Vol. 71, no. 16
U.S. Supreme Court overturns Oregon ruling in Philip Morris suit
Last Tuesday, the United States Supreme Court threw out a $79.5 million award that a 1999 Multnomah County jury had ordered Altria Group’s Philip Morris USA to pay to the widow of Jesse Williams, a former Portland Public Schools janitor and longtime smoker who died of cancer.
Although a major blow to the plaintiffs, the ruling could bode well for persons and businesses seeking stricter limits on big-dollar verdicts.
The 5-4 decision was seen as a monumental victory for “Big Tobacco,” in this case represented by Philip Morris, which contested an Oregon Supreme Court decision upholding the jury’s original verdict.
Yet the decision did not address a key argument made by Philip Morris and its supporters across a wide range of businesses – that the size of the award was “unconstitutionally large.”
Although the outcome was favorable for Philip Morris, the tobacco industry had hoped that the Supreme Court would limit the amount that can be awarded in punitive damage cases.
Instead, Justice Stephen Breyer wrote in his majority opinion that the award to Mr. Williams’ widow, Mayola Williams, was delivered for the wrong reasons. Rather than punishing Philip Morris for the harm done to Williams, the jury punished the defendant for past cases not before them.
“To permit punishment for injuring a nonparty victim would add a near standardless dimension to the punitive damages question,” Breyer said.
Philip Morris argued that the jury was encouraged to punish them for health problems suffered by every Oregonian who smoked its cigarettes.
Chief Justice John Roberts and justices Samuel Alito, Anthony Kennedy and David Souter, joined Breyer in the majority.
Dissenting were justices Ruth Bader Ginsburg, Antonin Scalia, John Paul Stevens and Clarence Thomas. Ginsburg said that Tuesday’s ruling made punitive damages law even more confusing.
Jesse Williams died of lung cancer in 1997 at the age of 67. He had smoked two packs a day of Philip Morris-made Marlboros for 45 years.
His widow argued that the jury award was appropriate as it punished Philip Morris for a decades-long “massive market-directed fraud” that misled people into thinking that cigarettes were not dangerous or addictive, downplayed the health risks of smoking and manipulated the levels of nicotine to keep smokers addicted.
She won compensatory damages of $821,486 in the fraud lawsuit she filed against Philip Morris – a substantially large differential considering the average punitive damage typically awards 9 times the category as opposed to 97 times in this case. A state court previously cut the compensatory award to $500,000, which is unaffected by Tuesday’s ruling.