Philip Morris USA v. Williams

PETITIONER: Philip Morris USA
RESPONDENT: Mayola Williams, Personal Representative of the Estate of Jesse D. Williams, Deceased
LOCATION: United States District Court for the District of Colorado

DOCKET NO.: 05-1256
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: Oregon Supreme Court

CITATION: 549 US 346 (2007)
GRANTED: May 30, 2006
ARGUED: Oct 31, 2006
DECIDED: Feb 20, 2007

ADVOCATES:
Mr. Andrew L. Frey - argued the cause for Petitioner
Robert S. Peck - argued the cause for Respondent

Facts of the case

Jesse Williams died of lung cancer at age 67 after a life spent smoking three packs of Marlboro cigarettes per day. His widow sued Phillip Morris, the maker of Marlboro cigarettes, alleging that the company had engaged in a deliberate, wide-spread campaign of misinformation on the dangers of smoking. The jury found for Williams and awarded her $821,485.50 in compensatory damages and $79.5 million in punitive damages. However, the trial judge found the punitive damages excessive and reduced them to $32 million.

Under the Supreme Court's decision BMW v. Gore, punitive damages must be reasonably related to the harm done to the plaintiff, but larger punitive damage awards may be appropriate if the defendant displayed reprehensible conduct. Citing Gore, the Oregon Court of Appeals reinstated the $79.5 million award, holding that Phillip Morris's conduct was reprehensible enough to warrant the large amount.

The Oregon Supreme Court declined to take the case. However, the U.S. Supreme Court sent the case back for consideration in light of State Farm v. Campbell, which held that punitive damages can normally only be as much as nine times greater than compensatory damages. The Oregon Court of Appeals again affirmed the $79.5 million award, ruling that the reprehensibility of Phillip Morris's conduct justified the larger ratio. The Oregon Supreme Court upheld the decision.

Phillip Morris appealed to the Supreme Court, arguing that the court had unreasonably exceeded federal guidelines on punitive damages. Phillip Morris also argued that it was unfair to punish the company for its actions toward other smokers who were not parties to the suit.

Question

1) Can a court's determination that a defendant's conduct was highly reprehensible and analogous to crime override the constitutional requirement that punitive damages must be reasonably related to the harm to the plaintiff?

2) Does due process permit a jury to punish a defendant for the effects of its conduct on non-parties?

Media for Philip Morris USA v. Williams

Audio Transcription for Oral Argument - October 31, 2006 in Philip Morris USA v. Williams

Audio Transcription for Opinion Announcement - February 20, 2007 in Philip Morris USA v. Williams

John G. Roberts, Jr.:

Justice Breyer has the opinion in 05-1256, Philip Morris versus Williams.

Stephen G. Breyer:

This case focuses upon punitive damages that were awarded to the state of a heavy smoker Jesse Williams who died of a smoking related disease.

An Oregon jury found that the cigarette company Phillip Morris had engaged in deceit that led to Williams’s death.

It awarded the state about $800,000 in compensatory damages and it then assessed punitive damages of $80 million which is about a 100 times of compensatory damages reward.

The trial judge found that the damages award punitive part was excessive and he reduced that amount from $80 million to $32 million.

But the Oregon Court of Appeals overturned the Trial Court on this point and it restored the full $80 million, the Oregon Supreme Court then affirmed that and we agree that we would review the Oregon Supreme Court’s determination.

Now Philip Morris makes two arguments in front of us, the first focuses upon statements that Williams’ lawyer made when he asked the jury to consider harmed cause other smokers in Oregon people other than Williams and in particular he was talking about individuals in Oregon whom Philip Morris’ cigarettes might have killed.

Philip Morris asked the trial judge in light of these statements to tell the jury in an instruction that although the jury could take account of the harm that these cigarettes caused other smokers when it considered the reasonableness of the relationship between Philip Morris’ conduct and the Williams’ harm.

It could not the jury could not consider the harm caused to other smokers’ in order to using Philip Morris or in order 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 trial judge did not give this proposed instruction, the Oregon Supreme Court ultimately upheld the trial judge.

The Oregon Supreme Court said “well if a jury cannot punish then it is difficult to see why it could consider the harm caused to other people at all” and Philip Morris argues that the Oregon Supreme Court’s view of the matter was constitutionally mistaken.

Philip Morris says first that the due process clause forbids punishing a defendant in a particular case for harm caused other people that are not before the court in that case and then Philip Morris point second to other cases of this court where we have suggested and I quote from one of them, a single digit multipliers are more likely to comport with due process and Philip Morris claims that the award a 100 times the amount of compensatory damages is grossly excessive and consequently forbidden by the constitution.

We agree with Philip Morris in respect to it’s first argument, an argument that in our view focuses upon the constitution’s procedural limitations.

We note that the due process clause prohibits a state from punishing an individual without for first providing that individual with what we have described, these are our words in other cases.

An opportunity to present every available defense to the charge, a defendant threatened with punishment for injuring a person who is not before the court has no opportunity at all to defend against that charge.

Moreover, where such punishment allowed the jury would inevitably be left speculate in respect to a host of details highly relevant to punishment and such speculation would further and significantly decrease a court’s ability to control the size of punitive damages awards through the use of specific legal standards.

We agree with the respondent that a jury can consider harm to others when it considers the reprehensibility of the defendant’s conduct but we think there is an important difference between a jury’s considering how bad that conduct is i.e. reprehensibility and the jury’s punishing for harm to others, given the serious risks of unfairness that can arise it is constitutionally important that the jury when deliberating ask the right question, not the wrong one.

We therefore hold that where there is a significant risk that the jury when awarding punitive damages could misunderstand in this way, how it may take account of harm to nonparties’ accord upon request must protect against that risk.

For these and for other reasons set forth in our opinion we conclude that the Oregon Supreme Court applied the wrong constitutional standard when it permitted the use of punitive damages to punish a defendant for harm caused to others not before the court.

We consequently vacate the Oregon Supreme Court’s judgment and we remand the case because the application of the proper standard may lead to a change in the level of the punitive damages award or to a new trial we shall not now consider Philip Morris’ second argument namely that the award is grossly excessive.

Justice Stevens and Justice Thomas each have filed a dissenting opinion.

Justice Ginsburg has also filed the dissenting opinion in which Justice Scalia and Justice Thomas have joined.