R.J. Reynolds Tobacco Company v. James Whitmire, as Personal etc. , 260 So. 3d 536 ( 2018 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D17-1986
_____________________________
R.J. REYNOLDS TOBACCO
COMPANY,
Appellant,
v.
JAMES WHITMIRE, as Personal
Representative of the Estate of
Evelyn Whitmire,
Appellee.
_____________________________
On appeal from the Circuit Court for Leon County.
Karen Gievers, Judge.
December 18, 2018
B.L. THOMAS, C.J.
In this Engle-progeny case, 1 Appellant challenges the trial
court’s denial of its motion for directed verdict, arguing that
Appellee failed to prove individual detrimental reliance, and thus
failed to prove fraudulent concealment and conspiracy. Because
Engle plaintiffs must prove detrimental reliance on fraudulent
statements, and no evidence here supports such reliance, we hold
that the trial court erred in denying Appellant’s motion for a
directed verdict.
1 Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006).
1
Appellee’s wife (the decedent) died in 1995 after being
diagnosed with lung cancer. Appellee, as the personal
representative of her estate, brought wrongful death claims on
her behalf against Appellant, arguing strict liability, negligence,
fraudulent concealment, and civil conspiracy to fraudulently
conceal. Appellee claimed the decedent was a member of the class
prospectively decertified in Engle.
The decedent started smoking cigarettes when she was about
14 years old, and normally smoked one or two packs a day.
Appellee and the decedent smoked Winston filtered cigarettes,
introduced by Appellant in 1954, and later switched to Salem
menthol-flavored filtered cigarettes.
The decedent made multiple unsuccessful attempts to quit
smoking cigarettes. She did not quit smoking until after her
cancer diagnosis, months before her death.
Appellee presented expert testimony that large tobacco
companies in the United States, including Appellant, made
fraudulent statements regarding the hazards of smoking on
December 4th, 1953 and thereafter. Appellant moved for a
directed verdict, arguing that Appellee presented no evidence
connecting these statements to the decedent’s smoking behavior.
Appellee argued that, under R.J. Reynolds Tobacco Company v.
Martin, 53 So. 3d 1060 (Fla. 1st DCA 2010), he was not required
to prove the decedent relied on specific statements by Appellant.
The trial court denied Appellant’s motion for directed verdict.
The jury found that the decedent was addicted to cigarettes
containing nicotine, and that such addiction was the cause of her
lung cancer and death. The jury apportioned 33% of the
responsibility of her death to the decedent, and 67% of the
responsibility to Appellant, awarding $3 million in damages to
Appellee for the loss of companionship and pain and suffering
caused by the decedent’s death.
After trial, Appellant renewed its motions for directed
verdict, asserting that no testimony connected the decedent’s
smoking to her reliance on any false or misleading statements by
any tobacco company. The trial court denied Appellant’s motion.
The court entered final judgment for the full $3 million
2
compensatory award, with no reduction based on the decedent’s
33% comparative fault. 2
The parties do not dispute that this is an Engle-progeny
case. Engle was a class action brought against several tobacco
companies, including Appellant, on behalf of all Florida-resident
smokers who developed smoking-related illnesses, including lung
cancer, caused by an addiction to nicotine. 945 So. 2d at 1256.
The trial was divided into three “phases,” with Phase I
concerning common issues relating to the defendant tobacco
companies’ conduct and to the general health effects of smoking.
Id. After Phase I, the jury reached a verdict in favor of the class.
Id. at 1257. After Phases II-A and II-B, which were intended to
determine entitlement and damages for the class representatives
and the class, the jury awarded the class representatives
$12.7 million in compensatory damages and the class as a whole
$145 billion in punitive damages. Id. The tobacco companies
appealed, and the supreme court eventually decertified the class
and vacated the punitive-damages award. Id. at 1269. However,
the supreme court held that some factual findings regarding
liability made during Phase I of the trial could be retained for
individual actions by Engle class members. Id. at 1254-55.
Analysis
“We review the denial of a motion for directed verdict
de novo.” Sorel v. Koonce, 53 So. 3d 1225, 1227 (Fla. 1st DCA
2011). A directed verdict is proper only “where no proper view of
the evidence could sustain a verdict in favor of the nonmoving
party.” Owens v. Publix Supermarkets, Inc., 802 So. 2d 315, 329
(Fla. 2001); Fla. R. Civ. P. 1.480.
In Martin, we described an Engle plaintiff’s burden of
persuasion on the fraudulent concealment claim:
2 In 2017, the supreme court held that “when a jury finds for
an Engle progeny plaintiff on intentional tort claims, the
plaintiff’s award may not be reduced by comparative fault.”
