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

PER CURIAM.

This case arises from the Third District Court of Appeal’s reversal of a final judgment entered in a smokers’ class action lawsuit that sought damages against cigarette companies and industry organizations for alleged smoking-related injuries. See Liggett Group, Inc. v. Engle, 853 So.2d 434 (Fla. 3d DCA 2003) (hereinafter “Engle II”). The final judgment awarded $12.7 million in compensatory damages to three individual plaintiffs and $145 billion in punitive damages to the entire class. See id. at 441. We have jurisdiction because Engle II misapplies our decision in Young v. Miami Beach Improvement Co., 46 So.2d 26 (Fla.1950). See art. V, § 3(b)(3), Fla. Const.

For the reasons explained more fully in this opinion, although we approve the Third District’s reversal of the $145 billion class action punitive damages award, we quash the remainder of the Third District’s decision. A majority of the Court (Anstead, Pariente, Lewis and Quince) holds that the compensatory damages award in favor of Mary Farnan in the amount of $2,850,000 and Angie Della Vecchia in the amount of $4,023,000 should be reinstated. However, the court unanimously agrees that the compensatory damages award in favor of Frank Amodeo must be vacated based on the statute of limitations.

Further, a majority of the Court (An-stead, Pariente, Lewis and Quince) concludes that Engle II misapplied our decision on the law of the case doctrine in Florida Department of Transportation v. Juliano, 801 So.2d 101, 106 (Fla.2001); that the certification of the class action and the Phase I trial process were not abuses of the trial court’s discretion; and that certain common liability findings can stand. However, we also conclude that the remaining issues, including individual causation and apportionment of fault among the defendants, are highly individualized and do not lend themselves to class action treatment. Thus, we remand with directions that the class should be decerti-fied without prejudice to the class members filing individual claims within one year of the issuance of our mandate in this case with res judicata effect given to certain Phase I findings.

More specifically, we hold as follows:

PUNITIVE DAMAGES: We unanimously hold that the Third District erred in concluding that under Young the class action punitive damages claims were barred by the settlement agreement between the State of Florida and many of the defendants involved in the present action (Florida Settlement Agreement or FSA). However, we vacate the punitive damages award because we unanimously conclude that the punitive damages award is excessive as a matter of law.

A majority of the Court (Anstead, Pariente, Lewis, and Quince) also concludes that the Third District misapplied Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), by holding that compensatory damages must be determined before a jury can consider entitlement to punitive damages. Although Justices Lewis and Quince would allow the finding of entitlement to punitive damages to stand, a different majority of the Court (Wells, Anstead, Pariente, and Bell) concludes that the trial court erred in allowing the jury to make this finding during Phase I because, consistent with Ault, proof of liability, which includes both reliance and causation, is a predicate to the determination of entitlement to punitive damages.

PHASE I FINDINGS: A majority of the Court (Anstead, Pariente, Lewis, and Quince) concludes that the Third District erred as a matter of law in conducting a plenary review of the trial court’s decision to certify the Engle Class after completion of an extended Phase I trial and after a different panel of the Third District upheld the certification. This same majority concludes that it was proper to allow the jury to make findings in Phase I on Questions 1 (general causation), 2 (addiction of cigarettes), 3 (strict liability), 4(a) (fraud by concealment), 5(a) (civil-conspiracy-concealment), 6 (breach of implied warranty), 7 (breach of express warranty), and 8 (negligence). Therefore, these findings in favor of the Engle Class can stand. The Court unanimously agrees that the nonspecific findings in favor of the plaintiffs on Questions 4 (fraud and misrepresentation) and 9 (intentional infliction of emotional distress) are inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause. Therefore, these findings cannot stand. Because the finding in favor of the plaintiffs on Question 5 (civil conspiracy-misrepresentation) relies on the underlying tort of misrepresentation, this finding also cannot stand.

ARGUMENTS OF ENGLE CLASS’S COUNSEL: A majority of the Court (An-stead, Pariente, Lewis, and Quince) disagrees with the Third District’s conclusion that the plaintiffs’ counsel’s improper arguments require reversal, but we condemn in no uncertain terms some of these arguments. We do not address the Phase II arguments because we are reversing the punitive damages award from Phase II-B and the defendants do not raise any error with respect to arguments made during Phase II-A, in which the jury determined the individual compensatory damages of three class representatives.

CLASS CERTIFICATION CUT-OFF DATE: While a majority (Anstead, Par-iente, Lewis, and Quince) agrees that the class cannot be open-ended, we disagree with the Third District’s ruling that the appropriate cut-off date for class membership is October 31, 1994, the date the class was initially certified. We conclude that the date of the trial court’s November 21, 1996, order that recertified a narrower class is the appropriate cut-off date.

JUDGMENT FOR CLASS MEMBERS: Because Mary Farnan, who was diagnosed with lung cancer in April 1996, is clearly a proper member of the class, the Third District erred in reversing the compensatory verdict in favor of Farnan in the amount of $2,850,000, except as against Liggett Group Inc. and Brooke Group Holding Inc., whom the jury found to be zero percent at fault. We thus approve the Third District’s conclusion that a directed verdict should be granted in favor of Liggett and Brooke.

As for Angie Della Vecchia, she was diagnosed with lung cancer in early 1997. However, at that time, it was also noted by her doctors that she had a past medical history of chronic obstructive pulmonary disease (“COPD”) and significant hypertension. Because two of the diseases at issue in this case are coronary heart disease and COPD, Della Vecchia’s medical records indicate that she had been suffering from a tobacco related disease prior to the time of certification and is therefore properly included as a class member. The jury specifically found that her lung disease was caused by smoking. Thus, a majority of the Court concludes that the compensatory judgment in favor of Della Vecchia in the amount of $4,023,000 should stand, except as against Liggett and Brooke, who were found to be zero percent at fault. The Court unanimously agrees with the Third District that the final judgment in favor of class representative Frank Amodeo must be reversed because all of Amodeo’s claims are barred by the statute of limitations.

