No.
`
`
`
`IN THE
`
`Supreme Court of the United States
`_______________
`
`PHILIP MORRIS USA INC.,
`
`
`
`
`
`v.
`
`Petitioner,
`
`JAMES NAUGLE, AS PERSONAL REPRESENTATIVE OF THE
`ESTATE OF LUCINDA NAUGLE, DECEASED,
`Respondent.
`
`_______________
`
`On Petition For A Writ Of Certiorari
`To The Florida Fourth District Court Of Appeal
`_______________
`
`PETITION FOR A WRIT OF CERTIORARI
`_______________
`
`ANDREW L. FREY
`LAUREN R. GOLDMAN
`MAYER BROWN LLP
`1221 Avenue of the Americas
`New York, NY 10020
`(212) 506-2500
`
`
`
`MIGUEL A. ESTRADA
` Counsel of Record
`AMIR C. TAYRANI
`BRANDON L. BOXLER
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
`(202) 955-8500
`mestrada@gibsondunn.com
`
`
`
`
`
`Counsel for Petitioner
`
`
`
`
`
`
`
`IN THE
`
`Supreme Court of the United States
`_______________
`
`PHILIP MORRIS USA INC.,
`
`
`
`
`
`v.
`
`Petitioner,
`
`JAMES NAUGLE, AS PERSONAL REPRESENTATIVE OF THE
`ESTATE OF LUCINDA NAUGLE, DECEASED,
`Respondent.
`
`_______________
`
`On Petition For A Writ Of Certiorari
`To The Florida Fourth District Court Of Appeal
`_______________
`
`PETITION FOR A WRIT OF CERTIORARI
`_______________
`
`ANDREW L. FREY
`LAUREN R. GOLDMAN
`MAYER BROWN LLP
`1221 Avenue of the Americas
`New York, NY 10020
`(212) 506-2500
`
`
`
`MIGUEL A. ESTRADA
` Counsel of Record
`AMIR C. TAYRANI
`BRANDON L. BOXLER
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
`(202) 955-8500
`mestrada@gibsondunn.com
`
`
`
`
`
`Counsel for Petitioner
`
`
`
`
`
`
`
`QUESTIONS PRESENTED
`This case presents questions also raised in the pe-
`tition for a writ of certiorari filed today in R.J. Reyn-
`olds Tobacco Co. v. Graham, No. 17-__:
`1. When there is no way to tell whether a prior
`jury found particular facts against a party, does due
`process permit those facts to be conclusively presumed
`against that party in subsequent litigation?
`2. Are strict-liability and negligence claims based
`on the findings by the class-action jury in Engle v. Lig-
`gett Group, Inc. preempted by the many federal stat-
`utes that manifested Congress’s intent that cigarettes
`continue to be lawfully sold in the United States?
`
`
`
`
`
`ii
`
`PARTIES TO THE PROCEEDING AND
`RULE 29.6 STATEMENT
`The plaintiff below was Lucinda Naugle; after Ms.
`Naugle passed away, respondent James Naugle was
`substituted as the personal representative of her es-
`tate.
`The defendant below was petitioner Philip Morris
`USA Inc. The complaint also named as defendants
`R.J. Reynolds Tobacco Co., Lorillard, Inc., Lorillard
`Tobacco Co., Liggett Group LLC, and Vector Group,
`Ltd., but those entities were dismissed before trial
`and were not parties to the appeal.
`Petitioner Philip Morris USA Inc. is a wholly
`owned subsidiary of Altria Group, Inc., which is the
`only publicly held company that owns 10% or more of
`Philip Morris USA Inc.’s stock. No publicly held com-
`pany owns 10% or more of Altria Group, Inc.’s stock.
