ELAINE HESS, еtc., Petitioner, vs. PHILIP MORRIS USA, INC., Respondent.
No. SC12-2153
Supreme Court of Florida
[April 2, 2015]
QUINCE, J.
Application for Review of the Decision of the District Court of Appeal - Direct Conflict of Decisions
Elaine Hess seeks review of the decision of the Fourth District Court of Appeal in Philip Morris USA, Inc. v. Hess, 95 So. 3d 254 (Fla. 4th DCA 2012), on the ground that it expressly and directly conflicts with the decision of the Third District Court of Appeal in Frazier v. Philip Morris USA Inc., 89 So. 3d 937 (Fla. 3d DCA 2012), approved, No. SC12-1401 (Fla. Apr. 2, 2015), and the decisions in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006), Pulmosan Safety Equip. Corp. v. Barnes, 752 So. 2d 556 (Fla. 2000), Kush v. Lloyd, 616 So. 2d 415 (Fla. 1992), Diamond v. E. R. Squibb & Sons, Inc., 397 So. 2d 671 (Fla. 1981), Laschke v. Brown & Williamson Tobacco Corp., 766 So. 2d 1076 (Fla. 2d DCA 2000), McLeod v. Barber, 764 So. 2d 790 (Fla. 5th DCA 2000), and Ambrose v. Catholic Soc. Servs., Inc., 736 So. 2d 146 (Fla. 5th DCA 1999), on a question of law. We have jurisdiction. See
The question before the Court, in this Engle2-progeny case, is whether plaintiff‘s fraudulent concealment claim is barred pursuant to
FACTS AND PROCEDURAL HISTORY
As surviving spouse of Stuart Hess and personal representative of his estate, Elaine Hess filed a complaint against Philip Morris USA, Inc. (“PM USA“), in the Seventeenth Judicial Circuit, in and for Broward County, asserting claims of strict
Mrs. Hess moved for partial summary judgment as to Engle affirmative defenses, arguing that the Engle Phase I findings were res judicata, and consequently, the relitigation of any defenses that were actually litigated or could have been litigated in Phase I were precluded. Mrs. Hess claimed that proof of reliance for her fraud claims was no longer an issue because of the defendants’ involvement in fraud by concealment and the res judicata effect of the Phase I finding. The trial judge ruled that the statute of repose defense was unavailable.
During the first phase of the trial,4 Mrs. Hess testified that Mr. Hess began smoking in the 1950s at twelve or thirteen years of age. He smoked about one to two packs a day when they met in 1963. Mrs. Hess also described Mr. Hess as a chain smoker, smoking two to three packs a day, which fluctuated. Mrs. Hess testified that Mr. Hess smoked Benson & Hedges 100‘s soft pack cigarettes—manufactured by PM USA—about 95% to 99% of the time, and smoked Marlboro products the remaining times. Mr. Hess smoked only filtered cigarettes because he believed they were safer and “caught all the bad stuff.” Mr. Hess believed and trusted the cigarette companies. In the mid-1970s, Mr. Hess first attempted to stop smoking. He tried often to cut down or stop smoking. Mrs. Hess denied that he had ever quit smoking permanently. In February 1996, Mr. Hess was told that he had lung cancer. On cross-examination, Mrs. Hess admitted that she and Mr. Hess discussed the Surgeon General‘s report from the mid-1960s, which stated that smoking was harmful. Mr. Hess, however, had “tremendous doubt” as to the report because the cigarette company executives stated that smoking was not harmful, and he doubted the accuracy of the warnings. The jury found that Mr. Hess was addicted to cigarettes containing nicotine and that such addiction was a legal cause of his death.
During the second phase of the trial, Mrs. Hess testified that she and her husband saw tobacco еxecutives on television commenting that cigarettes were safe, and that Mr. Hess believed what the executives were saying. Mr. Hess did not attempt to quit prior to the mid-1970s because he believed the companies, he was taken in by the advertisements, and he was addicted. However, a friend of Mr. Hess testified at trial that Mr. Hess “was aware of smoking being dangerous” prior to the mid-1970s.