With the summary of this Court’s holdings set forth above, we now turn to a more in-depth discussion of the background of this case and the salient issues.

FACTS AND PROCEDURAL HISTORY

On October 31, 1994, the trial court certified as a nationwide class action a group of smokers and their survivors under Florida Rule of Civil Procedure 1.220(b)(3). The class representatives on behalf of themselves, and all others similarly situated, filed an amended class action complaint seeking compensatory and punitive damages against major domestic cigarette companies and two industry organizations (hereinafter collectively referred to as “Tobacco”) for injuries allegedly caused by smoking.

The trial court defined the class as: “All United States citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine.” Tobacco filed an interlocutory appeal of the trial court’s order certifying the Engle Class pursuant to Florida Rule of Appellate Procedure 9.130(a)(6). See R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39, 40 (Fla. 3d DCA 1996) (hereinafter “Engle I ”). On January 31, 1996, the Third District affirmed the trial court’s order certifying the class but reduced the class to include only Florida smokers. See id. at 42 (striking “[a]ll United States citizens and residents” provision and substituting in its place “[a]ll Florida citizens and residents”). Tobacco’s petition for review by this Court was denied. See R.J. Reynolds Tobacco Co. v. Engle, 682 So.2d 1100 (Fla.1996).

On February 4, 1998, the trial court issued a trial plan, dividing the trial proceedings into three phases. Phase I consisted of a year-long trial to consider the issues of liability and entitlement to punitive damages for the class as a whole. See Engle II, 853 So.2d at 441. The jury considered common issues relating exclusively to the defendants’ conduct and the general health effects of smoking. See id. On July 7, 1999, at the conclusion of Phase I, the jury rendered a verdict for the Engle Class and against Tobacco on all counts.

Phase II was divided into two sub-parts — Phase II-A and Phase II-B. Phase II-A was intended to resolve the issues of entitlement and amount of compensatory-damages, if any, that the three individual class representatives — Frank Amodeo, Mary Farnan, and Angie Della Vecchia— should receive. Phase II-B was designed to result in a jury determination of a total lump sum punitive damage award, if any, that should be assessed in favor of the class as a whole.

At the conclusion of Phase II-A, the jury determined that the three individual class representatives were entitled to compensatory damages in varying amounts, which were offset by their comparative fault. The total award was $12.7 million. The jury subsequently determined in Phase II-B the lump-sum amount of punitive damages for the entire class to be $145 billion, without allocation of that amount to any class member. Tobacco filed several post-verdict motions, including a motion at the conclusion of phase IIB for a new trial or remittitur, a motion to set aside the verdict, and for entry of judgment, and another motion to decertify the class. See Engle v. R.J. Reynolds Tobacco, No. 94-08273 CA-22 (Fla. 11th Cir.Ct. Nov. 6, 2000) (hereinafter “Engle F.J.”), rev’d, 853 So.2d 434 (Fla. 3d DCA 2003).

On November 6, 2000, the trial court entered a final judgment and amended omnibus order, in which it granted judgment in Tobacco’s favor in two respects. First, the trial court granted Tobacco’s motion for directed verdict on a statute of limitations basis with regard to named plaintiff Frank Amodeo on the counts based on strict liability, implied warranty, express warranty, negligence, and intentional infliction of emotional distress. However, the trial court ruled that Amo-deo’s fraud and conspiracy claims were not time-barred. Second, the court granted Tobacco’s motion for directed verdict with regard to count seven of the complaint, in which the Engle Class sought equitable relief, upon the basis that the count had previously been dismissed by the court. The court entered judgment in favor of the Engle Class on all other counts, ordered immediate payment to the individual plaintiffs, and directed Tobacco to pay the $145 billion in punitive damages into the registry of the Dade County Circuit Court for the benefit of the entire class.

According to the trial plan, in Phase III, new juries are to decide the individual liability and compensatory damages claims for each class member (estimated to number approximately 700,000). See Engle II, 853 So.2d at 442. Thereafter, the plan contemplated that the trial court would divide the punitive damages previously determined equally among any successful class members. Pursuant to the omnibus order, interest on the punitive award began accruing immediately. See id.

Tobacco filed an appeal and the Third District reversed the final judgment with instructions that the class be decertified. See id.

ANALYSIS

1. Res Judicata

A. History of the Florida Settlement Agreement and the Master Settlement Agreement

In 1995, the State of Florida and others (hereinafter “State”) filed a complaint against many of the defendants involved in the present action (hereinafter “FSA Defendants”). This earlier action was initiated by the State under the Medicaid Third-Party Liability Act, section 409.910, Florida Statutes (1995). In its complaint, the State alleged counts of negligence, strict liability in tort, injunctive relief, various statutory and criminal violations, and violations of the Florida RICO Act. The State sought reimbursement of Medicaid monies expended in treating the victims of tobacco-related illnesses as well as other damages permitted by law, including punitive damages where available. Subsequent to the filing of the State’s complaint, the circuit court granted the FSA Defendants’ motion for summary judgment and dismissed all claims by the State for punitive damages with the exception of its claim for punitive damages contained in count four of the complaint alleging only statutory and criminal violations.

In 1997, the State and the FSA Defendants entered into the Florida Settlement Agreement, which resolved “all present and future civil claims against all parties to [the] litigation relating to the subject matter of [the] litigation, which [were] or could have been asserted by any of the parties [thereto].” (Emphasis supplied.) Pursuant to the terms of the FSA, in exchange for agreeing to resolve these claims, the State received $550 million for unspecified purposes, $200 million for a pilot program by the State of Florida aimed at the reduction of the use of tobacco products by minors, several billion dollars paid out over a period of time for the benefit of the State of Florida, and injunc-tive relief. As stated by the FSA, the monies received “constitute^] not only reimbursement for Medicaid expenses incurred by the State of Florida, but also settlement of all of Florida’s other claims, including those for punitive damages, RICO and other statutory theories.” Also included in the FSA was a “Non-Admissibility” provision which provided:

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.