`
`
`
`
`
`
`
`
`
`
`
`iii
`
`TABLE OF CONTENTS
`
`Page
`QUESTIONS PRESENTED ....................................... i
`PARTIES TO THE PROCEEDING AND
`RULE 29.6 STATEMENT ................................... ii
`TABLE OF APPENDICES ........................................ iv
`TABLE OF AUTHORITIES ........................................ v
`OPINIONS BELOW .................................................... 1
`JURISDICTION .......................................................... 1
`CONSTITUTIONAL PROVISIONS
`INVOLVED ........................................................... 2
`STATEMENT .............................................................. 2
`REASONS FOR GRANTING THE PETITION ....... 13
`I. THE FLORIDA COURTS’ EXTREME DEPARTURE
`FROM TRADITIONAL PRECLUSION PRINCIPLES
`VIOLATES DUE PROCESS ............................... 14
`II. UNDER BOTH GRAHAM AND MAROTTA, THE
`ENGLE STRICT-LIABILITY AND NEGLIGENCE
`FINDINGS RAISE INSUPERABLE PREEMPTION
`PROBLEMS .................................................... 16
`III. THE COURT SHOULD HOLD THIS PETITION
`PENDING RESOLUTION OF GRAHAM .............. 19
`CONCLUSION .......................................................... 20
`
`
`
`
`
`
`
`
`
`iv
`
`TABLE OF APPENDICES
`
`Page
`
`APPENDIX A: Opinion of the Florida Fourth
`District Court of Appeal (Apr. 27, 2017) ............ 1a
`APPENDIX B: Order of the Supreme Court of
`Florida Declining Jurisdiction (Feb. 13,
`2014) .................................................................... 3a
`APPENDIX C: Opinion of the Florida Fourth
`District Court of Appeal (Dec. 12, 2012) ........... 6a
`
`
`
`
`
`
`
`
`
`
`
`v
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`Engle v. Liggett Group, Inc.,
`945 So. 2d 1246 (Fla. 2006) ................. 2, 5, 6, 7, 15
`Fayerweather v. Ritch,
`195 U.S. 276 (1904) .......................................... 2, 15
`FDA v. Brown & Williamson Tobacco
`Corp., 529 U.S. 120 (2000) ......................... 3, 17, 18
`Fla. Star v. B.J.F.,
`530 So. 2d 286 (Fla. 1988) ............................... 1, 11
`Flores v. United States,
`137 S. Ct. 2211 (2017) .......................................... 19
`Geier v. Am. Honda Motor Co.,
`529 U.S. 861 (2000) .............................................. 17
`Graham v. R.J. Reynolds Tobacco Co.,
`857 F.3d 1169 (11th Cir. 2017) ................................
` .............................................. 3, 4, 11, 12, 13, 16, 18
`
`Honda Motor Co. v. Oberg,
`512 U.S. 415 (1994) .............................................. 16
`Innovention Toys, LLC v. MGA Entm’t,
`Inc., 136 S. Ct. 2483 (2016) .................................. 19
`KPMG LLP v. Cocchi,
`565 U.S. 18 (2011) .................................................. 1
`Kremer v. Chem. Constr. Corp.,
`456 U.S. 461 (1982) .............................................. 13
`Lawrence v. Chater,
`516 U.S. 163 (1996) ........................................ 19, 20
`
`
`
`
`
`vi
`
`Merrill v. Merrill,
`137 S. Ct. 2156 (2017) .......................................... 19
`Philip Morris USA Inc. v. Douglas,
`110 So. 3d 419 (Fla. 2013) ................................. 3, 7
`Philip Morris USA, Inc. v. Naugle,
`182 So. 3d 885 (Fla. Dist. Ct. App.
`2016) ..................................................................... 11
`R.J. Reynolds Tobacco Co. v. Brown,
`70 So. 3d 707 (Fla. Dist. Ct. App.
`2011) ..................................................................... 10
`R.J. Reynolds Tobacco Co. v. Marotta,
`214 So. 3d 590 (Fla. 2017) ....................... 4, 7, 8, 19
`Richards v. Jefferson Cty.,
`517 U.S. 793 (1996) .............................................. 16
`Taylor v. Sturgell,
`553 U.S. 880 (2008) ................................................ 2
`Constitutional Provisions
`U.S. Const. amend. XIV, § 1, cl. 2 ............................... 2
`U.S. Const. art. VI, cl. 2 .............................................. 2
`Statutes
`Pub. L. No. 89-92, 79 Stat. 282 (1965) ...................... 17
`Pub. L. No. 91-222, 84 Stat. 87 (1970) ...................... 17
`Pub. L. No. 98-24, 97 Stat. 175 (1983) ...................... 17
`Pub. L. No. 98-474, 98 Stat. 2200 (1984) .................. 17
`Pub. L. No. 99-252, 100 Stat. 30 (1986) .................... 17
`Pub. L. No. 102-321, 106 Stat. 394
`(1992) .................................................................... 17
`
`
`
`
`
`
`
`PETITION FOR A WRIT OF CERTIORARI
`
`Petitioner Philip Morris USA Inc. (“PM USA”) re-
`spectfully petitions for a writ of certiorari to review
`the judgment of the Florida Fourth District Court of
`Appeal in this case.
