Third District Court of Appeal State of Florida
Opinion filed September 22, 2021. Not final until disposition of timely filed motion for rehearing.
________________
No. 3D20-875 Lower Tribunal No. 17-25772 ________________
Philip Morris USA Inc., Appellant,
vs.
Edward F. Principe, Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Valerie R. Manno Schurr, Judge.
Arnold & Porter Kaye Scholer LLP, and Geoffrey J. Michael (Washington, D.C.); Mayer Brown LLP, and Michael Rayfield (New York, NY); Shook, Hardy & Bacon, L.L.P., and Scott A. Chesin (New York, NY), for appellant.
Ratzan Weissman & Boldt, and Kimberly L. Boldt and Ryan C. Tyler (Boca Raton); The Alvarez Law Firm, and Alex Alvarez, Michael Alvarez, Nick Reyes and Phillip Holden, for appellee.
Before EMAS, LOGUE and SCALES, JJ. SCALES, J.
In this non-Engle case,1 Philip Morris USA, Inc. (“PM”) appeals from a
final judgment entered against it after a jury determined PM had fraudulently
misrepresented to, and concealed from, Edward Principe the dangers
associated with smoking filtered cigarettes. We reverse the final judgment
because Principe’s claims are barred by Florida’s statute of repose for fraud.
I. Background2
A. Principe’s smoking history
In 1970, when he was sixteen years-old, Principe started smoking
Parliaments, a filtered cigarette manufactured by PM. In 1975, after joining
the Marines, Principe switched to another PM brand of filtered cigarette,
Marlboro. In about 1980, Principe switched to Marlboro Lights, and finally, in
the 1990s, to Marlboro Ultra Lights.
Each time Principe switched brands, he did so because he thought –
based on PM’s advertising and messaging – that he was progressing to a
1 Engle was a class action case against the tobacco industry by Florida smokers who suffered smoking-related diseases between 1990 and 1996. After a partial trial, the Florida Supreme Court vacated the judgment and de- certified the class, but held that certain findings made by the Engle jury would be res judicata for class members who sought to pursue individual claims. Engle v. Liggett Grp., Inc., 945 So. 2d 1246 (Fla. 2006). 2 The relevant facts are not in dispute.
2 safer cigarette. Ultimately, in 1998, Principe quit smoking. Shortly after
Principe quit smoking, PM changed its public position about the risks and
addictive nature of cigarettes. Contrary to its previous messaging, PM
publicly admitted both that smoking causes cancer and that nicotine is
addictive. Beginning in 1999, PM has stated publicly on its website that:
“Philip Morris USA agrees with the overwhelming medical and scientific
consensus that cigarette smoking is addictive and it can be very difficult to
quit smoking, but this should not deter smokers who want to quit from trying
to do so.”
B. PM’s about-face disclaimers
Beginning in the early 2000’s, PM’s website elaborated on this
message:
We agree with the overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema and other serious diseases in smokers. Smokers are far more likely to develop serious diseases, like lung cancer, than non-smokers. There is no “safe” cigarette.
PM’s website, which contained links to, and quotations from, various
publications from the U.S. Surgeon General and the National Cancer
Institute, also made clear that the only way to reduce the risks of smoking-
related diseases meaningfully was to quit smoking:
To reduce the health effects of smoking, the best thing to do is to quit; public health authorities do not endorse either smoking
3 fewer cigarettes or switching to lower tar and nicotine brands as a satisfactory way of reducing risk. In fact, one of the required cigarette warnings for packages and advertisements in the U.S. is “SURGEON GENERAL’S WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to Your Health.”
This message was amplified in a brochure produced by PM, in 2002, and
distributed as inserts in major newspapers nationwide. In a section titled
“Quitting Smoking,” the inserts stated plainly: “The only proven way to reduce
the health risks of smoking is to quit.” The inserts also included this
disclaimer: “Low-tar cigarettes evidence does not indicate a benefit to public
health.”
C. Principe’s lawsuit and the resulting proceedings
PM’s about-face disclaimers, though, had come too late for Principe.