Schoeff v. R.J. Reynolds Tobacco Co., 232 So. 3d 294, 305 (Fla.
2017).
3
To prevail on the fraud by concealment claim, the
plaintiffs had to prove the tobacco companies concealed
or failed to disclose a material fact; the companies knew
or should have known the material fact should be
disclosed; the companies knew their concealment of or
failure to disclose the material fact would induce the
plaintiffs to act; the tobacco companies had a duty to
disclose the material fact; and the plaintiffs
detrimentally relied on the misinformation.
53 So. 3d at 1068.
Here, the Engle findings establish that Appellant “made a
false or misleading statement of material fact with the intention
of misleading smokers,” and “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.” Engle, 945 So. 2d at 1257 n.4 (emphasis
added).
Liability for fraudulent concealment cannot be shown
without reliance on a false statement, absent a fiduciary
relationship that would create a duty to disclose. See TransPetrol,
Ltd. v. Radulovic, 764 So. 2d 878, 879 (Fla. 4th DCA 2000) (“A
defendant’s knowing concealment or non-disclosure of a material
fact may only support an action for fraud where there is a duty to
disclose”); State v. Mark Marks, P.A., 654 So. 2d 1184, 1189 (Fla.
4th DCA 1995) (“[S]uch duty arises when one party has
information that the other party has a right to know because of a
fiduciary or other relation of trust or confidence between them.”).
In a commercial transaction in which “the parties are dealing at
arm's length, a fiduciary relationship does not exist because there
is no duty imposed on either party to protect or benefit the other.”
Taylor Woodrow Homes Fla., Inc. v. 4/46-A Corp., 850 So. 2d 536,
541 (Fla. 5th DCA 2003).
Thus, even with the benefit of the Engle findings, plaintiffs
claiming fraudulent concealment must prove that they relied to
their detriment on false statements from the tobacco companies.
Hess v. Philip Morris USA, Inc., 175 So. 3d 687, 698 (Fla. 2015)
(“Engle-progeny plaintiffs must certainly prove detrimental
4
reliance in order to prevail on their fraudulent concealment
claims.”) (emphasis added). Otherwise, no duty to disclose
information would be imposed on the companies in this
transaction between a tobacco company and a consumer who
purchased cigarettes. The supreme court in Phillip Morris USA,
Inc. v. Douglas noted that the very reason the Engle class was
decertified was “‘because individualized issues such as legal
causation, comparative fault, and damages predominate.’” 110
So. 3d 419, 424 (Fla. 2013) (quoting Engle, 945 So. 2d at 1268)
(emphasis added). In the context of fraudulent concealment,
“causation” includes individual reliance. See, e.g., Humana Inc.
v. Castillo, 728 So. 2d 261, 265 (Fla. 2d DCA 1999) (holding that
the federal second circuit court properly applied reliance analysis
to determine causation and liability in class action).
In Martin, this court analyzed what constitutes sufficient
evidence for an Engle plaintiff’s fraudulent concealment claim.
53 So. 3d at 1069. There, R.J. Reynolds argued that the appellee
failed to prove reliance, because she presented no direct evidence
that the decedent relied on omissions in information
disseminated by the tobacco companies. Id. This court held that
direct evidence of reliance was not required:
[T]he record contains abundant evidence from which the
jury could infer Mr. Martin’s reliance on pervasive
misleading advertising campaigns for the Lucky Strike
brand in particular and for cigarettes in general, and on
the false controversy created by the tobacco industry
during the years he smoked aimed at creating doubt
among smokers that cigarettes were hazardous to
health.
Id. (emphasis added).
Here, Appellee argues that, as in Martin, he presented
evidence of the decedent’s smoking history and of the tobacco
companies’ pervasive and misleading advertising campaign, from
which the jury could infer the decedent’s detrimental reliance.
Appellee presented evidence of the decedent’s smoking
history, and presented extensive expert testimony regarding the
tobacco companies’ misleading and pervasive campaign, but he
presented inadequate evidence from which the jury could infer
5
that the decedent relied to her detriment on any false statements
from the tobacco companies. See Food Fair Stores, Inc. v. Trusell,
131 So. 2d 730, 733 (Fla. 1961) (“circumstantial evidence in a civil
action will not support a jury inference if the evidence is purely
speculative and, therefore, inadequate to produce an inference
that outweighs all contrary or opposing inferences”). Testimony
indicated that the decedent was uninterested in advertisements:
Appellee testified that he did not know whether the decedent was
influenced by cigarette advertisements and that they had never
discussed any statements by tobacco companies; Appellee’s son
testified that he could not recall the decedent ever expressing
interest in a statement from a tobacco company; and Appellee’s
sister-in-law testified that she had never heard the decedent
mention a cigarette advertisement. While Appellee testified that
he was “sure” the decedent saw cigarette advertisements on
television, he also testified that he did not know if she saw any
“statements” from any tobacco companies. Thus, no testimony
connected the decedent’s smoking to the false information
disseminated by the tobacco companies.
