Motion,Ex Parte: Corrine Moyer, et al Plaintiff vs. Rj Reynolds Tobacco Co, et al Defendant

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                                Filing # 103545499 E-Filed 02/19/2020 11:51:11 AM

IN THE CIRCUIT COURT OF THE 177!
JUDICIAL CIRCUIT IN AND FOR
BROWARD COUNTY, FLORIDA.

CIRCUIT CIVIL DIVISION 12
JUDGE KEATHAN B. FRINK

IN RE: ENGLE PROGENY CASES
TOBACCO LITIGATION

Pertains to: Heather Irimi as Personal
Representative Of the Estate of Dale Moyer

Case No.: 08-026337

PLAINTIFF’S MOTION JN LIMINE REGARDING MITIGATING EVIDENCE

Plaintiff seeks punitive damages against Defendant for their reprehensible conduct of
willfully and fraudulently concealing from the American public that they intentionally designed
their cigarettes to be powerfully addictive, while knowing (for decades) that the resulting
repetitive, decades-long smoking caused dozens of deadly illnesses. Defendant’s intentional
conduct caused millions upon millions of deaths.

Plaintiff asks this Court to prohibit Defendant from introducing evidence of other conduct
that is irrelevant to the jury’s decision on punitive damages (as well as the jury’s primary decisions
on causation and damages). Defendant’S only argument in past Engle! progeny trials is that this
other evidence—including settlement agreements with various states (the Master Settlement
Agreement (“MSA”) and Florida Settlement Agreement (“FSA”), regulation by the Food and Drug
Administration (“FDA”), and the compensatory damages awarded—are admissible as mitigating

evidence. That assertion is wrong.

| Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006).

*** FILED: BROWARD COUNTY, FL BRENDA D. FORMAN, CLERK 02/19/2020 11:51:09 AM.****Initially, none of this so-called mitigating evidence is admissible in Phase I of the trial,
when the jury is deciding simply whether the Defendant’s reprehensible conduct warrants punitive
damages. Mitigating evidence is inadmissible, if at all, only in Phase II, when the jury considers
how much of a punitive assessment to impose. However, none of the evidence Defendant offers
is ever properly admissible. First, evidence related to the MSA, the FSA, and FDA regulation is
inadmissible. And, even if it is, it is permissible only if Defendant present the evidence through a
completely knowledgeable employee who is subject to voir dire and can testify based on personal
knowledge, not hearsay. Second, evidence of other punitive and compensatory verdicts is
inadmissible or, at a minimum, must be limited to verdicts actually paid. Likewise, the number of
still-pending Engle cases is not admissible. Third, under no circumstances can Defendant argue
that the compensatory award by this jury may be considered in mitigation against a punitive
damage assessment (no more than a plaintiff can ask a jury to use a compensatory award to punish

a defendant).Table of Contents

Mitigating evidence is always irrelevant in Phase I...........:sscssssssssesessesesesseneecesesesaseneneeeseeeese 4
A brief explanation of the MSA and FSA..........scssssescscccsrsssssssssesessscscssssssesensnsssesesesesseseseseseree B

7 reasons this Court should exclude evidence of the MSA and FSA......ccsssssssesssesereensensenees LO

 

7 reasons this Court should exclude evidence of FDA regulation 21
This jury’s compensatory award in this case is irrelevant to Phase II considerations......... 30
Evidence of other punitive and compensatory verdicts is inadmissible...........ssessesssscesseees 33
The number of pending Engle cases is irrelevant .......sssssssssssssessssecsseesesesesesessnsesssesenseeseeseeces 34

Conclusion . 35Mitigating evidence is always irrelevant in Phase I.
I. Mitigating evidence is irrelevant to Plaintiffs four causes of action.

It is black-letter law that only relevant evidence is admissible at trial. McLean v. State, 934
So. 2d 1248, 1255 (Fla. 2006) (“The test of admissibility is relevancy.”). Relevant evidence is
defined as evidence that tends to prove or disprove any material fact. See § 90.401, Fla. Stat.;
Drayton v. State, 292 So. 2d 395, 396 (Fla. 3d DCA 1974). In Phase I, the jury will decide whether
Mr. Moyer was addicted to cigarettes containing nicotine, whether his addictive smoking caused
his diseases, and whether Defendant’s concealment of information and corresponding conspiracy
caused his illnesses and death. That Defendant entered into settlement agreements with various
states or are regulated by the FDA does not have any “logical tendency to prove or disprove” any
fact regarding these Phase I issues. Thus, that evidence is inadmissible.

I. Mitigating evidence is irrelevant to the Phase I punitive-damages question.

Defendant will likely agree that mitigating evidence is irrelevant to the main counts.
Instead, as they have done in the past, they will most likely argue mitigating evidence is relevant
to the punitive damages question in Phase I. Defendant is wrong, because “mitigating” evidence
is never relevant in Phase I.

As the Florida Supreme Court explained in the seminal case regarding bifurcation, “[a]t
the first stage of a trial in which punitive damages are an issue, the jury should hear evidence
regarding liability for actual damages, the amount of actual damages, and liability for punitive
damages, and should make determinations on those issues.” W.R. Grace & Co. v. Waters, 638 So.
2d 502, 506 (Fla. 1994). Then, if “the jury determines that punitive damages are warranted, the
same jury should then hear evidence relevant to the amount of punitive damages and should

determine the amount for which the defendant is liable. At this second stage, evidence of previouspunitive awards may be introduced by the defendant in mitigation.” Id. (emphasis added). Thus,
mitigating evidence belongs in Phase IJ; it has no place in Phase I.