In 2016, eighteen years after he stopped smoking, Principe was diagnosed
with laryngeal cancer. The following year, he underwent surgery that
removed his larynx, leaving him with permanent breathing, eating and
speaking problems.
On November 6, 2017, Principe filed this suit against PM 3 in the Miami-
Dade County Circuit Court. Principe asserted negligence and strict liability
3 Principe’s lawsuit also named other tobacco manufacturers and the retailer where Principe alleged that he purchased his cigarettes. Our record reflects that Principe and certain of these other defendants resolved Principe’s claims prior to trial, and only the case against PM is relevant to our adjudication.
4 claims, as well as the two fraud claims relevant here: fraudulent concealment
and fraudulent misrepresentation. With regard to his fraud claims, Principe’s
operative complaint asserted, with significant detail and specificity, that PM
engaged in a decades-long, deliberate campaign of deception regarding the
health dangers of smoking. Principe’s complaint asserts that PM “made
numerous public statements and advertisements, including but not limited
to, that smoking had not been proven to be injurious to health, that filtered
cigarettes were safe, safer or less hazardous than non-filtered cigarettes and
other similar statements and or advertisements.”
In his claim for fraudulent concealment, Principe alleged that
information regarding the health hazards of cigarettes was concealed by PM
“for the purpose of inducing [Principe] to smoke, what [he] believed to be a
safe, safer or less hazardous cigarette.” In his claim for fraudulent
misrepresentation, Principe alleged that PM “sustained a broad-based public
campaign for many years disseminating misleading information and creating
controversy over the adverse effects of smoking cigarettes, and the addictive
nature of smoking cigarettes, intending that current and potential smoker
[sic] would rely on the misinformation.”
Among its affirmative defenses, PM alleged that Principe’s claims are
barred by Florida’s statute of repose for fraud. At trial, the court deferred
5 ruling on PM’s motion for directed verdict based on PM’s statute of repose
defense, and the jury found in Principe’s favor on his two fraud claims. 4 The
jury awarded Principe $360,000 for past medical expenses and $10.2 million
in non-economic damages for future pain and suffering. The trial court then
entered the orders appealed by PM in this case: the final judgment consistent
with the jury verdict, the order denying PM’s post-trial motion for judgment
notwithstanding the verdict, and the order denying PM’s motion for directed
verdict upon which the trial court had deferred ruling.
II. Analysis5
As it did below, PM argues that, as a matter of law, Principe’s fraud
claims are time-barred by Florida’s statute of repose for fraud.
A. Statutes of limitations and repose – generally
A statute of limitations provides a specific time period after the accrual
of a cause of action in which a plaintiff must bring his lawsuit. This time period
generally begins upon the occurrence of the last element of the cause of
action. 6 For example, a plaintiff must bring an action for negligence within
4 The jury found in PM’s favor on Principe’s other claims. 5 When, as in this case, the relevant facts are not in dispute, whether a claim is barred by the statute of repose presents a question of law that we review de novo. Hess v. Philip Morris USA, Inc., 175. So. 3d 687, 692 (Fla. 2015).
6 four years of the occurrence of the last element for the tort of negligence:
generally, the plaintiff’s suffering injury as a result of the tortfeasor’s breach
of duty. § 95.11(3)(a), Fla. Stat. (2017).
Recognizing, though, that sometimes the last element of the cause of
action may occur – and the cause of action may therefore accrue – several
years after the defendant’s act or omission, legislatures have enacted
statutes of repose to ensure that a defendant’s potential liability ends at
some definite point, irrespective of when the cause of action may have
accrued. Statutes of repose “run from the date of a discrete act on the part
of the defendant without regard to when the cause of action accrued.” Kush
v. Lloyd, 616 So. 2d 415, 418 (Fla. 1992). For example, in the products
liability context, it is possible that a plaintiff’s injury (i.e., generally, the last
element of the cause of action for product liability) may not occur until
decades after the plaintiff buys the product. Thus, to ensure that a
manufacturer’s potential liability is not of indefinite duration, the Florida
Legislature enacted a statute of repose for products liability claims that
generally requires such claims be brought no later than twelve years after
6 In pertinent part, section 95.031(1) of the Florida Statutes provides: “A cause of action accrues when the last element constituting the cause of action occurs.”