During the time period in which Florida pursued an action against the FSA Defendants, several other states also initiated actions against the FSA Defendants for similar if not identical claims. These states settled their claims against the FSA Defendants in November of 1998 when all parties to that action entered into a Master Settlement Agreement (the “MSA”). The MSA released all claims of the participating states and also included a “Non-Admissibility” provision similar to that in the FSA. Under the MSA, the FSA Defendants are required to pay certain participating states more than $200 billion over the first twenty-five years, with additional amounts to be paid in perpetuity after that.

B. Res Judicata Effect of the FSA

The Third District in this case held that the punitive damages claims of the Engle Class were precluded by the FSA. See Engle II, 853 So.2d at 467. The district court reasoned that Florida, in agreeing to relinquish its claims through the FSA, had effectively resolved a matter of general interest to all of-its citizens and, therefore, the FSA was bindihg upon all citizens even though they were not parties to the original litigation. See id. at 468. The district court therefore concluded that the FSA’s “release, and the res judicata effect of the resulting final judgment, preclude[d] the [Engle Class’s] punitive-damage claims here.” Id.

We agree with the Third District that whether the application of res judicata was proper is a question of law. See id. at 468. We therefore apply a de novo standard of review. See D’Angelo v. Fitzmaurice, 863 So.2d 311, 314 (Fla.2003) (stating that standard of review for pure questions of law is de novo).

The doctrine of res judicata serves an important purpose in the judicial system of this state. The foundation of res judicata is that a final judgment in a court of competent jurisdiction is absolute and settles all issues actually litigated in a proceeding as well as those issues that could have been litigated. We have explained the doctrine of res judicata as follows:

A judgment on the merits rendered in a former suit between the same parties or their privies, upon the same cause of action, by a court of competent jurisdiction, is conclusive not only as to every matter which was offered and received to sustain or defeat the claim, but as to every other matter which might with propriety have been litigated and determined in that action.

Fla. Dep’t of Transp. v. Juliano, 801 So.2d 101, 105 (Fla.2001) (alteration in original) (quoting Kimbrell v. Paige, 448 So.2d 1009, 1012 (Fla.1984)).

In Young, this Court held that citizens of the City of Miami Beach were bound by a judgment against the city that enjoined the city from asserting any interest in a particular parcel of oeeanfront property. See 46 So.2d at 30. An association of citizens of the City of Miami Beach filed an action to determine the public’s interest in this parcel, which was owned by the defendant, a private corporation. See id. at 26. In holding that the claim was barred by the prior decree enjoining the City, we noted that a “judgment against a municipal corporation in a matter of general interest to all its citizens is binding on the latter, although they are not parties to the suit.” Id. at 30 (emphasis supplied) (quoting 38 Am.Jur. § 728).

Similarly, in Castro v. Sun Bank of Bal Harbour, 370 So.2d 392, 393 (Fla. 3d DCA 1979), the Third District held that private parties were precluded from relitigating public nuisance and zoning violation claims that had already been settled by the State. The district court reasoned that the plaintiffs were bound by the final judgment of the prior action “irrespective of whether they were formal parties to the ... action” because they were “citizens of the State of Florida and the City of Miami at the time of the [prior] litigation.” Id.

The district court, as well as Tobacco, relied on Young and Castro to support the position that the FSA is binding on all citizens of the State of Florida. However, in both of these cases the governmental entity was asserting interests of concern common to all of its citizens: the public’s interest in oceanfront property and public nuisance and zoning violations. Application of res judicata in these contexts is supported by precedent that has established that for a State to bind its citizens as a result of litigation advanced by the State, the government must be suing in its parens patriae capacity, litigating the rights or interests common to the public at large and thereby representing the citizenry of the State. See Satsky v. Paramount Commc’ns, Inc., 7 F.3d 1464, 1470 (10th Cir.1993). The Eleventh Circuit Court of Appeals appropriately described this form of action when it stated:

“In order to maintain [a parens patriae ] action, the State must articulate an interest apart from the interests of particular private parties, i.e., the State must be more than a nominal party. The State must express a quasi-sovereign interest.” Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel. Barez, 458 U.S. 592, 607, 102 S.Ct. 3260, 3268, 73 L.Ed.2d 995 (1982). “Parens patriae standing has been explained on the ground that the plaintiff state is not merely advancing the rights of individual injured citizens, but has an additional sovereign or quasi-sovereign interest.” 17 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4047 at 223 (1988). Although the Supreme Court has not expressly defined what is a “quasi-sovereign” interest, it is clear that a state may sue to protect its citizens against “the pollution of the air over its territory; or of interstate waters in which the state has rights.” 12 Moore’s Federal Practice ¶350.02[3] at 3-20 (1993). It is equally clear, however, that a state may not sue to assert the rights of private individuals. See Alfred L. Snapp, 458 U.S. at 600, 102 S.Ct. at 3265; Pennsylvania v. New Jersey, 426 U.S. 660, 665, 96 S.Ct. 2333, 2335, 49 L.Ed.2d 124 (1976); New York by Abrams v. Seneci, 817 F.2d 1015, 1017 (2nd Cir.1987); Illinois v. Life of Mid-America Ins. Co., 805 F.2d 763, 766 (7th Cir.1986), 13A Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure: Jurisdiction 2d § 3531.11 at 19 (1984).

Id. at 1469 (alteration in original).