While the Engle findings generally establish that Appellant
made misleading statements and concealed material information,
the supreme court in Engle specifically found that the trial
court’s Phase I findings on fraud should not be retained, as they
“involved highly individualized determinations.” Engle, 945
So. 2d at 1269.
Appellee argues individual reliance is established through
evidence of a plaintiff’s “life, knowledge, attitudes, and smoking
behavior” that, coupled with the evidence of the tobacco
companies’ pervasive campaign, would allow the jury to infer that
honesty from the industry, rather than perpetuation of the false
controversy, would have made a difference to the plaintiff.
Counsel argued that a plaintiff who smoked filtered cigarettes
has presented evidence from which reliance can be inferred
because the word “filter” connotes a healthier cigarette, yet
expert testimony established that filters do nothing to make
cigarettes healthier. Counsel further argued that the tobacco
companies concealed the fact that nicotine was addictive, and
expert testimony established generally that smokers have greater
success in quitting when they are aware that cigarettes are
addictive. Appellee asserts that the decedent would have been
6
more likely to quit if the information about nicotine’s addictive
nature had been disclosed.
Although evidence here suggested that the decedent believed
filtered cigarettes were less harmful, no evidence connected that
belief to the tobacco companies’ statements other than the word
“filter.” The Engle class was decertified because issues of
causation involve highly individualized findings. Douglas, 110
So. 3d at 424. To hold that smoking filtered cigarettes or viewing
advertisements establishes sufficient evidence for a fraudulent-
concealment claim would eliminate the requirement that
plaintiffs must individually show how they relied on the tobacco
companies’ statements. Appellee’s argument that knowledge
about the addictiveness of nicotine generally shows that smokers
are better able to quit does not show that the decedent relied to
her detriment on any tobacco company’s statement.
In Martin, we did not state which facts were sufficient to
show reliance; we held only that reliance can be proven by
circumstantial evidence. 53 So. 3d at 1069. This is an
unremarkable proposition, as circumstantial evidence can
establish civil liability. Voelker v. Combined Ins. Co. of Am., 73
So. 2d 403 (Fla. 1954). But circumstantial evidence cannot merely
raise an unfounded suspicion or legally sufficient speculation that
allows an intentional-tort claim to be submitted to a jury. While
Martin holds that detrimental reliance on false statements can be
proved through inference, it cannot be read to circumvent the
requirements of Engle, Douglas, and Hess that plaintiffs must
prove such reliance based on some evidence to support the
inference and the supreme court’s holdings on the merit of
circumstantial evidence to support liability. Trusell, 131 So. 2d at
733. The circumstantial evidence must establish individualized
reliance by the plaintiff, and this cannot be shown through mere
presentation of general evidence of the plaintiff’s life and
behavior, where, as here, that evidence gives no indication that
the plaintiff relied on any false information disseminated by the
tobacco companies. To allow such a broad reading of Martin
would abrogate the requirement that Engle plaintiffs prove
detrimental reliance, and contradict the clear statement in Hess
that the plaintiff “must certainly prove detrimental reliance” to
prevail on a claim of fraudulent concealment. Hess, 175 So. 3d at
698.
7
To hold a party liable for fraudulent concealment – where
there was no duty established as a matter of law and no evidence
of any reliance on a false statement – would allow a plaintiff to
impose severe consequences on a party where the plaintiff never
proved reliance on any false statements. Here, those
consequences include allowing Appellee to avoid the jury finding
the decedent 33% at fault, and instead to recover the entire
damages award despite the jury’s decision to the contrary.
