Case No IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

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1 EARL E. GRAHAM, etc., Case No IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT v. Plaintiff-Appellee, R.J. REYNOLDS TOBACCO COMPANY et al., Defendants-Appellants. Appeal from the United States District Court for the Middle District of Florida EN BANC AMICUS BRIEF OF ENGLE STATE PLAINTIFFS FIRMS Steven L. Brannock Celene Harrell Humphries Philip A. Padovano Maegan P. Luka Brannock & Humphries 100 South Ashley Drive, Suite 1130 Tampa, Florida (813) John S. Mills Courtney Brewer The Mills Firm, P.A. 325 North Calhoun Street Tallahassee, Florida (850) Kenneth S. Canfield Doffermyre Shields Canfield & Knowles, LLC 1355 Peachtree Street, Suite 1900 Atlanta, Georgia (404) Counsel for Amici Curiae Engle State Plaintiffs Firms

2 Graham v. R.J. Reynolds Tobacco Co., Case No CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT In compliance with 11th Cir. R , the undersigned certifies that the following is a complete list of all trial judge(s), attorneys, persons, associations of persons, firms, partnerships, or corporations that have an interest in the outcome of this particular case or appeal, and includes subsidiaries, conglomerates, affiliates and parent corporations, including any publicly held company that owns 10% or more of the party s stock, and other identifiable legal entities related to a party. 1. Altria Group, Inc. (Publicly held parent corporation of Defendant Philip Morris USA, Inc.) 2. Arnold & Porter, LLP (Counsel for Defendant Philip Morris USA, Inc.) 3. Arnold, Keri (Counsel for Defendant Philip Morris USA, Inc.) 4. Bancroft, PLLC (Counsel for Defendant R.J. Reynolds Tobacco Company) 5. Baringer, Randal S. (Counsel for Defendant R.J. Reynolds Tobacco Company) 6. Barnett, Kathryn E. (Former counsel for Plaintiff) 7. Bedell, Dittmar, DeVault, Pillans & Coxe, PA (Counsel for former Defendant Lorillard Tobacco Company) C-1 of 10

3 Graham v. R.J. Reynolds Tobacco Co., Case No Bernstein-Gaeta, Judith (Counsel for Defendant Philip Morris USA, Inc.) 9. Blasingame, Janna M. (Counsel for Plaintiff) 10. Bradford II, Dana G. (Counsel for Defendant Philip Morris USA, Inc.) 11. British American Tobacco p.l.c. (Through its ownership interest in Brown & Williamson Holdings, Inc., the indirect holder of more than 10% of the stock of Reynolds American Inc., parent company of Defendant R.J. Reynolds Tobacco Company) 12. Brannock & Humphries, PA (Counsel for Plaintiff) 13. Brannock, Steven (Appellate Counsel for Plaintiff) 14. Brown, Joshua Reuben (Counsel for Defendant Philip Morris USA, Inc.) 15. Brown & Williamson Holdings, Inc. (Holder of more than 10% of the stock of Reynolds American Inc., parent company of Defendant R.J. Reynolds Tobacco Company) 16. Browne, Mallori C. (Counsel for Defendant Philip Morris USA, Inc.) 17. Budner, Kevin (Counsel for Plaintiff) 18. Burnette, Jason T. (Counsel for Defendant R.J. Reynolds Tobacco Company) 19. Byrd, Kenneth S. (Counsel for Plaintiff) C-2 of 10

4 Graham v. R.J. Reynolds Tobacco Co., Case No Cabraser, Elizabeth Joan (Counsel for Plaintiff) 21. Clement, Paul D. (Counsel for Defendant R.J. Reynolds Tobacco Company) 22. Coll, Patrick P. (Counsel for former Defendant Lorillard Tobacco Company) 23. Council for Tobacco Research, USA, Inc. (former Defendant) 24. Crane, Eliza S. (Counsel for Defendant Philip Morris USA, Inc.) 25. Daboll, Bonnie C. (Counsel for Defendant Philip Morris USA, Inc.) 26. DeVault III, John Andrew (Counsel for former Defendant Lorillard Tobacco Company) 27. Dorsal Tobacco Corp. (former Defendant) 28. Elias, Jordan (Former counsel for Plaintiff) 29. Estrada, Miguel A. (Counsel for Defendant Philip Morris USA Inc.) 30. Farah & Farah, PA (Counsel for Plaintiff) 31. Farah Jr., Charles Easa (Counsel for Plaintiff) 32. Farah, Eddie Easa (Counsel for Plaintiff) 33. Geraghty William Patrick (Counsel for Defendant Philip Morris USA, Inc.) 34. German, Michael C. (Counsel for Defendant Philip Morris USA, Inc.) C-3 of 10

5 Graham v. R.J. Reynolds Tobacco Co., Case No Gillen, Jr., William A. (Counsel for Defendant Philip Morris USA, Inc.) 36. Goldberg, Richard W. (Judge of the U.S. Court of International Trade, sitting by designation) 37. Goldman, Lauren Rosenblum (Counsel for Defendant Philip Morris USA, Inc.) 38. Gross, Jennifer (Former counsel for Plaintiff) 39. Grossi, Jr., Peter T. (Counsel for Defendant Philip Morris USA, Inc.) 40. Hamelers, Brittany E. (Counsel for Defendant Philip Morris USA, Inc.) 41. Hartley, Stephanie J. (Counsel for Plaintiff) 42. Heimann, Richard M. (Counsel for Plaintiff) 43. Homolka, Robert D. (Counsel for Defendant Philip Morris USA, Inc.) 44. Hughes, Hubbard & Reed, LLP (Counsel for former Defendant Lorillard Tobacco Company) 45. Humphries, Celene Harrell (Counsel for Plaintiff) 46. Invesco Ltd. (Holder of more than 10% of the stock of Reynolds American Inc., parent company of Defendant R.J. Reynolds Tobacco Company) 47. Issacharoff, Samuel (Counsel for Plaintiff) C-4 of 10