`OPINIONS BELOW
`The decision of the Florida Fourth District Court
`of Appeal is unreported, but is electronically available
`at 2017 WL 1507615. See Pet. App. 1a. The order of
`the Florida Supreme Court declining discretionary re-
`view of an earlier decision in the case is reported at
`135 So. 3d 289. See Pet. App. 3a. Additional opinions
`of the Florida Fourth District Court of Appeal in the
`case are reported at 103 So. 3d 944, see Pet. App. 6a,
`and 182 So. 3d 885.
`JURISDICTION
`The Florida Fourth District Court of Appeal ren-
`dered its decision on April 27, 2017. See Pet. App. 1a.
`Under Florida law, PM USA cannot seek review in the
`Florida Supreme Court because the Fourth District’s
`decision does not contain any analysis or citation. See
`Fla. Star v. B.J.F., 530 So. 2d 286, 288 n.3 (Fla. 1988).
`This Court therefore has jurisdiction to review the
`Fourth District’s decision under 28 U.S.C. § 1257(a)
`because the Fourth District is “the highest court of
`[the] State in which a decision could be had.” See, e.g.,
`KPMG LLP v. Cocchi, 565 U.S. 18, 19 (2011) (per cu-
`riam).
`On July 18, 2017, Justice Thomas extended the
`deadline for PM USA to file a petition for a writ of cer-
`tiorari to September 24, 2017. See No. 17A67.
`
`
`
`
`
`2
`
`CONSTITUTIONAL PROVISIONS INVOLVED
`The Fourteenth Amendment to the United States
`Constitution provides in pertinent part: “nor shall
`any State deprive any person of life, liberty, or prop-
`erty, without due process of law.” U.S. Const. amend.
`XIV, § 1, cl. 2.
`Article VI of the United States Constitution pro-
`vides in pertinent part: “the Laws of the United
`States . . . shall be the supreme Law of the Land; and
`the Judges in every State shall be bound thereby, any
`Thing in the Constitution or Laws of any State to the
`Contrary notwithstanding.” U.S. Const. art. VI, cl. 2.
`STATEMENT
`Under longstanding and heretofore universal
`common-law principles, plaintiffs seeking to rely on
`the outcome of a prior proceeding to establish ele-
`ments of their claims must demonstrate that those el-
`ements were “actually litigated and resolved” in their
`favor in the prior case. Taylor v. Sturgell, 553 U.S.
`880, 892 (2008) (emphasis added; internal quotation
`marks omitted). This “actually decided” requirement
`is such a fundamental safeguard against the arbitrary
`deprivation of property that it is mandated by due pro-
`cess. See Fayerweather v. Ritch, 195 U.S. 276, 298-99,
`307 (1904).
`In this case and thousands of similar suits, how-
`ever, the Florida courts have jettisoned the “actually
`decided” requirement. According to the Florida Su-
`preme Court, members of the class of Florida smokers
`prospectively decertified in Engle v. Liggett Group,
`Inc., 945 So. 2d 1246 (Fla. 2006) (per curiam), can rely
`on the generalized findings rendered by the class-ac-
`tion jury before decertification—for example, that
`each defendant “placed cigarettes on the market that
`
`
`
`
`
`
`
`
`3
`
`were defective and unreasonably dangerous”—to es-
`tablish the tortious conduct elements of their claims,
`without demonstrating that the Engle jury actually
`decided that the defendants had engaged in tortious
`conduct relevant to their individual smoking histo-
`ries. Philip Morris USA Inc. v. Douglas, 110 So. 3d
`419, 424 (Fla.) (internal quotation marks omitted),
`cert. denied, 134 S. Ct. 332 (2013). The en banc Elev-
`enth Circuit recently held that full-faith-and-credit
`requirements obligate federal courts to give equally
`broad preclusive effect to the Engle jury’s findings
`(although on an entirely different preclusion rationale
`from that of the Florida Supreme Court). See Graham
`v. R.J. Reynolds Tobacco Co., 857 F.3d 1169, 1186
`(11th Cir. 2017) (en banc), petition for certiorari pend-
`ing, No. 17-__ (filed Sept. 15, 2017).
