Where Liability Found, Punitive Damages Not A Foregone Conclusion

September 11, 2017

Late last month a Florida jury returned a verdict in the 40th Engle progeny case to go to trial against R.J. Reynolds Tobacco (RJR) since the start of 2016. [1]  And for the 29th time during that period, the jury assigned some percentage of fault to RJR.  However, as has happened nearly one-third of the time in those 29 cases, the jury declined to impose punitive damages. 

While under normal circumstances these statistics—29 losses in 40 trials and 20 punitive damages findings—might appear grim, the Engle cases are anything but typical.  Due to the res judicata effect afforded to certain findings by the jury in the original Engle class trial, the plaintiff in every progeny case essentially begins with a directed verdict in his or her favor on the issues of general causation, addictiveness of cigarettes, strict liability, fraud by concealment, civil conspiracy-concealment, breach of implied warranty, breach of express warranty, and negligence. [2] And although the Florida Supreme Court has held that each Engle progeny plaintiff must individually establish an entitlement to punitive damages [3], the res judicata findings of fraud by concealment and conspiracy, paired with years of relentlessly negative publicity regarding tobacco companies, would seem to provide plaintiffs a fairly robust head start in that regard.  Yet in spite of these substantial hurdles, over the past two years RJR has prevailed in nearly one out of every four trials that went to verdict [4], has consistently succeeded in persuading juries to assign significant, and in some cases, the majority of, fault to plaintiffs, and has escaped punitive damages more than half of the time. [5]    

While there are undoubtedly myriad explanations for the varying outcomes in each case, the fact that RJR has avoided punitive damages in more than half the trials during this period and in one-third of the cases where it has been found liable suggests that the heightened standards applicable to punitive damages do matter. 

RJR’s ability to defeat punitive damages even after it has been found liable also underscores the importance and value of a focused punitive damages defense—especially in mass tort contexts like Engle where compensatory liability may be difficult to fully avoid.  Even where complete victory may be unattainable, defeating punitive damages can radically reduce the value of a case—and a docket overall.  Indeed, in the Engle cases, as in many mass torts, it is punitive damages that comprise the bulk of the financial exposure.  Case in point—the $20 million punitive damages award in the Konzelman case in November 2016 alone far exceeds the combined compensatory awards against RJR in the 15 trials so far in 2017. 

The upside, to the extent there is one, is that the heightened risk posed by punitive damages is accompanied by heightened standards intended to ensure that punitive damages are imposed fairly and only where warranted by truly “egregious” [6] conduct.  These heightened standards afford defendants certain tools and defenses that are not available in the compensatory liability context.  Though these tools and defenses will not enable a defendant to attain complete victory, they could, as evidenced by the Engle cases, mean the difference between a $1 million judgment and a judgment of $20 million or more.

Punitive damages reserved for egregious conduct

Florida juries are instructed that punitive damages are warranted only if the defendant “was guilty of intentional misconduct or gross negligence,” the latter being defined as “conduct [that i]s so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct.” [7]  In other words, punitive damages require considerably “worse” conduct than negligence, which is the mere failure to exercise ordinary care, or strict liability, which may be found irrespective of the degree of care used.  Juries are also instructed that this conduct must be proven by “clear and convincing evidence,” which they are told “differs from the ‘greater weight of the evidence’ [standard applicable to compensatory liability] in that it is more compelling and persuasive.” [8] Finally, juries are instructed that, unlike compensatory damages, punitive damages are awarded “as punishment to [the defendant] and as a deterrent to others.” [9]

That Engle juries have declined to impose punitive damages against RJR in nearly one out of every three cases in which they have found for the plaintiff since 2016 suggests that something about these concepts specific to punitive damages may be resonating with juries.  There also is evidence that in at least one case they mattered to the court.  In that case, the court overruled the jury’s finding of an entitlement to punitive damages and directed a verdict in RJR’s favor on the issue.  Thus, in both their trial presentation and motions practice, defendants should always be mindful of and fully leverage the principles that punitive damages (1) require really bad conduct (2) must be proven really clearly, and (3) can only be imposed because the conduct was so bad that it must be punished and deterred.  