6 Graham v. R.J. Reynolds Tobacco Co., Case No Jones Day (Counsel for Defendant R.J. Reynolds Tobacco Company) 49. Kamm, Cathy A. (Counsel for Defendant Philip Morris USA, Inc.) 50. Kasowitz, Benson, Torres & Friedman, LLP (Counsel for former Defendants Liggett Group, LLC and Vector Group, Ltd.) 51. Katsas, Gregory (Counsel for Defendant R.J. Reynolds Tobacco Company) 52. Kaufman, Andrew R. (Counsel for Plaintiff) 53. Knight, II, Andrew J. (Counsel for Defendant R.J. Reynolds Tobacco Company) 54. Kouba, David E. (Counsel for Defendant Philip Morris USA, Inc.) 55. Kreiner, Christopher A. (Counsel for Defendant R.J. Reynolds Tobacco Company) 56. Laane, M. Sean (Counsel for Defendant Philip Morris USA, Inc.) 57. Lantinberg, Richard Jason (Counsel for Plaintiff) 58. Lawson, L. Christine (Counsel for Defendant R.J. Reynolds Tobacco Company) 59. Lichtman, Jason L. (Counsel for Plaintiff) 60. Lieff Cabraser Heimann & Bernstein, LLP (Counsel for Plaintiff) 61. Lifton, Diane Elizabeth (Counsel for former Defendant Lorillard Tobacco Company) C-5 of 10

7 Graham v. R.J. Reynolds Tobacco Co., Case No Liggett Group, LLC (former Defendant) 63. London, Sarah R. (Counsel for Plaintiff) 64. Lorillard Tobacco Company (former Defendant) 65. Luther, Kelly Anne (Counsel for former Defendants Liggett Group, LLC and Vector Group, Ltd.) 66. Mayer Brown, LLP (Counsel for Defendant Philip Morris USA, Inc.) 67. Mayer, Theodore V.H. (Counsel for former Defendant Lorillard Tobacco Company) 68. Mayer-Cantú, Jerome P. (Former counsel for Plaintiff) 69. Michael, Geoffrey (Counsel for Defendant Philip Morris USA, Inc.) 70. Molony, Daniel F. (Counsel for Defendant Philip Morris USA, Inc.) 71. Monroe, Aulica Lin (Counsel for Defendant R.J. Reynolds Tobacco Company) 72. Morse, Charles Richard Allan (Counsel for Defendant R.J. Reynolds Tobacco Company) 73. Motley Rice LLC (Counsel for Plaintiff) 74. Murphy, Jr., James B. (Counsel for Defendant Philip Morris USA, Inc.) 75. Nelson, Robert J. (Counsel for Plaintiff) C-6 of 10

8 Graham v. R.J. Reynolds Tobacco Co., Case No Parker, Stephanie Ethel (Counsel for Defendant R.J. Reynolds Tobacco Company) 77. Parker, Terri L. (Counsel for Defendant Philip Morris USA, Inc.) 78. Parrish, Robert B. (Counsel for Defendant R.J. Reynolds Tobacco Company) 79. Patyrk, Robb W. (Counsel for former Defendant Lorillard Tobacco Company) 80. Persinger, Morgan E. (Counsel for Defendant R.J. Reynolds Tobacco Company) 81. Philip Morris International, Inc. (Parent corporation to Defendant Philip Morris USA, Inc.) 82. Philip Morris USA, Inc. (former Defendant) 83. Pitchford, Tyler (Appellate counsel for Plaintiff) 84. Prichard, Jr., Joseph W. (Counsel for Defendant R.J. Reynolds Tobacco Company) 85. Rabil, Joseph Matthew (Counsel for Defendant R.J. Reynolds Tobacco Company) 86. Reeves, David C. (Counsel for Defendant R.J. Reynolds Tobacco Company) 87. Reilly, Kenneth J. (Counsel for Defendant Philip Morris USA, Inc.) C-7 of 10

9 Graham v. R.J. Reynolds Tobacco Co., Case No Reynolds American Inc. (Publicly held parent corporation of Defendant R.J. Reynolds Tobacco Company) 89. R.J. Reynolds Tobacco Company (Defendant) 90. Ruiz, Maria Helena (Counsel for former Defendants Liggett Group, LLC and Vector Group, Ltd.) 91. Sankar, Stephanie S. (Counsel for Defendant Philip Morris USA, Inc.) 92. Sastre, Hildy M. (Counsel for Defendant Philip Morris USA, Inc.) 93. Sears, Connor J. (Counsel for Defendant Philip Morris USA, Inc.) 94. Sexton, Terrence J. (Counsel for Defendant Philip Morris USA, Inc.) 95. Shook Hardy & Bacon, LLP (Counsel for Defendant Philip Morris USA, Inc.) 96. Smith, Gambrell & Russell, LLP (Counsel for Defendant Philip Morris USA, Inc.) 97. Sprie, Jr., Ingo W. (Counsel for Defendant Philip Morris USA, Inc.) 98. Sullivan, Thomas C. (Counsel for Defendant R.J. Reynolds Tobacco Company) 99. Swerdloff, Nicolas (Counsel for former Defendant Lorillard Tobacco Company) 100. Tayrani, Amir C. (Counsel for Defendant Philip Morris USA, Inc.) 101. Tepikian, Bruce R. (Counsel for Defendant Philip Morris USA, Inc.) C-8 of 10

10 Graham v. R.J. Reynolds Tobacco Co., Case No The Tobacco Institute, Inc. (Former Defendant) 103. Toomey, Joel B. (United States Magistrate Judge for the Middle District of Florida) 104. Tye, Michael S. (Counsel for Defendant Philip Morris USA, Inc.) 105. Vector Group, Ltd. (former Defendant) 106. Weiner, Daniel H. (Counsel for former Defendant Lorillard Tobacco Company) 107. Wernick, Aviva L. (Counsel for former Defendant Lorillard Tobacco Company) 108. William, Cecily C. (Counsel for former Defendant Lorillard Tobacco Company) 109. Williams, Jack (Counsel for Defendant R.J. Reynolds Tobacco Company) 110. The Wilner Firm (Counsel for Plaintiff) 111. Wilner, Norwood (Counsel for Plaintiff) 112. Yarber, John F. (Counsel for Defendant R.J. Reynolds Tobacco Company) 113. Yarbrough, Jeffrey Alan (Counsel for Defendant R.J. Reynolds Tobacco Company) C-9 of 10

