02-2772 PHILIP MORRIS V. FRENCH

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State: Florida

Court: Florida Third District Court

Docket No: 02-2772 PHILIP MORRIS V. FRENCH

Case Date: 12/22/2004

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 JULY TERM, A.D. 2004 PHILIP MORRIS INC., R.J. REYNOLDS TOBACCO COMPANY, LORILLARD TOBACCO COMPANY, and BROWN & WILLIAMSON TOBACCO CORP., individually and as successor by merger to The American Tobacco Company, Appellants, vs. LYNN FRENCH, Appellee. ** ** ** ** ** ** ** ** LOWER TRIBUNAL NO. 00-1706 CASE NO. 3D02-2772

Opinion filed December 22, 2004. An Appeal from the Circuit Court for Miami-Dade County, Fredricka G. Smith, Judge. Greenberg Traurig, P.A., and David L. Ross, and Elliot H. Scherker, and Julissa Rodriguez, for appellant. Grover, Weinstein & Trop, P.A., and Robert Grover, and Marvin Weinstein; Podhurst, Orseck, P.A. and Joel S. Perwin, for appellee. Before SCHWARTZ, C.J., and GREEN and SHEVIN,, JJ.

PER CURIAM.

Philip

Morris

USA,

Inc.,

R.J.

Reynolds

Tobacco

Company,

Brown & Williamson Tobacco Corporation, and Lorillard Tobacco Company (collectively referred to as "the tobacco defendants") appeal from a final judgment, based on a jury verdict, awarding Lynn French $5.5 million dollars in damages for injuries she incurred as a result of second-hand smoke. The plaintiff,

French, cross-appeals from the final judgment's allocation of liability based upon the defendants' market shares, pursuant to a settlement agreement among the defendants in a prior class action. For the following reasons, we affirm the final judgment

in part and remand with instructions that the defendants be held jointly and severally liable for the plaintiff's damages. I. Facts A. Pre-Suit Events 1. In The Broin Settlement 1991, a class action suit was brought on behalf of

60,000 non-smoking flight attendants who had been exposed to second-hand cigarette smoke (otherwise known as environmental tobacco smoke or "ETS"). This court approved the class in Broin

v. Philip Morris Cos., Inc., 641 So. 2d 888 (Fla. 3d DCA 1994). On remand the trial court entered an order adopting a trial plan for the class action suit. This order provided:

2

In order to conserve precious Court time and to expedite the trial of the issues, it has become apparent that this case should be decided in Stages and Phases which would include "Special Verdicts" and "General Verdicts" (Manual for Complex Litigation). Therefore, Plan. the Court * * * has decided on the following

1. The trial shall be tried in Two Stages. The First Stage shall encompass all common issues with regard to the subclass of Lung/Pulmonary/Sinus diseases and disorders, including lung cancer. The First Stage will encompass common issues of Generic Causation (scientific) and issues revolving around the behavioral aspects of the Defendants concerning fraudulent misrepresentations and/or conspiracy. The Second Stage shall be concerned with the NonCommon or Individual Claims of the Plaintiffs in this subclass. After the Stage One trials,1 the Stage Two trials would then proceed on the individual claims of the plaintiffs as they

1

Phase One of Stage One was to include testimony and evidence regarding the scientific issues of generic causation and whether the tobacco defendants were aware of the health risks of secondhand smoke. Questions to be answered by way of special interrogatories included: A. Have the Plaintiffs proven by the greater weight of the evidence that Second Hand Smoke causes lung cancer and other Lung/Pulmonary/Sinus disease and disorders, and if so, which diseases of this subclass are caused by Second Hand Tobacco Smoke? B. Have the Plaintiffs proven by the greater weight of the evidence the amount and duration of exposure to Second Hand Tobacco Smoke that causes such disease or diseases? C. When did the Defendants know about the dangers of Second Hand Tobacco Smoke and whether the Defendants 3

relate

to

damages

and

the

"[l]iability

issues

that

are

remaining, including Defenses available to the Defendants." Phase One of Stage I began on June 2, 1997. presented 52 witnesses over three and The Plaintiffs months, and

one-half

rested their case on September 22, 1997. moved for a directed verdict on

The tobacco defendants the counts of fraud,

misrepresentation, conspiracy, and punitive damages. court took the motion under advisement. The

The trial defendants

presented 14 witnesses. October 9, 1997.