7 the alleged defective product is first purchased, irrespective of when the
plaintiff’s injury occurs. § 95.031(2)(a), Fla. Stat. (2017).
B. Florida’s statutes of limitations and repose for fraud, and the Hess decision
Florida’s statute of limitations for fraud is four years. § 95.11(3)(j), Fla.
Stat. (2017). Because a plaintiff can be the victim of fraud for some time
without even knowing it, Florida provides that the limitations period for
bringing a fraud claim does not begin until the wrongdoer’s acts were, or
should have been, discovered. See Kush, 616 So. 2d at 418. Significantly,
for our analysis, Florida’s legislature has combined fraud’s limitations statute
with a statute of repose requiring that any fraud action must begin within
twelve years of the commission of the alleged fraud, irrespective of the date
the wrongdoer’s acts were, or should have been, discovered:
An action founded upon fraud . . . must be begun within . . . [four years] . . . with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere . . . , but in any event an action for fraud . . . must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.
§ 95.031(2)(a), Fla. Stat. (2017) (emphasis added).
Hence, per the fraud repose statute, “[if] the ‘commission of the alleged
fraud’ does not take place within the statute of repose period, then the fraud
8 claim is extinguished.” Hess, 175 So. 3d at 696. In order to prove a fraudulent
misrepresentation claim, a plaintiff must generally establish that: (i) the
defendant made a false statement of material fact; (ii) the defendant knew or
should have known the representation was false; (iii) the false representation
was made with the intent that it would induce the plaintiff to act; and (iv) the
plaintiff suffered resulting damages in reliance upon the representation. 7
Butler v. Yusem, 44 So. 3d 102, 105 (Fla. 2010).
Although a plaintiff in a tobacco case must establish each of these
elements for a fraud claim, Florida’s Supreme Court has clarified that “the
date of the commission of the alleged fraud” in the fraud repose statute refers
not to the date that the fraud cause of action accrued, but rather, to the date
of the defendant’s “wrongful conduct.” Hess, 175 So. 3d at 698. In other
words, “for statute of repose purposes it is not necessary that the smoker
relied during the twelve-year repose period. Where there is evidence of the
defendant’s wrongful conduct within the repose period, the statute of repose
7 The elements of a fraudulent concealment claim are similar to that of fraudulent misrepresentation, and are as follows: (i) the defendant concealed or failed to disclose a material fact; (ii) the defendant knew or should have known the material fact should be disclosed; (iii) the defendant knew its concealment of or failure to disclose the material fact would induce the plaintiff to act; (iv) the defendant had a duty to disclose; and (v) the plaintiff detrimentally relied on the concealed information. R.J. Reynolds Tobacco Co. v. Martin, 53 So. 3d 1060, 1068 (Fla. 1st DCA 2010).
9 will not bar a plaintiff’s [fraud] claim.” Id. at 698 (emphasis added). And, for
statute of repose purposes, the “wrongful conduct” consists of “a discrete act
on the part of the defendant.” Hess, 175 So. 3d at 698 (citing Kush, 616 So.
2d at 418).
Therefore, to defeat a defendant’s statute of repose affirmative
defense in a tobacco case premised upon the defendant’s fraud, the plaintiff
need only show that the defendant’s “wrongful conduct” – i.e., the first three
elements of the fraudulent misrepresentation cause of action and the first
four elements of the fraudulent concealment cause of action – occurred prior
to the expiration of the twelve-year repose period (see section II(D), infra).
Put another way, in a tobacco case where the plaintiff is alleging fraud, the
plaintiff will defeat a statute of repose defense if the plaintiff establishes that,
during the twelve-year period prior to the filing of the complaint, the
defendant knowingly made a materially false statement 8 with the intent that
the statement be relied upon by smokers.
