This case is before the Court for review of the decision of the Fourth District Court of Appeal in R.J. Reynolds Tobacco Co. v. Marotta,
WHETHER FEDERAL LAW IMPLICITLY PREEMPTS STATE LAW TORT CLAIMS OF STRICT LIABILITY AND NEGLIGENCE BY ENGLE 1PROGENY PLAINTIFFS BASED ON THE SALE OF CIGARETTES.
Id. at 834. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. Because we conclude that Engle did not impose liability based solely on the sale of cigarettes, we rephrase the certified question as follows:
WHETHER FEDERAL LAW IMPLICITLY PREEMPTS STATE LAW TORT CLAIMS OF STRICT LIABILITY AND NEGLIGENCE BY ENGLE PROGENY PLAINTIFFS.
We answer the rephrased question in the negative and approve the Fourth District’s decision related to the preemption issue; however, we quash the decision below to the extent that it held that respondent, as representative of the estate of Phil Felice Marotta, was precluded from seeking punitive damages and remand for further proceedings consistent with this opinion,
BACKGROUND
This case follows a long line of cases decided in light of Engle v. Liggett Group, Inc. (Engle III),
After certification of the class in R.J. Reynolds Tobacco Co. v. Engle (Engle I),
In Phase II, the same jury decided the individual causation and damages for the class representatives, as well as the amount of punitive damages to be awarded to the entire class. Id. The jury found that the class representatives were entitled to compensatory damages, and awarded class-wide punitive damages in the amount of $145 billion. 3
The plan for Phase III was to have different juries decide the individual causation and damages for each class member, but prior to the start of Phase III, the class was decertified “because individualized issues such as legal causation, comparative fault, and damages predominate[d].” Engle III,
Specifically, this Court held that the following Phase I findings were entitled to res judicata effect: (1) smoking cigarettes causes certain enumerated diseases, including lung cancer; (2) nicotine is addictive; (3) the Engle “defendants placed cigarettes on the market that were defective and unreasonably dangerous”; (4) the Em gle defendants “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”; (5) 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) “all of the [Engle] defendants sold or supplied cigarettes that were defective”; (7) “all of the [Engle] defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to representations of fact made by said defendants”; and (8) “all of the [Engle] defendants were negligent.” Id. at 1276-77. However, this Court disapproved the use of the Phase I findings relating to intentional infliction of emotional distress, fraud and misrepresentation, and civil conspiracy based on misrepresentation because the nonspecific findings were “inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause.” Id. at 1255.
After Engle III was issued, there was some confusion among the courts regarding whether the Phase I findings were to be given the effect of claim preclusion or issue preclusion. This Court clarified that the “res judicata” effect in Engle III is claim preclusion, not issue preclusion. Philip Morris USA, Inc. v. Douglas,
FACTS AND PROCEDURAL BACKGROUND
The representative for the estate of Phil Felice Marotta (Marotta) filed an action as an Engle progeny plaintiff against R.J. Reynolds Tobacco Company (Reynolds), an Engle defendant, asserting that Marot-ta’s addiction to Reynolds’ cigarettes caused his death by lung cancer. Marotta raised several claims based on the Engle Phase I findings, including strict liability, negligence, concealment, and conspiracy. The jury found Reynolds liable on the strict liability claim, but not on the negligence, concealment, or conspiracy claims. The jury assigned 58% of the fault to Reynolds and 42% to Marotta and awarded total compensatory damages of $6’ million (reduced to $3.48 million to reflect comparative fault determinations). Reynolds appealed the final judgment, and Mar-otta cross-appealed the trial court’s decision to preclude the jury from considering punitive damages on the product liability claim. Marotta,
On appeal, the Fourth District affirmed. Id. In its opinion, the court wrote to specifically address Reynolds’ argument that “because Congress has expressly sanctioned the sale of cigarettes, and because the practical effect of the Engle progeny litigation is to establish that all cigarettes are inherently dangerous and defective, strict liability and negligence claims are implicitly preempted by federal law allowing the sale of cigarettes.” Id. at 831. The district court did not find merit in this argument, explaining that only certain tobacco claims are preempted by federal law,
’ The district court in Marotta acknowledged that the United States Court of Appeals for the Eleventh Circuit recently reached the opposite conclusion in Graham v. R.J. Reynolds Tobacco Co.,
The Marotta court disagreed with the decision in Graham for several reasons. First, Marotta determined that Graham “overstates the effect of the past ten years of Florida tobacco case law by equating it to a ban on cigarette sales.” Marotta,
The district court in Marotta also noted that Graham relied in part on a provision of the 2009 Family Smoking Prevention and Tobacco Control Act (FSPTCA), Pub. L. No. 111-31, 123 Stat. 1776 (2009), codified as 21 U.S.C. § 387a (2012), which grants the Food and Drug Administration (FDA) authority to regulate cigarettes, but specifically prohibits the FDA from banning them. See Graham,
[B]eeause Engle progeny cases do not support a conclusion that strict product liability claims amount 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. Accordingly, the trial court did not err in rejecting the defendant’s argument that negligence and strict liability claims are preempted by federal law.
