Appeals Court Deals Blow To Tobacco Companies

May 21, 2017

More than a decade after the Florida Supreme Court opened the floodgates for lawsuits against tobacco companies, an Atlanta-based appeals court this week rejected arguments that could have helped shield cigarette makers in legal battles about smoking-related illnesses and deaths.

The full 11th U.S. Circuit Court of Appeals ruled against R.J. Reynolds Tobacco Co. and Philip Morris USA, Inc., which contended that federal law trumps certain claims. The appeals court also rejected the companies' arguments of due-process violations.

The case largely stems from a 2006 Florida Supreme Court ruling that established findings about a series of issues including the dangers of smoking and misrepresentation by cigarette makers. The ruling helped spawn thousands of lawsuits in state and federal courts, with plaintiffs able to use the findings against tobacco companies — lawsuits that have become known as “Engle progeny” cases.

The appeals-court decision Thursday came in an Engle progeny case tried in federal court in Jacksonville. The case was filed by the family of Faye Graham, who died after smoking for 41 years and developing chronic obstructive pulmonary disease and lung cancer, according to a brief in the case.

A jury ruled against R.J. Reynolds and Philip Morris on issues of strict liability and negligence. It also found Graham partially at fault, with a judge ultimately deciding that R.J. Reynolds should pay $550,000 in damages and Philip Morris should pay $275,000.

In the appeal, the tobacco companies argued, in part, that federal laws regulate cigarettes and, as a result, should prevent claims of strict liability and negligence based on the Engle findings — a legal concept known as federal preemption.

“The strict-liability and negligence claims in this case do not rest on any alleged defect specific to the cigarettes smoked by Mrs. Graham. Instead … they rest on the inherent riskiness of all cigarettes,” attorneys for the tobacco companies argued in a 2014 brief. “The claims here thus seek to enforce a legal duty, grounded in Florida tort law, to refrain from selling ordinary cigarettes. Because such a duty squarely conflicts with federal law, the claims here are preempted.”

But Thursday's majority ruling, written by appeals-court Judge William Pryor, rejected such contentions, writing that “federal tobacco laws do not preempt state tort claims based on the dangerousness of all the cigarettes manufactured by the tobacco companies.”

“Florida may employ its police power to regulate cigarette sales and to impose tort liability on cigarette manufacturers,” Pryor wrote in the 43-page opinion.

The majority also rejected to the tobacco companies' arguments that due-process rights had been violated in using the Engle findings in the Graham case.

But appeals-court Judge Gerald Tjoflat wrote an encyclopedic 226-page dissent on the preemption and due-process issues. As an example, in addressing the preemption issue, he wrote that judges “cannot give effect to the Florida Supreme Court's decisions in a manner that operates as a ban on the sale of cigarettes without elevating state law over federal law.”

“I merely conclude that, having surveyed both federal and state law, it is clear that Congress would have intended to preempt Graham's strict-liability and negligence claims, rooted as they are in a broadly applicable state law set forth by the Florida Supreme Court that deems all cigarettes defective, unreasonably dangerous, and negligently produced,” Tjoflat wrote.