A federal appellate court thwarted efforts by tobacco companies to overturn a multimillion-dollar judgment against them, while pointing to the “unique and difficult challenge” Florida Supreme Court's Engle ruling created for courts and juries.

The U.S. Court of Appeals for the Eleventh Circuit shut down a multi-prong challenge by R.J. Reynolds Tobacco Co. and Philip Morris USA Inc., which sought to overturn $7.5 million in compensatory and punitive damages for plaintiff Pauline Burkhart.

The case involved a call for a mistrial after a dramatic courtroom occurrence that the defense said prejudiced the jury.  About 20 minutes into the third day of trial, Burkhart “suffered a medical incident” in which she reportedly “continued crying out in pain for 20 or 30 seconds or perhaps a minute” before jurors. The judge denied a motion to grant a mistrial, prompting the companies to allege abuse of discretion.

The federal appellate court affirmed, ruling in Burkhart's favor, but its 45-page ruling was a study in litigation nuances arising from the Engle class action. It delved into how district court judges, presiding over the thousands of cases that followed, have had to wrangle with the fallout from a case that required jurors to accept numerous previous blanket legal findings, while also weighing each suit's unique facts.

The landmark Engle decision stemmed from a 1994 Florida suit by six lung cancer patients accusing major U.S. country's major cigarette manufacturers of fraud, negligence, intentional infliction of emotional distress, breach of express warranty, strict liability, conspiracy to commit fraud and breach of implied warranty.

A Miami-Dade Circuit Court judge divided the case into three phases: The first resulted in a jury finding the tobacco companies' conduct entitled the class to punitive damages. The second awarded compensatory damages and also set a $145 billion punitive damages award for the entire class. But an appeal by the defendants disrupted the third phase, which would have asked to set “specific causation and damages for the remaining class members in Phase III.”

In a win for the defense, the Florida Supreme Court found class certification inapplicable, saying findings would hinge on each plaintiff's comparative fault, legal causation and other individual circumstances. But the high court also upheld much of the jury's Phase I findings—that the companies' behavior entitled the class to punitive damages—except “on the fraud and intentional infliction of emotional distress claims, which involved highly individualized determinations, and the finding on entitlement to punitive damages questions, which was premature.”

The Florida Supreme Court ruled that individual plaintiffs could bring their own suits, and that the “retained findings” would apply under the res judicata doctrine that prevents the relitigation of adjudicated claims between the same parties. The class-wide punitive damages award was vacated.

In the thousands of cases that followed, jurors had to uphold the Engle findings and go into deliberations accepting the tobacco companies committed multiple torts, including civil-conspiracy concealment, breach of implied warranty, fraud by concealment, breach of express warranty, strict liability and negligence. However, these jurors also had to weigh case-specific elements to determine whether addiction caused each plaintiff's disease. And in considering fraudulent-concealment and conspiracy claims, they had to evaluate whether each plaintiff relied on the companies' misrepresentations.

“Thus, the Phase I jury 'did not determine whether the defendants were liable to anyone,' ” Eleventh Circuit Judge Gerald Bard Tjoflat wrote in a unanimous decision with Judge Frank M. Hull and Senior U.S. District Judge Harvey Bartle III, sitting by special designation. “ Nor could Engle establish the tobacco companies' liability for purposes of awarding punitive damages.”

A key disparity: The Engle case established the cigarette companies met Florida's statutory definition of “intentional misconduct” by concealing and conspiring to withhold information about the dangers of smoking. But it never established the companies had “actual knowledge of the wrongfulness of their conduct and nevertheless intentionally pursued that conduct,” according the appellate court ruling.

Details in the Eleventh Circuit ruling show this issue was at the heart of the the Burkhart case, which was pending for years while awaiting the outcome of other Engle progeny appeals before federal panels and in Florida's high court. They point to defense claims that the district judge's interjections at trial reflected  “a fundamental misunderstanding of the role of the Engle findings” and prevented the companies from opposing Burkhart's request for punitive damages.

But the appellate court disagreed and upheld the trial outcome.

“The district court (judge) was concerned that (tobacco companies) counsel blurred the distinction between arguing that appellants did not have knowledge of the wrongfulness of their conduct—for purposes of awarding punitive damages—and that they did not conceal information or conspire to conceal information at all—for purposes of awarding compensatory damages under Burkhart's intentional tort claims,” Tjoflat wrote. “On each occasion in which the district court interrupted, the court did so to clarify to the jury that Appellants could not challenge the Engle findings on concealment, because R.J. Reynolds' counsel framed his argument as challenging whether concealment ever occurred at all.”