Florida Supreme Court ruling 'guts the impact of punitive damages'

The Florida Supreme Court ruled that a trial judge in a wrongful-death action must use judicial discretion on whether a punitive damages award a jury returned is reasonable in comparison to both the compensatory damage award and the injury that the beneficiaries suffered.

The ruling was based on a question the Fifth District Court of Appeal certified.

The Fifth DCA reversed a punitive damage award a jury returned to petitioner Brinda Coates against respondent R.J. Reynolds Tobacco Co. that exceeded the net compensatory damage award by a ratio of 106.7:1.

“Attorneys need to maximize compensatory damages in a strict liability or negligence claim if they’re seeking punitives,” said Ralf Rodriguez, a member at Cozen O’Connor, who is not involved in the case. “Attorneys need to educate the jury to recognize that compensatory damages are the driving force behind the litigation, and they can’t just depend on punitive damages.”

Supreme Court Chief Justice Carlos G. Muñiz, who was joined by Justices Charles T. Canady, John Couriel and Jamie Grosshans, entered the majority opinion, which centered around the disparity between the awards of $16 million in punitive damages and $150,000 in compensatory damages.

The justices ruled that under Florida law, a trial court has broad discretion in ruling on a motion for remittitur of damages, but “that discretion is constrained by statutory criteria that must be considered in determining whether the award is excessive.”

Justice Jorge Labarga, who penned the dissenting opinion, took issue with his colleagues reducing a punitive damage award the jury returned for Coates for the wrongful death of Lois Stucky.

Still, Labarga acknowledged that Florida’s Wrongful Death Act does not recognize Stucky’s death as a cognizable injury in awarding compensatory damages to the estate. Instead, the compensatory damages were awarded to Stucky’s adult heirs for the loss of their mother.

But Labarga added: “I disagree with the majority’s conclusion that under the Act, her death is not a cognizable injury for the purpose of awarding punitive damages.”

Labarga argued that the ruling “guts the impact of punitive damages in wrongful death cases,” because the majority ruled that “the basis of a wrongful death claim—the decedent’s death—may not be considered an injury suffered.”

Now, Labarga wrote, the decision increased the likelihood that the losing party will plead remittitur whenever the ratio of punitive damages to compensatory damages exceeds the ratio of 3:1.

‘Will Not Please’ the Plaintiffs Bar

Geoffrey J. Michael, a partner at Arnold & Porter Kaye Scholer in Washington, D.C., who was among the attorneys for R.J. Reynolds, and John S. Mills, a partner at Bishop & Mills in Jacksonville who was among the attorneys for Coates, did not respond and declined to comment, respectively.

The jury returned those verdicts in a non-Engle wrongful-death action in which Coates claimed Stucky died from lung cancer over her addiction to R.J. Reynolds cigarettes, according to the opinion. When Coates sought relief from R.J. Reynolds based on four theories, the jury only found in favor of strict liability.

Along with the $16 million punitive damage award, the jury returned a $300,000 compensatory damage award that it reduced by 50% over Stucky’s negligence, according to court documents. The trial judge rejected R.J. Reynolds’ motion for new trial or remittitur, and the Fifth DCA reversed the ruling, citing Florida and federal law and certifying the question on remittitur.

The justices found that it was not unreasonable for the trial judge to conclude, based on the facts and circumstances, that it was appropriate to depart from the 3:1 cap imposed by §768.73(1) Florida Statutes (1997).

However, the justices noted that §768.74(5)(d) of the statues imposed a further check against an excessive punitive damages award based on “whether the amount awarded bears a reasonable relation to the amount of damages proved and the injury suffered.”

John Meagher, managing partner and chair of the insurance practice group at Shutts & Bowen in Miami who is an uninvolved expert, said the Supreme Court ruling exhibited its philosophy of “judicial restraint.”

“This ruling will not please the members of the plaintiffs bar, but will provide comfort to those concerned about what they perceive to be ‘runaway’ jury verdicts,” Meagher said. “In any event, those arguments will have to be made to the legislative, rather than the judicial, branch for resolution under this court’s philosophy.”

Editor’s Note: ALM’s Complex Claims & Litigation Forum, scheduled for Feb. 27-March 1 at the Green Valley Ranch Resort in Las Vegas, will examine some of these issues as they relate to runaway jury verdicts and other insurance claims.

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