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Florida Fifth DCA rules that punitive damages award in Engle-progeny tobacco case that was over 50 times greater than the compensatory damages award was constitutionally excessive under Eighth Amendment

On October 23, 2020, in R.J. Reynolds Tobacco Company v. Coates, No. 5D19-2549, the Florida Fifth DCA reversed a $16 million punitive damages award for the plaintiff in an Engle-progeny tobacco.  The case was filed as a wrongful death action by the decedent smoker’s sister, individually and as personal representative of her sister’s estate.  The jury awarded the decedent’s three adult children a total of $300,000 in compensatory damages, which was reduced by fifty percent due to the decedent’s comparative fault, for a net of $150,000. The Fifth DCA did not consider the dollar amount of the punitive damages award excessive, noting that substantially greater punitive damages awards have been awarded in other cases.  Instead, the Court faulted the excessive amount of the award compared to dollar amount of compensatory damages in the case. The Florida punitive damages statute at issue in the case was the version of the statute in effect at the time of the decedent’s death.  At that time, Fla. Sat. § 768.73 provided that punitive damages awards cannot exceed three times the amount of the compensatory damages award unless the claimant demonstrates to the court by clear and convincing evidence that the award was not excessive in light of the facts and circumstances which were presented to the trier of fact. [The current version of the statute is substantially different].   Section 768.74(5)(d) in effect at that time provided that one of the criteria that a court must review in determining whether a punitive damages award is excessive is “[w]hether the amount awarded bears a reasonable relation to the amount of damages proved and the injury suffered.”  [This language still appears in the current version of the statute]. Focusing on the reprehensible conduct of the defendant in concealing the negative health risks of smoking from the general public, the Fifth DCA concluded that the evidence supported an award in excess of the presumptive 3 to 1 ratio, but the Court also  concluded that a ratio of 53.3 to 1 (after the comparative negligence reduction) was excessive under federal due process constraints. The Court favorably cited Boerner v. Brown & Williamson Tobacco Co., 394 F.3d 594, 602–03 (8th Cir. 2005) (holding that although tobacco company’s conduct was “highly reprehensible,” $15 million punitive amount, when measured against $4.025 million compensatory award, was excessive and remittitur to a 1 to 1 ratio was required).  The Fifth DCA consequently reversed the punitive damages award and remanded for entry of an order of remittitur or, if remittitur is rejected by either party, a new trial solely on the amount of punitive damages.  What the Court did not do was indicate what an acceptable ratio would be.  The Court noted that the U.S. Supreme Court has identified three factors that a court must consider in determining whether a punitive damages award is unconstitutionally excessive under the Eighth Amendment: “(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.” State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003).  The Fifth DCA additionally noted that the Florida Supreme Court has indicated that “[r]eprehensibility is ‘the most important indicium of the reasonableness of a punitive damages award.’ Schoeff v. R.J. Reynolds Tobacco Co., 232 So. 3d 294, 308 (Fla. 2017) (upholding punitive damages award of $30 million in Engle progeny case where there was no evidence amount could not have been awarded by reasonable jury and trial court found it free from undue prejudice). In addition, the Court cited an Eighth Circuit case, JCB, Inc. v. Union Planters Bank, NA, 539 F.3d 862, 876 (8th Cir. 2008) holding that punitive damages may withstand constitutional scrutiny when only nominal or a small amount of compensatory damages have been assigned, even though the ratio between the two will necessarily be large.  However, the Court also cited Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), in which the U.S. Supreme Court indicated that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.”