8 Obviously, not just any materially false statement made by the defendant during the repose period satisfies Hess’s requirement. The repose statute requires the action be brought within twelve years of “the commission of the alleged fraud.” Hess, 175 So. 3d at 698 (quoting § 95.031(2), Fla. Stat.) (emphasis added). Therefore, to be actionable under Hess – dispensing with the element of reliance during the repose period – the defendant’s materially false statement must not only be made within the repose period, but also must be similar in nature and related to the fraudulent statement upon which the plaintiff, outside the repose period, initially detrimentally relied.
10 C. Whether PM engaged in “wrongful conduct” during the repose period
Against this backdrop, we analyze this case and PM’s statute of repose
defense. It is important to note that we take no issue with the jury’s factual
findings and accept that Principe established the elements of both fraudulent
concealment and fraudulent representation. What makes this case
analytically challenging is the difficulty of applying the statute of repose given
both the chronology of events and the time periods that elapsed between the
occurrence of the elements of Principe’s fraud causes of action.
PM’s knowing misrepresentations and concealment were ongoing for
decades and were not disclaimed until approximately 2000, when PM began
publicly to renounce its prior false messaging regarding cigarette safety.
Principe’s reliance on PM’s misrepresentations and concealment occurred
in the 1970s and 1980s, long before PM’s disclaimers. Principe stopped
smoking in 1998, several years before PM’s disclaimers, almost eighteen
years before he was diagnosed with laryngeal cancer (and his cause of
action accrued), and nineteen years before he filed his lawsuit.
Our inquiry, however, is not whether or when Principe’s cause of action
against PM accrued. Because the statute of repose runs from the date of “a
discrete act on the part of the defendant” Hess, 175 So. 3d at 698 (citing
Kush, 616 So. 2d at 418), the parties appear to agree that this case hinges
11 – and we limit our focus – upon whether PM engaged in “wrongful conduct”
during the twelve-year repose period beginning on November 6, 2005, and
ending on November 6, 2017, the date Principe filed his lawsuit. If, in our de
novo review of the record, we conclude that PM engaged in “wrongful
conduct” during the repose period, we must affirm. Hess, 175 So. 3d at 698.
Otherwise, the statute of repose bars Principe’s claims. § 95.031(2)(a), Fla.
Stat. (2017).
Principe identifies two acts occurring during the repose period that he
asserts constitute “wrongful conduct” so as to defeat PM’s statute of repose
defense: (i) the 2011 deposition testimony of PM’s corporate representative,
Dr. Peter Lipowicz, in an unrelated Florida tobacco case in which Dr.
Lipowicz testified that PM believes that filtered cigarettes reduce the risk of
cancer; and (ii) PM’s continued manufacture and sale of cigarettes with filters
during the repose period. We address each of the identified acts in turn.
D. Dr. Lipowicz’s deposition testimony in an unrelated case
At trial, Principe presented the jury with deposition testimony, given in
2011, by Dr. Lipowicz, a PM vice president whom PM had designated as its
corporate representative in an unrelated Florida tobacco case. Principe
points to the following specific testimony as “wrongful conduct” (occurring
within Principe’s repose period):
12 Q: Does Philip Morris admit that filtered cigarettes are just as hazardous as unfiltered cigarettes?
A: No. We think that filtered cigarettes and the addition of filters on cigarettes, their research has shown that they have been shown to reduce the risk of cancer in smokers who smoke them. So we disagree with that.
....
Q: Does Philip Morris admit that there is not sufficient evidence that there is any less danger with low-tar cigarettes than other cigarettes?
A: No. Philip Morris – you know, we believe that lower-tar cigarettes, the evidence shows that there is some reduction in cancer risk by using lower-tar cigarettes.
Principe asserts that Dr. Lipowicz’s testimony – as PM’s corporate
representative – constitutes “wrongful conduct” because it is contrary not
only to established science, but also to PM’s own disclaimers made in 2000,
stating that “there is no safe cigarette.” As mentioned above, to constitute
“wrongful conduct” under Hess, the defendant’s conduct must meet the first
three elements of fraud: the defendant’s statement must be materially false,
knowingly made, and intended to induce another to act. (see Section II (B),
supra).