11 Graham v. R.J. Reynolds Tobacco Co., Case No Dated: May 23, 2016 /s/ John S. Mills John S. Mills C-10 of 10

12 TABLE OF CONTENTS TABLE OF CONTENTS... i TABLE OF CITATIONS... ii STATEMENT OF AMICI S INTERESTS... 1 STATEMENT OF THE ISSUES... 2 SUMMARY OF THE ARGUMENT... 2 ARGUMENT... 5 I. Defendants Misrepresent the Engle Class Proceedings II. The Engle Findings Cannot Amount to a Ban on the Sale of Cigarettes Because They Do Not Apply to All Cigarettes III. The Preemption Defense Is Barred by the Preclusive Effect of the Judgment Affirmed in Engle III, Which Must Be Given Full Faith and Credit IV. Giving Res Judicata Effect to the Engle Findings Does Not Violate Defendant s Due Process Rights V. Austin v. Tennessee Need Not Inform the Court s Analysis Because the Preemption Issue Should Be Avoided CONCLUSION CERTIFICATE OF SERVICE i

13 TABLE OF CITATIONS * Blue Cross & Blue Shield of Md., Inc. v. Weiner, 868 F.2d 1550 (11th Cir. 1989)... Bd. of Trs. of Carpenters Pension Trust Fund for N. Cal. v. Reyes, 688 F.2d 671 (9th Cir. 1982)... Brown v. R.J. Reynolds Tobacco Co., 611 F.3d 1324 (11th Cir. 2010)... Brown v. United States, 748 F.3d 1045 (11th Cir. 2014)... Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000)... * Community State Bank v. Strong, 651 F.3d 1241 (11th Cir. 2011)... * Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006)... FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 120 S. Ct (2000)... Hess v. Philip Morris USA, Inc., No. SC , 2015 WL (Fla. Apr. 2, 2015)... ii

14 Liggett Grp., Inc. v. Engle, 853 So. 2d 434 (Fla. 3d Dist. Ct. App. 2003)... Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 116 S. Ct. 873 (1996)... Philip Morris USA Inc. v. Douglas, 134 S. Ct. 332 (2013)... * Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419 (Fla. 2013)... Philip Morris USA, Inc. v. Douglas, 83 So. 3d 1002 (Fla. 2d Dist. Ct. App. 2012)... R.J. Reynolds Tobacco Co. v. Campbell, 132 S. Ct (2012)... R.J. Reynolds Tobacco Co. v. Clay, 133 S. Ct. 650 (2012)... R.J. Reynolds Tobacco Co. v. Engle, 552 U.S. 941, 128 S. Ct. 96 (2007)... R.J. Reynolds Tobacco Co. v. Gray, 132 S. Ct (2012)... R.J. Reynolds Tobacco Co. v. Hall, 132 S. Ct (2012)... iii

15 R.J. Reynolds Tobacco Co. v. Martin, 132 S. Ct (2012)... S. Pac. R. Co. v. United States, 168 U.S. 1, 18 S. Ct. 18 (1897)... San Remo Hotel, L.P. v. City & County of San Francisco, Cal., 545 U.S. 323, 125 S. Ct (2005)... Soffer v. R.J. Reynolds Tobacco Co., 106 So. 3d 456 (Fla. 1st Dist. Ct. App. 2012)... Spector Motor Serv., Inc. v. McLaughlin, 323 U.S. 101, 65 S. Ct. 152 (1944)... Tippitt v. Reliance Standard Life Ins. Co., 457 F.3d 1227 (11th Cir. 2006)... Town of Deerfield, N.Y. v. F.C.C., 992 F.2d 420 (2d Cir. 1993)... Waggoner v. R.J. Reynolds Tobacco Co., 835 F. Supp. 2d 1244 (M.D. Fla. 2011)... * Walker v. R.J. Reynolds Tobacco Co., 734 F.3d 1278 (11th Cir. 2013)... Walker v. R.J. Reynolds Tobacco Co., No (Order of June 11, 2013)... iv

16 Weiner v. Blue Cross of Md., Inc., 925 F.2d 81 (4th Cir. 1991)... STATUTES, CONSTITUTIONAL PROVISIONS, AND RULES OF COURT Public Health Cigarette Smoking Act, Pub. L. No , 5(b), 84 Stat. 87 (codified at 15 U.S.C. 1334(b)) U.S.C. 387p... SECONDARY SOURCES v

17 STATEMENT OF AMICI S INTERESTS The amici curiae filing this brief are the law firms of Abrahamson & Uiterwyk; The Alvarez Law Firm; Avera & Smith, LLP; Brannock & Humphries; David J. Sales, P.A.; Doffermyre Shields Canfield & Knowles, LLC; The Ferraro Law Firm; Gordon & Doner; Kelley Uustal, PLC; Knopf Bigger; Law Offices of Howard M. Acosta; Law Offices of John S. Kalil, P.A.; Law Offices of William J. Wichmann, P.A.; Levin Papantonio Thomas Mitchell Rafferty & Proctor, P.A.; The Mills Firm, P.A.; Morgan & Morgan; Schlesinger Law Offices, P.A.; Searcy Denney Scarola Barnhart & Shipley, P.A.; Terrell Hogan Yegelwel, P.A.; Trop Law Group, P.A.; Vaka Law Group; The Whittemore Law Group, P.A.; and Wiggins Childs Pantazis Fisher & Goldfarb, LLC (hereinafter, Amici ). Collectively, Amici represent thousands of Engle class members and have spent tens of millions of dollars in both time and hard costs bringing hundreds of the Engle class members cases to trial (with hundreds more cases pending). Amici relied on the finality afforded by the res judicata effect of the Engle findings in taking on these cases. Their interest is in addressing what Graham s brief does not: Defendants mischaracterization of the Engle proceedings and the fact that the preemption defense is precluded as a matter of state law subject to full faith and credit in the federal courts. Although Amici agree with the arguments Graham makes and fully support affirmance of Graham s judgment, they believe that this 1

