00-3400 LIGGETT GROUP INC. V. ENGLE

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State: Florida

Court: Florida Third District Court

Docket No: 00-3400 LIGGETT GROUP INC. V. ENGLE

Case Date: 05/21/2003

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.

IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT JANUARY TERM, A.D., 2003

LIGGETT GROUP INCORPORATED; BROOKE GROUP LIMITED; PHILIP MORRIS INCORPORATED; COUNCIL FOR TOBACCO RESEARCH-USA, INCORPORATED; TOBACCO INSTITUTE, INCORPORATED; LORILLARD TOBACCO COMPANY; LORILLARD, INCORPORATED; BROWN & WILLIAMSON TOBACCO CORPORATION; AMERICAN TOBACCO COMPANY; and R.J. REYNOLDS TOBACCO COMPANY, Appellants, vs. HOWARD A. ENGLE, M.D., et al., Appellees.

** ** ** ** ** ** ** ** ** ** ** CASE NOS: 3D00-3400, 3D00-3206, 3D00-3207, 3D00-3208,3D00-3210, 3D00-3212, 3D00-3215 LOWER TRIBUNAL NO. 94-8273

Opinion filed May 21, 2003. An Appeal from the Circuit Court for Miami-Dade County, Robert P. Kaye, Judge. Steel Hector & Davis, and Alvin B. Davis; Clarke Silverglate Campbell Williams & Montgomery, and Mercer B. Clarke, and Kelly A. Luther; Kasowitz, Benson, Torres & Friedman, and Marc E. Kasowitz, Daniel R. Benson, and Aaron H. Marks (New York); for Appellants, Liggett Group Inc. And Brooke Group Holding, Inc.

Shook, Hardy & Bacon, and Norman A. Coll; Winston & Strawn, and Dan K. Webb, and Stuart Altschuler (Chicago, Illinois); Dechert Price & Rhoads, and Robert C. Heim, and Joseph Patrick Archie (Philadelphia, Pennsylvania); for Appellant, Philip Morris Incorporated. Carlton Fields, and Benjamine Reid, and Wendy F. Lumish; Jones, Day, Reavis & Pogue, and James R. Johnson, and Diane G. Pulley (Atlanta, Georgia); Jones, Day, Reavis & Pogue, and Robert H. Klonoff, and Charles R.A. Morse ( Washington, D.C.); for Appellant, R.J. Reynolds Tobacco Company. Adorno & Yoss, and Anthony N. Upshaw; King & Spalding, and Gordon A. Smith, and Richard A. Schneider, and Barry Goheen, and Stephen B. Devereaux (Atlanta, Georgia); for Appellant, Brown & Williamson. Greenberg Traurig, and Arthur J. England, Jr., and David L. Ross, and Elliot H. Scherker; Shook, Hardy & Bacon, and James T. Newsom (Kansas City, Missouri); for Appellants, Lorillard, Inc., and Lorillard Tobacco Company. Debevoise & Plimpton, and Joseph P. Moodhe (New York), for Appellant, Counsel for the Council for Tobacco Research-U.S.A., Incorporated. Renaldy J. Gutierrez, and Kathleen M. Sales; Covington & Burling, and James A. Goold (Washington, D.C.); for Appellant The Tobacco Institute, Incorporated. Stanley M. Rosenblatt, and Susan Rosenblatt, for Appellees.

Before LEVY, GERSTEN, and GODERICH, JJ. GERSTEN, J. This is an appeal from a final judgment in a smokers' class action law suit seeking damages against cigarette companies and industry organizations for alleged smoking related injuries. The

final judgment awarded $12.7 million in compensatory damages to three individual plaintiffs, and $145 billion in punitive damages 2

to the entire class. be decertified.