Id. at 834. Nevertheless, the district court certified the question to this Court in ac-knowledgement of Graham’s contrary holding. This review follows.
ANALYSIS
Whether state law is preempted by federal law is a pure question of law subject to de novo review. Vreeland v. Ferrer,
The certified question in this case asks whether federal law implicitly preempts Marotta’s strict liability and negligence claims as an Engle progeny plaintiff based on the sale of cigarettes. Reynolds contends that Congress, through decades of legislation, has established its intention to regulate cigarettes while foreclosing their removal from the market, and that any state law that conflicts with this objective is implicitly preempted. Reynolds argues that imposing tort liability for the sale of ordinary cigarettes amounts to a ban, and therefore such claims are preempted. Further, Reynolds insists that the liability imposed in Engle and Engle progeny cases was based on the inherent characteristics of cigarettes (namely, the presence of nicotine, which causes addiction and disease), thereby holding cigarette manufacturers hable for selling products that are sanctioned and protected by Congress.
In answering the certified question, we consider: (1) whether and to what extent federal law preempts state law tort claims against tobacco companies; and (2) whether Engle Phase I findings are based on the inherent characteristics of cigarettes such that these findings amount to a functional ban.
Whether and to what extent federal law preempts state law tort claims against cigarette manufacturers
Reynolds argues that Congress has completely foreclosed the removal of cigarettes
Federal preemption arises under three circumstances: (1) where Congress has expressly preempted state law; (2) where state law attempts to regulate a field that Congress intended the federal government to occupy exclusively; or (3) where state law actually conflicts with federal law, either because it would be impossible to comply with both federal and state regulations, or because the state regulation “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Vreeland,
Congressional purpose is “the ultimate touchstone in every pre-emption case.” Vreeland,
Congress first addressed the health effects of cigarettes with the enactment of the FCLAA in 1965. The Act’s express purpose is twofold: (1) to inform the public that smoking cigarettes is a health hazard, and (2) to protect the tobacco industry from the burdens of complying with contradictory state regulations regarding the labels and advertisements of their products. Pub. L. No. 89-92, § 2, 79 Stat. 282, 282 (1965) (codified at 15 U.S.C. § 1331 (2012)). To accomplish this purpose, the FCLAA both mandated warnings on cigarette packages and expressly preempted state laws that would impose different or additional labeling or advertising requirements. Id. §§ 4-5.