`In addition, both the Florida Supreme Court and
`Eleventh Circuit have disregarded previously well-
`recognized principles of implied preemption by per-
`mitting plaintiffs to rely on the Engle strict-liability
`and negligence findings, which may rest on a determi-
`nation that all cigarettes produced by the Engle de-
`fendants were defective—a theory of liability that di-
`rectly conflicts with federal statutes resting on the
`“collective premise . . . that cigarettes . . . will con-
`tinue to be sold in the United States.” FDA v. Brown
`& Williamson Tobacco Corp., 529 U.S. 120, 139
`(2000). In Graham, for example, the en banc Eleventh
`Circuit interpreted the Florida Supreme Court’s deci-
`sion in Douglas as holding that the Engle jury found
`that all cigarettes are defective based on their inher-
`ent health risks and addictiveness, but nonetheless
`concluded that claims relying on that sweeping theory
`of liability are compatible with Congress’s carefully
`calibrated regulatory approach to cigarettes and
`therefore are not impliedly preempted. See Graham,
`
`
`
`
`
`
`
`
`4
`
`857 F.3d at 1186, 1191; see also R.J. Reynolds Tobacco
`Co. v. Marotta, 214 So. 3d 590, 605 (Fla. 2017) (hold-
`ing that federal law does not preempt Engle progeny
`plaintiffs’ strict-liability and negligence claims).
`PM USA and R.J. Reynolds Tobacco Co. have filed
`a petition for a writ of certiorari today seeking review
`of the Eleventh Circuit’s decision in Graham, which
`presents due-process and implied-preemption ques-
`tions that are also directly at issue in this case:
`(1) whether due process prohibits plaintiffs from rely-
`ing on the preclusive effect of the generalized Engle
`jury findings to establish elements of their individual
`claims, and (2) whether Engle progeny plaintiffs’
`claims for strict liability and negligence are impliedly
`preempted by federal law. See R.J. Reynolds Tobacco
`Co. v. Graham, No. 17-__. Graham—a fractured deci-
`sion in which Judge Tjoflat authored a more-than-
`200-page dissent—is an ideal vehicle for this Court to
`consider the two issues presented in this case and the
`thousands of other Engle progeny cases pending in
`state and federal courts across Florida.
`The Court should hold this petition pending the
`disposition of Graham, and then dispose of the peti-
`tion in a manner consistent with its ruling in Graham.
`A. The Engle Class Action
`The Engle litigation began in 1994 when six indi-
`viduals filed a putative nationwide class action in
`Florida state court seeking billions of dollars in dam-
`ages from PM USA and other tobacco companies. The
`Engle trial court ultimately certified a class of all Flor-
`ida “citizens and residents, and their survivors, who
`have suffered, presently suffer or have died from dis-
`
`
`
`
`
`
`
`
`5
`
`eases and medical conditions caused by their addic-
`tion to cigarettes that contain nicotine.” 945 So. 2d at
`1256.
`The Engle trial court adopted a complex three-
`phase trial plan. In Phase I, the jury would make
`findings on purported “common issues” relating to the
`defendants’ conduct and the health effects of smoking.
`945 So. 2d at 1256. In Phase II, the same jury would
`address the specific claims of the class representatives
`and assess class-wide punitive damages. Id. at 1257.
`And in Phase III, new juries would apply the Phase I
`findings to the claims of individual class members. Id.
`at 1258.
`During the year-long Phase I trial, the class ad-
`vanced many different factual allegations regarding
`the defendants’ products and conduct over the course
`of four decades, including many allegations that per-
`tained to only some cigarette designs, only some
`brands of cigarettes, or only some periods of time. For
`example, the class asserted in support of its strict-lia-
`bility and negligence claims that some cigarette
`brands had unduly high nitrosamine levels, others
`used ammonia as a tobacco additive to enhance addic-
`tiveness, and others had higher smoke pH than nec-
`essary; that the filters on some cigarettes contained
`harmful components; and that the ventilation holes in
`“light” or “low tar” cigarettes were improperly placed.
`Engle Class Opp. to Strict Liability Directed Verdict
`at 3; Engle Tr. 11966-71, 16315-18, 27377, 36664-65.
