsel ‘are not evidence.’” Pl. Br. at 28 (citations omitted). But the mere fact that the court instructed the jury at certain points during the two-week trial that counsel’s statements were not evidence could not cleanse the taint of Plaintiff’s counsel’s improper arguments.
Plaintiff’s
reasoning would confer blanket immunity for improper arguments, given that the instruction on which Plaintiff relies is given as a matter of course. See Eleventh Circuit, Civil Pattern Jury Instr. Preface at iv. (2013) (noting that “[t]he Basic Instructions cover in a logical sequence those topics that should be included in a trial court’s instructions in every case”); id. at 30 (Basic Instruction 3.3: “[Y]ou
2
The only specific argument Plaintiff identifies – that she could not have relied on statements that she did not see or hear (Pl. Br. at 26-27) – was not an improper statement of counsel’s opinion, but instead a proper appeal to common sense. Moreover, it was directly linked to the district court’s instruction that the jury must determine whether Plaintiff “relied to her detriment on the incomplete representations the defendant in fact was making about the health effects and/or addictive nature of smoking cigarettes.” Doc. 124 at 2371-72. PM USA was entitled to point out that it was a logical impossibility for Plaintiff to have detrimentally relied on an incomplete representation that did not reach her. 13
Case: 15-15633
Date Filed: 12/06/2017
Page: 25 of 65
must consider only the evidence that I have admitted in the case.
Evidence
includes the testimony of witnesses and the exhibits admitted. But, anything the lawyers say is not evidence and isn’t binding on you.”). Moreover, the fact that arguments are not evidence – and that jurors are routinely told that this is so – does not mean counsel can make incendiary arguments or improperly disparage a party’s defense. See supra at 11-12. The failure of such a generic instruction to cure Plaintiff’s improper arguments is even more plain given that, when faced with objections to the specific arguments, far from giving a curative instruction, the trial court overruled several of PM USA’s objections – including counsel’s inflammatory child-predator analogy – thereby enhancing the prejudicial impact. See supra at 6. In the few instances where Plaintiff’s counsel’s improper arguments were followed by curative instructions, those instructions were insufficient to cure the prejudice created by Plaintiff’s counsel. In some instances, Plaintiff’s counsel continued to make the same improper arguments.3 Moreover, “[t]he wisdom of experience is
3
For example, following Plaintiff’s counsel’s improper comment that defense counsel would “do anything to create doubt,” the Court ignored PM USA’s counsel’s request to approach and simply told the jury to “[d]isregard that comment.” Doc. 125 at 2528. Plaintiff’s counsel then repeated this improper argument and again disparaged the defense for “mak[ing] arguments to create doubt.” Id. at 2528. Similarly, after Plaintiff’s counsel improperly offered his personal opinions that PM USA’s conduct was “sick” and “disgusting,” the Court reminded the jury to “decide the case on the evidence and not the personal observations of counsel.” Id. at 2468. Again, Plaintiff’s counsel ignored the 14
Case: 15-15633
Date Filed: 12/06/2017
Page: 26 of 65
embodied in the aphorism that the scent of a skunk thrown into the jury box cannot be wiped out by a trial court’s admonition to ignore the smell.” Reed v. Gen. Motors Corp., 773 F.2d 660, 664 (5th Cir. 1985); see also, e.g., Gov’t of the Virgin Islands v. Toto, 529 F.2d 278, 283 (3d Cir. 1976) (in criminal case, once prior “bad acts” are before the jury, “it is most difficult, if not impossible, to assume continued integrity of the presumption of innocence. A drop of ink cannot be removed from a glass of milk.”); Krulewitch v. United States, 336 U.S. 440, 453 (1949) (Jackson, J., concurring) (“The naive assumption that prejudicial effects can be overcome by instructions to the jury all practicing lawyers know to be unmitigated fiction.”) (citation omitted); Nash v. United States, 54 F.2d 1006, 1007 (2d Cir. 1932) (L. Hand, J.) (sometimes a limiting instruction amounts to a “recommendation to the jury of a mental gymnastic which is beyond, not only their powers, but anybody’s else”). Plaintiff also cannot excuse her counsel’s improper comments by claiming they were “isolated” or “stray” remarks. That description is inaccurate; Plaintiff’s counsel made multiple inflammatory and improper arguments in his closing. See PM USA Br. at 6-8. But even if Plaintiff’s comments could be described as isolated, a single egregious argument can be enough to warrant reversal. See, e.g.,
sustained objection and repeated his opinion that “I think the evidence shows that it’s disgusting.” Id. at 2468. 15
Case: 15-15633
Date Filed: 12/06/2017
Page: 27 of 65
Allstate, 845 F.2d at 319 (finding single improper argument – appealing to jurors’ pecuniary interests as insurance rate-payers –
sufficient to warrant reversal,
although the court did “not have the benefit of the entire text of the closing argument before it” because “it is difficult to place the contested remarks within any argument that would cleanse the taint of their improper suggestion”); Wilson v. NHB Indus., Inc., 219 F. App’x 851, 853 (11th Cir. 2007) (per curiam) (finding single improper comment during rebuttal “when [defendant] had no further opportunity to speak to the jury” – suggesting that the defendant “should have taken action that in fact would have been prohibited” under the relevant law – sufficient to warrant reversal). That is the case here. No surrounding context could cleanse the taint of branding PM USA as a child molester. While Plaintiff contends that the amount of the jury’s verdict demonstrates that it was not inflamed (Pl. Br. at 29-30), the opposite is true. The jury awarded over $20 million in punitive damages – based on fraud claims so lacking in evidentiary support that the trial court overturned them as a matter of law – and $6.25 million in compensatory damages. The size of this verdict “is a significant factor suggesting prejudice sufficient to require a new trial.”
Whittenburg v.
Werther Indus., 561 F.3d 1122, 1132 (10th Cir. 2009). And, the reversal of the jury’s punitive award does not deprive it of its relevance to the existence of prejudice. This is the amount that jury intended to award Plaintiff, and its size
16
Case: 15-15633
Date Filed: 12/06/2017
Page: 28 of 65
“suggest[s] that counsel’s comments had a prejudicial effect” and “accomplish[ed] the purpose which [they were] clearly intended to accomplish; namely, the enhancement of damages.” Id. at 1132-33.4 II.
THE DISTRICT COURT CORRECTLY GRANTED JUDGMENT AS A MATTER OF LAW ON PLAINTIFF’S FRAUD CLAIMS BASED ON HER FAILURE TO ESTABLISH RELIANCE A.
Plaintiff’s Claims Require Proof Of Detrimental Reliance
The district court correctly held that Plaintiff’s fraud claims failed as a matter of law based on Plaintiff’s failure to prove detrimental reliance. Plaintiff does not dispute that her fraud claims require such proof: “[d]etrimental reliance is an element of an Engle plaintiff’s fraudulent concealment and conspiracy claims.” Pl. Br. at 30. Nor could she. In Engle progeny cases, as in other fraud cases, “nonspecific
findings
in
favor
of
the
plaintiffs
on
...
fraud
and
misrepresentation . . . are inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause.” Douglas, 110 So.3d at 428, 430
4
Nor does the jury’s assignment of 40 percent comparative fault to Plaintiff (Pl. Br. at 29) immunize her counsel’s improper arguments. An untainted trial may have resulted in a finding of even greater fault on her part, or no liability for PM USA, or an award of less damages. Appellate courts have not hesitated to reverse Engle verdicts based on improper arguments even where the jury has found substantial fault on the part of the smoker, or awarded far lower damages than in this case. See, e.g., Gafney, 188 So. 3d at 56-57 (reversing based on improper arguments; jury assigned 34 percent fault to smoker); Cohen v. Philip Morris USA, Inc., 203 So. 3d 942 (Fla. Dist. Ct. App. 2016) (affirming trial court’s order granting a new trial based on improper arguments; jury awarded $2 million in damages and assigned 40 percent fault to the smoker). 17
Case: 15-15633
Date Filed: 12/06/2017
Page: 29 of 65
(citation and internal quotations omitted); see also Hess v. Philip Morris USA Inc., 175 So. 3d 687, 691 (Fla. 2015) (progeny plaintiffs must prove the smoker at issue case “detrimentally relied” on “statements made by [defendants] that omitted material information.”). Accordingly, Plaintiff must “show [she] . . . would not have entered into the transaction [with Defendants] had the [concealed] information been disclosed.” Humana, Inc. v. Castillo, 728 So. 2d 261, 265 (Fla. Dist. Ct. App. 1999). Plaintiff cannot make this showing.