Mrs. Hess presented evidence that between 1953 and 1997, the tobacco companies were successful in using all their
Before deliberations, the jury was instructed that PM USA “concealed or omitted material information not otherwisе known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both.” The trial judge also instructed the jury that it “must determine whether [Mr.] Hess relied to his detriment on any statements made by [PM USA] that omitted material information,” and if he did so rely, then to consider whether punitive damages were warranted. The conspiracy to commit fraud claim was never submitted to the jury.
The jury awarded compensatory damages as follows: $2 million in favor of Mrs. Hess and $1 million in favor of Mr. Hess‘s son. PM USA and Mr. Hess were found by the jury to be 42% and 58% at fаult, respectively. The jury was specifically asked on the verdict form, “Did [Mr.] Hess rely to his detriment on any statement by [PM USA] that omitted material information which caused or contributed to his injury and death?,” and if so, whether such reliance took place before May 5, 1982, after May 5, 1982, or both before and after May 5, 1982. The jury indicated that Mr. Hess did rely and that it occurred only before May 5, 1982. Finding that Mrs. Hess was entitled to punitive damages, the jury awarded her $5 million. Final judgment was entered in favor of Mrs. Hess for $6.26 million.
PM USA moved for judgment as a matter of law on the fraudulent concealment claim, arguing that in light of the jury‘s finding that Mr. Hess‘s detrimental reliance took place only before May 5, 1982, PM USA did not defraud Mr. Hess within the twelve-year statute of repose period (May 5, 1982, through May 5, 1994). The trial court denied PM USA‘s motion.
On appeal to the Fourth District, PM USA claimed that the trial court erred in denying its motion for judgment as a matter of law on the fraudulent concealment claim. Hess, 95 So. 3d at 256. The district court noted that the elements of a fraudulent concealment claim are as follows:
(1) the tobacco companies concealed or failed to disclose a material fact; (2) the companies knew or should have known the material fact should be disclosed; (3) the companies knew their concealment of or failure to disclose the material fact would induce the plaintiffs to act; (4) the tobacco companies had a duty to disclose the material fact; and (5) the plaintiffs detrimentally relied on the misinformation.
Id. at 259 (quoting R.J. Reynolds Tobacco Co. v. Martin, 53 So. 3d 1060, 1068 (Fla. 1st DCA 2010)). The district court explained that while the Engle jury found that the tobacco companies “concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both,” plaintiffs must still prove relianсe in a fraud-based claim and juries must be instructed on reliance and damages. Id.
ANALYSIS
The issue presented is whether an Engle-progeny plaintiff‘s fraudulent concealment claim is barred by
In making a judicial effort to ascertain the legislative intent implicit in a statute, the courts are bound by the plain and definite language of the statute and are not authorized to engage in semantic niceties or speculations. If the language of the statute is clear and unequivocal, then the legislative intent must be derived from the words used without involving incidental rules of construction or engaging in speculation as to what the judges might think that the legislators intendеd or should have intended.
Durden v. Am. Hosp. Supply Corp., 375 So. 2d 1096, 1098-99 (Fla. 3d DCA 1979) (quoting Tropical Coach Line, Inc. v. Carter, 121 So. 2d 779, 782 (Fla. 1960)). “Where a statute of limitations shortens the existing period of time the statute is generally construed strictly, and where there is reasonable doubt as to legislative intent, the preference is to allow the longer
Engle
On May 5, 1994,7 smokers and their survivors filed a class action complaint against cigarette companies—including “Philip Morris Incorporated (Philip Morris U.S.A.)“—and industry organizations for damages allegedly caused by smoking-related injuries. Engle, 945 So. 2d at 1254, 1256 n.3. The Engle class was defined as “[a]ll [Florida] citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine.” Id. at 1256. The complaint consistеd of claims of fraud and misrepresentation, conspiracy to commit fraud and misrepresentation, strict liability in tort, breach of express warranty, breach of implied warranty of merchantability and fitness, negligence, and intentional infliction of mental distress. R.J. Reynolds Tobacco Co. v. Engle, 672 So. 2d 39, 40 (Fla. 3d DCA 1996).