Thereafter, a settlement was reached on

The trial court preliminarily approved the

agreement and subsequently approved, without modification, the agreement following a fairness hearing. The motion for directed

verdict was still pending at the time of the settlement.

were aware of the threat to the safety and health of Airline Flight Attendants? * * * E. What, if any duty the Defendants had to warn NonSmokers of the dangers of exposure to Second Hand Tobacco Smoke through channels of communication other than advertising or promotion. F. Evidence and testimony concerning the issues of strict liability and implied warranty. If the jury were to find in the plaintiffs' favor and determine that the plaintiffs were entitled to punitive damage then the trial would proceed to Phase Two on the issue of the amount of punitive damages to be awarded.

4

The settlement agreement contains many provisions with both sides having made to considerable fund a concessions. The tobacco $300

defendants

agreed

research

foundation2

with

million and to pay counsel for the class $49 million in fees and costs. In addition, the tobacco defendants agreed to:

[W]aive the statute of limitations; shift the burden of proof on generic causation as to lung cancer, chronic obstructive pulmonary disease, chronic bronchitis, chronic sinusitis and emphysema; allow the class members to proceed in the venue where they reside or where otherwise proper; provide a copy of the video of the trial, including expert testimony, for use in individual lawsuits; accept service of process by certified mail; not contest personal jurisdiction or service of process; not challenge joinder of defendants in one lawsuit; not assert that any released party is responsible in whole or part for injuries or damages; not assert motions to dismiss challenging legal sufficiency of any claims in individual actions that restate verbatim the counts in the Broin complaint; [and] support Federal legislation that would impose a smoking ban on all international flights. Ramos v. Philip Morris Cos., Inc., 743 So. 2d 24, 27 (Fla. 3d DCA 1999). Under agreement"), the the agreement class (hereinafter "Broin all settlement claims for

plaintiffs

abandoned

punitive damages and agreed to dismiss with prejudice, their fraud, misrepresentation and conspiracy claims. and their survivors, however, retained the The plaintiffs right to bring

2

The foundation was endowed to sponsor scientific research for the early detection and cure of diseases caused by cigarette smoke. 5

individual suits for compensatory damages based on any "theory of liability other than for fraud, misrepresentation, conspiracy to commit fraud or or misrepresentation, other alleged RICO, or suppression, intentional

concealment conduct."

any

willful

Finally, and most importantly for our purposes here, the tobacco defendants agreed to a shift in the burden of proof for purposes of general causation. Specifically, the settlement

agreement provides that: (d) With respect to any Retained Claims seeking damages on account of lung cancer, chronic bronchitis, emphysema, chronic obstructive pulmonary disease, or chronic sinusitis, brought by a member of the Class or his or her survivor, the burden of proof as to whether Environmental Tobacco Smoke ("ETS") can cause one of the above-described diseases ("General causation") shall be borne by the Settling Defendants and the Jury shall be so instructed; in all other respects, including the issue of whether an individual plaintiff's disease was caused by ETS (specific causation"), the ordinary burdens of proof applicable to any Retained Claims shall remain unaltered. In addition, the altered burden of proof provided herein with respect to general causation shall in no way affect the ability of the Settling Defendants to introduce any evidence or argument as to general causation, specific causation, or alternative causation, or to introduce any other evidence or argument which the Settling Defendants would otherwise be entitled to present, at any future trial in which Retained Claims are brought. The Settling Defendants' agreement to alter the burden of proof as provided herein is not an admission of any sort, and shall not be construed, now or at any future trial or proceeding, as an admission of causation or any other fact or legal contention[.]

6

Various intervenors objected to the settlement agreement claiming, in part, that the agreement required them to retry the breach-of-duty issue. The trial court approved the settlement

finding it "fair, adequate and reasonable," and that the class plaintiffs' claims taken as a whole, had a less than 50% chance of prevailing at trial. This court affirmed the settlement agreement finding that "the trial court correctly ruled that the settlement is `fair, adequate and reasonable.'" omitted). Ramos, 743 So. 2d at 31 (citations

As one of many benefits in the agreement, this court

specifically found that: [a]nother substantial benefit is the burden-shifting provision. This provision establishes a "generic causation" presumption in favor of the flight attendants. Many experts opined that this provision forecloses any defense argument that there is no valid, scientific basis for a finding of causation. R. 10294-95. This benefit, in and of itself, is a significant victory for the individual plaintiffs. As the trial court noted, there was a "high likelihood ... that the jury would not find causation as to all 26 diseases. Ramos, 743 So. 2d at 32. 2. Post Settlement Flight Attendant Litigation Following the settlement, over 3,000 flight attendants

brought individual suits against the tobacco defendants for the claims retained by the agreement. Faced with this multitude of

suits, the administrative judge supervising the suits determined that rulings on common issues of law would be made by a single