We reverse with instructions that the class

I. Overview In May of 1994, six named individuals filed a class action complaint seeking damages for injuries allegedly caused by smoking. All six alleged they were unable to stop smoking because they were addicted to nicotine and, as a result, developed medical problems ranging from cancer and heart disease to colds and sore throats. They sought over $100 billion in compensatory damages on theories of strict liability, negligence, breach of express warranty,

breach of implied warranty, fraud, conspiracy to commit fraud, and intentional infliction of emotional distress. In addition, the plaintiffs sought over $100 billion in punitive damages on their claims for fraud, conspiracy, and emotional distress. The

defendants are the major domestic cigarette companies and two industry organizations (hereafter collectively referred to as "defendants").1 The
1

class

of

smokers

and

their

survivors

(hereafter

The defendant cigarette companies are: Philip Morris Incorporated ("Philip Morris"); R.J. Reynolds Tobacco Company ("Reynolds"); Brown & Williamson Tobacco Corporation, individually and as successor by merger to The American Tobacco Company ("Brown & Williamson" or "B&W"); Lorillard Tobacco Company and Lorillard, Incorporated (collectively, "Lorillard"); and Liggett Group Incorporated and Brooke Group Holding Incorporated (collectively, "Liggett"). The defendant industry organizations are The Council for Tobacco Research-U.S.A., Incorporated ("CTR") and The Tobacco Institute, Incorporated ("TI"). 3

collectively referred to as "plaintiffs") was certified in October of 1994 as a nationwide class action under Florida Rule of Civil Procedure 1.220(b)(3). The trial court defined the class as: "All

United States citizens and residents, and their survivors, who have suffered, presently suffer or have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine." Thereafter in 1996, this Court reduced the class to include Florida smokers only. R.J. Reynolds Tobacco Co. v. Engle, 672 So. This Court did not approve any trial

2d 39 (Fla. 3d DCA 1996).

plan for the case, because no trial plan had been issued at that time. In February of 1998, the trial court issued its first trial plan, which provided for the trial proceedings to be divided into three phases.2
2

Phase 1 consisted of a year-long trial on liability

The trial court subsequently made changes in the plan, both before and during the trial. A major change in the plan concerned the method of assessing punitive damages. The original plan provided that in Phase 1, after trying certain "common issues," the jury would determine the potential entitlement of subclasses to punitive damages and then determine a "basis or ratio" for computing punitive damages individually for each class member within each subclass. In Phase 2, the jury would determine the individual liability and compensatory-damage claims of each named plaintiff, and then the punitive "basis or ratio" would be applied to each plaintiff's compensatory award (if any) to determine his or her punitive award. However, after the jury returned its Phase 1 verdict, and before the Phase 2 trial began, the court abandoned the "basis or ratio" method. Instead the court determined the jury would assess punitive damages as a lump sum with respect to the entire class. No allocation would be made of that amount to any of the named plaintiffs, nor to any particular class member. The 4

and entitlement to punitive damages.

The jury considered common

issues relating exclusively to defendants' conduct and the general health effects of smoking. At the conclusion of Phase 1, the jury

rendered a verdict for the class on all counts. In Phase 2, the jury determined that the three individual class representatives were entitled to compensatory damages in varying amounts which were offset by their comparative fault. The

total award was $12.7 million. Thereafter, the jury determined the lump-sum amount of punitive damages for the entire class to be $145 billion, without allocation of that amount to any class member. The defendants filed several post-verdict motions, including motions for remittitur and class decertification. The trial court Instead, in

did not hold hearings on the post-verdict motions.