The Standard Jury Instruction this Court is required to give? underscores that point. The
Standard Instruction focuses solely on whether the Defendant’s conduct was egregious enough to
warrant the imposition of punitive damages. The jury is not invited to consider whether other facts
mitigate or soften the egregiousness of Defendant’s conduct. Specifically, the Phase I instruction
directs the jury that: *

Punitive damages are warranted if you find by clear and convincing
evidence that:

dd) the conduct causing [loss] [injury] [or] [damage] to (claimant) was so
gross and flagrant as to show a reckless disregard of human life or of the safety of
persons exposed to the effects of such conduct; or

(2) the conduct showed such an entire lack of care that the defendant must have
been consciously indifferent to the consequences; or

(3) the conduct showed such an entire lack of care that the defendant must have
wantonly or recklessly disregarded the safety and welfare of the public; or

(4) _ the conduct showed such reckless indifference to the rights of others as to be
equivalent to an intentional violation of those rights.

[You may determine that punitive damages are warranted against one
defendant and not the other[s] or against more than one defendant.]

? Somewhat recently, rule 1.470(b) was amended to reflect that trial courts “shall” use the Standard
Jury Instructions unless the trial court determines that the instruction is “erroneous or inadequate.”
In the event a trial court decides to modify a Standard Instruction, “the trial judge shall state on
the record or in a separate order the legal basis for varying from the Standard Instruction.” Fla. R.
Civ. P. 1.470(b) (emphasis added).

3 Florida Standard Jury Instruction PD 1 is attached as Exhibit A.

5Florida Standard Jury Instructions - Civil, PD 1.a(2)(a) (emphasis added). “Mitigating evidence”
about settlement agreements Defendant has reached with the states or about FDA regulation has
nothing to do with “the conduct that caused harm” to Plaintiff.*

Because the focus in the Phase I punitive damages inquiry is solely on the conduct that
caused harm, mitigating evidence is not relevant in the Phase I question. Allowing the jury to
consider mitigating evidence in Phase I would be directly contrary to the Standard Instruction and
would require this Court to articulate why it is deviating from the substance of the Standard Jury
Instruction. See Fla. R. Civ. P. 1.470(b).

The Phase II Standard Instruction, in contrast, states that mitigating evidence is relevant in
Phase II of trial. That instruction provides:

The parties may now present additional evidence related to whether
punitive damages should be assessed and, if so, in what amount. You should
consider this additional evidence along with the evidence already presented, and
you should decide any disputed factual issues by the greater weight of the evidence.
“Greater weight of the evidence” means the more persuasive and convincing force
and effect of the entire evidence in the case.”

You will now determine the amount of punitive damages, if any, to be
assessed as punishment and as a deterrent to others. This amount would be in
addition to the compensatory damages you have previously awarded. In making

this determination, you should consider the following:

(1) _ the nature, extent and degree of misconduct and the related circumstances;
[and]

{(2) [the] [each] defendant’s financial resources; and]*

*Refer to Note on Use 4

4 As the United States Supreme Court has explained, the jury can consider harm to others when
deciding whether the Defendant’s conduct was reprehensible enough to justify punitive damages.
Philip Morris USA v. Williams, 549 U.S. 346, 355 (2007) (“Evidence of actual harm to nonparties
can help to show that the conduct that harmed the plaintiff also posed a substantial risk of harm to
the general public, and so was particularly reprehensible....”).

6[() (identify any other circumstance that the jury may consider in determining
the amount of punitive damages.)]*

*Refer to Note on Use 10

Florida Standard Jury Instructions - Civil, PD 1.b(1) (opening instruction) (emphasis added), PD
1.b(2)(a) (emphasis added) (Ex. A). Note 4 indicates that instruction (2) is only to be given where
evidence of financial worth is introduced.

We call the Court’s attention to Note 10 because it is important. That notes says:

10. Subparagraph (3) should be used only after the court has

determined that the evidence includes some additional circumstance that may

affect the amount of punitive damages. See, e.g., Owens-Corning Fiberglass Corp.

v. Ballard, 749 So. 2d 483 (Fla. 1999) (listing various such factors). See generally

BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). One such circumstance

is the assessment of punitive damages against the defendant in prior cases. See W.R.
Grace & Co. v. Waters, 638 So. 2d 502 (Fla. 1994).

Florida Standard Jury Instructions - Civil, PD 1 Note on Use 10 (emphasis added) (Ex. A). In
essence, Note 10, coupled with the introduction’s statement that the parties are going to present
“additional evidence” (which indicates the evidence was not admitted in Phase I), are proof
positive that “mitigating evidence” factors are not relevant or admissible until Phase Il. We note
for the Court that even the primary case relied upon by Defendant supports Plaintiffs position.
Humana Health Ins. Co. v. Chipps, 802 So. 2d 492 (Fla. 4th DCA 2001) (finding that mitigating
evidence “reflected on the egregiousness of Humana’s conduct and, thus, may have impacted the
amount of damages awarded.”) (emphasis added).

Stated differently, the fact that Defendant may have settled with the states or may be subject
to FDA regulation (so that, according to Defendant, it need not be deterred), is not relevant to the
Phase I question of whether Defendant’s conduct in creating a defective product and lying to the
American public about its dangers warrants the imposition of punitive damages. In this way, the
punitive damages issue is similar to a criminal capital case. In Phase I of the criminal case, whether

7the defendant had a difficult childhood has nothing to do with whether the defendant committed
murder. The only question in Phase I is whether a capital crime was committed. If the answer is
yes, the trial proceeds to the sentencing phase. It is only then that the jury hears mitigation
evidence—such as defendant’s difficult childhood or defendant’s positive traits or conduct that
would militate against a harsh sentence.

Having made clear that mitigating evidence is never relevant in Phase I, we explain below
the limitations that must be placed on the kind of evidence Defendant can introduce as “mitigation”
in Phase II. The topics covered are: settlement agreements with various states (the MSA and FSA),
FDA regulation, compensatory damages that are awarded in this case, pending Engle progeny
cases, and other punitive and compensatory verdicts.

