Philip Morris USA, Inc. v. Boatright

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

PHILIP MORRIS USA INC. and LIGGETT )
GROUP, LLC, )
)
Appellants/Cross-Appellees, )
)
v. ) Case No. 2D15-622
)
RICHARD BOATRIGHT and DEBORAH )
BOATRIGHT, )
)
Appellees/Cross-Appellants. )
___________________________________)

Opinion filed April 12, 2017.

Appeal from the Circuit Court for Polk
County; John M. Radabaugh, Judge.

Adriana M. Paris, Terri L. Parker, and
Sean T. Becker of Shook, Hardy & Bacon
L.L.P., Tampa; Geoffrey J. Michael of
Arnold & Porter LLP, Washington, DC; and
William P. Geraghty and Rachel A. Canfield
of Shook, Hardy & Bacon L.L.P., Miami;
for Appellant/Cross-Appellee Philip Morris
USA Inc.

Karen H. Curtis of Clarke Silverglate,
P.A., Miami; and Leonard A. Feiwus and
Ann M. St. Peter-Griffith of Kasowitz,
Benson, Torres & Friedman LLP, Miami,
for Appellant/Cross-Appellee Liggett
Group LLC.

Celene H. Humphries, Steven L.
Brannock, Philip J. Padovano, Maegen
P. Luka, and Thomas J. Seider of
Brannock & Humphries, Tampa; and
Scott Schlesinger, Steven Hammer,
Jonathan R. Gdanski, and Brittany
Chambers of Schlesinger Law Offices,
P.A., Fort Lauderdale, for Appellees/
Cross-Appellants.

SILBERMAN, Judge.

In this Engle1 progeny case, Philip Morris USA Inc. and Liggett Group,

LLC (the Defendants) appeal a final judgment in favor of Richard Boatright, who was a

heavily addicted smoker, and his wife, Deborah Boatright, in the total amount of $32.75

million for compensatory and punitive damages. The jury found Philip Morris liable on

theories of negligence, strict liability, fraudulent concealment, and conspiracy to commit

fraud by concealment. The jury found Liggett liable for conspiracy to commit fraud by

concealment. Philip Morris raises seven issues on appeal, including issues regarding

comments in closing argument, the introduction of evidence, comparative fault, and

punitive damages. Liggett raises three issues on appeal regarding the conspiracy

verdict, joint and several liability, and punitive damages. We affirm on the main appeal.

The Boatrights cross-appeal regarding two issues related to comparative

fault. We reverse on the cross-appeal. The trial court erred when it reduced the

compensatory damages award by Mr. Boatright's comparative fault because the

apportionment statute does not apply to an action based on an intentional tort.

Therefore, we remand for the trial court to amend the judgment to reflect the full amount

of the jury's verdict. In doing so, we certify conflict with R.J. Reynolds Tobacco Co. v.

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

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Schoeff, 178 So. 3d 487 (Fla. 4th DCA 2015), review granted, No. SC15-2233, 2016

WL 3127698 (Fla. May 26, 2016), R.J. Reynolds Tobacco Co. v. Grossman, 42 Fla. L.

Weekly D106 (Fla. 4th DCA Jan. 4, 2017), and R.J. Reynolds Tobacco Co. v. Calloway,

201 So. 3d 753 (Fla. 4th DCA 2016), review denied, No. SC16-1937, 2017 WL 1023712

(Fla. Mar. 16, 2017), to the extent that they hold that the core of these types of actions

is grounded in negligence and that the comparative fault statute is applicable to reduce

the verdict by the smoker's comparative fault.

The Boatrights brought this action against the Defendants seeking to

recover damages for Mr. Boatright, who was a heavily addicted smoker, and for his wife

of thirty years, Deborah Boatright, for loss of consortium. Mr. Boatright's addiction to

these cigarettes ultimately led to his diagnosis of chronic obstructive pulmonary disease

("COPD") in 1992 and two double-lung transplants. Relevant here are the allegations of

the second amended complaint for negligence, strict liability, fraudulent concealment,

and conspiracy to fraudulently conceal. The trial court conducted a three-week-long

trial.

The evidence presented showed that the Defendants and their co-

conspirators in the tobacco industry intentionally designed addictive and deadly

cigarettes and conspired for fifty years to hide the dangers of smoking cigarettes from

the public. The tobacco industry spent billions of dollars to highly engineer cigarettes to

promote addiction to nicotine so that smokers would buy more cigarettes. And the

tobacco industry searched for new smokers by investing heavily in marketing that

targeted youths. In internal company documents, the industry called these young

people "replacement smokers" and "crops" to be harvested.