It is also possible that RJR (and other tobacco companies) have benefitted from the particular way that Florida law defines—or perhaps more accurately, does not define—the conduct that warrants punitive damages.  In some jurisdictions “fraud” is expressly included in the definition of the conduct that may support an award of punitive damages. [10]  In those jurisdictions and in cases in which the underlying claim sounds in fraud (as the claims partly do in the Engle cases), juries (and courts) may be more inclined to impose punitive damages based purely on findings of liability for the underlying, fraud-based tort (even in spite of the elevated burden of proof applicable to punitive damages and requirement that they only be imposed to punish and deter). 

Florida law, on the other hand, speaks in terms of “intentional misconduct” and “gross negligence”. [11]  While at least certain kinds of fraud-based torts, if sufficiently egregious and proven with sufficient clarity, would seem capable of meeting one or both of those standards, Florida law and instructions do not expressly include fraud as a triggering category of conduct. [12]  This definitional feature may inure to the benefit of RJR and others in their ongoing defense of Engle punitive damages claims based on their alleged fraudulent concealment of the dangers of smoking.  In this vein, defendants should always be aware of the specific standards and instructions for punitive damages in the jurisdictions where they face such claims, and be cognizant of how they may help or hinder the defense of punitive damages.

If the plaintiff is also to blame, is the defendant less deserving of punishment?

In Florida, like many other jurisdictions, juries are required to assign relative percentages of fault to the plaintiff, defendant(s), and certain nonparties who may be at fault. [13]  A defendant’s liability for compensatory damages is then adjusted based on the percentage of fault assigned to it. [14] Punitive damages, on the other hand, are awarded specifically against each defendant, and the amount imposed is not reduced according the defendant’s percentage of fault.  At least not officially. 

In practice, however, it appears that the relative blame assigned to the parties may indeed influence punitive damages decisions.  Specifically, the outcomes of the Engle cases against RJR over the past two years suggest that juries may be less inclined to impose punitive damages, or at least substantial awards thereof, where the plaintiff was also significantly to blame.  Since 2016, juries assigned as much or more fault to the plaintiff as they assigned to RJR in 12 of the 29 cases where the jury found for the plaintiff.  In 6 of those 12 cases, the jury declined to impose punitive damages, accounting for two-thirds of the total cases where the jury found for the plaintiff but declined to impose punitive damages.  Thus, in cases where the plaintiff was found to be equally or more to blame than RJR, juries declined to impose punitive damages 50 percent of the time, whereas in cases where RJR was found more at fault, juries declined to impose punitive damages just 17 percent of the time. 

In the four cases where the jury blamed the plaintiff the same or more than it blamed RJR, but still awarded punitive damages, the awards were generally low. [15] Only one such award was greater than $200,000, and two were less than $100,000.  In contrast, in the 17 cases where the jury blamed RJR more than it blamed the plaintiff, there were 11 punitive damages awards of $2 million or more.  RJR’s experience in the Engle litigation over the past two years, therefore, supports the notion that when juries blame the plaintiff as much or more than the defendant, they will impose punitive damages less frequently and in lower amounts.

Of course, as with most things in life, blaming the plaintiff can be a double-edged sword.  If unsuccessful, the strategy may inflame the jury into awarding more punitive damages than it otherwise would have.  It is possible that the larger punitive damages awards against RJR over the past two years could have been driven in whole or in part by anger at what jurors perceived as RJR unjustifiably attempting to shift blame for its own wrongdoing.  Indeed, in the cases with the three highest punitive awards ($20 million, $12 million, and $10 million), the fault assigned to the plaintiffs ranged between just 15 and 25 percent.

Save the worst for last, and give yourself one final chance

In accordance with longstanding Florida precedent [16], Engle progeny trials are generally bifurcated in the following fashion:  Engle class membership, liability, comparative fault, compensatory damages, and entitlement to punitive damages are determined in Phase I; then, if an entitlement to punitive damages is found, the amount of punitive damages is assessed in Phase II. [17] The primary benefit of this procedure to defendants is that it generally postpones the use of the most prejudicial evidence and argument—things like the defendant’s financial condition and harm to others, which are relevant, if at all, only to the amount of any punitive damages award—until after the jury has made its findings regarding compensatory and punitive liability.  In theory at least, this reduces the likelihood of jury liability determinations being driven by passion and prejudice.

