Appendix — R.J. Reynolds Tobacco Co. v. Engle (No. 06-1545)

TABLE OF CONTENTS

APPENDIX A: Opinion of the Supreme Court of

Florida, dated December 21, 2006 ..................cccsecseeeee la

APPENDIX B: Opinion of the District Court of Ap-

peal of Florida, Third District, dated May 21,

APPENDIX C: Final Judgment and Amended Om-

nibus Order of the Circuit Court of the Eleventh

Judicial Circuit for Miami-Dade County, Florida,

dated November 7, 2000 .................. Jioinnbieahsnbenvest 127a

APPENDIX D: Order of the Supreme Court of

Florida on Rehearing, dated December 21, 2006.... 187a

APPENDIX E: Defendants’ Proposed Jury Instruc-

tion on Preemption, dated June 14, 1999.00.00... 190a

APPENDIX F: Phase I Verdict Form, dated July 7,

EEE TR PES eT en ne cre a ee ee ee 192a

APPENDIX G: Post- Cipollone Decisions Address-

ing Preemption of “Concealment” and “Neutrali-

Se SN i achanidniccthivntesecckhsieedéskacewshéonisebianraeaninen 207a

la

APPENDIX A

[Opinion of the Supreme Court of

Florida (December 21, 2006)]

Supreme Court of Florida

No. SC03-1856

Howard A. ENGLE, M.D., et al.,

Petitioners,

VS.

LIGGETT GROUP, INC., et al.,

Respondents.

[December 21, 2006]

REVISED OPINION

PER CURIAM.

This case arises from the Third District Court of Ap-

peal’s reversal of a final judgment entered in a smokers’ class

action lawsuit that sought damages against cigarette compa-

nies and industry organizations for alleged smoking-related

injuries. See Liggett Group, Inc. v. Engle, 853 So.2d 434

(Fla. 3d DCA 2003) (hereinafter “Engle IT”). The final judg-

ment awarded $12.7 million in compensatory damages to

three individual plaintiffs and $145 billion in punitive dam-

ages to the entire class. See id. at 441. We have jurisdiction

because Engle II misapplies our decision in Young v. Miami

Beach Improvement Co., 46 So.2d 26 (Fla.1950). See art. V,

§ 3(b)(3), Fla. Const.

For the reasons explained more fully in this opinion, al-

though we approve the Third District’s reversal of the $145

2a

billion class action punitive damages award, we quash the

remainder of the Third District’s decision. A majority of the

Court (Anstead, Pariente, Lewis and Quince) holds that the

compensatory damages award in favor of Mary Farnan in the

amount of $2,850,000 and Angie Della Vecchia in the

amount of $4,023,000 should be reinstated. However, the

court unanimously agrees that the compensatory damages

award in favor of Frank Amodeo must be vacated based on

the statute of limitations.

Further, a majority of the Court (Anstead, Pariente,

Lewis and Quince) concludes that Engle II misapplied our

decision on the law of the case doctrine in Florida Depart-

ment of Transportation v. Juliano, 801 So.2d 101, 106 (Fla.

2001); that the certification of the class action and the Phase I

trial process were not abuses of the trial court’s discretion;

and that certain common liability findings can stand. How-

ever, we also conclude that the remaining issues, including

individual causation and apportionment of fault among the

defendants, are highly individualized and do not lend them-

selves to class action treatment. Thus, we remand with direc-

tions that the class should be decertified without prejudice to

the class members filing individual claims within one year of

the issuance of our mandate in this case with res judicata ef-

fect given to certain Phase I findings.

More specifically, we hold as follows:

PUNITIVE DAMAGES: We unanimously hold that

the Third District erred in concluding that under Young the

class action punitive damages claims were barred by the set-

tlement agreement between the State of Florida and many of

the defendants involved in the present action (Florida Settle-

ment Agreement or FSA). However, we vacate the punitive

damages award because we unanimously conclude that the

punitive damages award is excessive as a matter of law.

A majority of the Court (Anstead, Pariente, Lewis, and

Quince) also concludes that the Third District misapplied

3a

Ault v. Lohr, 538 So.2d 454, 456 (Fla. 1989), by holding that

compensatory damages must be determined before a jury can

consider entitlement to punitive damages. Although Justices

Lewis and Quince would allow the finding of entitlement to

punitive damages to stand, a different majority of the Court

(Wells, Anstead, Pariente, and Bell) concludes that the trial

court erred in allowing the jury to make this finding during

Phase I because, consistent with Ault, proof of liability,

which includes both reliance and causation, is a predicate to

the determination of entitlement to punitive damages.

PHASE I FINDINGS: A majority of the Court (An-

stead, Pariente, Lewis, and Quince) concludes that the

Third District erred as a matter of law in conducting a ple-

nary review of the trial court’s decision to certify the Engle

Class after completion of an extended Phase I trial and after a

different panel of the Third District upheld the certification.’

This same majority concludes that it was proper to allow the

jury to make findings in Phase I on Questions | (general cau-

sation), 2 (addiction of cigarettes), 3 (strict liability), 4(a)

(fraud by concealment), 5(a) (civil-conspiracy-concealment),

6 (breach of implied warranty), 7 (breach of express war-

ranty), and 8 (negligence). Therefore, these findings in favor

of the Engle Class can stand. The Court unanimously agrees

that the nonspecific findings in favor of the plaintiffs on

Questions 4 (fraud and misrepresentation) and 9 (intentional

infliction of emotional distress) are inadequate to allow a

subsequent jury to consider individual questions of reliance

and legal cause. Therefore, these findings cannot stand. Be-

cause the finding in favor of the plaintiffs on Question 5

(civil conspiracy-misrepresentation) relies on the underlying

tort of misrepresentation, this finding also cannot stand.

ARGUMENTS OF ENGLE CLASS’S COUNSEL: A

majority of the Court (Anstead, Pariente, Lewis, and

' Justices Wells and Bell would affirm the Third District as to its

conclusions regarding the class action.

4a

Quince) disagrees with the Third District’s conclusion that

the plaintiffs’ counsel’s improper arguments require reversal,

but we condemn in no uncertain terms some of these argu-

ments. We do not address the Phase II arguments because

we are reversing the punitive damages award from Phase II-

B and the defendants do not raise any error with respect to

arguments made during Phase II-A, in which the jury deter-

mined the individual compensatory damages of three class

representatives.

CLASS CERTIFICATION CUT-OFF DATE: While

a majority (Anstead, Pariente, Lewis, and Quince) agrees

that the class cannot be open-ended, we disagree with the

Third District’s ruling that the appropriate cut-off date for

class membership is October 31, 1994, the date the class was

initially certified. We conclude that the date of the trial

court’s November 21, 1996, order that recertified a narrower

class is the appropriate cut-off date.

JUDGMENT FOR CLASS MEMBERS: Because

Mary Farnan, who was diagnosed with lung cancer in April

1996, is clearly a proper member of the class, the Third Dis-

trict erred in reversing the compensatory verdict in favor of

Farnan in the amount of $2,850,000, except as against Lig-

gett Group Inc. and Brooke Group Holding Inc., whom the

jury found to be zero percent at fault. We thus approve the

Third District’s conclusion that a directed verdict should be

granted in favor of Liggett and Brooke.

As for Angie Della Vecchia, she was diagnosed with

lung cancer in early 1997. However, at that time, it was also

noted by her doctors that she had a past medical history of

chronic obstructive pulmonary disease (“COPD”) and sig-

nificant hypertension. Because two of the diseases at issue in

this case are coronary heart disease and COPD, Della Vec-

chia’s medical records indicate that she had been suffering

from a tobacco related disease prior to the time of certifica-

tion and is therefore properly included as a class member.

The jury specifically found that her lung disease was caused

Sa

by smoking. Thus, a majority of the Court concludes that the

compensatory judgment in favor of Della Vecchia in the

amount of $4,023,000 should stand, except as against Liggett

and Brooke, who were found to be zero percent at fault.” The

Court unanimously agrees with the Third District that the fi-

nal judgment in favor of class representative Frank Amodeo

must be reversed because all of Amodeo’s claims are barred

by the statute of limitations.

With the summary of this Court’s holdings set forth

above, we now tum to a more in-depth discussion of the

background of this case and the salient issues.

FACTS AND PROCEDURAL HISTORY

On October 31, 1994, the trial court certified as a ra-

tionwide class action a group of smokers and their survivors

under Florida Rule of Civil Procedure 1.220(b)(3). The class

representatives on behalf of themselves, and all others simi-

larly situated, filed an amended class action complaint seek-

ing compensatory and punitive damages against major do-

mestic cigarette companies and two industry organizations

(hereinafter collectively referred to as “Tobacco”) for injuries

allegedly caused by smoking.”

* We also note that the defendants never objected to Farnan or

Della Vecchia as a proper members of the class. Although the de-

fendants opposed the Engle Class’s 1998 motion to add thirteen

class representatives, which listed Farnan and Della Vecchia, their

arguments focused on the timeliness of the motion and on the fact

that adding thirteen new class representatives was unnecessary.

The defendants did state that the brief descriptions of the proposed

new class representatives that were provided by the plaintiffs did

not indicate that “they would be adequate class representatives,

whose claims are not time-barred.” However, the defendants did

not argue that any of the proposed class representatives, including

Farnan and Della Vecchia, were not proper members of the class

because of the class cut-off date.

> The cigarette companies are: R.J. Reynolds Tobacco Company;

RJR Nabisco, Inc.; Philip Morris Incorporated (Philir Morris

6a

The trial court defined the class as: “All United States

citizens and residents, and their survivors, who have suffered,

presently suffer or who have died from diseases and medical

conditions caused by their addiction to cigarettes that contain

nicotine.” Tobacco filed an interlocutory appeal of the trial

court’s order certifying the Engle Class pursuant to Florida

Rule of Appellate Procedure 9.130(a)(6). See R.J. Reynolds

Tobacco Co. v. Engle, 672 So.2d 39, 40 (Fla. 3d DCA 1996)

(hereinafter “Engle I’). On January 31, 1996, the Third Dis-

trict affirmed the trial court’s order certifying the class but

reduced the class to include only Florida smokers. See id. at

42 (striking “[a]ll United States citizens and residents” provi-

sion and substituting in its place “[a]ll Florida citizens and

residents”). Tobacco’s petition for review by this Court was

denied. See R.J. Reynolds Tobacco Co. v. Engle, 682 So.2d

1100 (Fla. 1996).

On February 4, 1998, the trial court issued a trial plan,

dividing the trial proceedings into three phases. Phase I con-

sisted of a year-long trial to consider the issues of liability

and entitlement to punitive damages for the class as a whole.

See Engle II, 853 So.2d at 441. The jury considered com-

mon issues relating exclusively to the defendants’ conduct

and the general health effects of smoking. See id. On July 7,

1999, at the conclusion of Phase I, the jury rendered a verdict

for the Engle Class and against Tobacco on all counts.*

U.S.A.); Philip Morris Companies, Inc.; Lorillard Tobacco Com-

pany; Lorillard, Inc.; Brown & Williamson Tobacco Corporation,

individually and as successor by merger to The American Tobacco

Company; Liggett Group Inc.; Brooke Group Holding Inc., and

Dosal Tobacco Corp. The industry organizations are The Council

for Tobacco Research-U.S.A., Inc., and The Tobacco Institute, Inc.

because of the class cut-off date.

* The Phase I findings were: (1) that cigarettes cause some of the

diseases at issue; (2) that nicotine is addictive; (3) that the defen-

dants placed cigarettes on the market that were defective and un-

reasonably dangerous; (4) that the defendants made a false or mis-

Ta

Phase II was divided into two subparts—Phase II-A and

Phase II-B. Phase II-A was intended to resolve the issues of

entitlement and amount of compensatory damages, if any,

that the three individual class representatives—Frank

Amodeo, Mary Farnan, and Angie Della Vecchia—should

receive. Phase II-B was designed to result in a jury determi-

nation of a total lump sum punitive damage award, if any,

. that should be assessed in favor of the class as a whole.

At the conclusion of Phase II-A, the jury determined that

the three individual class representatives were entitled to

compensatory damages in varying amounts, which were off-

set by their comparative fault. The total award was $12.7

million. The jury subsequently determined in Phase II-B the

lump-sum amount of punitive damages for the entire class to

be $145 billion, without allocation of that amount to any

leading statement of material fact with the intention of misleading

smokers; (4)(a) that the defendants concealed or omitted material

information not otherwise known or available knowing that the

material was false or misleading or failed to disclose a material

fact concerning the health effects or addictive nature of smoking

cigarettes or both; (5) that all of the defendants agreed to misrepre-

sent information relating to the health effects of cigarettes or the

addictive nature of cigarettes with the intention that smokers and

the puvlic would rely on this information to their detriment; (5)(a)

that the defendants agreed to conceal or omit information regard-

ing the health effects of cigarettes or their addictive nature with the

intention that smokers and the public would rely on this informa-

tion to their detriment; (6) that all of the defendants sold or sup-

plied cigarettes that were defective; (7) that all of the defendants

sold or supplied cigarettes that at the time of the sale or supply did

not conform to representations of fact made by the defendants; (8)

that all of the defendants were negligent; (9) that all of the defen-

dants engaged in extreme and outrageous conduct or with reckless

disregard relating to cigarettes sold or supplied to Florida smokers

with the intent to inflict severe emotional distress; and (10) that all

of the defendants’ conduct rose to a level that would permit an

award of punitive damages.

8a

class member. Tobacco filed several post-verdict motions,

including a motion at the conclusion of phase II-B for a new

trial or remittitur, a motion to set aside the verdict, and for

entry of judgment, and another motion to decertify the class.

See Engle v. R.J. Reynolds Tobacco, No. 94-08273 CA-22

(Fla. 11th Cir. Ct. Nov. 6, 2000) (hereinafter “Engle F.J.”),

rev'd, 853 So.2d 434 (Fla. 3d DCA 2003).

On November 6, 2000, the trial court entered a final

judgment and amended omnibus order, in which it granted

judgment in Tobacco’s favor in two respects. First, the trial

court granted Tobacco’s motion for directed verdict on a stat-

ute of limitations basis with regard to named plaintiff Frank

Amodeo on the counts based on strict liability, implied war-

vanty, express warranty, negligence, and intentional infliction

of emotional distress. However, the trial court ruled that

Amodeo’s fraud and conspiracy claims were not time-barred.

Second, the court granted Tobacco’s motion for directed ver-

dict with regard to count seven of the complaint, in which the

Engle Class sought equitable relief, upon the basis that the

count had previously been dismissed by the court. The court

entered judgment in favor of the Engle Class on all other

counts, ordered immediate payment to the individual plain-

tiffs, and directed Tobacco to pay the $145 billion in punitive

damages into the registry of the Dade County Circuit Court

for the benefit of the entire class.

According to the trial plan, in Phase III, new juries are to

decide the individual liability and compensatory damages

claims for each class member (estimated to number approxi-

mately 700,000). See Engle II, 853 So.2d at 442. Thereafter,

the plan contemplated that the trial court would divide the

punitive damages previously determined equally among any

successful class members. Pursuant to the omnibus order, in-

terest on the punitive award began accruing immediately.

See id.

9a

Tobacco filed an appeal and the Third District reversed

the final judgment with instructions that the class be decerti-

fied. See id.

ANALYSIS

1. Res Judicata

A. History of the Florida Settlement Agreement and

the Master Settlement Agreement

In 1995, the State of Florida and others (hereinafter

“State”) filed a complaint against many of the defendants in-

volved in the present action (hereinafter “FSA Defendants”).°

This earlier action was initiated by the State under the Medi-

caid Third-Party Liability Act, section 409.910, Florida Stat-

utes (1995). In its complaint, the State alleged counts of neg-

ligence, strict liability in tort, injunctive relief, various statu-

tory and criminal violations, and violations of the Florida

RICO Act. The State sought reimbursement of Medicaid

monies expended in treating the victims of tobacco-related

illnesses as well as other damages permitted by law, includ-

ing punitive damages where available. Subsequent to the fil-

ing of the State’s complaint, the circuit court granted the FSA

* The named plaintiffs in the State’s suit were: The State of Flor-

ida; Lawton Chiles, Jr., Individually and as Governor; the Depart-

ment of Business and Professional Regulation; the Agency for

Health Care Administration; and the Department of Legal Affairs.

award of punitive damages.