18 Court should be fully apprised of all of the legal arguments before deciding this important issue that will affect thousands of Amici s clients. No party s counsel authored this brief in whole or in part. No party, party s counsel, or any person other than Amici have contributed money for the preparation or submittal of this brief. STATEMENT OF THE ISSUES After (I) correcting Defendants mischaracterization of the Engle proceedings, this brief demonstrates that (II) the Engle findings cannot be a ban on the sale of cigarettes because they do not apply to all cigarettes, (III) Defendants constitutional preemption arguments are precluded under state law barring a due process violation, (IV) Defendants received all the process they were due in both the class and individual stages of this litigation, and (V) Austin v. Tennessee only applies to the preemption question. SUMMARY OF THE ARGUMENT As a complement to Graham s arguments for affirmance on the merits, which largely accept Defendants characterization of the class proceedings, this brief demonstrates it is unnecessary indeed, inappropriate to reach the merits of Defendants constitutional arguments because they depend on false premises that led the panel to unwittingly violate the avoidance doctrine by opining on a substantial, but unnecessary constitutional question. 2

19 I. A review of the Engle record reveals the fallacies in Defendants Goldilocks complaint that the class s claims were either too narrow to avoid a due process challenge or too broad to escape preemption scrutiny. Instead, the class claims approved by the Florida Supreme Court were just right in that they applied to all cigarettes containing nicotine designed and marketed by the defendants, but had no application to cigarettes without nicotine or cigarettes designed and marketed by other manufacturers. Equally false is Defendants claim that the Florida Supreme Court only rejected their express preemption defense. Defendants advanced and the supreme court rejected the same implied preemption defense advanced here. The course of the individual litigation that followed further undermines Defendants cries of being denied due process. II. The Engle findings cannot be a ban on the sale of cigarettes because they do not rest on the mere inherent dangers of all cigarettes, which is the false premise of Defendants preemption argument. Instead, the findings are based on the Engle defendants tortious conduct in manipulating the nicotine in their cigarettes to ensure their customers will become and stay addicted. III. The merits of Defendants constitutional preemption argument should be avoided, in any event, because relitigation of this defense is precluded by Engle III. Even if Defendants were correct in claiming that Engle III s discussion of preemption was limited to express preemption under the Labeling Act (and they 3

20 are not), a rejection of the implied preemption argument raised here was a necessary prerequisite for establishing the defendants common liability to the class on these claims. After all, the lower appellate court held in Engle II that the preemption defense asserted here defeated the class s claims, and the Florida Supreme Court quashed that decision and held that all class members were entitled to recover on these claims. Absent a due process violation, that determination must be given full faith and credit in federal court even though it was a determination of federal constitutional law. IV. As this Court correctly held in Walker, Defendants were afforded due process during the Engle class proceedings, which culminated in the Florida Supreme Court s final determination that the class members had proven the conduct elements of their claims for negligence, strict liability, fraudulent concealment, and conspiracy to conceal. That court determined these findings apply to all class members, regardless of which brand they smoked, and respectfully, it is not for this Court to second-guess that determination. V. Though it supports Graham s scholarly preemption arguments, Austin v. Tennessee should not inform the resolution of the foregoing questions because it has nothing to do with the due process question and the answer to that question renders the preemption question moot. 4

21 ARGUMENT Graham largely accepts at face value Defendants characterization of the Engle class proceedings and argues why Defendants preemption and due process arguments fail as a matter of federal law regardless of the accuracy of their factual claims. Graham is undoubtedly correct, but it is unnecessary and therefore inappropriate to reach the merits of Defendants constitutional arguments because they are based on misrepresentations of the class proceedings and have been settled in decisions that are binding on the parties. This should not be a de novo appeal of the Florida Supreme Court s decision that the class proved conduct sufficient to subject Defendants to liability to each class member. I. DEFENDANTS MISREPRESENT THE ENGLE CLASS PROCEEDINGS. Amici first provide what is missing from the parties briefs a correct and complete recitation of the relevant history of Engle litigation. Defendants describe the Engle class s claims as follows: On the claims for strict liability and negligence, the class asserted broad allegations that all cigarettes are defective, and that the sale of all cigarettes is negligent, simply because cigarettes cause diseases and are addictive. At the same time, however, the class also asserted various narrower allegations targeting design features limited to specific types of cigarettes, such as unfiltered cigarettes, filtered cigarettes, full-flavored cigarettes, light cigarettes, and cigarettes with specific additives. (Appellants En Banc Brief at 5-6.) Defendants provide no citation for this Goldilocks characterization of the claims being either too narrow to evade a due 5

22 process issue or too broad to avoid a preemption problem. They do not even cite to the appendix of Engle materials they have requested leave to file. 1 That may be because the class asserted neither kind of claim and, instead, took the just right approach of seeking to impose liability only for cigarettes that both contained nicotine and were manufactured by the Engle defendants. The starting and ending point for determining the legal theories asserted by the class is the class complaint. 2 It framed four claims that are routinely pursued in Engle litigation today: strict liability, negligence, fraud (both by misrepresentation and nondisclosure), and conspiracy to commit fraud. Compl , The strict liability and negligence counts applied solely to the tobacco companies named as defendants, whom the complaint described as cigarette manufacturers that manipulated the level of nicotine in their tobacco products so as to make 1 With a few days notice, Amici can file an appendix containing the Engle materials cited herein if it pleases the Court. 2 See Ocean Bank v. Caribbean Towers Condo. Ass n, 121 So. 3d 1087, 1090 (Fla. Dist. Ct. App. 2013) ( The principle that relief is limited to the matters pled, embedded in Florida Rule of Civil Procedure 1.110, serves as a procedural bar to a party requesting relief outside the pleadings in almost all circumstances. ). While a defendant can consent to the trial of issues not pled, Defendants were successful in preventing the Engle class from expanding its claims beyond what was pled in the complaint. See Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219, 1226 (Fla. 2016) (explaining how Defendants prevented class from asking jury to award punitive damages on strict liability and negligence claims because they were not demanded on these counts of complaint). 3 It also included claims for breach of express and implied warranty, intentional infliction of emotional distress, and medical monitoring. Compl ,