There is, however, another, less-recognized potential benefit to this form of bifurcation.  It gives defendants one final chance to seize victory, at least as to punitive damages, from the proverbial jaws of defeat.  As discussed, in Phase I, the jury must determine whether the defendant’s conduct warrants punitive damages—that is, whether it was proven by clear and convincing evidence to constitute intentional misconduct or gross negligence.  If the jury determines that it does, it is fair to assume that—at least at that moment—the jury intends to actually impose some amount of punitive damages.  But the jury is not required to do so.  Florida’s standard instructions for use in Phase II make clear that, even after the jury has found the defendant has engaged in intentional misconduct or gross negligence, the jury still “may in [its] discretion decline to assess punitive damages.” [18]

That is exactly what happened in one 2016 Engle trial against RJR.  At the conclusion of Phase I, the jury found that the plaintiff was entitled to punitive damages.  In Phase II the following day, however, they jury awarded $0.  While this outcome is clearly the exception, it nevertheless is a reminder that Phase II proceedings provide defendants with one last chance to present evidence and argument as to why they should not be punished, or at least not punished severely.  As to the latter point, it appears RJR has had some success in that regard as well.  Five of the punitive damages awards against RJR in the past two years have been $200,000 or less, and two of those were $30,000 or less. 

The lesson is simple—defendants should never view Phase II proceedings as an afterthought.  They provide one final chance—one that could be worth millions of dollars—to avoid a significant punitive damages award.  Accordingly, defendants should be well-prepared for any Phase II proceeding with a cogent presentation highlighting relevant mitigating considerations weighing against substantial punishment. 

This article appeared in Law360 and is available online to subscribers.

For further information, please contact the author of this article or any other member of the McGuireWoods’ punitive damages team.


  1. All case statistics discussed herein come from Reynolds American Inc.’s second quarter SEC Form 10-Q filed on or about August 1, 2017 as interpreted to best of the author’s ability.
  2. See Soffer v. R.J. Reynolds Tobacco Co., 187 So. 3d 1219, 1226 (Fla. 2016).
  3. See id. at 1227 (“[T]the res judicata effect of the Phase I findings addressed in Engle has no application to claims for punitive damages sought by Engle progeny plaintiffs.”).
  4. Three cases ended in a mistrial during this period.
  5. In addition to the cases where the jury found for RJR on liability, and the cases where the jury found against RJR but declined to impose punitive damages, there was one case where the jury found an entitlement to punitive damages but the court directed a verdict in RJR’s favor on the issue, and another case where the jury found an entitlement to punitive damages but the court declared a mistrial on the issue when the jury was unable to agree on an amount. 
  6. Chrysler Corp. v. Wolmer, 499 So. 2d 823, 825 (Fla. 1986).
  7. See Fla. Std. Jury Instr. (Civ.) 503.1, Punitive Damages—Bifurcated Procedure.
  8. See id.
  9. See id.
  10. Georgia is one such jurisdiction.  See O.C.G.A § 51-12-5.1(a).
  11. See Fla. Stat. 768.72(2); Fla. Std. Jury Instr. (Civ.) 503.1, Punitive Damages—Bifurcated Procedure.
  12. See id.
  13. See Fla. Stat. 768.81.
  14. See id.
  15. In the remaining two cases where the jury blamed the plaintiff the same or more than RJR, the court granted a directed verdict on punitive damages in one, and in the other the parties settled before the jury fixed an amount of punitive damages.
  16. See W.R. Grace & Co. v. Waters, 638 So.2d 502 (Fla. 1994).  This procedure resembles the punitive damages bifurcation procedures followed in many other states.
  17. See, e.g., R. J. Reynolds Tobacco Co. v. Hiott, 129 So. 3d 473, 475 (1st DCA. 2014).
  18. This instruction is consistent with the law in most states that juries have the discretion to decline to impose punitive damages even if they find the defendant liable for the kind of conduct that could support punitive damages.
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