The named defendants in the State’s suit were: The American

Tobacco Company; R.J. Reynolds Tobacco Company; RJR Na-

bisco, Inc.; B.A.T. Industries, PLC; Batus Holdings, Inc.; Brown

& Williamson Tobacco Corporation; Philip Morris Companies,

Inc.; Philip Morris Incorporated (Philip Morris U.S.A.); Loews

Corporation; Lorillard Tobacco Company; United States Tobacco

Company; UST Inc.; The Council for Tobacco Research-U.S.A.

Inc. (successor to Tobacco Institute Research Committee); The

Tobacco Institute, Inc.; Hill & Knowlton, Inc.; British American

Tobacco Co., Ltd.; and Dosal Tobacco Corp., Inc.

10a

Defendants’ motion for summary judgment and dismissed all

claims by the State for punitive damages with the exception

of its claim for punitive damages contained in count four of

the complaint alleging only statutory and criminal viola-

tions.°

In 1997, the State and the FSA Defendants entered into

the Florida Settlement Agreement, which resolved “all pre-

sent and future civil claims against all parties to [the] litiga-

tion relating to the subject matter of [the] litigation, which

[were] or could have been asserted by any of the parties

[thereto].” (Emphasis supplied.) Pursuant to the terms of the

FSA, in exchange for agreeing to resolve these claims, the

State received $550 million for unspecified purposes, $200

million for a pilot program by the State of Florida aimed at

the reduction of the use of tobacco products by minors, sev-

eral billion dollars paid out over a period of time for the

benefit of the State of Florida, and injunctive relief. As

stated by the FSA, the monies received “constitute[d] not

only reimbursement for Medicaid expenses incurred by the

State of Florida, but also settlement of all of Florida’s other

claims, including those for punitive damages, RICO and

other statutory theories.” Also included in the FSA was a

“Non-Admissibility” provision which provided:

These settlement negotiations have been undertaken

by the parties in good faith and for settlement pur-

poses only, and neither this Settlement Agreement

nor any evidence of negotiations hereunder, shall be

offered or received in evidence in this Action, or

any other action or proceeding, for any purpose

° Specifically, count four contained allegations that the defendants

violated the Florida Drug and Cosmetic Act, statutory provisions

prohibiting the wrongful targeting of minors, statutory provisions

prohibiting fraudulent practices, statutory provisions prohibiting

public nuisances, and the Florida Deceptive and Unfair Trade

Practices Act.

lla

other than in an action or proceeding arising under

this Settlement Agreement.

During the time period in which Florida pursued an ac-

tion against the FSA Defendants, several other states also ini-

tiated actions against the FSA Defendants for similar if not

identical claims. These states settled their claims against the

FSA Defendants in November of 1998 when all parties to

that action entered into a Master Settlement Agreement (the

“MSA”). The MSA released all claims of the participating

states and also included a “Non-Admissibility” provision

similar to that in the FSA. Under the MSA, the FSA Defen-

dants are required to pay certain participating states more

than $200 billion over the first twenty-five years, with addi-

tional amounts to be paid in perpetuity after that.

B. Res Judicata Effect of the FSA

The Third District in this case held that the punitive

damages claims of the Engle Class were precluded by the

FSA. See Engle I, 853 So.2d at 467. The district court rea-

soned that Florida, in agreeing to relinquish its claims

through the FSA, had effectively resolved a matter of general

interest to all of its citizens and, therefore, the FSA was bind-

ing upon all citizens even though they were not parties to the

original litigation. See id. at 468. The district court therefore

concluded that the FSA’s “release, and the res judicata effect

of the resulting final judgment, preclude[d] the [Engle

Class’s} punitive-damage claims here.” Id.

We agree with the Third District that whether the appli-

cation of res judicata was proper is a question of law. See id.

at 468. We therefore apply a de novo standard of review.

See D’Angelo v. Fitzmaurice, 863 So.2d 311, 314 (Fla.2003)

(stating that standard of review for pure questions of law is

de novo).

The doctrine of res judicata serves an important purpose

in the judicial system of this state. The foundation of res ju-

dicata is that a final judgment in a court of competent juris-

12a

diction is absolute and settles all issues actually litigated in a

proceeding as well as those issues that could have been liti-

gated. We have explained the doctrine of res judicata as fol-

lows:

A judgment on the merits rendered in a former suit

between the same parties or their privies, upon the

same cause of action, by a court of competent juris-

diction, is conclusive not only as to every matter

which was offered and received to sustain or defeat

the claim, but as to every other matter which might

with propriety have been litigated and determined in

that action.

Fla. Dep’t of Transp. v. Juliano, 801 So.2d 101, 105

(Fla.2001) (alteration in original) (quoting Kimbrell v. Paige,

448 So.2d 1009, 1012 (Fla. 1984)).

In Young, this Court held that citizens of the City of Mi-

ami Beach were bound by a judgment against the city that

enjoined the city from asserting any interest in a particular

parcel of oceanfront property. See 46 So. 2d at 30. An asso-

ciation of citizens of the City of Miami Beach filed an action

to determine the public’s interest in this parcel, which was

owned by the defendant, a private corporation. See id. at 26.

In holding that the claim was barred by the prior decree en-

joining the City, we noted that a “judgment against a munici-

pal corporation in a matter of general interest to all its citi-

zens is binding on the latter, although they are not parties to

the suit.” Id. at 30 (emphasis supplied) (quoting 38 Am. Jur.

§ 728).

Similarly, in Castro v. Sun Bank of Bal Harbour, 370

So.2d 392, 393 (Fla. 3d DCA 1979), the Third District held

that private parties were precluded from relitigating public

nuisance and zoning violation claims that had already been

settled by the State. The district court reasoned that the

plaintiffs were bound by the final judgment of the prior ac-

tion “irrespective of whether they were formal parties to the

13a

... action” because they were “citizens of the State of Flor-

ida and the City of Miami at the time of the [prior] iitiga-

tion.” Id.

The district court, as well as Tobacco, relied on Young

and Castro to support the position that the FSA is binding on

all citizens of the State of Florida. However, in both of these

cases the governmental entity was asserting interests of con-

cer common to all of its citizens: the public’s interest in

oceanfront property and public nuisance and zoning viola-

tions. Application of res judicata in these contexts is sup-

ported by precedent that has established that for a State to

bind its citizens as a result of litigation advanced by the State,

the government must be suing in its parens patriae capacity,

litigating the rights or interests common to the public at large

and thereby representing the citizenry of the State. See Sat-

sky v. Paramount Commc’ns, Inc., 7 F.3d 1464, 1470 (10th

Cir.1993). The Eleventh Circuit Court of Appeals appropri-

ately described this form of action when it stated:

“In order to maintain [a parens patriae ] action, the

State must articulate an interest apart from the inter-

ests of particular private parties, i.e., the State must

be more than a nominal party. The State must ex-

press a quasi-sovereign interest.” Alfred L. Snapp

& Son, Inc. v. Puerto Rico, ex rel. Barez, 458 U.S.

592, 607, 102 S.Ct. 3260, 3268, 73 L.Ed.2d 995

(1982). “Parens patriae standing has been explained

on the ground that the plaintiff state is not merely

advancing the rights of individual injured citizens,

but has an additional sovereign or quasi-sovereign

interest.” 17 Charles A. Wright, Arthur R. Miller

& Edward H. Cooper, Federal Practice and Proce-

dure: Jurisdiction 2d § 4047 at 223 (1988). Al-

though the Supreme Court has not expressly defined

what is a “quasi-sovereign” interest, it is clear that a

state may sue to protect its citizens against “the pol-

lution of the air over its territory; or of interstate wa-

14a

ters in which the state has rights.” 12 Moore’s Fed-

eral Practice §350.02[3] at 3-20 (1993). It is

equally clear, however, that a state may not sue to

assert the rights of private individuals. See Alfred

L. Snapp, 458 U.S. at 600, 102 S.Ct. at 3265; Penn-

sylvania v. New Jersey, 426 U.S. 660, 665, 96 S.Ct.

2333, 2335, 49 L.Ed.2d 124 (1976); New York by

Abrams _v. Seneci, 817 F.2d 1015, 1017 (2nd

Cir.1987); Illinois v. Life of Mid-America Ins. Co.,

805 F.2d 763, 766 (7th Cir.1986), 13A Charles A.

Wright, Arthur R. Miller & Edward H. Cooper,

Federal Practice & Procedure: Jurisdiction 2d

§ 3531.11 at 19 (1984).

Id. at 1469 (alteration in original).

In Satsky, the court analyzed an action in which a group

of property owners alleged a variety of private property

claims arising from the defendant’s operation of a mine. See

id. at 1466. The defendant claimed that a consent decree be-

tween itself and the State of Colorado precluded the plain-

tiffs’ claims. See id. at 1467. In reversing a final summary

judgment entered by the lower court for the defendant, the

court held that “(t]o the extent [the] claims involve injuries to

purely private interests, which the State cannot raise, then the

claims are not barred.” Id. at 1470. We agree with the rea-

soning of Satsky and with the principle that “litigation by a

government agency will not preclude a private party from

vindicating a wrong that arises from related facts but gener-

ates a distinct individual cause of action.” Southwest Air-

lines Co. v. Texas Intern. Airlines, Inc., 546 F.2d 84, 98 (Sth

Cir. 1977).

In the litigation that resulted in the FSA, the State, in

support of its claim for punitive damages, alleged knowing

and intentional dissemination of false, fraudulent and mis-

leading statements to the general public by the FSA Defen-

15a

dants in violation of section 817.41, Florida Statutes (1995).’

In the present case, the Engle Class relied on legal theories

that were based on injuries personal to the class members to

support the claim for punitive damages. Since the State had

no right to pursue these types of private interests on behalf of

its citizens, the punitive damages claims settled by the State

in the FSA, if any, were distinct from the punitive damages

sought by the Engle Class in the present case.

The reasoning in In re Exxon Valdez, 270 F.3d 1215

(9th Cir.2001), is instructive. In that case, the defendants ap-

pealed a punitive damages award for claims arising out of the

Exxon Valdez oil spill. See id. at 1221. The plaintiffs con-

sisted of separate classes of commercial fishermen, Alaskan

natives, and landowners affected by the spill. See id. at

1225. These distinct classes sought compensatory and puni-

tive damages for injuries resulting from the Exxon Valdez

spill. See id. The jury returned a verdict in favor of the

plaintiffs which assessed $287 million in compensatory dam-

ages and $5 billion in punitive damages. See id. Exxon ap-

pealed the resulting judgment, asserting that the punitive

damages award was barred by the res judicata effect of a

consent decree between Exxon and the United States and the

State of Alaska that settled claims in a previous action filed

under the Clean Water Act. See id. at 1227. In holding that

the award was not barred by the previous settlement, the

court concluded that the interests asserted by the plaintiffs

were distinct from those asserted by the United States and

Alaska in the prior action. See id. at 1228. The court, rely-

ing on Satsky, noted that the prior consent decree addressed

harms caused to the environment and the general public

whereas the claims in the class action were to vindicate

’ The State’s only claim for punitive damages arose from the al-

leged violation of this Florida statutory provision prohibiting mis-

leading advertising. None of the other statutory provisions alleged

to be violated by the FSA Defendants in count four of the State’s

complaint allowed the recovery of punitive damages.

l6a

wrongs that resulted in individual injuries. See In re Exxon

Valdez, 270 F.3d at 1227-28. Moreover, the court stressed

that although the consent decree “released all government

claims, [it] provides explicitly that ‘nothing in this agree-

ment, however, is intended to affect legally the claims, if any,

of any person or entity not a Party to this Agreement.’”” Id. at

1227. The FSA expressly provided that neither the agree-

ment itself “nor any evidence of negotiations [t]hereunder,

shall be offered or received in evidence in this Action, or any

other action or proceeding, for any purpose other than in an

action or proceeding arising under this Settlement Agree-

ment.” The facts of In re Exxon are similar to the circum-

stances presented in this case and support our conclusion that

the Third District erred in holding that the FSA barred the

Engle Class’s punitive damages claim.

2. Punitive Damages Award

Although we conclude that the Third District erred in

applying the doctrine of res judicata to bar the Engle Class’s

punitive damages claim, we must vacate the classwide puni-

tive damages award because we unanimously agree with the

Third District that the trial court erred in allowing the jury to

determine a lump sum amount before it determined the

amount of total compensatory damages for the class. As a

matter of law, the punitive damages award violates due proc-

ess because there is no way to evaluate the reasonableness of

the punitive damages award without the amount of compen-

satory damages having been fixed. The amount awarded is

also clearly excessive because it would bankrupt some of the

defendants. A majority of the Court further concludes that

the trial court erred in allowing the jury to consider entitle-

ment to punitive damages during the Phase I tnal. We ad-

dress these issues separately.

17a

A. Phase I Finding on Entitlement to Punitive Dam-

ages

The last question on the Phase I verdict form asked the

jury to determine whether “[u]nder the circumstances of this

case, ... the conduct of any Defendant rose to a level that

would permit a potential award or entitlement to punitive

damages.” The jury answered “yes” with respect to each of

the defendants. In Phase II-B, the jury awarded a total of

$145 billion in punitive damages to the class.

The Third District ruled that the trial erred in awarding

classwide punitive damages “without the necessary findings

of liability and compensatory damages.” Engle II, 853 So:2d

at 450. A majority of the Court (Anstead, Pariente, Lewis,

and Quince) concludes that an award of compensatory dam-

ages is not a prerequisite to a finding of entitlement to puni-

tive damages. Compensatory and punitive damages serve

distinct purposes. As the United States Supreme Court has

explained:

The former are intended to redress the concrete loss

that the plaintiff has suffered by reason of the de-

fendant’s wrongful conduct. The latter, which have

been described as “quasi-criminal,” operate as “pri-

vate fines” intended to punish the defendant and to

deter future wrongdoing. A jury’s assessment of the

extent of a plaintiff's injury is essentially a factual

determination, whereas its imposition of punitive

damages is an expression of its moral condemna-

tion.

Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532

U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (cita-

tions omitted).

Because a finding of entitlement to punitive damages is

not dependent on a finding that a plaintiff suffered a specitic

injury, an award of compensatory damages need not precede

a determination of entitlement to punitive damages. There-

18a

fore, we conclude that the order of these determinations is

not critical. See Jenkins v. Raymark Indus., Inc., 782 F.2d

468, 474 (Sth Cir.1986).

A different majority of the Court (Wells, Anstead, Pari-

ente, and Bell) concludes that under our decision in Ault v.

Lohr, 538 So.2d 454, 456 (Fla.1989), a finding of liability is

required before entitlement to punitive damages can be de-

termined, and that liability is more than a breach of duty. A

finding of liability necessarily precedes a determination of

damages, but does not compel a compensatory award. For

example, in Ault, the jury found that the defendant had com-

mitted an assault and battery but awarded $0 in compensa-

tory damages and $5000 in punitive damages. See id. at 455.

Thus, unlike the Phase I jury in this case, the jury in Ault

found that the plaintiff had proved the underlying cause of

action but did not suffer any compensable damage.

Although we appeared to use “breach of duty” and “li-

ability” interchangeably in Ault, the Court expressly adopted

the principles set forth in dicta in Lassiter v. International

Union of Operating Engineers, 349 So.2d 622 (Fla.1976).

Specifically, we stated that

[n]ominal damages are awarded to vindicate an in-

vasion of one’s legal rights where, although no

physical or financial injury has been inflicted, the

underlying cause of action has been proved to the

satisfaction of a jury. Accordingly, the establish-

ment of liability for a breach of duty will support an

otherwise valid punitive damage award even in the

absence of financiai loss for which compensatory

damages would be appropriate.

