New York Times
"Supreme Court to Weigh Award in a Smoker's Death"
Linda Greenhouse, May 30, 2006
The Supreme Court, opening a new chapter in its effort to establish
constitutional boundaries for punitive damages, agreed on Tuesday to hear a
cigarette maker's appeal of a $79.5 million punitive damage award.
The amount was 97 times greater than the compensatory damages that an Oregon
jury awarded in the case to the widow of a smoker who died of lung cancer.
As in earlier punitive damages cases, the question for the justices is whether
the award was so disproportionate to the injury as to violate the constitutional
guarantee of due process. The Supreme Court has been closely divided in these
cases, and with two new justices, the court may have decided that the time was
right for a fresh look.
When the justices take up the case in their next term, they will hardly be
writing on a clean slate. In an important victory for corporate defendants, the
court three years ago overturned an award of $145 million in punitive damages
against the State Farm insurance company and set out some guidelines.
In the State Farm case, a Utah jury had assessed compensatory damages of $1
million, meaning that there was a 145:1 ratio of punitive damages to
compensatory. Finding the punitive award ''neither reasonable nor proportionate
to the wrong committed,'' Justice Anthony M. Kennedy wrote for the majority that
''few awards exceeding a single-digit ratio between punitive and compensatory
damages, to a significant degree, will satisfy due process.''
The vote in that case was 6 to 3; two members of the majority, Chief Justice
William H. Rehnquist and Justice Sandra Day O'Connor, are no longer on the
court. Not only for that reason, the outcome in the new case, Philip Morris USA
v. Williams, No. 05-1296, is far from certain.
Punitive damages decisions have not followed the court's typical
liberal-conservative ideological alignments. Justices Antonin Scalia, Clarence
Thomas and Ruth Bader Ginsburg were the dissenters last time, with Justice
Ginsburg complaining that the majority was ''boldly out of order'' to invade the
province of state legislatures and state courts in placing limits on punitive
damages.
Further, the court's major punitive damages rulings have come in cases in which
the injury that led to the lawsuit was economic rather than physical. The State
Farm case began as a suit over the insurance company's initial refusal to settle
a claim for a policyholder. Another important precedent, a 1996 decision that
overturned a $2 million punitive damage award against the BMW automobile
company, began as a complaint that cars were being sold as new without informing
buyers that the paint had been touched up.
In his opinion in the State Farm case, Justice Kennedy noted that the case
involved ''no physical injuries.'' While he did not elaborate, the suggestion
was that other considerations might apply had the harm to the plaintiffs
consisted of more than ''only minor economic injuries.''
The plaintiff in the new case, Mayola Williams, was married to a man who began
smoking while serving in the United States Army in Korea in 1950 and who went on
to smoke three packs of Marlboro cigarettes a day for decades. In 1996, lung
cancer was diagnosed in the man, Jesse Williams, and he died the next year.
Mrs. Williams's lawsuit asserted that the maker of Marlboro, Philip Morris,
which with its various brands accounts for about half the cigarette sales in the
United States, had perpetrated a 50-year fraud to conceal the health effects of
smoking. Her lawyer asked the jury to consider ''how many other Jesse Williamses
in the last 40 years in the state of Oregon there have been.''
The company's Supreme Court appeal argues that it violates due process to punish
a defendant ''for the effects of its conduct on nonparties,'' that is, on other
smokers whose cases were not before the jury.
Rejecting that argument in its opinion in February of this year, the Oregon
Supreme Court said that Philip Morris ''engaged in a massive, continuous, near
half-century scheme to defraud the plaintiff and many others'' by concealing the
truth and inducing its customers to keep smoking. The state court called the
company's conduct ''extraordinarily reprehensible, by any measure of which we
are aware.''
The Supreme Court's precedents have referred to ''reprehensibility'' as a factor
to consider in evaluating a punitive damages award. In this case, Philip Morris
argues in its appeal, the Oregon court improperly permitted its conclusion on
reprehensibility to ''override the constitutional requirement that punitive
damages be reasonably related to the plaintiff's harm.''
The company's appeal was supported by briefs filed by the United States Chamber
of Commerce and the Product Liability Advisory Council, a coalition of 133
manufacturers. The case will be argued in November or December.