From YHOO board, excerpts from the petition to the Florida Supreme Court:
A PETITION BY THE TOBACCO INDUSTRY TO FLORIDA'S SUPREME COURT WAS FILED
ON FRIDAY, OCTOBER 29. ITS KEY PURPOSE APPEARS TO BE TO SECURE EARLY
JURISDICTION OF THE ENGLE MATTER BY THAT COURT, AND TO HAVE CORRECTED IN
THE NEAR TERM, THE SERIOUS CHALLENGES THAT THE CURRENT TRIAL PLAN
PRESENTS TO IT. GIVEN THE LACK OF INDUSTRY COMMENT ON THIS MATTER, WE
THINK THAT THE FILING INCLUDES MUCH VALUABLE INFORMATION TO INVESTORS,
AND WE WOULD URGE ALL OBSERVERS TO READ THE PRELIMINARY STATEMENT BELOW.
PRELIMINARY STATEMENT
This case presents a FLAGRANT VIOLATION of the Florida and federal
constitutions by a trial judge and equally flagrant abdication of
judicial responsibility by the Third District Court of Appeal ("Third
DCA"). It involves one of the largest class actions in the history of
this country: a plaintiff class of potentially hundreds of thousands of
smokers seeking to impose upon petitioners liability in the amount of
hundreds of billions of dollars for diseases allegedly caused by
smoking. In 1996, the Third DCA affirmed the trial court's unprecedented
certification of this class for purposes of trying certain "common"
issues App. 2, R. J. Reynolds Tobacco Co. v. Engle, 672 So. 2d 39, 41
(Fla. 3d DCA), rev. denied, 682 So. 2d 1100 (Fla. 1996). However, as
part of its Mandate, the court directed that "the issue of damages,"
among "other issues," could not be determined on a classwide basis and
must be resolved individually "as to each class member."
In defiance of that Mandate and basic principles of Florida and federal
constitutional law, the trial judge has now, after eight months of trial,
RADICALLY ALTERED the long-standing trial plan and ordered the jury to
assess a LUMP-SUM PUNITIVE DAMAGES award for the entire class (a class of
which the trial judge is himself a member). This Order, pursuant to
which the plaintiffs will ask the jury in the next few weeks to return an
obviously unbondable punitive award in excess of $100 billion, would have
the jury assess this lump-sum amount even though:
1)it is undisputed that both compensatory liability and the amount of
compensatory damages cannot be determined on a classwide basis;
2)the jury will have adjudicated defendants' liability for compensatory
damages with respect to only three class members handpicked by
plaintiffs' counsel; and
3)defendants' liability to the hundreds of thousands of other class
members will depend on a host of individual issues (such as individual
causation, reliance, comparative fault, and statute of limitations) that
the jury will not allowed or able to consider at this time.
IN OTHER WORDS, THE TRIAL COURT'S ORDER WILL ALLOW THE JURY TO IMPOSE A
DEVASTATING, POTENTIALLY BANKRUPTING, UNBONDABLE PUNITIVE AWARD
COMPLETELY UNTETHERED TO ANY FINDING OR CONSIDERATION OF COMPENSATORY
LIABILITY. The jury will have NO IDEA HOW MANY CLASS MEMBERS might have
valid claims or what the total amount of compensatory liability might be.
The award will likewise be completely divorced from any consideration of
what have heretofore been critical issues in smoking and heath litigation
- each smoker's own individual knowledge of the risks of smoking, the
mitigating circumstances surrounding each smoker's claim, and the extent
of the causal link (if any) between the conduct on which the punitive
award is based and the class member's alleged injuries.
Worse, the jury's arbitrary award will be cast in stone. Under the
trial judge's Order, the award will remain the same even if only a few
class members ultimately prove their claims and the jury awards only a
small amount of compensatory damages. It is difficult to conceive of a
greater violation of the settled constitutional precepts that punitive
damages may be awarded only after a threshold finding of compensatory
liability and only in an amount "reasonably related" to the amount of
compensatory damages. BMW of North America v. Gore, 517 U.S. 559 (1996);
Owens-Corning v. Ballard, No. 92, 963, 1999 WL 669026 (Fla. Aug. 26,
1999). Nor is it any easier to reconcile the Order with the
constitutional requirement that punitive damages reflect each
plaintiff's individual circumstances, including (1) any individual
mitigating circumstances arising from each class member's own conduct,
and 2) the relationship (if any) between each class member's injuries
and the wrongful conduct giving rise to the punitive determination.