In 1969, Congress amended the FCLAA with the Public Health Cigarette Smoking Act of 1969 (1969 Act), Pub. L. No. 91-222, 84 Stat. 87 (1970). The 1969 Act tightened regulations by strengthening warning labels and banning radio and television advertising of cigarettes. The 1969 Act also modified the federal preemption provision. The legislative history indicates that the
The FCLAA was amended again in 1984 when Congress passed the Comprehensive Smoking Education Act with the stated purpose of “making Americans more aware of any adverse health effects of smoking, to assure the timely and widespread dissemination of research findings and to enable individuals to make informed decisions about smoking.” Pub. L. No. 98-474, § 2, 98 Stat. 2200, 2200 (1984). The Comprehensive Smoking Education Act amended cigarette labeling requirements and compelled the Secretary of Health and Human Services to research and report on the effects of cigarette smoking. See 15 U.S.C. §§ 1333(a), 1341(a) (2012).
In 2009, the FSPTCA was signed into law. The FSPTCA accomplished a number of things, but most importantly, it gave the FDA authority to regulate tobacco products. 21 U.S.C. § 387a (2012). The FDA’s authority is not unlimited, however. Among other things, the FDA may not ban tobacco products. Id. § 387g(d)(3). Importantly, the FSPTCA also included a savings clause that preserved certain state powers related to tobacco regulation. See id. § 387p(a).
Reynolds asserts that through this legislation, Congress has made a deliberate choice to protect the market for ordinary cigarettes, despite their known and inherent health and addiction risks. Reynolds cites the United States Supreme Court’s decision in FDA v. Brown & Williamson Tobacco Corp.,
However, while Brown & Williamson held that the FDA did not have the authority to regulate tobacco products, it said nothing about the states’ power to do the same. The Supreme Court’s analysis focused primarily on whether Congress had granted the FDA, as a federal agency, such regulatory authority. See Berger v. Philip Morris USA, Inc.,
Brown & Williamson is not a case about preemption of state law. It is, rather, a case about whether Congress delegated authority to an executive agency to promulgate rules about and regulations relating to tobacco. Such delegation implicates congressional goals for what it wanted federal law to achieve or not to achieve.
... Brown & Williamson’s discussion of congressional objectives with respect to cigarettes supports only the unremarkable contention that Congress itself did not wish to remove cigarettes from the national market. It does not support the more extreme inference that Congress intended to displace state police powers in regulating cigarettes.
Id. at 1341 (citations omitted). We agree with this conclusion reached by the district court.
Reynolds further asserts that the imposition of tort liability for the sale of cigarettes would undermine Congress’s express intention under the FCLAA to protect the “commerce and national economy” of the tobacco industry. However, the context in which Congress enacted the FCLAA is helpful in interpreting congressional .intentions. In 1964, the Surgeon General’s Advisory Committee issued a report discussing the hazard that cigarette smoking poses to health. As a result, the Federal Trade Commission (FTC) and several states moved quickly to regulate the advertising and labeling of cigarettes. See Cipollone,
Further, the majority of state
6
and federal
7
court decisions that have addressed the question of federal preemption in tobacco product liability cases have held that Congress only intended to preempt state laws to the extent that they relate to labeling or advertising of tobacco products. Indeed, a plurality of the United States Supreme Court came to this conclusion after examining the scope of the preemption provisions within the FCLAA and the 1969 Act. Cipollone,
[TJhere is no general, inherent conflict between federal pre-emption of state warning requirements and the continued vitality of state common-law damages actions. For example, in the Comprehensive Smokeless Tobacco Health Education Act of 1986, Congress expressly pre-empted state or local imposition of a“statement relating to the use of smokeless tobacco products and health” but, at the same time, preserved state-law damages actions based on those products.
Id. at 518 (footnote omitted). The Court also noted that such a reading comports with the 1965 Act’s purpose to avoid “diverse, nonuniform, and confusing cigarette labeling and advertising regulations with respect to any relationship between smoking and health.” Id. at 519,
[W]e must fairly but—in light of the strong presumption against preemption—narrowly construe the precise language of [the Act’s preemption provision] and we must look to each of petitioner’s common-law claims to determine whether it is in fact pre-empted. The central inquiry in each case is straightforward: we ask whether the legal duty that is the predicate of the common-law damages action constitutes a “requirement or prohibition based on smoking and health ... imposed under State law with respect to ... advertising or promotion,” giving that clause a fair but narrow reading.
