SUPREME COURT OF FLORIDA CASE NO. SC LOWER TRIBUNAL NO. 4D

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1 Filing # E-Filed 06/03/ :11:36 PM SUPREME COURT OF FLORIDA CASE NO. SC LOWER TRIBUNAL NO. 4D R.J. REYNOLDS TOBACCO COMPANY, vs. Defendant/Petitioner, RECEIVED, 06/03/ :13:43 PM, Clerk, Supreme Court PHIL J. MAROTTA, as Personal Representative of the Estate of Phil F. Marotta, Deceased, Plaintiff/Respondent. / RESPONDENT S ANSWER BRIEF Philip Freidin Richard B. Rosenthal Freidin Brown, P.A. Counsel of Record 2 South Biscayne Boulevard Florida Bar No Suite 3100 Law Offices of Richard B. Rosenthal, P.A. Miami, Florida Brickell Avenue, Suite 1408 pf@fblawyers.net Miami, Florida Tel: (305) / Fax; (305) rbr@rosenthalappeals.com Alex Alvarez Randy Rosenblum The Alvarez Law Firm Dolan Dobrinsky Rosenblum, LLP 355 Palermo Avenue 2665 South Bayshore Drive, Suite 609 Miami, Florida Miami, Florida alex.alvarez@integrityforjustice.com rrosenblum@ddrlawyers.com Robert E. Schack 8950 Southwest 74 Court Counsel for Respondent Suite 1711 Miami, Florida reslegal@hotmail.com

2 TABLE OF CONTENTS TABLE OF CITATIONS...ii INTRODUCTION...1 STATEMENT OF THE CASE AND FACTS...2 A. The All Cigarettes Myth...3 B. RJR Repeatedly Asserted Implied Preemption Throughout The Engle Trial and Appellate Process...11 C. Other Mis-Statements in RJR s Factual Recitation...16 SUMMARY OF ARGUMENT...20 ARGUMENT...22 I. JURISDICTION/SCOPE OF REVIEW...22 II. RJR S PREEMPTION ARGUMENT IS BARRED...25 A. RJR s Argument is Barred by the Res Judicata Effect of Engle...25 B. There is No Reason for this Court to Revisit Douglas...32 III. RJR S IMPLIED PREEMPTION ARGUMENT IS WITHOUT MERIT...35 A. RJR s Implied Preemption Argument Fails Because it is Premised on the All Cigarettes Myth...35 B. The Federal Statutes Do Not Support Implied Preemption Here...37 C. The Tobacco Case Law on Preemption is Squarely Against RJR...42 D. RJR s Argument Contravenes Established Principles of Federalism and Dual Sovereignty...47 i

3 E. RJR is Not Entitled to A New Trial...48 IV. RJR S DUE PROCESS ARGUMENT IS WITHOUT MERIT...49 V. THE COURT SHOULD SUMMARILY QUASH AND REMAND SOLELY REGARDING THE CLAIM FOR PUNITIVE DAMAGES...50 CONCLUSION...50 CERTIFICATE OF SERVICE...52 CERTIFICATE OF COMPLIANCE...52 ii

4 TABLE OF CITATIONS Animal Leg. Defense Fund v. Veneman, 490 F.3d 725 (9th Cir. 2007)...19 Altria Group v. Good, 555 U.S. 70 (2008)...43 Austin v. Tennessee, 179 U.S. 343 (1900)...42 Barton Protective Servs., Inc. v. Faber, 745 So.2d 968 (Fla. 4th DCA 1999)...49 Bates v. Dow Agrosiences, LLC, 544 U.S. 431 (2005)...47 Berger v. Philip Morris USA, Inc., 2016 WL (M.D. Fla. May 5, 2016)...passim Boerner v. Brown & Williamson Tobacco Co., 394 F.3d 594 (8th Cir. 2005)...46 Bougpoulos v. Altria Group, Inc., 954 F. Supp. 3d 54 (D. N.H. 2013)...46 Brown v. Philip Morris USA, Inc., th No (Fla. 4 Cir. Aug. 3, 2015)...24 Cantor v. Davis, 489 So. 2d 18 (Fla. 1986)...25, 28 Chinatown Neighborhood Assn. v. Harris, 794 F.3d 1136 (9th Cir. 2015)...43 Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)...40, 43 ii

5 Conley v. RJ Reynolds Tobacco Co., 286 F. Supp. 2d 1097 (N.D. Cal. 2002)...43, 46 Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419 (Fla. 2013)...passim Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006)...passim FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000)...14, 16, 17, 37, 38 Ferlanti v. Liggett Group. Inc., 929 So. 2d 1172 (Fla. 4th DCA 2006)...43 Freightliner Corp. v. Myrick, 514 U.S. 280 (1995)...39, 40 Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000)...43, 44 Graham v. R.J. Reynolds Tobacco Co., 782 F.3d 1261 (11th Cir. 2015), vacated and reh g en banc ordered, 811 F.3d 434 (11th Cir. 2016)...1, 19, 23 Gray v. R. J. Reynolds Tobacco Co., st No (Fla. 1 Cir. May 20, 2015)...24 Hardin v. R. J. Reynolds Tobacco Co., th No (Fla. 11 Cir. May 13, 2015)...24 In re Holder, 945 So. 2d 1130 (Fla. 2006)...32 In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 725 F.3d 65 (2d Cir. 2013)...43 iii