Ault, 538 So.2d at 455 (some emphasis supplied) (quoting

Lassiter, 349 So.2d at 625-26).

In this case, the Phase I verdict did not constitute a

“finding of liability” under Ault. This is evidenced by the

fact that had the jury found for Tobacco on the legal cause

19a

and reliance issues during Phase II, there would have been no

opportunity for the jury to award the named plaintiffs dam-

ages of any type. In other words, Phase II findings for To-

bacco on legal causation and reliance would have precluded

the jury from awarding compensatory or punitive damages.

It was error for the trial court to allow the jury to consider en-

titlement to punitive-damages before the jury found that the

plaintiffs had established causation and reliance.

In Phase I, the jury decided issues related to Tobacco’s

conduct but did not consider whether any class members re-

lied on Tobacco’s misrepresentations or were injured by To-

bacco’s conduct. As the Third District noted, the Phase I

jury “did not determine whether the defendants were liable to

anyone.” Engle II, 853 So.2d at 450. It was therefore error

for the Phase I jury to consider whether Tobacco was liable

for punitive damages.

B. Excessiveness

Even if it were not error to determine entitlement to pu-

nitive damages in Phase I, it was clear error to allow the jury

to go beyond mere entitlement and award classwide punitive

damages when total compensatory damages had not been de-

termined. Under Florida law, a trial court’s determination of

whether a damage award is excessive, requiring a remittitur

or a new trial, is reviewed by an appellate court under an

abuse of discretion standard. See St. John v. Coisman, 799

So.2d 1110, 1114 (Fla. 5th DCA 2001). However, a trial

court’s determination as to whether a punitive damage award

exceeds the boundaries of due process as guaranteed by the

Unites States Constitution is reviewed by a court under a de

novo standard. See Cooper Indus., 532 U.S. at 436, 121

S.Ct. 1678.

Florida law requires that an appellate court review a pu-

nitive damages award to make certain that the manifest

weight of the evidence does not render the amount of puni-

tive damages assessed out of all reasonable proportion to the

eee Tee Ce, ee ee ey Tee tet eee

20a

malice, outrage, or wantonness of the tortious conduct. See

Arab Termite & Pest Control of Fla., Inc. v. Jenkins, 409

So.2d 1039, 1043 (Fla.1982). Additionally, an award must

be reviewed to ensure that it bears some relationship to the

defendant’s ability to pay and does not result in economic

castigation or bankruptcy of the defendant. See Bould v.

Touchette, 349 So.2d 1181, 1186 (Fla.1977).

In the past, we have not discussed whether punitive

damages awards must bear some reasonable relation to com-

pensatory damages. See Lassiter v. Int’] Union of Operating

Eng’rs, 349 So.2d 622, 626 (Fla.1977); see also Ault, 538

So.2d at 456; Bankers Multiple Line Ins. Co. v. Farish, 464

So.2d 530, 533 (Fla.1985); Arab Termite, 409 So.2d at 1043.

For example in Arab Termite, we stated that punitive dam-

ages “are to be measured by the enormity of the offense, en-

tirely aside from the measure of compensation for the injured

plaintiff.” 409 So.2d at 1043. However, we now hold, con-

sistent with United States Supreme Court decisions after Ault

that recognize due process limits on punitive damages, that a

review of the punitive damages award includes an evaluation

of the punitive and compensatory amounts awarded to ensure

a reasonable relationship between the two.

The United States Supreme Court has stated that a re-

view of a punitive damages award must include consideration

of three guideposts to determine whether the award is uncon-

stitutionally excessive:

(1) the degree of reprehensibility of the defendant’s

misconduct; (2) the disparity between the actual or

potential harm suffered by the plaintiff and the puni-

tive damages award; and (3) the difference between

the punitive damages awarded by the jury and the

civil penalties authorized or imposed in comparable

cases.

State Farm Mutual Auto. Ins.Co. v. Campbell, 538 U.S. 408,

418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (citing BMW

2la

of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct.

1589, 134 L.Ed.2d 809 (1996)).

The second guidepost is determinative in this case. As

the United States Supreme Court has explained regarding this

second factor:

[W]e have been reluctant to identify concrete consti-

tutional limits on the ratio between harm, or poten-

tial harm, to the plaintiff and the punitive damages

award. Gore, 517 U.S., at 582, 116 S.Ct. 1589

(“[W]e have consistently rejected the notion that the

constitutional line is marked by a simple mathe-

matical formula, even one that compares actual and ~

potential damages to the punitive award”); TXO

[Production Corp. v. Alliance Resources Corp., 509

U.S.] at 458[, 113 S.Ct. 2711]. We decline again to

impose a bright-line ratio which a punitive damages

award cannot exceed. Our jurisprudence and the

principles it has now established demonstrate, how-

ever, that, in practice, few awards exceeding a sin-

gle-digit ratio between punitive and compensatory

damages, to a significant degree, will satisfy due

process. In [Pacific Mutual Life Insurance Co. v. ]

Haslip, in upholding a punitive damages award, we

concluded that an award of more than four times the

amount of compensatory damages might be close to

the line of constitutional impropriety. 499 U.S., at

23-24[, 111 S.Ct. 1032]. We cited that 4-to-1 ratio

again in Gore. 517 U.S., at 581[, 116 S.Ct. 1589].

The Court further referenced a long legislative his-

tory, dating back over 700 years and going forward

to today, providing for sanctions of double, treble,

or quadruple damages to deter and punish. Id., at

581, and n. 33[, 116 S.Ct. 1589]. While these ratios

are not binding, they are instructive. They demon-

strate what should be obvious: Single-digit multipli-

ers are more likely to comport with due process,

22a

while still achieving the State’s goals of deterrence

and retribution, than awards with ratios in range of

500 to 1, id., at 582[, 116 S.Ct. 1589], or, in this

case, of 145 to 1.

Nonetheless, because there are no rigid bench-

marks that a punitive damages award may not sur-

pass, ratios greater than those we have previously

upheld may comport with due process where “a par-

ticularly egregious act has resulted in only a small

amount of economic damages.” Ibid.; see also ibid.

(positing that a higher ratio might be necessary

where “the injury is hard to detect or the monetary

value of noneconomic harm might have been diffi-

cult to determine”). The converse is also true, how-

ever. When compensatory damages are substantial,

then a lesser ratio, perhaps only equal to compensa-

tory damages, can reach the outermost limit of the

due process guarantee. The precise award in any

case, of course, must be based upon the facts and

circumstances of the defendant’s conduct and the

harm to the plaintiff.

In sum, courts must ensure that the measure of

punishment is both reasonable and proportionate to

the amount of harm to the plaintiff and to the gen-

eral damages recovered.

Campbell, 538 U.S. at 424-26, 123 S.Ct. 1513. Thus, the

amount of compensatory damages must be determined in ad-

vance of a determination of the amount of punitive damages

awardable, if any, so that the relationship between the two

may be reviewed for reasonableness.

In this case, the district court stated that without having

total compensatory damages determined it would be “impos-

sible to determine whether punitive damages bear a ‘reason-

able’ relationship to the actual harm inflicted on the plain-

tiff.” Engle II, 853 So.2d at 451. We agree. The trial plan

23a

allowed a lump sum determination of punitive damages for

the entire class when compensatory damages had been de-

termined only for the three individual class representatives.

This approach does not provide a reviewing court with an

adequate starting point to compare the lump sum punitive

damages amount to compensatory dama‘zes to ensure there is

some reasonable relationship. Accordingly, even if there was

no error in allowing the Phase I jury to find entitlement to

punitive damages, the classwide punitive damages award

must be reversed.*

3. Law of the Case-Class Certification

In concluding that the Engle Class must be decertified,

the Third District in Engle II ruled that the “‘predominance’

or ‘commonality’ requirement is not satisfied, where claims

involve factual determinations unique to each plaintiff.” 853

So.2d at 445. The district court explained that “common

questions” did not predominate over individual issues be-

cause the choice of law analysis would require examination

of numerous different state laws governing different individ-

ual claims. See id. at 449. The court also concluded that

class representation would not be “superior” to individual

suits because: (1) individualized issues of liability, affirma-

tive defenses, and damages outweighed any common issues

in the case; (2) each class member had unique and different

experiences, which would necessitate litigation of substan-

tially separate issues, including legal causation, specific

medical causation, reliance, and awareness of risks; and (3)

* We also conclude that the punitive damages award was clearly

excessive under the limitation based on ability to pay established

by our precedent because it is “so inordinately large as obviously

to exceed the maximum limit of a reasonable range within which

the jury may properly operate.” Lassiter, 349 So.2d at 627. A

comparison of the amounts awarded and the financial worth as-

signed to each company by the Engle Class’s expert clearly dem-

onstrates that the award would result in an unlawful crippling of

the defendant companies.

24a

individualized choice of law issues would cause class pro-

ceedings to be unmanageable. See id. at 445-47.

We conclude that the Third District erred in nullifying its

previous affirmance of the trial court’s certification order.

Contrary to the Third District’s conclusion, Florida Rule of

Civil Procedure 1.220(d)({1) did not authorize the subsequent

(and different) panel of appellate judges to simply substitute

its judgment for that of the prior panel and reverse the trial

court’s certification order after the trial court entered its final

judgment after Phase II. See Engle Ii, 853 So.2d at 443 n.4.

A class is normally certified at an early stage of the pro-

ceedings, certainly before trial, and typically before discov-

ery is completed. Rule 1.220(d)(1) provides an avenue for

reexamining certification if subsequent discovery shows that

circumstances have changed. See Int’l Longshoremen’s

Ass’n, Deep Sea Local 1408 v. Fisher, 860 So.2d 1078, 1078

(Fla. lst DCA 2003) (affirming the trial court’s nonfinal or-

der Certifying a class but noting that “because the order is in-

terlocutory, it may be revisited by the trial court should cir-

cumstances change”). Rule 1.220(d)(1) was not designed to

allow a district court to decertify a class, contrary to its pre-

vious affirmance of class certification and after notice to

thousands of Floridians, a two-year trial, and an entry of final

judgment.

Moreover, under the doctrine of law of the case, the

Third District would have been justified in reversing its pre-

vious ruling in Engle I only if it concluded that the prior rul-

ing would have resulted in a clear manifest injustice. See

Juliano, 801 So.2d at 106 (“[A]n appellate court has the

power to reconsider and correct an erroneous ruling that has

become the law of the case where a prior ruling would result

in a ‘manifest injustice.””) (quoting Strazzulla v. Hendrick,

177 So.2d 1, 4 (Fla.1965)).

Law of the case “requires that questions of law actually

decided on appeal must govern the case in the same court and

25a

the trial court, through all subsequent stages of the proceed-

ings.” Juliano, 801 So.2d at 105. The Third District recently

reiterated the purpose of the law of the case doctrine in a de-

cision holding that the doctrine precluded relitigation of the

propriety of class action treatment: “[P]oints of law adjudi-

cated in a prior appeal are binding in order to promote stabil-

ity of judicial decisions and to avoid piecemeal litigation.”

State, Dep’t of Revenue v. Bridger, 935 So.2d 536, 538, 539

(Fla. 3d DCA 2006) (quoting Bueno v. Bueno de Khawly,

677 So.2d 3, 4 (Fla. 3d DCA 1996)).

The law of the case applies in subsequent proceedings as

long as there has been no change in the facts on which the

mandate was based. Specifically, we have recognized that

an appellate court should reconsider a point of law

previously decided on a former appeal only as a

matter of grace, and not as a matter of right; and that

an exception to the general rule binding the parties

to “the law of the case” at the retrial and at all sub-

sequent proceedings should not be made except in

unusual circumstances and for the most cogent rea-

sons-and always, of course, only where “manifest

injustice” will result from a strict and rigid adher-

ence to the rule.

Strazzulla v. Hendrick, 177 So.2d 1, 4 (Fla. 1965). We have

also cautioned that “the exception to the rule should never be

allowed when it would amount to nothing more than a sec-

ond appeal on a question determined on the first appeal.” Id.

(emphasis supplied).

We conclude that no circumstances existed that justified

the subsequent panel’s reconsideration of the prior Third Dis-

trict decision approving class certification, which all parties

and the trial court relied on to govern the continuation of the

class action. On this issue, the analysis of the Engle II court

was flawed in several respects. First, the Engle II court ig- —

nored the trial court’s pretrial ruling that only Florida law

26a

would apply when it stated that the “choice-of-law analysis

in the present case will require examination of numerous sig-

nificantly different state laws governing the different plain-

tiffs’ claims.” Engle II, 853 So.2d at 449. Second, none of

the cases from other jurisdictions cited by the Third District

in Engle II to justify decertification was in the procedural

posture of the present case.”

This case came before the Third District in Engle II after

it had affirmed the class certification and after the conclusion

of a trial on all common issues. Thus, there is no need to en-

gage in an abstract analysis of the propriety of separate pro-

ceedings on common limited liability issues. Invalidating the

completed class action proceedings on manageability and su-

* See, e.g., Barnes v. American Tobacco Co., 161 F.3d 127 (3d

Cir.1998) (affirming district court’s decertification); Castano _v.

American Tobacco Co., 84 F.3d 734 (Sth Cir.1996) (reversing

class certification on interlocutory appeal); Estate of Mahoney v.

R.J. Reynolds Tobacco Co., 204 F.R.D. 150 (S.D. Iowa 2001) (de-

nying motion to certify class action); Badillo v. American Tobacco

Co., 202 F.R.D. 261 (D. Nev. 2001) (denying motions to certify

class action); Guillory v. American Tobacco Co., No. 97 C 8641,

2001 WL 290603 (N.D. Ill. Mar. 20, 2001) (denying motion to cer-

tify class action); Aksamit v. Brown & Williamson Tobacco Corp.,

No. C.A. 6:97-3636-24, 2001 WL 1809378 at *9 (D.S.C. Dec. 29,

2000) (denying a motion to certify class action); Thompson v.

American Tobacco Co., Inc., 189 F.R.D. 544 (D. Minn.1999) (de-

nying motion to certify class action); Insolia v. Philip Morris Inc.,

186 F.R.D. 535, 546 (W.D. Wis. 1998) (denying motion to certify

class action); Emig v. American Tobacco Co., 184 F.R.D. 379, 389

(D. Kan.1998) (denying motion to certify class action); Barreras

Ruiz _v. American Tobacco Co., 180 F.R.D. 194, 197 (D.P.R.

1998) (denying motion to certify class action); Smith v. Brown &

Williamson Tobacco Corp., 174 F.R.D. 90, 94 (W.D.Mo.1997)

(denying motion to certify class action); Philip Morris, Inc. v. An-

geletti, 358 Md. 689, 752 A.2d 200 (2000) (reversing trial court’s

class certification after trial plan had been established but before

trial commenced).

27a

periority grounds after a trial has occurred does not accord

with common sense or logic.

Of course, this Court is not bound by the Third District’s

law of the case. See Juliano, 801 So.2d at 105 (“The doctrine

of the law of the case requires that questions of law actually

decided on appeal must govern the case in the same court and

the trial court, through all subsequent stages of the proceed-

ings.”). Nevertheless, we conclude that the trial court did not

abuse its discretion in certifying the class. See Fla. Dep’t of

Agric. & Consumer Servs. v. City of Pompano Beach, 829

So.2d 928, 929 (Fla. 4th DCA 2002) (“The trial court’s order

certifying the class is subject to review under an abuse of

discretion standard.”); Bouchard Transp. Co. v. Updegraff,

807 So.2d 768, 771 (Fla. 2d DCA 2002) (“[T]he determina-

tion that a case meets the requirements of a class action is a

factual finding that is within the trial court’s discretion and

will be reversed on appeal only if an abuse of discretion is

shown.”).

4. Three-Phase Trial Plan—Decertification

We agree with the Third District that problems with the

three-phase trial plan negate the continued viability of this

class action. We conclude that continued class action treat-

ment for Phase III of the trial plan is not feasible because in-

dividualized issues such as legal causation, comparative

fault, and damages predominate. See Fla. R. Civ. P.