After presiding over pre-trial
proceedings, a trial lasting more than two weeks and post-trial motions, the district court correctly concluded that Plaintiff’s own testimony demonstrated her lack of reliance as a matter of law. Berger v. Philip Morris USA, Inc., 101 F. Supp. 3d 1228, 1242 (M.D. Fla. 2015) (“her testimony failed to connect, and even served to disconnect, her ensuing decisions with the companies’ false pronouncements”). The district court also correctly rejected Plaintiff’s attempt to fill this hole in her case with an inference of reliance. Id. at 1237-42. Furthermore, there is no merit to Plaintiff’s argument that she was excused from proving reliance on the theory that cigarette advertising contributed to the peer pressure that she says led her to begin smoking. For these reasons, the decision below should be affirmed.
18
Case: 15-15633
B.
Date Filed: 12/06/2017
Page: 30 of 65
Plaintiff’s Testimony Establishes That She Did Not Rely As A Matter Of Law
The district court relied heavily upon Plaintiff’s “remarkably candid and forthright” testimony when concluding that she could not prove reliance. Berger, 101 F. Supp. 3d at 1241. And with good reason: Plaintiff in this case is an injured living smoker. Thus, unlike Engle-progeny cases in which the smoker is deceased – like the Martin case on which Plaintiff relies – Plaintiff gave extensive testimony about her reasons for smoking and choosing particular brands. As the district court recognized, “only Mrs. Berger, of all the witnesses, possessed personal, intimate knowledge of the extent to which, if any, she detrimentally relied.” Id. at 1241.5 Plaintiff’s testimony establishes beyond any reasonable dispute that she did not detrimentally rely on any concealment or omission by PM USA (or any alleged 5
Plaintiff’s testimony here distinguishes this case from Evers, one of the Engleprogeny decisions upon which Plaintiff relies. In Evers, the smoker was deceased and therefore direct testimony from the actual smoker was not available. Evers v. R.J. Reynolds Tobacco Co., 195 So. 3d 1139, 1141 (Fla. Dist. Ct. App. 2015). Although Plaintiff also relies on Naugle, a case in which the plaintiff was a living smoker who testified, Pl. Br. at 33, the plaintiff’s testimony in Naugle stands in sharp contrast to the testimony given by Plaintiff here. The plaintiff in Naugle testified that she recalled multiple occasions when the tobacco defendants “said that smoking was not addictive and that there was no proof that it caused any diseases” and that she “believed what they told me.” Appellee’s Answer Br. at 31 Philip Morris USA, Inc., v. Naugle, 2011 WL 1494195 (Fla. Dist. Ct. App.) (internal quotation marks omitted). The opposite is true here: Plaintiff testified that she did not recall any statements by any tobacco entity about the health or addiction risks of smoking. Moreover, in Naugle, the court relied heavily on the Martin decision, which is inapplicable here for the reasons discussed in Section II.C.3. 19
Case: 15-15633
coconspirator).
Date Filed: 12/06/2017
Page: 31 of 65
Plaintiff testified that the “only reason” she smoked her first
cigarette was because of “peer pressure” and not because of any statement or concealment by PM USA. See Doc. 113 at 1311. Plaintiff further testified that she did not choose any particular brand or continue to smoke because of any statement or concealment by PM USA or another tobacco company: Q. Sitting here today, you’re not telling anybody that you remember a single ad and you went out and bought a pack of cigarettes because of it? You’re not telling anybody that, are you? A. No. Id. at 1267. To the contrary, Plaintiff confirmed that it was “correct” that she “never bought or chose a particular brand of cigarette because of an advertisement.” Id. at 1334 (emphasis added). Moreover, Plaintiff testified that she never heard or saw a tobacco company representative discussing the health effects of smoking at any point between the 1950s through the 1990s. See id. at 1371-73. Plaintiff points to evidence concerning advertisements for Marlboro, Marlboro Lights, or Parliament as establishing reliance. Pl. Br. at 39-43. But the existence of these advertisements cannot establish reliance given that Plaintiff cannot identify any advertisements upon which she relied. Indeed, rather than advertising, Plaintiff testified that she chose specific brands for other reasons, including to “keep the loose tobacco” out of her mouth, or because her sister 20
Case: 15-15633
Date Filed: 12/06/2017
Page: 32 of 65
recommended the brand, or because she “liked the taste.” Doc. 113 at 1328-29 (“Q. And you switched to filtered cigarettes to keep the loose tobacco out of your mouth; correct? A. Right. Q. And there was no other reason that you chose to smoke filtered Winston cigarettes; correct? A. No reason.”); id. at 1329-30 (“Q. And I think you started smoking Parliaments, you told us, because your sister Josephine recommended them to you? A. Yes.”); id. at 1330 (“Q. And you liked the taste of those Parliaments better; right? A. Right. Q. And that was the reason that you picked Parliament cigarettes; correct? A. Yes.”); id. at 1331 (“Q. And the reason you switched to light cigarettes is because you liked the taste of those cigarettes better; correct? A. They weren’t as harsh. Q. They weren’t as strong or harsh; correct? A. Right, correct. Q. And there’s no other reason that you chose to smoke a light cigarette; correct? A. Just that reason.”).6 In addition to this testimony, there also was considerable evidence that Plaintiff was aware of the health hazards associated with smoking.
Plaintiff
testified that she remembered when the warning labels came out and that they said that cigarettes can be dangerous to your health. Id. at 1338. Most of the Plaintiff’s smoking occurred after this took place. See id. at 1268-71 (Plaintiff testified she 6
Plaintiff also cannot overcome her failure to offer proof of reliance based on advertising alone because PM USA cannot be held liable for merely exercising its right to advertise legal products. See Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 565 (2000); Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980). 21
Case: 15-15633
Date Filed: 12/06/2017
Page: 33 of 65
started smoking in the late 1950s); Doc. 110 at 985 (warning labels were required on cigarette packs starting in 1966). Even before warning labels appeared on cigarette packages, Plaintiff’s mother told her that the Surgeon General was going to put warnings on cigarettes and that she did not want plaintiff to smoke: Q. Mrs. Berger, your mom told you that she had read something about the Surgeon General in the newspaper. Do you remember that? A. Yes. Q. Okay. And what she told you was that the Surgeon General was going to put warnings on the packages of cigarettes that you were smoking; correct? A. Correct. Q. And she specifically said, from now on when you buy a pack of cigarettes there’s going to be a warning on there. A. She said they’re going to put a warning on those things, those were her exact words. ... Q. And she didn’t want you to smoke; right? A. Of course not. Doc. 113 at 1336-37.7
7
In addition, Plaintiff’s doctors and her sister all started telling her to quit smoking in the 1980s. See id. at 1349-50. Indeed, Plaintiff and her sister made a bet in 1983 to stop smoking because they “didn’t want to end up with an oxygen tank.” Id. at 1350-51, 1354. As a result of the bet, Plaintiff stopped smoking for about a month. Id. 22
Case: 15-15633
Date Filed: 12/06/2017
Page: 34 of 65
Evidence that Plaintiff was aware of the health risks of smoking further establishes that Plaintiff could not have relied to her detriment on any alleged concealment by PM USA. See, e.g., M/I Schottenstein Homes, Inc. v. Azam, 813 So. 2d 91, 94-95 (Fla. 2002) (“If the recipient knows that . . . the statement is false or its falsity is obvious to him, his reliance is improper, and there can be no cause of action for fraudulent misrepresentation.”); Besett v. Basnett, 389 So. 2d 995, 998 (Fla. 1980) (reliance requirement not satisfied where the recipient of the information “knows the representation to be false or its falsity is obvious to him”).8 C.