6 Izzarelli v. RJ Reynolds Tobacco Co., 806 F. Supp. 2d 516 (D. Conn. 2011)...46 Liggett Group, Inc. v. Davis, 973 So. 2d 467 (Fla. 4th DCA 2007)...17 Liggett Group, Inc. v. Engle, 853 So. 2d. 460 (Fla. 3d DCA 2003)...14, 45 Medtronic, Inc. v. Lohr, 518 U.S, 470 (1996)...47 Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985)...42 Murray v. Reiger, 872 So. 2d 217 (Fla. 2002)...25, 28 Musnick v. King Motor Co., 325 F.3d 1255 (11th Cir. 2003)...19 Philip Morris USA, Inc. v. Arnitz, 933 So. 2d 693 (Fla. 2d DCA 2006)...43 Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419 (Fla. 2013)...passim Philip Morris USA, Inc. v. Hess, 95 So. 3d 254 (Fla. 4th DCA 2012)...31, 32 Philip Morris USA, Inc. v. Lourie, No. 2D (Fla. 2d DCA)...24 Philip Morris USA, Inc. v. Tullo, 121 So. 3d 595 (Fla. 4th DCA 2012)...48 Pickelman v. Mich. State Police, 31 Fed. App x 298 (6th Cir. 2002)...43 iv

7 Puerto Rico Dept t of Consumer Affairs v. Isla Petro. Corp., 485 U.S. 495 (1988)...39 Richardson v. RJ Reynolds Tobacco Co., 578 F. Supp. 2d 1073 (E.D. Wisc. 2008)...46 Riegel v. Medtronic, Inc., 552 U.S. 312 (2008)...39 RJ Reynolds Tobacco Co. v. Engle, 672 So. 2d 39 (Fla. 3d DCA 1996)...8 RJ Reynolds Tobacco Co. v. Engle, 552 U.S. 941, rh g denied, 552 U.S (2007)...16 RJ Reynolds Tobacco Co. v. Marotta, 182 So. 3d 829 (Fla. 4th DCA 2016)...passim RJ Reynolds Tobacco Co. v. Martin, 53 So. 2d 1060 (Fla. 1st DCA 2010)...5 Russo v. Philip Morris USA, Inc., th No CA-01(58) (Fla. 11 Cir. Apr. 28, 2015)...24 Ryan v. R.J. Reynolds Tobacco Co., th No (19) (Fla. 17 Cir. Apr. 16, 2015)...24 Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219 (Fla. 2016)...passim Spain v. Brown & Williamson Tobacco, 363 F.3d 1183 (11th Cir. 2004)...46 Sprietsma v. Mercury Marine, 537 U.S. 51 (2002)...44 v

8 United States v. Lopez, 514 U.S. 549 (1995)...48 United States v. Philip Morris USA, Inc., 449 F. Supp. 2d. 1 (D.D.C. 2006), aff d in part, 566 F.3d 1095 (D.C. Cir. 2009), cert. denied, 130 S. Ct (2010)...47 Viva! Int l Voice for Animals v. Adidas Promo. Retail Ops., 162 P.3d 569 (Cal. 2007)...43 Walker v. RJ Reynolds Tobacco Co., 734 F.3d 1278 (11th Cir. 2013), cert. denied, 134 S. Ct (2014)...18, 19, 45, 50 Williamson v. Mazda Motors of Am., Inc., 562 U.S 323 (2011)...47 Wyeth v. Levine, 555 U.S. 555 (2009)...39, 44, 45, 47 STATUTORY PROVISIONS Alcohol and Drug Abuse Amendments of 1983, Pub. L. No , 97 Stat. 175 (1983)...40 Alcohol, Drug Abuse and Mental Health Administration Reorganization Act, Pub. L. No , 202, 106 Stat. 394 (1992)...40 Comprehensive Smokeless Tobacco Health Education Act of 1986, 15 U.S.C (1988)...41 Family Smoking Prevention and Tobacco Control Act of 2009, 21 U.S.C. 387p(a)(1) & (b)...41 Federal Cigarette Labeling and Advertising Act of 1965, 15 U.S.C et. seq...40 vi

9 Public Health Cigarette Smoking Act of 1969, Pub. L. No , 84 Stat. 87 (1970)...40 OTHER MATERIALS Brief of Plaintiff Class in Engle, 2004 WL (Fla. 2004)...28 Brief of Petitioner RJ Reynolds in Douglas, 2012 WL (Fla. May 30, 2012)...33 G. Kogan & R. Waters, The Operation and Jurisdiction of the Florida Supreme Court, 18 NOVA L. REV (1994) Reply Brief of RJ Reynolds in Douglas, 2012 WL (Fla., filed June 18, 2012)...33, 34 RJ Reynolds U.S Supreme Court brief in FDA v. Brown & Williamson, 1999 WL (U.S., filed Sept. 10, 1999)...38 RJ Reynolds Pet. for Certiorari in Engle, 2007 WL (U.S., filed on May 21, 2007)...15, 16 Robert N. Proctor, Why ban the sale of cigarettes? The case for abolition, TOBACCO CONTROL, 22:i27 (2013)...42 vii

10 INTRODUCTION The arguments presented by Petitioner R.J. Reynolds Tobacco Company ( RJR ) have been unanimously rejected by every court that has considered them. Indeed, the supposed conflict that animated the Fourth District to certify the implied preemption question as one of great public importance has since disappeared, leaving instead complete unanimity among all the Florida and Federal courts. Fifteen days after the Fourth District noted that its ruling in this case conflicted with a panel decision of the U.S. Court of Appeals for the Eleventh Circuit in Graham v. RJR, 782 F.3d 1261 (11th Cir. 2015), the Eleventh Circuit vacated its Graham panel decision and ordered that case to be heard en banc. 811 F.3d 434. Both before and since the Graham panel opinion was rendered a nullity by its vacatur, every court confronted with the certified question whether the negligence and strict liability claims of an Engle progeny plaintiff are impliedly preempted by federal law has rejected it. The unanimous tidal wave of court decisions is correct. RJR s implied preemption argument is barred by res judicata, and it is wrong anyhow. The only live issue in this case is something that already has been resolved by this Court: Mr. Marotta was entitled to present his punitive damages case to the jury. Soffer v. RJR, 187 So. 3d 1219 (Fla. 2016). The Fourth District ruled pre-soffer that punitive damages were unavailable to Mr. Marotta on his victorious products liability 1