1.220(b)(3) (“A claim or defense may be maintained on be-

half of a class if the court concludes that the prerequisites of

subdivision (a) are satisfied, and that ... the claim or defense

is not maintainable under either subdivision (b)(1) or (b)(2),

but the questions of law or fact common to the claim or de-

fense of the representative party and the claim or defense of

each member of the class predominate over any question of

law or fact affecting only individual members of the

es 2

28a

Florida Rule of Civil Procedure 1.220(d)(4)(A) provides

that “[w]hen appropriate ... a claim or defense may be

brought or maintained on behalf of a class concerning par-

ticular issues.” Although no Florida cases address whether it

is appropriate under rule 1.220(d)(4)(A) to certify class

treatment for only limited liability issues, several decisions

by federal appellate courts applying a similar provision in the

Federal Rules of Civil Procedure provide persuasive author-

ity for this approach.

Federal Rule of Civil Procedure 23(c)(4)(A) provides

that “[w]Jhen appropriate ... an action may be brought or

maintained as a class action with respect to particular issues.”

In determining whether the predominance requirement of

Federal Rule of Civil Procedure 23(b)(3)'° has been met, sev-

eral United States Courts of Appeals have concluded that un-

der federal rule 23(c)(4)(A) a trial court can properly separate

liability and damages issues, certifying class treatment of li-

ability while leaving damages to be determined on an indi-

vidual basis. See Olden v. LaFarge Corp., 383 F.3d 495, 509

(6th Cir.2004) (stating that the district court can properly “bi-

furcate the issue of liability from the issue of damages, and if

liability is found, the issue of damages can de decided by a

special master or by another method”); Carnegie v. House-

hold Int’l, Inc., 376 F.3d 656, 661 (7th Cir.2004) (noting that

“Rule 23 allows district courts to devise imaginative solu-

tions to problems created by the presence in a class action

litigation of individual damages issues”); In_re_ Visa

Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 139-

41 (2d Cir.2001) (noting that “[c]ommon issues may pre-

dominate when liability can be determined on a class-wide

'© Federal rule 23(b)(3) is similar to Florida rule 1.220(b)(3) and

provides in pertinent part that “[a]n action may be maintained as a

class action if the prerequisites of subdivision (a) are satisfied, and

in addition ... the court finds that the questions of law or fact

common to the members of the class predominate over any ques-

tions affecting only individual members.”

29a

basis, even when there are some individualized damage is-

sues” and that “[t]here are a number of management tools

available to a district court to address any individualized

damages issues that might arise in a class action”); Valentino

v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.1996)

(“Even if the common questions do not predominate over the

individual questions so that class certification of the entire

action is warranted, Rule 23 authorizes the district court in

appropriate cases to isolate the common issues under Rule

23(c)(4)(A) and proceed with class treatment of these par-

ticular issues.”); see also Slaven v. BP America, Inc., 190

F.R.D. 649, 658 (C.D. Cal. 2000) (maintaining class status

“solely for the determination of liability” and st-ting that

“{i]f plaintiffs prevail on the liability portion of their case, the

Court will determine the appropriate method of adjudicating

causation and damages issues at that juncture”).'!

The Second and Seventh Circuits have also stated that

the determination that class treatment of damages issues is

inappropriate can be made after a finding on liability. See

Carnegie, 376 F.3d at 661 (explaining that one option avail-

able to the district courts for solving problems created by the

presence in a class action litigation of individual damages is-

'' But see Castano v. American Tobacco Co., 84 F.3d 734, 745

n.21 (Sth Cir.1996) (concluding that the interactiou of (b)(3) and

(c)(4) requires that “a cause of action, as a whole, must satisfy the

predominance requirement of (b)(3) and that (c)(4) is a housekeep-

ing rule that allows courts to sever the common issues for a class

trial”). Both the Second and Fourth Circuits have noted the con-

flict on this issue. See Gunnells v. Healthplan Services, Inc., 348

F.3d 417, 444 (4th Cir.2003) (“[T]here is a circuit conflict as to

whether predominance must be shown with respect to an entire

cause of action, or merely with respect to a specific issue, in order

to invoke (c)(4).”); Robinson v. Metro-North Commuter R.R. Co.

267 F.3d 147, 167 n.12 (2d Cir.2001) (noting that “an alternate

understanding of the interaction of (b)(3) and (c)(4) to that set forth

in Castano has been advanced elsewhere”’).

30a

sues is to decertify the class after the liability trial); Visa

Check/MasterMoney Antitrust Litigation, 280 F.3d at 141

(same). In Carnegie, the Seventh Circuit discussed the man-

ageability of a class action alleging RICO violations and ex-

plained:

Often ... there is a big difference from the stand-

point of manageability between the liability and

remedy phases of a class action. The number of

class members need have no bearing on the burden-

someness of litigating a violation of RICO.

Whether particular members of the class were de-

frauded and if so what their damages were are an-

other matter, and it may be that if and when the de-

fendants are determined to have violated the law

separate proceedings of some character will be re-

quired to determine the entitlements of the individ-

ual class members to relief. That prospect need not

defeat class treatment of the question whether the

defendants violated RICO. Once that question is

answered, if it is answered in favor of the class, a

global settlement . . . will be a natural and appropri-

ate sequel. And if there is no settlement, that won’t

be the end of the world. Rule 23 allows district

courts to devise imaginative solutions to problems

created by the presence in a class action litigation of

individual damages issues.

376 F.3d at 661 (citations omitted). In Visa

Check/MasterMoney Antitrust Litigation, the Second Circuit

concluded that the district court adequately addressed indi-

vidual issues that might arise from certifying the class by

specifically recognizing “its ability to modify its class certifi-

cation order, sever liability and damages, or even decertify

the class if such an action ultimately became necessary.” 280

F.3d at 141.

In this case, the Phase I trial has been completed. The

pragmatic solution is to now decertify the class, retaining the

3la

jury’s Phase I findings other than those on the fraud and in-

tentional infliction of emotion distress claims, which in-

volved highly individualized determinations, and the finding

on entitlement to punitive damages questions, which was

premature. Class members can choose to initiate individual

damages actions and the Phase I common core findings we

approved above will have res judicata effect in those trials.

See Daenzer v. Wayland Ford, Inc., 210 F.R.D. 202, 205

(W.D. Mich. 2002) (entering summary judgment on the issue

of liability, decertifying the class on the issue of damages and

stating that “[t]he Court’s decision as to liability is res judi-

cata in any damages action individual class members decide

to bring”); McCormack v. Abbott Labs., 617 F.Supp. 1521

(D. Mass. 1985) (concluding that plaintiff's strict liability

claim was barred by judgment for the defendants entered in a

prior class action, which the plaintiff joined, before that class

action was decertified).!*

We disagree with Justice Wells’ conclusion that bifurcat-

ing the trial in this manner violates article I, section 22 of the

Florida Constitution. See concurring in part and dissenting

in part op. at 1285-87. We recognize the concerms expressed

by the Fifth Circuit Court of Appeals in Castano v. American

Tobacco Co., 84 F.3d 734, 750 (Sth Cir.1996), in which that

court held that bifurcation of issues in a nationwide smoking

class action violated the Seventh Amendment to the United

? Justice Wells asserts that allowing limited Phase I findings to

stand sets “harmful and confusing precedent.” Concurring in part

and dissenting in part op. at 1284. However, the procedural pos-

ture of this case is unique and unlikely to be repeated. Further,

many of the questions posed by Justice Wells are answered in this

opinion. As we state in both the opening and closing of the opin-

ion, class members (i.e. those individuals who fit the class descrip-

tion as of the November 21, 1996, cut-off date) must file individ-

uai actions against the defendants within one year of the issuance

of this Court’s mandate to benefit from the Phase | finding we up-

hold herein.

32a

States Constitution.'? However, subsequent to its decision in

Castano, the Fifth Circuit held that the risk of infringing on

the parties’ Seventh Amendment rights is not significant and

is in fact avoided where the liability issues common to all

class members are tried together by a single initial jury, and

issues affecting individual class members such as causation,

damages, and comparative negligence are tried by different

juries. See Mullen v. Treasure Chest Casino, LLC, 186 F.3d

620, 628-29 (Sth Cir.1999). Recognizing that it had previ-

ously reached a different conclusion in Castano, the Fifth

Circuit explained that the circumstances of Castano were dis-

tinct from those present in Mullen:

In Castano, we were concermed that allowing a sec-

ond jury to consider the plaintiffs’ comparative neg-

ligence would invite that jury to reconsider the first

jury’s findings concerning the defendants’ conduct.

We believe that such a risk has been avoided here

by leaving all issues of causation for the phase-two

jury. When a jury considers the comparative negli-

gence of a plaintiff, “the focus is upon causation. It

is inevitable that a comparison of the conduct of

plaintiffs and defendants ultimately be in terms of

causation.” Lewis v. Timco, Inc., 716 F.2d 1425,

1431 (Sth Cir.1983) (en banc); see id. (permitting

the use of comparative negligence in strict liability

claims). Thus, in considering comparative negli-

gence, the phase two jury would not be reconsider-

ing the first jury’s fmdings of whether Treasure

Chest’s conduct was negligent or the [vessel] un-

seaworthy, but only the degree to which those con-

'? When this Court has interpreted article I, section 22 of the Flor-

ida Constitution, it found guidance in the Seventh Amendment of

the United States Constitution while recognizing that the Seventh

Amendment does not apply to actions brought in state court. See

Dep’t of Revenue v. The Printing House, 644 So.2d 498, 500 (Fla.

1994),

33a

ditions were the sole or contributing cause of the

class member’s injury. Because the first jury will

not be considering any issues of causation, no Sev-

enth Amendment implications affect our review of

the district court’s superiority finding.

Mullen, 186 F.3d at 628-29 (emphasis supplied).

The Fifth Circuit’s reasoning in Mullen is persuasive. In

this case, although the jury decided issues common to all

class members, none involved whether, or the degree to

which, the defendants’ conduct was the sole or contributing

cause of the class members’ injuries, which is the pertinent

question in applying the doctrine of comparative negligence.

We thus follow the reasoning of Mullen and conclude that

the trial plan in this case did not violate Tobacco’s rights un-

der article I, section 22 of the Florida Constitution.

5. Arguments of Engle Class’s Counsel

We conclude that, under the totality of the circum-

stances, reversal is not warranted based on the remarks made

by the Engle Class’s counsel, Stanley Rosenblatt. Neverthe-

less, we must again remind counsel that we will not condone

improper arguments. Inappropriate jury arguments in this

type of case risk wasting significant judicial resources. Here,

trial counsel ventured very close to the line of reversible error

on a number of occasions in his attempt to counteract oppcs-

ing counsel’s contentions that Tobacco acted lawfully and to

communicate his message to the jury that “legal doesn’t

make it right.” However, we conclude that under the totality

of the circumstances these comments did not rise to the level

of reversible error.

If the issue of an opponent’s improper argument has

been properly preserved by objection and motion for mistrial,

the trial court should grant a new trial if the argument was

“so highly prejudicial and inflammatory that it denied the

opposing party its right to a fair trial.” Tanner v. Beck, 907

So.2d 1190, 1196 (Fla. 3d DCA 2005); see also Murphy v.

34a

Int’I Robotic Sys., Inc., 766 So.2d 1010, 1013 n.2 (Fla. 2000)

(stating the Court’s decision addressing unobjected-to argu-

ment “does not impact the legal standards applicable to con-

sideration of the issue that has been properly preserved by

objection and motion for mistrial, which remains whether the

comment was highly prejudicial and inflammatory”). To jus-

tify granting a motion for a new trial based on unobjected-to

improper argument, the trial court must find that the im-

proper argument is of such a nature as to reach into the valid-

ity of the trial itself to the extent that the verdict could not

have been obtained but for such comments. See Murphy,

766 So.2d at 1029-30. A trial court’s order granting or deny-

ing a motion for a new trial based on either objected-to or

unobjected-to improper argument is reviewed for abuse of

discretion. See id. at 1030-31 (“[T]he appellate court must

... apply an abuse of discretion standard in reviewing either

the trial court’s grant or denial of a new trial based on the

unobjected-to closing argument.”); Bocher v. Glass, 874

So.2d 701, 704 (Fla. 1st DCA 2004) (reviewing a trial court’s

order denying a motion for rehearing based on objected-to

improper argument for an abuse of discretion).

In denying Tobacco’s motions for mistrial, the trial court

stated:

The Court has carefully considered the Motions for

Mistrial in this cause and has determined that cura-

tive instructions to the jury and/or motions to strike

have been granted as requested by the movant, for

most of the motions, and in any event the cumula-

tive effect of the alleged error, was not in the opin-

ion of the Court, sufficient to have so influenced the

jury as to affect the outcome of the case considering

the length of the trial, the number of witnesses pre-

sented, the quality and quantity of the testimony, the

huge amount of documentary evidence, and specifi-

cally the substance of the alleged remarks. The jury

in this case rendered three verdicts, each based upon

35a

a mountain of evidence over a period of two years in

three separate trials. The court feels confident, that

although some remarks of counsel may have been

uncalled for, or subject to objection, they were not

SO egregious as to require a new trial.

Engle F.J., No. 94-08273 CA-22 order at 17. However, the

Third District held that the comments “caused irreparable

prejudice and require reversal.” Engle II, 853 So.2d at 458.

Specifically, the district court determined that this was ac-

complished in two stages:

First, by inflaming the jury with racial pandering

and pleas for nullification of the law to secure enti- ~

tlement to punitive damages. And second, by re-

moving responsibility from the jury for the size of

the award, through arguing the award would be sub-

ject to appellate review and that it would not be paid

out in a lump sum, but rather through a payout

scheme.

Id. at 459. The district court then proceeded to list all of

counsel’s arguments it determined were improper.

Significantly, the manner in which the district court has

set forth and presented the offending argument, stringing the

comments together, would certainly cause a reader to assume

that the comments are prejudicial. However, this is not

proper analysis for review under the totality of the circum-

stances. Context is crucial. To determine whether the chal-

lenged statements and arguments were in fact prejudicial, the

statements cannot be evaluated in isolation but must be

piaced and evaluated in context. See State v. Jones, 867

So.2d 398, 400 (Fla.2004) (“[T]his Court has evaluated the

prosecutor’s action in context rather than focusing on the

challenged statement in isolation.”).

We emphasize that the duration of this trial does not

mean that a comment or several comments standing alone

would not warrant reversal. Nonetheless, the length of the

36a

trial is relevant to the analysis because the alleged improper

statements were not made on the same day or contained

within a two- or three-hour closing argument. These state-

ments spanned a two-year period. Some comments were

made during opening statements in Phase I (liability phase)

in October of 1998, some during Phase I closing argument in

June of 1999, and others during the closing statements in

Phase II-B (punitive damages phase) in July of 2000. Many

of the alleged improper comments did not even prompt an

objection by Tobacco."

We begin with the Third District’s conclusion that plain-

tiffs’ counsel engaged in “racial pandering” and that the

jury’s “runaway” verdict was evidently one inflamed by pas-

sion and prejudice. A single reference to “race” in the Phase

I opening statement was in the context of the consumer stud-

ies that the defendants conducted that divide American con-

sumers into groups. Mr. Rosenblatt’s comment that “they

study races” was part of a statement about the study of the

American consumer: “They study kids; they study races;

they divide the American consumer into groups to sell their

product.” In fact, when the defense objected on the basis that

those comments were “only designed to prejudice the jury,”

the trial court rejected this argument because that was “not

the context of which it’s being used.” Mr. Rosenblatt then

followed up with the statement that this is an industry that

“divides the American consumer into groups: white, black,

'* This Court has recognized:

Harmfulness in this context also carries a requirement that

the comments be so highly prejudicial and of such collective

impact as to gravely impair a fair consideration and determina-

tion of the case by the jury. Passing remarks of little conse-

quence in the scope of a lengthy trial should find little sympathy

if no contemporaneous objection is voiced. The extensiveness

of the objectionable material is a factor to be considered in the

harmfulness analysis.