`Likewise, to support its fraudulent concealment and
`conspiracy claims, the class identified numerous dis-
`tinct categories of allegedly fraudulent statements by
`the defendants, including statements pertaining to
`the health risks of smoking, others pertaining to the
`addictiveness of smoking, and still others limited to
`
`
`
`
`
`
`
`
`6
`
`certain designs and brands of cigarettes, such as
`“light” cigarettes. In fact, class counsel acknowledged
`that the class’s concealment allegations rested on
`“thousands upon thousands of statements about” cig-
`arettes. Id. at 35955 (emphasis added).
`Over the defendants’ objection, the class sought
`and secured a Phase I verdict form that asked the jury
`to make only generalized findings on each of its
`claims. On the class’s strict-liability claim, for exam-
`ple, the verdict form asked whether each defendant
`“placed cigarettes on the market that were defective
`and unreasonably dangerous.” Engle, 945 So. 2d at
`1257 n.4. On the concealment and conspiracy claims,
`the jury was asked whether the defendants concealed
`information about the “health effects” or “addictive
`nature of smoking cigarettes.” Id. at 1277. The jury
`answered each of those generalized questions in the
`class’s favor, but its findings do not reveal which of the
`class’s numerous underlying theories of liability the
`jury accepted, which it did not consider at all, and
`which it rejected.
`In Phase II, the Engle jury determined individu-
`alized issues of causation and damages as to three
`class representatives. 945 So. 2d at 1257. It then
`awarded $145 billion in punitive damages to the class
`as a whole. Id.
`On appeal, the Florida Supreme Court held that
`“continued class action treatment” was “not feasible
`because individualized issues . . . predominate[d],”
`and that the punitive damages award could not stand
`because there had been no liability finding in favor of
`the class. Engle, 945 So. 2d at 1262-63, 1268. Based
`on “pragmatic” considerations, however, the court
`stated that class members could “initiate individual
`damages actions” within one year of its mandate and
`
`
`
`
`
`
`
`
`7
`
`that the “Phase I common core findings . . . will have
`res judicata effect in those trials.” Id. at 1269.
`In the wake of the Florida Supreme Court’s deci-
`sion, approximately 9,000 plaintiffs alleging member-
`ship in the Engle class filed “Engle progeny” actions in
`Florida state and federal courts, invoking the “res ju-
`dicata effect” of the Phase I findings to establish the
`tortious-conduct elements of their individual claims.
`In Douglas, the Florida Supreme Court rejected the
`Engle defendants’ argument that federal due process
`prohibits giving such sweeping preclusive effect to the
`Engle findings. 110 So. 3d at 422. In so doing, the
`Florida Supreme Court recognized that the Engle
`class’s multiple theories of liability “included brand-
`specific defects” that applied to only some cigarettes
`and that the Engle findings would therefore be “use-
`less in individual actions” if plaintiffs invoking their
`preclusive effect had to show what the Engle jury had
`“actually decided,” as Florida issue-preclusion law re-
`quired. Id. at 423, 433. The court nevertheless held
`that the findings could be given preclusive effect un-
`der principles of claim preclusion, which “unlike issue
`preclusion, has no ‘actually decided’ requirement” and
`applies to any issue that the Engle jury “might” have
`decided against the defendants. Id. at 435 (emphasis
`added). It was therefore “immaterial” that the “Engle
`jury did not make detailed findings” sufficient to iden-
`tify the actual basis for its verdict. Id. at 433.
`Subsequently, the Florida Supreme Court held in
`Marotta that federal law does not “implicitly preempt
`state law tort claims of strict liability and negligence
`by Engle progeny plaintiffs.” 214 So. 3d at 605 (alter-
`ations omitted). According to the court, “permitting
`Engle progeny plaintiffs to bring state law strict lia-
`bility and negligence claims against Engle defendants
`
`
`
`
`
`
`
`
`8
`
`does not conflict” with federal law because Congress
`did not “intend[ ] to preclude the States from banning
`cigarettes.” Id. at 596, 600. Even if it did, the court
`continued, “tort liability like that in Engle does not
`amount to such a ban” because the Engle jury’s strict-
`liability and negligence verdicts could have rested on
`a variety of grounds, including the ground that the de-
`fendants “intentionally increased the amount of nico-
`tine in their products,” rather than on “the inherent
`characteristics of all cigarettes.” Id. at 601. In so
`holding, Marotta reiterated that the Engle findings
`must be given claim-preclusive effect without regard
`to what the jury “actually decided.” Id. at 593.