The District Court Correctly Concluded That Plaintiff Could Not Establish Reliance Using Inferences
Plaintiff largely ignores her own testimony and argues instead that “[d]etrimental reliance can be inferred from a pervasive advertising scheme.” Pl. Br. at 38; see also id at 32-33. As the district court correctly concluded, Plaintiff cannot establish reliance with inferences. Berger, 101 F. Supp. 3d at 1241-43. 1.
Reliance Cannot Be Inferred Based On The Scope Of Misconduct
Florida cases have held that merely alleging misconduct by defendant is insufficient to establish reliance. See Morgan v. W.R. Grace & Co.-Conn., 779 So.
8
Even if Plaintiff had adduced evidence that she relied on a statement made by PM USA that was rendered misleading due to an omission, she failed to introduce any evidence that such reliance was detrimental. Indeed, Plaintiff did not present any evidence that, but for PM USA’s concealment, she would have avoided starting to smoke or would have quit in time to avoid her injuries. 23
Case: 15-15633
Date Filed: 12/06/2017
Page: 35 of 65
2d 503, 506 (Fla. Dist. Ct. App. 2000) (plaintiff could not show reliance through “various documents aimed at the general public . . . lulled the . . . public, including her, into a false sense of security about the safety of . . . reclaimed land”); Morgan v. Canaveral Port Auth., 202 So. 2d 884, 887 (Fla. Dist. Ct. App. 1967) (“It cannot be assumed that the appellants relied to their detriment upon any act or omission on the part of the appellees.”); Humana, 728 So. 2d at 265 (reliance “cannot be satisfied by assumption”). This is particularly true in Engle-progeny cases.
As the Florida Supreme Court made clear in Douglas, evidence of
defendants’ conduct alone cannot establish reliance. Id. at 110 So.3d at 428, 430; see also Engle, 853 So. 2d at 446 n.10 (“Florida law bars any presumption of reliance in cases involving fraud”), aff’d in part and quashed in part on other grounds, Engle, 945 So. 2d 1246. Plaintiff nevertheless relies almost exclusively upon evidence of PM USA’s alleged misconduct to provide sufficient evidence of reliance. The district court recognized that Plaintiff could not connect such evidence to her own purchasing decisions: “her testimony failed to connect, and even served to disconnect, her ensuing decisions with the companies’ false pronouncements about those issues.” Berger, 101 F. Supp. 3d at 1239-43. This conclusion was correct. For example, Plaintiff’s expert historian, Dr. Robert Proctor, spent considerable time discussing advertisements, statements and internal documents
24
Case: 15-15633
Date Filed: 12/06/2017
Page: 36 of 65
from PM USA and other tobacco companies that purportedly show that PM USA concealed information relating to the health risks of smoking. But Dr. Proctor freely admitted that what he knows about Plaintiff is “extremely limited” and that he “[doesn’t] know anything about her biography.” Doc. 110 at 929, 930. He thus conceded he had “no evidence that [Plaintiff] saw the Julie London ad,” for Marlboro cigarettes that he showed to the jury, or that she relied on “any of the advertisements that [Dr. Proctor had] been shown in this courtroom.” Id. at 931. And he also agreed that he did not have “any evidence that [Plaintiff] ever saw, heard, or relied on any statement from Philip Morris” regarding the dangers of smoking or otherwise. Id. at 936-37. Plaintiff argues that she offered evidence that tobacco industry representatives such as the “Truth Squad” made misleading statements. Pl. Br. at 33-34. But, again, Plaintiff presented no evidence connecting those statements to her.
To the contrary, she testified that she never saw or heard (much less
detrimentally relied upon) any such statements. Doc. 113 at 1371-73. Similarly, Plaintiff relies on evidence that she contends shows PM USA and other tobacco companies attempted to mislead smokers to believe that filtered and “light” cigarettes were safer than unfiltered or full-flavor cigarettes. Pl. Br. at 4043. Here, too, the evidence showed no link to Plaintiff. She expressly admitted that she did not smoke either filtered or light cigarettes because she thought they
25
Case: 15-15633
Date Filed: 12/06/2017
Page: 37 of 65
were better for her health. Doc. 113 at 1331-32. Instead, she testified that she smoked filter cigarettes because the filter prevented loose tobacco leaves from getting into her mouth, and that she smoked light cigarettes because she preferred the taste. Id. at 1328-29, 1331. 2.
Plaintiff’s Testimony Refutes Any Inference Of Reliance
In light of these facts, even if an inference of reliance were permissible in some cases, no reasonable jury could draw such an inference in this case. The United States Supreme Court has made clear that inferences and presumptions are improper unless they comport with “common sense and probability.”
United
States Dep’t of Justice v. Landano, 508 U.S. 165, 175 (1993); see also, e.g., Daniels v. Twin Oaks Nursing Home, 692 F.2d 1321, 1327 (11th Cir. 1982) (an inference is not “reasonable” if it is “at war with uncontradicted . . . facts”) (citation omitted). Any inference therefore must “evaporate” in the presence of “direct evidence that proves the contrary.” Marlo Invs., Inc. v. Verne, 227 So. 2d 58, 60 (Fla. Dist. Ct. App. 1969); see also, e.g., Paniello v. Smith, 606 So. 2d 626, 627 (Fla. Dist. Ct. App. 1992); Alan & Alan Inc. v. Gulfstream Car Wash, Inc., 385 So. 2d 121, 123 (Fla. Dist. Ct. App. 1980) (“It is a well-settled principle that a fact cannot be established by circumstantial evidence which is perfectly consistent with direct, uncontradicted, reasonable and unimpeached testimony that the fact does not exist.”). Moreover, courts do not permit inferences or presumptions of reliance
26
Case: 15-15633
Date Filed: 12/06/2017
Page: 38 of 65
unless the record demonstrates that the alleged fraud is the only reason why a consumer would enter into the transaction. See, e.g., Poulos v. Caesars World Inc., 379 F.3d 654, 667-68 (9th Cir 2004) (rejecting presumption where “there may be no single, logical explanation” for plaintiffs’ decision to enter into the transaction); McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 225 n.7 (2d Cir. 2008) (rejecting presumption and distinguishing consumer transaction from cases involving “a financial transaction,” which “does not usually implicate the same type or degree of personal idiosyncratic choice as does a consumer purchase”). These principles preclude any inference of reliance here. As the district court recognized, Plaintiff’s own testimony makes clear that she did not rely, since she did not make any smoking decisions based on any statement from PM USA, let alone one allegedly rendered misleading due to an omission of information. See supra Section II.B. Accordingly, the only evidence in the record is contrary to and precludes any inference that Plaintiff relied on any purportedly misleading advertising. See Daniels, 692 F.2d at 1327; Prickett v. United States, 111 F. Supp. 2d 1191, 1197 n.3 (M.D. Ala. 2000), aff’d, 268 F.3d 1066 (11th Cir. 2001). 3.