A brief explanation of the MSA and FSA

The State of Florida sued the tobacco companies in 1995, alleging the same causes of action
brought in this case. As explained by Florida’s Attorney General, the purpose of the lawsuit was
to recoup “significant Medicaid costs and other healthcare expenditures the State had incurred in
the past and would incur in the future due to tobacco-related illnesses from its citizens’
consumption of [the defendants’] cigarettes.” Exhibit B (State’s Motion to Enforce settlement
agreement), p.4; see also p.6 (“the settlement payments are intended to compensate the State for
both past and future healthcare expenses incurred due to the consumption of the subject
cigarettes.”). The parties reached a settlement in 1997. As part of the settlement, the defendants
(R.J. Reynolds included) “agreed to pay the State up-front ‘initial payments,’ and thereafter to pay
several hundred million dollars per year to the State—in perpetuity—in settlement for the State’s
claims.” /d. at p.6. Co-conspirator Philip Morris explicitly stated the purpose of these payments,

which “teflect[ed] the parties’ intent that the settlement payments compensate Florida for health-care costs relating not just to sales of the settling companies’ cigarettes prior to the settlement, but
also to ongoing and future sales of those cigarettes.” See PM’s Motion to Enforce settlement
agreement (Exhibit C at p.9).

At the same time, 46 other states, having also sued the tobacco companies, entered into the
MSA. Liggett Group v. Engle, 853 So. 2d 434, 468 (Fla. 3d DCA 2003). Like Florida, all these
states sought to recover the considerable amount of Medicaid dollars spent treating their citizens
for diseases caused by Defendant’s product, cigarettes. The MSA called for more than $200 billion
to be paid over 26 years and for payments into perpetuity after that. /d. The MSA also required
the Defendant to do things like provide their internal documents to the public.

Relevant to our motion in limine here, both settlement agreements state that neither the
agreements “nor any evidence of negotiations” or “public discussions” related to the agreements
shall be “offered or received in evidence in any action or proceeding for any purpose other than
in an action or proceeding arising under or relating” to the agreements.

Specifically, the FSA provides:

C. Non-Admissibility. These settlement negotiations have been undertaken by the

parties in good faith and for settlement purposes only, and neither this settlement

agreement nor any evidence of negotiations hereunder, shall be offered or received

in evidence in this Action, or any other action or proceeding, for any purpose other

than in an action or proceeding arising under this settlement agreement.

See Exhibit D (Florida Settlement Agreement). The MSA has a similar provision:

(f) Non-Admissibility. The settlement negotiations resulting in this Agreement
have been undertaken by the Settling States and the Participating Manufacturers in
good faith and for settlement purposes only, and no evidence of negotiations or
discussions underlying this Agreement shall be offered or received in evidence in
any action or proceeding for any purpose. Neither this Agreement nor any public
discussions, public statements or public comments with respect to this Agreement
by any Settling State or Participating Manufacturer or its agents shall be offered or
received in evidence in any action or proceeding for any purpose other than in an
action or proceeding arising under or relating to this Agreement.See Exhibit E (excerpts of Master Settlement Agreement). (A full copy of the entire 279-page
document is available on the National Association of Attorneys General website and is also being
provided to this Court via a separate notice of filing. See
http://www.naag.org/assets/redesign/files/msa-tobacco/MSA.pdf.)

It is undisputed that Defendant signed the documents agreeing to these provisions.

reasons why this Court should exclude evidence of the MSA and FSA

1. On their face, the documents say they are inadmissible for any reason.
On their face, both the MSA and FSA say they cannot be offered or received “for any
purpose.” There isn’t much more to say. Defendant agreed, time and again, in the State’s
enforcement litigation against them that, on the whole, the FSA is “comprised of clear and

unambiguous language” and was negotiated by Defendants’ “very sophisticated lawyers.” Exhibit
F at p.3 (Order Granting State’s Motion to Enforce settlement agreement).

Defendant has, in the past, argued that they did not want to offer the agreements themselves
into evidence, they just wanted to have their witnesses tell the jury about the agreements. Bluntly,
the argument borders on the absurd. The agreements say they are not to be admitted into evidence
for any reason. Saying that the jury cannot see the agreements, but can nevertheless hear about
them, eviscerates the very purpose of the non-admissibility clause Defendant specifically
contracted for. Cf Vyfvinkel v. Vyfvinkel, 135 So. 3d 384, 386 (Fla. Sth DCA 2014) (“It thus
follows that where one interpretation of a contract would be absurd and another would be

consistent with reason and probability, the contract should be interpreted in the rational manner.”).

2. Payments made under the settlement agreements are irrelevant in Phase II.

10Even if the settlement agreements did not expressly provide for inadmissibility, evidence
of payments to others under the settlement agreements is still inadmissible under Phillip Morris
USA, Inc. v. Williams, 549 U.S. 346 (2007).

It used to be that, in mass tort cases, companies would be punished, over and over again,
for harm to an unspecified (large) group of people. To avoid that situation, Florida used to allow
juries to consider, as mitigating evidence, compensatory and punitive damages already imposed
(in other cases) against the manufacturer. Owens-Corning Fiberglas Corp. v. Ballard, 749 So. 2d
483, 484-85, 489 (Fla. 1990); W.R. Grace & Co. v. Waters, 638 So. 2d 502, 505 (Fla. 1994).

That all changed in 2007. In Phillip Morris v. Williams, the United States Supreme Court
held that it is unconstitutional for the punitive award to include amounts intended to punish the
manufacturers for harming nonparties. Williams found that harm to others is relevant only to the
initial question of whether the conduct is reprehensible enough to warrant punitive damages. But
the harm to all those other people is no longer relevant when the jury turns to calculating the
amount of the punitive damage assessment. Instead, the size of the punitive verdict only addresses
the defendant’s conduct as it relates to the one person bringing suit.