23 these products addictive. Id. at 8-9. One of these defendants, Florida s Dosal Tobacco Corp., was dropped before the verdict, and the complaint made no allegations regarding cigarettes manufactured by other manufacturers, such as Nat Sherman, Inc., and Santa Fe Natural Tobacco Co., Inc. See, e.g., (listing manufacturers, including over a dozen not named as defendants in Engle) (last visited May 22, 2016). 4 These counts alleged that the defendants manipulated nicotine levels in their cigarettes to ensure addiction, failed to use available safer alternative designs, and failed to warn consumers of what they had done. Compl. at 36-37, The defendants answers claimed that the nicotine in their cigarettes occurred naturally and not through manipulation and that their cigarettes were not addicting, and they asserted federal preemption as an affirmative defense. E.g., RJR Answer 6, 19; PM Answer 5, 16. After the trial court certified a nationwide class of smokers without any limitations to those who smoked certain types of cigarettes (e.g., filtered, light, low-tar, etc.), the defendants appealed on the ground that there were too many 4 These are not trivial companies. Dosal s 305 s, Nat Sherman s selftitled brand, and Santa Fe s American Spirit (acquired by Reynolds after the Engle litigation) are among the top 25 selling brands. (last visited May 22, 2016). 7

24 individual issues to sustain class treatment. R.J. Reynolds Tobacco Co. v. Engle, 672 So. 2d 39, 41 (Fla. Dist. Ct. App. 1996) ( Engle I ). Although it narrowed the class to Florida smokers, the appellate court otherwise affirmed class certification because the basic issues of liability common to all members of the class will clearly predominate over the individual issues. Id. On remand, the trial court formulated a three-phase trial plan. Phase 1 was a year-long trial that was limited to common issues relating exclusively to defendants conduct and the general health effects of smoking. Liggett Grp. Inc. v. Engle, 853 So. 3d 434, 441 (Fla. Dist. Ct. App. 2003) ( Engle II ). Preemption was a common topic throughout this phase. Defendants focused their arguments on claims that they failed to warn of the dangers of smoking after July 1, 1969, the effective date of the Public Health Cigarette Smoking Act, Pub. L. No , 5(b), 84 Stat. 87 (codified at 15 U.S.C. 1334(b)). On Defendants motion, the court went through every allegation of the complaint to determine whether it was preempted and granted Defendants summary judgment on the allegations in the strict liability and negligence counts that were based on a failure to warn. Order on Defendant s Motion for Partial Summary Judgment at 3-5. The court entertained additional preemption arguments throughout the trial. E.g., Tr. 96:10,736-63; 149:16,400-01, 170:18,708-21, 253:27,957-58, 421:42,393-8

25 94. The court sustained several preemption objections and overruled others. At Defendants request, it instructed the jury: Preemption is a doctrine of federal law that limits the claims the plaintiffs can make in this case. You need to understand this limitation in order to perform your duty as jurors. Tr. 351:37,569. After explaining the requirements of federal labelling law, the court warned that the jury could not base any finding of liability on a determination that after July 1 of 1969, one or more of these defendants should have included additional or more clearly stated warnings on their cigarette packages or in their advertisements. However, federal law does not limit the liability of any defendant against claims based on negligence [or] strict liability. Tr. 351:37, The defendants made few arguments before or during trial that the strict liability and negligence claims were preempted as a ban on the sale of cigarettes because they understood the claims did not go that far. For example, they argued to the jury, without objection, that the case was not about whether cigarettes themselves as a product category are wrong or unethical or immoral or against religion, or whatever other words were used. That s just not what the law requires you to do. That s not what the case is about. The case isn t a referendum on smoking. Just not that s not what it s about. Tr. 349:37,361; see also Tr. 542:53,913 ( [U]nder the theories of this case, the harm is not merely caused by actually selling cigarettes. ); Tr. 578:57,569 ( It is an undeniable fact that no matter what is decided in this courtroom, cigarettes will be available on the market in this country for the foreseeable future. ). 9

26 Defendants claim that the trial court refused their request for a verdict form that would have identified the brands of cigarettes that were defective is misleading. (Appellants En Banc Brief at 6.) True, the court declined to give their proposed impractical essay-style verdict form that would have required the jury to identify in narrative form every defect it found for every brand of cigarette and every time period. Defs. Proposed Verdict Form. But the court made clear that if Defendants want specificity, then there is a way of doing it. Tr. 35, Defendants never proposed a yes/no verdict form for specific kinds or brands of cigarettes because there were no brand-specific allegations pled by the class. Everyone knew that the class claims were directed at all cigarettes containing nicotine manufactured by these Defendants. That was the whole point of trying these claims on a class basis. The trial court instructed the jury that the class had to satisfy one of two tests to prevail on their strict liability claims that each defendant s cigarettes fail[ed] to perform as safely as an ordinary consumer would expect when used as intended or that the risk of danger in the design outweighs the benefits. Tr. 351:37,571. The court also instructed that to prevail on the negligence claim, the class had to prove that each defendant was negligent in designing, manufacturing, testing, or marketing of cigarettes [and] prior to July 1, 1969, in failing to warn smokers of the health risks of smoking or the addictiveness of smoking. Tr. 351:37,