In Satsky, the court analyzed an action in which a group of property owners alleged a variety of private property claims arising from the defendant’s operation of a mine. See id. at 1466. The defendant claimed that a consent decree between itself and the State of Colorado precluded the plaintiffs’ claims. See id. at 1467. In reversing a final summary judgment entered by the lower court for the defendant, the court held that “[t]o the extent [the] claims involve injuries to purely private interests, which the State cannot raise, then the claims are not barred.” Id. at 1470. We agree with the reasoning of Satsky and with the principle that “litigation by a government agency will not preclude a private party from vindicating a wrong that arises from related facts but generates a distinct individual cause of action.” Southwest Airlines Co. v. Texas Intern. Airlines, Inc., 546 F.2d 84, 98 (5th Cir.1977).

In the litigation that resulted in the FSA, the State, in support of its claim for punitive damages, alleged knowing and intentional dissemination of false, fraudulent and misleading statements to the general public by the FSA Defendants in violation of section 817.41, Florida Statutes (1995). In the present case, the Engle Class relied on legal theories that were based on injuries personal to the class members to support the claim for punitive damages. Since the State had no right to pursue these types of private interests on behalf of its citizens, the punitive damages claims settled by the State in the FSA, if any, were distinct from the punitive damages sought by the Engle Class in the present case.

The reasoning in In re Exxon Valdez, 270 F.3d 1215 (9th Cir.2001), is instructive. In that case, the defendants appealed a punitive damages award for claims arising out of the Exxon Valdez oil spill. See id. at 1221. The plaintiffs consisted of separate classes of commercial fishermen, Alaskan natives, and landowners affected by the spill. See id. at 1225. These distinct classes sought compensatory and punitive damages for injuries resulting from the Exxon Valdez spill. See id. The jury returned a verdict in favor of the plaintiffs which assessed $287 million in compensatory damages and $5 billion in .punitive damages. See id. Exxon appealed the resulting judgment, asserting that the punitive damages award was barred by the res judicata effect of a consent decree between Exxon and the United States and the State of Alaska that settled claims in a previous action filed under the Clean Water Act. See id. at 1227. In holding that the award was not barred by the previous settlement, the court concluded that the interests asserted by the plaintiffs were distinct from those asserted by the United States and Alaska in the prior action. See id. at 1228. The court, relying on Satsky, noted that the prior consent decree addressed harms caused to the environment and the general public whereas the claims in the class action were to vindicate wrongs that resulted in individual injuries. See In re Exxon Valdez, 270 F.3d at 1227-28. Moreover, the court stressed that although the consent decree “released all government claims, [it] provides explicitly that ‘nothing in this agreement, however, is intended to affect legally the claims, if any, of any person or entity not a Party to this Agreement.’ ” Id. at 1227. The FSA expressly provided that neither the agreement itself “nbr any evidence of negotiations [thereunder, 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.” The facts of In re Exxon are similar to the circumstances presented in this case and support our conclusion that the Third District erred in holding that the FSA barred the Engle Class’s punitive damages claim.

2. Punitive Damages Award

Although we conclude that the Third District erred in applying the doctrine of res judicata to bar the Engle Class’s punitive damages claim, we must vacate the classwide punitive damages award because we unanimously agree with the Third District that the trial court erred in allowing the jury to determine a lump sum amount before it determined the amount of total compensatory damages for the class. As a matter of law, the punitive damages award violates due process because there is no way to evaluate the reasonableness of the punitive damages award without the amount of compensatory damages having been fixed. The amount awarded is also clearly excessive because it would bankrupt some of the defendants. A majority of the Court further concludes that the trial court erred in allowing the jury to consider entitlement to punitive damages during the Phase I trial. We address these issues separately.

A. Phase I Finding on Entitlement to Punitive Damages

The last question on the Phase I verdict form asked the jury to determine whether “[u]nder the circumstances of this case, ... the conduct of any Defendant rose to a level that would permit a potential award or entitlement to punitive damages.” The jury answered “yes” with respect to each of the defendants. In Phase II-B, the jury awarded a total of $145 billion in punitive damages to the class.

The Third District ruled that the trial erred in awarding classwide punitive damages “without the necessary findings of liability and compensatory damages.” Engle II, 853 So.2d at 450. A majority of the Court (Anstead, Pariente, Lewis, and Quince) concludes that an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages. Compensatory and punitive damages serve distinct purposes. As the United States Supreme Court has explained:

The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant’s wrongful conduct. The latter, which have been described as “quasi-criminal,” operate as “private fines” intended to punish the defendant and to deter future wrongdoing. A jury’s assessment of the extent of a plaintiffs injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation.

Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (citations omitted).

Because a finding of entitlement to punitive damages is not dependent on a finding that a plaintiff suffered a specific injury, an award of compensatory damages need not precede a determination of entitlement to punitive damages. Therefore, we conclude that the order of these determinations is not critical. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 474 (5th Cir.1986).

A different majority of the Court (Wells, Anstead, Pariente, and Bell) concludes that under our decision in Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), a finding of liability is required before entitlement to punitive damages can be determined, and that liability is more than a breach of duty. A finding of liability necessarily precedes a determination of damages, but does not compel a compensatory award. For example, in Ault, the jury found that the defendant had committed an assault and battery but awarded $0 in compensatory damages and $5000 in punitive damages. See id. at 455. Thus, unlike the Phase I jury in this case, the jury in Ault found that the plaintiff had proved the underlying cause of action but did not suffer any compensable damage.

Although we appeared to use “breach of duty” and “liability” interchangeably in Ault, the Court expressly adopted the principles set forth in dicta in Lassiter v. International Union of Operating Engineers, 349 So.2d 622 (Fla.1976). Specifically, we stated that

[njominal damages are awarded to vindicate an invasion of one’s legal rights where, although no physical or financial injury has been inflicted, the underlying cause of action has been proved to the satisfaction of a jury. Accordingly, the establishment of liability for a breach of duty will support an otherwise valid punitive damage award even in the absence of financial loss for which compensatory damages would be appropriate.