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 Mr. Boatright began smoking when he was twelve years old in direct

response to youth marketing. He continued to smoke for the next thirty-eight years.

From 1966 to 2004, Mr. Boatright smoked over 25,000 packs of cigarettes. The

evidence showed that Mr. Boatright was a Marlboro man, smoking primarily Philip

Morris cigarettes, and that he smoked a de minimis amount of Liggett cigarettes.

Mr. Boatright was a professional ballroom dancer but had the lungs of an

eighty-eight-year-old man when he was diagnosed with COPD at the age of thirty-nine.

He tried quitting cold turkey and tried prescription drugs, gum, and hypnosis to quit.

After his COPD diagnosis, Mr. Boatright struggled for over eleven years but finally quit.

Years later, he had to undergo two double-lung transplants. He was sixty-one at the

time of trial and continues to suffer very serious side effects. For example, his colon

ruptured within hours of arriving home after the first transplant, and he now has a

colostomy bag. In order to be close to the Mayo Clinic for Mr. Boatright's many medical

visits, Mrs. Boatright sold the house her father built and moved from Lakeland to

Jacksonville.

The evidence also showed that the tobacco industry, including the

Defendants, engaged in a conspiracy to conceal and misrepresent information about

the addictiveness of nicotine and the serious health risks caused by smoking nicotine

cigarettes. Industry executives agreed to attack the sources of health warnings and to

cast doubt on the connection between smoking and disease. One of the many internal

documents from Phillip Morris introduced into evidence stated that "doubt is our

product." But at the same time, the tobacco industry pretended to be on a crusade to

confirm the safety of its product and promised the American public that it would report

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back if it discovered anything. The industry's intent was not just to hide the truth; it was

to create doubt to give addicted smokers an excuse to keep smoking.

The industry's efforts also included design features, such as filtered

cigarettes, that worked to undermine a smoker's motivation and ability to quit smoking.

In the 1950s, the Engle defendants began marketing filtered cigarettes to the public as

a safer alternative. Mr. Boatright smoked filtered cigarettes. The tobacco industry

concealed from the public that smokers of filtered cigarettes ingest more tar and other

carcinogens than those who smoke unfiltered cigarettes. The Engle defendants all

concealed the fact that they intentionally designed their filtered cigarettes to increase

the dose of nicotine, thereby enhancing addictiveness to cigarettes and resulting in

greater sales. The Defendants did not publicly admit that smoking nicotine cigarettes is

addictive and causes COPD and other illnesses until after Mr. Boatright was diagnosed

with COPD.

At the close of the Boatrights' case, the trial court directed a verdict in

favor of Liggett as to the claims for negligence, strict liability, and fraudulent

concealment. The case against Liggett went to the jury only on the conspiracy claim.

With respect to comparative fault, the verdict form asked the jury to state what

percentage of any fault it charged to Philip Morris and Mr. Boatright that was a legal

cause of Mr. Boatright's COPD. The verdict form instructed the jury as follows:

In determining the total amount of damages, you should not
make any reduction because of the responsibility of Richard
Boatright. The court will enter a judgment based on your
verdict and, in entering judgment, will make any reduction
required by law to reduce the total amount of damages by
the percentage of fault which you find is chargeable to
Richard Boatright. If you find for the Plaintiffs on either of
the intentional torts, then the amount of compensatory

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 damages awarded to Plaintiffs will not be reduced by
Richard Boatright's fault.

The jury found that Mr. Boatright was addicted to Philip Morris cigarettes

and that his addiction caused his COPD. Further, the jury found that Philip Morris's

concealment or omission of information regarding smoking cigarettes caused Mr.

Boatright's COPD. The jury also found that the participation in an agreement to conceal

by each of the Defendants was a legal cause of Mr. Boatright's COPD and thus found

against both of the Defendants on the conspiracy claim.

The jury allocated 85% fault to Philip Morris and 15% fault to Mr.

Boatright. The jury awarded a total of $15 million in compensatory damages. For Mr.

Boatright, the jury awarded $2.5 million in economic damages and $10 million in

damages for his past and future pain and suffering. For Mrs. Boatright, the jury

awarded $2.5 million for her past and future loss of consortium. In the second phase of

the trial, the jury awarded $19.7 million in punitive damages against Philip Morris and

$300,000 against Liggett. We note that the jury's punitive damages award is less than

the $20 million that the Boatrights' counsel requested against Philip Morris and less than

the $5 million requested against Liggett.

