June 17, 2009
Written By Attorneys William O. Krekstein and Melanie E. Bork
This article is an interpretation of current law and is offered for informational purposes only. This material is not legal advice and should not be construed or used as a substitute for the advice of an attorney.
On March 29, 2009, the United States Supreme Court allowed a $79.5 million punitive damages award to stand that it had previously remanded twice for reconsideration in Phillip Morris USA, Inc. v Williams.
Jesse Williams began smoking in the 1950's and died of lung cancer in 1997 with a three pack a day habit. His widow brought an action in Oregon state court alleging that Phillip Morris deliberately misled the general public on the health effects of smoking. The Oregon jury awarded punitive damages 97 times greater than the compensatory damages.
In 2003, Phillip Morris sought review by the United States Supreme Court arguing that the award was excessive under State Farm v. Campbell. Finding that the Constitution's due process clause prevents states from imposing punitive damages for harm done to a non-party, the U.S. Supreme Court remanded the case for reconsideration. The Oregon Supreme Court reaffirmed the award. Phillip Morris appealed again, and on review, the United States Supreme Court took issue with the weight the state court gave to defendant's conduct toward non-parties in determining the reprehensibility of the behavior and remanded the case again.
In January 2008, the Oregon Supreme Court chose to again affirm the original award. Phillip Morris petitioned the U.S. Supreme Court to review the case for a third time and the court again agreed to hear the appeal. Yet after hearing argument in December 2008, the Supreme Court issued a one sentence ruling dismissing the appeal as improvidently granted.
By dismissing the appeal, the high court has effectively ended the litigation that had been going on for the better part of ten years. It also shows the court's unwillingness, or perhaps inability, to place a firm cap on punitive damage awards. Though the court has established guideposts for courts to follow in assessing the constitutionality of high punitive damage awards, it will be left up to the lower courts to implement those guideposts thus continuing the current trend of inconsistent rulings.