Ault, 538 So.2d at 455 (some emphasis supplied) (quoting Lassiter, 349 So.2d at 625-26).

In this case, the Phase I verdict did not constitute a “finding of liability” under Ault. This is evidenced by the fact that had the jury found for Tobacco on the legal cause and reliance issues during Phase II, there would have been no opportunity for the jury to award the named plaintiffs damages of any type. In other words, Phase II findings for Tobacco on legal causation and reliance would have precluded the jury from awarding compensatory or punitive damages. It was error for the trial court to allow the jury to consider entitlement to punitive damages before the jury found that the plaintiffs had established causation and reliance.

In Phase I, the jury decided issues related to Tobacco’s conduct but did not consider whether any class members relied on Tobacco’s misrepresentations or were injured by Tobacco’s conduct. As the Third District noted, the Phase I jury “did not determine whether the defendants were liable to anyone.” Engle II, 853 So.2d at 450. It was therefore error for the Phase I jury to consider whether Tobacco was liable for punitive damages.

B. Excessiveness

Even if it were not error to determine entitlement to punitive damages in Phase I, it was clear error to allow the jury to go beyond mere entitlement and award classwide punitive damages when total compensatory damages had not been determined. Under Florida law, a trial court’s determination of whether a damage award is excessive, requiring a remittitur or a new trial, is reviewed by an appellate court under an abuse of discretion standard. See St. John v. Coisman, 799 So.2d 1110, 1114 (Fla. 5th DCA 2001). However, a trial court’s determination as to whether a punitive damage award exceeds the boundaries of due process as guaranteed by the Unites States Constitution is reviewed by a court under a de novo standard. See Cooper Indus., 532 U.S. at 436, 121 S.Ct. 1678.

Florida law requires that an appellate court review a punitive damages award to make certain that the manifest weight of the evidence does not render the amount of punitive damages assessed out of all reasonable proportion to the malice, outrage, or wantonness of the tortious conduct. See Arab Termite & Pest Control of Fla., Inc. v. Jenkins, 409 So.2d 1039, 1043 (Fla.1982). Additionally, an award must be reviewed to ensure that it bears some relationship to the defendant’s ability to pay and does not result in economic castigation or bankruptcy of the defendant. See Bould v. Touchette, 349 So.2d 1181, 1186 (Fla.1977).

In the past, we have not discussed whether punitive damages awards must bear some reasonable relation to compensatory damages. See Lassiter v. Int’l Union of Operating Eng’rs, 349 So.2d 622, 626 (Fla.1977); see also Ault, 538 So.2d at 456; Bankers Multiple Line Ins. Co. v. Farish, 464 So.2d 530, 533 (Fla.1985); Arab Termite, 409 So.2d at 1043. For example in Arab Termite, we stated that punitive damages “are to be measured by the enormity of the offense, entirely aside from the measure of compensation for the injured plaintiff.” 409 So.2d at 1043. However, we now hold, consistent with United States Supreme Court decisions after Ault that recognize due process limits on punitive damages, that a review of the punitive damages award includes an evaluation of the punitive and compensatory amounts awarded to ensure a reasonable relationship between the two.

The United States Supreme Court has stated that a review of a punitive damages award must include consideration of three guideposts to determine whether the award is unconstitutionally excessive:

(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.

State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (citing BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996)).

The second guidepost is determinative in this case. As the United States Supreme Court has explained regarding this second factor:

[W]e have been reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award. Gore, 517 U.S., at 582, 116 S.Ct. 1589 (“[W]e have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award”); TXO [Production Corp. v. Alliance Resources Corp., 509 U.S.] at 458[, 113 S.Ct. 2711]. We decline again to impose a bright-line ratio which a punitive damages award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. In [Pacific Mutual Life Insurance Co. v.] Haslip, in upholding a punitive damages award, we concluded that an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety. 499 U.S., at 23-24[, 111 S.Ct. 1032]. We cited that 4-to-1 ratio again in Gore. 517 U.S., at 581[, 116 S.Ct. 1589]. The Court further referenced a long legislative history, dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish. Id., at 581, and n. 33[, 116 S.Ct. 1589]. While these ratios are not binding, they are instructive. They demonstrate what should be obvious: Single-digit multipliers are more likely to comport with due process, while still achieving the State’s goals of deterrence and retribution, than awards with ratios in range of 500 to 1, id., at 582[, 116 S.Ct. 1589], or, in this case, of 145 to 1.

Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process where “a particularly egregious act has resulted in only a small amount of economic damages.” Ibid.; see also ibid, (positing that a higher ratio might be necessary where “the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine”). The converse is also true, however. When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee. The- precise award in any case, of course, must be based upon the facts and circumstances of the defendant’s conduct and the harm to the plaintiff.

In sum, courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.

Campbell, 538 U.S. at 424-26, 123 S.Ct. 1513. Thus, the amount of compensatory damages must be determined in advance of a determination of the amount of punitive damages awardable, if any, so that the relationship between the two may be reviewed for reasonableness.

In this case, the district court stated that without having total compensatory damages determined it would be “impossible to determine whether punitive damages bear a ‘reasonable’ relationship to the actual harm inflicted on the plaintiff.” Engle II, 853 So.2d at 451. We agree. The trial plan allowed a lump sum determination of punitive damages for the entire class when compensatory damages had been determined only for the three individual class representatives. This approach does not provide a reviewing court with an adequate starting point to compare the lump sum punitive damages amount to compensatory damages to ensure there is some reasonable relationship. Accordingly, even if there was no error in allowing the Phase I jury to find entitlement to punitive damages, the classwide punitive damages award must be reversed.