Murphy, 766 So.2d at 1029-30.

37a

Jewish, Christian, young, old.” The trial court did not abuse

its discretion by determining that these statements were made

in an attempt to show how Tobacco sells its products and ad-

vertises to different groups, not to impermissibly prejudice

the jury.

As to the Phase I closing argument, we agree that a se-

ries of improper remarks occurred when counsel injected race

into his argument:

Are there two sides to every question? And the im-

mediate gut reaction is: Yeah, yeah. You want to

be fair and you say: Right, there’s two sides to

every question. What’s the other side to the Holo-

caust? What is the other side to slavery?

An objection was made and sustained. While one could posit

that this was merely an attempt to explain to the jury that

there are not always two sides, several minutes later Mr.

Rosenblatt returned to a race-based theme by referring to

Rosa Parks:

Let’s discuss the concept of legal in the context of

America. I noticed in last week’s newspaper, Rosa

Parks, who is 86 years old, got the Congressional

Gold Medal because in 1955....

Mr. Rosenblatt got no further because an objection was made

and sustained. Undaunted by the trial court’s ruling, Mr.

Rosenblatt continued:

We look back in history. We look back in history.

The whole civil rights movement of the ‘60s was

fighting against unjust laws. Dr. King was arrested

in the ‘60s....

An objection was made and overruled and Mr. Rosenblatt

continued:

In this building, in this building, a temple to the law,

they were—there were drinking fountains which

said Whites Only.

38a

Once again, an objection was made and overruled.

There is absolutely no justification for this series of re-

marks, which appears to compare the tobacco industry with

slavery and, by invoking civil rights leaders Rosa Parks and

Martin Luther King, appealed to the jury’s sense of outrage

for the injustices visited upon African-Americans in this

country. We condemn these tactics of Mr. Rosenblatt. His

attempt to incite racial passions was conduct unbecoming an

attorney practicing in our state courts.

Nevertheless, we note that the trial court sustained objec-

tions to several of these remarks and no motion for mistrial

was made or curative instruction requested. In addition,

there was no further race-based argument during the remain-

der of the closing, and, significantly, no such references were

made in any of Mr. Rosenblatt’s Phase I rebuttal argument.

We next discuss the Third District’s conclusion that Mr.

Rosenblatt’s Phase I closing argument was also replete with

impermissible references to jury nullification. The relevant

comments were made in response to Tobacco’s preemption

defense: that the warnings on the cigarettes were as provided

by law. Although compliance with the federal warnings pre-

empted any claim based on failure to warn, it did not elimi-

nate the other causes of action that the jury had to consider in

Phase I. As for the comment “legal don’t make it right,” Mr.

Rosenblatt was referring to the answers given by the CEO for

Brown & Williamson, Nick Brookes. Mr. Brookes was

asked what he would do with his product if he became con-

vinced that cigarettes caused cancer and heart disease. His

reply was it would not affect his business because “it’s a le-

gal product.” Mr. Rosenblatt’s response was that “legal

don’t make it right.” No objection was made. In fact, this

theme continued in rebuttal when Mr. Rosenblatt explained

without objection:

It’s a legal product. There is no question about it.

But a legal product does not mean that the cigarette

39a

companies are not responsible when their product

causes harm and death to their customers. And be-

ing legal is a very relative term.

These arguments were not an attempt to tell the jury to ignore

the law.

We conclude, under the totality of the circumstances, in-

cluding that several objections were sustained and a-number

of the arguments were unobjected-to, that the defendants did

not sustain their burden of proving reversible error under

Murphy or that the trial court abused its discretion in denying

the motion for new trial as to Phase I. As to Phase II, we

note that no arguments have been raised as to impermissible

comments during Phase II-A, in which the jury determined

compensatory damages as to the three class representatives.

Moreover, a review of the verdicts reveals that each verdict

reflected a careful and differentiated analysis as to compara-

tive fault and individual damages and in no way justifies the

Third District’s overall conclusion that this was a runaway

jury inflamed by race because of the arguments directed to

the four of the six members of the jury who were African-

American. As to Phase II-B, because we are reversing the

punitive damages award we do not separately review each of

these arguments except to again note that no race-based ar-

guments were made.

6. ‘Reversal of Final Judgments in Favor of the Three

Class Representatives

The issue of whether two of the three Engle Class repre-

sentatives are properly included within the class as certified —

by the trial court and approved on appeal involves the appli-

cation of the law to a set of undisputed facts. “[WJhere the

facts are essentially undisputed, the legal effect of the evi-

dence will be a question of law.” Town of Palm Beach v.

Palm Beach County, 460 So.2d 879, 882 (Fla. 1984). Ques-

tions of law are reviewed de novo.

40a

The trial court originally certified this class on October

31, 1994. This order provided for notice to the members of

the class by way of publication and indicated that the trial

court was to hold an additional hearing “to discuss the con-

tent, timing and manner of providing notice.” At that time,

the class was described as:

All United States citizens and residents, and their

survivors, who have suffered, presently suffer or

who have died from diseases and medical conditions

caused by their addiction to cigarettes that contain

nicotine. The class shall specifically exclude offi-

cers, directors and agents of the [d]efendants.

Engle I, 672 So.2d at 40. The class certification was af-

firmed by the Third District on January 31, 1996, but the

class membership was altered by the district court to include

only Florida citizens and residents. See id. at 42. Subse-

quent to the district court’s modification limiting the class to

Florida citizens, the trial court issued an amended order on

November 21, 1996, recertifying the more limited class.

The final class description could lead one to believe that

the class is open-ended because there is no stated cut-off date

for membership. However, an open-ended class would not

allow for notice and an opportunity to opt out as required by

rule 1.220(d)(2) and may implicate potential class members’

right of access to the courts under article I, section 21 of the

Florida Constitution.

Further, without the ability to opt out, potential plaintiffs

could argue that they should be ailowed to intervene after a

judgment in favor of the class or, alternatively, that they are

not bound by an adverse judgment. Cf. Katz v. Carte

Blanche Corp., 496 F.2d 747, 759 (3d Cir.1974) (explaining

that prior to the adoption of Federal Rule of Civil procedure

23(c\(2) some courts suggested that “it would be proper to

make the class action determination and permit class mem-

bers to intervene after the defendant’s liability had been de-

4la

termined in the single lawsuit,” that this “one-way interven-

tion had the effect of giving collateral estoppel effect to the

judgment of liability in a case where the estoppel was not

mutual,” and that the notice and opt-out provisions were

adopted to give mutual estoppel effect to the judgment on li-

ability). A finite class is necessary to avoid muit?ple similar

lawsuits and to make legal process more effective and expe-

ditious, important goals of a class action suit. See Tenney v.

City of Miami Beach, 152 Fla. 126, 11 So.2d 188, 189

(1942) (“The very purpose of a class suit is to save a multi-

plicity of suits, to reduce the expense of litigation, to make

legal processes more effective and expeditious, and to make

available a remedy that would not otherwise exist.”).

The plain language of the class certification indicates

that the trial court anticipated that the class would be cut off

or limited to the date of final certification. The phrase “who

have suffered, presently suffer or have died” supports the

view that the class should include only those people who

were affected in the past or who were presently suffering at

the time the class was recertified by the trial court. More-

over, although not controlling, federal case law supports the

interpretation that the date of final class certification should

be presumed the proper cut-off date for class membership.

See Sosna v. Iowa, 419 U.S. 393, 463 (1975) (“A litigant

must be a member of the class which he or she seeks to rep-

resent at the time the class action is certified by the district

court.”) (citing Bailey v. Patterson, 369 U.S. 31 (1962));

Davis v. Ball Mem’! Hosp. Ass’n, 753 F.2d 1410, 1420 (7th

Cir.1985) (“To be a proper class representative, the named

plaintiff must be a member of the class at the time the class

action is certified.”).

In our view, it is reasonable to conclude that the cut-off

date for class membership is November, 21, 1996, the date

the trial court recertified the class and issued an amended or-

der conforming the class description to the Third District’s

decision. It was with this November 21, 1996, order that the

42a

circuit court first ordered that notice to potential class mem-

bers be published in newspapers and magazines circulated in

Florida. The language employed by the United States Su-

preme Court in Sosna, although not addressing a scenario

such as we face today, is not contrary to our conclusion.

Relying upon Davis v. Ball Memorial Hospital Associa-

tion, the district court held that “{s]ince Farnan was diag-

nosed in April 1996, and Della Vecchia was diagnosed in

February 1997, they are clearly excluded from the class and

the judgment in their favor must be reversed.” Engle II, 853

So.2d at 454 n. 23 (emphasis supplied). However, “diagno-

sis” as a qualifying factor does not appear anywhere in the

description of the class certified. Rather, the class is de-

scribed as those “who have suffered, presently suffer or have

died from diseases and medical conditions.” Engle I, 672

So.2d at 40 (emphasis supplied). The critical event is not

when an illness was actually diagnosed by a physician, but

when the disease or condition first manifested itself.

Our review of the medical records demonstrates that

class representative Farnan was formally diagnosed with lung _

cancer in March of 1996, clearly demonstrating her disease

had manifested by that time. Therefore, she was a proper

member of the class at the time of the circuit court’s Novem-

ber 21, 1996, order. As for class representative Della Vec-

chia, it was noted by her doctors in early 1997 that she had a

past medical history of “COPD” and significant hyperten-

sion. Thus, Della Vecchia’s medical records indicate that she

had been suffering from a tobacco-related disease prior to the

time of certification and is also properly included as a class

member. We therefore quash the district court’s reversal of

judgment entered in favor of class representatives Farnan and

Della Vecchia and hereby order that the judgments be rein-

stated.

In addition to reversing the judgments in favor of Farnan

and Della Vecchia, the district court also held that the judg-

ment in favor of Tobacco should have been entered as to all

43a

of class representative Amodeo’s claims. See Engle II, 853

So.2d at 455 n.23. We agree that the district court properly

held that all judgments in favor of class representative

Amodeo were barred by the applicable statute of limitations.

6. [sic] Final Judgments Entered in Favor of the Three

Class Representatives in Favor of Liggett and Brooke

As noted above, the final judgments entered in favor of

class representative Amodeo, including those against Liggett

and Brooke, must be reversed because Amodeo’s claims are

barred by the statute of limitations. We also agree with the

Third District that the judgments against defendants Liggett

and Brooke in favor of Farnan and Del Vecchia must be re-

versed because there was insufficient evidence to support

these judgments. As the Third District explained, “it is un-

disputed that the Liggett defendants did not manufacture or

sell any of the products that allegedly caused injury to the in-

dividual plaintiff representatives. It is also undisputed that

the jury found the Liggett defendants zero percent at fault

with respect to each of the named plaintiffs.” Engle Il, 853

So.2d at 466 n. 46. A defendant who is found to be zero

percent at fault for a plaintiffs damages cannot be held

jointly and severally liable for those damages. We agree

with the Third District that this inconsistency in the verdict

requires reversal of the judgments entered against Liggett and

Brooke. See id.

CONCLUSION

In conclusion, we approve the Third District’s holding

that the $145 billion award of punitive damages must be va-

cated. However, we disapprove the Third District’s conclu-

sion that the class action punitive damages claims were

barred by the FSA.

We also disapprove the Third District’s holding that the

trial court abused its discretion in denying Tobacco’s motion

for a mistrial due to improper argument by the Engle Class’s

counsel. We uphold the award of compensatory damages as

44a

to plaintiffs Farnan and Della Vecchia, and approve the re-

versal of the entry of judgment in favor of Amodeo. How-

ever, the judgments against defendants Liggett and Brooke

must reversed.

We approve the Phase I findings for the class as to Ques-

tions 1 (that smoking cigarettes causes aortic aneurysm,

bladder cancer, cerebrovascular disease, cervical cancer,

chronic obstructive pulmonary disease, coronary heart dis-

ease, esophageal cancer, kidney cancer, laryngeal cancer,

lung cancer (specifically, adenocarinoma, large cell carci-

noma, small ceil carcinoma, and squamous cell carcinoma),

complications of pregnancy, oral cavity/tongue cancer, pan-

creatic cancer, peripheral vascular disease, pharyngeal can-

cer, and stomach cancer), 2 (that nicotine in cigarettes is ad-

dictive), 3 (that the defendants placed cigarettes on the mar-

ket that were defective and unreasonably dangerous), 4(a)

‘that the defendants concealed or omitted material informa-

tion not otherwise known or available knowing that the mate-

rial was false or misleading or failed to disclose a material

fact concerning the health effects or addictive nature of

smoking cigarettes or both), 5(a) (that the defendants agreed

to conceal or omit information regarding the health effects of

cigarettes or their addictive nature with the intention that

smokers and the public would rely on this information to

their detriment), 6 (that all of the defendants sold or supplied

cigarettes that were defective), (7) (that all of the defendants

sold or supplied cigarettes that, at the time of sale or supply,

did not conform to representations of fact made by said de-

fendants), and 8 (that all of the defendants were negligent).

Therefore, these findings in favor of the Engle Class can

stand.

The class consists of all Florida residents fitting the class

description as of the trial court’s order dated November 21,

1996. However, we conclude for the reasons explained in

this opinion that continued class action treatment is not feasi-

ble and that upon remand the class must be decertified. Indi-

45a

vidual plaintiffs within the class will be permitted to proceed

individually with the findings set forth above given res judi-

cata effect in any subsequent trial between individual class

members and the defendants, provided such action is filed

within one year of the mandate in this case. We remand this

case to the Third District for further proceedings consistent

with this opinion.

It is so ordered.

ANSTEAD and PARIENTE, JJ., concur.

LEWIS, C.J., concurs in part and dissents in part with an

opinion, in which QUINCE, J., concurs.

WELLS, J., concurs in part and dissents in part with an

opinion, in which BELL, J., concurs.

CANTERO, J., recused.

LEWIS, C.J., concurring in part and dissenting in part.

I concur in the majority’s opinion and most of the rea-

soning employed therein. However, I cannot agree with the

majority’s analysis and conclusion with regard to entitlement

to punitive damages. For the reasons that follow, in my view

Florida law clearly requires that the jury’s determination of

entitlement to punitive damages which resulted in Phase I

must stand.

PHASE I FINDINGS ON ENTITLEMENT

TO PUNITIVE DAMAGES

Although I do agree with the majority’s conclusion that

the Third District misapplied our decision in Ault v. Lohr,

538 So.2d 454, 456 (Fla. 1989), in holding that compensatory

damages must be determined before a jury can consider enti-

tlement to punitive damages, I cannot agree with the major-

ity’s view that the trial court erred in allowing the jury to

consider the entitlement of the class to punitive damages dur-

ing Phase I of the trial based on the majority’s conclusion

46a

that proof of liability, which includes both reliance and cau-

sation, is a missing predicate here to the determination of en-

titlement to punitive damages. For the reasons that follow, I

would allow the jury’s determination of punitive conduct and

of entitlement to punitive damages to stand for the class to be

later applied as the case proceeds.

This Court has previously addressed “whether a plaintiff

can recover punitive damages where the factfinder has found

a breach of duty but no compensatory or actual damages have

been proven.” Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989).

In Ault, we clearly recognized that “an express finding of a

breach of duty should be the critical factor in an award of pu-

nitive damages.” Id. Further, this Court has held that “a

finding of liability alone will support an award of punitive

damages ‘even in the absence of financial loss for which

compensatory damages would be appropriate.” Id. (quoting

Lassitter v. Int’] Union of Operating Eng’rs, 349 So.2d 622,

626 (Fla.1977)); see also Mortellite v. Am. Tower, L.P., 819

So.2d 928, 935 (Fla. 2d DCA 2002) (concluding that, based

on the trial court’s finding of breach of duty, the appellant

was ultimately entitled to a punitive damage award even if,

after remand, it was again determined that he was not entitled

to compensatory damages); Horizon Leasing v. Leefmans,

568 So.2d 73, 75 (Fla. 4th DCA 1990) (“[A] plaintiff can re-

cover punitive damages where the fact finder has found a

breach of duty but no compensatory or actual damages have

been proven.”).