Id. at 523-24 (plurality opinion) (footnote omitted) (quoting 1969 Act § 5(b)). The plurality determined that the 1969 Act preempted the petitioner’s “claims based on a failure to warn and the neutralization of federally mandated warnings to the extent that those claims rely on omissions or inclusions in respondents’ advertising or promotions,” but not the petitioner’s express warranty, intentional fraud and misrepresentation, and conspiracy claims. Id. at 530-31,
Overall, the history of federal tobacco legislation shows that Congress sought to create a balanced regulatory scheme, first and foremost to educate the public about the health hazards of smoking, and “[s]econdarily, ... to create uniform rules regarding the regulation of tobacco advertising, to recognize the economic importance of the tobacco industry and to confirm the individual’s ‘right to choose to smoke or not to smoke.’” Richardson,
Factual Basis for Engle Phase I Findings
Even if Congress did intend to prevent the states from banning cigarettes, it is clear that tort liability like that in Engle does not amount to such a ban. Reynolds’ entire preemption argument is based on its assertion that Engle imposes liability for the sale of “ordinary” cigarettes containing nicotine. 10 Reynolds argues that imposing tort liability based on the inherent risks involved with smoking amounts to a ban on cigarettes because it creates a common law duty that tobacco companies necessarily breach every time they place a cigarette on the market. Reynolds therefore concludes that because Congress has foreclosed the removal of tobacco from the market, these state tort claims that equate to a ban are impliedly preempted by federal law. However, Reynolds concedes that federal law does not preempt ah product liability claims against cigarette manufacturers, such as those based on a theory of defect narrower than the inherent dangerousness of all cigarettes. Therefore, a critical question is whether Engle defendants’ liability is based solely on the inherent dangers of cigarettes. We hold that it is not.
Several aspects of Engle, such as the class complaint, the verdict form instructions, and the Phase I jury findings, indicate that the inherent characteristics of all cigarettes did not form the sole basis for liability. Rather, the case was premised on the allegation that the Engle defendants intentionally increased the amount of nicotine in their products to ensure that consumers became addicted.
First, as the Engle class complaint itself demonstrates, class members did not allege that the defendants should be held liable solely because of the inherent dangers of all cigarettes. For example, the named defendants did not include all cigarette manufacturers or distributers who sold cigarettes in Florida. Instead, the complaint described the defendants as “manufacturers and distributors of tobacco products ... containing the chemical nicotine; said Defendants manipulated the level of nicotine in their tobacco products so as to make these products addictive.” (emphasis added). Amended Class Action Complaint for Compensatory and Punitive Damages at 8-9, Engle v. R.J. Reynolds Tobacco Co., No. 94-08273 CA,
In addition, the complaint alleges repeatedly that the defendants intentionally
The strict liability claim was based on the allegation that “Defendants’ tobacco products, containing manipulated levels of nicotine, as intentionally manipulated by these Defendants, which caused Plaintiffs and members of the class to become addicted to nicotine upon personal consumption, constitute products that are unreasonably dangerous and defective.” Amended Class Action Complaint at 38. Likewise, the negligence claim alleged that defendants breached their duty of reasonable care to the class by:
(a) failure to design and manufacture products that were not addictive; (b) failure to design and manufacture tobacco products that did not contain an unreasonable level of nicotine; ... (d) failure to take any reasonable precautions or exercise reasonable care to adequately or sufficiently reduce or remove the level of nicotine in cigarettes so that smokers would have the ability to quit; (e) failure to utilize a safer design that was readily available to Defendants, so that smokers could purchase a nicotine free cigarette; (f) failure to utilize accurate measurements as to levels of true nicotine yield and tar in “low tar” cigarettes.