Williams has been uniformly applied in the Engle litigation. See, e.g., RJ. Reynolds
Tobacco Co. v. Townsend, 90 So. 3d 307, 313 n.7 (Fla. Ist DCA 2012). That is, in nearly every
Engle case to date, the Court gives the jury an instruction that says something along the lines of:

When determining the amount, if any, of punitive damages to be awarded, you may

not impose punitive damages to punish Defendants for harms caused to others

whose cases are not before you, nor may you consider evidence of conduct that
has no connection to the conduct that injured [the plaintiff].

Thus, unlike the law in place during asbestos litigation, the jury is now told to focus solely

on the conduct related to a particular plaintiff when awarding damages.

llWhat’s good for the goose is good for the gander. If the jury cannot consider evidence that
has no connection to the harms to Plaintiff in Phase II, then it is a black-letter violation of both
Supreme Court precedent and Florida’s standard jury instructions to allow the jury to consider the
MSA (which settled with 46 state governments over Medicaid reimbursement claims) or the FSA
(which settled Medicaid reimbursement claims made by the State of Florida), because neither
settlement agreement has any connection to Plaintiff.

3. Evidence of payments under the MSA and FSA is irrelevant because it asks the jury
to compare apples to oranges.

Evidence regarding the MSA and FSA is also inadmissible because these are settlements
of unrelated claims made by different parties. As explained above, both the MSA and FSA
resolved claims asserted by the various states’ Attorneys General against the tobacco industry for
harm done to the states in the form of increased health care costs. The MSA and FSA resolved
those Attorneys General claims and not the claims of any Florida citizen. It is analogous to an
attempt by Ford Motor Company to introduce evidence that it had settled a claim arising out of a
defective seatbelt to rebut a damage claim in a suit involving a breach of contract — they have
absolutely nothing to do with each other.

4. Allowing use of the MSA and/or FSA would require a trial within a trial.

If Defendant wants to talk to this jury about the MSA and FSA, Plaintiff is going to want
to introduce evidence about Defendant’s failure to adhere to the terms of those agreements.
Defendant has been sued, more than once, for welching on the MSA and FSA. As part of the
1,500+ page opinion, Judge Kessler noted several ways that the tobacco defendants have violated
the MSA. United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1, 845-46 (D.D.C. 2006).
Judge Kessler in the D.C. District Court wrote about several cases where courts have held that

Defendant had violated the MSA. Jd. at 840-47. She concluded that there was no evidence that

12“the MSA has been or will continue to be adequately enforced.” Jd. at 847. She added that,
“Defendants’ assertions that, as a result of the MSA, they are now new companies headed by
changed management are simply not accurate” — and then gave a detailed list of facts to back up
that finding. /d. at 848-50. Exhibit G (excerpt of United States v. Philip Morris USA, Inc., 449
F. Supp. 2d 1, 840-50).

Indeed, R.J. Reynolds has violated the MSA repeatedly over the years, forcing states to sue
R.J. Reynolds into compliance. See, e.g., State v. R.J. Reynolds Tobacco Co., 151 Wash. App. 775
(2009) (violating MSA provision on youth marketing); United States v. Philip Morris USA, Inc.,
449 F. Supp. 2d at 844-46 (summarizing MSA violations); State ex rel. Petro v. R.J. Reynolds
Tobacco Co., 820 N.E.2d 910, 914 (2004) (violating provision on branded merchandise); People
ex rel. Lockyer v. R.J. Reynolds Tobacco Co., 11 Cal. Rptr. 3d 317, 323, 327-28 (2004) (failing to
change youth-magazine placement policies); State ex rel. Goddard v. R.J. Reynolds Tobacco Co.,
206 Ariz. 117, 121 (Ct. App. 2003) (advertising cigarettes at racetracks); People ex rel. Lockyer v.
R.J. Reynolds Tobacco Co., 132 Cal. Rptr. 2d 151 (2003) (same); United States v. Philip Morris
USA, Inc., 449 F. Supp. 2d at 848.

If Defendant wants to tell this jury that they do not need to be punished or deterred because
the MSA is in place and Defendant is being good corporate citizens as a result, Plaintiff is going
to want this jury to know that Defendant is not depicting reality. Plaintiffis also going to want the
jury to hear that Defendant is not really suffering because of the MSA or FSA. In order to pay
those settlements, Defendant has simply increased the cost of cigarettes. (Defendant will want to
argue taxes are responsible for the price hike, but that is untrue and will be yet another trial within
atrial. See Ex. C at p.24 (“Reynolds. . has told the Florida Legislature that its ‘brands’ carry a ‘per-

pack fee’ to ‘offset[] the state’s health care costs.””).

13Plus, R.J. Reynolds’ track record is not any better when it comes to the FSA. Recently, the
Florida Attorney General and Philip Morris filed suit against R.J. Reynolds for failing to make its
payments under the FSA. Ex. B; Ex. C. As of January 18, 2017, R.J. Reynolds was over $45
million in arrears. Ex. B at p.1. IfR.J. Reynolds wants to tell this jury that it need not be punished
since it is making payments to the State of Florida into perpetuity, then Plaintiff will want the jury
to hear that is not true. R.J. Reynolds will surely respond (as it did in the lawsuit with the State)
that the company that purchased R.J. Reynolds’ major brands, ITG, should be held responsible for
making those payments now, despite a ruling that R.J. Reynolds remains obligated to make the
payments outlined in the FSA. Ex. C atp.15.° Atthat point, this wrongful death action will convert
into a contract dispute—a case within a case.

5. The Third District’s Engle case does not save Defendant’s bacon.

Defendant has argued in the past that the Third District has somehow issued binding case
law that requires this Court to allow the use of the MSA and FSA (impliedly in Phase I and Phase
II). Notably, no court has ever adopted the position. The likely reason is because the argument is
legally wrong.