Plaintiff Cannot Establish Reliance Based On Martin
Plaintiff also relies on the Florida First District Court of Appeal’s decision in Martin when attempting to establish reliance through generalized evidence. Pl. Br. at 38. The district court considered this same argument and concluded that Martin
27
Case: 15-15633
Date Filed: 12/06/2017
Page: 39 of 65
did not apply. 101 F. Supp. 3d at 1237-39. This Court should reach the same conclusion. First, as the district court recognized, Martin does not control in federal court. Rather, as this Court held in Daniels, “federal law controls questions of the sufficiency of the evidence in state law claims,” including the application of inferences. 692 F.2d at 1323-24; accord Prickett, 111 F. Supp. 2d 1197 n.3. Plaintiff’s reliance upon Neff v. Kehoe, 708 F.2d 639 (11th Cir. 1983), does not change this outcome. Pl. Br. at 39. Neff does not hold that state law controls the application of inferences in federal court. In fact, it did not even discuss the standard for assessing the reasonableness of an inference, nor does Neff disagree with Daniels.9 To the contrary, Neff turned on what type of intent was required as a matter of state law, and the Alabama cases cited in Neff make clear that the issue was not one of “inferences” at all.
The Neff court relied on Winn-Dixie
Montgomery, Inc. v. Henderson, 395 So.2d 475 (Ala. 1981), which held that a reckless misstatement will “supply” the necessary mental state under Alabama law: “when representations are made recklessly and heedlessly without any regard to their consequences, they will supply the necessary intent to support a fraud action.” 9
Even if it did, the panel deciding Neff could not have overturned Daniels; only an en banc court can do that. See, e.g., In re Lambrix, 776 F.3d 789, 794 (11th Cir. 2015) (“we are bound to follow [prior holding] unless and until it is overruled or undermined to the point of abrogation by the Supreme Court or by this Court sitting en banc”) (internal quotations and citations omitted). 28
Case: 15-15633
Date Filed: 12/06/2017
Page: 40 of 65
Id. at 476. Likewise, International Resorts, Inc. v. Lambert, 350 So.2d 391 (Ala. 1977), cited in Neff, does not address inferences but instead holds that “an action for damages will lie when one makes representations relied upon by another without knowing or caring whether they are true or false.” Id. at 394. Both of these cases thus involved the nature of intent required to violate state law, as opposed to the ability to use inferences to meet a burden of proof. Second, even if Martin applied in federal court and allowed an inference of reliance under some circumstances, it would not permit such an inference under the facts of this case. The Martin court held that there was “abundant evidence” from which the jury in that case was permitted to infer the smoker’s reliance because the smoker had been exposed to “pervasive misleading advertising campaigns” that spanned fifty years and a “false controversy created by the tobacco industry . . . aimed at creating doubt among smokers that cigarettes were hazardous to health.” Martin, 53 So. 3d at 1069. As discussed above, in this case, such an inference is irrational and contrary to the facts. See supra at 26-27. Indeed, in Duignan, Florida’s Second District Court of Appeal recently recognized that even where Martin applies, it does not mean “that a tobacco company cannot show otherwise.” Philip Morris USA Inc. v. Duignan, -- So. 3d ---, 2017 WL 5471866, at *11 (Fla. Dist. Ct. App. 2017). Third, to the extent that Martin is read to mean that there is a per se
29
Case: 15-15633
Date Filed: 12/06/2017
Page: 41 of 65
inference of reliance, that would be inconsistent with Florida law and Engle itself. As the district court also found, Martin was wrongly decided under Florida law. Martin’s holding that the jury may infer reliance is contrary to a long line of Florida authorities requiring direct proof of individual reliance that “cannot be satisfied by assumptions.” Humana, 728 So. 2d at 265; see also supra at 24. In addition, Plaintiff’s reading of Martin is inconsistent with the Florida Supreme Court’s mandate in Douglas that progeny cases must resolve individualized issues of legal causation and reliance. Douglas, 110 So. 3d at 424-25 (quoting Engle, 945 So. 2d at 1255)) (emphasis added). If all Engle plaintiffs can prove reliance merely from the scope of the Engle defendants’ fraud, reliance would cease to be an individualized issue. Finally, even if the Court were to determine that Martin permitted the jury in this case to infer that Plaintiff heard or saw an act of concealment by PM USA, Plaintiff’s fraudulent concealment claim would still fail, and the judgment below on her fraud claims should be affirmed, because there is no evidence that, but for the alleged fraud, Plaintiff would have quit smoking and avoided her injury instead of continuing to smoke. See supra at 23 n.8.10
10
Plaintiff’s approach also would require improper inference stacking. See, e.g., Nielsen v. City of Sarasota, 117 So. 2d 731, 733 (Fla. 1960) (“if a party to a civil action depends upon the inferences to be drawn from circumstantial evidence as proof of one fact, it cannot construct a further inference upon the initial inference in order to establish a further fact”); Stanley v. Marceaux, 991 So. 2d 938, 939 30
Case: 15-15633
D.
Date Filed: 12/06/2017
Page: 42 of 65
Plaintiff Could Not Establish Reliance By Arguing That Peer Pressure Caused Her To Smoke
Plaintiff also attempts to establish reliance indirectly based on peer pressure when she was a teenager.
Plaintiff reasons that advertising affected societal
attitudes toward smoking and those societal attitudes in turn created pressure that eventually caused her to start smoking. Plaintiff does not cite a single authority in support of her “reliance on peer pressure” argument. See Pl. Br. at 35-37. And there is none – Florida law does not support such an attenuated causal chain. See, e.g., Morgan, 779 So. 2d at 506 (rejecting plaintiff’s reliance argument that “various documents aimed at the general public . . . lulled the . . . public, including her, into a false sense of security about the safety of such reclaimed land”). Moreover, even if this theory were actionable (it is not), Plaintiff did not raise it at trial and therefore has waived it. See, e.g., Access Now, Inc. v. Sw. (Fla. Dist. Ct. App. 2008) (reversing a plaintiff’s verdict because “plaintiff presented only circumstantial evidence and relied upon impermissible inferences stacked upon inferences”); Slitor v. Elias, 544 So. 2d 255, 257-58 (Fla. Dist. Ct. App. 1989) (similar); Green House, Inc. v. Thiermann, 288 So. 2d 566, 568 (Fla. Dist. Ct. App. 1974) (similar). To meet her burden under this approach, the jury would have had to infer that: (1) Plaintiff saw, read or heard a statement from PM USA; (2) the statement was misleading due to omitted information; (3) she received such statements before she was allegedly unable to stop smoking cigarettes containing nicotine; (4) she was misled by, and relied upon, such statements; and (5) she would not have smoked or would have quit smoking and avoided her injury if not for the alleged concealment. Some courts have recognized an exception to this rule, but only when the inferences preceding the final inference are established to the exclusion of all other reasonable inference. See Nielsen, 117 So. 2d at 733. That is not the case here. None of these inferences can be stablished to the exclusion of all other reasonable inferences. 31
Case: 15-15633
Date Filed: 12/06/2017
Page: 43 of 65
Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004) (“This Court has repeatedly held that an issue not raised in the district court and raised for the first time in an appeal will not be considered by this court.” (internal quotation marks and citation omitted)).