Petitioners brought the trial judge's Order to the Third DCA by way of a
Motion to Enforce the Mandate and For Other Relief. App. 10, Defendants'
Motion to Enforce the Mandate and For Other Relief, Aug. 16, 1999
("Motion to Enforce the Mandate"). On September 3, 1999, the Third DCA
ruled that trial judge's Order did violate the Mandate, expressly
instructing that "the issue of damages, "both compensatory and punitive,
must be tried on a individual basis." App. 12, Order Granting
Defendants' Motion to Enforce the Mandate, Sept. 3, 1999 ("Sept. 3, 1999
Order"). But just two weeks later, the Third DCA - on its own motion and
without any explanation - did an about-face, issuing an order holding
this ruling "for naught" and setting the issue for oral argument. App.
13, Order Vacating and Holding for Naught Prior Order Granting
Defendants' Motion to Enforce the Mandate, Sept. 17, 1999 ("Sept. 17,
1999 Order"). On October 20, 1999, less than one hour after that oral
argument, the Third DCA issued another order. This time the Third DCA
denied petitioners' Motion to Enforce the Mandate, stating only that
issues could be raised in a subsequent appeal. App. 15, Order Denying
Defendants' Motion to Enforce the Mandate, Oct. 20, 1999 ("Oct. 20, 1999
Order"). The Order did not reference the court's prior ruling or
provide any explanation as to how the trial judge's Order could possibly
be consistent with the Mandate. In short, the Third DCA had determined
that the trial judge violated the law, but has now chosen to do nothing
about it.
The trial court did not have the right to ignore the Mandate, and the
Third DCA did not have the right to refuse to enforce it. The Mandate
became legally unalterable at the expiration of the term in which it was
entered, and petitioners have a clear legal right to its enforcement.
This Court accordingly has jurisdiction to issue a writ of prohibition
directing the trial judge to comply with the Mandate or, alternatively,
to issue a writ of mandamus directing the Third DCA to enforce the
Mandate and reinstate its September 3, 1999 Order.
Furthermore, this Court also has jurisdiction under its "All Writs" power
to correct these violations of Florida and federal constitutional law.
The trial judge's Order threatens to impede this Court's ability to
review that Order in the future. Petitioners face an unconstitutional
trial - presided over by a judge who is a member of the plaintiff class -
that places their corporate existence and their employees' continued
livelihoods in the hands of a single six-person jury.
Although a massive, lump-sum award could not be immediately reduced to
judgment, the looming prospect of such an award would still have an
immediate and significantly adverse effect on petitioners' businesses.
Such an award would impact substantially petitioners' ability to borrow
money at reasonable rates - and perhaps at any rate at all. The in
terrorem pressure towards a "blackmail settlement" created by such a
possibility justifies immediate intervention by a higher court. E.g., In
re Rhone-Poulenc Rorer Inc., 51 F,3d 1293, 1298 (7th Cir. 1995) (issuing
extraordinary relief for this reason where trial court error produced the
threat of a similar "immense judgment" that could force "blackmail
settlement"). The Order is one that, in a wholly unconstitutional m
anner, may be "effectively unreviewable at the end of the case," id. at
1298, and thus implicates this Court's "All Writs" power to correct the
trial judge's manifest errors now.
The Order also threatens to inflict grave and irreparable harm to the
public and the State of Florida. The jury's assessment of a huge
lump-sum punitive award (from which any class member who establishes
liability would be entitled to a large, pro rata share) would spawn a
deluge of additional compensatory damages claims that would otherwise not
have been brought and that would choke the Florida courts for decades to
come. Moreover, such an award would have a devastating impact on the
communities in Florida and the rest of the country that have economies
dependent upon tobacco.
In contrast, the Order produces no legitimate benefit for the plaintiff
class. By the plain terms of the Order, the punitive award is to be
distributed pro rata to all class members who establish liability and
compensatory damages - a distribution that by definition cannot begin
until after the close of hundreds of thousands of individual trials. As
a result, even though the jury would assess a classwide punitive award
now, the trial court could not enter a final judgment with respect to any
class member and therefore could not distribute a single penny of that
award - or any compensatory award - to class members for decades to come.
In sum, whatever has prompted the trial judge and the Third DCA to act as
they have -- whether it be a misunderstanding of the rules of law or any
effort to aid plaintiffs in coercing a settlement of a massive class
action that never should have been certified in the first place - is
illegitimate. The Florida courts should not be perceived as permitting
corporate defendants to be terrorized into blackmail settlements. This
Court should intervene now to prevent this manifest injustice. |