For starters, the Third District was not asked to resolve a dispute about the admissibility of
the MSA and FSA. In this early Engle case, the issue on review was whether the trial court erred
in instructing the jury that the agreements “do not constitute punishment of or deterrence to these
defendants.” Liggett Group v. Engle, 853 So. 2d 434, 469 (Fla. 3d DCA 2003). The Third District
held that was error because the jury should have been allowed to consider the agreements as

mitigating evidence. Importantly, no one argued that the agreements were not admissible. So, the

> RJ. Reynolds and Philip Morris have appealed the trial court’s ruling that R.J. Reynolds remains
obligated to continue making the payments for the sold brands under the FSA.

14point for which Defendant are using the case was never argued (and therefore never addressed) by
the court. A case cannot be binding law on an issue it does not address. See, e.g., Speedway
SuperAmerica, LLC v. Tropic Enterprises, Inc., 966 So. 2d 1, 3 (Fla. 2d DCA 2007) (“[N]o
decision is authority on any question not raised and considered, although it may be involved in the
facts of the case.”).

The second reason Defendant’s argument is legally wrong is because it ignores the timing.
The Third District issued its opinion in May 2003. Four years later, the United States Supreme
Court decided Williams, which says a jury can only impose punitive damages relative to the harm
suffered by the plaintiff in a particular case. So even if the MSA and FSA could somehow have
been relevant to any phase of the punitive damages inquiry in 2003, they are no longer relevant in
a post-Williams world.

We also note that, when it comes to the trend around the state, the MSA and FSA are
excluded more often than not. And, after over 200+ Engle cases having been tried, no appellate
court has reversed based on the exclusion of those agreements.

6. Defendant will bring unqualified witnesses, who know only half the story or rely on
hearsay, to testify about the MSA and FSA (and also FDA regulation).

This is a big fight in front of this Court for good reason. Recently, R.J. Reynolds used the
MSA and FSA to convince a jury to change its mind about punitive damages. That jury had
returned a “yes” verdict in Phase I before changing course in Phase II and returning a $0 punitive
damages award. Verdict, Prentice v. R.J. Reynolds Tobacco Co., Case No. 16-2007-CA-011551-
DXXX (Fla. 4th Cir. Duval County, Sept. 28, 2016 (Exhibit H); Jury Verdict Form—Punitive
Damage Phase, Prentice v. R.J. Reynolds Tobacco Co., Case No. 16-2007-CA-011551-DXXX

(Fla. 4th Cir. Duval County, Sept. 29, 2016 (Exhibit I).

15During the Phase II closing arguments, R.J. Reynolds argued that it had been “punished
enough” and “deterred enough” by the MSA and FSA. Examples included:

e “And the evidence that you heard, if you are concemed that the companies have
not been held accountable and therefore have never answered for the conspiracy
that you found that caused Mr. Price’s COPD and death, ...Consider the $3 billion
[sic] the companies have already paid under the Florida Settlement Act to the state
of Florida and the $58 million more that Reynolds has already paid to the other
states and it will continue to pay on an ongoing basis.” Transcript Excerpts,
Prentice v. R.J. Reynolds Tobacco Co., Case No. 16-2007-CA-011551-DXXX (Fla.
4th Cir. Duval County) (Composite Exhibit J, p.4208).

@ “What does that mean? It means that you are entitled, should you choose, to
decide that Reynolds has already been punished enough; that for a company that’s
not doing today the things that should never have happened in the past, a $186
million is enough. $3 billion is enough. $58 billion that’s being paid to the states

and will continue in perpetuity for as long as R. J. Reynolds Tobacco Company
is in business is enough.” (Comp. Ex. J, p.4218 (emphasis added)).

The jury was very interested in that testimony, sending out a question during deliberations
asking, “The money that is paid to the states from RJR, what is done or the purpose of that money?”
Comp. Ex. J, p.4241. The court instructed the jury that they had to use their recollections of the
evidence. Comp. Ex. J, pp.4241-42. But then a juror stood up and said, “Can I ask? I do not
recall that...being said.” Comp. Ex. J, p.4242.

The reason that the juror did not recall that information being offered is because it never
was, although that was not the fault of the plaintiff. Defendant historically brings a witness to
testify about the MSA and FSA who is educated about only one side of the matter. This makes
cross-examination impossible. In the case just discussed, when plaintiff's counsel questioned R.J.
Reynolds’ witness about obligations under the MSA and the various times that R.J. Reynolds has
been fined for violating the MSA, R.J. Reynolds’ witness strangely knew nothing. Comp. Ex. J,

pp.4068-70.

16In the recent deposition of a different R.J. Reynolds witness, Dr. Alderman, the plaintiff
exposed the same pattern of only being partially informed. The line of questioning was:

Q. And then your disclosure states that another area of your expected testimony is

financial information, such as MSA payments, Florida settlement agreement

payments, and FDA user fees. What is the basis of your knowledge for MSA

payments, Florida settlement agreement payments, and FDA user fees?

A. Those are numbers that I get from a person in finance at Reynolds American.

Q. And who is that person?

A. Her name is Elizabeth Johnson.

Q. And she’s in the finance division?

A. Yes, of Reynolds American.

Q. Do you know what her title is?

A. I don’t recall her exact title, no.

Q. Why does she give you those numbers?

A. Imean, the—part of my disclosure, part of what I will be prepared to testify, is

on—in—in potential Phase 2 part of the trial would be the—the amount of money

that we’ve paid to the FDA, to the states, through the MSA and -- the FDA.

Q. Okay. Those numbers aren’t numbers that you need as part of your employment
in the applied and materials development division of RAI Innovations Company?

