Philip Morris USA, Inc. v. Tina Russo, etc. ( 2015 )

Supreme Court of Florida
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No. SC12-1401
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PHILIP MORRIS USA, INC., et al.,
Petitioners,
vs.
TINA RUSSO, etc.,
Respondent.
[April 2, 2015]
QUINCE, J.
Philip Morris USA, Inc. (“PM USA”) and R.J. Reynolds Tobacco Company
(“R.J. Reynolds”), seek review of the decision of the Third District Court of
Appeal in Frazier v. Philip Morris USA Inc., 89 So. 3d 937 (Fla. 3d DCA 2012),1
on the ground that it expressly and directly conflicts with the decisions of the
Fourth District Court of Appeal in Philip Morris USA, Inc. v. Hess, 95 So. 3d 254(Fla. 4th DCA 2012), quashed, No. SC12-2153 (Fla. Apr. 2, 2015), Philip Morris
USA, Inc. v. Naugle, 126 So. 3d 1155 (Fla. 4th DCA 2012), opinion withdrawn,
1. Phyllis Frazier passed away before the Third District issued its decision.
Tina Russo, Ms. Frazier’s daughter, was substituted as the Respondent as executor
de son tort for Ms. Frazier’s estate.
and superseded on reh’g, Philip Morris USA, Inc. v. Naugle, 103 So. 3d 944 (Fla.
4th DCA 2012), review denied, 135 So. 3d 289 (Fla. 2014), and Philip Morris USA
Inc. v. Cohen, 102 So. 3d 11 (Fla. 4th DCA 2012), and with this Court’s decision
in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006), on questions of law.
We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons that
follow, we approve the Third District’s decision in Frazier to the extent of its
conclusion pertaining to the statute of repose and disapprove Naugle and Cohen.
FACTS AND PROCEDURAL HISTORY
In December 2007, Ms. Frazier filed a complaint against PM USA and R.J.
Reynolds in the Eleventh Judicial Circuit in and for Miami-Dade County, alleging
that her smoking of the defendants’ cigarettes proximately caused her to develop
chronic obstructive pulmonary disease (COPD).2 Ms. Frazier brought claims of
strict liability-defective design, negligent design, fraud by concealment, and civil
conspiracy-fraud by concealment. Punitive damages were sought in her fraud by
concealment and civil conspiracy-fraud by concealment claims. The defendants
each raised statutes of limitations and statutes of repose defenses in their answers.
The testimony offered at trial included that Ms. Frazier started smoking in
1945, when she was fourteen or fifteen years old. Ms. Frazier smoked Winston
2. Ms. Frazier also named Liggett Group, LLC and Vector Group LTD.,
Inc., as defendants. Pursuant to a joint stipulation, the trial court later dismissed
the claims against Liggett Group, LLC and Vector Group LTD., Inc.
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cigarettes but switched to the Carlton brand of cigarettes because it advertised that
it had the lowest tar and nicotine in its cigarettes. Ms. Frazier then switched to
Parliaments because that brand advertised “the recessed filter” in its cigarettes,
which she thought was better for her. In relying on advertising and believing that
it was better for her, Ms. Frazier made a final switch to Benson & Hedges Ultra
Lights. Ms. Frazier testified that the advertisements were “influential,” and that
the “tobacco company” did not tell her that it was hazardous, which she relied on.
Ms. Frazier stated that the correctness of the warning displayed on the cigarette
packages was “controversial” because “there wasn’t any definite information.”
Ms. Frazier admitted that she was aware that cigarettes were addictive in
1963, and by the mid-1970s, she was aware that smoking could cause lung cancer,
COPD, and emphysema. In 1991, Ms. Frazier was informed that she had an
asthma attack. In that same year, Ms. Frazier’s pulmonologist’s impression was
that she suffered from tobacco addiction with underlying COPD. In 1992, Ms.
Frazier quit smoking. The pulmonologist testified that Ms. Frazier’s first “real”
documented COPD was in 1993, when Ms. Frazier was told that she had COPD
and emphysema. According to her physician, Ms. Frazier’s cigarette smoking was
the cause of her disease. Ms. Frazier underwent a lung transplant in 2003.