We do not quarrel with Principe’s assertion that Dr. Lipowicz’s
deposition testimony was knowingly false, thus establishing the first two
elements of fraud. We agree, though, with PM’s argument that Dr.
13 Lipowicz’s compelled testimony in a deposition in an unrelated case, was not
intended to induce anyone to act. The testimony was not intended to induce
nonsmokers to start smoking; it was not intended to induce smokers to
smoke more cigarettes; nor was it intended to induce smokers of non-filtered
cigarettes to smoke filtered cigarettes. Indeed, this deposition testimony in
an unrelated case was not intended by PM to induce anyone to do anything.
While the deposition was a public statement, as part of a public proceeding
(and presumably it was offered into evidence in the case in which it was
solicited as well as in this case), there is no evidence in this record – or any
suggestion by Principe – that PM intended that the testimony induce anyone
to act.
Principe argues that, under Hess, he need establish only that Dr.
Lipowicz’s testimony was false and made knowingly, without regard to
whether the testimony was intended to induce reliance. We do not read the
holding in Hess so broadly. As mentioned earlier, Hess instructs that, for
statute of repose purposes, to determine “the date of the commission of the
alleged fraud” we look to the discrete act of the defendant, without regard to
the plaintiff’s reliance on that act. Hess, 175 So. 3d at 698. Because the plain
text of the repose statute expressly requires a defendant’s “commission of
the alleged fraud” to occur within the repose period, see § 95.031(2)(a), Fla.
14 Stat. (2017) (emphasis added), we cannot, consistent with the statute’s plain
language, read into Hess an implied excusal of another element of fraud,
that is, proof that the defendant intended reliance upon a knowingly false
statement.
A false statement in the abstract, even if knowingly made, does not
constitute fraud; indeed, what makes a false statement fraudulent is the
declarant’s intent that others rely upon it. Butler, 44 So. 3d at 105. Hence, to
give full effect to both the repose statute’s text and Hess’s holding, we cannot
conclude, as Principe invites us to do, that a defendant’s knowingly false
statement, made without an intent to induce, constitutes sufficient “wrongful
conduct,” thereby negating the statute of repose defense.
Thus, we conclude, as a matter of law, that Dr. Lipowicz’s deposition
testimony did not constitute the requisite “wrongful conduct” occurring within
the repose period so as to defeat PM’s statute of repose defense.
E. PM’s continued manufacture and distribution of filtered cigarettes – the Gentile decision
Principe also asserts that the statute of repose is inapplicable because
PM’s manufacturing and distribution of filtered cigarettes during the repose
period constituted a misrepresentation. Essentially, Principe argues that, for
decades, PM’s messaging touted the health benefits of filtered cigarettes,
15 and, because PM now concedes in its public messaging that filtered
cigarettes are not safe, PM’s continued manufacturing and distribution of
filtered cigarettes is inherently wrongful conduct that defeats a statute of
repose defense. Heavily relying on our sister court’s opinion in Philip Morris
USA Inc. v. Gentile, 281 So.3d 493 (Fla. 4th DCA 2019), PM responds by
arguing that its above-referenced public disclaimers, published in 2000 and
2002, adequately and expressly disclaimed any prior fraudulent messaging,
thus extinguishing Principe’s fraud claims.
In Gentile, the plaintiff filed a wrongful death action on behalf of the
deceased smoker who died from lung cancer in 2014. In his lawsuit, the
Gentile plaintiff alleged, among other claims against PM, fraudulent
misrepresentation and concealment. At trial, PM argued (as it did below in
this case) that it was entitled to a directed verdict because the plaintiff had
failed to prove that PM had made false or misleading statements during the
repose period that began on May 12, 2003, twelve years prior to the suit’s
filing. Id. at 494, n.2. The trial court denied PM’s directed verdict motion and,
after the jury returned a verdict for the plaintiff, PM appealed. Id. at 494.
On appeal, PM argued that essentially the same public disclaimers,
referenced in section I(B), supra, negated the Gentile plaintiff’s virtually
identical fraud claims. Id. at 496. The Gentile court, on de novo review,
16 reversed and remanded with instructions for the trial court to enter a directed
verdict for PM on the plaintiff’s fraud claims. The Gentile court determined
that PM’s continued marketing of light and ultra-light cigarettes during the
repose period did not constitute a misrepresentation because PM had
“adequately disclaimed any prior misrepresentations.” Id. at 497.
