Thursday, February 2, 2006

Oregon Upholds 151:1 Punitive: Compensatory Verdict

In the suit against what is now Altria, the court upheld $79.5 million in punitives on a $521,000 compensatory award (reduced from the jury's $821,000).  [Changed the story link to a better AP story on the Post site.]  Guess we'll see how solid that 9:1 ratio is. 

Update: The opinion is now up on the Court's website.  The concluding paragraphs:

Of the three Gore guideposts, then, two support a very significant punitive damage award. One guidepost -- the ratio -- cuts the other way. In the end, we are left to use those competitive tools to assess whether the jury's punitive damage award was not "grossly excessive" and therefore should be reinstated.

The Gore guideposts are not bright-line tests.  See, e.g., Campbell, 538 US at 425 ("there are no rigid benchmarks that a punitive damages award may not surpass"); see also Gore, 517 US at 582 ("we have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula"). In other words, the guideposts are only that -- guideposts.  Gore also referred to them as indicia. 517 US at 575 (reprehensability is "most important indicium"); id. at 580 (ratio is "second and perhaps most commonly cited indicium"); id. at 583 (comparable sanctions "provides a third indicium for excessiveness").  Campbell specifically contemplated that some awards exceeding single-digit ratios would satisfy due process.  See id. at 425 ("in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process"). Single-digit ratios may mark the boundary in ordinary cases, but the absence of bright-line rules necessarily suggests that the other two guideposts -- reprehensability and comparable sanctions -- can provide a basis for overriding the concern that may arise from a double-digit ratio.

And this is by no means an ordinary case. Philip Morris's conduct here was extraordinarily reprehensible, by any measure of which we are aware. It put a significant number of victims at profound risk for an extended period of time. The State of Oregon treats such conduct as grounds for a severe criminal sanction, but even that did not dissuade Philip Morris from pursuing its scheme.

In summary, Philip Morris, with others, engaged in a massive, continuous, near-half-century scheme to defraud the plaintiff and many others, even when Philip Morris always had reason to suspect -- and for two or more decades absolutely knew -- that the scheme was damaging the health of a very large group of Oregonians -- the smoking public -- and was killing a number of that group. Under such extreme and outrageous circumstances, we conclude that the jury's $79.5 million punitive damage award against Philip Morris comported with due process, as we understand that standard to relate to punitive damage awards. It follows that the Court of Appeals correctly held that the trial court should have entered judgment against Philip Morris for the full amount of the jury's punitive damage award.

More later.

http://lawprofessors.typepad.com/tortsprof/2006/02/oregon_upholds_.html

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Point of Law has the details, including the interesting issues on which the Court granted cert. Here is my earlier post on the [Read More]

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