In fact, the verdict form asked whether Plaintiff had relied upon
representations made by PM USA. On the concealment claim, the verdict form asked “Did Mrs. Berger rely to her detriment on the incomplete representations.” Doc. 92 at Q.5 (emphasis added). And, on the conspiracy claim, it asked “Did Mrs. Berger rely to her detriment on a statement(s) made or act(s) done in furtherance of Philip Morris’s agreement with other cigarette manufactures [sic] to conceal or omit material information concerning the health effects and/or addictive nature of smoking cigarettes.” Doc. 92 at Q.8 (emphasis added). The trial court in turn addressed the jury’s affirmative answers to these questions when deciding PM USA’s motion for a directed verdict – i.e., whether there was sufficient evidence from which a reasonable jury could provide those answers.11
11
In addition to the instructions, Plaintiff was required to establish a misleading statement that was made directly to her – rather than a mere failure to disclose – given the absence of any fiduciary relationship between her and PM USA. Florida courts uniformly hold that “[f]raud based upon a failure to disclose material information exists only when a duty to make such disclosure exists.” Friedman v. Am. Guardian Warranty Servs., Inc., 837 So. 2d 1165, 1166 (Fla. Dist. Ct. App. 2003). Plaintiff did not even allege such a relationship, let alone introduce evidence of one. Moreover, a manufacturer does not have a fiduciary duty to the ultimate consumer of its products where the consumer did not purchase cigarettes directly from that manufacturer (as opposed to a retailer). See, e.g., Joy v. Brown & Williamson Tobacco Corp., 1998 WL 35229355, at *5 (M.D. Fla. May 8, 1998) 32
Case: 15-15633
Date Filed: 12/06/2017
Page: 44 of 65
Accordingly, the issue was not then – and is not here – whether the jury could have answered “yes” to entirely different questions concerning whether a third party relied on statements and then took action based on that reliance that harmed Plaintiff. Plaintiff’s observation that a manufacturer’s statement can be conveyed to a smoker through a third party is therefore beside the point. This is not a case in which Plaintiff claims to have relied on a statement by PM USA that was conveyed to her through a newspaper, magazine, or friend. Plaintiff was unable to identify any concealment or incomplete representation by PM USA or other tobacco company on which she relied, regardless of whether it was made to her directly by a PM USA employee or through a newspaper, magazine, or other third party.
Instead, Plaintiff makes the completely different assertion that
advertising affected her friends, who in turn took actions that affected her. But that theory cannot support the verdict in this case because it is not the basis for the verdict form questions that were actually asked in this case, and it would not provide the basis for a valid claim under Florida law in any event. Finally, even if Plaintiff’s peer pressure theory were recognized and had any (under Florida law, “no confidential or fiduciary relationship aris[es] from . . . arms-length sales between a manufacturer and a consumer”); Taylor v. Am. Honda Motor Co., 555 F. Supp. 59, 64 (M.D. Fla. 1982) (rejecting fraudulent concealment claim because parties were not in privity: “No Florida case has gone so far as to impose upon merchants a duty to disclose information to the public at large, and this Court declines to do so today.”); Kovach v. McLellan, 564 So. 2d 274, 277 (Fla. Dist. Ct. App. 1990) (no duty to disclose given lack of privity). 33
Case: 15-15633
Date Filed: 12/06/2017
Page: 45 of 65
relevance to the verdict form questions that were actually asked, it is not supported by the evidence. Plaintiff simply assumes that cigarette advertising affected the attitudes of her friends who exerted peer pressure on her to smoke. But there is no support whatsoever in the record for this assertion. For example, after her counsel showed the “Do you inhale” video ad by PM USA that encouraged smokers to inhale when smoking – while conceding that Plaintiff herself never saw it – Plaintiff testified in response to questioning from her own attorney that she did not know who taught Anita Russo (the friend who gave Plaintiff her first cigarette) how to inhale. Doc. 113 at 1376-77. The Court sustained PM USA’s objection to the question, “Do you know why [your friends] thought it was cool to smoke?” Doc. 113 at 1378. And Plaintiff did not otherwise offer any testimony about what influence tobacco company advertisements may have had on the friends who allegedly encouraged her to smoke. E.
Plaintiff Cannot Obtain Reversal Based On The Jury Instruction’s Requirement That Plaintiff Prove An “Incomplete Representation”
Plaintiff states in passing in her initial brief that “it is not necessary for a plaintiff to identify a specific incomplete representation, statement, or act.” Pl. Br. at 30. Plaintiff, however, does not argue that the district court erred by requiring reliance on an “incomplete representation” in the jury instructions and verdict form. See, e.g., Doc. 94 at 29-30; Doc. 92 at Q.5. Nor can Plaintiff raise this
34
Case: 15-15633
argument now.
Date Filed: 12/06/2017
Page: 46 of 65
As an initial matter, Plaintiff waived any argument that this
particular language was erroneous by failing to challenge it in her initial brief. See, e.g., Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012) (stating that it is well settled in this circuit that a party abandons an issue “by failing to list or otherwise state it as an issue on appeal”).
Moreover, the
instruction the district court gave was correct, and even if proof of a statement that omitted or concealed information was not required, Plaintiff could not have proven reliance. In Hess v. Philip Morris USA Inc., the Court explained that progeny plaintiffs must prove the smoker “detrimentally relied on the misinformation” from tobacco companies to prevail on fraudulent concealment and conspiracy claims and that misinformation must take the form of “statements made by [defendants] that omitted material information.” 175 So. 3d 687, 691 (Fla. 2015) (emphases added). Likewise, outside of the Engle context, it is well-established that a fraudulent concealment plaintiff must generally base the fraud claim on a statement rendered untruthful by omitted information: [A] concealment becomes a fraud where it is effected by misleading and deceptive talk, acts [or] conduct, or is accompanied by misrepresentations, or where in addition to a party’s silence there is any statement, word or act on his part which tends affirmatively to a suppression of the truth, or to a covering up or disguising of the truth, or to a withdrawal or distraction of a party’s attention from
35
Case: 15-15633
Date Filed: 12/06/2017
Page: 47 of 65
the real facts; then the line is overstepped and the concealment becomes fraud. Joiner v. McCullers, 28 So. 2d 823, 825 (Fla. 1947) (emphasis added); see also, e.g., Lorillard Tobacco Co. v. Alexander, 123 So. 3d 67, 80 (Fla. 3d Dist. Ct. App. 2013) (“To prevail on the fraudulent concealment and conspiracy claims, [plaintiff] was only required to show that [the decedent] relied on the deceptive statements made by [defendants].”). Moreover, even if Florida law generally did not require reliance on a statement rendered false or misleading due to concealment, Engle progeny plaintiffs who seek to rely on the res judicata effect of the Engle findings are surely required to do so. The original Engle court instructed the jury as follows: On the Plaintiffs’ claim for fraud by concealment, the issues for your determination are: 1, whether one or more of the Defendants omitted or concealed material facts that would be necessary to make statements by said defendants not misleading; Doc. 135-2 at 37572 (emphasis added). Because Plaintiff was allowed to take advantage of the Engle jury’s findings, Plaintiff was required to prove reliance based on the same form of concealment found by the Engle jury. PM USA acknowledges that, despite these authorities, two Florida District Courts of Appeals have held that, in some cases, it might not be necessary for the Plaintiff in an Engle case to identify a specific “statement” omitting or concealing
36
Case: 15-15633
Date Filed: 12/06/2017
Page: 48 of 65
materials information. See Philip Morris USA Inc. v. Duignan, -- So. 3d -- , 2017 WL 5471866 (Fla. Dist. Ct. App. 2017); R.J. Reynolds Tobacco Co. v. Calloway, 201 So. 3d 753 (Fla. Dist. Ct. App. 2016) (en banc). These cases, however, do not suggest that the district court’s instructions below were incorrect.12 In Duignan, the court concluded only that Florida law does not “categorically require[] reliance on ‘a statement.’” 2017 WL 5471866, at *9 (emphasis added). In Calloway, the Court noted – in dicta – that fraudulent concealment instructions might include “reliance ‘on a statement’ [if] the facts of the case warrant it.” 201 So. 3d at 766 (emphasis added). The facts of this case “warrant it.” Unlike Duignan, Calloway, and Putney, which were cases in which the smoker died years before trial and therefore never testified, the smoker in this case was Plaintiff herself, who had the opportunity at trial to identify any statements or representations that she believed to be incomplete. Plaintiff failed to do so. Indeed, Plaintiff could not have proven reliance even if she was not required to establish an “incomplete representation.” As the Duignan court recognized, “the very purpose of the reliance requirement is to determine whether the plaintiff acted 12
Plaintiff does not cite Calloway or Duignan (which was decided after Plaintiff filed her brief) on this point, but instead cites Philip Morris USA Inc. v. Putney, 199 So. 3d 465 (Fla. Dist. Ct. App. 2016). Putney, however, found reliance was satisfied based on Martin, which does not apply here for the reasons described above. See supra at Section II.C.3.
