Burton v. R.J. Reynolds Tobacco Co.

397 F.3d 906, 2005 U.S. App. LEXIS 2049, 2005 WL 300372
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 9, 2005
Docket02-3262
StatusPublished
Cited by41 cases

This text of 397 F.3d 906 (Burton v. R.J. Reynolds Tobacco Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burton v. R.J. Reynolds Tobacco Co., 397 F.3d 906, 2005 U.S. App. LEXIS 2049, 2005 WL 300372 (10th Cir. 2005).

Opinions

LUCERO, Circuit Judge.

David Burton (“Burton”) sued R.J. Reynolds Tobacco Co. (“Reynolds”) alleging that it caused the loss of his legs by fraudulently concealing, failing to warn of, and failing to test for the dangers of cigarette smoking. After a thirteen day trial, the jury found in Burton’s favor on three of his claims for relief, authorized punitive damages, and awarded Burton $196,416 in compensatory damages. . Subsequently, the court awarded Burton $15 million in punitive damages. Reynolds appeals the jury verdict and award of compensatory and punitive damages. We exercise jurisdiction pursuant to 28 U.S.C. § 1291, and REVERSE the jury’s verdict on liability in part, REVERSE the dependent award of punitive damages, and AFFIRM other aspects of the judgment.

I

In 1950, around the same time he quit high school to help support his mother, brothers, and sisters, plaintiff David Burton began to smoke Camel and Lucky Strike cigarettes. He was 14 or 15 years old. For the next 43 years, Burton continued to smoke because, as he explained, he enjoyed the taste. Burton did not go to physicians for check-ups and claimed to have never been sick. It was not until the summer of 1993, when Burton began to develop problems walking due to poor circulation, that he went to see a physician. His treating physician informed him that his circulation problems were caused by his cigarette smoking and advised him to “stop smoking or his legs were going to rot off.” Doubting whether cigarettes were causing his leg problems, Burton sought two other medical opinions, both of which confirmed the initial diagnosis. The third doctor recommended vascular bypass surgery in order to resolve his circulatory problems. In the meantime, despite his doctors’ warnings, he did not initially attempt to quit smoking. In the fall of 1993, Burton underwent the recommended bypass surgery, which was unsuccessful, and shortly thereafter both of his legs were amputated below the knee. He stopped smoking while he was admitted to the hospital but started again after he was discharged. Burton finally quit smoking when, as he recounts, his physician warned him: “If it took your legs, it will take your arms.”

Following the amputation of his legs, Burton brought this products liability ac[910]*910tion in 1994 against Defendants, Reynolds, the manufacturer of Camel cigarettes, and The American Tobacco Co. (“American”), the manufacturer of Lucky Strike cigarettes. Basing his complaint on the fact that he had been addicted to cigarettes and that cigarette smoking caused his peripheral vascular disease (“PVD”), he alleged numerous claims under Kansas law, including defective design, negligent failure to warn, negligent failure to test, breach of express warranty, fraudulent concealment, conspiracy to conceal, and fraudulent misrepresentation.

In 1995, the district court granted defendants’ joint motion for summary judgment in part, and dismissed Burton’s fraudulent misrepresentation and breach of express warranty claims. Burton v. R.J. Reynolds Tobacco Co., 884 F.Supp. 1515, 1527-28 (D.Kan.1995). The court also dismissed any claims based on a post-1969 failure to warn as preempted by the Public Health Cigarette Smoking Act of 1969 (“1969 Act”). 15 U.S.C. §§ 1331-1340; Burton, 884 F.Supp. at 1521.

Proceeding to trial on the remaining claims in 2002, a jury returned a verdict for Burton on his fraudulent concealment, pre-1969 negligent failure to warn, and negligent failure to test claims. Burton v. R.J. Reynolds Tobacco Co., 205 F.Supp.2d 1253, 1255 (D.Kan.2002).

In awarding compensatory damages in the amount of $196,416 against Reynolds and $1,984 against American, the jury also authorized an award of punitive' damages against Reynolds based on Burton’s fraudulent concealment claim. Id. Pursuant to this authorization, the district court awarded Burton punitive damages in the amount of $15 million. Id. Defendants’ motion for judgment as a matter of law and, in the alternative, for a new trial, having been denied, Burton v. R.J. Reynolds Tobacco Co., 208 F.Supp.2d 1187, 1214 (D.Kan.2002), Reynolds now appeals.

II

With regard to the jury’s verdict on Burton’s fraudulent concealment claim, Burton v. R.J. Reynolds Tobacco Co., 205 F.Supp.2d 1253, 1255 (D.Kan.2002), Reynolds argues, first, that Kansas courts would not recognize a claim for fraudulent concealment under the facts of this case, and, second, that the verdict is not supported by sufficient evidence. Because we agree with Reynolds’ first contention, we need not address the second.

A

We review a district court’s interpretation of state law de novo. Blackhawk-Cent. City Sanitation Dist. v. Am. Guar. & Liab. Ins. Co., 214 F.3d 1183, 1188 (10th Cir.2000). Under Kansas law, to establish fraudulent concealment, or “fraud by silence,” the plaintiff must prove by clear and convincing evidence that: (1) the defendant had knowledge of material information the plaintiff did not have and could not have discovered through the exercise of reasonable diligence; (2) the defendant had a duty to communicate that information to the plaintiff; (3) the defendant deliberately failed to communicate the information to the plaintiff; (4) the plaintiff justifiably relied on the defendant to communicate the information; and (5) the plaintiff was injured by the defendant’s failure to communicate the information. Miller v. Sloan, Listrom, Eisenbarth, Sloan & Glassman, 267 Kan. 245, 978 P.2d 922, 932 (1999).

Not every nondisclosure is a fraudulent concealment. Robinson v. Shah, 23 Kan.App.2d 812, 936 P.2d 784, 790 (1997). Nondisclosure becomes fraudulent only when it violates a duty to disclose. See id. [911]*911“A party has a duty to disclose material facts if the party knows that the other is about to enter into the transaction under mistake as to such facts, and that the other, because of the relationship between them ... would reasonably expect disclosure of such facts.” OMI Holdings, Inc. v. Howell, 260 Kan. 305, 918 P.2d 1274, 1300-01 (1996). Such relationships giving rise to the duty to disclose may include certain kinds of disparate contractual relationships, as well as fiduciary relationships. See DuShane v. Union Nat’l Bank, 223 Kan. 755, 576 P.2d 674, 679 (1978) (holding that a duty to disclose may arise “between two contracting parties when there is a disparity of bargaining powers or of expertise,” or “[i]f the parties to a bargain are in a fiduciary relationship to one another”); Flight Concepts Ltd. P’ship v. Boeing Co., 38 F.3d 1152, 1158 (10th Cir.1994) (“The duty to disclose arises under Kansas law when there is a fiduciary relationship which may be created by contract or may arise from the relationship of the parties.”).

Burton does not suggest that Reynolds was bound by a contractual relationship creating a fiduciary duty, but does argue that Reynolds owed him a fiduciary duty nonetheless.

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Bluebook (online)
397 F.3d 906, 2005 U.S. App. LEXIS 2049, 2005 WL 300372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burton-v-rj-reynolds-tobacco-co-ca10-2005.