`B. Proceedings In This Case
`Pursuant to the procedures established by the
`Florida Supreme Court in Engle, Lucinda Naugle
`brought this personal-injury action against PM USA
`to recover damages for her emphysema.1 Ms. Naugle
`claimed to be a member of the Engle class because her
`emphysema was caused by an addiction to cigarettes,
`and she asserted claims for strict liability, negligence,
`fraudulent concealment, and conspiracy to commit
`fraudulent concealment. The complaint did not iden-
`tify any specific defect, act of negligence, or act of con-
`cealment that allegedly caused Ms. Naugle’s injuries.
`Instead, the complaint invoked the Engle findings and
`alleged that the conduct elements of Ms. Naugle’s
`claims were already “conclusively established in this
`action” because she was a member of the decertified
`Engle class. Am. Compl. ¶ 28.
`Over PM USA’s objection, the trial court ruled
`that, upon proving that she was a member of the
`
` 1 Ms. Naugle died on November 1, 2013, and respondent James
`Naugle was substituted as her personal representative.
`
`
`
`
`
`
`
`
`9
`
`Engle class, Ms. Naugle would be permitted to rely on
`the “res judicata effect” of the Engle jury findings to
`establish the conduct elements of her claims and
`would not be required to prove those elements at trial.
`S.R. 5:831-35; T. 3736.
`The jury ultimately found that Ms. Naugle was an
`Engle class member, found in her favor on all claims,
`and awarded her approximately $57 million in com-
`pensatory damages and $244 million in punitive dam-
`ages. Pet. App. 8a. The trial court remitted the total
`award to approximately $37 million. Pet. App. 8a.
`PM USA appealed to the Florida Fourth District
`Court of Appeal and argued, among other things, that
`the trial court violated the “‘actually decided’ require-
`ment . . . mandated by due process” when it gave pre-
`clusive effect to the Engle findings. Initial Br. of Ap-
`pellant PM USA 15. On the negligence claim, for ex-
`ample, PM USA maintained that the trial court
`“should have ruled out any use” of the Engle findings
`“to establish that PM USA engaged in negligent con-
`duct related to Ms. Naugle’s injuries” because “it is
`impossible to say that the Engle jury actually decided
`that PM USA was negligent in some specific manner
`that could have harmed Ms. Naugle.” Id. at 30. The
`court could not circumvent this problem, PM USA ex-
`plained, by construing the finding as resting on the
`“uniform allegation that all cigarettes were defective
`at all times” because “federal law would preempt that
`kind of claim.” Id. at 24. PM USA likewise argued
`that the Engle jury’s concealment finding “does not es-
`tablish, to any degree of certainty, that PM USA was
`guilty of any wrongful conduct that harmed Ms.
`Naugle.” Id. at 28-29 (emphasis omitted). For those
`reasons, PM USA stated, the trial court violated “De-
`fendants’ due process rights . . . in relying on the
`
`
`
`
`
`
`
`
`10
`
`Engle findings to excuse Ms. Naugle from proving
`that PM USA engaged in wrongful conduct relevant to
`this case.” Id. at 30.
`The Fourth District held that controlling prece-
`dent “foreclose[d]” PM USA’s argument that “applica-
`tion of the Engle findings to this progeny case violates
`[PM USA’s] due process rights.” Pet. App. 8a-9a (cit-
`ing R.J. Reynolds Tobacco Co. v. Brown, 70 So. 3d 707
`(Fla. Dist. Ct. App. 2011)). The court agreed with PM
`USA, however, that the damages awards “were in-
`fected by passion and prejudice,” and remanded for a
`new trial on the amount of compensatory and punitive
`damages. Pet. App. 13a.
`PM USA then sought discretionary review in the
`Florida Supreme Court, which at the time had
`granted review in Douglas—a case that squarely pre-
`sented PM USA’s due-process challenge to the preclu-
`sive effect of the Engle Phase I findings. See PM
`USA’s Notice to Invoke Discretionary Jurisdiction 2.
`After the Florida Supreme Court decided Douglas and
`rejected the Engle defendants’ due-process argument,
`the court issued an order to show cause why it should
`not deny PM USA’s pending request for review in this
`case. Order of May 17, 2013, Philip Morris USA, Inc.
