An “Engle progeny” case is a case in which an injured smoker sues a tobacco company for fraudulent concealment, conspiracy, and other tortious conduct. What proof is required to prevail on the reliance element of the fraudulent concealment and conspiracy claims?  An Engle progeny plaintiff must prove reliance on a statement that was made by an Engle defendant (for a concealment claim) or co-conspirator (for a conspiracy claim) and that concealed or omitted material information about the health effects or addictiveness of smoking cigarettes. See Prentice v. RJ Reynolds Tobacco Co., 338 So. 3d 831 (Fla. 2022). The facts at issue in Prentice were these:

John Price got chronic obstructive pulmonary disease after smoking multiple packs of R.J. Reynolds cigarettes a day for most of his adult life. Price sued RJR and asserted claims for strict liability, negligence, fraudulent concealment, and conspiracy to fraudulently conceal. After Price’s death from COPD, Linda Prentice maintained the lawsuit as a wrongful death action.

Price and Prentice’s lawsuit traces to 1994, when injured smokers filed a class action seeking damages from RJR, the other major domestic tobacco companies, and affiliated organizations for smoking-related illnesses. Our Court prospectively decertified the class in Engle v. Liggett Group, Inc. (Engle III), 945 So. 2d 1246 (Fla. 2006). At the time of our decision in Engle III, the Engle trial court had completed Phases I and II of the case’s three planned phases. The reader can disregard Phase II, which has no relevance to our decision today.

The Florida Supreme Court held in Engle III that, notwithstanding the court’s decision to decertify the class, individual class members like Price could choose to bring individual actions in which certain factual findings from Phase I of Engle would be given “res judicata effect.” Engle III, 945 So. 2d at 1277. Those findings have come to be known as the “approved Phase I findings.” The individual class member lawsuits, of which there have been thousands, are usually referred to as “Engle progeny” cases.

The point of an Engle progeny case is to litigate the plaintiff-specific reliance, causation, and damages issues that were left unaddressed by the Phase I jury. That jury “did not determine whether the defendants were liable to anyone.” Id. at 1263. Instead, the Phase I findings related “exclusively to the defendants’ conduct and the general health effects of smoking.” Id. at 1256; see also id. at 1276-77 (listing the approved Phase I findings).

An Engle progeny plaintiff must first prove membership in the Engle class—a class consisting of Florida residents who developed a qualifying smoking-related illness by November 21, 1996, and whose illness was caused by an addiction to cigarettes containing nicotine. Upon successfully proving class membership, the plaintiff is entitled to use the approved Phase I findings to establish the conduct elements of her Engle claims. See Engle III; Philip Morris USA, Inc. v. Douglas, 110 So. 3d 419 (Fla. 2013)(clarifying how the approved Phase I findings were to be used in Engle progeny cases).

In the Prentice case, the jury first found that Price was a member of the Engle class. The jury then found in Prentice’s favor on her claims for strict liability, negligence, and concealment conspiracy, but not for fraudulent concealment. The jury awarded Prentice $6.4 million in compensatory damages and apportioned 60% of the fault for Price’s death to Price and 40% to RJR. But because the jury found in Prentice’s favor on concealment conspiracy (an intentional tort), the judgment was not reduced to reflect Price’s comparative fault. See Schoeff v. R.J. Reynolds Tobacco Co., 232 So. 3d 294, 305 (Fla. 2017). RJR appealed.

The First District’s decision in the appeal focused on RJR’s challenge to the jury instruction on Prentice’s concealment conspiracy claim. By way of background, the approved Phase I findings pertinent to that claim were (1) “that the [Engle] defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both;” and (2) “that the defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment.” Engle III, 945 So. 2d at 1257 n.4.

In addition to the approved Phase I findings, Prentice presented evidence that:

The major tobacco companies in the United States, including RJR, made fraudulent statements about the hazards of smoking as early as December 4, 1953. Over a fifty-year period, the tobacco companies concealed information about the addictive nature of nicotine and the harmful effects of smoking while engaging in marketing efforts to encourage people to smoke.