In this matter, Tobacco asserts, and the majority agrees,

that the jury in Phase I only determined that Tobacco

breached its duty and that a breach of duty does not consti-

tute “a finding of liability” under Ault. Contrary to this as-

sertion, the Phase I jury in the present case found Tobacco

responsible with regard to the common core issues pertaining

to liability and general causation. This is supported by the

fact that the trial plan only allowed the jury to proceed to the

next stage of Phase I-a determination of entitlement to puni-

47a

tive damages-if liability was found. The final judgment

awarding compensatory damages to the three class represen-

tatives and punitive damages to the entire class was only pos-

sible after liability was determined because a judgment for

damages could not be entered if there had been no finding of

liability. See Oliveira v. Ilion Taxi Aero LTDA, 830 So.2d

241, 242 (Fla. 4th DCA 2002) (recognizing “as does Ault,

that as a matter of law a judgment for damages cannot be en-

tered where there is no finding of liability”); Cont’) Assur-

ance Co. v. Davis, 538 So.2d 542, 544 (Fla. Ist DCA 1989)

(concluding that “absent the jury’s finding of liability on the

underlying fraud issue, there can be no valid award of puni-

tive damages,” citing Ault); Cloutier v. Cent. Contracting,

Inc., 418 So.2d 1233, 1234 (Fla. Sth DCA 1982) (concluding

that a verdict finding damages without finding liability can-

not support the damage award). Pursuant to Ault, the jury’s

finding of liability and responsibility with regard to the

common core issues alone in Phase I could support the jury’s

determination that the class was entitled to punitive damages,

notwithstanding that compensatory damages have ‘not yet

been awarded to all class members. In fact, a final judgment

awarding punitive damages has been affirmed notwithstand-

ing that the judgment awarded no compensatory damages.

See Russin v. Richard F. Greminger, P.A., 563 So.2d 1089

(Fla. 4th DCA 1990) (citing Ault). A finding of liability, not

compensatory damages, is the sine qua non of entitlement to

a punitive damage award.

In support of its argument that compensatory damages

are a prerequisite for awarding punitive damages, Tobacco

relies, as did the subsequent panel in Engle II, on only a con-

curring opinion in Ault, in which it was stated:

The crucial element in determining whether puni-

tive damages may be awarded absent an award of

compensatory damages is proof of the underlying

cause of action. Where actual damage is an essen-

tial element of the underlying cause of action, an

48a

award of compensatory damages must be a prereq-

uisite to an award of punitive damages. This case

involved the torts of assault and battery, which do

not require proof of actual damage.

853 So.2d at 457 (Ehrlich, C.J., concurring specially). How-

ever, a majority of this Court did not agree with that state-

ment and did not join with that concurring opinion and,

therefore, it is of no precedential value whatsoever. See

Greene v. Massey, 384 So.2d 24, 27 (Fla.1980) (“A concur-

ring opinion does not constitute the law of the case nor the

basis of the ultimate decision unless concurred in by a major-

ity of the Court.... The special concurring opinion has no

precedential value and it cannot serve to condition or limit

the concurrence in the [majority] opinion. .. .”); Lindsay v.

Cotton, 123 So.2d 745, 746 (Fla. 3d DCA 1960) (“A concur-

ring opinion has no binding effect as precedent; such an opin-

ion represents only the personal view of the concurring judge

and does not constitute the law of the case.””). Moreover, nei-

ther the Ault court nor any other Florida court has ever ad-

dressed Ault in the class action context. Due to the unique-

ness and purpose of the class action device, which allows a

jury to determine liability with regard to common issues first

before determining individual damages, in my view, the

jury’s verdict in Phase I finding Tobacco liable with regard to

the common issues is a sufficient predicate to constitute a

“finding of liability” under Ault. This conclusion is sup-

ported by the fact that had the jury in Phase I found Tobacco

not liable with regard to the common issues of liability and

general causation each class member’s claim at that point

would have been rendered moot, thereby precluding Phase II.

In addition, a key factor in considering whether compen-

satory damages should be awarded prior to a determination

of entitlement to punitive damages in a class action is

whether the awarding of one is critical to awarding the other.

In other words, is the relative timing of the awards the deter-

49a

minative factor? I conclude that the timing of the awards

should not be the absolute controlling factor.

Compensatory and punitive damages serve distinct pur-

poses. See Arab Termite & Pest Control of Fla., Inc. v. Jen-

kins, 409 So.2d 1039, 1042-43 (Fla.1982). In Arab Termite

we recognized the distinction between compensatory and pu-

nitive damages, specifically:

[T]he amount of compensation for loss is an entirely

separate matter from the amount of punitive dam-

ages. Punitive damages apply to wrongdoing not

covered by the criminal law, where the private inju-

ries inflicted partake of public wrongs. They are to

be measured by the enormity of the offense, entirely

aside from the measure of compensation for the in-

jured plaintiff.

Jenkins, 409 So.2d at 1042-43. In awarding punitive dam-

ages, the focus is on the defendant’s conduct, not on the con-

duct of the plaintiff or the extent of the injury to be compen-

sated. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468,

474 (Sth Cir.1986). While the purpose of compensatory

damages is “to restore the injured party to the position it

would have been [in] had the wrong not been committed,”

Laney v. Am. Equity Inv. Life Ins. Co., 243 F. Supp. 2d

1347, 1354 (M.D. Fla. 2003), the purpose of punitive dam-

ages “is not to further compensate the plaintiff, but to punish

the defendant for its wrongful conduct and to deter similar

misconduct by it and other actors in the future.” Owens-

Corning Fiberglas Corp. v. Ballard, 749 So.2d 483, 486

(Fla.1999). “Punitive damages are appropriate when a de-

fendant engages in conduct which is fraudulent, malicious,

deliberately violent or oppressive, or committed with such

gross negligence as to indicate a wanton disregard for the

rights of others.” W.R. Grace & Co.-Conn. v. Waters, 638

So.2d 502, 503 (Fla.1994). The punitive damage inquiry,

unlike that for compensatory damages, “focuses primarily on

50a

the egregiousness of the defendant’s conduct.” Watson v.

Shell Oil Co., 979 F.2d 1014, 1019 (Sth Cir.1992).

Moreover, the United States Supreme Court has also

recognized the distinct purposes of compensatory and puni-

tive damages:

The former are intended to redress the concrete loss

that the plaintiff has suffered by reason of the de-

fendant’s wrongful conduct. The latter, which have

been described as “quasi-criminal,” operate as “‘pri-

vate fines” intended to punish the defendant and to

deter future wrongdoing. A jury’s assessment of the

extent of a plaintiff's injury is essentially a factual

determination, whereas its imposition of punitive

damages is an expression of its moral condemna-

tion.

Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532

U.S. 424, 432 (2001) (citations omitted). Punitive damages

“are not compensation for injury. Instead, they are private

fines levied by civil juries to punish reprehensible conduct

and to deter its future occurrence.” Gertz v. Robert Welch,

Inc., 418 U.S. 323, 350 (1974). Punitive damages “serve a

broader function; they are aimed at deterrence and retribu-

tion.” State Farm Mutual Auto. Ins.Co. v. Campbell, 538

U.S. 408, 416 (2003).

Entitlement to punitive damages, therefore, aimed at de-

terrence and retribution for a public wrong, is distinct and not

dependent on the specific injury suffered by the class mem-

ber. While no plaintiff in the Engle Class may ultimately re-

ceive an award of punitive damages without proving that he

or she suffered actual damages in Phase III, the determination

with regard to entitlement to punitive damages on a class ba-

sis need not be made concurrently with an evaluation of a

particular claimant. See Sterling v. Velsicol Chemical Corp.,

855 F.2d 1188, 1217 (6th Cir.1988) (“[T]he district court

need not defer its award of punitive damages prior to deter-

Sla

mining compensatory damages for the entire class of 128 in-

dividuals. So long as the court determines the defendant’s li-

ability and awards representative class members compensa-

tory damages, the district court may in its discretion award

punitive damages to the class as a whole at that time.”)

Moreover, although the Unites States Supreme Court has

recognized that “compensatory damages and punitive dam-

ages are typically awarded at the same time by the same de-

cisionmaker,” it has never held that entitlement to these dam-

ages must absolutely be assessed at the same time. Cooper

Indus., Inc., 532 U.S. at 432 (emphasis supplied). Therefore,

in my view, the relative timing of the assessment of entitle-

ment to punitive damages and a compensatory damage award

is not critical. See Jenkins, 782 F.2d at 474. But see Allison

v. Citgo Petroleum Corp., 151 F.3d 402, 417-18 (Sth Cir.

1998).

It is important to highlight the distinction between a jury

determination that a class is entitled to punitive damages be-

fore compensatory damages have been actually awarded ver-

sus an actual jury award of a specific amount to a class as a

lump sum punitive damage award before compensatory dam-

ages have been determined. In my view, the former com-

ports with the requirements of due process while the latter, as

the majority correctly concludes, does not. However, con-

trary to the conclusion reached by the majority, in my view,

the trial court did not abuse its discretion in allowing the jury

in Phase I of the trial plan to determine whether the class was

entitled to punitive damages after liability regarding the

common issues had been determined. Notwithstanding the

above, I concur in the majority’s holding which disapproves

the trial court’s trial plan in Phase II-B in which it allowed a

lump sum punitive damage award to be determined prior to a

determination of individual class members’ compensatory

damage awards, which will occur in Phase III, based on due

process concerns. A simple determination of entitlement to

punitive damages on a class basis does not violate Tobacco’s

52a

due process rights because no class member will be awarded

punitive damages until the class member has been awarded

compensatory damages in Phase III. See In re New Orleans

Train Car Leakage Fire Litigation, 795 So.2d 364, 379 (La.

Ct. App. 2001) (determining that there was no due process

violation where the quantum of punitive damages was deter-

mined when the quantum of compensatory damages had been

determined as to only 20 of 8,047 plaintiff class members).

Ultimately, Tobacco will not be required to pay a class mem-

ber punitive damages until that class member demonstrates

his or her entitlement to compensatory damages in Phase III.

Tobacco will have the opportunity to be heard at each Phase

III trial with regard to why that individual plaintiff is not en-

titled to compensatory damages. To date, Tobacco has not

been required to pay any class member a punitive damage

award. Therefore, because Tobacco in Phase III will be

heard with regard to each class member’s compensatory

damage claim before they are required to pay that class

member any punitive darhages, I conclude that Phases | and

II-A of the trial court’s trial plan did not violate Tobacco’s

due process rights, and that the jury’s finding with regard to

entitlement to punitive damages should stand. The majority

today has inflicted serious harm to class actions which in-

volve egregious behavior and has done so contrary to the

clear law of Florida.

CONCLUSION

For the above reasons, I respectfully dissent from the

portion of the majority opinion that reasons and holds that it

was error for the trial court to allow the jury to make a de-

termination of the entitlement of the class to punitive dam-

ages during Phase I of the trial. If the majority had properly

analyzed and discussed the availability of the class action

status here the contrary result on the punitive issue would

have been obvious. I concur in the majority’s decision in all

other respects.

QUINCE, J., concurs.

53a

WELLS, J., concurring in part and dissenting in part.

I concur with the following in the majority decision and

opinion:

1. Approving the Third District Court of Appeal’s re-

versal of the $145 billion class action punitive damages

award.

2. Approving the Third District’s reversal of the judg-

ment on behalf of plaintiff Amodeo.

3. Holding that the Third District misapplied Young v.

Miami Beach Improvement Co., 46 So.2d 26 (Fla.1950), to

the extent that the Third District’s decision would bar indi-

vidual smokers’ claims. I do not, though, join in the major-

ity’s opinion to the extent that it implies that there could be a

proper class action for smokers’ claims.

4. Hoiding that the trial court erred in allowing the jury

to find entitlement to punitive damages in Phase I of the trial.

5. Holding that the class be decertified.

I dissent as to all other parts of the majority decision and

opinion for the reasons that I will write about in this opinion.

In sum, I would affirm the remainder of the Third District’s

extensive opinion, except that I would provide that any indi-

vidual who can show that he or she relied on being a member

of the class certified by the trial court in this case and based

on that reliance did not bring an individual action would be

allowed to file suit within one year of our decision becoming

final.'°

'S There is no record of how many, if any, unnamed individuals re-

lied upon being members of the class and thus did not file an inde-

pendent action. I conclude that the latest date that this class could

have closed was November 21, 1996, so that individuals would

have to have claims which were not barred on that date. To avoid

barring any of those individuals who did in good faith rely upon

being members of the class, 1 would order that the statute of limita-

le i, i, ee, OO DE Te eet

54a

ANALYSIS >

Overview

The bottom line is that this was not properly a class ac-

tion. The Third District’s decision that this was not a proper

class action is in accord with the overwhelming majority of

courts from numerous jurisdictions. The Third Circuit in

Barnes v. American Tobacco Co., 161 F.3d 127, 143 (d

Cir.1998), explains why:

In decertifying the class, the District Court decided

that “too many individual issues exist which prevent

this case from proceeding as a class action.” Barnes

[v. American Tobacco Co.], 176 F.R.D. [479,] at

500. As noted, the District Court found that addic-

tion, causation, and affirmative defenses all pre-

sented individual issues not properly decided in a

class action. We believe that addiction, causation,

the defenses of comparative and contributory negli-

gence, the need for medical monitoring and the stat-

ute of limitations present too many individual issues

to permit certification. As in Amchem [Products,

Inc. v. Windsor, 521 U.S. 591 (1997) ], plaintiffs

were “exposed to different ... products, for differ-

ent amounts of time, in different ways, and over dif-

ferent periods.” See Amchem, [521 U.S. at 624]

(citation omitted). These disparate issues make

class treatment inappropriate. [n.19]

[n. 19.] We note that the individual issues

raised by cigarette litigation often preclude class

tions can be avoided for those individuals or claims filed for one

year from the date of our decision becoming final. An individual

would have to plead and prove the avoidance as a reply to a statute

of limitation affirmative defense pursuant to Florida Rule of Civil

Procedure 1.100(a). I believe that this procedure would conform

to what this Court allowed in Lance v. Wade, 457 So.2d 1008

(Fla.1984).

a AO AE TON MATER P RA

55a

certification. See, e.g., Castano v. The American

Tobacco Co., 84 F.3d 734 (Sth Cir.1996) (decer-

tifying 23(b)(3) class because individual issues

predominated); Smith v. Brown & Williamson

Tobacco Corp., 174 F.R.D. 90 (W.D. Mo. 1997)

(denying certification under 23(b)(1), (2) & (3)

because of the presence of individual issues);

Ruiz v. The American Tobacco Co., 180 F.R.D.

194 (D. Puerto Rico 1998) (denying certification

under 23(b)(2) and 23(b)(3) because “cigarette

addiction” claims raised too many individual is-

sues). Significantly, no federal appeals court has

upheld the certification [of] a class of cigarette

smokers or reversed a District Court’s refusal to

certify such a class. In some state cases, how-

ever, plaintiff smokers have succeeded in certifi-

cation. See Richardson v. Phillip Morris, No.

96145050/CE212596[, 1998 WL 35164799]

(Baltimore Cir. Ct. Jan. 28, 1998) (certifying

class of Maryland smokers seeking compensatory

and punitive damages); R.J. Reynolds Tobacco

Co. v. Engle, 672 So.2d 39 (Fla.App. 3 Dist.

1996), rev. denied, 682 So.2d 1100 (1996) (certi-

fication of state-wide class of tobacco smokers

suing for damages caused by smoking).'®

Castano_v. American Tobacco Co., 84 F.3d 734 (Sth

Cir.1996), was the initial case which comprehensively exam-

ined whether a class action could be pursued in tobacco liti-

gation. While Castano was a class action claiming a nation-

wide class and the present case was limited to a Florida class,

'© Barnes was decided, and thus this footnote was written, before

the Maryland Court of Appeals (Maryland’s court of last resort)

held that the class action in the Maryland case cited was not proper

and decertified the class in Philip Morris v. Angeletti, 358 Md.