27 The jury was asked only two questions applying to cigarettes generally. The first asked whether smoking causes various disease, and the jury answered yes for most of them. Phase I Verdict 1-2. The second asked whether cigarettes containing nicotine are addictive, and the jury answered yes. Id. at 2. But those answers did not establish liability. Instead, the strict liability question asked whether each defendant had place[d] cigarettes on the market that were defective and unreasonably dangerous. Id. at 2. The jury answered yes for each defendant separately. Id. at 2-3. Far from suggesting that all cigarette manufacturers are negligent, the negligence question expressly posited the existence of a nonnegligent manufacturer, asking whether each defendant had failed to exercise the degree of care which a reasonable cigarette manufacturer would exercise under like circumstances. Id. at 10. The jury was provided yes/no answer blanks for each defendant and for time periods before, after, and both before and after July 1, 1969, and it answered yes for all defendants and all time periods. Id. at The fraud and conspiracy claims were divided into four questions, asking whether each defendant (1) made a false statement of material fact, (2) fraudulently concealed the dangers of smoking, (3) conspired with others to misrepresent the effects of smoking, and (4) conspired with others to conceal the dangers of smoking. Id. at 4-8. The jury answered yes for all defendants except one (Brooke Group, Ltd.), and it concluded that punitive damages were warranted. Id. 11

28 Defendants unsuccessfully sought a new trial based on preemption, among other arguments. Phase I Motion for New Trial Because Phase 1 did not decide any issue of damages, there was no judgment for Defendants to appeal, and the case proceeded to Phase 2. In Phase 2, the jury first determined the individual issues for three class representatives, finding in favor of all three, and then determined that the defendants should collectively pay $145 billion to the class in punitive damages. Engle II, 853 So. 2d at 441. The defendants again sought a new trial based on preemption, clearly including the same implied preemption argument raised here, contending that comments by class counsel were tantamount to suggesting that cigarettes should not be sold because they present health risks, a position they argued was contrary to the framework for the sale of cigarettes established by Congress, which allows the sale of cigarettes. Phase II-B Motion for New Trial 33 (citing FDA v. Brown & Williamson Tobacco Corp., 529 US. 120 (2000)). In its order denying the defendants post-trial motions and entering a judgment awarding compensatory damages to the three class representatives and punitive damages to the entire class, the trial court found there was sufficient evidence that the defendants cigarettes contain carcinogens and other harmful chemicals and that they manipulated the levels of nicotine, although it also noted evidence that some cigarettes had various issues with their filters. Am. Final 12

29 Judgment & Am. Omnibus Order at 4. The court relied on case law holding that a design defect which renders the product more addictive than it could be or addictive when it need not be at all, may render the cigarette unreasonably dangerous in conjunction with its harmful qualities. Id. at 5 (citing Burton v. R.J. Reynolds Tobacco Co., 884 F. Supp (D. Kan. 1995), and Rogers v. R.J. Reynolds Tobacco Co., 557 N.E.2d 1045 (Ind. Ct. App. 1990)). A judgment having now been entered, Defendants appealed before Phase 3 could begin. That phase would have consisted of new juries determining the individual elements for the claims of the rest of the class, estimated to exceed 700,000, with the punitive damage award to be equally divided among all successful class members. Engle II, 853 So. 2d 442. The intermediate appellate court reversed the judgment on a range of issues. First, it concluded that individual issues predominated over common issues so the class should never have been certified. Id. at The other relevant ground for reversal was the court s conclusion that certain comments by class counsel sought to premise liability on the mere sale of cigarettes in violation of the preemption defense Defendants convinced the panel to adopt here: Congress has foreclosed the removal of tobacco products from the market and therefore [f]ederal law preempts claims that selling cigarettes is tortious or otherwise improper. Id. at 460 & n.35 (citing FDA, 529 U.S. 120). 13

30 While the panel quoted favorably from that decision (Opinion 39-40), the Florida Supreme Court quashed it. Engle v. Liggett Grp., Inc., 945 So. 2d 1246 (Fla. 2006) ( Engle III ). The supreme court concluded that class certification had not been an abuse of discretion, id. at , ; determined that the trial court had properly allowed the jury to make certain findings on a class basis, including the findings on strict liability, negligence, fraudulent concealment, and conspiracy to conceal, id. at 1255; but found the jury should not have been allowed to make class-wide findings for fraudulent statements because those findings were not sufficiently specific to allow another jury to determine whether a particular smoker relied on them. Id. The court also concluded that the case could not be continued as a class action into Phase 3 because the common issues had been resolved and individual issues would predominate going forward. Id. at After reviewing case law from around the country approving class treatment of only certain issues, the court concluded that the pragmatic solution was to decertify the class and allow class members to file individual damages actions in which res judicata effect would be given to the class findings that it had approved. Id. at But it made clear that the other findings, such as the findings based on fraudulent statements, would not have such effect because they were highly individualized. Id. at After all, not every class member heard the same statements and the jury had not been 14

31 asked to identify what statements were fraudulent, so how could a subsequent jury determine reliance? In contrast, another jury could apply the negligence and strict liability findings merely by determining whether a class member was injured by cigarettes manufactured by a particular defendant. Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419, 430 (Fla. 2013). In addition to holding that the strict liability and negligence findings (among others) would have res judicata effect in each individual trial, the court also directly rejected Defendants preemption argument: Although compliance with the federal warnings preempted any claim based on failure to warn, it did not eliminate the other causes of action that the jury had to consider in Phase I. Engle, 945 So. 2d at The court was not merely addressing warning label preemption, either. It was also addressing Defendants complaints that class counsel had argued to the jury that Defendants could be liable even though cigarettes legally could be sold, finding that [t]hese arguments were not an attempt to tell the jury to ignore the law. Id. at Defendants sought certiorari on both due process and preemption grounds, telling the Supreme Court of the United States that a denial of certiorari would subject petitioners to adverse judgments in progeny actions. Cert. Pet. 30. The Court promptly denied review. R.J. Reynolds Tobacco Co. v. Engle, 552 U.S. 941, 128 S. Ct. 96, reh g denied, 552 U.S. 1056, 128 S. Ct. 694 (2007). 15