37
Case: 15-15633
Date Filed: 12/06/2017
Page: 49 of 65
differently because of PM’s or Reynolds’ concealment or omission of facts.” 2017 WL 5471866, at *9. Plaintiff’s own testimony establishes that she would not have. Plaintiff began and continued smoking for several reasons other than any information that was concealed from her or anything having to do with perceived health risks. See supra at Section II.B. As the district court correctly recognized, there is “strong – indeed, conclusive – evidence that the disinformation campaign played no role in her decisions as they related to the addictive nature and health effects of smoking.” Berger, 101 F. Supp. 2d at 1243. F.
Plaintiff’s Claim For Conspiracy Fails
Plaintiff concedes that her claim for conspiracy to commit fraudulent concealment also requires reliance: “Detrimental reliance is an element of an Engle plaintiff’s . . . conspiracy claims.” Pl. Br. at 30. Plaintiff’s conspiracy claim therefore fails as a matter of law for the same reason as her fraudulent concealment claim. III.
PLAINTIFF’S USE OF THE ENGLE FINDINGS TO ESTABLISH CERTAIN ELEMENTS OF HER FRAUD CLAIMS VIOLATED DUE PROCESS The Court also should affirm the judgment in favor of PM USA on
Plaintiff’s fraud claims (or at a minimum require a new trial) because Plaintiff’s use of the Engle findings with respect to those claims violated due process. The Court’s en banc decision in Graham v. R.J. Reynolds Tobacco Co., 857 F.3d 1169
38
Case: 15-15633
Date Filed: 12/06/2017
Page: 50 of 65
(11th Cir. 2017) (en banc), does not foreclose or undermine in any way PM USA’s arguments against giving preclusive effect to the Engle jury’s concealment and conspiracy findings. In fact, Graham’s reasoning underscores the constitutional problems with permitting Plaintiff to rely on the Engle findings to establish the conduct elements of her concealment and conspiracy claims. The same question is currently pending before the Court in Searcy v. R.J. Reynolds Tobacco Co., No. 13-15258, which is fully briefed (including supplemental briefing addressing the Graham decision) and was argued on October 17, 2014. This Court concluded in Graham that permitting plaintiffs to invoke the Engle jury’s strict-liability and negligence findings to establish elements of those claims does not violate due process because those findings are based on a single common theory applicable to all Engle class members – i.e., “that all of the companies’ cigarettes cause disease and addict smokers.” 857 F.3d at 1176. The Court did not have occasion in Graham to consider the Engle jury’s concealment and conspiracy findings. The particular issue in Graham was the propriety of using the Engle defect and negligence findings in progeny litigation.
See
Drummond Co. v. Terrance P. Collingsworth, Conrad & Scherer, LLP, 816 F.3d 1319, 1326 (11th Cir. 2016) (“A decision cannot hold anything beyond the facts of the case that gave rise to it.”).
39
Case: 15-15633
Date Filed: 12/06/2017
Page: 51 of 65
But Graham’s reasoning makes clear that due process prohibits giving the same sweeping preclusive effect to the Engle jury’s concealment and conspiracy findings because the Engle class did not pursue a single common theory of concealment as the basis for its concealment and conspiracy-to-conceal claims. Not only were the Engle verdict-form questions on concealment and conspiracy worded in the disjunctive – permitting a verdict in the class’s favor if the jury found that defendants concealed information about the “health effects” or the “addictive nature of smoking cigarettes,” Engle Doc. 394-31 at Q.4a – but also the Engle class pursued multiple distinct allegations on each of those two alternative concealment theories.
In fact, class counsel acknowledged that the class’s
concealment allegations rested on “thousands upon thousands of statements about” cigarettes. Engle Doc. 1065-10 at 35955 (emphasis added); see also Doc. 135-2 at 37572 (instructing the Engle jury to determine whether defendants “concealed material facts that would be necessary to make statements by said defendants not misleading”). In light of the disjunctive verdict-form questions and disparate concealment allegations, there can be no common theory of concealment that applies to all Engle class members. The absence of a single common theory of concealment creates a very real possibility that the jury’s concealment and conspiracy verdicts in this case rest on types of statements that the Engle jury found not to be fraudulent. That risk of
40
Case: 15-15633
Date Filed: 12/06/2017
Page: 52 of 65
inconsistent jury determinations is precisely the reason that the Seventh Amendment prohibits trying “issues involving overlapping legal and factual questions” before separate juries. Alabama v. Blue Bird Body Co., 573 F.2d 309, 318 (5th Cir. 1978). And the risk that PM USA is being deprived of its property without any jury having found every element of Plaintiff’s concealment and conspiracy claims is the reason why due process requires assurance that the particular issue on which preclusion is being sought was actually decided by a prior jury. See Fayerweather v. Ritch, 195 U.S. 276, 299, 307 (1904). The Court should affirm the judgment in favor of PM USA on Plaintiff’s concealment and conspiracy claims for this additional, independent reason. IV.
THE COURT SHOULD AFFIRM THE DISTRICT COURT’S SETTING ASIDE OF THE PUNITIVE DAMAGES AWARD The district court correctly set aside the jury’s punitive damages award. As
the court recognized, this award was based solely upon Plaintiff’s fraudulent concealment and conspiracy claims.
Because those claims failed, Plaintiff’s
punitive damages claim likewise failed. Plaintiff, however, asks the Court to reinstate the punitive damages award based on the conduct underlying Plaintiff’s negligence and strict liability claims. Doing so would be flatly contrary to both Florida law and federal due process, and would violate PM USA’s right to a jury
41
Case: 15-15633
Date Filed: 12/06/2017
Page: 53 of 65
trial,13 since punitive damages can only be based on the same conduct underlying compensatory liability. Plaintiff cannot meet this requirement. Plaintiff’s fraud claims relied upon allegations of intentional conduct, while her non-intentional torts relied upon allegations of negligence or strict liability. These categories of alleged misconduct are not the same. Thus, it is entirely possible that the jury could have concluded that PM USA’s intentional misconduct warranted a certain award of punitive damages, but would have concluded that PM USA’s negligent conduct did not warrant any punitive damages. Moreover, PM USA has never had an opportunity to defend itself against punitive damages based on the negligence or strict liability claims, let alone before a jury. A.