Amended Class Action Complaint at 50-51. It is clear, then, that the class complaint did not merely allege that the defendants sold their cigarettes despite knowing that the nicotine within their products was addictive and carcinogenic. Nor did the complaint allege that the defendants’ cigarettes were defective and dangerous merely for containing nicotine. Rather, the complaint alleged that the defendants not only knew that nicotine was addictive and carcinogenic, but intentionally increased the amount of nicotine in their produets to ensure their consumers became and remained addicted. It alleged that the cigarettes were defective precisely because of this manipulation.
Second, the Engle Phase I verdict form did not presuppose that all cigarettes are inherently defective or that all cigarette manufacturers are inherently negligent. See Berger,
[I]f strict liability were founded merely on those properties [addictive and carcinogenic], the strict liability question would simply have asked whether each defendant “placefd] cigarettes on the market”—period. But the strict liability inquiry did not end there. The court asked the jury to determine discretely whether each of the seven defendants “placefd] cigarettes on the market that were defective and Unreasonably dangerous.” The jury determined that each defendant did. Assuming the jury followed its instructions, what it actually decided is that each defendant’s partieu-lar cigarettes were defective, not that all cigarettes are inherently defective.
Id. (citations omitted). Similarly, on the question of negligence, the jury was asked if each defendant “failed to exercise the degree of care which a reasonable cigarette manufacturer would exercise under like circumstances.” Verdict Form for Phase I at 10, Engle v. R.J. Reynolds Tobacco Co., No. 94-08273 CA (Fla. 11th Cir. Ct. July 7, 1999). This standard assumes that it is possible for cigarettes to be sold in a reasonable manner. See Philip Morris USA, Inc. v. Lourie,
Third, in denying the Engle defendants’ motion for directed verdict, the trial court’s statements regarding the sufficiency of the evidence indicates that the jury considered much more than the mere sale of cigarettes containing nicotine:
There was more than sufficient evidence at trial to satisfy the legal requirements of [the strict liability count] and to support the jury verdict that cigarettes manufactured and placed on the market by the defendants were defective in many ways including the fact that the cigarettes contained many carcinogens, nitrosamines, and other deleterious compounds such as carbon monoxide. That levels of nicotine were manipulated, sometime[s] by utilization of ammonia to achieve a desired “free basing effect” of pure nicotine to the brain, and sometime[s] by using a higher nicotine content tobacco called Y-l, and by other means such as manipulation of the levels-of tar and nicotine. The evidence more than sufficiently proved that nicotine is an addictive substance which when combined with other deleterious properties, made the cigarette unreasonably dangerous. The evidence also showed some cigarettes were manufactured with the breathing air holes in the filter being too close to the lips so that they were covered by the smoker thereby increasing the amount of the deleterious effect of smoking the cigarette. There was also evidence at trial that some filters being testmarketed utilize glass fibers that could produce disease and deleterious effects if inhaled by a smoker.
Engle v. R.J. Reynolds Tobacco, No. 94-08273 CA-22,
In addition, although Marotta’s claims were necessarily based on the Engle Phase I findings, the record reflects that the jury in this case heard evidence that Reynolds manipulated the level of nicotine in its cigarettes. For example, an expert witness for Marotta testified regarding the techniques utilized by the tobacco industry, including Reynolds, to control the amount of nicotine in their products. 12 In addition, the allegation that Reynolds intentionally engineered its cigarettes to addict consumers was reiterated to the jury during opening and closing statements.