In Phase I of the trial, the Engle jury decided issues common to the entire class, including general causation, the Engle defendants’ common liability to the class members for the conduct alleged in the complaint, and the class‘s entitlement to punitive damages. Engle, 945 So. 2d at 1256. At the conclusion of the Phase I trial, the Engle jury returned a verdict in favor of the class on all counts. Id. at 1256-57. Notably, in question number 4a (“Fraud by Concealment“) of the Phase I verdict form, the jury was asked the following question as to each defendant:
Did one or more of the Defendants conceal or omit material information, not otherwise known or available, knowing the material was false and misleading, or failed to disclose a material fact concerning or proving the health effects and/or addictive nature of smoking cigarettes?
The jury found that each of the Engle defendants committed fraud by concealment. Having answered the question posed to it in the affirmative as to each defendant, the jury was further directed to find whether each defendant‘s conduct occurred before May 5, 1982, after May 5, 1982, or both before and after May 5, 1982. With the exception of Brooke Group, Ltd., Inc., all of the defendants’ conduct were found to have occurred both before and after May 5, 1982.8
At the conclusion of Phase II, the jury awarded $12.7 million in compensatory damages to three individual plaintiffs and $145 billion in punitive damages to the entire class. Id. at 1254. In its final judgment and amended omnibus order, the trial judge in Engle denied the defendants’ motion for directed verdict on the issue of the statute of repose. Engle, 2000 WL 33534572, at *5.
The district court vacated the $145 billion punitive damages award, which we
1 (that smoking cigarettes causes [certain named diseases, including lung cancer]), 2 (that nicotine in cigarettes is addictive), 3 (that the [Engle] defendants placed cigarettes on the market that were defective and unreasonably dangerous), 4(a) (that the [Engle] defendants concealеd or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both), 5(a) (that the [Engle] defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment), 6 (that all of the [Engle] defendants sold or supplied cigarettes that were defective), (7) (that all of the [Engle] defendants sold or supplied cigarеttes that, at the time of sale or supply, did not conform to representations of fact made by said defendants), and 8 (that all of the [Engle] defendants were negligent).
Id. at 1254, 1276-77 (emphasis added). “[T]he Phase I verdict against the Engle defendants resolved all elements of the claims that had anything to do with the Engle defendants’ cigarettes or their conduct.” Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419, 432 (Fla.), cert. denied, 134 S. Ct. 332 (2013). “[T]he Phase I findings establish the Engle defendants’ common liability for the strict liability, negligence, breach of express and implied warranty, fraudulent concealment, and conspiracy to fraudulently conceal claims alleged by the Engle class.” Id. at 436 (emphasis added).
The Phase I jury “did not consider whether any class members relied on Tobacco‘s misrepresentations or were injured by Tobacco‘s conduct. . . . [T]he Phase I jury ‘did not determine whether the defendants were liable to anyone.’ ” Engle, 945 So. 2d at 1263 (quoting Liggett Group Inc. v. Engle, 853 So. 2d 434, 450 (Fla. 3d DCA 2003)). We explained that “individual causation” must be decided in the individual lawsuits. Id. at 1254. Although we concluded that the common liability Phase I findings relating to fraudulent concealment were to have res judicata effect, we disapproved the use of the Phase I conduct findings as to fraud and misrepresentation (and civil conspiracy based on misrepresentation) because they were “inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause.” Id. at 1255.9 We did not discuss the statute of repose in our opinion.
Statutes of Limitations v. Statutes of Repose
To carefully analyze the issue presentеd, it is important to compare statutes of limitations with statutes of repose. “Both the statute of limitations and the statute of repose are affirmative defenses.” Johnston v. Hudlett, 32 So. 3d 700, 704 (Fla. 4th DCA 2010) (quoting Doe v. Hillsborough Cnty. Hosp. Auth., 816 So. 2d 262, 264 (Fla. 2d DCA 2002)); see also
Statutes of limitations “bar actions by setting a time limit within which an action must be filed as measured from the accrual of the cause of action, after which time obtaining relief is barred.” Merkle v. Robinson, 737 So. 2d 540, 542 n.6 (Fla. 1999); see also Bauld v. J. A. Jones Constr. Co., 357 So. 2d 401, 402 (Fla. 1978). Statutes of limitations “begin[] to run upon the accrual of a cause of action except where there are provisions which defer the running of the statute in cases of fraud or where the cause of action cannot be reasonably discovered.” Kush, 616 So. 2d at 418.