The trial court denied all of Philip Morris's posttrial motions, except that it

granted the request to reduce the compensatory damages award by Mr. Boatright’s

comparative fault but did not explain its reasoning. The trial court entered a final

judgment under which the Defendants are jointly and severally liable for $10,625,000 in

compensatory damages to Mr. Boatright and $2,125,000 in compensatory damages to

Mrs. Boatright. In accordance with the jury's verdict, the judgment awards punitive

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damages of $19.7 million against Philip Morris and $300,000 against Liggett. We first

address the issue of comparative fault that the Boatrights raised in their cross-appeal.

The Boatrights' Cross-Appeal

The Boatrights contend that the trial court erred when it reduced the

compensatory damages award by Mr. Boatright's comparative fault. At issue is whether

the comparative fault statute, section 768.81, Florida Statutes (Supp. 1992),2 requires

that the Boatrights' verdict be reduced by comparative fault. First, we note that the

Boatrights' counsel did not waive the argument that section 768.81 does not apply to the

verdict. And we point out that the jury was instructed that if it found for the Boatrights on

either of the intentional torts, then the amount of compensatory damages would not be

reduced by Mr. Boatright's comparative fault. The same information was given to the

jury on the verdict form.

Second, we address the merits of the Boatrights' argument and agree that

section 768.81 is inapplicable. Thus, the trial court should not have reduced the

compensatory award by Mr. Boatright's comparative fault.

The case against Philip Morris proceeded on the two product claims and

the two fraud claims. On the verdict form, the jury found that the "concealment or

omission of material information about the health effects or addictive nature of smoking

cigarettes or both" by Philip Morris "was a legal cause of Richard Boatright's COPD."

The jury also found as to both Philip Morris and Liggett that "the agreement to conceal

2The applicable version of section 768.81 is the one that was in effect
when the cause of action arose. See D'Angelo v. Fitzmaurice, 863 So. 2d 311, 314 n. 9
(Fla. 2003), superseded by statute on other grounds as stated in Port Charlotte HMA,
LLC v. Suarez, 41 Fla. L. Weekly D2393, D2395 (Fla. 2d DCA Oct. 26, 2016).

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or omit information about the health effects or addictive nature of smoking cigarettes or

both was a legal cause of Richard Boatright's COPD." Even in the negligence count,

the Boatrights' second amended complaint alleges that the "Defendants had actual

knowledge of the wrongfulness of their conduct and the high probability that injury or

damage to the Smoker would result, and despite that knowledge, intentionally pursued

their course of conduct."

Section 768.81 applies to "negligence cases" which include actions based

on theories of negligence, strict liability, and product liability. § 768.81(4)(a). The

statute provides that "[i]n an action to which this section applies, any contributory fault

chargeable to the claimant diminishes proportionately the amount awarded as economic

and noneconomic damages for an injury attributable to the claimant's contributory fault,

but does not bar recovery." § 768.81(2). The statute explicitly does not apply to "any

action based upon an intentional tort." § 768.81(4)(b). Further, the statute instructs that

"[i]n determining whether a case falls within the term 'negligence cases,' the court shall

look to the substance of the action and not the conclusory terms used by the parties." §

768.81(4)(a).

As to our standard of review, we agree with the Fourth District in R.J.

Reynolds Tobacco Co. v. Schoeff, 178 So. 3d 487, 496 (Fla. 4th DCA 2015), review

granted, No. SC15-2233, 2016 WL 3127698 (Fla. May 26, 2016), that we review de

novo the legal issue of whether the conduct qualifies as negligence or as an intentional

tort. To the extent the First District applied an abuse of discretion standard in R.J.

Reynolds Tobacco Co. v. Sury, 118 So. 3d 849, 852 (Fla. 1st DCA 2013), we disagree

with the use of that standard. But we agree with the Sury court's conclusion that section

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768.81 did not require reduction of the compensatory damage award by the smoker's

percentage of fault. See id.

In Sury, the First District recognized that "the public policy behind the

exclusion in section 768.81 for intentional torts" is based on the fact that intentional

wrongs and simple negligence are different as to the type of fault " 'and in the social

condemnation attached to it.' " 118 So. 3d at 852 (quoting Merrill Crossings Assocs. v.

McDonald, 705 So. 2d 560, 562 (Fla. 1997)). The Sury court stated that "although the

plaintiff pled negligence and strict liability, the additional allegations of the intentional

torts and the proof of affirmative, calculated misrepresentations in the tobacco

companies' advertising and other publications supported the conclusion that this action

'actually had at its core an intentional tort by someone.' " Id. (quoting Merrill Crossings

Assocs., 705 So. 2d at 563); see also R.J. Reynolds Tobacco Co. v. Allen, 42 Fla. L.