11 claim, rejecting his cross-appeal below. RJR v. Marotta, 182 So. 3d 829, 830 (Fla. 4th DCA 2016). That lone aspect of the Fourth District s decision should be summarily quashed and remanded for further proceedings consistent with Soffer. STATEMENT OF THE CASE AND FACTS In this Engle progeny case, the jury found that Mr. Marotta s addiction to RJR s cigarettes caused his death by lung cancer. The evidence demonstrated that Mr. Marotta began smoking cigarettes at the age of 12, became heavily addicted, and smoked 2 to 3 packs a day of RJR brands (mostly Winston, but also Kools, Doral and Tareyton) persistently for decades, before his eventual death at the early age of See, e.g., Tr. Vol. 5 at 496. He tried to beat his addiction numerous times, always without success. Tr. Vol. 11 at 1421; Vol. 17 at On a strict products liability claim, the jury found RJR liable. The jury found for RJR on the claims for negligence, concealment, and conspiracy. The jury assigned 58% of the fault to RJR and 42% to Mr. Marotta, awarding $6 million in total compensatory damages $2 million to each of Mr. Marotta s three survivors. The trial court denied RJR s post-trial motions, and after reducing the damages to 1/ References to Mr. Marotta s trial will be cited in the following format: Tr. Vol. [volume number] at [page number]. References to the Engle trial the materials of which were included as part of the record in the Fourth District will be cited in the following format: Engle Tr. Vol. [volume number] at [page number]. 2

12 reflect the jury s determination of comparative fault, entered final judgment against RJR for $3.48 million. The Fourth District affirmed on all points, but recognizing the Eleventh Circuit s decision to the contrary in Graham, it certified the implied preemption question as one of great public importance. Marotta, 182 So. 3d at 834. Tellingly, RJR s appellate brief says little about the evidence actually presented at Mr. Marotta s trial. Instead, RJR simply makes sweeping generalizations, trying to convince this Court (Brief at 1) that Mr. Marotta s strict liability claim was premised on the inherent health and addiction risks of all cigarettes. That is simply not so. This myth the All Cigarettes Myth as we will call it pervades RJR s Brief. A. The All Cigarettes Myth The reality is that we presented evidence that Mr. Marotta was addicted to the RJR cigarettes he smoked, and that this addiction caused his death by lung cancer. From the outset, we told the jury our case would not be about inherent health risks and addictiveness of all cigarettes but rather how RJR deliberately engineered and manipulated the nicotine levels: They purposely controlled the levels of nicotine in cigarettes to keep people addicted. They can take it out almost completely or to the point where it s no longer addictive. But they chose not to do that. Tr. Vol. 5 at 452. And that is exactly what our evidence proved. It demonstrated that RJR deliberately manipulated the levels of nicotine in the cigarettes Mr. Marotta smoked, 3

13 in order to maximize the addictiveness of them. For example, using a demonstrative chart, one of our experts testified (Tr. Vol. 7 at ): A: [T]hese are different formulas -- well, rather nicotine contents in the different types of leaves, and then they re separated by each different brand, a number of different brands. So the three bars are each for Marlboro, Kent, and Winston, the different ratios of different types of leaf that are used in those. Q: Are Winston cigarettes reflected in this chart? A: Yes, those are the yellow bars. Q: And is that manufactured by R.J. Reynolds Tobacco Company? A: Yes, it s shows the percentage of nicotine there for Winston is being just a little over two percent nicotine in bright leaf. Q: And what is the significance of the fact that different stings of tobacco have different amounts of nicotine in them? A: It s just a way for the tobacco industry to do what they call precision manufacturing, where they can actually control very precisely how much nicotine was in a particular brand by manipulating the different types of leaves involved in the blending of the cigarette. The expert further explained some of the ways in which RJR deliberately manipulated the nicotine, emphasizing that there was nothing inherent about the addictive characteristics of RJR s cigarettes rather, it was RJR s deliberate decision: Q: And before we go through the specifics of this document, let me just ask you a couple of general questions about this issue of controlling nicotine. Is that a sophisticated process? Is it an easy process? Can you describe it for the jury? A: No, it s quite sophisticated. The way it's actually manipulated in these processes is done within two decimal points of content of nicotine for any given cigarette design. Q: Have you studied whether the issue of how tobacco is grown can affect the amount of nicotine in that tobacco? A: Yes. 4