The Florida Legislature has determined that the time within which an action generally must be begun under any statute of limitations is from the time the cause of action “accrues.”
On the other hand, statutes of repose “bar actions by setting a time limit within which an action must be filed as measured from a specified act, after which time the cause of action is extinguished.” Merkle, 737 So. 2d at 542 n.6 (citing Kush, 616 So. 2d at 418); see also Carr v. Broward Cnty., 505 So. 2d 568, 570 (Fla. 4th DCA 1987) (“The period of time established by a statute of repose commences to run from the date of an event specified in the statute . . . . At the end of the time period the cause of action ceases to exist.“), approved, 541 So. 2d 92 (Fla. 1989). “[T]he statute of repose may be constitutionally applied to bar claims even when the cause of action does not acсrue until after the period of repose has expired.” Damiano v. McDaniel, 689 So. 2d 1059, 1060 (Fla. 1997). “[S]tatutes of repose are a valid legislative means to restrict or limit causes of action in order to achieve certain public interests.” Carr, 541 So. 2d at 95. Statutes of repose are “legislative determination[s] that there must be an outer limit beyond which [claims] may not be instituted,” “attempt[ing] to balance the rights of injured persons against the exposure of [defendants] to liability for endless periods of time.” See Kush, 616 So. 2d at 421-22. Certainly, over time “memories fade, documents are destroyed or lost, and witnesses disappear.” Nehme v. Smithkline Beecham Clinical Labs., Inc., 863 So. 2d 201, 209 (Fla. 2003).
In Kush, we сlearly expressed that statutes of repose “run[] from the date of a discrete act on the part of the defendant without regard to when the cause of action accrued.” 616 So. 2d at 418 (emphasis added);11
puts an outer limit on the right to bring a civil action. That limit is measured not from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant. A statute of repose “bar[s] any suit that is brought after a specified time since the defendant acted (such as by designing or manufacturing a product), even if this period ends before the plaintiff has suffered a resulting injury.”
CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2182 (2014) (emphasis added) (quoting Black‘s Law Dictionary 1546 (9th ed. 2009));12 see also Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 88 n.4 (2d Cir. 2010) (“[A] statute of repose extinguishes a plaintiff‘s cause of action after the passage of a fixed period of time, usually measured from one of the defendant‘s acts.“) (second emphasis added).
The Statute of Repose for Fraud Claims
Effective in 1975, section 95.031, which included the statute of repose governing fraud claims, has essentially remained unchanged. See ch. 74-382, §§ 3, 36, Laws of Fla. (1974). The twelve-year statute of repose for fraud claims provides as follows:
[I]n any event an action for fraud under s. 95.11(3) must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.
In Frazier v. Philip Morris USA Inc., 89 So. 3d 937 (Fla. 3d DCA 2012), the tobacco companies argued on appeal that the statute of repose required the Engle-progeny plaintiff to prove, in her fraudulent concealment and conspiracy to conceal claims, that she relied upon a deceptive statement or omission after May 5, 1982. Id. at 947. The Third District disagreed, stating:
We conclude that the last act done in furtherance of the alleged conspiracy fixes the pertinent date for purposes of commencement of the statute of repose, and we conclude that Ms. Frazier introduced evidence of deceptive statements or omissions occurring after May 5, 1982. Laschke v. Brown & Williamson Tobacco Corp., 766 So. 2d 1076, 1078 (Fla. 2d DCA 2000). We reject the [defendants‘] contention that Ms. Frazier was obligated to show further or continued reliance upon the alleged last act in furtherance of the conspiracy.
Id. at 947-48.15 Thus, the Third District held that plaintiff‘s reliance during the repose period was not necessary because it is the last act done in furtherance of the alleged conspiracy that triggers the statute of repose. But see Lorillard Tobacco Co. v. Alexander, 123 So. 3d 67, 75 (Fla. 3d DCA 2013) (“Since the statute of repose begins in 1982, Coleman‘s belief and reliance through 1985 was relevant to show that his cause of action was not barred by the statute.“).