Ms. Frazier presented the following testimony relating to the conduct on the
part of the tobacco companies. In 1953, when the studies first linked cigarettes and
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cancer, the tobacco companies hired scientists who confirmed that cancer rose
dramatically as people smoked more cigarettes. In response to public concerns, the
tobacco companies issued “A Frank Statement,” wherein claims were made about
the safety of cigarette smoking which were reinforced by advertisements and
public interviews given by tobacco executives. The companies’ publicly made
claims were contradicted by their internal research. As early as 1961, the tobacco
companies’ internal documents reflected the ineffectiveness of filters in removing
cancerous components. Tobacco companies knew nicotine was addicting and that
smoking causes lung cancer and emphysema.
Ms. Frazier also offered testimony that the head of research at PM USA said
in a 1976 interview that the company is “sincere” in its belief that cigarettes are not
harmful. The head of the Tobacco Institute testified during a 1978 Congressional
subcommittee meeting that smoking is not causing deaths and that science does not
know if smoking causes death. A Tobacco Institute spokesperson stated in 1983
that “I don’t think that there has been a causal relationship established between
cigarette smoking and any other disease.” In 1984, R.J. Reynolds took out
advertisements in major newspapers and magazines calling for an open debate
regarding smoking’s danger, which would show that smoking does not cause
cancer. A tobacco spokesperson stated in 1984 that “[i]t is not known whether
cigarettes cause cancer.” After the 1988 Surgeon General’s report asserted that
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nicotine was addicting, the Tobacco Institute released a statement that said “it has
not been established that cigarette smoking produces a physical dependence to
nicotine.” In 1994, tobacco company executives testified under oath before
Congress that nicotine was not addictive and that “it has not been proven that
cigarette smoking causes cancer.” In 1999, the tobacco companies admitted that
smoking was harmful.
As to the fraudulent concealment and civil conspiracy of fraudulent
concealment claims, the jury was instructed that the
defendants concealed or omitted material information not otherwise
known or available knowing that the material was false and
misleading or failed to disclose a material fact concerning the health
effects or addictive nature of smoking cigarettes or both, and
defendants agreed with each other, with other companies, or both to
conceal or omit information concerning the health effects or the
addictive nature of smoking cigarettes or both.
The defendants requested that the trial judge instruct the jury on section
95.031(2), Florida Statutes (1993), the twelve-year statute of repose governing
fraud claims. The proposed language read as follows: “In making your
determinations regarding Plaintiff’s fraudulent concealment and agreement to
conceal claims, you may not consider evidence of alleged concealment, statements,
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or other conduct before [December 14, 1995/May 5, 1982].”3 The trial court
denied the requested instruction on the fraud statute of repose.
The trial court also refused to allow the following question—proposed by
the defendants—to appear on the verdict form which pertained to the fraudulent
concealment claim:
Please state as to each Defendant whether the Defendant, [after
December 14, 1995] [after May 5, 1982], made a statement that
concealed or omitted material information concerning the health
effects and/or the addictive nature of smoking cigarettes and, if so,
whether Ms. Frazier relied on the statement to her detriment such that,
but for the statement, she would have acted differently and avoided
her injuries.
Instead, the following question was submitted to the jury on the verdict form:
Please state as to each Defendant whether Plaintiff relied to her
detriment on a statement by that Defendant that concealed or omitted
material information concerning the health effects and/or the addictive
nature of smoking cigarettes and, if so, whether Plaintiff relied on the
statement to her detriment such that, but for the statement, she would
have acted differently and avoided her injuries.
Philip Morris USA Inc. Yes____ No_____
R.J. Reynolds Tobacco Company Yes____ No_____
The verdict form question concerning the conspiracy claim provided as follows:
Please state as to each Defendant whether Plaintiff relied to her
detriment on a statement made in furtherance of that Defendant’s
agreement with others to conceal or omit material information
3. December 14, 1995, and May 5, 1982, referred to the twelve years prior
to the filing of Ms. Frazier’s individual complaint and twelve years prior to the
filing of the Engle class complaint, respectively.
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regarding the health effects and/or addictive nature of smoking
cigarettes and, if so, whether, but for the statement, she would have
acted differently and avoided her injuries.
Philip Morris USA Inc. Yes____ No_____
R.J. Reynolds Tobacco Company Yes____ No_____
The jury found that Ms. Frazier was addicted to cigarettes containing
nicotine and that her addiction was a legal cause of her COPD or emphysema.
However, the jury determined that prior to May 5, 1990—which was four years
prior to the filing of the Engle class complaint—Ms. Frazier knew or should have
known in the exercise of reasonable care that she had been injured and that there
was a causal connection between her smoking and her injury. Ms. Frazier’s claims
were thus barred by the applicable four-year statutes of limitations. As instructed,
the jury did not decide the issues of causation, the fraudulent concealment and
conspiracy claims, comparative fault, compensatory damages, and the entitlement
to punitive damages.