14 Q: And can you describe that for us, please? A: Well, there are many different ways to control the amount of nicotine in a particular tobacco leaf, and this can be been controlled by how tightly the plants are grown together, by how much fertilizer is added, by manipulating which particular leaf you take. The top leaves have more nicotine than the lower leaves. The type of climate will affect the type of soil, so there are many different ways to control how much nicotine is in the leaf, apart from just which variety you choose as well; that's another way to manipulate. Q: Is it possible to grow tobacco with no nicotine? A: Yes, or essentially no nicotine. Id. at The point was summarized in this pithy exchange (Tr. Vol. 9 at 976): Q: Doctor, does nicotine occur naturally in tobacco? A: Yes. Q: Does that mean that it s not manipulated by the tobacco companies? A: No. The expert further explained that RJR actually did, at one point, design and market certain cigarettes that it believed would be safer these cigarettes, called Premier and Eclipse, merely heated the tobacco rather than burning it, causing the smoker to inhale less actual smoke but RJR removed them because smokers 2 generally disliked the taste. Tr. Vol. 10 at While marketing these safer 2/ This reality has existed for over 80 years. RJR v. Martin, 53 So. 3d 1060, 1070 (Fla. 1st DCA 2010) ( The evidence also showed that as early as 1935 it was technically possible to remove nicotine from Lucky Strikes cigarettes but the company [RJR's predecessor] chose not to do so.... That business decision endured, as... RJR... remained concerned that if it were to remove nicotine from its cigarettes people would elect not to smoke. ). 5

15 cigarettes, RJR continued to sell the brands that Mr. Marotta smoked, which RJR privately knew were unreasonably addictive and unsafe. Tr. Vol. 10 at In closing argument, we reminded the jury of this point (Tr.Vol 19 at ): They get it. Listen, if we continue to make this thing addictive, people are going to continue to smoke. And if we don t make it addictive, guess what, people won t smoke.... [T]his whole thing about, well, if you get a little bit of tobacco from the ground, it s going to have nicotine in it. Nicotine naturally occurs in tobacco. Yeah. But they manipulate it, because you could raise or lower the level of nicotine in cigarettes so that you don t make it addictive. The products liability question on the verdict form echoed this specificity: Were the defective and unreasonably dangerous cigarettes manufactured by Reynolds the legal cause of Mr. Marotta s lung cancer and death? R. Vol. 48 at Based on the evidence, the jury answered this question in the affirmative. Id. Similarly, the trial and appellate record in Engle belie any notion that Mr. Marotta s case was premised on an assertion that all cigarettes are defective because of their inherent risks. It is not accurate when RJR asserts (Brief at 2) that in the Engle trial, [o]n the strict liability and negligence claims, the class asserted broad allegations that all cigarettes are defective, and the sale of all cigarettes is negligent, because cigarettes are addictive and cause diseases. Here is what actually occurred during Engle: RJR omits any discussion of the natural starting point for analyzing the nature 6

16 and scope of the claim in Engle: the Class Complaint itself. The Class Complaint did not encompass an attack on all cigarettes. Engle Compl , Nor did the strict liability and negligence counts apply to all tobacco companies selling cigarettes far from it. Rather, it 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 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 many other leading manufacturers, such as Nat 3 Sherman, Inc., and Santa Fe Natural Tobacco Co., Inc. Nor did the Class Complaint seek to include smokers of all cigarettes as class members. Rather, the focus was on addicted smokers. The Class Complaint asserted that the common questions included whether the defendants manipulated the levels of nicotine in their tobacco products, and whether the level of nicotine in their products was manipulated to cause smokers to be addicted to nicotine. Id. at Similarly, the Class Complaint cited industry documents reflecting that cigarettes are not the industry s true product; rather a cigarette is a storage container for a day s supply of nicotine. Id. at 23. It also cited direct evidence of manipulation 3 See (listing the top 25 brand manufacturers, including over a dozen not named as defendants in Engle). 7

17 of nicotine levels. Id. at 26. In context, the dangerous and defective products referred to as cigarettes containing nicotine, id. at 36, were those which produced addiction and disease from the named defendants manipulation. The protracted battle regarding class certification in Engle further narrowed the scope of the case, and intensified its focus on the role that nicotine plays in causing disease. Not only was addiction an element of class membership, but class members were limited to those whose illness and death were caused by that addiction. Ultimately, the Third District refined the class definition to include all Florida citizens and residents, and their survivors, who have suffered, presently suffer or have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine. RJR v. Engle, 672 So. 2d 39, (Fla. 3d DCA 1996). The Phase I verdict form for the Engle trial further cements the notion that the 4 jury was not being asked to render a decision about all cigarettes. The verdict form the trial court ultimately approved 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 4/ The trial court refused to give the named defendants 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, but the court made clear that if defendants want specificity, then there is a way of doing it, Engle Tr. 35 at But the defendants never submitted a proposed verdict form with Yes/No questions for specific types of cigarettes. 8

18 intended or that the risk of danger in the design outweighs the benefits. Engle Tr. 351 at 37,571. The court also instructed that to prevail on negligence, the class had to prove 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. Engle Tr. 351 at 37,577. 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, standing alone, 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 non-negligent 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

19 If RJR s assertion that the Engle theory of strict liability was that all cigarettes are defective... because cigarettes are addictive and cause disease were correct, the jury s answer to the first question (do cigarettes cause disease?) would have been the basis for liability. But it was not. This fact was necessary but not sufficient to establish the class s claims; standing in isolation, the verdict form s first question no more established liability than the fact that car wrecks cause injuries would alone establish a manufacturer s liability in an auto products liability case. The basis for liability asserted in the strict liability and negligence claims against the Engle defendants was that those 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 many cigarettes every day as a result of addiction. 5 In short, the record squarely exposes and refutes RJR s All Cigarettes Myth. And that myth is the predicate for RJR s entire argument here. The strict liability claim was that the defective cigarettes were only those: (1) that contained nicotine 5/ 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). ). 10

