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Case 3:09-cv-10116-RBD-JBT Document 199 Filed 06/04/13 Page 1 of 7 PageID 11991



UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

JACKSONVILLE DIVISION



Plaintiff,

OLIVER PICKETT, JR., as Personal
Representative of the ESTATE OF
OLIVER PICKETT, SR.,



vs.

R.J. REYNOLDS TOBACCO
COMPANY,




Defendant.

Case No. 3:09-cv-10116-J-37JBT



ORDER

This cause is before the Court on the following:

1.

R.J. Reynolds Tobacco Company’s Motion for Attorneys’ Fees (Doc. 179),

filed April 11, 2012;

2.

Plaintiff’s Opposition to Defendant’s Motion for Attorneys’ Fees (Doc. 181),

filed April 25, 2012;

3.

Defendant’s Reply in Support of Its Motion for Attorney’s Fees (Doc. 187),

filed May 9, 2012;

4.

5.

Report and Recommendation (Doc. 194), filed February 13, 2013;

Defendant’s Objections

to

the Magistrate Judge’s Report and

Recommendation Denying Defendant’s Motion

for Attorneys’ Fees

(Doc. 195), filed February 27, 2013; and

6.

Plaintiff’s Response to Defendant’s Objections to the Magistrate Judge’s

Report and Recommendations Denying Defendant’s Motion for Attorneys’

Fees (Doc. 196), filed March 18, 2013.

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Upon consideration, the Court hereby finds that Defendant’s motion for attorney’s fees



is due to be denied, for the reasons set forth below.

BACKGROUND

In this Engle-progeny wrongful death tobacco case, Defendant initially served

Plaintiff with a settlement proposal for $10,000, which Plaintiff rejected. (Doc. 179, p. 2;

Doc. 181, p. 1.) The case went to trial, and the jury ultimately found that the decedent

was addicted to cigarettes, that his addiction was a legal cause of his death, and that

Defendant’s placement of cigarettes on the market was also a legal cause of his death.

(Doc. 152, pp. 1–2.) The jury found that the decedent and Defendant were each 50%

liable. (Doc. 152, p. 3.) However, the jury awarded zero damages to the decedent’s

survivors for pain and suffering and loss of companionship.1 (Id. at 4.) The jury also

found that punitive damages were not warranted. (Id.)

The Court entered judgment in favor of Defendant. (Doc. 177.) Plaintiff moved to

amend the judgment, arguing that Plaintiff was actually the prevailing party on his

claims even though the jury awarded zero damages. (Doc. 182.) The Court denied that

motion, finding that Defendant was the prevailing party in both the legal and the

practical sense. (Doc. 189, p. 2.)

Defendant then moved for attorney’s fees, seeking a total of $41,860 for the

59.8 hours that counsel spent in court at the trial. (Id. at 3.) Plaintiff opposed, arguing

that Defendant’s settlement offer was so low as not to be made in good faith, meaning

that Defendant was not entitled to fees pursuant to Florida Statutes § 768.79. (Doc. 181,



1 Plaintiff had also brought claims for economic damages in the form of medical
and funeral bills in excess of $30,000; however, Plaintiff dropped those claims on the
day before the trial began and proceeded only with the claims for non-economic
damages in the form of pain and suffering and loss of companionship. (Doc. 181, p. 3.)



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p. 1.) Defendant replied that the settlement proposal was proven reasonable by the



jury’s zero-damages award. (Doc. 187, p. 1.) Defendant also submitted that it believed

that it had no liability based on the facts of this case and that its exposure was minimal

given the many verdicts finding no liability or zero damages in similar cases. (Id. at 4–5.)

Magistrate Judge Joel B. Toomey subsequently entered a Report and

Recommendation (R&R) recommending that this Court deny Defendant’s motion for

attorney’s fees. (Doc. 194, p. 1.) Defendant objected. (Doc. 195.) Plaintiff responded.

(Doc. 196.) A hearing was held in this matter before the undersigned on April 18, 2013.

(Doc. 198.) This matter is now ripe for the Court’s adjudication.

I.

R&R

STANDARDS

When a party objects to a magistrate judge’s findings, the district court must

“make a de novo determination of those portions of the report . . . to which objection is

made.” 28 U.S.C. § 636(b)(1). The district court “may accept, reject, or modify, in whole

or in part, the findings or recommendations made by the magistrate judge.” Id. The

district court must consider the record and factual issues based on the record

independent of the magistrate judge’s report. Ernest S. ex rel. Jeffrey S. v. State Bd. of

Educ., 896 F.2d 507, 513 (11th Cir. 1990).

II.

Bad Faith

“If an offer satisfies the requirements of [Fla. Stat.] § 768.79(1)–(6), . . . [t]he sole

basis on which a court can disallow an entitlement to an award of fees is if it determines

that [the] offer was not made in good faith.” McMahan v. Toto, 311 F.3d 1077, 1083

(11th Cir. 2002) (alterations in original) (citation and internal quotation marks omitted).

“The burden is upon the offeree to prove that the offeror acted without good faith.”



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Levine v. Harris, 791 So. 2d 1175, 1178 (Fla. 4th DCA 2001).



