The Supreme Court of the United States has overturned a $79.5 million punitive damages award made by an Oregon jury against cigarette manufacturer Philip Morris USA.
In Philip Morris USA v. Williams, the widow of a heavy smoker named Jesse Williams had sued teh tobacco giant for damages as a result of Mr. Williams’ death. A jury awarded compensatory damages of about $821,000 and punitive damages of $79.5 million. The Supreme Court said that the latter award could not stand.
The basis of the decision was interesting. Although Philip Morris’s lawyers had asked the Supreme Court to find that the award was “grossly excessive”, the Court did not so find. Rather, it concluded that the award had been improperly based, in part, on the jury’s desire to punish Philip Morris for harming other smokers.
At trial, Philip Morris had asked the judge to instruct the jury that “that ‘you may consider the extent of harm suffered by others in determining what [the] reasonable relationship is’ between any punitive award and ‘the harm caused to Jesse Williams’ by Philip Morris’ misconduct, ‘[but] you are not to punish the defendant for the impact of its alleged misconduct on other persons, who may bring lawsuits of their own in which other juries can resolve their claims . . . .” The judge refused. Instead, he directed the jury that “'[p]unitivedamages are awarded against a defendant to punish misconduct and to deter misconduct,’ and ‘are not intended to compensate the plaintiff or anyone else for damages caused by the defendant’s conduct.’
A majority of the Supreme Court agreed that this instruction was improper. It offended the “due process clause” of the U.S. Constitution, in that it permitted the jury to punish a defendant (Philip Morris) for inflicting injury on non-parties without affording that defendant “an opportunity to present every available defense” [or, we would say, “defence”]. The majority said that to allow such an award to stand would amount to a taking of property from a defendant without due process.
The Court did accept that a jury was entitled to take into account damage done to non-parties in assessing the reprehensibility of the defendant’s conduct. And it acknowledged that the Supreme Court had not previously held, explicitly, “that a jury may not punish for the harm caused others.” But, it said bluntly, “we do so hold now.”
The award was vacated and the case remanded for further proceedings “not inconsistent with this opinion”.