20 (the trial evidence showed that the defendants could and indeed did market some safer cigarettes, but they didn t sell well because smokers didn t get addicted); and (2) that were designed and marketed by these defendants (many major brands were not produced by the Engle defendants, and thus were not affected, and one named defendant, Brooke Group, was partially exonerated in Engle); and (3) that were designed and marketed during a limited time frame to a limited class of smokers. Earlier this month, the U.S. District Court in Jacksonville systematically reviewed these very same materials from the Engle trial record and concluded, in a detailed opinion, that the All Cigarettes Myth was just that a myth: PM USA evidently believes that the Phase I findings were premised on the theory that all cigarettes are inherently defective and that every cigarette sale is an inherently negligent act. PM USA s characterization of the Engle findings is hard to reconcile with what occurred at the Phase I trial, taking into account the Engle plaintiffs allegations, the evidence presented in Phase I, the jury instructions, and the structure and content of the Phase I verdict itself. * * * Accordingly, I reject PM USA s characterization of the Phase I liability findings as being based on nothing more than the inherent properties of cigarettes. Berger v. Philip Morris USA, Inc.,2016 WL , *6-*8 (M.D. Fla. May 5, 2016). B. RJR Repeatedly Asserted Implied Preemption Throughout the Engle Trial and Appellate Proceedings. Another critical area in which the factual recitation in RJR s Brief is misleading is its discussion of the implied preemption issue in the Engle class trial and appeals. RJR s factual recitation mentions only a (later-quashed) decision about 11

21 preemption from the Third District in Engle (Brief at 31), but RJR omits any reference to its own repeated invocation of the implied preemption affirmative defense throughout the Engle litigation. From the very filing of the Engle Class Complaint, RJR asserted the affirmative defense of federal preemption. RJR Answer at 6, 19. In analyzing the Engle defendants motion for summary judgment based on federal preemption, the trial court scrutinized the claims of the individual class members to determine if they were preempted. Order on Defendants Motion for Partial Summary Judgment 9. The court painstakingly analyzed dozens of discrete allegations by the class, identifying those which were not preempted. For example, the class s allegation that the defendants manipulated the level of nicotine in their tobacco products so as to make these products addictive was not preempted. Id. 9(a). Nor were the allegations that the defendants failed to utilize available, safer alternative designs for cigarettes, id. 9(ee), nor that the defendants failed to design and manufacture products that did not contain an unreasonable level of nicotine. Id. 9(aaa). The defendants also raised the issue of preemption through repeated evidentiary objections. E.g., Engle Tr.96:10,736-63; 149:16,400-01, 170:18,708-21, 253:27,957-58, 421:42, The trial court sustained some of them. At the defendants request, the trial court instructed the jury (Engle Tr. 351:37,569): 12

22 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. Numerous times the defendants made the same core implied preemption argument that RJR presents here i.e., the defendants could not be held liable merely for selling cigarettes, because cigarettes are legal (Engle Tr. 349: 37,361): [This case is 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. See id. 542:53,913 ( [U]nder the theories of this case, the harm is not merely caused by actually selling cigarettes. ); id. 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. ). After the jury in Phase I found for the class, the defendants unsuccessfully sought a new trial based, among other arguments, on preemption. Phase I Motion for New Trial And then again, after the jury returned its Phase II verdict, the defendants again sought a new trial based on the same argument that RJR is advancing today: that the class suggesting that cigarettes should not be sold because they present health risks, is contrary to the framework for the sale of cigarettes established by Congress, which allows the sale of cigarettes. Phase II-B Motion for 13

23 New Trial 33 (citing FDA v. Brown & Williamson, 529 US. 120 (2000)). The defendants made the implied preemption argument on appeal, and the Third District accepted it: In FDA v. Brown & Williamson, 529 U.S. at 137, 120 S.Ct. 1291, the Supreme Court noted that Congress has foreclosed the removal of tobacco products from the market since at least Moreover, during the period from 1965 to 1992 a period in which the adverse health consequences of tobacco use were well known, as were nicotine's pharmacological effects Congress passed various statutes that directly addressed the problem of tobacco and health, while continuing to uphold the legality of selling cigarettes. FDA v. Brown & Williamson, 529 U.S. at , 120 S.Ct See Lorillard v. Reilly, 121 S.Ct. at Because the sale of cigarettes is subject to federal regulation, attempts to impose contradictory requirements or prohibitions under state law are subject to at least implied preemption. See, e.g., Insolia, 128 F.Supp.2d at 1225 ( allowing tort actions against cigarette manufacturers and sellers for the allegedly negligent act of continuing to make and sell cigarettes would interfere with Congress's policy in favor of keeping cigarettes on the market ); see also, Geier v. American Honda Motor Co., 529 U.S. 861, 865, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000) (federal regulation of car manufacturers preempted state-law tort claims); cf., Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341, 350, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001) (state-law claims based on alleged misrepresentations to a federal regulatory agency were preempted). Liggett Grp., Inc. v. Engle, 853 So. 2d 460 n.35 (Fla. 3d DCA 2003). But this Court then quashed that opinion. Engle v. Liggett Grp., Inc., 945 So. 2d 1246 (Fla. 2006). Among this Court s various holdings in Engle was its direct rejection of defendants preemption argument: Although compliance with the federal warnings preempted any claim based on failure to warn, it did not eliminate the other 14