“[T]he question of whether a proposal was served in good faith turns entirely on

whether the offeror had a reasonable foundation upon which to make his offer and

made it with the intent to settle the claim against the offeree should the offer be

accepted.” Wagner v. Brandeberry, 761 So. 2d 443, 446 (Fla. 2d DCA 2000). However,

“[i]n making this determination, the trial court is not restricted to the testimony of the

offeror attesting to good faith; rather, the court may properly consider objective evidence

of facts and circumstances that suggest whether the offeror made the offer with

subjective good faith.” Arrowood Indem. Co. v. Acosta, Inc., 58 So. 3d 286, 289 (Fla. 1st

DCA 2011).

Thus, the court should take into account the following factors in determining the

offeror’s subjective good faith: the amount of the offer, the offeror’s potential exposure,

the complexity and closeness of the case, and the offeror’s justification for the offer. Id.

at 290. The court should not take into account the reasonableness of the offeree’s

rejection of the offer. TGI Friday’s, Inc. v. Dvorak, 663 So. 2d 606, 613 (Fla. 1995)

(noting that the fact that an offeree had a good reason to reject a low offer is not

properly considered in the determination of entitlement to fees, but should be

considered in determining the amount of fees).

As to the amount of the offer, courts should “view with considerable skepticism

nominal offers which bear no reasonable relationship to damages and which are not

founded upon a reasonable and realistic assessment of liability.” Eagleman v.

Eagleman, 673 So. 2d 946, 948 (Fla. 4th DCA 1996). However, “nominal offers of

judgment are not alone determinative of bad faith.” Fox v. McCaw Cellular Commc’ns of

Fla., Inc., 745 So. 2d 330, 333 (Fla. 4th DCA 1998) (clarifying Eagleman). “Therefore,



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even viewing such offers with ‘considerable skepticism,’ proof of bad faith requires a



showing beyond the mere amount of the offer. . . . [It] involves an inquiry into the

circumstances shown by the entire record of the case.” Id. (quoting Eagleman, 673 So.

2d at 948).

DISCUSSION

Magistrate Judge Toomey’s R&R recommended that this Court deny Defendant’s

motion because he found that Plaintiff met his burden of demonstrating that Defendant’s

settlement proposal was not made in good faith, and he also reasoned that Defendant’s

justifications for its proposal were not supported by the circumstances at the time it was

made. (Doc. 194.) Defendant objected to the R&R, arguing that: (1) it failed to give due

weight to the take-nothing verdict; (2) it failed to properly evaluate the strength of

Plaintiff’s claim; (3) it relied on factually dissimilar Engle-progeny cases; and (4) it

improperly shifted the burden of proof to Defendant. (Doc. 195.) The Court agrees with

Magistrate Judge Toomey that Defendant’s motion for attorney’s fees is due to be

denied.

It is undisputed that it is Plaintiff’s burden to show lack of subjective good faith;

however, in addition to the offeror’s subjective justification for the offer, the Court also

considers objective indicators, such as the amount of the offer, the potential exposure,

and the complexity of the case. See Arrowood, 58 So. 3d at 290. That courts should

look to objective indicia of the offeror’s subjective good faith is in keeping with the fact

that the burden rests on the offeree to demonstrate bad faith—for if courts could only

look to the offeror’s self-serving, post hoc rationalizations of subjective good faith

without resort to objective indicators, it would be virtually impossible for an offeree to

meet his burden.



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Magistrate Judge Toomey is uniquely poised to weigh these factors: he has a

deep knowledge of the strengths and weaknesses of this particular case, in addition to

his intimate familiarity with overarching tobacco litigation as a whole, having had

exclusive responsibility for implementing case management orders and resolving

discovery disputes in all of the thousands of tobacco cases filed in this Court. From this

well-informed vantage point, Magistrate Judge Toomey considered Defendant’s

subjective justification and the objective indicators and determined that Plaintiff

sustained his burden of proving Defendant’s bad faith.

As to the take-nothing verdict, if the Court accepted Defendant’s proposition that

a verdict in one’s favor proves a low settlement offer reasonable, the Court would be

forced to read the good-faith requirement completely out of the statute. Hindsight is

20/20, and while the verdict is one factor to consider, it is not dispositive. In light of all

the other factors—the low amount of the offer, the timing of the offer, the predetermined

conduct issues tipping the scales, the high potential for punitive damages, the verdicts

decided around the same time that the offer was made, and the protracted, rancorous

history of this litigation—the Court finds that these objective indicators undercut

Defendant’s self-interested protestation of good

faith. Plaintiff has

therefore

demonstrated that Defendant’s $10,000 offer, made on the eve of trial after a great deal

of expensive and drawn-out motion practice, was not made with the subjective good

faith intent to settle this claim.

Having considered the record as a whole and having reviewed de novo the

portions of the R&R to which Defendant specifically objected, the Court agrees with

Magistrate Judge Toomey’s recommendation and finds that Defendant’s motion for

attorney’s fees is due to be denied.



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CONCLUSION

Accordingly, it is hereby ORDERED AND ADJUDGED:

1.

Defendant’s Objections

to

the Magistrate Judge’s Report and

Recommendation Denying Defendant’s Motion

for Attorneys’ Fees

(Doc. 195) are OVERRULED.

2.

Magistrate Judge Toomey’s Report and Recommendation (Doc. 194) is

ADOPTED and CONFIRMED and made a part of this Order.

3.

R.J. Reynolds Tobacco Company’s Motion for Attorneys’ Fees (Doc. 179)

is DENIED.

DONE AND ORDERED in Chambers in Jacksonville, Florida, on June 3, 2013.












Copies:

Counsel of Record

Honorable Joel B. Toomey



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