Widow Seeks Reinstatement of Tobacco Verdict Award
The widow of a plaintiff who won a $37.5 million verdict in Miami against cigarette makers has asked the Florida 3rd District Court of Appeal to reinstate trial court findings that the defendants deceived the public about the dangers of smoking.
If the court agrees, it would make it easier for individual plaintiffs to bring claims against tobacco companies and would preserve her award.
Yolanda Lukacs, widow of John Lukacs, who died of bladder and tongue cancer last year, filed an amicus brief in the appeal of the Florida smokers' class action last week. She is asking the court to reconsider its May 20 decision to vacate the $145 billion punitive damages verdict handed down by a jury in the Florida smokers' class action in 2000, decertify the class and remand the case to Miami-Dade Circuit Court.
Lukacs is asking the court to reinstate the class for the limited purpose of letting the jury's findings in the first phase of the three-part class action trial stand. In Phase 1 of the class action trial, the jury found the tobacco companies liable for deceiving the public about the addictive nature of nicotine and the harmful effects of smoking.
She also asked the 3rd DCA to clarify how she and other individual plaintiffs should proceed if the appellate court declines to reconsider its decision.
If the appellate court grants Mrs. Lukacs' request to reinstate Phase I, other Florida smokers could use the same approach to prove their cases one by one, Lukacs' attorney, Philip Gerson, argued in the amicus brief filed last Thursday.
But if the 3rd DCA does not reinstate the jury's general findings about the tobacco companies' deception, the estimated 700,000 individual members of the class would have to prove their claims of fraud and conspiracy from scratch, making it financially unrealistic for them to proceed, said Gerson, a partner at Gerson & Schwartz in Miami. "It's not surprising the panel found the $145 billion award objectionable," Gerson said, "but to throw out the entire case would mean that all that judicial effort was wasted and that the tobacco companies have a free ride in Florida."
Stanley and Susan Rosenblatt, the Miami attorneys who represented the class and won the unprecedented punitive damages verdict against the nation's five biggest cigarette makers in Miami-Dade Circuit Court in July 2000, filed their own motion for rehearing on July 16.
They are asking the entire 11-member court to rehear the case -- something the appellate court rarely does. They want the court to reinstate the $145 billion award.
But Elliot Scherker, who is representing the tobacco companies, argues that the 3rd DCA correctly threw out the case and that no part of the trial court's findings, including Lukacs' award, should be preserved. "We believe the court correctly decertified the class," said Scherker, a shareholder at Greenberg Traurig in Miami.
The class action lawsuit, filed on behalf of Miami Beach pediatrician Howard Engle and five other main plaintiffs, went to trial in three phases. It accused the cigarette makers of fraud, conspiracy, intentional infliction of emotional distress, manufacture and sale of a defective product, breach of warranty, and negligence. The first phase of the class action was a yearlong trial of asserted common issues relating to the defendants' conduct and the general health effects of smoking. It ended in July 1999 and a jury found the tobacco industry liable for lying to the public about the addicting nature of nicotine and the harmful effects of smoking.
Phase 2 was divided into two parts. In the first the jury heard evidence relating to three individual members of the class. In the second part of the second phase, the jury socked the tobacco industry with the $145 billion verdict.
The third phase of the class action involved individual claims by smokers. Because of his terminal condition, John Lukacs was allowed to proceed to trial individually while the jury verdict in the first two stages of the class action suit were pending appeal.
Lukacs, a Miami lawyer, started smoking in his teens and continued for 30 years until he quit in the early 1970s. His attorneys argued that his habit was fueled by years of tobacco company advertising celebrating smoking as safe and sophisticated.
The Lukacs trial was held to determine whether the tobacco companies were liable for compensatory damages. Lukacs was the only member of the class allowed to proceed to trial.