24 causes of action that the jury had to consider in Phase I. Engle, 945 So. 2d at The Court was not merely addressing express preemption based on the warning labels; it was also addressing defendants implied preemption argument that class counsel had argued to the jury that defendants could be liable despite the fact that cigarettes legally could be sold, finding that [t]hese arguments were not an attempt to tell the jury to ignore the law. Id. at Notably, in quashing the Third District s opinion, this Court also reinstated the jury s compensatory damage verdicts for two of the class representatives: Mary Farnan and Angie Della Vecchia. Id. at The defendants eventually paid those judgments to Ms. Farnan ($2.85 million) and Ms. Della Vecchia ($4.02 million). Yet today, having been found liable for and ultimately paid those judgments, RJR makes the Orwellian assertion (Brief at 32) that it was RJR who prevailed in Engle because the Third District s implied preemption ruling went unchallenged in this Court. But before payment was made to the two victorious class representatives in Engle, RJR sought certiorari in the U.S. Supreme Court, where they made federal preemption a centerpiece, listing it as one of the two Questions Presented in the case, along with due process. RJR Pet. for Certiorari in Engle, 2007 WL (U.S. May 21, 2007). RJR s petition asserted not just express preemption as a basis for review, but also just as RJR is asserting today the supposed inconsistency 15

25 between liability under Florida common law tort principles and the basic purpose of federal statutes regulating tobacco. Id. at *20,*29. RJR explicitly acknowledged that its petition would be its final opportunity to defeat Engle progeny cases on the basis of preemption: If certiorari is not granted, the Florida courts disregard for federal preemption will subject petitioners to adverse judgments based on those theories in all the follow-on cases to which the Florida Supreme Court has given the green light. Id. at *30. The U.S. Supreme Court denied review. RJR v. Engle, 552 U.S. 941, rh g denied, 552 U.S (2007). As the foregoing chronology reveals, the Engle case from beginning to end was replete with the defendants repeated assertions that the plaintiffs claims were impliedly preempted by federal law. And those efforts ultimately failed. C. Other Mis-Statements in RJR s Factual Recitation. Although we will amplify this infra, it bears mention here RJR has mis-stated the holdings of several cases in its factual recitation. First, RJR says (Brief at 1) that FDA v. Brown & Williamson ( B&W ), 529 U.S. 120 (2000), held as a matter of federal law that Congress has foreclosed the removal of tobacco products from the market. Id. at This selective quotation snippet is misleading. B&W certainly did not hold that Congress has decreed tobacco products cannot be banned anywhere within the country by any governmental entity. The Supreme Court instead 16

26 made clear that it was saying the FDA could not effect a nationwide ban on tobacco products. B&W, 529 U.S. at 139 ( A ban of tobacco products by the FDA would therefore plainly contradict congressional policy ) (emphasis ours). That is because the FDA is an administrative agency, and as such, it would have needed a Congressional delegation of authority for the agency to effect such a ban. As we explain infra, the sovereign States, unlike federal administrative agencies, do not need a permission slip from Congress to exercise regulatory authority to protect the public health and welfare of their citizens and residents. Morever, the market B&W was referring to i.e., that for which the FDA could not ban tobacco products was the nationwide market. See id. at (Congress is the entity which gets to set policy for commerce and the national economy ). B&W said nothing at all about whether a any particular State could regulate or even completely ban the sale of tobacco products within its State borders. RJR next misleads (Brief at 1) by stating that [t]he Fourth District has given conflicting answers on the implied preemption question in the case at bar and in Liggett Grp., Inc. v. Davis, 973 So. 2d 467 (Fla. 4th DCA 2007). RJR claims that the Fourth District in the case at bar held the opposite from Davis and did so without attempting to distinguish Davis. Id. Not so. In actuality, the Fourth District in the case at bar directly addressed Davis, explaining that [w]hether a state law claim is 17

27 preempted is dependent on the exact nature of that particular claim and then quoting Davis for the proposition that state law claims based on the manufacturer s practices of testing or research unrelated to advertising were not preempted. Accordingly, not all tobacco claims are preempted, only certain ones. Marotta, 182 So. 3d at 831 (quoting Davis, 973 So. 2d at ). As the Fourth District made clear, there is no conflict between Marotta and Davis because the holding of each is predicated on the exact nature of that particular claim. Id. Davis was not an Engle progeny case, and thus its claims were not Engle claims. Davis actually affirmed that a design defect claim against a cigarette manufacturer is not preempted by federal statutes. Id. at 472. Next, RJR mis-states the Eleventh Circuit s decision in Walker v. RJR, 734 F.3d 1278 (11th Cir. 2013). According to RJR (Brief at 6), Walker premised its decision upon the court s read[ing] Douglas to have held that the Engle jury actually decided that all cigarettes are defective, and the sale of all cigarettes is negligent, because cigarettes are addictive and cause various diseases. Id. at 1281, Despite RJR s repeated use of the word all in quotation marks, Walker never endorsed the All Cigarettes Myth. Rather, Walker specified that it was addressing the Engle defendants cigarettes (id. at 1281) which, as we noted supra, is a considerably smaller sub-set of cigarettes than all cigarettes. Indeed, rather than accepting the All Cigarettes Myth, what Walker actually held was that the decision 18

28 of the Supreme Court of Florida [in Douglas] forecloses that argument. Whether a jury actually decided an issue is a question of fact, and the Supreme Court of Florida looked past the ambiguous jury verdict to decide this question of fact. Id. at 1289 (bracketed material added for clarity; internal citation omitted). RJR reports (Brief at 8) that the Eleventh Circuit granted rehearing en banc in Graham but does not mention the panel decision was also vacated, 811 F.3d 434, meaning it is a legal nullity. Musnick v. King Motor Co., 325 F.3d 1255, 1257 n.1 (11th Cir. 2003) (A vacated decision has no effect whatsoever. ); Animal Leg. Defense Fund v. Veneman, 490 F.3d 725, (9th Cir. 2007) (Thomas, J., concurring) ( Vacatur... render[s] an opinion a legal nullity. ). Lastly, RJR mis-states the holding of the Fourth District in the case at bar. According to RJR (Brief at 10), the Fourth District held that federal law does not impliedly preempt strict-liability and negligence claims based on the inherent health and addiction risks of all cigarettes. The Fourth District held no such thing. Rather, the court described the flaws in the assertion that the past ten years of Florida tobacco case law can somehow be equate[d]... to a ban on cigarette sales. Marotta, 182 So. 3d at 832. Indeed, specifically because the Fourth District did not credit RJR s All Cigarettes Myth, it concluded as follows: In sum, because Engle progeny cases do not support a conclusion that strict product liability claims amount 19