R.J. Reynolds Tobacco Co. v. Prentice, 290 So. 3d 963, 965 (Fla. 1st DCA 2019).

Although the approved Phase I findings sufficed to establish the conduct elements of her concealment claims, it remained for Prentice to prove the other elements of the claims, including the reliance element. As to the reliance element of her conspiracy claim, RJR had sought an instruction telling the jury that it must determine “whether Mr. Price reasonably relied to his detriment on a statement that concealed or omitted material information regarding the health effects of smoking cigarettes or their addictive nature, and that was made in furtherance of” the Engle defendants’ conspiracy. Id.

The trial court refused. It instead instructed the jury to determine “whether the conspiracy to withhold health information or information regarding addiction and any acts proven in furtherance of that conspiracy were relied upon by John Price to his detriment.” Id. at 966. RJR argued that the trial court’s refusal to give RJR’s requested special instruction on reliance was both erroneous and prejudicial.

The First District agreed with RJR, principally on the authority of the decision in R.J. Reynolds Tobacco Co. v. Whitmire, 260 So. 3d 536 (Fla. 1st DCA 2018). The holding in Whitmire was that, to prevail on fraudulent concealment, Engle progeny plaintiffs “must prove detrimental reliance on fraudulent statements.” Id. at 537. The Whitmire court started from the premise that the Engle defendants owed smokers no free-standing disclosure obligation and that the defendants’ disclosure obligation would therefore have to be triggered by the defendants’ statements. The court further reasoned that, absent a plaintiff’s reliance on those statements, there could be no liability for fraud. Applying the Whitmire court’s holding, the First District here concluded that the disputed jury instruction in Prentice’s case was prejudicial error because neither it nor any other instruction informed the jury of the need to find that Price had relied on a statement. To remedy the error, the district court vacated the entire judgment.

The First District’s decision on the reliance issue conflicts with decisions of other district courts. Specifically, although all Florida courts agree that fraudulent concealment and concealment conspiracy claims include a reliance element, the Second, Third, and Fourth Districts have held that an Engle progeny plaintiff need not prove reliance on a statement. See Philip Morris USA, Inc. v. Duignan, 243 So. 3d 426 (Fla. 2d DCA 2017); Philip Morris USA, Inc. v. Chadwell, 306 So. 3d 174 (Fla. 3d DCA 2020); R.J. Reynolds Tobacco Co. v. Burgess, 294 So. 3d 910 (Fla. 4th DCA 2020).

The Florida Supreme Court framed the issue and held as follows:

RJR says that an Engle progeny plaintiff must prove reliance on a statement. Prentice says that the plaintiff’s burden is to prove reliance on silence. In our view, RJR is right. We hold that, to prevail on fraudulent concealment and concealment conspiracy claims, an Engle progeny plaintiff must prove reliance on a statement that was made by an Engle defendant (for a concealment claim) or co-conspirator (for a conspiracy claim) and that concealed or omitted material information about the health effects or addictiveness of smoking cigarettes. Before we explain why, we begin with three clarifying points.

First, although the jury here found RJR liable for concealment conspiracy and not for fraudulent concealment, we will discuss the two claims interchangeably. It is common ground that each claim includes a reliance element and that our answer to the question presented in this case should apply equally to each claim. See Loeb v. Geronemus, 66 So. 2d 241, 243 (Fla. 1953) (“The gist of a civil action for conspiracy is not the conspiracy itself but the civil wrong which is alleged to have been done pursuant to the conspiracy.”).

Second, we emphasize that an Engle progeny plaintiff need not prove reliance on a statement that was affirmatively false on its face. It is enough for the plaintiff to prove reliance on statements that, while not necessarily false on their face, are misleading because they conceal or omit other material information. The key distinction is between making statements that are misleading by omission, on the one hand, and pure silence or a passive failure to disclose, on the other. Only the former can support fraud liability in an Engle progeny case.