The District Court Correctly Instructed The Jury That It Could Only Award Punitive Damages Based Upon Plaintiff’s Fraudulent Concealment And Conspiracy Claims
At the time of trial, Florida law precluded plaintiffs from seeking punitive damages based on non-intentional tort claims. See Soffer v. R.J. Reynolds Tobacco Co., 106 So. 3d 456 (Fla. Dist. Ct. App. 2012), rev’d, 187 So.3d 1219 (Fla.
13
PM USA expressly preserves its argument that the punitive damages award is excessive and that remittitur is appropriate upon remand in the event this Court affirms any or all of the jury’s punitive damages award. Doc. 197 (trial court stating that ruling “moots PM USA’s argument that the punitive damages award is excessive” but making clear that PM USA “can renew its argument if I grant Mrs. Berger’s pending Rule 60(b) motion (Doc. 190) and a punitive damage award thereafter ultimately results”). 42
Case: 15-15633
Date Filed: 12/06/2017
Page: 54 of 65
2016).14 The district court therefore correctly instructed the jury that it could only award punitive damages based on Plaintiff’s fraud claims and that it “should not consider the conduct underlying Mrs. Berger’s claims for strict liability or negligence” in deciding whether to award punitive damages. Doc. 127 at 2652-53 (emphasis added). Indeed, the trial court repeatedly instructed the jury during the first phase of trial on this point, which addressed whether punitive damages were warranted.15 The trial court likewise made clear in its instructions for the second phase of trial, on the punitive amount, that any punitive award “should not consider the conduct underlying [Plaintiff’s] claims for strict liability or negligence.” Doc. 127 at 2855.16
14
The Florida Supreme Court subsequently held that Engle class members are not prohibited from seeking punitive damages on their products claims. See Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219 (Fla. 2016). PM USA agrees that this intervening precedent will allow Plaintiff to attempt to seek punitive damages on those claims in the event of a retrial. But that is not the question in this appeal. The question here is whether the punitives award from the first trial based on intentional torts can be affirmed based on allegations of non-intentional conduct. It cannot. 15
See Doc. 124 at 2383-84 (“If you find for Mrs. Berger and against the defendant on her fraudulent concealment claim or her conspiracy to fraudulently conceal claim, you must then decide whether in addition to compensatory damages, punitive damages are awarded on either or both of those claims as punishment to the defendant and as a deterrent to others.” (emphases added)); id. at 2384 (similar); id. at 2385 (similar). 16
See also id. at 2853 (“the amount you award must be limited to the damage you find by a preponderance of the evidence to have been . . . legally caused by such fraudulent misconduct”); id. at 2854 (similar).
43
Case: 15-15633
Date Filed: 12/06/2017
Page: 55 of 65
In light of these instructions, which Plaintiff does not challenge, the jury’s punitive damages award could not have been based on Plaintiff’s negligence and strict liability claims unless the jury simply ignored the trial court’s instructions. Plaintiff can offer no indication that the jury did so, and the Court should decline to reach such a conclusion. The trial court’s instructions on this point were repeated, fulsome and clear; in these circumstances, there could be no basis to override the presumption that juries follow their instructions. United States v. Brown, 983 F.2d 201, 203 (11th Cir. 1993); United States v. Roy, 855 F.3d 1133 (11th Cir. 2017). B.
Reinstating Punitive Damages Based On Negligence And Strict Liability Would Violate State Law And The Constitution
Despite the district court’s clear instructions, Plaintiff contends that the Court can affirm the jury’s award of punitive damages based on the conduct underlying her negligence and strict liability claims. These efforts fail: punitive and compensatory damages must be based on the same conduct. Plaintiff made this same argument to the district court in the context of a Rule 60 motion, and the district court properly rejected it. See Doc. 202. In denying Plaintiff’s Rule 60 motion, the district court noted it had “due process concerns about Plaintiff’s proposed remedy” of “simply reinstating the $20.7 punitive damages verdict” because “the jury never decided whether the conduct underlying the negligence and strict liability claims called for punitive damages.” Id. at 6-7.
44
Case: 15-15633
Date Filed: 12/06/2017
Page: 56 of 65
Under Florida law, a necessary condition for any punitive damages award is that “the underlying cause of action has been proved to the satisfaction of a jury.” Lassitter v. Int’l Union of Operating Eng’rs 349 So. 2d 622, 625-26 (Fla. 1976); see also, e.g., Ault v. Lohr, 538 So. 2d 454, 456 (Fla. 1989) (“[A]n express finding of liability” based on “an encroachment upon an established right” is a prerequisite for any punitive damages judgment.); Engle, 945 So. 2d at 1262 (an actual “finding of liability is required before entitlement to punitive damages can be determined”). Likewise, when deciding whether to impose punitive damages, a jury is required to consider (1) whether the conduct underlying the compensatory damage award was sufficiently egregious to warrant a punitive award, see W.R. Grace & Co. v. Waters, 638 So. 2d 502 (Fla. 1994), and (2) whether there is the required “reasonable relationship” between the amount needed to compensate plaintiff for the underlying injury and any award made to punish defendant, Engle, 945 So. 2d at 1264; see also, e.g., Smith v. Vining, 407 So. 2d 1048, 1049 (Fla. Dist. Ct. App. 1981) (observing that “punitive damages must bear a relationship to the fact of injury or invasion of legal right”) (citation omitted).17
17
The Standard Jury Instructions approved by the Florida Supreme Court for causes of action arising before October 1, 1999 (including the instant case) reflect this basic principle. They direct the jury to determine whether “the conduct causing [loss] [injury] [or] [damage] to (claimant)” satisfied the various legal standards. Standard Jury Instructions – Civil Cases No. 96-1, 689 So. 2d 1042, 1044 (Fla. 1997) (emphasis added). This instruction makes clear that the punitive 45
Case: 15-15633
Date Filed: 12/06/2017
Page: 57 of 65
Similarly, due process requires that punitive damages be based on the same conduct for which the jury imposed liability in the first instance. In State Farm v. Campbell, 538 U.S. 408 (2003), the Supreme Court made it clear that conduct “independent from the acts upon which liability was premised, may not serve as the basis for punitive damages.” Id. at 422 (emphasis added). Reinstating the punitive damages award, despite the failure of Plaintiff’s concealment and conspiracy claims, would violate this constitutional requirement.
Indeed, this
result would allow Plaintiff to recover punitive damages that were based upon acts of fraudulent conduct despite the failure by Plaintiff to establish liability based on that conduct. Plaintiff cannot avoid this problem by arguing that the basis for punitive damages was “the same conduct for which the jury imposed liability for the negligence and strict liability claims.” Pl. Br. at 45-46. These bald assertions do not withstand scrutiny. As discussed above, the jury was clearly instructed that it could award punitive damages based only upon “the specific conduct of Philip Morris that was the basis for your findings that Philip Morris is liable to Mrs. Berger on her claims involving fraudulent concealment and conspiracy to fraudulently conceal.” Doc. 127 at 2855. Under Eleventh Circuit authority, the
damages deliberations must focus on the same conduct that was the legal cause of plaintiff’s injury. 46
Case: 15-15633
Date Filed: 12/06/2017
Page: 58 of 65
jury is presumed to follow the Court’s instructions, see supra at 44, and therefore levied punitive damages based only on conduct underlying the fraud claims. If the Court does not reinstate Plaintiff’s fraudulent concealment and conspiracy claims, Plaintiff’s vacated punitive damages award cannot be reinstated. Plaintiff argues that “the acts undergirding Mrs. Berger’s negligence and strict liability claims included all of the acts on which her intentional tort claims were based.’” Pl. Br. at 47. This is demonstrably wrong. Intentionally fraudulent conduct is not the same as negligent conduct.