November of 2000, the trial court entered an "Omnibus Order on All Pending Motions" denying most of the defense motions, with two minor exceptions.3 The Omnibus Order granted judgment in the

plaintiffs' favor in all other respects, ordering immediate payment

defendants objected to the original and to subsequent versions of the plan. In its Omnibus Order, the court granted judgment in the defendants' favor in two respects. First, it ruled that the claims of named plaintiff Mr. Amodeo were time-barred with respect to strict liability, negligence, breach of warranty, and intentional infliction of emotional distress. However, it ruled that Mr. Amodeo's fraud and conspiracy claims were not time barred. Second, the court granted judgment for the defendants on the plaintiffs' claim for equitable relief, pursuant to a prior dismissal of that claim. 5
3

to the individual plaintiffs, and directing the defendants to immediately pay the $145 billion in punitive damages into the court registry for the benefit of the entire class. The trial court

reserved jurisdiction to "conduct further proceedings pursuant to the mandate of the Third District Court of Appeal" - an apparent reference to the coming Phase 3 trials and this Court's 1996 ruling that individual hearings are required "on at least the issue of damages, if not other issues as well." v. Engle, 672 So. 2d at 41. In Phase 3, which has not yet begun, new juries will decide the individual liability and compensatory damages claims for each class member (estimated to number at least 700,000). The trial R.J. Reynolds Tobacco Co.

court will then divide the $145 billion punitive damages award equally among the successful class members. Pursuant to the

Omnibus Order, interest on the $145 billion punitive award began accruing immediately at $14.5 billion annually. The defendants now appeal the adverse Omnibus Order. II. Class Decertification Required Although the emotional appeal of the class representatives' claims is compelling, our job as appellate judges is not to be swayed by emotion where to do so results in violating established legal principles. The law in the instant case clearly mandates

that the trial court order certifying the class be reversed, with instructions that the class members may pursue their claims on an 6

individualized basis. Under Florida Rule of Civil Procedure 1.220(d)(1), a classcertification order may be altered or amended at any time before entry of a judgment on the merits. Class-certification orders

necessarily precede substantial development of the issues and facts. For this reason, a court is required to reassess its class

rulings as the case develops. See Barnes v. American Tobacco Co., 161 F.3d 127, 140 (3d Cir. 1998); In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Product Liab. Litig., 55 F.3d 768, 792 n.14 (3d Cir. 1995); Stott v. Haworth, 916 F.2d 134, 139 (4th Cir. 1990); Kuehner v. Heckler, 778 F.2d 152, 163 (3d Cir. 1985); Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983). Thus, even after a

certification order is entered, "the judge remains free to modify it in the light of subsequent developments in the litigation." Forehand v. Florida State Hosp., 89 F.3d 1562, 1566 (11th Cir. 1996). In 1996, this Court affirmed as modified the trial court order certifying the class. See R.J. Reynolds Tobacco Co., et al v. At that time, we

Engle, et al., 672 So. 2d 39 (Fla. 3d DCA 1996).

limited the case to a Florida-only class based upon our finding that a nationwide class would be unmanageable because it would comprise in excess of one million class members. See R.J. Reynolds Tobacco Co., et al v. Engle, et al., 672 So. 2d at 41. This was

the first smokers' case to be certified as a class action anywhere 7

in the country. been issued and

At the time of certification, no trial plan had the plaintiffs estimated the class size at

approximately 300,000 people. Two years after class certification, the trial court issued its first trial plan. As finally implemented, the plan provided In Phase 1, which

that trial would be divided into three phases.

has been completed, the jury made a general finding that smoking causes some, but not all, of the diseases in issue and that cigarettes containing nicotine are addictive. The jury also made

a general finding that the defendants had engaged in unspecified conduct that "rose to a level that would permit a potential award or entitlement to punitive damages." In Phase 2, which has also been completed, the same jury found the three class representatives established liability and The

compensatory damages with respect to their individual claims.

jury then awarded a lump sum of $145 billion dollars in punitive damages to the entire class, without allocation to any class member. The trial plan provides that Phase 3, which has not yet begun, will consist of a series of individual trials before new juries to determine whether the defendants are liable to the other class members, and the amount of any compensatory damages. The

plaintiffs have now more than doubled their original estimate of class size from 300,000 to at least 700,000. 8 After completion of

the estimated 700,000 or more class member individual trials, the plan provides that the trial court will then equally divide the $145 billion dollar lump-sum punitive award among the successful class members. The defendants objected to the trial plan and filed their first motion to decertify the class in 1998. The trial court