32 Undeterred, Defendants raise the due process argument in nearly every case they lost, usually with the same passing argument they made in Walker that the only way to avoid their due process argument is to create a preemption problem. Every Florida appellate court, the Florida Supreme Court, and this Court have rejected that argument, and the Supreme Court of the United States has denied certiorari on this issue at least seventeen times since Engle III. 5 5 Walker v. R.J. Reynolds Tobacco Co., 734 F.3d 1278 (11th Cir. 2013), cert. denied, 134 S. Ct (2014); Philip Morris USA Inc. v. Douglas, 110 So. 3d 419 (Fla.), cert. denied, 134 S. Ct. 332 (2013); R.J. Reynolds Tobacco Co. v. Kirkland, 136 So. 3d 604 (Fla. 2d DCA 2013), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Mack, 134 So. 3d 956 (Fla. 1st DCA), cert. denied, 134 S. Ct (Fla. 2014); R.J. Reynolds Tobacco Co. v. Smith, 131 So. 3d 18 (Fla. 1st DCA), rev. denied, 139 So. 3d 299 (Fla.), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Sury, 118 So. 3d 849 (Fla. 1st DCA 2013), rev. denied, 134 So. 3d 449 (Fla.), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Townsend, 118 So. 3d 844 (Fla. 1st DCA 2013), rev. denied, 135 So. 3d 289 (Fla.), cert. denied, 134 S. Ct (2014); Lorillard Tobacco Co. v. Mrozek, 106 So. 3d 479 (Fla. 2012), rev. denied, 135 So. 3d 288 (Fla.), cert. denied, 134 S. Ct (2014); Philip Morris USA, Inc. v. Barbanell, 100 So. 3d 152 (Fla. 4th DCA 2012), rev. denied, 135 So. 3d 289 (Fla.), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Koballa, 99 So. 3d 630 (Fla. 5th DCA 2012), rev. denied, 135 So. 3d 289 (Fla.), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Brown, 70 So. 3d 707 (Fla. 4th DCA 2011), rev. denied, 133 So. 3d 931 (Fla.), cert. denied, 134 S. Ct (2014); R.J. Reynolds Tobacco Co. v. Clay, 84 So. 3d 1069 (Fla. 1st DCA), cert. denied, 133 S. Ct. 650 (2012); R.J. Reynolds Tobacco Co. v. Hall, 70 So. 3d 642 (Fla. 1st DCA 2010), rev. denied, 67 So. 3d 1050 (Fla. 2011), cert. denied, 132 S. Ct (2012); R.J. Reynolds Tobacco Co. v. Gray, 63 So. 3d 902 (Fla. 1st DCA), rev. denied, 67 So. 3d 1050 (Fla. 2011), cert. denied, 132 S. Ct (2012); Liggett Grp LLC v. Campbell, 60 So. 3d 1078 (Fla. 1st DCA), rev. denied, 67 So. 3d 1050 (Fla. 2011), cert. denied, 132 S. Ct (2012), and 132 S. Ct (2012); R.J. Reynolds Tobacco Co. v. Martin, 53 So. 3d 1060 (Fla. 1st DCA 16

33 Defendants have only recently developed preemption as a stand-alone argument as they did here, but no trial court has accepted it to Amici s knowledge. The only appellate court yet to write on the argument is the Fourth District, which rejected Defendants position on the merits in R.J. Reynolds Tobacco Co. v. Marotta, 182 So. 3d 829, 831 (Fla. Dist. Ct. App. 2016). The panel s decision in this case led that court to certify the question to the Florida Supreme Court, which accepted review and is still in the briefing stage. R.J. Reynolds Tobacco Co. v. Marotta, No. SC16-218, 2016 WL (Fla. Mar. 8, 2016). The issue is also pending in a case in the Second District that has been fully briefed and argued. Philip Morris USA, Inc. v. Lourie, No. 2D While their constitutional claims have been consistently rejected, Defendants continue to receive due process at every step. Other than the fact that they do not all burden the same trial court and proceed under different case numbers, it is hard to distinguish an Engle progeny trial from the Phase 3 proceedings envisioned in the class trial plan. Although most class members drop the two breach of warranty claims, experience is otherwise consistent with the Florida Supreme Court s observation that class members merely pick up litigation of the approved six 2010), rev. denied, 67 So. 3d 1050 (Fla. 2011), cert. denied, 132 S. Ct (2012). 17

34 causes of action right where the class left off i.e., with the Engle defendants common liability for those claims established. Douglas, 110 So. 3d at 432. Just as Graham had to do in this case, plaintiffs must prove that by the class cut-off date of November 21, 1996, the smoker (1) was a Florida citizen or resident, Damiankis v. Philip Morris USA, Inc., 155 So. 3d 453, (Fla. Dist. Ct. App. 2015), who (2) had begun suffering from a tobacco-related disease, R.J. Reynolds Tobacco Co. v. Ciccone, No. SC , 2016 WL (Fla. Mar. 24, 2016), and (3) smoked because of addiction as opposed to some other reason, Douglas, 110 So. 3d at If there is a dispute that their disease manifested before May 5, 1990 (four years prior to the filing of the class complaint), they must overcome a statute of limitations defense. Frazier v. Philip Morris USA, Inc., 89 So. 3d 937, (Fla. Dist. Ct. App. 2012). Then they must prove their damages, which are reduced by the fault the jury allocates to the smoker at least as to the negligence and strict liability claims. They must further prove the smoker relied on the Defendants concealment to have a shot at avoiding the comparative fault reduction. R.J. Reynolds Tobacco Co. v. Sury, 118 So. 3d 849, (Fla. Dist. Ct. App. 2013). Finally, to recover punitive damages, plaintiffs must prove that the defendants conduct warranted punishment by clear and convincing evidence. Soffer, 187 So. 3d at