29 to a ban on the sale of cigarettes, and because federal tobacco laws expressly preserve a state s ability to regulate tobacco in ways other than manufacturing and labeling while declining to modify or otherwise affect any action or the liability of any person under the product liability law of any State, we find no conflict between the applicable state and federal laws. Id. at 834. SUMMARY OF ARGUMENT There is no reason for this Court to exercise its discretion to decide the certified question because the underlying conflict which prompted the Fourth District to certify it no longer exists. Indeed, the Eleventh Circuit having now vacated its panel opinion in Graham, every court both Florida and Federal is in total agreement that RJR s implied preemption argument fails. Put simply: There is no conflict and no need to provide guidance to the lower courts in Florida. All courts already agree. The only issue that merits this Court s attention is the argument the Fourth District rejected in our cross-appeal below. Mr. Marotta argued that the trial court should have permitted him to seek punitive damages on his strict liability claim, and noted that this exact issue was then pending in this Court. But before this Court resolved the question by issuing its decision in Soffer v. RJR, 187 So. 3d 1219 (Fla. 2016), the Fourth District disallowed Mr. Marotta s punitive damages claim. Marotta, 182 So. 3d at 830. That lone aspect of the Fourth District s decision should 20

30 be summarily quashed and remanded for further proceedings consistent with Soffer. The Court should go no further than that. But if it does, RJR s preemption argument is barred by the res judicata effect of Engle anyhow. As this Court made clear in Douglas, the res judicata effect of Engle bars any arguments that were raised or could have been raised in the Engle litigation which seek to immunize the conduct of the Engle defendants. In other words, the conduct elements of their torts have been established and cannot be contested. But that is exactly what RJR is attempting to do here, through its preemption defense: arguing that its conduct was non-tortious because it was impliedly protected by federal law. Certainly nothing prevented RJR from making that argument within the Engle litigation, and indeed RJR did make it there repeatedly. Either way, it is barred now. Accordingly, this Court need not and indeed should not bother confronting the implied preemption question. Morever, the Court has already decided the question in both Engle and Douglas, and there is no reason to re-visit it here. Engle held: 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 [of the Engle trial]. Engle, 945 So. 2d at In Douglas, RJR again asserted its preemption argument, but the Court rejected it, affirming the general verdict for the 21

31 plaintiff based on strict liability. Douglas, 110 So. 3d at 422. RJR now attempts to tapdance away from Douglas holding by arguing that its argument today is somehow different from what it argued in Douglas; but RJR s own briefs in both Engle and Douglas betray the fallacy of that argument. Even if RJR s preemption argument were not barred, the argument is wrong on the merits anyway. It is predicated on RJR s All Cigarettes Myth : i.e., that the Engle strict liability claim is that all cigarettes are defective because of their inherent health risks and addictiveness. As our factual recitation explained, that assertion is simply not true. The Engle findings do not involve all cigarettes. They pertain only to a limited universe of cigarettes of a limited kind, produced and marketed by a limited list of tobacco companies, during a specific limited time frame. Nor is there any merit to RJR s perfunctory due process argument, an argument which every court including this one has rejected many times over. There is nothing new about that argument today. ARGUMENT I. JURISDICTION/SCOPE OF REVIEW As this Court is well aware, certification does not create mandatory jurisdiction. The Florida Supreme Court has discretion to decline review, such as where the question is irrelevant, or where answering it would serve no purpose. On 22

32 occasion, the Court also seems to have declined to answer questions it regarded as too insignificant. G. Kogan & R. Waters, The Operation and Jurisdiction of the Florida Supreme Court, 18 NOVA L. REV (1994). When the Fourth District certified the question in this case, it explicitly did so based on the view that its opinion conflicted with the panel opinion in Graham (Marotta, 182 So. 3d at , 834): Recently in Graham v. R.J. Reynolds Tobacco Co., 782 F.3d 1261 (11th Cir. 2015, the Eleventh Circuit held that Engle progeny strict liability and negligence claims are implicitly preempted by federal law. *** We disagree with Graham, and we respectfully note what we believe to be flaws in its reasoning. *** Recognizing the Eleventh Circuit s decision to the contrary, however, we certify this latest Engle progeny defense as a question of great public importance[.] However, exactly 15 days after the Fourth District issued its opinion, the Eleventh Circuit vacated the panel opinion in Graham and set it for rehearing en 6 banc. Vacatur renders the panel opinion a nullity, as if it never existed. Supra at 19. Now that the Graham panel opinion has been vacated, there is no conflict. Indeed, both before Graham and after Graham, every court confronted with the certified question whether the negligence and strict liability claim of an Engle progeny plaintiff is impliedly preempted by federal law has rejected the argument on the merits, or otherwise held that the argument was barred by the res judicata effect of Engle. Roughly 200 Engle progeny trials pre-dated Graham, and none of them has 6/ The Eleventh Circuit later issued an amended order to the same effect, but merely adding that Chief Judge Carnes had recused himself. 811 F.3d