Thereafter, Ms. Frazier moved for a directed verdict on the statutes of
limitation defense and for a new trial, contending that the defendants failed to
present any evidence that Ms. Frazier was on notice of a causal connection
between her smoking and her development of COPD or emphysema on or before
May 5, 1990. Her motions were denied, and accordingly, final judgment was
entered in favor of the defendants.
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Ms. Frazier appealed the trial court’s denial of her motions for directed
verdict and for a new trial. Frazier, 89 So. 3d at 939. Finding no competent record
evidence that Ms. Frazier’s claims accrued before the statute of limitations bar
date, the Third District reversed and remanded for a new trial with instructions that
the trial court grant her motion for a directed verdict on the statute of limitations
issue. Id. at 939, 948.4
PM USA and R.J. Reynolds cross-appealed, asserting that Ms. Frazier’s
fraudulent concealment and conspiracy to conceal claims were barred by section
95.031(2), the fraud statute of repose, and that Ms. Frazier was required to prove
that she relied upon a deceptive statement or omission after May 5, 1982. Id. at
947. In addressing this claim, the Third District held that “the last act done in
furtherance of the alleged conspiracy fixes the pertinent date for purposes of
commencement of the statute of repose, and we conclude that Ms. Frazier
introduced evidence of deceptive statements or omissions occurring after May 5,
1982.” Id. (citing Laschke v. Brown & Williamson Tobacco Corp., 766 So. 2d
1076, 1078 (Fla. 2d DCA 2000)). The district court rejected the defendants’
argument that Ms. Frazier was “obligated to show further or continued reliance
upon the alleged last act in furtherance of the conspiracy.” Id. at 947-48.
4. The district court specifically found that manifestations of Ms. Frazier’s
COPD or emphysema did not begin until 1991. Id. at 948.
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Therefore, the Third District found no error in the trial court’s denial of the
instruction on the fraud statute of repose. Id. at 948.5 PM USA and R.J. Reynolds
then sought review of the district court’s decision in Frazier relating to their cross-
appeal claims.6
ANALYSIS
Pursuant to the statute of repose contained in section 95.031(2), fraud claims
“must be begun within 12 years after the date of the commission of the alleged
fraud, regardless of the date the fraud was or should have been discovered.” §
95.031(2), Fla. Stat. PM USA and R.J. Reynolds contend that (1) the plain
language of the statute requires proof of reliance on an act committed no more than
twelve years before the complaint was filed, and (2) the trial court erred in denying
their requested jury instruction on the statute. We disagree.
In Engle, 945 So. 2d 1246, we concluded that certain Phase I jury findings,
including findings pertinent to fraudulent concealment7 and civil conspiracy-
5. The district court also found no error in PM USA and R.J. Reynolds’
additional claim raised in their cross-appeal regarding the trial court’s granting of
preclusive effect to certain Phase I Engle findings. Id.
6. In their initial brief on the merits, PM USA and R.J. Reynolds provided
that they are not requesting the Court to address the preclusive effect of the Engle
findings issue and that they have elected not to present the statute of limitations
issue.
7. “[T]hat the [Engle] defendants concealed or omitted material information
not otherwise known or available knowing that the material was false or
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concealment claims,8 were entitled to res judicata effect in individual actions,
provided that they were filed against the defendants within one year of our
mandate. Id. In Hess v. Philip Morris USA, Inc., No. SC12-2153 (Fla. Apr. 2,
2015), we recently held that the statute of repose provided in section 95.031(2), did
not bar a fraudulent concealment claim even though there was no evidence of the
smoker’s reliance within the repose period (May 5, 1982, through May 5, 1994).
Hess, No. SC12-2153 at 2. We explained:
Engle-progeny plaintiffs must certainly prove detrimental
reliance in order to prevail on their fraudulent concealment claims.
While we look to reliance in determining when an action accrued for
the application of the fraud statute of limitations, the accrual of an
action has no bearing on the fraud statute of repose. Because statutes
of repose “run[] from the date of a discrete act on the part of the
defendant,” Kush [v. Lloyd], 616 So. 2d [415,] 418 [(Fla. 1992)], we
hold that the defendant’s last act or omission triggers Florida’s fraud
statute of repose. In other words, we find that “the date of the
commission of the alleged fraud” under section 95.031(2), refers to
the defendant’s wrongful conduct. Thus, we conclude that for statute
of repose purposes it is not necessary that the smoker relied during the
twelve-year repose period. Where there is evidence of the defendant’s
wrongful conduct within the repose period, the statute of repose will
not bar a plaintiff’s fraudulent concealment claim.