Weekly D491, D492-93 (Fla. 1st DCA Feb. 24, 2017) (following Sury and determining

that the trial court did not commit error by refusing to apportion fault in a case dealing

with the intentional torts of fraudulent concealment and conspiracy to fraudulently

conceal); Philip Morris USA Inc. v. Buchanan, 155 So. 3d 1156, 1158 (Fla. 1st DCA

2014) (relying upon Sury as to the substance of the action being an intentional tort).

The Fourth District in Schoeff reached a different result in an Engle lawsuit

and held that "at its core, Plaintiff's suit is a products liability suit based on conduct

grounded in negligence." 178 So. 3d at 496; see also R.J. Reynolds Tobacco Co. v.

Grossman, 42 Fla. L. Weekly D106, D107 (Fla. 4th DCA Jan. 4, 2017) (relying on

Schoeff); R.J. Reynolds Tobacco Co. v. Calloway, 201 So. 3d 753, 767 (Fla. 4th DCA

2016) (same), review denied, No. SC16-1937, 2017 WL 1023712 (Fla. Mar. 16, 2017).

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The dissent in Schoeff aptly stated that "[t]he gravamen of the charge is that the

tobacco company intentionally designed its products in a defective manner and pursued

a callous and intentional course of tortious conduct by fraudulent concealment." 178

So. 3d at 497 (Taylor, J., concurring in part and dissenting in part). We agree with the

First District in Sury and the dissent in Schoeff that "the 'core' of Engle progeny actions

is intentional misconduct as a matter of law." Id.

Therefore, we reverse the final judgment and remand for the trial court to

enter an amended judgment to reflect the full amount of the jury's verdict. In doing so,

we certify conflict with Schoeff, Grossman, and Calloway to the extent that they hold

that the core of those actions is grounded in negligence and that section 768.81 is

applicable to reduce the verdict by the smoker's comparative fault.

Philip Morris's Main Appeal

In issue one, Philip Morris contends that a new trial is necessary because

the trial court allowed the Boatrights' counsel to inflame the jury during closing

arguments. It argues that the Boatrights' counsel disparaged the defense and defense

counsel and improperly argued regarding nationwide harm and international harm

caused by cigarettes. In reviewing the points raised, we note that many comments

were a fair comment on the evidence or even a reading from Philip Morris's own

documents that were admitted into evidence, such as the references to "doubt is our

product." Philip Morris relies in part on Calloway to argue for a new trial, but the

references to the defense and defense counsel in the present case were very limited

and far less significant than the comments in Calloway.

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 Regarding arguments concerning harm to others and the number of

deaths from smoking, it was made clear to the jury that harm to others was relevant only

to show the degree of reprehensibility of the Defendants' conduct. See R.J. Reynolds

Tobacco Co. v. Townsend, 90 So. 3d 307, 313 n.7 (Fla. 1st DCA 2012) (citing Philip

Morris USA v. Williams, 549 U.S. 346, 355 (2007)). In its closing, the Boatrights'

counsel read the instruction to the jury that it could consider harm to others in assessing

the reprehensibility of the Defendants' acts as proven in this case. And the trial court

instructed the jury that that it could not impose punitive damages to punish a defendant

for harm caused to others.

We also note that a number of the comments challenged on appeal were

made without objection. The trial court denied the motion for new trial regarding the

comments by the Boatrights' counsel, and the trial court is in the best position to judge

the effect of the comments. "A trial court's denial of a motion for mistrial and a motion

for new trial based on improper closing arguments are reviewed for abuse of discretion."

Calloway, 201 So. 3d at 759 (quoting Whitney v. Milien, 125 So. 3d 817, 818 (Fla. 4th

DCA 2013)). We find no abuse of discretion in the trial court's denial of Philip Morris's

motion for new trial. And to the extent that any error occurred in the closing argument,

there is no reasonable possibility that any error contributed to the verdict. See Special

v. W. Boca Med. Ctr., 160 So. 3d 1251, 1256 (Fla. 2014) (stating standard for harmless

error in civil cases).

In issue two, Philip Morris relies primarily on its argument in issue one to

summarily contend that the trial court erred in admitting evidence during the testimony

of the Boatrights' expert witness, Dr. Proctor. Because we reject Philip Morris's

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arguments in issue one, we reject them as to issue two as well, and Philip Morris has

not otherwise established reversible error as to the admission of the evidence.

In issue three, Philip Morris contends that the trial court erred in failing to

ask the jury to determine Liggett's share of fault based on the comparative fault statute,

section 768.81. We find no error because the comparative fault statute does not apply,

as discussed above in the Boatrights' cross-appeal.