denied the motion, although it expressed "reservations about the manageability of this case" and predicted that "the necessary individual hearings will place a serious demand upon Florida's judicial resources." The denial of decertification was then appealed to this Court. This Court dismissed the appeal for lack of jurisdiction, but expressly stated that the defendants had a right to obtain review of "the propriety of the order by plenary appeal from any adverse final judgment."4 The plaintiffs' "law of the case" argument in response to the decertification issues raised in this appeal clearly lacks merit in light of this Court's March 6, 1998 order expressly stating: "Appellants/petitioners may however, review the propriety of the order [denying decertification] by plenary appeal from any adverse final judgment." The "law of the case" doctrine, in any event, has only limited application to class-certification decisions. Such decisions remain conditional and subject to reconsideration until the case is finally resolved. See Fla. R. Civ. P., Rule 1.220(d)(1) (class certification order may be altered or amended any time before entry of judgment on the merits); see also, Toledo v. Hillsborough County Hosp. Auth., 747 So. 2d 958, 960 (Fla. 2d DCA 1999)(rejecting "law of the case" challenge to trial court's decision to decertify, even though the appellate court had previously affirmed the initial class certification); Hebert v. Monsanto Co., 682 F.2d 1111, 1132 (5th Cir. 1982) (law of the case is inapplicable to Federal Rule 23); Zenith Laboratories, Inc. v. 9
4

In the years since initial affirmance of certification in 1996, virtually all courts that have addressed the issue have concluded that certification of smokers' cases is unworkable and improper. See Barnes v. American Tobacco Co., 161 F.3d 127 (3d

Cir. 1998), cert. denied, 526 U.S. 1114 (1999); Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996); Mahoney v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150 (S.D. Iowa 2001); Badillo v. American Tobacco Co., 202 F.R.D. 261 (D. Nev. 2001); Guillory v. American Tobacco Co., 2001 U.S. Dist. LEXIS 3353 (N.D. Ill. Mar. 19, 2001); Aksamit v. Brown & Williamson Tobacco Corp., 2000 U.S. Dist. LEXIS 18880 (D.S.C. Dec. 29, 2000); Walls v. American Tobacco Co., 2000 U.S. Dist. LEXIS 16040 (N.D. Okla. Oct. 19, 2000); Chamberlain v. American Tobacco Co., 70 F. Supp. 2d 788 (N.D. Ohio 1999); Hansen v. American Tobacco Co., 1999 U.S. Dist. LEXIS 11277 (E.D. Ark. July 21, 1999); Thompson v. American Tobacco Co., 189 F.R.D. 544 (D. Minn. 1999); Clay v. American Tobacco Co., 188 F.R.D. 483 (S.D. Ill. 1999); Insolia v. Philip Morris, Inc., 186 F.R.D. 535 (W.D. Wis. 1998); Emig v. American Tobacco Co., 184 F.R.D. 379 (D. Kan. Carter-Wallace, Inc., 530 F.2d 508, 512 (3d Cir. 1976) (same). Even the trial court acknowledged that this Court's prior approval of class certification was "preliminar[y]," and this Court has specifically noted that "law of the case is inapplicable if there is even an arguable change in the substantive evidence presented." Metro. Dade County v. Martino, 710 So. 2d 20, 22 (Fla. 3d DCA 1998); see City of Miami v. Bell, 606 So. 2d 1183, 1185 (Fla. 1st DCA 1992)(the "law of the case" doctrine was "not meant to create vested rights in decisions that have become obsolete or erroneous with time"), quashed in part, 634 So. 2d 163 (Fla. 1994). The "law of the case" doctrine clearly does not foreclose decertification. 10