To the contrary, Plaintiff’s
allegations of fraudulent conduct claim that PM USA took intentional steps to mislead smokers such as Plaintiff. In contrast, Plaintiff’s negligence and strict liability allegations do not depend on intentional actions to defraud smokers at all. They focus on whether defendants, regardless of intent, violated a standard of care and whether their products had a defective design. Given the different conduct that underlies intentional and non-intentional tort claims, it is entirely possible -- if not highly likely -- that a jury would find fraudulent conduct more egregious and deserving of punitive damages than negligent conduct.
Plaintiff’s suggestion
otherwise is meritless. Moreover, the court determined that intentional conduct did not harm Plaintiff because she did not rely on it. As a result, intentional conduct cannot form the basis of her punitive damages claim. Indeed, it would be particularly
47
Case: 15-15633
Date Filed: 12/06/2017
Page: 59 of 65
perverse (and unconstitutional) here to allow an award of punitive damages based on the jury’s verdict given that the trial court held that the jury was wrong to find that PM USA was liable on Plaintiff’s fraud claims. In essence, the jury awarded punitive damages based only on conduct that the trial court found as a matter of law did not harm Plaintiff but, if it harmed anyone, harmed only non-parties. To impose punitive damages based on such conduct would violate the Constitution. See Philip Morris USA v. Williams, 549 U.S. 346, 353 (2007) (“The Constitution’s Due Process Clause forbids a State to use a punitive damages award to punish a defendant for injury that it inflicts upon nonparties.”). Reinstating the punitive damages award would violate due process for the additional reason that PM USA did not have the opportunity to present its defenses to an award of punitive damages with respect to the negligence and strict liability claims. “[T]he Due Process Clause prohibits a State from punishing an individual without first providing that individual with ‘an opportunity to present every available defense.’” Williams, 549 U.S. at 353 (quoting Lindsey v. Normet, 405 U.S. 56, 66 (1972) (internal quotation marks omitted)). PM USA must be given that opportunity. Likewise, reinstating the punitive damages award would violate PM USA’s right to a jury trial. As demonstrated above, the prior jury did not consider whether PM USA was liable for punitive damages based on the alleged
48
Case: 15-15633
Date Filed: 12/06/2017
Page: 60 of 65
conduct underlying Plaintiff’s negligence and strict liability claims. PM USA has the right to a jury trial on those issues. See U.S. Const. Amend VII. C.
PM USA’s Arguments Are Not Barred By Judicial Estoppel
Finally, Plaintiff argues that PM USA is judicially estopped from arguing that the evidence and arguments underlying the jury’s punitive damages award are different from the evidence and arguments underlying Plaintiff’s non-intentional tort claims. Pl. Br. at 48-49. Plaintiff’s estoppel argument fails because PM USA has never taken the position that the evidence and arguments underlying intentional torts and non-intentional torts are identical. See, e.g., Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1273 (11th Cir. 2010) (to establish “the bar of judicial estoppel . . . it must be shown that the allegedly inconsistent positions were made under oath in a prior proceeding”) (citation and quotations omitted). Plaintiff’s entire estoppel argument is based on a brief filed by PM USA, and the other defendants in the Engle progeny cases pending at the time below, to address the verdict form that Defendants believed should be used in progeny cases after the Florida First District Court of Appeal’s decision in Soffer v. R.J. Reynolds Tobacco Co., 106 So. 3d 456, 457 (Fla. Dist. Ct. App. 2012), which held that Engle plaintiffs could only seek punitive damages on their fraud claims. See Pl. Br. at 49 (citing Defs. Mem. Regarding Soffer, Doc. 943, Case 3:09-cv-10000). That decision (later reversed, see Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d
49
Case: 15-15633
Date Filed: 12/06/2017
Page: 61 of 65
1219 (Fla. 2016)) was at the time the only Florida appellate authority on that point, and therefore binding in federal court under Erie principles. Defendants submitted the brief that Plaintiff cites in order to address the impropriety of using verdict form that asked the jury to enter a separate punitive damages award for each of the plaintiff’s four claims, fraudulent concealment, conspiracy, negligence and strict liability. See Engle Doc. 943 at 1-2. Defendants’ brief instead proposed a verdict form with a single question for the jury to answer regarding the amount of punitive damages, if any. This verdict form likewise provided that the jury would reach this question only if the plaintiff prevailed on his or her fraudulent concealment and conspiracy claims. Contrary to Plaintiff’s argument, when requesting this verdict form, Defendants never suggested or argued that “the allegations and evidence underlying each of Mrs. Berger’s claims were identical with respect to punitive damages.” Pl. Br. at 49 (emphasis added). To the contrary, Defendants argued that this verdict form should be used because (a) it was consistent with Florida state law at that time, including Soffer (Engle Doc. 943 at 2-3, 6-7), (b) it avoided the risk of overlapping awards of punitive damages (id. at 3-5), (c) it was the same approach being taken by state courts in Engle progeny cases (id. at 7-9), and (d) it was consistent with Florida’s model jury instructions (id. at 9-10). Nowhere did PM USA argue that the evidence and arguments underlying the plaintiffs’ four
50
Case: 15-15633
Date Filed: 12/06/2017
different Engle progeny claims were “identical.”
Page: 62 of 65
Nor could PM USA have
advanced that argument. Intentional torts and non-intentional torts have different elements and turn on different factual issues. See supra at 47-48. Simply put, Plaintiff cannot show that PM USA’s arguments here are “clearly inconsistent with [its] earlier position” and therefore cannot rely on judicial estoppel to bar PM USA from raising these arguments.
New Hampshire v. Maine, 532 U.S. 742, 750
(2001). CONCLUSION For the foregoing reasons, the Court should vacate the jury verdict and judgment entered below on Plaintiff’s negligence and strict liability claims and affirm the judgment in PM USA’s favor on Plaintiff’s fraudulent concealment and conspiracy claims.
51
Case: 15-15633
Dated: December 6, 2017
Date Filed: 12/06/2017
Page: 63 of 65
Respectfully submitted, /s/ Geoffrey J. Michael Ingo W. Sprie, Jr. ARNOLD & PORTER KAYE SCHOLER LLP 250 West 55th St. New York, NY 10019 (212) 836-8000 M. Sean Laane Geoffrey J. Michael ARNOLD & PORTER KAYE SCHOLER LLP 601 Massachusetts Ave, NW Washington, DC 20001 (202) 942-5000 Counsel for Defendant-Appellant PHILIP MORRIS USA INC.
52
Case: 15-15633
Date Filed: 12/06/2017
Page: 64 of 65
RULE 32 CERTIFICATE OF COMPLIANCE I hereby certify that this document complies with the type-volume limit of Fed. R. App. 32(a)(7)(B) because, excluding the parts of the document exempted by Fed. R. App. P. 32(f), this document contains 12,973 words.
/s/ Geoffrey J. Michael Counsel for Defendant-Appellant PHILIP MORRIS USA INC.
53
Case: 15-15633
Date Filed: 12/06/2017
Page: 65 of 65
CERTIFICATE OF SERVICE I hereby certify that on December 6, 2017, I caused to be electronically filed the foregoing Appellant’s Reply Brief / Answer Brief On Cross-Appeal using the Court’s Appellate PACER system, which automatically serves e-mail notification of such filing to the attorneys of record who are registered participants in the Court’s electronic notice and filing system and each of whom may access this filing via the Court’s Appellate PACER system.
/s/ Geoffrey J. Michael Counsel for Defendant-Appellant PHILIP MORRIS USA INC.
54