A. I don’t think I need those numbers necessarily to do my—my day-to-day job,
but it’s something I would like to be informed of—on, to—for the purposes of
these—this litigation.
Depo. Excerpt of Steven Alderman, Ph.D., Mobley v. R.J. Reynolds Tobacco Co., Case No. 2007-
CA-1709-K (Fla. 16th Cir. Monroe County, July 25, 2017) (Exhibit K at pp. 70-71).
An August 8, 2017, deposition of Charles Garner, another R.J. Reynolds executive, reflects

the same lack of knowledge:

Q. Dr. Garner, on your disclosure, which is Exhibit 4, could you just take a look at
it and let me know if you prepared the disclosure?

17A. I did prepare the disclosure.

Q. Just in flipping through this, I don’t see anywhere in your expertise that says an
area of your expertise would be the MSA or the FSA, is that correct?

A. I think you’re probably correct in that, Mr. Luciano.

Q. And is that not an area of your expertise?

A. Well, I mean, I’m not a lawyer, so I’m not expert on the inner workings of the
MSA and the FSA,I know that we have one and that we have complied it since
1998.

Q. For example, do you know why R.J. Reynolds Tobacco Company made the
decision to enter in the MSA FSA?

A. Do not.

Q. Are you aware of the cost/benefit analysis undertaken by R.J. Reynolds Tobacco
Company leading up to the decision leading to enter into the MSA or FSA?

MR. KREINER: Objection to form.

A. I don’t know if there was a cost/benefit analysis, and I’m certainly not aware of
it if there was one.

Depo. Excerpt of Dr. Charles Garner, Ph.D., Mobley v. R..J. Reynolds Tobacco Co., Case No. 2007-
CA-1709-K (Fla. 16th Cir. Monroe County, August 8, 2017) (Exhibit L, pp.27-28).

As another example, Dr. Garner said the only reason he knew about pending Engle cases
is because “it’s something that we report out in our files with the Securities and Exchange
Commission. It’s in the 10-Qs, and it’s also in the annual statement of the 10-K.” Ex. L, p.28.
Later, when asked what the source of his knowledge was for the amounts R.J. Reynolds has paid
in punitive damages, Dr. Gamer testified, “I read a legal document. I don’t know exactly what to
call it, but it was a legal document that was submitted in Florida with respect to number of cases

that we have paid punitive damages and total number of punitive damages paid.” Ex. L, pp.29-30.

18Dr. Garner admitted that he did not prepare the document and that awareness of the amount of
punitive damages paid was not within the scope of his job. Ex. L, p.30.

Adding insult to injury, the basis for the employee’s knowledge is not first-hand
knowledge. The basis is pure hearsay—reading an SEC filing, or passing along information “from
accounting”—and Defendant’s experts should not be permitted to serve as a conduit for that
hearsay. The hearsay nature of the testimony is a stand-alone basis for excluding the testimony.
See, e.g., Linn v. Fossum, 946 So. 2d 1032, 1037-38 (Fla 2006) (“Florida courts have routinely
recognized that an expert’s testimony may not merely be used as a conduit for the introduction of
the otherwise inadmissible evidence.”).

In short, Defendant presents an employee to testify only as to their side of the story and
make sure he or she is aware only of facts favorable to Defendant. That’s nothing more than a
sham witness. At a minimum, before this Court allows Defendant to present such testimony, there
should be a voir dire of the witness to determine if he or she is, in fact, knowledgeable.

7. The statewide trend is to exclude testimony about the MSA and FSA.
Many trial courts have excluded evidence related to the settlement agreements. We’ve

provided this Court with orders that we were able to find as Composite Exhibit M.°

© Order Granting Plaintiffs Motion to Preclude Reference to Tobacco settlement agreements and
Government Regulation of Defendants’ Products, Lima v. R.J. Reynolds Tobacco Co., Case No.
15-CA-7140 (Fla. 13th Cir. Hillsborough County, Apr. 2, 2017); Order on Plaintiff Jessie
Gamble’s Motion in Limine No. 4 to Preclude Reynolds from Arguing or Offering Evidence that
they are Subject to FDA Regulation or any Evidence Related to the Master settlement agreement
or the Florida settlement agreement, /n Re: Engle Progeny Cases Tobacco Litigation, Pertains to
Gamble, Case No. 16-2014-CA-3848-XXXX-MaA (Fla. 4th Cir. Duval County, Feb. 17, 2016);
Order on Plaintiff Helen Taylor’s Motion in Limine No 4 to Preclude Defendant from Arguing or
Offering Evidence that they are Subject to FDA Regulation, Jn Re: Engle Progeny Cases Tobacco
Litigation, Pertains to Taylor, Case No. 16-2007-CA-11654-MXXX-MA (Fla. 4th Cir. Duval
County, Oct. 14, 2014); Omnibus Order on Pending Pretrial Motions, Weinstein v. R.J. Reynolds
Tobacco Co., Case No. 502007CA023835 (Fla. 15th Cir. Palm Beach County, May 2, 2013) (at
P’s Mot. 924).

19‘reasons why this Court should exclude evidence of FDA regulation

Defendant almost always argues that evidence of FDA regulation is admissible in Phase II,
arguing that this regulation makes it less likely, if not impossible, for the tortious acts alleged in
this lawsuit to occur again in the future. Defendant further claims that the fear of civil penalties is
deterrence enough. Jd. Below, we explain why Defendant is wrong.

1. Evidence of FDA regulation is irrelevant to Phase II.

FDA regulation is irrelevant to the Phase II question regarding the amount of punitive
damages. Punitive damages serve two purposes—punishment for a defendant’s past conduct and
deterring future similar misconduct by anyone. L.g., St. Regis Paper Co. v. Watson, 428 So. 2d
243, 247 (Fla. 1983). That language is, in fact, included in the pattern charge on punitive damages,
and will likely be given in this case.

The Family Smoking Prevention and Tobacco Control Act and FDA regulation are not
relevant to punishment. Regulations are necessarily prospective; as such, they cannot impose a
punishment on tobacco companies for their past misconduct. Nor are they relevant to deterring
others from similar misconduct. The possibility that Defendant will be regulated does not remove
the need for deterrence to others.