1998); Barreras Ruiz v. American Tobacco Co., 180 F.R.D. 194 (D.P.R. 1998); Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90 (W.D. Mo. 1997); Tijerina v. Philip Morris Inc., 1996 WL 885617 (N.D. Tex. Oct. 8, 1996); Philip Morris, Inc. v. Angeletti, 752 A.2d 200 (Md. 2000); Reed v. Philip Morris, Inc., 1997 WL 538921 (D.C. Super. Ct. Aug. 18, 1997), and on second motion, No. 96-5070 (D.C. Super. Ct. July 23, 1999); Small v. Lorillard Tobacco Co., 679 N.Y.S.2d 593 (App. Div. 1998), aff'd, 720 N.E.2d 892 (N.Y. 1999); Geiger v. American Tobacco Co., 696 N.Y.S.2d 345 (N.Y. Sup. Ct. 1999), aff'd, 716 N.Y.S.2d 108 (N.Y. App. Div. 2000). These class action decisions all applied rules that are functionally identical to Florida's class action rules.5 instances these courts denied certification based In many upon the

demonstrated problem in the instant case.

Simply, that the

plaintiffs smokers' claims are uniquely individualized and cannot satisfy the "predominance" and "superiority" requirements imposed by Florida's class action rules.6
5

See

Barnes v. American Tobacco

We note further that since Florida's class action provision, Florida Rule of Civil Procedure 1.220, is based upon Federal Rule of Civil Procedure 23, federal precedents are persuasive authority in our construction of Florida's class action rules. See Concerned Class Members v. Sailfish Point, Inc., 704 So. 2d 200, 201 (Fla. 4th DCA 1998). Rule 1.220, sets forth the prerequisites for class certification and reads in pertinent part: "(a) Prerequisites to Class Representation. Before any claim ... may be maintained on behalf of a class by one party or more suing ... as the representative of all the members of a class, the court shall first conclude that 11
6

Co., 161 F.3d at 149 (certification improper because smokers' claims involve "individual issues" such as "nicotine addiction, causation, . . . contributory/comparative negligence and the

statute of limitations"); Badillo v. American Tobacco Co., 202 F.R.D. at 263-65 (proposed class of persons exposed to second-hand smoke improper for certification because of individual issues of "causation, comparative fault, assumption of the risk, product identification, statute of limitations, and damages"); Thompson v. American Tobacco Co., 189 F.R.D. at 551-52 (refusing to certify because individual issues predominated); Emig v. American Tobacco Co., 184 F.R.D. at 387-95 (refusing to certify because smokers' claims are individualized); Barreras Ruiz v. American Tobacco Co., 180 F.R.D. at 196-99 (refusing to certify for failure to satisfy requirements of commonality, representativeness, and fairness).7 (1) the members of the class are so numerous that separate joinder of each member is impracticable, (2) the claim ... of the representative party raises questions of law or fact common to the questions of law or fact raised by the claim ... of each member of the class, (3) the claim ... of the representative party is typical of the claim ... of each member of the class, and (4) the representative party can fairly and adequately protect and represent the interests of each member of the class." Moreover, this Court and other Florida courts have recognized the impropriety of class certification in cases comparable to this one. See Norwegian Cruise Lines Ltd. v. Rose, 784 So. 2d 1248, 1248 (Fla. 3d DCA 2001)(reversing certification of class of cruise ship passengers who became ill by ship's food and water due to "insufficient commonality"); Stone v. Compuserve Interactive Services, Inc., 804 So. 2d 383 (Fla. 4th DCA 2001) (upholding denial of certification because of individualized fact issues and numerous differences in state laws governing different class 12
7

To be certified, a class must satisfy the prerequisites of Florida Rule of Civil Procedure, Rule 1.220. Rule 1.220(a)

requires that common issues of law predominate over the different individual issues at the core of each class member's claim. See

Stone v. Compuserve Interactive Serv's, Inc., 804 So. 2d 383 (Fla. 4th DCA 2001). This "predominance" or "commonality" requirement is not satisfied, where claims involve factual determinations unique to each plaintiff. See Execu-Tech Bus. Sys. Inc. v. Appleton