33 held the plaintiff s claim was impliedly preempted. And every Florida decision issued after the Graham panel opinion has explicitly rejected it. See Ryan v. R.J. th Reynolds Tobacco Co., No (19) (Fla. 17 Cir. Apr. 16, 2015); Russo v. th Philip Morris USA, Inc., No CA-01(58) (Fla. 11 Cir. Apr. 28, 2015); th Hardin v. R. J. Reynolds Tobacco Co., No (Fla. 11 Cir. May 13, 2015); st Gray v. R. J. Reynolds Tobacco Co., No (Fla. 1 Cir. May 20, 2015); Brown th 7 v. Philip Morris USA, Inc., No (Fla. 4 Cir. Aug. 3, 2015). In the federal system, Graham has been rendered a nullity by its vacatur, but even so, the U.S. District Court in Jacksonville recently added its voice to the unanimous chorus rejecting Graham s reasoning (Berger, 2016 WL , at *6 (citations omitted)): I am well aware that the now vacated, now non-binding panel opinion in Graham endorsed PM USA s argument.... Like other courts in Florida, and around the country, which have rejected preemption claims, I find entirely unpersuasive PM USA s arguments and the panel s rationale that somehow Congress, when it decided not to ban cigarette sales in toto, implicitly preempted state law product liability. Put simply: There is no conflict and no need to provide guidance to the lower courts in Florida. They are in complete agreement that the Engle defendants implied preemption argument fails. Whatever great public importance the Fourth District perceived at the time before the Graham panel opinion was vacated it is gone now. 7/ Copies of those opinions were part of the record below. The issue is pending in a Second District appeal which has not yet been orally argued, PM v. Lourie, No.2D , in which the trial court found no merit to the implied preemption defense. 24

34 There is, however, one issue that does merit this Court s attention. See Cantor v. Davis, 489 So. 2d 18, 20 (Fla. 1986) ( Once this Court has jurisdiction, however, it may, at its discretion, consider any issue affecting the case. ); Murray v. Reiger, 872 So. 2d 217, 223 n.5 (Fla. 2002) (same). In the Fourth District, Mr. Marotta crossappealed and argued that the trial court erred by preventing him from seeking punitive damages on his strict liability claim, and specifically noted that the question was pending in this Court. The Fourth District before this Court resolved the question by issuing its ruling in Soffer v. RJR, 187 So. 3d 1219 (Fla. 2016) held Mr. Marotta was not entitled to seek punitive damages. Marotta, 182 So. 3d at 830. Now that Soffer has resolved that question, that lone aspect of the Fourth District s decision should be summarily quashed and remanded for further proceedings. II. RJR s IMPLIED PREEMPTION ARGUMENT IS BARRED. A. RJR s Argument is Barred by the Res Judicata Effect of Engle When this Court in Engle said its findings would have res judicata effect in all progeny cases, the Court meant exactly what it said: res judicata not collateral estoppel. Douglas, 110 So. 3d at 432 ( At its core, the defendants due process argument is an attack on our decision in Engle to give the Phase I findings res judicata as opposed to issue preclusion effect in class members individual damages actions. However, res judicata is the proper term, and we decline the defendants 25

35 invitation to rewrite Engle. ). Thus, RJR is barred in Engle progeny cases from asserting any defense to the conduct elements that RJR actually raised in the Engle trial or could have raised there: Because the claims in Engle and the claims in individual actions like this case are the same causes of action between the same parties, res judicata (not issue preclusion) applies. As we explained in Engle, 945 So.2d at 1259 (quoting Kimbrell, 448 So.2d at 1012), 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. With the Engle defendants common liability established by the Phase I findings, individual plaintiffs do not have to reprove those elements of their claims. Likewise, Engle defendants are precluded from arguing in individual actions that they did not engage in conduct sufficient to subject them to liability. Douglas, 110 So. 3d at (italics in original; underlining supplied by us). But that is precisely what RJR is attempting to do here via its implied preemption defense: RJR is arguing that it did not engage in conduct sufficient to subject [RJR] to liability because, according to RJR, its conduct is impliedly protected by federal law. As Douglas reaffirmed clearly, that argument is completely barred by res judicata. Id. at 431 ( [A]s we held in Engle, the Phase I jury s verdict fully settled all arguments regarding the Engle defendants conduct. ) (emphasis added). That should be the end of the story. However, RJR asserts today (Brief at 31) that res judicata does not bar RJR s 26

36 implied preemption defense because an argument for express preemption... is entirely distinct from an argument for implied preemption... [and in Engle] [t]his Court rejected the former, but did not address the latter. We have already demonstrated how the historical reality is totally at odds with any contention that the defendants did not assert an implied preemption defense in Engle. Supra at On this point, the record itself speaks volumes: RJR and its Engle co-defendants indeed asserted the implied preemption argument throughout Engle. RJR tries to gain mileage by arguing (Brief at 31) that [a]fter losing that issue [implied preemption] in the Third District, the class did not even bother to raise it in this Court. That argument fails for a host of reasons. First, as our factual recitation described, supra at 14-15, this Court in Engle was not merely addressing express preemption based on the warning labels; it was also addressing defendants implied preemption argument that class counsel had argued to the jury that defendants could be liable despite the fact that cigarettes legally could be sold, finding that [t]hese arguments were not an attempt to tell the jury to ignore the law. Engle, 945 So.2d at Second, whether the Engle class itself raised the issue to this Court in its merits brief is irrelevant; the issue was one of the express bases for the Third District s ruling a ruling which this Court then quashed. Once this Court accepted jurisdiction in Engle, the Court was of course free to consider any and all issues in the 27