Florida v. American Tobacco Co.
(3rd Party Rec. FL 15th Cir. Ct. 1995 Settled) Citation: 707 So.2d 851 (Fla.App.4 Dist., 1998)This third party Medicaid recovery suit was filed by Lawton M. Chiles, Jr. individually and as Governor of the State of Florida, Robert A. Butterworth as Attorney General for the State of Florida, the Department of Business and Professional Regulation, and the Agency for Health Care Administration against the American Tobacco Co., R.J. Reynolds, British American Tobacco, Brown & Williamson, Philip Morris, Liggett, Brooke Group, Loews Corp., Lorillard, United States Tobacco, the Council for Tobacco Research, the Tobacco Institute, Hill & Knowlton, and Dosal Tobacco on February 21, 1995.
The plaintiffs claimed that the defendants were unjustly enriched, are required to indemnify the plaintiffs, were negligent, are liable under strict product liability, breached express or implied warranties, negligently performed a voluntary undertaking, committed fraud and intentional misrepresentation, maintained a conspiracy, aided and abetted liability.
The plaintiffs allege that the defendants manufactured fraudulent science through the work of the Tobacco Institute Research Committee and the Council for Tobacco Research, suppressed research on "safer" cigarettes, and manipulated nicotine levels to maintain addiction. The defendants are also alleged to have maintained a continuing conspiracy to defraud the public, targeted minors in their marketing.
The plaintiffs sought reimbursement for all Medicaid expenses caused by the foreseeable and intended use of cigarettes. They also sought equitable relief including an injunction preventing defendants from acting in concert or engaging in consumer fraud, funds for a corrective public education campaign, dissolution of the Council for Tobacco Research and the Tobacco Institute, and disgorgement of all profits from the sale of cigarettes in Florida.
The case was heard in the Circuit court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida (Nos. 96-3434, 96-4193) before the Honorable Harold J. Cohen. The foreign parent corporation defendants moved to dismiss the complaint's non-economic injunctive relief for lack of jurisdiction. The judge granted the motion. The state appealed. After the interlocutory hearing, but before the Appeals Court had ruled, the parties reached a settlement agreement for $11.3 billion on August 25, 1997. This was prior to the Master Settlement Agreement.
The settlement excluded the parent companies from all monetary relief, but included them with regard to injunctive relief. In addition to the monetary provisions, the agreement states that within the state of Florida:
(1) Defendants will discontinue billboard and transit advertisements;
(2) Support legislation (a) prohibiting the sale of cigarettes in vending machines, (b) strengthening penalties for selling cigarettes to minors, (c) strengthening penalties for owning cigarettes as a minor.
(3) Disclose all documents determined to be without privilege.
The District Court of Appeal of Florida, Fourth District (707 So.2d 851) affirmed the judgment on March 4, 1998. The Honorable Judges Warner, Polen, and Amy Steele Donnor heard the case. The court found that the parent corporations did not have enough control over their subsidiaries to justify personal jurisdiction in Florida.