7

judge.3

In May of 2000, Judge Robert Kaye, the trial judge in

Broin, was appointed to rule on these common issues. An issue arose as to which party would carry what burdens of proof in light counsel of the Broin that settlement issues agreement. in Stage I The were

plaintiffs'

urged

"all

resolved with the settlement and the only thing left to be tried is specific causation for each Plaintiff and damages." The

tobacco defendants, on the other hand, claimed that although they had assumed the burden of proof on the issue of general causation each plaintiff should be required to put on witnesses and experts to prove each of the individual elements of their pled claims. Both parties briefed the issue and the court heard Judge Kaye issued an "Order on the

the arguments of counsel.

Courts Administration and Jurisdiction Over the Consummation of the Settlement of the of Agreement" settlement liability ruling that the burden in shifting a

portion

agreement in

created, of

essence,

presumption

favor

the

plaintiffs.

Specifically, the court held that: This Court has always been of the opinion that the spirit and intent of the Settlement Agreement was to the effect that the Retained Claims which were to be tried in individual trials, subsequent to the Settlement, were to be tried as Stage II claims. The administrative judge also determined that the Jett v. Philip Morris, Inc. case would be used as the vehicle for the entry of the orders regarding these common issues of law. See Philip Morris, Inc. v. Jett, 802 So. 2d 353, 354 (Fla. 3d DCA 2001). 8
3

At issue in this motion is whether Plaintiff bears the burden of proving the elements of the counts alleged in the complaint--Strict Liability, Breach of Implied Warranty, and Negligence, or whether there is a rebuttable presumption in Plaintiffs favor that shifts the burden and relieves Plaintiff of the task of proving up the elements of the counts on Plaintiffs case in chief. * * * Since there is a rebuttable presumption that ETS is harmful to one's health and can cause certain enumerated diseases, (generic causation) and that rebuttable presumption is in the Plaintiffs favor according to the Settlement Agreement, then that presumption resolved the issues of proving the elements of Strict Liability, Negligence and Breach of Implied Warranty, in Plaintiff's case in chief because each of those causes of action depends on proving the "generic causal effect" of ETS. For example, Plaintiff may say that placing an unreasonably dangerous product, in an [sic] substantially unaltered condition, (a cigarette that produces ETS,) on the market, can cause one of the enumerated diseases. The presumption that ETS causes certain diseases, then is tied directly to the definition of "unreasonably dangerous," e.g.,-if ETS causes disease, (generic causation), then it is unreasonably dangerous, and that presumption is in the plaintiff's favor by the terms of the Settlement Agreement. As to Implied Warranty, the presumption in the plaintiffs favor is that the manufacturer produced a product that was not fit for the uses intended or that it was reasonably foreseeable that it was not fit for the uses intended (because it produced ETS,) and ETS can cause disease, (again, generic causation). As to Negligence, the presumption in plaintiffs favor is that the defendant marketed a product that produced ETS, which causes certain diseases to a non-smoker, (generic causation) and this act by the defendant was negligence, i.e. (doing something that a reasonably careful person or entity would not do). This does not, of course, eliminate the Plaintiff's burden of proving "specific causation", that is, that the Plaintiff's specific disease was cause by ETS, and that the Plaintiff suffered damages

9

as a result of that disease. Issues of liability other than those referenced above, still rest with the Plaintiff. The Defendant's burden is to disprove the generic causation issue, (that Environmental Tobacco Smoke does cause certain enumerated diseases claimed by the Plaintiff). Under the terms of the Settlement Agreement paragraph 12(d),: "the altered burden of proof provided herein with respect to general causation . . . Shall in no way affect the ability of the Settling defendants to introduce any evidence or argument as to general causation, specific causation, or alternative causation, or to introduce any other evidence or argument which the Settling Defendants would otherwise be entitled to present, at any future trail in which Retained Claims are brought." In view of the above, it is apparent to this Court that the upcoming individual trials referenced in the Settlement Agreement are to be conducted on the basis of being a STAGE II trial to answer the questions of whether ETS was the specific cause of the disease or injury claimed by the Plaintiff, and then to resolve the issue of damages if any. The tobacco defendants appealed this order. We dismissed the appeal as premature "without prejudice to the defendants'

ability to appeal the issue sub judice at the conclusion of the case." B. Philip Morris Inc. v. Jett, 802 So. 2d at 356-57.