689, 752 A.2d 200 (2000).

56a

much of the analysis is applicable to the present case.'’ The

Castano court stated:

The Castano class suffers from many of the diffi-

culties that the Georgine [v. Amchem Prods., 83

F.3d 610 (3d Cir.1996),] court found dispositive.

The class members were exposed to nicotine

through different products, for different amounts of

time, and over different time periods. Each class

member’s knowledge about the effects of smoking

differs, and each plaintiff began smoking for differ-

ent reasons. Each of these factual differences im-

pacts the application of legal rules such as causa-

tion, reliance, comparative fault, and other affirma-

tive defenses.

Id. at 742-43 n.15. The United States Supreme Court’s

analysis in Amchem Products, Inc. v. Windsor, 521 U.S. 591,

624-25 (1997), instructs on the point in rejecting a settlement

of an asbestos litigation class action. Other cases with simi-

lar holdings are: Philip Morris USA Inc. v. Hines, 883 So.2d

292 (Fla. 4th DCA 2003); Estate of Mahoney v. R.J. Rey-

nolds Tobacco Co., 204 F.R.D. 150, 156 (S.D. Iowa 2001);

Badillo v. American Tobacco Co., 202 F.R.D. 261, 264 (D.

Nev. 2001); Guillory v. American Tobacco Co., No. 97 C

8641, 2001 WL 290603 at *20, *24, *27 (N.D. Ill. Mar.20,

2001); Aksamit v. Brown & Williamson Tobacco Corp., No.

C.A. 6:97-3636-24, 2001 WL 1809378 at *24 (D.S.C.

Dec.29, 2000); Thompson v. American Tobacco Co., 189

F.R.D. 544, 551 (D. Minn. 1999); Hansen v. American To-

bacco Co., No. LR-C-96-881, 1999 WL 33659388, *2, 1999

U.S. Dist. LEXIS 11277 at *7 (E.D. Ark. July 21, 1999); In-

solia v. Philip Morris Inc., 186 F.R.D. 535, 546 (W.D. Wis.

1998); Emig v. American Tobacco Co., 184 F.R.D. 379, 389

(D. Kan. 1998); Barreras Ruiz v. American Tobacco Co., 180

'7 See Susan E. Kearns, Decertification of Statewide Tobacco

Class Actions, 74 N.Y.U. L.Rev. 1336 (1999).

57a

F.R.D. 194, 197 (D.P.R.1998); Smith v. Brown & William-

son Tobacco Corp., 174 F.R.D. 90, 94 (W.D. Mo. 1997); In

re Simon II, 407 F.3d 125 (2d Cir. 2005); Arch v. American

Tobacco Co., Inc., 175 F.R.D. 469 (E.D. Pa. 1997).

I recognize that a problem exists in this case because of

the interlocutory appeal to the Third District in which a dif-

ferent panel of the Third District approved a class action for a

class composed of Florida smokers. But I also recognize that

the 1996 decision by the Third District was made at a time

when this case was only in the pleading stage. At the time of

the 1996 decision, there was no trial plan with Phases I, II,

and III. In fact, the three individuals who became the class

representatives and who presented claims for compensatory

damages, Farnan, Della Vecchia, and Amodeo, were added

as class representatives after the Third District’s 1996 deci-

sion. Though the trial court proceeded on the basis of the

1996 Third District decision, for the reasons stated by the

Second District in Toledo v. Hillsborough County Hospital

Authority, 747 £o.2d 958 (Fla. 2d DCA 1999), the 1996 de-

cision in the interlocutory appeal should not be given law-of-

the-case effect: “Due to the trial court’s broad authority to

alter or amend orders determining class certification, the doc-

trine of law of the case ‘applies only sparingly in class certi-

fication proceedings.’ Fair Housing for Children Coalition,

Inc. v. Pornchai Int’l, 890 F.2d 420, at 421 (9th Cir.1989)

(unpublished disposition).” Toledo, 747 So.2d at 960. The

present majority apparently agrees because the majority ulti-

mately decertifies the class.

In what I conclude will be harmful and confusing prece-

dent, the majority saves some of the jury findings in Phase I

of the class action before decertifying the class. I do not join

in doing that; rather, I would follow the overwhelming ma-

jority of courts and hold that this was not a proper class ac-

tion. The result of the majority “retaining the jury’s Phase I

findings” is not, as the majority asserts, “pragmatic,” major-

ity op. at 1269; rather, it is problematic. Under the majority’s

58a

holding, the class closed a decade ago. Who are the indi-

viduals that are to get the use of these “findings”? How will

a trial court make that determination? Does the individual

only have to have an injury manifest prior to November 21,

1996, or does the individual have to have notice of the class

action? Does the majority’s holding mean that the statute of

limitation has not run on any Florida resident’s claim whose

injury manifested prior to November 21, 1996? How long do

individuals have to file such individual actions? How are

these findings to be used in cases in which the findings are

used? I assume that any individual cases filed on claims in

which injuries manifested on November 22, 1996, or later do

not get the benefit of these findings, so that there will be two

classes of claimants. These are only a few of the issues

which arise in application of the majority’s holding.

Punitive Damages

As previously stated, I concur in the majority’s holding

that agrees with the Third District that the trial court erred in

allowing the jury to consider entitlement to punitive damages

during the Phase I trial. I do not concur, however, with the

majority’s opinion that an award of compensatory damages is

not a prerequisite to a finding of entitlement to punitive dam-

ages and that an award of compensatory damages need not

precede a determination of entitlement to punitive damages.

I do not concur because the majority’s opinion is in conflict

with the Supreme Court’s decisions in BMW of North Amer-

ica, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d

809 (1996), and State Farm Mutual Automobile Insurance

Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155

L.Ed.2d 585 (2003).

The Supreme Court has made it clear that punitive dam-

ages must be in ratio to compensatory damages. In fact, the

majority quotes a passage from the Campbell decision which

mates this clear. It necessarily follows, then, that there must

lse eempensatory damages in order for punitive damages to

be in ratio to compensatory damages. Thus, I conclude that

59a

the majority decision here is in conflict with the Supreme

Court decisions and is thereby erroneous.

Law-of-the-Case Class Certification

I have previously stated why the law-of-the-case doc-

trine should not apply to the Third District’s 2003 review of

this case, which followed the Phase I and Phase II jury trials

and judgments. Florida Department of Transportation v.

Juliano, 801 So.2d 101 (Fla. 2001), should not be applied in

this class action. Moreover, since the majority ends up de-

certifying the class, I fail to understand the point of the ma-

jority’s discussion of this issue. Majority op. at 1265-67.

The Third District in its 2003 opinion correctly explains

why the law-of-the-case doctrine does not apply. Liggett

Group, Inc. v. Engle, 853 So.2d 434, 443 n. 4 (Fla. 3d DCA

2003). Furthermore, as the majority states, “Of course, this

Court is not bound by the Third District’s law of the case.”

Majority op. at 1267.

In the present case, the trial plan was not decided by the

trial court until after the 1996 interlocutory appeal. The de-

fendants objected to the trial plan and moved to decertify the

class. The trial court denied the motion, although it ex-

pressed reservations about the manageability of the case and

predicted that the necessary individual hearings will place a

serious demand upon Florida’s judicial resources. The denial

of the defendant’s motion to decertify was then appealed to

the Third District. The Third District dismissed the appeal

for lack of jurisdiction but expressly stated that the defen-

dants had a night to obtain review of the propriety of the or-

der by plenary appeal from any adverse judgment. Engle,

853 So.2d at 443. But now the majority in this Court makes

the trial plan unreviewable in the district court by applying

the law of the case to the earlier certification. Certainly, the

trial plan should have been reviewable by the district court as

part of a review of the motion to decertify after the trial plan

60a

was ordered.’* It was the trial plan which demonstrated just

how unworkable this class action was and why the class

should have been decertified. It was the trial plan which re-*

sulted in the errors upon which the majority in this Court re-

verses the trial court’s final judgment.

It was the trial plan which resulted in the Phase I jury

deciding whether the defendants were negligent, breached

warranties, were strictly liable, or were guilty of fraud and

misrepresentation, but Phase II decided the claimant’s com-

parative fault. Such a bifurcation of issues violates article I,

section 22 of the Florida Constitution, just as the Fifth Circuit

in Castano v. American Tobacco Co., 84 F.3d 734 (Sth Cir.

1996), found that such a bifurcation of issues violated the

Seventh Amendment to the United States Constitution.

The Castano court explained why a bifurcation of the

comparative negligence issue from the defendant’s negli-

gence issue with a trial by separate juries is a violation of the

Seventh Amendment to the United States Constitution:

Another factor weighing heavily in favor of indi-

vidual trials is the risk that in order to make this

'8 See William Dodds, Trial Plans Come to Class Action Arena,

226 N.Y. Law J. (Aug. 13, 2001) at 2:

Faced with actions that seek to aggregate claims of in-

creasingly broad and disparate groups of plaintiffs, many courts

across the country now require that plaintiffs, and sometimes

both parties, prepare detailed trial plans at the time of or in ad-

vance of class certification. For example, in In re Ford Motor

Company Vehicle Paint Litigation, 182 F.R.D. 214, 224 (E.D.

La. 1998), the district court required the plaintiff to submit a

trial plan, saying it was constrained from “certifying a class now

and worrying about how to try it later.” Similarly, in South-

western Refining Co., Inc. v. Bernal, 22 S.W.3d 425, 435 (Tex.

2000), the Texas Supreme Court declared that “it is improper to

certify a class without knowing how the claims can and will

-kely be tried,” requiring plaintiffs to submit trial plans prior to

certification.

6la

class action manageable, the court will be forced to

bifurcate issues in violation of the Seventh Amend-

ment. This class action is permeated with individual

issues, such as proximate causation, comparative

negligence, reliance, and compensatory damages.

In order to manage so many individual issues, the

district court proposed to empanel a class jury to ad-

judicate common issues. A second jury, or a num-

ber of “second” juries, will pass on the individual is-

sues, either on a case-by-case basis or through group

trials of individual plaintiffs.

The Seventh Amendment entitles parties to have

fact issues « ecided by one jury, and prohibits a sec-

ond jury from reexamining those facts and issues.

[n. 30] Thus, Constitution allows bifurcation of is-

sues that are so separable that the second jury will

not be called upon to reconsider findings of fact by

the first:

[T]jhis Court has cautioned that separation of is-

sues is not the usual course that should be fol-

lowed, and that the issue to be tried must be so

distinct and separable from the others that a trial

of it alone may be had without injustice. This

limitation on the use of bifurcation is a recogni-

tion of the fact that inherent in the Seventh

Amendment guarantee of a trial by jury is the

general right of a litigant to have only one jury

pass on a common issue of fact. The Supreme

Court recognized this principle in Gasoline Prod-

ucts [Co., Inc. v. Champlin Refining Co., 283

U.S. 494 (1931) J.... The Court explained

... that a partial new trial may not be “properly

resorted to unless it clearly appears that the issue

to be retried is so distinct and separable from the

others that a trial of it alone may be had without

injustice.” Such a rule is dictated for the very

62a

practical reason that if separate juries are allowed

to pass on issues involving overlapping legal and

factual questions the verdicts rendered by each

jury could be inconsistent.

Alabama v. Blue Bird Body Co., 573 F.2d 309, 318

(Sth Cir.1978) (citations and footnotes omitted).

[n. 30] “[N]Jo fact tried by jury, shall be other-

wise re-examined in any Court of the United

States ...” U.S. Const. amend VII.

The Seventh Circuit recently addressed Seventh

Amendment limitations to bifurcation. In [In re]

Rhone-Poulenc [Rorer, Inc.], 51 F.3d [1293] at

1302-03, Chief Judge Posner described the constitu-

tional limitation as one requiring a court to “carve at

the joint” in such a way so that the same issue is not

reexamined by different juries. “The right to a jury

trial . . . is a right have juriable issues determined by

the first jury impaneled to hear them (provided there

are no errors warranting a new trial), and not reex-

amined by another finder of fact.” Id. at 1303.

Severing a defendant’s conduct from compara-

tive negligence results in the type of risk that our

court forbade in Blue Bird. Comparative negli-

gence, by definition, requires a comparison between

the defendant’s and the plaintiff's conduct. Rhone-

Poulenc, 51 F.3d at 1303 (“Comparative negligence

entails, as the name implies, a comparison of the

degree of negligence of plaintiff and defendant.”) At

a bare minimum, a second jury will rehear evidence

of the defendant’s conduct. There is a risk that in

apportioning fault, the second jury could reevaluate

the defendant’s fault, determine that the defendant

was not at fault, and apportion 100% of the fault to

the plaintiff. In such a situation, the second jury

would be impermissibly reconsidering the findings

63a

of a first jury. The risk of such reevaluation is so

great that class treatment can hardly be said to be

superior to individual adjudication.

84 F.3d at 750-51. Every smoker’s case has a substantial

comparative fault defense.

The majority’s opinion approves one jury making the

decision on the defendant’s negligence and a different jury

making a decision on the plaintiff's negligence and compar-

ing the two. The second jury will be required to accept the

first jury’s findings as to the defendant’s negligence and then

in some way compare the defendant’s negligence with the

second jury’s finding as to the plaintiff's negligence. It is

only logical that comparative negligence, which the second

jury will be finding, is an evaluation of how the negligence of

the two parties relate. That can only be accomplished by

weighing the evidence of each party’s negligence as a cause

of the defendant’s negligence, which the majority’s bifurca-

tion of negligence and comparative negligence prevents from

occurring on the basis of one jury’s findings. Similarly, there

is no logical way to decide the issues of misrepresentation

and the element within misrepresentation of reliance by sepa-

rate juries without having the second jury required to accept

the findings of the first jury. Both constitutionally and prac-

tically, these are issues which should be decided by one fact-

finder so that there is consistency in the resolution of the

facts.

The majority states that it will follow the Fifth Circuit’s

two-to-one majority opinion in Mullen v. Treasure Chest Ca-

sino, LLC, 186 F.3d 620, 628-29 (Sth Cir.1999), rather than

the Fifth Circuit’s decision in Castano. I cannot agree.

Mullen was not a smoker’s case. Mullen was a case brought

under the federal Jones Act,'? in which the claims by the in-

dividuals were from the same defective ventilation system in

a floating casino that occurred over the same general period

'? 46 U.S.C. § 688 (1988).

64a

of time. The Mullen majority pointed out that these were

important distinguishing facts from Castano and from the as-

bestos case decided by the Supreme Court in Amchem Prod-

ucts, Inc. Moreover—and very significantly—the Mullen

majority specifically pointed out that as in Treasure Chest,

the defendant in the Mullen case did not raise in the trial

court the Seventh Amendment issue of having one jury con-

sider the defendant’s conduct and another consider the plain-

tiffs’ comparative negligence. I find the dissent in Mullen

which adheres to Castano and In re Rhone-Poulenc Rorer,

Inc., 51 F.3d 1293, 1302-03 (7th Cir.1995), to be the view

which is correct for smokers’ cases in Florida.

Finally, the majority opinion decides that the cut-off date

for class membership should be November 21, 1996. Major-

ity op. at 1274. This was, of course, after the Third District

decision in the interlocutory appeal, which was issued on

January 31, 1996. R.J. Reynolds Tobacco Co. v. Engle, 672

So.2d 39 (Fla. 3d DCA 1996). It is wholly inconsistent for

the majority to apply the law of the 1996 case to prevent the

Third District’s 2003 review of the certification and to also

hold that the cut-off date for the class was after the 1996 re-

view. This results in the actual order of certification being

unreviewable in the district court.

