A high-profile Engle progeny lawsuit that once threatened Reynolds American Inc.’s financial solvency returns to trial Tuesday after an 18-month wait.
The case in Florida Judicial Court involves Cynthia Robinson, the widow of Michael Johnson Sr., who died at age 36.
Robinson initially won a $23 billion punitive damages award from a Florida jury in July 2014. That award represented at that time about 75% of Reynolds’ market capitalization.
In January 2015, a Florida Circuit Court judge drastically reduced the punitive damages to $16.9 million — the same amount the jury awarded in compensatory damages.
“That award is admittedly and clearly constitutionally excessive,” Judge Terry Terrell said. He said awarding an equal amount in compensatory and punitive damages “is reasonable and just.”
Reynolds said following the judge’s ruling that “while we are gratified that the court reduced the punitive damages award as clearly excessive and impermissible under state and constitutional law, we believe and will argue on appeal that the entire verdict should be set aside and a new trial granted on all issues.”
In December 2017, the Florida Supreme Court determined in a 5-2 ruling that it would not hear Robinson’s appeal on reducing the punitive damages. That denial sent the case back to Florida Judicial Court.
Engle progeny lawsuits sprang from a decision in 2006 by the Florida Supreme Court that decertified a $145 billion class-action lawsuit initially filed by Howard Engle. That ruling limits former class members to filing individual lawsuits stating that cigarettes caused their respective illnesses.
In the Robinson lawsuit, Johnson was determined to have been 29.5% responsible for his illness.
The Florida appeals court reversed the judgment of the trial court in February 2017, in part by saying attorneys for Robinson “crossed the boundaries of proper closing argument repeatedly, flagrantly and often in defiance of the trial court’s admonishments.”
Robinson was represented by Willie Gary, one of the nation’s foremost and controversial attorneys in personal-injury lawsuits.
Gary urged the Escambia County jury to “send a message to R.J. Reynolds and other big tobacco companies that will force them to stop putting the lives of innocent people in jeopardy.”
“It is clear from the record that Robinson’s trial strategy was to utterly vilify their opponent,” the appeals court ruled in February 2017.
Gray described Reynolds as “unrepentant, anti-military, criminal predator, whom the jury must fight and destroy” and “God’s not pleased” with Reynolds’ conduct.
Reynolds’ attorneys said the jury award “reflects a degree of passion and prejudice never before seen in Engle progeny litigation.”
“We must conclude that Robinson (attorney’s) misconduct had its intended result,” the appeals court ruled. “Indeed, we regard the absurdly excessive punitive award as sure proof that the jury gave great weight to Robinson (attorney’s) presentation.”
“Our conclusion is reinforced by the absence of any meaningful effort on the part of the trial court to stop the wrongdoing, even when Robinson’s (attorney) engaged in misconduct previously ruled improper. Because this did not occur here, in spite of counsel’s myriad improper and inflammatory comments, Reynolds was denied a fair trial.”
Analysts said there was ample legal precedent in and outside the tobacco industry that the amount was likely to be ruled excessive by a state appeals or state supreme court, and possibly thrown out or drastically reduced.
Christopher Growe, an analyst with Stifel, has said the U.S. Supreme Court “has set a clear standard for punitive damage awards for single-digit multiples at most of compensatory damages.”
In October 2002, a Los Angeles jury awarded $26.8 billion in punitive damages in a lawsuit involving Philip Morris USA. The amount was reduced to $26.8 million by a trial judge, and then set aside by an appellate court.
Reynolds is not responsible for paying damages while the verdict is under appeal.
However, the appeal also could take years, millions of dollars in legal fees and require the placing of a $5 million appeal bond.