French's Underlying Lawsuit French brought her suit, "pursuant to the terms of the

Settlement Agreement," against the tobacco defendants seeking compensatory damages under theories of strict liability,

negligence and breach of implied warranty.

She claimed that she

10

was a non-smoker, and worked as a flight attendant for Trans World Airlines ("TWA") from May 1976 through the present, and that she suffers from chronic bronchitis and sinusitis as a result of her ongoing exposure to second-hand cigarette smoke in airline cabins. The tobacco defendants answered the complaint

and asserted, as affirmative defenses, that their products are not defective and did not cause or contribute to French's

alleged injuries. grounds that they

French moved to strike these defenses on were barred by the settlement agreement

because only specific causation and damages were at issue. The trial court, adopting Judge Kaye's order in Jett, held that French would not have to prove liability, but rather the jury had to determine two issues: 1) "can ETS cause chronic sinusitis," and 2) "did it in this case." Thus, the primary

issues litigated at trial were the extent that French had been exposed to ETS during the years that smoking was permitted in the passenger areas of aircrafts, and whether such exposure

caused French's chronic sinusitis.4

4

Smoking was permitted on all commercial airlines until a limited no-smoking ban was placed on the airline industry in 1988. This ban prohibited smoking on all domestic flights of two hours or less. The Federal Aviation Administration banned smoking on all flights of six hours or less in February 1990. TWA, French's employer, banned smoking an all flights from the United Kingdom, France, and Germany in March 1996, and thereafter banned smoking on all of its flights in April 1997. 11

Although

the

tobacco

defendants

stipulated

that

French

suffered from chronic sinusitis, they argued that her health problems did not develop until 1995, and that her ailment was not caused by ETS. The defense experts testified that French's

chronic sinusitis was caused by scarring from a sinus surgery performed in 1989, and that allergies also contributed to her overall condition. These experts also claimed that second hand

smoke cannot cause chronic sinusitis, and exposure to second hand smoke does not predispose an individual to develop chronic sinusitis. French, in contrast, presented the testimony of her

treating physician, Dr. Persky.

Prior to trial, the tobacco

defendants moved in limine to exclude Dr. Persky's testimony under the standard set forth in Frye v. United States.5 This

motion was denied without an evidentiary hearing, with the trial court noting: "If [Dr. Persky] says he has an opinion based on reasonable medical certainty it was connected with this, even if he doesn't know what the dosage is, he can testify about the nature of the smoke."

5

293 F. 1013 (D.C. Cir. 1923). This standard requires that an expert's testimony be "based on a scientific principle or discovery that is `sufficiently established to have gained acceptance in the particular field in which it belongs.'" Ramirez v. State, 651 So. 2d 1164, 1166-67 (Fla. 1995).

12

Dr.

Persky

testified

that

he

had

diagnosed

French

as

suffering from chronic sinusitis based on her symptoms which included sinus pressure, headaches, and nasal discharge. testified that, in his clinical opinion, French's He upper

respiratory and sinus lining were damaged by her exposure to second hand smoke. Finally, Dr. Persky opined that exposure to

ETS was the primary cause of French's chronic sinusitis.6 The jury was instructed as follows: The parties stipulate that the Plaintiff, Lynn French, has a condition known as chronic sinusitis. In this case, you are to determine, one, whether exposure to second hand smoke, . . . can cause the disease of chronic sinusitis, and, if so, two, whether Plaintiff's exposure to second hand smoke, . . . in aircraft cabins caused her chronic sinusitis, and, three, if so, what damages were sustained by her? With respect to Plaintiff's claim of chronic sinusitis, the Defendants have the burden to prove that second hand smoke does not cause this condition. . . . If you find that Defendants have failed to meet their burden of proof, then you should consider the next issue. On the next issue, the Plaintiff has the burden to prove by the greater weight of the evidence that her chronic sinusitis was caused by her exposure to second hand smoke in aircraft cabins. If the greater weight of the evidence on this claim supports the position of the Plaintiff, then you will consider the question of her damages. However, if you find that the Plaintiff has failed to meet her burden of proof on this claim, then your verdict should be for the Defendants.

The defendants did not renew their Frye motion during the course of Dr. Persky's testimony.