In issue four, Philip Morris contends that the punitive damages award

against it must be significantly reduced because it is excessive. The jury awarded $15

million in compensatory damages to Mr. and Mrs. Boatright and awarded $19.7 million

in punitive damages against Philip Morris. We note that the Boatrights' counsel asked

for more than the jury awarded, and the evidence fully supports the jury's award. The

trial court did not err in declining to find the punitive damages excessive. See Lorillard

Tobacco Co. v. Alexander, 123 So. 3d 67, 82-83 (Fla. 3d DCA 2013) (upholding punitive

damage award of $25 million when the remitted compensatory award was $10 million);

R.J. Reynolds Tobacco Co. v. Townsend, 118 So. 3d 844, 847 (Fla. 1st DCA 2013)

(affirming punitive damages award of $20 million when the ratio of punitive damages to

compensatory damages was 1.85 to 1); cf. Schoeff, 178 So. 3d at 491 (determining that

punitive damages award of $30 million fell "on the excessive side of the spectrum" when

the compensatory award was $10.5 million).

In issue five, Philip Morris contends that it is entitled to a credit against the

punitive damages award in this case based on the "Guaranteed Sum Stipulation" Philip

Morris entered into in the Engle case. We reject this argument and agree with the

Boatrights that the Guaranteed Sum Stipulation specifically applied to the judgment in

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Engle and is not applicable to the judgment in this case. See Calloway, 201 So. 3d at

756 (noting that the issue of a credit against punitive damages based on the stipulation

was raised but not reversing on that basis or commenting on the issue for purposes of

remand).

In issues six and seven, Philip Morris recognizes that the issues have

already been determined by controlling case law but wishes to preserve its position for

further review. As to issue six, the acceptance of the Phase I Engle findings as res

judicata does not violate the Engle defendants' right to due process. Phillip Morris USA,

Inc. v. Douglas, 110 So. 3d 419, 436 (Fla. 2013). As to issue seven, punitive damages

may be awarded for strict liability and negligence claims in an Engle progeny case.

Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219, 1234 (Fla. 2016) (approving

Philip Morris USA, Inc. v. Hallgren, 124 So. 3d 350, 358 (Fla. 2d DCA 2013), regarding

the issue of punitive damages).

Liggett's Main Appeal

In issue one, Liggett contends that the trial court should have directed a

verdict in Liggett's favor on the conspiracy claim because Mr. Boatright's de minimis use

of Liggett's cigarettes did not cause his injury. But the law of civil conspiracy holds co-

conspirators liable for harm caused by other members of a conspiracy to commit an

intentional tort. Rey v. Philip Morris, Inc., 75 So. 3d 378, 383 (Fla. 3d DCA 2011)

(stating that the law of civil conspiracy extends "liability to a co-conspirator which may

not have caused any direct injury to the claimant" and recognizing "the policy that an

entire group of conspirators acting collectively to achieve an unlawful goal—including

consumer fraud—should be jointly and severally liable for the acts of all participants in

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the scheme"); see also Blake v. Lorillard Tobacco Co., 81 So. 3d 637, 638 (Fla. 5th

DCA 2012) (adopting "the well-reasoned opinion" of the court in Rey regarding civil

conspiracy). The jury found that Philip Morris's fraudulent concealment caused Mr.

Boatright's injuries and that Philip Morris and Liggett's agreement to conceal was a legal

cause of Mr. Boatright's injuries. Therefore, Liggett was properly held liable as a

member of the conspiracy with Philip Morris to fraudulently conceal.

In issue two, Liggett contends that it cannot be held jointly and severally

liable for compensatory damages because the jury was not given an opportunity to

allocate fault to Liggett. However, based on the resolution of the cross-appeal that the

exception for intentional torts in the comparative fault statute, section 768.81(4)(b),

applies, Liggett is not entitled to relief on this issue.

In issue three, Liggett requests that the punitive damages award be

vacated if this court finds merit in either of its arguments in its first and second issues.

Because we have determined that Liggett's arguments do not have merit, we affirm the

$300,000 punitive damage award against Liggett.

Conclusion

We affirm on Philip Morris's main appeal and on Liggett's main appeal.

Because we have determined on the Boatrights' cross-appeal that the core of this action

is grounded in intentional misconduct, the comparative fault statute, section 768.81,

does not apply. Therefore, we reverse the final judgment and remand for the trial court

to enter an amended judgment to reflect the full amount of the jury's verdict. In doing

so, we certify conflict with Schoeff, Grossman, and Calloway to the extent that they hold

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that the core of these types of actions are grounded in negligence and that section

768.81 is applicable to reduce the verdict by the smoker's comparative fault.

Affirmed in part, reversed in part, and remanded.

LaROSE and BADALAMENTI, JJ., Concur.

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