A landmark $23.6 billion award for the widow and son of a smoker in Robinson v. R.J. Reynolds Tobacco Company may have brought the tobacco industry to a crossroads, according to legal experts. The question: will tobacco companies continue to litigate thousands of Florida’s remaining Engle progeny cases individually, or will they look for a quicker, more efficient alternative to resolve litigation that stretches back 20 years?
Engle's Origins and the Tobacco Defense Strategy
The Engle progeny cases stem from a 2006 Florida Supreme Court decision decertifying Engle v. Liggett Group Inc., a class-action tobacco suit originally filed in 1994. Although the court's ruling required plaintiffs to bring their claims against tobacco defendants individually, it gave preclusive effect to the original suit's findings that tobacco companies had placed a dangerous, addictive product on the market; had conspired to conceal the dangers of nicotine; and had acted negligently. As a result, many Engle progeny plaintiffs are required to prove only injury and causation to establish at least some form of damages in their individual cases.
In response, the tobacco industry elected to litigate Engle progeny claims individually, as they do with tobacco suits in other states. Prior to Robinson, Engle progeny verdicts had been split, and pro-plaintiff verdicts for both compensatory and punitive damages ran in the tens-of-millions of dollars. Then, on July 19, the Robinson jury awarded $23.6 billion in punitive damages, the largest such award in an Engle case to-date. While many legal professionals, including loss-of-life compensation expert Ken Feinberg, believe that Robinson's punitive award won't survive on appeal, they feel it may force tobacco companies to rethink their current strategy. “As long as they continue to insist on individual trials, one, by one, by one, by one: they may win 10 out of 12 cases,” Feinberg said. “The other two… they’ll get slammed.”
The Cost and Benefits of a Mass Settlement
Establishing a mass compensation fund and settling the claims may be the most efficient, cost-effective way to resolve the Engle cases, according to Richard Daynard a law professor at Northeastern University and chair of the law school's Tobacco Products Liability Project. "It would make sense to consider a settlement agreement... that would be sufficiently appetizing" for most Engle progeny plaintiffs to opt into, Daynard said. While the initial costs to establish the fund may be enormous, Daynard said tobacco companies would eliminate risks and reduce long-term costs of trying the cases individually, including negative headlines, unpredictable verdicts, and Florida appellate court decisions that have trended against tobacco defendants.
However, Daynard added that the potential cost of any mass settlement may have increased in light of the Robinson award. Pre-Robinson, the tobacco industry might have gotten a "discount on the thought that they do their best to make (plaintiffs' cases) difficult," Daynard said. "At this point, they might have to offer people a settlement amount close to asbestos" compensation funds.
The Future of Engle Cases and Their Effect Outside Florida
The potential benefits of an Engle progeny settlement beg the question of why tobacco companies haven't already moved to settle the claims. Daynard said tobacco companies have followed their basic strategy, in Engle progeny and tobacco suits nationwide, out of the "fear that, if they settle one case, the floodgates will open" and they would be exposed to ever-increasing liability. However, Daynard noted that the Engle cases arise from "unique circumstances," such as their state class action origins and the preclusive effect of the original claim's findings, that aren't applicable to tobacco litigation outside Florida. "They could settle (the Engle progeny) without a significant effect on other cases being brought" against them, he said.
Indeed, regardless of whether the tobacco industry elects to settle Florida's Engle progeny, Daynard believes that tobacco defendants are forced to continue to litigate suits in other states. He pointed to statistics showing that smoking-related illnesses kill more than 400,000 people a year. "Tobacco companies, as rich as they are, really can't cover the costs" of a large-scale, nationwide settlement, Daynard said.
In Florida, Feinberg believes tobacco companies will inevitably move toward resolving remaining Engle cases en masse. "The question is how long will the industry… (insist on litigating Engle progeny cases) one at a time, trial-by-trial, slowly winning some, losing others,” Feinberg said. “(It’s) hard for me to see how... that will go on indefinitely.”