During his trial, Lukacs used the general findings from Phase 1 of the class action as building blocks to prove that smoking caused his particular illness and that he was drawn to cigarettes after watching glamorous portrayals of smoking in movies and advertising. In June 2002, a Miami-Dade jury found three of the tobacco companies liable for his ailment and awarded him and his wife $37.5 million, including $24.5 million for pain and suffering, $500,000 for medical expenses and $12.5 million for loss of consortium. His estate has not yet received the money because the trial judge reserved entering final judgment until the 3rd DCA ruled on the tobacco companies' appeal.
But now that the 3rd DCA has decertified the class, the status of that verdict remains unclear. Lukacs' attorneys argue that the jury's findings in his individual trial still stand because he proved that the makers of the particular brands he smoked caused his cancer. At worst, Lukacs' attorneys argue, they will have to return to the trial judge, Miami-Dade Circuit Judge Amy Steele Donner, and ask that they be allowed to retry Phase I of the class action.
But attorneys for the tobacco companies argue that the 3rd DCA's May ruling leaves Lukacs' widow in the same boat as the other class members -- she would have to go back and prove his case individually from Square 1.
In November 2001, the cigarette makers, led by Philip Morris, filed an appeal to the 3rd DCA. While the appeal was pending, Lukacs went to trial in June 2002. In the 3rd DCA's recent decision to decertify the class, the three-judge panel held that each smoker's claim was too unique and individualized to be tried collectively. It also said that a class action suit was inappropriate because many Florida class members are not originally from the state.
In addition, the panel found that awarding classwide punitive damages before establishing the injuries of each member of the class violated Florida law. The judges said the $145 billion punitive award was excessive and would bankrupt the defendants. In their motion for rehearing, the Rosenblatts contend that the three-judge panel that unanimously threw out their case committed "judicial plagiarism" because much of the court's 68-page opinion reiterated "almost verbatim" the tobacco industry's arguments in its appellate briefs.
The Rosenblatts claim that 3rd DCA Judges David Gersten, Mario Goderich and David Levy "flip-flopped" in reversing a 1996 ruling by another 3rd DCA panel approving certification of the class. Goderich was a member of both panels.
When the May 20 decision came out, many legal experts expressed surprise that the 3rd DCA had essentially reversed its previous ruling.
"They suddenly realized the transient nature of the Florida population makes it impossible to have a Florida-only class action," Mark Gottlieb, an attorney with the Tobacco Products Liability Project in Boston told the Daily Business Review after the ruling. "It's surprising that these realizations are so late in coming."
Lukacs' amicus brief joins the Rosenblatts' motion for rehearing, but takes a different tack. She is asking the 3rd DCA only to reinstate the jury's findings in Phase I. The individuals then could proceed to trial, as John Lukacs did, to prove that their specific disease was caused by smoking. The individual plaintiffs also would have to show that they were victims of the tobacco companies' fraud -- meaning that they relied on the industry's false claims that cigarettes were not hazardous to their health. "Forget about punitive damages," Gerson said. "Our case demonstrates that it's practical to resolve these cases building on the Phase 1 jury findings."
As far as punitive damages, Gerson proposes that the juries in the individual cases assess the amount of punitive damages for each class member. Under the trial plan in the Engle case, the $145 billion award was to be divided among the class members after they proved their individual cases in Phase 3 of the litigation, which never took place. Dick Daynard, chairman of the Tobacco Product Liability Project, said Gerson's plan sounds plausible.
"The Florida court system is free to operate their class actions any way that makes sense," Daynard said. "The ultimate purpose is to do justice. And it is certainly clear that if this class remains decertified, the great majority of class members are never going to get their day in court."
Elliot Scherker said the tobacco companies would be filing a response to the motions for rehearing filed by Lukacs and the Rosenblatts.
The 3rd DCA has not yet indicated whether it will rehear the case. The court only rehears cases when the losing party proves there is an internal conflict between its recent decision and a previous ruling from the same appellate court. The judges can also rehear the case if they are convinced it involves an issue of great public importance.