Papers, Inc., 743 So. 2d 19 (Fla. 4th DCA 1999). Rule 1.220 also requires that class representation be superior to other available methods of fairly and efficiently adjudicating the claims presented. See Castano v. American Tobacco Co., 84 F.3d at 734; Emig v. American Tobacco Co., 184 F.R.D. at 379; Humana, Inc. v. Castillo, 728 So. 2d 261 (Fla. 2d DCA 1999). If

significant individual issues exist, little value is gained by proceeding as a class action. Not only would the lawsuit become

members' claims); Chateau Communities, Inc. v. Ludtke, 783 So. 2d 1227, 1231 (Fla. 5th DCA 2001) (reversing certification of mobile home owners class asserting fraud claims because a host of issues would have to be considered individually); see also Hoechst Celanese Corp. v. Fry, 753 So. 2d 626, 628 (Fla. 5th DCA)(reversing certification of class of plumbing system owners asserting fraud claims because individual issues "not only predominate, but overwhelm, any common issues"), rev. denied, 773 So. 2d 55 (Fla. 2000); Execu-Tech Bus. Sys., Inc. v. Appleton Papers, Inc., 743 So. 2d 19 (Fla. 4th DCA 1999)(affirming refusal to certify class of fax paper purchasers alleging unfair trade practices since individual issues predominate); Humana, Inc. v. Castillo, 728 So. 2d 261, 264 ("class actions seeking relief from separate contracts on the basis of fraud, whatever the genesis of the fraud, are prohibited"), rev. dismissed, 741 So. 2d 1134 (Fla. 1999). 13

unmanageable, it would further be unjust to bind absent class members to a negative decision where the class representative's claims present different individual issues than those of the absent members. Under these circumstances, class representation would not be "superior" to individual suits for the fair and efficient adjudication of the controversy. Phase 2 of the trial See Fla. R. Civ. P. 1.220(b)(3). conclusively established that

individualized issues of liability, affirmative defenses, and damages, outweighed any "common issues" in this case, and that class representation is not superior. Specifically, concrete proof relating to the class representatives; Mr. Amodeo, Ms. Farnan, and Ms. Della Vecchia, established that individualized issues

predominate and render further proceedings unmanageable.8 As evidenced by the proceedings in Phase 2, each claimant will have to prove that his or her illness not only was caused by smoking, but was also proximately caused by defendants' alleged misconduct.9 For example, with respect to any misrepresentation After the year-long "common issues" trial in Phase 1, it took another five months to try the claims of just three individuals. Each of these three class representatives' cases required lengthy proof to establish the individualized elements of their claims. In Phase 3, each of the hundreds of thousands of others (at least 700,000 by the plaintiffs' estimate) will necessarily have to do the same. Phase 2 effectively demonstrated that specific medical causation is inherently individualized. For example, even though Ms. Farnan and Ms. Della Vecchia both developed "lung cancer," at least fourteen different experts were required to testify on that 14
9 8

claim, each Phase 3 claimant will have to prove that he or she actually and reasonably relied on a false statement of material fact. This requires an individualized showing of reliance.10 See

