Punitive Damages Again Before Supreme Court (Philip Morris v. Williams, Round 3)

It’s rare for any case to go the Supreme Court, but one case going three times? Philip Morris v. Williams was heard again today. And in a remarkable suggestion from the Chief Judge during oral argument, the court may consider deviating from the technical issue before it today and decide once and for all the issue of whether or not bright line limits on punitive damages can be read into the Constitution, and if so, by how much.

This is the nutshell history for this smoker’s case that challenges the limits of punitive damages:

• Jury verdict for $821,000 in compensatory damages and $79.5M in punitive damages;
• Punitive damages reduced by trial court to $32M;
• Punitive damage award reinstated by Oregon Court of Appeals;
• Affirmed by Oregon Supreme Court;
• Remanded by U.S. Supreme Court to decide punitive damages issue in light of its new punitive damages ruling in State Farm v Campbell, which gave confusing guidance on the degree to which the Due Process Clause of the Fourteenth Amendment is violated by a large award;
• After considering State Farm v. Campbell, the Oregon Court of Appeals and then Oregon Supreme Court both affirm again;
• Philip Morris appealed and the US Supreme Court once again remanded the case to Oregon, this time based on the jury instructions;
• Affirmed for the third time by the Oregon Supreme Court; and
• Argued in the U.S. Supreme Court today for the third time, with Philip Morris trying to claim that the Oregon courts were defying the Supremes by not knocking the award down.

Now here is the interesting part: During oral argument today about the esoteric issue of the federal courts interceding on state law issues involving jury charges, Chief Justice Roberts reportedly suggested that the court finally decide the penultimate issue of whether the Constitution permits a nearly 100 to 1 ratio of punitive to compensatory damages. (Pages 51-53 of this transcript, via How Appealing)

This is odd for two reasons. First, Roberts suggested that the court decide an issue it doesn’t really have to decide, since the issue before it was jury instructions. But more importantly, if the court were to decide whether a 100:1 punitive to compensatory ratio is constitutionally permissible, there are already five votes in favor of upholding the principle of a 100:1 ratio.

Here’s why the court will uphold the award it if decides that issue: The prior punitive damage case of State Farm v. Campbell was decided by a 6-3 majority. But two members of that majority are gone (Rehnquist and O’Connor) and two others from that majority have indicated in this case, either in dissent (Stevens) or oral argument (Breyer) that they have no problem with the concept of a 100:1 ratio if the facts deem it appropriate. Therefore, there are already five votes in favor of upholding a 100:1 ratio in principle. (See, Philip Morris Punitive Damages Decision — Why It Was Good For Plaintiffs.) And that is without Roberts and Alito having tipped their hands as to which way they will vote.

See also:

• In Big Punitives Case, Has Court Painted Itself into a Corner? (WSJ Law Blog)
• Third and Long for Philip Morris (Greenburg @ Legalities)
• Smoker’s widow seeks $79.5M award at Supreme Court (Salon)
• New briefing on tobacco case? Maybe (Denniston @ ScotusBlog)

Links to this post:

Blawg Review #189
For my first three Blawg Reviews, I’ve let Dante lead me through Hell, Purgatory, and Heaven. Inconsiderately enough, however, Il Maestro never completed a fourth cantica for his Divine Comedy, leaving me stuck for a theme this time …

posted by Colin Samuels @ December 08, 2008 3:00 AM