35 Given this gauntlet each class member must run, Defendants continue to win a significant number of cases. By Amici s count, there have now been 234 Engle progeny trials in state or federal court. Plaintiffs obtained a 128 verdicts awarding compensatory damages (55%) including 69 (29%) where punitive damages were also awarded. Defendants have won 73 defense verdicts (31%). The remaining 33 trials (14%) resulted in a mistrial or hung jury, which Defendants routine tout as wins. Even when Defendants lose, damages are often very low. See, e.g., Walker, 734 F.3d at 1286 (noting judgments in two cases at issue were for $7, and $27,500). This is hardly the record of defendants who are being deprived of due process. II. THE ENGLE FINDINGS CANNOT AMOUNT TO A BAN ON THE SALE OF CIGARETTES BECAUSE THEY DO NOT APPLY TO ALL CIGARETTES. The panel s opinion could not be more clear that it rested entirely on the conclusion that the Engle strict liability and negligence findings apply to all cigarettes, an assertion the panel repeated again and again. (Opinion at 38, 43, 48, 49.) Misled by Defendants mischaracterization of these claims, the panel erred in concluding that the Engle findings at issue are premised on the theory that all cigarettes are inherently defective and that every cigarette sale is an inherently negligent act. Id. at

36 If that were the case, the jury s answer to the first question (whether cigarettes cause disease) would have been the basis for liability. But it was not. True, this fact was necessary to the class s claims, but it no more established liability here than the fact that car wrecks cause injuries would establish a manufacturer s liability in an auto products liability case. The basis for liability asserted in the strict liability and negligence claims was that these specific manufacturers designed their cigarettes by manipulating the nicotine to ensure addiction, failed to warn their customers of this manipulation before 1969, and declined to use safer available alternative designs that would not addict. By the very definition of the class, these smokers did not get cancer merely because they smoked some cigarettes; their injuries were caused by smoking dozens of cigarettes a day for decades as a result of addiction. See Douglas, 110 So. 3d at ( [P]roving class membership often hinges on the contested issue of whether the plaintiff smoked cigarettes because of addiction or for some other reason (like the reasons of stress relief, enjoyment of cigarettes, and weight control argued below). ). In short, the Engle defendants are liable to class members who became addicted, which led them to smoke enough cigarettes over a long enough period of time to get cancer, because their addiction was the result of the unreasonably dangerous design of the defendants cigarettes and the defendants negligence in 20

37 designing and marketing them. Had the defendants instead sold cigarettes based on available alternative designs that were not manipulated to ensure addiction, the class members would have avoided injury. While the jury answered the liability questions the same for all defendants still in the case by the time of trial, that outcome was not inevitable as the jury instructions demonstrate. It simply shows that class counsel chose these particular defendants wisely based on what they could prove. The findings do not suggest, for example, that top-25 selling brands of cigarettes like Dosal s 305 s, Santa Fe s American Spirit, or Nat Sherman s self-titled brand would subject those manufacturers to liability. For the foregoing reasons, the Engle record makes clear that the inherent dangers of all cigarettes were not the sole basis for the strict liability and negligence findings and that, while those findings certainly took those dangers into account, liability was premised on specific misconduct by the Engle defendants, not the mere manufacture and sale of cigarettes. Indeed, even faced with a unanimous, though vacated-pending-en-banc-review panel opinion to the contrary, a district judge in Jacksonville just rejected Defendants preemption defense for precisely this reason. See Berger v. Philip Morris USA, Inc., No. 3:09-cv-14157, 2016 WL , *6-8 (M.D. Fla. May 5, 2016) (citing the Amici s brief in support of the petition for rehearing en banc in this case). 21

38 III. THE PREEMPTION DEFENSE IS BARRED BY THE PRECLUSIVE EFFECT OF THE JUDGMENT AFFIRMED IN ENGLE III, WHICH MUST BE GIVEN FULL FAITH AND CREDIT. Although Graham failed to articulate res judicata as a bar to the preemption defense, he did contend that it is too late to revive the issue. The panel derided this suggestion as a too-big-to-fail argument to which the Constitution lends [no] credence. (Opinion at 49.) That may be, but the panel overlooked that the full faith and credit statute compels respect for the finality of Engle: The general rule implemented by the full faith and credit statute that parties should not be permitted to relitigate issues that have been resolved by courts of competent jurisdiction predates the Republic. It has found its way into every system of jurisprudence, not only from its obvious fitness and propriety, but because without it, an end could never be put to litigation. This Court has explained that the rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for, the aid of judicial tribunals would not be invoked for the vindication of rights of person and property, if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue and actually determined by them. San Remo Hotel, L.P. v. City & Cty. of S.F., 545 U.S. 323, , 125 S. Ct. 2491, 2501 (2005) (footnote and citation omitted) (quoting S. Pac. R. Co. v. United States, 168 U.S. 1, 49, 18 S. Ct. 18 (1897)). In Douglas, the Florida Supreme Court reaffirmed that Engle III finally adjudicated the defendants common liability on the conduct elements of the 22

39 strict liability and negligence claims, including every class-wide defense that either was raised or could properly have been raised: res judicata prevents the same parties from relitigating the same cause of action in a second lawsuit and 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.. Engle defendants are precluded from arguing in individual actions that they did not engage in conduct sufficient to subject them to liability. 110 So. 3d at (quoting Engle, 945 So. 2d at 1259); see also Hess v. Philip Morris USA, Inc., 175 So. 3d 687, (Fla. 2015) (holding that res judicata effect of Engle findings preclude the statute of repose defense because it goes to defendants conduct, not plaintiff s reliance). Whether one looks at this as a question of claim preclusion that does not require a prior actual adjudication, as Douglas requires, or as a question of issue preclusion that requires a prior actual adjudication, as Defendants contend, the preemption defense is barred. While Defendants initially succeeded in the state intermediate court on the same preemption defense credited by the panel, Engle II, 853 So. 2d at 460, the Florida Supreme Court ruled to the contrary. Engle III, 945 So. 2d at Indeed, rejecting the preemption defense was a necessary component of the decision to affirm the judgment in favor of the class representatives and give the findings res judicata effect in individual trials. Once the United States Supreme Court denied certiorari, that was the end. 23