It is well settled that a party cannot recover in fraud for alleged
misrepresentations that have been expressly disclaimed. See Mac-Gray
Servs., Inc. v. DeGeorge, 913 So. 2d 630, 634 (Fla. 3d DCA 2005). As
described in section I(B), supra, in 2000 and 2002, PM issued its official
position regarding smoking and health issues, clearly and unequivocally
stating, among other things, that: “There is no safe cigarette. Cigarettes are
addictive and cause serious disease in smokers. For those concerned about
the health risks of smoking, the best thing to do is to quit.”
Gentile held that these disclaimers adequately disclaimed any prior
misrepresentations so that PM’s continued marketing of light and ultra-light
cigarettes during the repose period did not constitute a fraudulent
misrepresentation. Gentile, 281 So. 3d at 496. Principe seeks to distinguish
Gentile on the basis that the Gentile plaintiff alleged that the deceased
smoker relied upon PM’s misrepresentations regarding light and ultra-light
cigarettes, as opposed to filtered cigarettes. Principe argues that, because
17 a portion of the disclaimers referenced in the Gentile opinion specifically
reference “light” and “ultra-light” cigarettes – and the disclaimers do not
specifically reference “filtered” cigarettes – Gentile is inapplicable.
We do not read Gentile’s holding as limiting the scope of PM’s
disclaimers only to light and ultra-light cigarettes. We agree with PM that
there is no reasonable way to read into these disclosures the distinctions
that Principe would have us make; that, by not specifically mentioning
“filtered” cigarettes in the disclaimers, the disclaimers do not disclaim any
prior misrepresentations regarding filtered cigarettes. PM’s disclaimers did
not suggest, either overtly or subtly, that a smoker’s health concerns could
be alleviated by smoking filtered cigarettes. To the contrary, the advice and
messaging in the disclaimers are absolute and unequivocal: those with any
health concerns should quit smoking because there are no safe cigarettes.9
We therefore conclude, as did the Gentile court, that PM’s pre-repose
period disclaimers adequately disclaimed the dangers inherent in cigarette
smoking so that PM’s continued manufacture and distribution of filtered
9 In its order denying PM’s directed verdict motion, the trial court concluded that PM had failed to preserve a “disclaimer defense.” PM, though, did not allege, and on appeal does not argue a separate affirmative defense of disclaimer. As Gentile instructs, this Court may look to PM’s disclaimers to determine whether PM engaged in wrongful conduct during the repose period.
18 cigarettes did not constitute a misrepresentation occurring during the repose
period. Id. at 496-97. 10
III. Conclusion
The two acts identified by Principe that occurred during the repose
period – Dr. Lipowicz’s deposition testimony and PM’s continued
manufacture and sale of filtered cigarettes – do not constitute “wrongful
conduct” as required by Hess. Therefore, because the record reveals no
other wrongful conduct by PM occurring within the repose period, Principe’s
fraud claims are barred by Florida’s statute of repose for fraud. We reverse
the final judgment and the trial court’s orders denying PM’s motions for
directed verdict and judgment notwithstanding the verdict, and remand for
entry of a final judgment for PM.
Reversed and remanded, with instructions.
10 This is not a case where PM’s manufacture and sale of filtered cigarettes during the repose period are coupled with messaging that suggests a filter makes its cigarettes safer or healthier. Principe, rather, asks us to conclude that a cigarette containing a filter is, itself, a fraudulent misrepresentation. While cigarette filters do not make cigarettes safer or healthier, we are unable to conclude, based on our de novo review of this record, that either PM’s manufacturing of filtered cigarettes, or its labelling a cigarette that has a filter as “filtered,” is inherently fraudulent. Indeed, at oral argument, PM’s counsel stated that its customers prefer a cigarette with a filter because a filter blocks small pieces of tobacco from reaching the smoker’s mouth.