The Florida Supreme Court 7/6/06 overturned a $145 billion punitive damages judgment by a lower state court against tobacco companies, but reinstated an inappropriate class certification decision. The suit was brought on behalf of a class of Florida residents who claim deleterious health effects related to cigarette smoking.In reversing the punitive damages award, the court recognized the requirements set forth by the Supreme Court of the United States in State Farm Mut. Auto Ins. Co v. Campbell in 2003. Under that decision, there must be a reasonable relationship between punitive damages and the underlying compensatory damages. Since the compensatory damages have not been set in this case, it was impossible for the Florida courts to justify any punitive damages award.
Unfortunately, the court also reinstated the lower court’s defective certification decision. The NAM and the Washington Legal Foundation had filed a joint amicus brief urging it not to certify the class. We argued that Florida should use the normal criteria for certifying a case as a class action, namely, that common questions of law or fact predominate over questions affecting only individual members and that a class action is superior to other available methods of adjudication. The plaintiffs argued, however, that certification of the class "serves the public interest" even if the case does not otherwise meet the requirements for class certification. There is also a dispute over whether the class can be decertified in Phase 2 of the trial; we argued that it can, because the original certification was only preliminary.
Although the class punitive damages award was overturned, individual claims for actual and punitive damages may proceed. There are important individual issues relating to reliance and causation that must be proven.
In August, 2006, the NAM supported Liggett's petition for rehearing the case. Since the petition was denied, individual cases have been filed at the trial level.