PORTLAND, Ore. – The question of whether juries should be allowed to award massive punitive damages is at stake when the U.S. Supreme Court hears arguments over an $80 million verdict against tobacco giant Philip Morris.
The Oregon case is widely seen as a test of how the court will interpret previous cases on punitive damages – the additional money intended to punish a company or individual for their behavior and act as a deterrent.
Two key cases have suggested there should be a limit of 9-to-1 or less on punitive damages compared to actual or compensatory damages, intended to simply restore any financial or economic losses.
The ruling in Philip Morris v. Williams, scheduled for oral arguments Tuesday, may have a sweeping effect on jury awards beyond the tobacco industry, attracting intense interest from corporate America and trial attorneys.
“This ruling might apply to pharmaceuticals, it might apply to automobiles, or it might apply to all products,” said Carl Tobias, a University of Richmond School of Law professor who tracks punitive damage cases.
The $79.5 million in punitive damages awarded to the family of Jesse Williams in Oregon was more than 150 times the $521,000 in actual damages – an amount the Oregon Supreme Court ruled last February was not excessive given the “extraordinarily reprehensible” conduct of Philip Morris in marketing cigarettes.
Williams started smoking in the 1950s while serving in the Army in Korea, a habit that reached three packs of Marlboros a day before he died of lung cancer in 1997.
His widow, Mayola, declined to comment, along with officials of Altria Group Inc., the corporate parent of Philip Morris.
The attorney who will argue the case for the Williams family said he believes the court could use the Oregon case to emphasize there are exceptions to every rule – especially when misconduct is severe – meaning “reprehensible” or “egregious” in legal terms.
“I think this case is unlike anything they’ve heard to date in the area of punitive damages,” said Robert Peck, president of the Center for Constitutional Litigation.
“Knowing that, by lying to their customers they were going to kill quite a few of them and cause disease in every one of them,” tobacco companies reached “an order of reprehensibility that’s unlike anything the court has faced before,” Peck said.
But an attorney who filed a “friend of the court” brief supporting Philip Morris said he doubted the court would consider the tobacco company an exception to the guidelines on punitive damages it has been shaping.
“I think this case definitely does not fall into any of the exceptions,” said Ted Boutrous, an attorney for the Product Liability Advisory Council, made up of various manufacturers. It includes Philip Morris.
“Plaintiffs in product liability cases almost always make the same kind of argument: Their case shows a company engaging in particularly bad behavior, and therefore the sky is the limit on punitive damages,” he said.
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