3. Law of the Case — Class Certification

In concluding that the Engle Class must be decertified, the Third District in Engle II ruled that the “ ‘predominance’ or ‘commonality’ requirement is not satisfied, where claims involve factual determinations unique to each plaintiff.” 853 So.2d at 445. The district court explained that “common questions” did not predominate over individual issues because the choice of law analysis would require examination of numerous different state laws governing different individual claims. See id. at 449. The court also concluded that class representation would not be “superior” to individual suits because: (1) individualized issues of liability, affirmative defenses, and damages outweighed any common issues in the case; (2) each class member had unique and different experiences, which would necessitate litigation of substantially separate issues, including legal causation, specific medical causation, reliance, and awareness of risks; and (3) individualized choice of law issues would cause class proceedings to be unmanageable. See id. at 445-47.

We conclude that the Third District erred in nullifying its previous affir-mance of the trial court’s certification order. Contrary to the Third District’s conclusion, Florida Rule of Civil Procedure 1.220(d)(1) did not authorize the subsequent (and different) panel of appellate judges to simply substitute its judgment for that of the prior panel and reverse the trial court’s certification order after the trial court entered its final judgment after Phase II. See Engle II, 853 So.2d at 443 n. 4.

A class is normally certified at an early stage of the proceedings, certainly before trial, and typically before discovery is completed. Rule 1.220(d)(1) provides an avenue for reexamining certification if subsequent discovery shows that circumstances have changed. See Int’l Longshoremen’s Ass’n, Deep Sea Local 1108 v. Fisher, 860 So.2d 1078, 1078 (Fla. 1st DCA 2003) (affirming the trial court’s nonfinal order certifying a class but noting that “because the order is interlocutory, it may be revisited by the trial court should circumstances change”). Rule 1.220(d)(1) was not designed to allow a district court to decertify a class, contrary to its previous affirmance of class certification and after notice to thousands of Floridians, a two-year trial, and an entry of final judgment.

Moreover, under the doctrine of law of the case, the Third District would have been justified in reversing its previous ruling in Engle I only if it concluded that the prior ruling would have resulted in a clear manifest injustice. See Juliano, 801 So.2d at 106 (“[A]n appellate court has the power to reconsider and correct an erroneous ruling that has become the law of the case where a prior ruling would result in a ‘manifest injustice.’ ”) (quoting Strazzulla v. Hendrick, 177 So.2d 1, 4 (Fla.1965)).

Law of the case “requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings.” Juliano, 801 So.2d at 105. The Third District recently reiterated the purpose of the law of the case doctrine in a decision holding that the doctrine precluded relitigation of the propriety of class action treatment: “[P]oints of law adjudicated in a prior appeal are binding in order to promote stability of judicial decisions and to avoid piecemeal litigation.” State, Dep’t of Revenue v. Bridger, 935 So.2d 536, 538, 539 (Fla. 3d DCA 2006) (quoting Bueno v. Bueno de Khawly, 677 So.2d 3, 4 (Fla. 3d DCA 1996)).

The law of the case applies in subsequent proceedings as long as there has been no change in the facts on which the mandate was based. Specifically, we have recognized that

an appellate court should reconsider a point of law previously decided on a former appeal only as a matter of grace, and not as a matter of right; and that an exception to the general rule binding the parties to “the law of the case” at the retrial and at all subsequent proceedings should not be made except in unusual circumstances and for the most cogent reasons—and always, of course, only where “manifest injustice” will result from a strict and rigid adherence to the rule.

Strazzulla v. Hendrick, 177 So.2d 1, 4 (Fla.1965). We have also cautioned that “the exception to the rule should never be allowed when it would amount to nothing more than a second appeal on a question determined on the first appeal.” Id. (emphasis supplied).

We conclude that no circumstances existed that justified the subsequent panel’s reconsideration of the prior Third District decision approving class certification, which all parties and the trial court relied on to govern the continuation of the class action. On this issue, the analysis of the Engle II court was flawed in several respects. First, the Engle II court ignored the trial court’s pretrial ruling that only Florida law would apply when it stated that the “choice-of-law analysis in the present case will require examination of numerous significantly different state laws governing the different plaintiffs’ claims.” Engle II, 853 So.2d at 449. Second, none of the cases from other jurisdictions cited by the Third District in Engle II to justify decertification was in the procedural posture of the present case.

This case came before the Third District in Engle II after it had affirmed the class certification and after the conclusion of a trial on all common issues. Thus, there is no need to engage in an abstract analysis of the propriety of separate proceedings on common limited liability issues. Invalidating the completed class action proceedings on manageability and superiority grounds after a trial has occurred does not accord with common sense or logic.

Of course, this Court is not bound by the Third District’s law of the case. See Juliano, 801 So.2d at 105 (“The doctrine of the law of the case requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings.”). Nevertheless, we conclude that the trial court did not abuse its discretion in certifying the class. See Fla. Dep’t of Agric. & Consumer Servs. v. City of Pompano Beach, 829 So.2d 928, 929 (Fla. 4th DCA 2002) (“The trial court’s order certifying the class is subject to review under an abuse of discretion standard.”); Bouchard Transp. Co. v. Updegraff, 807 So.2d 768, 771 (Fla. 2d DCA 2002) (“[T]he determination that a case meets the requirements of a class action is a factual finding that is within the trial court’s discretion and will be reversed on appeal only if an abuse of discretion is shown.”).

4. Three-Phase Trial Plan — Decertifi-cation

We agree with the Third District that problems with the three-phase trial plan negate the continued viability of this class action. We conclude that continued class action treatment for Phase III of the trial plan is not feasible because individualized issues such as legal causation, comparative fault, and damages predominate. See Fla. R. Civ. P. 1.220(b)(3) (“A claim or defense may be maintained on behalf of a class if the court concludes that the prerequisites of subdivision (a) are satisfied, and that ... the claim or defense is not maintainable under either subdivision (b)(1) or (b)(2), but the questions of law or fact common to the claim or defense of the representative party and the claim or defense of each member of the class predominate over any question of law or fact affecting only individual members of the class.... ”)•

Florida Rule of Civil Procedure 1.220(d)(4)(A) provides that “[w]hen appropriate ... a claim or defense may be brought or maintained on behalf of a class concerning particular issues.” Although no Florida cases address whether it is appropriate under rule 1.220(d)(4)(A) to certify class treatment for only limited liability issues, several decisions by federal appellate courts applying a similar provision in the Federal Rules of Civil Procedure provide persuasive authority for this approach.