In addition to contravening the supreme court’s holdings
requiring individualized proof in tobacco cases, such a holding
would contradict black-letter law on the burden of persuasion in
civil cases in which a plaintiff relies on circumstantial evidence to
support an inference, here being the inference that because the
decedent saw advertising containing false statements about the
risks of smoking, she in fact relied on those statements, which
resulted in her disease. Trusell, 131 So. 2d 733: Voelker, 73
So. 2d at 405-06. In Trusell, the supreme court relied on its
holding in Voelker, reiterating that a jury verdict cannot be
predicated on circumstantial evidence that established only
potential speculation. Trusell, 131 So. 2d at 733. Thus, here, the
fact that the decedent saw advertising cannot prove reliance, as
she may or may not have internalized the false statements in the
advertisements and changed her behavior accordingly. In fact, as
noted above, the evidence shows that she did not. There was no
evidence admitted that the decedent relied on these false
statements; only that she was exposed to the statements. This is
not enough. In Trusell, the court noted that “a jury could not
reach a conclusion imposing liability . . . without indulging in the
prohibited mental gymnastics of constructing one inference upon
another inference in a situation where, admittedly, the initial
inference was not justified to the exclusion of all other reasonable
inferences.” 131 So. 2d at 733 (emphasis added).
Because Appellee failed to present adequate evidence as a
matter of law that the decedent relied on fraudulent statements
by Appellant regarding the health hazards of smoking cigarettes,
we reverse the trial court’s denial of Appellant’s motion for a
directed verdict on the fraudulent concealment and conspiracy
claims. We remand for an order granting the directed verdict and
reducing the compensatory damage award to deduct the
decedent’s comparative fault. We need not reach the issue of
8
whether the trial court erred in rejecting Appellant’s requested
jury instruction requiring the jury to find that the decedent relied
on a “statement” to find fraudulent concealment and conspiracy,
in light of our holding directing that the verdict be granted for
Appellant on fraudulent concealment and conspiracy.
We reject all other arguments raised by Appellant.
AFFIRMED in part, REVERSED in part, and REMANDED.
WINSOR, J., concurs; MAKAR, J., dissents with opinion.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
MAKAR, J., dissenting.
A question in this Engle-progeny case is whether there is
record evidence from which the jury could infer that Mrs.
Whitmire, a life-long cigarette smoker, was aware of the tobacco
advertising campaign and that she relied to her detriment on the
misinformation it contained. Because the answer is yes, and our
decision in R.J. Reynolds Tobacco Co. v. Martin, 53 So. 3d 1060(Fla. 1st DCA 2010) (upholding verdict where reliance was
proven by inference), remains applicable law, I cannot join in
reversing the verdict.
Mrs. Whitmire began smoking at age fourteen and did so at
the rate of one to two packs daily—interrupted only during the
pregnancy of her son—until she died in 1995 of lung cancer. She
married her husband, also a heavy smoker, in 1968; they met in
1966 when she was nineteen, and he was twenty-three. He later
quit smoking in the 1980s, but she could not.
At trial, extensive evidence was presented that tobacco
companies, including R.J. Reynolds Tobacco Company (“RJR”),
9
participated in multi-decade, pervasive advertising campaigns
that concealed the adverse health effects of smoking from
cigarette consumers during the time period when Mr. Whitmire
and his wife were heavy smokers and multi-media consumers.
Specifically, Mr. Whitmire testified that they watched “a lot” of
television together including programs such as I Love Lucy,
Gunsmoke, and the Beverly Hillbillies, which were ones featured
in the expert testimony about the tobacco companies’ misleading
advertising campaigns. Mr. Whitmire was “sure” that they saw
cigarette advertisements when they watched television together.
She watched both local and national news programs (preferring
CBS and Walter Cronkite) and some of the early music videos
(including a song called “Smoke! Smoke! Smoke!”). Mr. Whitmire
recalled that they watched Perry Mason and that her favorite
show was Dallas. Mrs. Whitmire kept up on current events. They
subscribed to the Tallahassee Democrat (Mr. Whitmire’s father
was the paper’s circulation manager). Mr. Whitmire read the
paper every day, Mrs. Whitmire less so. She read Reader’s Digest
and Life Magazine, the former one of the few magazines that
occasionally had anti-smoking articles, albeit a very minor
percentage of their overall content.
Mr. Whitmire recalled the time when he and his wife both
had colds and “had heard that maybe menthol was a better
cigarette,” so they “tried them, and we kept smoking Salems the
rest of our smoking history.” At some point, he broke open a filter
and showed her a “dirty brown” residue, noting that the
substance was “something that’s not going into our lungs,” the
inference being that the filter was removing harmful substances
when, in fact, toxins were not removed. He testified that his wife,
up until her diagnosis of lung cancer, did not understand the
addictive nature of nicotine; that there was arsenic in cigarette
smoke; and that smoking might kill her. Although he and his wife
did not hear or discuss specific “statements” from tobacco
companies, they never heard any “statement” from the companies
in their advertisements that their filters didn’t work; that
cigarette smoking was harmful; that a regular smoker had a 50%
greater chance of dying from a smoking-related illness; or that
cyanide, arsenic, and other carcinogens were in cigarette smoke.