Defendant might argue that punitive damages are unnecessary because the FDA regulations
prevent them from engaging in conduct that is fraudulent, malicious, wanton, and oppressive in
the future. So, according to them, there is no need to deter future misconduct by them. But, that
is not the definition of mitigating evidence. Mitigation evidence is evidence that “would have the
effect of reducing or softening the moral or social culpability” of misconduct by the defendant that
has already occurred. Humana Health Ins. Co. of Fla., Inc. v. Chipps, 802 So. 2d 492, 496 (Fla.

4th DCA 2001).

20There is no Florida case authorizing evidence in mitigation that the law prohibits future
misconduct. This is unsurprising. That Defendant is supposed to follow federal regulations does
not reduce or soften their moral or social culpability.

2. FDA regulation should be excluded from Phase II because it is meaningless.

Even if FDA regulation could somehow be shoehorned into the category of “mitigating
evidence” and, therefore, become relevant (it cannot), the evidence should still be excluded in this
case because attempts to regulate the tobacco industry have been borderline worthless. In other
words, Defendant’s argument—that the FDA’s oversight means Defendant will go forth and sin
no more—is simply not true. And, multiple courts have said so.

For example, in United States v. Philip Morris USA, Inc., 686 F.3d 832 (D.C. Cir. 2012),
the D.C. Circuit Court of Appeals thoughtfully addressed why the current regulations in place—
and the potential for new regulation—will not stop Defendant from continuing its wrongful
conduct. In that case, the trial judge determined, after a lengthy trial involving much of the same
evidence used in the Engle progeny cases, that Defendant (along with other cigarette companies)
had violated the federal RICO statute. After being affirmed on appeal, the trial judge issued an
injunction prohibiting Defendant from continuing their misconduct. Congress then passed the
Family Smoking Prevention and Tobacco Control Act (which was the enabling act for FDA
regulation). In response, Defendant tried to lift the injunction on the grounds that, as a result of
the Act, there was “no reasonable likelihood” they would commit future RICO violations given
the FDA’s regulatory oversight. This is essentially the same argument that Defendant will make

here.

21The trial court rejected Defendant’s argument and the D.C. Circuit Court affirmed. As part
of that affirmance, the appellate court explained why it was not reasonable to assume that the
tobacco companies would comply with FDA regulations:

[Defendants’] argument assumes the defendants’ compliance with the Tobacco

Control Act. And in light of the defendants’ history of non-compliance with various

legal requirements, there was no reason for the district court to make such an

assumption. Indeed, the court expressly found the Tobacco Control Act was not

likely to produce compliance when RICO and the Master settlement agreement

(“MSA”) had failed to do so in the past. . . . If the defendants were not deterred by

the possibility of RICO liability, the district court reasonably found the
defendants were not likely to be deterred by the Tobacco Control Act either.

Id. at 836-37 (emphasis added).

The D.C. Circuit’s opinion proved prescient. Since that opinion was issued, Defendant has
been busy suing the FDA for trying to regulate the industry. See, e.g., Philip Morris, et al. v.
United States Food and Drug Administration, et. al, Civil Action No. 1:15-cv-1590, District of
Columbia (Sept. 30, 2015); Lorillard, Inc. v. Food & Drug Admin., 2012 WL 3542228 (D.D.C.
2012); R.J. Reynolds Tobacco Co. v. Food & Drug Admin., 823 F. Supp. 2d 36 (D.D.C. 2011);
United States v. Philip Morris USA, Inc., 787 F. Supp. 2d 68 (D.D.C. 2011); Commonwealth
Brands, Inc. v. U.S., 678 F. Supp. 2d 512 (W.D. Ky. 2010); 23-34 94th St. Grocery Corp v. New
York City Bd. of Health, 757 F. Supp. 2d 407 (S.D.N.Y. 2010).

But in individual lawsuits like the one here, Defendant usually files a motion in limine
asking the court to exclude evidence of their lawsuits against the FDA. See, e.g., Defendant’s
Motion in Limine to Exclude Any References, Testimony, or Argument Regarding Litigation
Arising out of the FDA’s Regulation of Tobacco Products, Proposed Graphic Warning Labels, or
Certain Congressional Findings, Mobley v. R..J. Reynolds Tobacco Co. Case No. 2007-CA-1709
K (Fla. 16th Cir. Monroe County, July 28, 2017) (Exhibit N); see also Philip Morris, et. al v.

United States Food and Drug Administration, et. al, Civil Action No. 1:15-cv-1590, District of

22Columbia (Sept. 30, 2015); Lorillard, Inc. v. Food & Drug Admin., 2012 WL 3542228 (D.D.C.
2012); R.J. Reynolds Tobacco Co. v. Food & Drug Admin., 823 F. Supp. 2d 36 (D.D.C. 2011);
United States v. Philip Morris USA, Inc., 787 F. Supp. 2d 68 (D.D.C. 2011); Commonwealth
Brands, Inc. v. U.S., 678 F. Supp. 2d 512 (W.D. Ky. 2010); 23-34 94th St. Grocery Corp v. New
York City Bd. of Health, 757 F. Supp. 2d 407 (S.D.N-Y. 2010).

Defendant want this evidence excluded because they have been very effective in nullifying
any attempt at regulation. For example, in one case, Defendant immediately obtained an injunction
to stop implementation of the new warning requirements proposed by the FDA. While noting that
the FDA’s “previous efforts to combat the tobacco companies’ advertising campaigns have been
like bringing a butter knife to a gun fight” (in light of the estimated $12.49 billion in advertising
the tobacco companies spent in 2006 alone), the D.C. Circuit determined that the labeling
requirement the FDA proposed was unconstitutional. 2.J. Reynolds Tobacco Co. v. Food & Drug
Admin., 696 F.3d 1205, 1221 (D.C. Cir. 2012) (emphasis added).