Third, in its briefing here RJR says that reliance on “a statement” does not mean reliance on a specific statement—for example, a specific advertisement. RJR maintains that reliance on “a statement” can include “a category of statements addressing a particular topic (e.g., advertisements for filtered cigarettes).” We agree that reliance on “a statement” does not require proof of reliance on “a specific statement,” and our holding must be taken to include this understanding. As we will explain, what matters for purposes of reliance is that the plaintiff be able to prove a causal connection running from an Engle defendant’s statement or statements, to the plaintiff’s beliefs about the health effects or addictiveness of smoking cigarettes, to the plaintiff’s injury. The statements relied upon must have been capable of causing the plaintiff to form a false belief about the health effects or addictiveness of smoking cigarettes.^[2]

The court said in Hess v. Philip Morris USA, Inc., 175 So. 3d 687, 698 (Fla. 2015), that “Engle-progeny plaintiffs must certainly prove detrimental reliance in order to prevail on their fraudulent concealment claims.”

What is reliance?

The court defined reliance:

Reliance means that a plaintiff has entered a transaction in whole or in part because of the defendant’s fraudulent conduct. See 3 Dan B. Dobbs et al., The Law of Torts § 671, at 665 (2d ed. 2011). More specifically, reliance requires the plaintiff to have “received, believed, and acted upon” a misrepresentation by the defendant. John C.P. Goldberg et al., The Place of Reliance in Fraud, 48 Ariz. L. Rev. 1001, 1007 (2006). “[W]here the recipient knows the true facts that are misrepresented or for any reason does not believe the misrepresentation, he cannot be found to rely on it.” 2 Fowler V. Harper et al., The Law of Torts § 7.13, at 465 (2d ed. 1986) (footnotes omitted). Similarly, there can be no reliance if the plaintiff is unaware of the defendant’s misrepresentation until after the transaction is complete, or if the plaintiff would have acted the same way regardless of whether the defendant had made the misrepresentation. See Restatement (Third) of Torts: Liability for Economic Harm § 11 (Am. L. Inst. 2020).

Actionable misrepresentations are not limited to statements that are affirmatively false on their face. Fraud liability can also be premised on statements that are misleading because they omit other material information. Indeed, the common law has long recognized that the representation underlying a fraud claim can be communicated through myriad forms of conduct. See generally W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 106 (5th ed. 1984) (“The representation which will serve as a basis for an action of deceit … usually consists, of course, of oral or written words; but it is not necessarily so limited.”).

What matters is that the defendant intend to induce the plaintiff’s reliance by creating a false impression in the plaintiff’s mind. That is why our cases have made clear that, in any fraud case, the object of a plaintiff’s reliance is a representation by the defendant. See, e.g., Am. Int’l Land Corp. v. Hanna, 323 So. 2d 567, 569 (Fla. 1975) (“In an action for fraud and deceit plaintiff must allege (1) that defendant made a representation on which plaintiff was meant to act, (2) that the representation was false and defendant knew that fact, and (3) that plaintiff relied on the representation to his injury.”). Fraud is effected through representations.

In the common law of fraud:

… reliance is what establishes the necessary connection between a fraudulent representation and the plaintiff’s injury. Put differently, regardless of the form of the defendant’s fraudulent conduct, reliance is an indispensable aspect of proving causation in a fraud claim. “The element of reliance overlaps with (and may be considered a form of) the usual requirement in tort that a defendant’s wrong be a factual or `but for’ cause of the harm that the plaintiff suffered.” Restatement (Third) of Torts: Liability for Economic Harm § 11 cmt. a (Am. L. Inst. 2020); see Leon Green, Deceit, 16 Va. L. Rev. 749, 762 (1930) (“Whether the plaintiff was induced to act upon the defendant’s representation is the question of causal relation in its simplest form. It is usually stated in terms of the plaintiff’s reliance.”).