In its Phase I verdict form, the Engle jury found that the Engle
defendants committed fraud by concealment based on conduct that
occurred after May 5, 1982, i.e., during the statute of repose period.
misleading or failed to disclose a material fact concerning the health effects or
addictive nature of smoking cigarettes or both.” Id. at 1277.
8. “[T]hat the [Engle] 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.” Id.
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Because we hold that the defendants’ last act or omission triggers the
fraud statute of repose and since the Engle jury found that the Engle
defendants’ fraudulent concealment conduct occurred within the
repose period, we conclude that the Engle defendants are precluded as
a matter of law from asserting the fraud statute of repose defense in
Engle-progeny cases.
Hess, No. SC12-2153 at 22-23.
In the instant case, unlike in Hess, both fraudulent concealment and
conspiracy to commit fraud by concealment claims were submitted to the jury.9
Consistent with our decision in Hess, we conclude that the district court below
properly determined that the trial court did not err in denying PM USA and R.J.
Reynolds’ requested jury instruction on the fraud statute of repose. We emphasize
that evidence of reliance need not be established within the fraud statute of repose
period. PM USA and R.J. Reynolds’ requested jury instruction would have
precluded the jury from considering any evidence of reliance prior to the repose
period.10
9. A civil conspiracy claim requires: (1) an agreement between two or more
parties; (2) to do an unlawful act or to do a lawful act by unlawful means; (3) the
doing of some overt act in pursuance of the conspiracy; and (4) damage to plaintiff
as a result of the acts done under the conspiracy. Raimi v. Furlong, 702 So. 2d
1273, 1284 (Fla. 3d DCA 1997). “The gist of a civil action for conspiracy is not
the conspiracy itself but the civil wrong which is alleged to have been done
pursuant to the conspiracy.” Loeb v. Geronemus, 66 So. 2d 241, 243 (Fla. 1953).
The critical date for the statute of repose relating to conspiracy claims “should be
the date of the last act done in furtherance of the conspiracy.” Laschke, 766 So. 2d
at 1079.
10. We do not address the constitutional right of access to the courts claim.
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We therefore disapprove the decisions of the Fourth District in Naugle and
Cohen, which require reliance during the statute of repose period. See Naugle, 103
So. 3d at 947 (“Because fraudulent concealment requires proof of reliance,
Naugle’s claim is barred unless the record demonstrates that she justifiably relied
on statements or omissions made after that date [May 5, 1982].”); Cohen, 102 So.
3d at 15 (“[A]ppellee’s fraudulent concealment claim had to be based on conduct
that occurred after May 5, 1982—she must prove that Nathan relied upon
statements or omissions by appellants made after that date. The jury should have
been instructed accordingly.”).
CONCLUSION
In light of the foregoing, we approve the Third District’s decision in Frazier
to the extent of its conclusion concerning the statute of repose and disapprove
Naugle and Cohen.11
It is so ordered.
LABARGA, C.J., and PARIENTE, LEWIS, CANADY, POLSTON, and PERRY,
JJ., concur.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
11. Because this opinion is limited to the issue of the statute of repose, we
therefore express no opinion as to the separate issue addressed by the district court
involving the statute of limitations. We note that the certified conflict question in
R.J. Reynolds Tobacco Co. v. Ciccone, No. SC13-2415, deals with defining the
term “manifestation” as it relates to the smoker’s tobacco-related disease or
medical condition for purposes of establishing Engle class membership.
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Application for Review of the Decision of the District Court of Appeal - Direct
Conflict of Decisions
Third District - Case No. 3D11-580
(Miami-Dade County)
William Patrick Geraghty, Frank Cruz-Alvarez, and Alexandria Bach Lagos of
Shook, Hardy & Bacon L.L.P., Miami, Florida; Raoul G. Cantero, III of White &
Case LLP, Miami, Florida; Gregory George Katsas of Jones Day, Washington,
District of Columbia; Benjamine Reid, Alina Alonso Rodriguez, and Olga Marie
Vieira of Carlton Fields Jorden Burt, P.A., Miami, Florida; and Lauren R.
Goldman and Scott A. Chesin of Mayer Brown LLP, New York, New York,
for Petitioners
Philip Maurice Gerson and Edward Steven Schwartz of Gerson & Schwartz, P.A.,
Miami, Florida,
for Respondent
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