Wednesday, February 21, 2007

Supreme Court Reverses in Philip Morris Punitive Damages Case

Yesterday, the Supreme Court struck down the $79.5 million punitive damages award in the Oregon tobacco wrongful death case of Mayola Williams v. Philip Morris.  Here's the story in the Chicago Tribune about the 5-4 decision.  The Supreme Court's opinion did not decide whether the amount of punitive damages was unconstitutionally excessive as a multiple of compensatory damages.  In other words, we still don't know just how strictly the Court will apply the single-digit multiple standard of State Farm v. Campbell -- an issue of great practical significance in punitive damages cases.  But in the Williams case, the Supreme Court did address the punitive damages issue most applicable to mass torts, ruling that a jury may punish a defendant only for harm to the actual litigant, not for harm to others.

Today's New York Times ran an editorial criticizing the ruling as "a win for corporate wrongdoers."  The Times may well be correct that this Supreme Court "is more concerned about — and more willing to protect — the powerful than the powerless." The editorial contrasts the Court's narrow view of 8th Amendment protection for criminal defendants with its use of the due process clause to protect corporate defendants from punitive damages.  But on the core issue decided in the Williams case, isn't the Times missing the point?

[T]he court ruled that the award was improper because it punished Philip Morris for harm done to people who were not part of the lawsuit. There is nothing unusual, or wrong, about courts considering the broader impact of a wrongdoer’s misdeeds. As Justice John Paul Stevens noted in dissent, “A murderer who kills his victim by throwing a bomb that injures dozens of bystanders should be punished more severely than one who harms no one other than his intended victim.” The fact that Philip Morris hurt so many other smokers along with Jesse Williams is surely relevant to its punishment.

The editorial makes it seem like the question is how much a defendant should be punished for its wrongdoing.  But this was not a criminal case or a government proceeding for a civil fine.  Nor was it a class action or other multi-plaintiff litigation.  It was a civil lawsuit brought by an individual plaintiff.  The question is whether an individual litigant is entitled to collect punitive damages for harm to others.  Ultimately, that's a question of aggregation:  Is it permissible to aggregate the amount of punitive damages on the defendant side, without aggregating the distribution of punitive damages on the plaintiff side?  If the goal is to punish a defendant for its harm to multiple victims -- and if we're looking to private civil litigation rather than to government proceedings -- doesn't it make more sense to accomplish this by collective litigation in which the claims of multiple victims can be resolved, rather than by permitting an individual to receive collective punitive damages?

HME

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The U.S. Supreme Court has issued a decision in Philip Morris USA v. Williams which appears to impose some limitations on punitive damage awards. In that case, a widow successfully sued, receiving a verdict for the death of her husband [Read More]

Tracked on Feb 26, 2007 2:12:24 PM

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