The bottom line is that the potential authority of the federal government to regulate the
tobacco industry means virtually nothing if the process has not been implemented. Not to mention
the glacial speed with which federal regulation is implemented, the limited resources of the FDA
to enforce regulations that are actually passed, and the tobacco companies’ relentless and well-
funded fights against regulation. All these things are factors that bear upon whether FDA
regulation is an adequate deterrent.

The end result is that evidence of the future application of the Tobacco Control Act and
FDA regulation is too speculative to be admissible, particularly given Defendant’s long history of
failing to comply with federal and state law, and of effectively fighting all attempts at regulating

the tobacco industry.

233. Evidence regarding FDA regulation should be excluded under section 90.403.

The danger of unfair prejudice, confusion of issues, and misleading the jury is very real
when it comes to evidence of FDA regulation. This is another factor militating in favor of
exclusion. The public does not generally understand the significance of FDA regulation and,
without a detailed explanation of the law and the nature of regulation, the difficulty of imposing
regulations, the often lengthy delay before implementation of any regulation, and the likelihood of
years of litigation by the tobacco industry to prevent any regulation, the jury may well believe that
regulation will be more effective than is likely to be the case or draw other unsupported
conclusions. The evidence should therefore be excluded under section 90.403, Florida Statutes.
See generally, e.g., Donahue v. Albertson's, Inc., 472 So. 2d 482, 483 (Fla. 4th DCA 1985)
(“Evidence which presents purely collateral issues which would only serve to confuse and mislead
the jury is too remote and should be excluded.”).

To be clear, this Court should not underestimate the broad (and misleading) arguments
Defendant will make if they are allowed to present evidence about FDA regulation. For example,
in the Ryan case, R.J. Reynolds told the jury:

The FDA has tobacco companies, including R.J. Reynolds, on lockdown. They’ ve

got them on lockdown. Every aspect of their business is subject to FDA regulation

when it comes to these tobacco products. The FDA has regulated the manufacture,

marketing and sale of tobacco products since 2009. June of 2009 they started that
process, and it’s continued. They regulate everything that they do.

Trial Transcript Excerpt, In Re: Engle Progeny Cases Tobacco Litigation, Pertains to Ryan, Case
No. 08-22579 (Fla. 17th Cir. Broward County, Apr. 21, 2015) (Exhibit O at p. 2947). Similarly,
in Cox, R.J. Reynolds said:

Finally, this whole issue of deterrence. “You’ve got to award millions of dollars,

and you’ve got to award punitive damages in this case, because that would deter
them. That would cause them to change the way they’re designing cigarettes.”

24The FDA is responsible for that. You’ve heard over and over—I’m not going to go
through all this again, but you’ve heard that the FDA has authority to regulate the
design, manufacture, sale and advertisement of cigarettes, and the FDA can regulate
the levels of carcinogens, of tar and nicotine in cigarettes, and the FDA can regulate
what additives are used in cigarettes.

The tobacco companies have to go to the FDA and ask for permission to make any
change to the design ofa cigarette that has public health implications or to introduce
a new product.

What—what does all this mean for the issues in this case? There’s nothing left to
deter. There’s nothing left. This is all under control already. It’s all under control

Trial Transcript Excerpt, Cox v. R.J. Reynolds Tobacco Co., Case No. 01-08-CA-3712 (Fla. 8th
Cir. Alachua County, Dec. 16, 2011) (Exhibit P at pp.3246-50). As explained above, these
arguments are just flat wrong: the tobacco industry continues to operate unchecked because
implementing FDA regulation has been “like bringing a butter knife to a gun fight.” R.J. Reynolds
Tobacco Co. v. Food & Drug Admin., 696 F.3d 1205, 1221 (D.C. Cir. 2012).

4. The minimal relevancy of FDA regulation calls for exclusion under section 90.612.

Under section 90.612(1)(b), Florida Statutes, the Court has the responsibility to control the
interrogation of witnesses and the presentation of evidence as to “avoid a needless consumption of
time.” Evidence that has minimal probative value thus can be excluded under section 90.612(1)(b)
when it is a waste of time, even if the Court could not exclude it on that basis under section 90.403.
Ehrhardt, Fla. Evidence, §403.1, at 185.

Testimony about how the Tobacco Control Act or FDA regulation might affect
Defendant’s future conduct would open the door to Plaintiff rebutting Defendant’s evidence by
introducing evidence of things like the tobacco industry’s history of non-compliance with prior
laws and agreements and the ferocity with which it fights FDA regulation. (Again, Defendant
usually files a motion in limine seeking to exclude that evidence as being irrelevant and

prejudicial.) Allowing Defendant to present evidence regarding FDA regulation would clearly

25make evidence of Defendant’s effort to combat FDA regulation relevant—and would as a result
dramatically expand the length of the trial and create a host of issues regarding the scope and type
of permissible testimony. Basically, it would be the nightmare of a trial within a trial. Thus, this
Court should exercise its discretion under section 90.612(b) to preclude the testimony.

5. The practical problem of Defendant’s FDA witness tending to be only partially
informed.

As with the MSA and FSA testimony, Defendant tends to call witnesses who are only
partially educated about the FDA process. For example, R.J. Reynolds recently called Dr. Potts.
His expert disclosure broadly said he would testify regarding “FDA’s regulatory oversight of the
tobacco industry.” Defendant R.J. Reynolds Tobacco Company’s Expert Disclosures, Jn Re:
Engle Progeny Cases Tobacco Litigation, Pertains to Prentice, Case No. 16-2007-CA-11551-
DXXX-MA (Fla. 4th Cir. Duval County, June 13, 2016) (Exhibit Q). Dr. Potts (who is also on
the witness list in this case) took the stand for R.J. Reynolds and went on for a full volu