Federal Rule of Civil Procedure 23(c)(4)(A) provides that “[w]hen appropriate ... an action may be brought or maintained as a class action with respect to particular issues.” In determining whether the predominance requirement of Federal Rule of Civil Procedure 23(b)(3) has been met, several United States Courts of Appeals have concluded that under federal rule 23(c)(4)(A) a trial court can properly separate liability and damages issues, certifying class treatment of liability while leaving damages to be determined on an individual basis. See Olden v. LaFarge Corp., 383 F.3d 495, 509 (6th Cir.2004) (stating that the district court can properly “bifurcate the issue of liability from the issue of damages, and if liability is found, the issue of damages can de decided by a special master or by another method”); Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir.2004) (noting that “Rule 23 allows district courts to devise imaginative solutions to problems created by the presence in a class action litigation of individual damages issues”); In re Visa Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 139-41 (2d Cir.2001) (noting that “[e]ommon issues may predominate when liability can be determined on a class-wide basis, even when there are some individualized damage issues” and that “[t]here are a number of management tools available to a district court to address any individualized damages issues that might arise in a class action”); Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.1996) (“Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4)(A) and proceed with class treatment of these particular issues.”); see also Slaven v. BP America, Inc., 190 F.R.D. 649, 658 (C.D.Cal.2000) (maintaining class status “solely for the determination of liability” and stating that “[i]f plaintiffs prevail on the liability portion of their case, the Court will determine the appropriate method of adjudicating causation and damages issues at that juncture”).

The Second and Seventh Circuits have also stated that the determination that class treatment of damages issues is inappropriate can be made after a finding on liability. See Carnegie, 376 F.3d at 661 (explaining that one option available to the district courts for solving problems created by the presence in a class action litigation of individual damages issues is to decertify the class after the liability trial); Visa Check/MasterMoney Antitrust Litigation, 280 F.3d at 141 (same). In Carnegie, the Seventh Circuit discussed the manageability of a class action alleging RICO violations and explained:

Often ... there is a big difference from the standpoint of manageability between the liability and remedy phases of a class action. The number of class members need have no bearing on the bur-densomeness of litigating a violation of RICO. Whether particular members of the class were defrauded and if so what their damages were are another matter, and it may be that if and when the defendants are determined to have violated the law separate proceedings of some character will be required to determine the entitlements of the individual class members to relief. That prospect need not defeat class treatment of the question whether the defendants violated RICO. Once that question is answered, if it is answered in favor of the class, a global settlement ... will be a natural and appropriate sequel. And if there is no settlement, that won’t be the end of the world. Rule 23 allows district courts to devise imaginative solutions to problems created by the presence in a class action litigation of individual damages issues.

376 F.3d at 661 (citations omitted). In Visa Check/MasterMoney Antitrust Litigation, the Second Circuit concluded that the district court adequately addressed individual issues that might arise from certifying the class by specifically recognizing “its ability to modify its class certification order, sever liability and damages, or even decertify the class if such an action ultimately became necessary.” 280 F.3d at 141.

In this case, the Phase I trial has been completed. The pragmatic solution is to now decertify the class, retaining the jury’s Phase I findings other than those on the fraud and intentional infliction of emotion distress claims, which involved highly individualized determinations, and the finding on entitlement to punitive damages questions, which was premature. Class members can choose to initiate individual damages actions and the Phase I common core findings we approved above will have res judicata effect in those trials. See Daenzer v. Wayland Ford, Inc., 210 F.R.D. 202, 205 (W.D.Mich.2002) (entering summary judgment on the issue of liability, decertifying the class on the issue of damages and stating that “[t]he Court’s decision as to liability is res judicata in any damages action individual class members decide to bring”); McCormack v. Abbott Labs., 617 F.Supp. 1521 (D.Mass.1985) (concluding that plaintiff’s strict liability claim was barred by judgment for the defendants entered in a prior class action, which the plaintiff joined, before that class action was decertified).

We disagree with Justice Wells’ conclusion that bifurcating the trial in this manner violates article I, section 22 of the Florida Constitution. See concurring in part and dissenting in part op. at 1285-87. We recognize the concerns expressed by the Fifth Circuit Court of Appeals in Castano v. American Tobacco Co., 84 F.3d 734, 750 (5th Cir.1996), in which that court held that bifurcation of issues in a nationwide smoking class action violated the Seventh Amendment to the United States Constitution. However, subsequent to its decision in Castaño, the Fifth Circuit held that the risk of infringing on the parties’ Seventh Amendment rights is not significant and is in fact avoided where the liability issues common to all class members are tried together by a single initial jury, and issues affecting individual class members such as causation, damages, and comparative negligence are tried by different juries. See Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 628-29 (5th Cir.1999). Recognizing that it had previously reached a different conclusion in Castaño, the Fifth Circuit explained that the circumstances of Castaño were distinct from those present in Mullen:

In Castaño, we were concerned that allowing a second jury to consider the plaintiffs’ comparative negligence would invite that jury to reconsider the first jury’s findings concerning the defendants’ conduct. We believe that such a risk has been avoided here by leaving all issues of causation for the phase-two jury. When a jury considers the comparative negligence of a plaintiff, “the focus is upon causation. It is inevitable that a comparison of the conduct of plaintiffs and defendants ultimately be in terms of causation.” Lewis v. Timco, Inc., 716 F.2d 1425, 1431 (5th Cir.1983) (en banc); see id. (permitting the use of comparative negligence in strict liability claims). Thus, in considering comparative negligence, the phase two jury would not be reconsidering the first jury’s findings of whether Treasure Chest’s conduct was negligent or the [vessel] unseaworthy, but only the degree to which those conditions were the sole or contributing cause of the class member’s injury. Because the first jury will not be considering any issues of causation, no Seventh Amendment implications affect our review of the district court’s superiority finding.