10
The jury was instructed, in part, that the evidence of
fraudulent concealment must show that “Mrs. Whitmire
reasonably relied to her detriment on the concealment or
omission of material facts concerning the health effects or
addictive nature of smoking cigarettes or both by [RJR], and if so,
whether such reliance was a legal cause of her lung cancer and
death.” Part of the instruction also said it was unnecessary “that
a direct statement be made to Mrs. Whitmire in order that it give
rise to the right to rely upon the statement for it is immaterial
whether it passes through a direct or circuitous channel in
reaching her, provided that it be made with the intent that it
shall reach her and be acted upon by the injured party.” *
As a whole, this evidence was sufficient under Martin to
allow a jury to infer that Mrs. Whitmire was aware of or saw the
misleading advertisements via the television and other media of
the time, that she lacked important information as to the
undisclosed harmful health effects of smoking, and that the
disclosure of such information would have corrected her
misunderstanding about the true nature of the product and
potentially changed her smoking behavior. The counter-point is
that she was so severely addicted to smoking (reflected in her
life-long compulsive smoking from dawn to dusk and sometimes
in the middle of the night) that nothing—even truthful
disclosures of the severe health effects of smoking—would have
persuaded her to change her behavior (her pregnancy being the
exception). But these points and counter-points are factual
* At trial and on appeal, RJR takes the position that the jury
instructions must include a requirement that a plaintiff have
relied on a specific “statement” versus a non-disclosure, but this
position was rejected in Philip Morris USA, Inc. v. Duignan, 243
So. 3d 426, 443 (Fla. 2d DCA 2017), which explains convincingly
why that is the correct result; see also Cote v. R.J. Reynolds
Tobacco Co., Nos.15-15633, 16-15957, 2018 WL 6167395, at *8
(11th Cir. Nov. 26, 2018) (noting Duignan’s “comprehensive
review” of Florida fraudulent concealment law in the Engle
context and concluding that “Florida courts have consistently
held that Engle-progeny plaintiffs are not required to show
reliance on a specific statement.”).
11
matters the jury was entrusted to assess. Martin, 53 So. 3d at
1069 (upholding verdict based on “abundant evidence from which
the jury could infer [plaintiff’s] reliance on pervasive misleading
advertising campaigns . . . and on the false controversy created
by the tobacco industry during the years he smoked aimed at
creating doubt among smokers that cigarettes were hazardous to
health.”); Cote, 2018 WL 6167395, at *9-*10 (reversing and
remanding for entry of judgment in plaintiff’s favor on claims of
fraudulent concealment and concealment to fraudulently conceal
on similar facts).
On this record, the jury could have believed and sided with
either party’s narrative or come down somewhere in-between as
to the negligence and intentional tort claims (they assigned her
33% of the fault on the negligence claim), precluding a grant of a
directed verdict for RJR. See Martin, 53 So. 3d (upholding jury
verdict for plaintiff on all claims and assigning 34% of fault);
Cote, 2018 WL 6167395, at *4 (upholding jury verdict for plaintiff
on all claims and assigning her 40% of fault). Rather than a
media “hermit” who was isolated from the tobacco companies’
advertising campaigns, Mrs. Whitmire fully engaged in the media
of the day (TV, newspaper, magazines) to such an extent that her
husband said he was “sure” that they saw the misleading
cigarette advertisements. On balance, the record evidence is
sufficient for the jury to have concluded that she “reasonably
relied to her detriment on the concealment or omission by RJR of
material information not otherwise known or available or RJR’s
failure to disclose material facts concerning the health effects or
addictive nature of smoking cigarettes” and that this reliance was
a cause of her death. For that reason, I cannot join in reversing
the verdict in her favor.
_____________________________
Charles F. Beall, Jr., of Moore, Hill & Westmoreland, P.A.,
Pensacola; Emily C. Baker of Jones Day, Atlanta, GA; Edward M.
Carter and Kenneth M. Grose of Jones Day, Columbus, OH;
Charles R. A. Morse of Jones Day, New York, NY; Michael A.
Carvin, Jones Day, Washington, D.C.; Kenneth R. Hart of Ausley
McMullen, Tallahassee, for Appellant.
12
David J. Sales and Daniel R. Hoffman of David J. Sales, P.A.,
Sarasota, for Appellee.
13