6

13

The jury returned a verdict awarding French $5.5 million in damages ($2 million for past, and $3.5 million for future noneconomic damages). Post trial, the tobacco defendants renewed their Frye

motion with regard to Dr. Persky's testimony. sought element a new of trial based on French's

In addition, they to and prove each of

failure

her

strict

liability,

negligence

breach

warranty claims, on claims of prejudicial conduct by French's counsel, and sought alternatively, a remittitur of the verdict. Finally, the defendants also argued that the jury should have apportioned fault under section 768.81, Florida Statute.7 The trial court denied all of the defendants' post-trial motions, save the motion for remittitur. With regards to the

shifting of the burden of proof, the court specifically found: Although the defendants argue that the terms of the Broin settlement agreement did not foreclose their ability to require that the plaintiff prove all of the elements of her claims, I concluded that the burdenshifting provision in the Broin settlement did just that. In other words, if there is a presumption that
7

This statute provides in pertinent part: (3) Apportionment of damages -- In an action to which this section applies, the court shall enter judgment against each party liable on the basis of such party's percentage of fault and not on the basis of the doctrine of joint and several liability; provided that with respect to any party whose percentage of fault equals or exceeds that of a particular claimant, the court shall enter judgment with respect to economic damages against that party on the basis of the doctrine of joint and several liability. 14

second-hand smoke causes chronic sinusitis in nonsmokers, it follows that cigarettes are presumed to be unreasonably dangerous and/or that manufacturing such a product is something that a reasonably careful person would not do. The court acknowledges that the agreement could be interpreted differently. However, if the defendants' position were accepted, each of the 3000 flight attendants would have to prove that cigarettes are unreasonably dangerous to non-smokers, rendering the burden-shifting provision meaningless. It is more logical to conclude that in settling the class action lawsuit, the parties intended that the focus in the individually-retained claims would be on whether the plaintiff's disease was actually caused by exposure to second-hand smoke, and if so, what damages were sustained. (Footnotes omitted.) Although both parties opposed a market-share division of liability,8 the trial court sua sponte found that "the only

reasonable form of judgment in this case is one which apportions the damages among the defendants based on their Market share as set forth in the settlement agreement." Finally, the court granted the defendants' motion for

remittitur finding that prejudice against the tobacco companies, a present-day popular villain, interfered with the jury's ability to assess the damages based on a reasonable view of the evidence. This prejudice was, to some extent, fed by plaintiff's counsel. The verdict was reduced to $500,000 ($300,000 for past pain and suffering and $ 200,000 for future pain and suffering).
8

French

The defendants argued that French had to prove each individual defendant's fault, and French argued that her injury was indivisible. 15

accepted the remittitur and the trial court entered an Amended Final Judgment allocating $250,000 to Philip Morris; $123,500 to R.J. Reynolds; $82,000 to Brown and Williamson; and $44,000 to Lorillard. II. This appeal and cross-appeal followed.

The Law The tobacco defendants claim that there are four grounds

for reversal: 1) That the trial court erred in "rewriting" the settlement agreement to create a presumption of the defendants' liability; 2) That the trial court erred in admitting Dr.

Persky's testimony regarding the cause of French's sinusitis, because this testimony violated the Frye standards; 3) That the prejudicial conduct of French's counsel denied the defendants a fair trial; and 4) That the trial court erred in failing to require French to establish each defendant's individual

liability. except for

French, on the other hand, argues for an affirmance the market share distribution of the remitted

judgment.

We address each of these issues separately.9

A. Whether the trial court erred in its interpretation and enforcement of the Broin settlement. The trial court's construction of a contract, here a

settlement agreement, is subject to de novo review.

Sunhouse

Constr., Inc. v. Amwest Surety Ins. Co., 841 So. 2d 496, 498

9

Because we find that the issue on cross-appeal and the defendants' final argument are inter-related, we will address these issues together. 16

(Fla. 3d DCA 2003).

Courts are required to construe a contract

as a whole and give effect, where possible, to every provision of the agreement. 1130 (Fla. 2d DCA See Story v. Culverhouse, 727 So. 2d 1128, 1999) ("In construing the terms of a

settlement agreement, a court is required to review the entire instrument and to give effect to every provision contained in that contract."). follow a If an agreement that is ambiguous, comports the court logic, See

should

construction

best

with

reason, and the purposes underlying the parties' agreement.

Wright & Seaton, Inc. v. Prescott, 420 So. 2d 623, 629 (Fla. 4th DCA 1982) ("The court should with arrive at [a contract] and the

interpretation

consistent

reason,

probability,

practical aspect of the transaction between the parties."). Under paragraph 12(d) of the Broin settlement agreement, the burden of proof shifted to the tobacco defendants to

disprove general causation.

This issue of genuine causation is

the only common issue expressly preserved, in the settlement agreement, for future litigation. The defendants' claim, however, that the plain language of paragraph 12(d) means that:

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