Mullen, 186 F.3d at 628-29 (emphasis supplied).

The Fifth Circuit’s reasoning in Mullen is persuasive. In this case, although the jury decided issues common to all class members, none involved whether, or the degree to which, the defendants’ conduct was the sole or contributing cause of the class members’ injuries, which is the pertinent question in applying the doctrine of comparative negligence. We thus follow the reasoning of Mullen and conclude that the trial plan in this case did not violate Tobacco’s rights under article I, section 22 of the Florida Constitution.

5. Arguments of Engle Class’s Counsel

We conclude that, under the totality of the circumstances, reversal is not warranted based on the remarks made by the Engle Class’s counsel, Stanley Rosen-blatt. Nevertheless, we must again remind counsel that we will not condone improper arguments. Inappropriate jury arguments in this type of case risk wasting significant judicial resources. Here, trial counsel ventured very close to the line of reversible error on a number of occasions in his attempt to counteract opposing counsel’s contentions that Tobacco acted lawfully and to communicate his message to the jury that “legal doesn’t make it right.” However, we conclude that under the totality of the circumstances these comments did not rise to the level of reversible error.

If the issue of an opponent’s improper argument has been properly preserved by objection and motion for mistrial, the trial court should grant a new trial if the argument was “so highly prejudicial and inflammatory that it denied the opposing party its right to a fair trial.” Tanner v. Beck, 907 So.2d 1190, 1196 (Fla. 3d DCA 2005); see also Murphy v. Int’l Robotic Sys., Inc., 766 So.2d 1010, 1013 n. 2 (Fla.2000) (stating the Court’s decision addressing unobjected-to argument “does not impact the legal standards applicable to consideration of the issue that has been properly preserved by objection and motion for mistrial, which remains whether the comment was highly prejudicial and inflammatory”). To justify granting a motion for a new trial based on unobjected-to improper argument, the trial court must find that the improper argument is of such a nature as to reach into the validity of the trial itself to the extent that the verdict could not have been obtained but for such comments. See Murphy, 766 So.2d at 1029-30. A trial court’s order granting or denying a motion for a new trial based on either objected-to or unobjected-to improper argument is reviewed for abuse of discretion. See id. at 1030-31 (“[T]he appellate court must ... apply an abuse of discretion standard in reviewing either the trial court’s grant or denial of a new trial based on the unobjected-to closing argument.”); Bocher v. Glass, 874 So.2d 701, 704 (Fla. 1st DCA 2004) (reviewing a trial court’s order denying a motion for rehearing based on objected-to improper argument for an abuse of discretion).

In denying Tobacco’s motions for mistrial, the trial court stated:

The Court has carefully considered the Motions for Mistrial in this cause and has determined that curative instructions to the jury and/or motions to strike have been granted as requested by the movant, for most of the motions, and in any event the cumulative effect of the alleged error, was not in the opinion of the Court, sufficient to have so influenced the jury as to affect the outcome of the case considering the length of the trial, the number of witnesses presented, the quality and quantity of the testimony, the huge amount of documentary evidence, and specifically the substance of the alleged remarks. The jury in this case rendered three verdicts, each based upon a mountain of evidence over a period of two years in three separate trials. The court feels confident, that although some remarks of counsel may have been uncalled for, or subject to objection, they were not so egregious as to require a new trial.

Engle F.J., No. 94-08273 CA-22 order at 17. However, the Third District held that the comments “caused irreparable prejudice and require reversal.” Engle II, 853 So.2d at 458. Specifically, the district court determined that this was accomplished in two stages:

First, by inflaming the jury with racial pandering and pleas for nullification of the law to secure entitlement to punitive damages. And second, by removing responsibility from the jury for the size of the award, through arguing the award would be subject to appellate review and that it would not be paid out in a lump sum, but rather through a payout scheme.

Id. at 459. The district court then proceeded to list all of counsel’s arguments it determined were improper.

Significantly, the manner in which the district court has set forth and presented the offending argument, stringing the comments together, would certainly cause a reader to assume that the comments are prejudicial. However, this is not proper analysis for review under the totality of the circumstances. Context is crucial. To determine whether the challenged statements and arguments were in fact prejudicial, the statements cannot be evaluated in isolation but must be placed and evaluated in context. See State v. Jones, 867 So.2d 398, 400 (Fla.2004) (“[T]his Court has evaluated the prosecutor’s action in context rather than focusing on the challenged statement in isolation.”).

We emphasize that the duration of this trial does not mean that a comment or several comments standing alone would not warrant reversal. Nonetheless, the length of the trial is relevant to the analysis because the alleged improper statements were not made on the same day or contained within a two- or three-hour closing argument. These statements spanned a two-year period. Some comments were made during opening statements in Phase I (liability phase) in October of 1998, some during Phase I closing argument in June of 1999, and others during the closing statements in Phase II-B (punitive damages phase) in July of 2000. Many of the alleged improper comments did not even prompt an objection by Tobacco.

We begin with the Third District’s conclusion that plaintiffs’ counsel engaged in “racial pandering” and that the jury’s “runaway” verdict was evidently one inflamed by passion and prejudice. A single reference to “race” in the Phase I opening statement was in the context of the consumer studies that the defendants conducted that divide American consumers into groups. Mr. Rosenblatt’s comment that “they study races” was part of a statement about the study of the American consumer: “They study kids; they study races; they divide the American consumer into groups to sell their product.” In fact, when the defense objected on the basis that those comments were “only designed to prejudice the jury,” the tria