Reynolds contends that numerous state and federal decisions have held that federal law preempts state strict liability and
However, Davis is distinguishable because it is not an Engle progeny case. Davis revolved around the premise that liability was sought for the inherent dangerousness of cigarettes. On the other hand, as previously discussed, the jury in Engle found that the defendants had placed unreasonably dangerous cigarettes on the market based on the fact that they had manipulated the nicotine levels in their products. Further, the Fourth District issued the decisions in both Davis and Mar-otta. Read together, the Fourth District has taken the position that civil suits against tobacco companies are only preempted to the extent that they seek liability for the sale of “ordinary” cigarettes, but because Engle imposed liability for something more, progeny claims are not preempted. Indeed, in Davis, the court observed that “a design defect claim against a cigarette manufacturer is not preempted by federal statutes.” Id. at 472. Alternatively, to the extent that these cases do conflict, the difference could be attributed to a change in the Fourth District’s position regarding implied conflict preemption in tobacco product liability cases. See Little v. State,
Reynolds also argues that Engle tort claims are preempted to the extent that they seek to impose liability for conduct that Congress has specifically allowed, citing the United States Supreme Court’s decision in Geier v. American Honda Motor Co., Inc.,
PUNITIVE DAMAGES
Although Marotta sought punitive damages in his individual action against Reynolds, the trial court precluded the jury from considering it, and the Fourth District affirmed on appeal. Marotta,
CONCLUSION
In sum, although Reynolds insists that Engle imposed liability for the sale of ordinary cigarettes containing nicotine, the records in both Engle and Marotta do not support this argument. While the Engle jury did make findings based on the inherent addictiveness and carcinogenic nature of cigarettes containing nicotine, such findings were not the sole basis of liability. Instead, the record in Engle reflects that the claims were grounded in allegations that Engle defendants deliberately manufactured their' products to increase the likelihood of addiction, despite defendants’ knowledge of the hazards of nicotine, and that Engle plaintiffs suffered disease and death as a result of their inability to quit.
We therefore rephrase the certified question as follows to eliminate the suggestion that the Engle Phase I findings were based on the mere sale of cigarettes:
WHETHER FEDERAL LAW IMPLICITLY PREEMPTS STATE LAW TORT CLAIMS OF STRICT LIABILITY AND NEGLIGENCE BY ENGLE PROGENY PLAINTIFFS.
We answer this question in the negative and approve the district court’s decision in this regard. However, as previously discussed, we quash the portion of the district court’s decision that affirmed the trial court’s determination that the jury should be precluded from considering punitive damages, and remand to the district court for proceedings consistent with this opinion.
It is so ordered.
Notes
. As will be discussed later in this opinion, "Engle" refers in general to the class action
. The Engle defendants included R.J. Reynolds Tobacco Company, Philip Morris Inc., Lorillard Tobacco Company, Lorillard, Inc., American Tobacco Company, Brown & Williamson Tobacco Corporation, Liggett Group, Inc., Dosal Tobacco Corporation, Council for Tobacco Research-U.S.A., Inc., Tobacco Institute, Inc., and Brooke Group, Ltd., Inc. See R.J. Reynolds Tobacco Co. v. Engle,
. This Court later held that the punitive damages award was both clearly excessive and premature because, although the Phase I jury decided the Engle defendants’ common liability to the class under certain claims, it did not decide the plaintiff-specific elements of those claims and, therefore, "did not determine whether the defendants were liable to anyone.” Engle III,
. “No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.” 15 U.S.C. § 1334(b) (2012).
. Brown & Williamson was decided before the enactment of the FSPTCA, which granted the FDA the. authority to regulate tobacco products.
. See, e.g., Cantley v. Lorillard Tobacco Co.,
. See, e.g., Altria Grp., Inc. v. Good,
. "No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.” 15 U.S.C. § 1334(b) (Supp. III 1964) (emphasis added).
. "No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.” 15 U.S.C. § 1334(b) (1982) (emphasis added).
. The certified question itself focuses on this aspect of Reynolds’ argument, asking "[w]hether federal law implicitly preempts state law tort claims of strict liability and negligence ... based on the sale of cigarettes.” Marotta,
. The class was certified as including all Florida "citizens and residents, and their survivors, who have suffered, presently suffer or have died from diseases and medical conditions by their addiction to cigarettes that contain nicotine.” Engle I,
. One expert witness for Marotta testified that the level of nicotine in tobacco leaves can be manipulated through the way the tobacco plant is grown (e.g., how tightly the plants are grown together and how much fertilizer is used), and by which tobacco leaves are selected for blending (e.g., top leaves contain more nicotine than lower leaves).