Closing Arguments and Individual Judgments

I dissent from the majority’s decision that the blatantly

improper closing arguments do not require reversal. The

Third District’s decision concerning this offensive argument

was precisely correct. There is no way to read the argument

of plaintiff's counsel other than to conclude that it dwelled

upon issues which are and should be per se reversible error

because the arguments were intended to have jurors make

their decisions on issues which had no relevancy or material-

ity in the case. These arguments were extreme in my view. I

will not join in a decision which affirms judgments which in

part are a result of such arguments.

65a

It is because of the closing arguments that the judgments

for compensatory damages on behalf of Farnan and Della

Vecchia against the defendants other than Liggett and

Brooke” must be reversed. Additionally, the individual ver-

dicts cannot stand because the closing argument in Phase I

was not only materially tainted by racial pandering and pleas

for nullification but was also materially tainted by arguments

which would have only been appropriate in seeking punitive

damages. Since, as the majority has held, it was improper for

the trial court to allow the Phase I jury to consider punitive

damages, the arguments in support of punitive damages were

improper and wrongfully prejudiced the defendants from re-

ceiving a fair trial in Phase I. This is still another reason why

it is error for the majority to allow some of the Phase I jury

findings to stand.

CONCLUSION

For the foregoing reasons, I concur with the majority’s

reversal of the $145 billion judgment; reversal of the judg-

ment in behalf of Amodeo; holding that the Third District

misapplied Young v. Miami Beach Improvement Co., 46

So.2d 26 (Fla.1950); and holding that the trial court erred in

allowing the jury to find entitlement to punitive damages in

Phase I of the trial. I dissent to all other parts of the majority

decision and opinion.

BELL, J., concurs.

Application for Review of the Decision of the District Court

of Appeal — Direct Conflict of Decisions

Third District — Case Nos. 3D00-3206, 3D00-3207,

3D00-3208, 3D00-3210, 3D00-3212, 3D00-3215, and

3D00-3400

© The majority held that the Third District was correct that the

judgments against Liggett and Brooke should be reversed on other

grounds. I agree.

66a

(Dade County)

Stanley M. Rosenblatt and Susan Rosenblatt of Stanley M.

Rosenblatt, P.A., Miami, Florida,

for Petitioners

Alvin Bruce Davis of Steel, Hector and Davis, P.A., Miami,

Florida, Mercer K. Clarke and Kelly A. Luther of Clarke,

Silverglate, Campbell, Williams and Montgomery, Miami,

Florida, Marc E. Kasowitz, Daniel R. Benson and Aaron H.

Marks of Kasowitz, Benson, Torres and Friedman, LLP,

New York, New York, Elliott H. Scherker, Arthur J. Eng-

land, Jr., and David L. Ross of Greenberg Traurig, P.A., Mi-

ami, Florida, Norman A. Coll and Kenneth J. Reilly of

Shook, Hardy and Bacon, LLP, Miami, Florida, Stephen N.

Zack of Zack, Sparber, Kosnitzky, Spratt and Brooks, P.A.,

Miami, Florida, Benjamine Reid and Wendy F. Lumish of

Carlton Fields, P.A., Miami, Florida, Anthony N. Upshaw of

Adorno and Yoss, P.A., Miami, Florida, Renaldy J. Gutierrez

and Kathleen M. Sales of Gutierrez and Associates, Miami,

Florida, Dan K. Webb and Stuart Altschuler of Winston and

Strawn, LLP, Chicago, Illinois, Robert H. Klonoff of Jones

Day, Washington, D.C., Robert C. Heim and Joseph Patrick

Archie of Dechert, LLP, Philadelphia, Pennsylvania, James

R. Johnson and Diane P. Flannery of Jones Day, Atlanta,

Georgia, and Richard A. Schneider of King and Spalding,

LLP, Atlanta, Georgia, Joseph P. Moodhe of Debevoise and

Plimpton, New York, New York, James T. Newsom of

Shook, Hardy and Bacon, LLP, Kansas City, Missouri,

for Respondents

Norwood S. Wilner of Spohrer, Wilner, Maxwell and Mat-

thews, P.A., Jacksonville, Florida on behalf of Tobacco Trial

Lawyers Association; Theodore Jon Leopold of Ricci-

Leopold, P.A., Palm Beach Gardens, Florida, Richard

67a

Frankel, Matthew L. Myers, and Michael Stroud, Washing-

ton, D.C. on behalf of Trial Lawyers for Public Justice and

Public Citizen, the Campaign for Tobacco-Free Kids, and the

American Cancer Society; Stephen P. Teret and Jon S. Ver-

nick, Center for Law and the Public’s Health, Johns Hopkins

Bloomberg School of Public Health, Baltimore, Maryland,

and John B. Ostrow, Miami, Florida on behalf of American

Public Health Association, American Medical Associatioh,

American Academy of Pediatrics, American Heart Associa-

tion, American Lung Association, American Legacy Founda-

tion and Roswell Park Cancer Institute, Sylvester Compre-

hensive Cancer Center/University of Miami Hospital and

Clinics and the Women’s Cancer League of Greater Miami;

Phillip Timothy Howard of Howard and Associates, P.A.,

Tallahassee, Florida, Douglas Blanke, Executive Director,

William Mitchell College of Law, Saint Paul, Minnesota,

Richard A. Daynard, Ph.D., Robert L. Kline and Christopher

Banthin, Northeastern University School of Law, Boston,

Massachusetts on behalf of Tobacco Control Legal Consor-

tium and Tobacco Control Resource Center; Roy C. Young

of Young Van Assenderp, Tallahassee, Florida, John H.

Beisner, John F. Niblock and Jessica Davidson Miller of

O’Melveny and Myers, LLP, Washington, D.C., and Robin

S. Conrad, National Chamber Litigation Center, Inc., Wash-

ington, D.C., on behalf of the Chamber of Commerce of the

United States; Rebecca O’Dell Townsend of Haas, Dutton,

Blackburn, Lewis and Longley, P.L., Tampa, Florida, Daniel

J. Popeo and David Price, Washington, D.C., on behalf of

Washington Legal Foundation and National Association of

Manufacturers,

for Amici Curiae

68a

APPENDIX B

[Opinion of the District Court of Appeal of Florida, Third

District (May 21, 2003)]

LIGGETT GROUP INCORPORATED; Brooke Group

Limited; Philip Morris Incorporated; Council for To-

bacco Research-USA, Incorporated; Tobacco Insti-

tute, Incorporated; Lorillard Tobacco Company; Lor-

illard, Incorporated; Brown & Williamson Tobacco

Corporation; American Tobacco Company; and R.J.

Reynolds Tobacco Company, Appellants,

Vv.

Howard A. ENGLE, M.D., et al., Appellees.

Nos. 3D00-3400, 3D00-3206 to 3D00-3208, 3D00-3210,

3D00-3212, 3D00-3215.

District Court of Appeal of Florida,

Third District.

May 21, 2003.

Rehearing and Rehearing En Banc Denied Sept. 22, 2003.

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 (Chi-

cago, Illinois); Dechert Price & Rhoads, and Robert C. Heim,

and Joseph Patrick Archie (Philadelphia, Pennsylvania), for

Appellant, Philip Morris Incorporated.

69a

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.

Adormo & Yoss, and Anthony N. Upshaw; King & Spal-

ding, 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 Ap-

pellant The Tobacco Institute, Incorporated.

Stanley M. Rosenblatt, and Susan Rosenblatt, for Appel-

lees.

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 com-

panies and industry organizations for alleged smoking related

injuries. The final judgment awarded $12.7 million in com-

pensatory damages to three individual plaintiffs, and $145

billion in punitive damages to the entire class. We reverse

with instructions that the class be decertified.

[. Overview

In May of 1994, six named individuals filed a class ac-

tion complaint seeking damages for injuries allegedly caused

70a

by smoking. A‘ six alleged they were unable to stop smok-

ing 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 bil-

lion 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 “defen-

dants”).'

The class of smokers and their survivors (hereafter col-

lectively 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 survi-

vors, 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 in-

clude Florida smokers only. R.J. Reynolds Tobacco Co. v.

Engle, 672 So.2d 39 (Fla. 3d DCA 1996). This Court did not

approve any trial plan for the case, because no trial plan had

been issued at that time.

' The defendant cigarette companies are: Philip Morris Incorpo-

rated (“Philip Morris”); R.J. Reynolds Tobacco Company (“Rcey-

nolds”); Brown & Williamson Tobacco Corporation, individually

and as successor by merger to The American Tobacco Company

(“Brown & Williamson” or “B & W”); Lorillard Tobacco Com-

pany and Lorillard, Incorporated (collectively, “Lorillard”); and

Liggett Group Incorporated and Brooke Group Holding Incorpo-

rated (collectively, “Liggett”). The defendant industry organiza-

tions are The Council for Tobacco Research-U.S.A., Incorporated

(“CTR”) and The Tobacco Institute, Incorporated (“TT”).

Tila

In February of 1998, the trial court issued its first trial

plan, which provided for the trial proceedings to be divided

into three phases.” Phase 1 consisted of a year-long trial on

liability and entitlement to punitive damages. The jury con-

sidered 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, in-

cluding motions for remittitur and class decertification. The

trial court did not hold hearings on the post-verdict motions.

> The trial court subsequently made changes in the plan, both be-

fore 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 puni-

tive damages individually for each class member within each sub-

class. 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 plain-

tiffs compensatory award (if any) to determine his or her punitive

award. However, after the jury returned its Phase | 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 defendants ob-

jected to the original and to subsequent versions of the plan.

72a

Instead, in November of 2000, the trial court entered an

“Omnibus Order on All Pending Motions” denying most of

the defense motions, with two minor exceptions.’ The Om-

nibus Order granted judgment in the plaintiffs’ favor in all

other respects, ordering immediate payment 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 ju-

risdiction 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 is-

sue of damages, if not other issues as well.” R.J. Reynolds

Tobacco Co. v. Engle, 672 So.2d at 41.

In Phase 3, which has not yet begun, new juries will de-

cide the individual liability and compensatory damages

claims for each class member (estimated to number at least

700,000). The trial 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 ad-

verse Omnibus Order.

II. Class Decertification Required

Although the emotional appeal of the class representa-

tives’ claims is compelling, our job as appellate judges is not

> In its Omnibus Order, the court granted judgment in the defen-

dants’ 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 in-

fliction of emotional distress. However, it ruled that Mr.

Amodeo’s fraud and conspiracy claims were not time barred. Sec-

ond, the court granted judgment for the defendants on the plain-

tiffs’ claim for equitable relief, pursuant to a prior dismissal of that

claim.

73a

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 individualized basis.

Under Florida Rule of Civil Procedure 1.220(d)(1), a

class-certification order may be altered or amended at any

time before entry of a judgment on the merits. Class-

certification orders necessarily precede substantial develop-

ment of the issues and facts. For this reason, a court is re-

quired 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 (Sth Cir.1983). Thus, even after a

certification order is entered, “the judge remains free to mod-

ify it in the light of subsequent developments in the litiga-

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

time, we 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 in the country. At the

time of certification, no trial plan had been issued and 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

that trial would be divided into three phases. In Phase 1,

74a

which 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 en-

gaged 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 compensatory damages with respect to their individual

claims. The jury then awarded a lump sum of $145 billion

dollars in punitive damages to the entire class, without allo-

cation to any class member.

The trial plan provides that Phase 3, which has not yet

begun, will consist of a series of individual tals 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. 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 de-

nied the motion, although it expressed “reservations about

the manageability of this case” and predicted that “the neces-

sary 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 jurisdic-

tion, but expressly stated that the defendants had a night to

obtain review of “the propriety of the order by plenary appeal

from any adverse final judgment.’

* The plaintiffs’ “law of the case” argument in response to the de-

certification issues raised in this appeal clearly lacks merit in light

75a

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, 119

S.Ct. 1760, 143 L.Ed.2d 791 (1999); Castano v. American

Tobacco Co., 84 F.3d 734 (Sth Cir.1996); Estate of Mahoney

v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150 (S.D. lowa

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.

of this Court’s March 6, 1998 order expressly stating: “Appel-

lants/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 certi-

fication 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

(Sth Cir.1982) (law of the case is inapplicable to Federal Rule 23);

Zenith Laboratories, Inc. v. 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 “prelimi-

nar[y],” and this Court has specifically noted that “law of the case

is inapplicable if there is even an arguable change in the substan-

tive 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” doc-

trine was “not meant to create vested rights in decisions that have

become obsolete or erroneous with time”), guashed in part, 634

So.2d 163 (Fla.1994). The “law of the case” doctrine clearly does

not foreclose decertification.

76a

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 vy. 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.1998); Barreras Ruiz v. American To-

bacco 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, 358 Md. 689,

752 A.2d 200 (2000); Reed v. Philip Morris, Inc., 1997 WL

538921 (D.C. Super. Ct. Aug. 18, 1997), and on second mo-

tion, No. 96-5070 (D.C. Super. Ct. July 23, 1999); Small v.

Lorillard Tobacco Co., 252 A.D.2d 1, 679 N.Y.S.2d 593

(1998), aff'd, 94 N.Y.2d 43, 698 N.Y.S.2d 615, 720 N.E.2d

892 (1999); Geiger v. American Tobacco Co., 181 Misc.2d

875, 696 N.Y.S.2d 345 (N.Y. Sup. Ct. 1999), aff'd, 277

A.D.2d 420, 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.° In

many instances these courts denied certification based upon

the demonstrated problem in the instant case. Simply, that

the plaintiffs smokers’ claims are uniquely individualized

and cannot satisfy the “predominance” and “superiority” re-

> We note further that since Florida’s class action provision, Flor-

ida 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).

77a

quirements imposed by Florida’s class action rules.° See

Barnes v. American Tobacco Co., 161 F.3d at 149 (certifica-

tion improper because smokers’ claims involve “individual

issues” such as “nicotine addiction, causation, ... contribu-

tory/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”); Thomp-

son 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 (refus-

ing to certify for failure to satisfy requirements of commonal-

ity, representativeness, and fairmess).’

® 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 (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,

78a

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 dif-

ferent 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 in-

volve 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 su-

perior to other available methods of fairly and efficiently ad-

judicating 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 ex-

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 Ser-

vices, 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 members’

claims); Chateau Communities, Inc. v. Ludtke, 783 So.2d 1227,

1231 (Fla. Sth 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. Sth DCA)(reversing certifi-

cation 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).

79a

ist, little value is gained by proceeding as a class action. Not

only would the lawsuit become unmanageable, it would fur-

ther be unjust to bind absent class members to a negative de-

cision where the class representative’s claims present differ-

ent individual issues than those of the absent members. Un-

der these circumstances, class representation would not be

“superior” to individual suits for the fair and efficient adjudi-

cation of the controversy. See Fla. R. Civ. P. 1.220(b)(3).

Phase 2 of the trial conclusively established that indi-

vidualized issues of liability, affirmative defenses, and dam-

ages, 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 individual-

ized issues predominate and render further proceedings un-

manageable.®

As evidenced by the proceedings in Phase 2, each claim-

ant will have to prove that his or her illness not only was

caused by smoking, but was also proximately caused by de-

fendants’ alleged misconduct.’ For example, with respect to

* After the year-long “common issues” trial in Phase 1, it took an-

other 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 four-

teen different experts were required to testify on that 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

80a

any misrepresentation 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 individual-

ized showing of reliance.’ See Shoma Dev. Corp. v.

Vazquez, 749 So.2d 1287, 1289 (Fla. 3d DCA 2000)(class ac-

tion not appropriate for fraud claims; reliance of one pur-

chaser does not establish that of others); Castano v. Ameri-

can Tobacco Co., 84 F.3d at 745 (“fraud class action cannot

be certified when individual reliance will be an issue”); Clay

v. American Tobacco Co., 188 F.R.D. at 492 (denying certi-

fication of claims alleging fraudulent marketing of cigarettes

because “all members of the proposed class were not sub-

regime, unique medical history, and whether she had a “scar can-

cer” 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 class-wide 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 | verdict rests upon. More-

over, Florida law bars any presumption of reliance in cases involv-

ing 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 re-

lief from separate contracts on the basis of fraud are prohibited, ir-

respective 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 omis-

sion and, the

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