Judicial progress

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In overturning the $79.5 million verdict against tobacco company Philip Morris, ruling on Tuesday that due process had been violated, the Supreme Court took what we hope will be a productive step toward reining in excessive punitive damages awards.

The lawsuit was filed by Mayola Williams on behalf of her husband, who died in 1996 of lung cancer after smoking two packs of cigarettes a day for 45 years. During the trial, the plaintiff's attorney asked the jury to "think about how many other Jesse Williams in the last 40 years in the State of Oregon there have been." Lawyers for Philip Morris requested that the jury be instructed "not to punish the defendant for the impact of its alleged misconduct on other persons," but the Oregon court declined to do so. Philip Morris challenged, but the Oregon Supreme Court upheld the trial court's decision not to include those instructions -- and the nearly $80 million in damages.

The Supreme Court overturned that decision, concluding in a surprisingly close 5-4 ruling that the Constitution's due process clause protects a defendant from being punished for harm done to "nonparties," or those who are "strangers to the litigation." Ruling as the Oregon Supreme Court did would generate a panoply of questions -- "How many such victims are there? How seriously were they injured? Under what circumstances did injury occur?" -- that would not be answered during the course of the trial. A jury could then assign damages based on a grievance that the defendant doesn't have the opportunity to address.

The court did not rule on whether the punitive damage sum was unconstitutionally high, although with compensatory damages at $821,000, the punitive damages clearly violate the court's guidelines of a "single-digit ratio." That the court declined to set a limit on punitive damages is not a bad thing, however. Capping punitive damages, we have argued and still believe, is not necessarily a constitutional matter and is better addressed through tort-reform legislation.

What is important in this case is that the court has made progress in clarifying its position on how punitive damages should be meted out. "We did not previously hold explicitly that a jury may not punish for the harm caused others," wrote Justice Stephen Breyer. "But we do so hold now." That doesn't mean, the court went on to say, that a jury can't consider harm done to others by a defendant. "Conduct that risks harm to many," Justice Breyer wrote, "is likely more reprehensible than conduct that risks harm to only a few" -- a fact that juries will still be permitted to consider, but only as they decide how to award damages for wrongs done to the plaintiff alone. Juries may well find it difficult to distinguish between weighing harm to others without "directly" punishing the defendant for it. On the whole, however it should reduce the size of absurd punitive damages awards. That's progress, but not quite clarity.