Setback for R.J. Reynolds Against Florida Smokers

(CN) - R.J. Reynolds was not deprived of due process by the application of res judicata to a jury's finding that cigarettes generally are unhealthy and addictive, the 11th Circuit ruled.

In 2006, the Supreme Court of Florida affirmed a jury's verdict in a massive class action brought by smokers and their survivors against the major tobacco companies.

The jury found that the tobacco companies breached their duty of care, manufactured defective cigarettes and concealed information about the harm of cigarettes.

In the same ruling, however, the Supreme Court also decertified the class for the damages phase, ruling that class treatment "is not feasible because individualized issues such as legal causation, comparative fault, and damages predominate."

It said that the jury's decision would nevertheless have res judicata, so that the only unresolved issues in the individual lawsuits would involve specific causation and damages.

The decertified class then filed thousands of individual cases in state and federal courts. Claims filed in the U.S. District Court for the Middle District of Florida were consolidated in Waggoner v. R.J. Reynolds Tobacco Co.

Ultimately a federal judge rejected Reynolds' argument that applying res judicata to the individual suits violated its right to due process, because the jury's verdict did not make a specific ruling about any brand of cigarette.

A three-judge panel of the Atlanta-based federal appeals court agreed last week.

"Because R.J. Reynolds had a full and fair opportunity to be heard in the Florida class action and the application of res judicata under Florida law does not cause an arbitrary deprivation of property, we affirm the judgments against R.J. Reynolds and in favor of the survivors of the smokers," Judge William Pryor wrote for the panel.

The Florida Supreme Court had found that all tobacco companies are liable regardless of what brand of cigarettes the smoker smoked, based on evidence presented to the jury that all cigarettes that contain nicotine are addictive and produce dependence, according to the ruling.

"But the court did not approve all of the findings from Phase I," Pryor wrote. "Instead, the court stated that the findings of the jury in Phase I about fraud and intentional infliction of emotional distress cannot have preclusive effect because 'the non-specific findings in favor of the plaintiffs' on those questions were 'inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause.'"

R.J. Reynolds contested its liability before the trial court, appealed to the Supreme Court of Florida, and petitioned the U.S. Supreme Court for review, but was denied.

The tobacco company also has the opportunity to contest its liability in suits brought by individual smokers, the court said.

Furthermore, "the modest sums received by the plaintiffs in this appeal - less than $28,000 for [Alvin] Walker and less than $8,000 for [George] Duke - suggest that the juries fairly considered the questions of damages and fault," Pryor noted.

He added: "We cannot say that the procedures, however novel, adopted by the Supreme Court of Florida to manage thousands of these suits under Florida law violated the federal right of R.J. Reynolds to due process of law."

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