`v. Naugle (Fla.). PM USA responded by acknowledg-
`ing that “Douglas forecloses the arguments raised in
`PM USA’s petition.” PM USA’s Response to May 17,
`2013 Order to Show Cause 6. The Florida Supreme
`Court thereafter denied review. See Pet. App. 3a.
`While PM USA’s request for review was pending
`before the Florida Supreme Court, the retrial on dam-
`ages proceeded in the trial court, and a new jury
`awarded Ms. Naugle $4.1 million in compensatory
`damages and $7.5 million in punitive damages.
`
`
`
`
`
`
`
`
`11
`
`PM USA appealed again to the Fourth District,
`which remanded the case for a juror interview regard-
`ing possible juror misconduct. See Philip Morris USA,
`Inc. v. Naugle, 182 So. 3d 885 (Fla. Dist. Ct. App.
`2016) (per curiam). After the interview, PM USA
`moved for a new trial, which the trial court denied.
`The Fourth District affirmed in an unpublished per
`curiam opinion that did not contain any analysis or
`citation, see Pet. App. 1a, and that therefore was not
`subject to review in the Florida Supreme Court, see
`Fla. Star v. B.J.F., 530 So. 2d 286, 288 n.3 (Fla. 1988).
`C. The Eleventh Circuit’s En Banc Decision
`In Graham
`Several weeks after the Fourth District issued its
`final opinion in this case, the en banc Eleventh Circuit
`issued its opinion in Graham v. R.J. Reynolds Tobacco
`Co., which held by a 7-3 vote that permitting plaintiffs
`to rely on the Engle findings to establish the conduct
`elements of their strict-liability and negligence claims
`does not violate due process, and further held that fed-
`eral law does not impliedly preempt those claims. 857
`F.3d at 1186, 1191.
`On the due-process issue, the Graham majority
`did not adopt Douglas’s novel claim-preclusion theory,
`but instead construed Douglas as having held that the
`Engle strict-liability and negligence findings rest on a
`single common theory applicable to all class mem-
`bers—i.e., “that all of defendants’ cigarettes cause dis-
`ease and addict smokers.” 857 F.3d at 1176. Accord-
`ing to the court, the defendants “were afforded the
`protections mandated by the Due Process Clause” be-
`cause they received “notice” of and an “opportunity to
`be heard on the common theories” during the Engle
`trial, and it was obligated to “give full faith and credit”
`
`
`
`
`
`
`
`
`12
`
`to the Engle jury’s findings on those “common theo-
`ries.” Id. at 1185.
`On the implied-preemption issue, the Graham
`majority held that federal law does not foreclose tort
`liability premised on the theory that all cigarettes are
`defective because, in the court’s view, “[n]othing” in
`any federal statute “reflects a federal objective to per-
`mit the sale or manufacture of cigarettes.” 857 F.3d
`at 1188. As a result, federal law does not displace
`state-law “tort liability based on the dangerousness of
`all cigarettes manufactured by the tobacco compa-
`nies.” Id. at 1191.
`Three judges wrote separately in dissent. In a
`more-than-200-page dissent, Judge Tjoflat concluded
`that giving preclusive effect to the Engle findings vio-
`lates due process and that, in the alternative, the
`Engle progeny plaintiffs’ strict-liability and negli-
`gence claims are impliedly preempted. He empha-
`sized that the Engle Phase I verdict form “did not re-
`quire the jury to reveal the theory or theories on which
`it premised its tortious-conduct findings” and that the
`defendants “have never been afforded an opportunity
`to be heard on whether the[ ] unreasonably dangerous
`product defect(s) or negligent conduct” found by the
`Engle jury caused harm to any specific progeny plain-
`tiff. Graham, 857 F.3d at 1194, 1201 (Tjoflat, J., dis-
`senting). Judge Tjoflat further explained that “the
`way in which the Engle-progeny litigation has been
`carried out has resulted in a functional ban on ciga-
`rettes, which is preempted by federal regulation
`premised on consumer choice.” Id. at 1194.
`Judge Julie Carnes sided with the majority on the
`implied-preemption issue, but agreed with Judge
`Tjoflat on the due-process issue, reasoning that the
`Engle findings “are too non-specific to warrant them
`
`
`
`
`
`
`
`
`13
`
`being given preclusive effect in subsequent trials.”
