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Appeal costs smoker $16 million award but at least she can recover legal fees

By Daniel Fisher - Jun 20, 2023

TALLAHASSEE, Fla. (Legal Newsline) - A woman who sued RJ Reynolds over the smoking-related death of her sister can recover legal fees for an appeal that ultimately cost her a $16 million punitive-damages award because her compensatory damages were still higher than a settlement offer RJR had rejected. 

A jury awarded Brinda Coates only $150,000 in compensatory damages over the death of her sister, Lois Stucky, but $16 million in punitive damages. An appeals court reversed the punitive damages as excessive and the Florida Supreme Court affirmed in January, sending the case back to determine more reasonable punitives.

The $150,000 damages award was still more than Coates’ pretrial offer to settle for $25,000, however, meaning her lawyers could seek their fees under Florida’s offer-of-judgment statute. That law says either party can recover fees if they win at court or the judgment is 25% less than the other side’s settlement offer. 

RJR argued she wasn’t entitled to fees since the appeals court reversed her $16 million punitive damages award. Granting her lawyers fees for an unsuccessful appeal will only encourage more appeals, the company said.

Applying what it described as a “supremacy-of-the-text” approach, the Florida Supreme Court said the state’s said the statute contains two sections that undermine RJR’s arguments. First, the law refers to fee awards and costs as “penalties,” and Florida courts have consistently treated them that way. Second, the law allows defendants to recover fees even if the plaintiff wins a substantial judgment, as long as it is at least 25% less than the defendant’s final offer.

“It is not reasonable to hold that the Legislature created a prevailing-party requirement when the statute’s text allows for awards to litigants who do not prevail,” the court concluded.

Other Florida statutes contain language limiting fees to the prevailing party, the court went on. The offer-of-judgment law is different, serving to penalize parties who reject a good-faith, reasonable offer and proceed to trial. 

“We do not share RJR’s concern that our interpretation of the offer-of-judgment statute will result in a flood of frivolous appeals,” the court said. A judge must still determine reasonable fees and will take into account whether an appeal was frivolous, the court said.

The Florida Justice Reform Institute (FJRI) and American Tort Reform Association (ATRA) viewed the decision eliminating the $16 million punitive damages award as a victory for the rule of law.