Frazier relied on Laschke, a pre-Engle decision from the Second District Court of Appeal which explained that the statute of repose “runs not from the time a cause of action accrues, but from the date of a discrete act on the part of a defendant.” 766 So. 2d at 1078 (citing Kush, 616 So. 2d at 416). The district court in Laschke found that the critical date for the statute of repose relating to conspiracy claims “should be the date of the last act done in furtherance of the conspiracy.” Id. at 1079.16 The Second District continued to rely on Laschke in an Engle-progeny case. See Philip Morris USA, Inc. v. Hallgren, 124 So. 3d 350, 353 (Flа. 2d DCA 2013).
In R.J. Reynolds Tobacco Co. v. Webb, 93 So. 3d 331 (Fla. 1st DCA), review denied, 107 So. 3d 406 (Fla. 2012), the First District Court of Appeal stated that “[i]n claims alleging conspiracy, the critical date
Reliance During the Statute of Repose Period is Irrelevant
Pursuant to the statute of repose, fraud claims “must be begun within 12 years after the date of the commission of the alleged fraud.”
Engle-progeny plaintiffs must certainly prove detrimental reliance in order to prevail on their fraudulent concealment claims. While we look to reliance in determining when an action accrued for the application of the fraud statute of limitations, the accrual of an action has no bearing on the fraud statute of repose. Because statutes of repose “run[] from the date of a discrete act on the part of the defendant,” Kush, 616 So. 2d at 418, we hold that the defendant‘s last act or omission triggers Florida‘s fraud statute of repose. In other words, we find that “the date of the commission of the alleged fraud” under
In its Phase I verdict form, the Engle jury found that the Engle defendants committed fraud by concealment based on conduct that occurred after May 5, 1982, i.e., during the statute of repose period. Because we hold that the defendants’ last act or omission triggers the fraud statute of repose and since the Engle jury found that the Engle defendants’ fraudulent сoncealment conduct occurred within the repose period, we conclude that the Engle defendants are precluded as a matter of law from asserting the fraud statute of repose defense in Engle-progeny cases.
We therefore quash the Fourth District‘s decision in Hess, which required that there be evidence of the smoker‘s reliance during the repose period as to Mrs. Hess‘s fraudulent concealment claim. We additionally find that Mrs. Hess presented evidence of PM USA‘s fraudulent concealment conduct within the statute of repose period. Because we conclude that PM USA was precluded from raising the
CONCLUSION
Based on the foregoing, we quash the Fourth District‘s decision in Hess, approve Frazier to the extent of its conclusion pertaining to the statute of repose, and approve Kush and Laschke. We reinstate the jury verdict rendered below.
It is so ordered.
LABARGA, C.J., and PARIENTE, LEWIS, CANADY, POLSTON, and PERRY, JJ., concur.
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND IF FILED, DETERMINED.
Fourth District - Case No. 4D09-2666
(Broward County)
John Stewart Mills and Courtney Rebecca Brewer of The Mills Law Firm, P.A., Tallahassee, Florida; Gary Mark Paige of Trop & Ameen, P.A., Davie, Florida and Adam Trop of Trop & Ameen, P.A., Fort Lauderdale, Florida; Bruce S. Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Fort Lauderdale, Florida; Alex Alvarez of The Alvarez Law Firm, Coral Gables, Florida; and Marvin Weinstein of Grover & Weinstein, P.A., Miami Beach, Florida,
for Petitioner
Joseph Hagedorn Lang, Jr. of Carlton Fields Jorden Burt, P.A., Tampa, Florida; and Andrew Scott Brenner, Patricia Melville, and Luis Eduardo Suarez of Boies, Schiller & Flexner, LLP, Miami, Florida; and Raoul G. Cantero, III and John-Paul Rodriguez of White & Case LLP, Miami, Florida,
for Respondent
Steven L. Brannock, Celene Harrell Humphries, and Tyler K. Pitchford of Brannock & Humphries, Tampa, Florida,
for Amici Curiae Engle