`Graham, 857 F.3d at 1191 (Carnes, J., concurring in
`part and dissenting in part). Finally, Judge Wilson
`was “not content that the use of the Engle jury’s highly
`generalized findings in other forums meets ‘the mini-
`mum procedural requirements of the Due Process
`Clause,”’ and would have remanded in light of the
`due-process violation without reaching the implied-
`preemption issue. Id. at 1314-15 (Wilson, J., dissent-
`ing) (quoting Kremer v. Chem. Constr. Corp., 456 U.S.
`461, 481 (1982)).
`PM USA and R.J. Reynolds Tobacco Co. today
`have filed a petition for a writ of certiorari in Graham.
`REASONS FOR GRANTING THE PETITION
`This petition raises due-process and implied-
`preemption questions that are also directly at issue in
`Graham: whether due process prohibits Engle prog-
`eny plaintiffs from relying on the generalized Phase I
`findings to establish the tortious-conduct elements of
`their individual claims, and whether federal law im-
`pliedly preempts Engle progeny plaintiffs’ strict-lia-
`bility and negligence claims. Although this Court has
`denied several previous petitions raising a due-pro-
`cess challenge to the preclusive effect of the Engle
`findings, those petitions all predated the Eleventh
`Circuit’s divided en banc decision in Graham as well
`as the Florida Supreme Court’s preemption ruling in
`Marotta. Now that both the Florida Supreme Court
`and en banc Eleventh Circuit have addressed the due-
`process and preemption issues, the questions pre-
`sented are fully ripe for review in Graham.
`The Court should therefore hold this petition
`pending the outcome of Graham and then dispose of
`the petition consistently with its ruling in that case.
`
`
`
`
`
`
`
`
`14
`
`I. THE FLORIDA COURTS’ EXTREME DEPAR-
`TURE FROM TRADITIONAL PRECLUSION PRIN-
`CIPLES VIOLATES DUE PROCESS.
`As explained at length in the petition for a writ of
`certiorari filed today in Graham, the Florida state and
`federal courts are engaged in the serial deprivation of
`the Engle defendants’ due-process rights. This Court
`is the only forum that can provide PM USA with relief
`from the unconstitutional procedures that have now
`been endorsed by both the Florida Supreme Court and
`the en banc Eleventh Circuit. Almost 200 progeny
`cases have been tried, and thousands more cases re-
`main pending, each seeking millions of dollars in dam-
`ages.
`The Florida Supreme Court’s decision in Douglas
`and the Eleventh Circuit’s decision in Graham relieve
`Engle progeny plaintiffs from proving the most basic
`elements of their claims—for example, that the ciga-
`rettes they smoked were defective—without requiring
`the plaintiffs to establish that those particular issues
`were actually decided in their favor in Phase I of
`Engle. In so doing, those decisions permit progeny
`plaintiffs to deprive PM USA and the other Engle de-
`fendants of their property in the absence of any assur-
`ance that the plaintiffs have ever proved all the ele-
`ments of their claims—and despite the possibility that
`the Engle jury may have resolved at least some of
`those elements in favor of the defendants.
`In this case, the trial court permitted Ms. Naugle
`to rely on the Engle Phase I findings to establish that
`the PM USA cigarettes she smoked contained a defect
`without requiring her to establish that the Phase I
`jury had actually decided that issue in her favor. In-
`deed, the Engle findings do not state whether the jury
`found a defect in PM USA’s filtered cigarettes, or its
`
`
`
`
`
`
`
`
`15
`
`unfiltered cigarettes, or in only some of its brands but
`not in others. For all we know, Ms. Naugle may have
`smoked a type of PM USA cigarette that the Engle
`jury found was not defective.
`The trial court likewise permitted Ms. Naugle to
`rely on the Phase I findings to establish that the ad-
`vertisements and other statements by PM USA on
`which she supposedly relied were fraudulent. The
`generalized Phase I verdict form, however, did not re-
`quire the jury to identify which statements it found to
`be fraudulent from among the “thousands upon thou-
`sands of statements” on which the class’s concealment
`claim rested. Engle Tr. 35955. For example, the
`Engle jury may have found that PM USA’s only fraud-
`ulent statements pertained to the “health effects” of
`smoking and not to its “addictive nature”—as the dis-
`junctively worded verdict form would have permitted,
`Engle, 945 So. 2d at 1277—but the jury in this case
`may have premised its fraudulent-concealment ver-
`dict exclusively on Ms. Naugle’s alleged reliance on
`statements about addiction that the Engle jury did not
`find to be fraudulent.
`In
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