Shoma Dev. Corp. v. Vazquez, 749 So. 2d 1287, 1289 (Fla. 3d DCA 2000)(class action not appropriate for fraud claims; reliance of one purchaser does not establish that of others); Castano v. American Tobacco Co., 84 F.3d at 745 ("fraud class action cannot be certified when individual reliance will be an issue"); Clay v. issue. With respect to Ms. Farnan, plaintiffs presented extensive testimony about her two independent primary cancers, her family history of cancer, her unique symptomology, and whether her lung cancer was really a BAC form of lung cancer (which the jury in Phase I had decided was not caused by smoking). With respect to Ms. Della Vecchia, there was extensive evidence about her treatment regime, unique medical history, and whether she had a "scar cancer" which is a different type of cancer also not associated with smoking. There is no legal or factual support for the plaintiffs' "presumed reliance" argument. The plaintiffs suggest that classwide liability can be created by presuming that every class member actually and reasonably relied on whatever unspecified statement(s) the jury found in Phase 1 to be false. The fatal flaw in this argument is that the plaintiffs never proved that every class member even saw or heard whatever statement(s) the Phase 1 verdict rests upon. Moreover, Florida law bars any presumption of reliance in cases involving fraud. See Humana, Inc. v. Castillo, 728 So. 2d 261, 264-65 (Fla. 2d DCA 1999) (reliance requirement in common-law fraud cases cannot be satisfied by assumptions; class actions seeking relief from separate contracts on the basis of fraud are prohibited, irrespective of the genesis of the fraud); but see Davis v. Powertel, Inc., 776 So. 2d 971 (Fla. 1st DCA 2000) (damage claims brought pursuant to Florida Deceptive and Unfair Trade Practices Act are different from common law fraud claims because plaintiff need not demonstrate individual reliance on relevant representation or omission and, therefore, such claims may be asserted on behalf of a class), review denied, 794 So. 2d 605 (Fla. 2001). 15
10

American Tobacco Co., 188 F.R.D. at 492 (denying certification of claims alleging fraudulent marketing of cigarettes because "all members of the proposed class were not subjected to the same advertising and that advertising did not have a similar effect on all members.").11 Because each class member had unique and different experiences that will require the litigation of substantially separate issues, class representation is not "superior" to individual suits. See

Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th Cir. 2001); Haley v. Medtronic, Inc., 169 F.R.D. 643 (C.D. Cal. 1996); see also Barnes, 161 F.3d at 145-46 (proof of general causation in cigarette litigation does not establish tort liability); In re "Agent Orange" Product Liab. Litig., 818 F.2d 145, 164-65 (2d Cir. 1987) (Main issue "is not whether [defendant's product] has the capacity to cause harm, the generic causation issue, but whether it

The Phase 2 trial also evidenced that individualized inquiries with regard to each smoker's awareness of the health risks of smoking at various points in time will be required in the Phase 3 trial. For example, Ms. Farnan testified that she was clearly aware of the health risks. In 1978, when she was 23, her father was diagnosed with a heart condition, and his doctor told Ms. Farnan that smoking had caused the condition. She later went to nursing school, where she received further information about the health effects of smoking. By the mid-1980's, she became "convinced" that smoking causes disease; nonetheless, she "absolutely wanted to continue smoking." In contrast, Mr. Amodeo testified that he believed that it had not been scientifically proven that smoking was addictive or caused lung cancer because he "didn't believe that the government would allow cigarettes to be sold if they were unsafe." 16

11

did cause harm and to whom."). This is further evidenced by the fact that affirmative This Court

defenses and damages must be litigated individually.12

has already recognized that damages require individualized proof. See Engle, 672 So. 2d at 41. Particularly in this type of smoking

case where proof of damages is essential to liability, damages cannot be determined on a class-wide basis because the issue of damages requires individualized proof with regard to each smoker.13 See Execu-Tech Bus. Sys., Inc. v. Appleton Papers, Inc., 743 So. 2d

The defendants raised a number of affirmative defenses to the plaintiffs' claims, including comparative fault, which common sense dictates requires individualized proof. However, the plaintiffs assert there is no need for individualized proof on these issues, essentially claiming that all class members were affected by the defendants' allegedly wrongful and conspiratorial conduct in the same way. This is simply not so as evidenced by the fact that the jury assessed different comparative fault percentages for each of the Phase 2 plaintiffs (Amodeo 25%, Farnan 20%, Della Vecchia 15%). The degree of fault the jury attributed to each defendant varied significantly among each of the three plaintiffs. Thus it is apparent that evaluation of each class members' comparative fault, will require experts on both sides to consider issues unique to each smoker, such as influences from friends and family members, exposure to information and/or propaganda regarding smoking, addiction issues, and actual knowledge of an injury or claim. It is impossible to determine such facts without mandating an individual inquiry into the specifics of each plaintiffs class members' circumstances. Proof of damages alone consumed several days of testimony with respect to each Phase 2 plaintiff. For example, on issues unique to Ms. Della Vecchia's alleged damages, the jury heard testimony from Ms. Della Vecchia herself, her husband, her two children, her sister, her brother-in-law, her family minister, and an economist. Comparable damages testimony will be required for each class member in Phase 3. 17
13

