PHILIP MORRIS USA INC.,

v.

EDWARD F. PRINCIPE,

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.

2

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

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 smokingrelated 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

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 November⁶, 2017, Principe filed this suit against PM³ 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.

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).

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.”

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 within¹² 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

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).

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.

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

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.

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,

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,

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

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.

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.