12

at 19 (class certification improper because "the issue of damages and impact in the case simply `does not lend itself to [a

mechanical calculation] but requires separate mini-trials, of an overwhelming[ly] large number of individual claims'"); Smith v. Texaco, 263 F.3d 394 (class members who "challenge[d] broad

policies and practices that were applied in a non-standard way" could not assert uniform injuries and were required to prove punitive damages individually), opinion withdrawn, cause dismissed by, 281 F.3d 477 (5th Cir. 2001); Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 147 (4th Cir. 2001) (impermissible to determine damages on a class-wide basis when the governing law requires individualized proof of damages; common issues may not predominate where proof of damages is essential to liability); Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977)(common issues did not predominate even though the case presented a common question of violation, because there existed individualized issues of injury and damage). Similarly, individualized choice-of-law issues demonstrate that class proceedings in the instant case are unmanageable and cannot be viewed as superior to individual litigation. See Stone

v. Compuserve Interactive Serv., Inc., 804 So. 2d at 383 (class certification improper where, among other things, individualized choice-of-law inquiries are required); see also Zinser v. Accufix Research Inst., Inc., 253 F. 3d 18 1180, 1190 (9th Cir. 2001)

(certification improper because of "individualized issues and variances in state law"); Castano v. American Tobacco Co., 84 F.3d at 741-44 (discussing how variations in state law can "swamp any common issues and defeat predominance"). For choice-of-law purposes, Florida law utilizes the "most significant relationship" test which provides that: "The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties." Bishop v. Florida Specialty Paint Co., 389 So.

2d 999, 1001 (Fla. 1980) (internal citation omitted); see also, Ryder Truck Rental, Inc. v. Rosenberger, 699 So. 2d 713, 715 (Fla. 3d DCA 1997). Applying Florida's "most significant relationship" test to the present case, the trial court was required to take into account a variety of factors beyond the place where the cause of action arose. During pretrial proceedings, undisputed evidence showed

that nearly 50% of Florida residents who are over 50 years old -those most likely to be class members -- moved to Florida after reaching age 50. Moreover, more than 65% of all current and former smokers in Florida moved here after they became regular smokers. The demographic evidence presented at trial strongly suggested many class members were not Florida residents at the time of diagnosis

19

or manifestation.14 If diagnosis or manifestation did not occur during residency in Florida, each court in the Phase 3 proceedings will have to perform a full choice-of-law analysis and apply the law of the state with the most significant relationship to the parties and the occurrence. Especially in a state which has a highly transient

population, choice-of-law problems present an insuperable roadblock to smokers' class actions, even where the class is limited to one state's residents. See Reed v. Philip Morris, Inc., 1997 WL 538921 (D.C. Super. Ct. Aug. 18, 1997)(memorandum opinion and order). As noted in Reed v. Philip Morris, Inc., 1997 WL 538921 (D.C. Super. Ct. Aug. 18, 1997) which denied class certification to plaintiff smokers where the choice-of-law analysis applied was the "most significant relationship" test:

Additionally, the circumstances of particular named plaintiffs confirmed the likelihood of other states' laws applying to the plaintiffs' claims. For example, Mr. Starr, originally a named plaintiff, started smoking in Colorado, became a regular smoker in Colorado, and suffered his alleged smoking-related problems in Colorado. Mr. Starr's only connection with Florida was that he moved here a few months before suit was filed. Unlike Florida, Colorado requires that punishable conduct be proven beyond a reasonable doubt for purposes of assessing punitive damages. See Colo. Rev. Stat. Ann.

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