Guest Blogger: Effect of Philip Morris is Uncertain
by Jay M. Feinman
Representatives of corporate
But the celebration may be premature. Instead of another clear step in the Court’s march to limit the rights of victims and protect corporate wrongdoers, the Philip Morris case muddies the law, and its effect will only be felt after lower courts—and probably the Supreme Court—clarify its meaning in future cases.
Punitive damages have been awarded since the early days of the Republic. Their purposes are to punish and to deter wrongdoing; as a
Mayola Williams sued Philip Morris following the death from lung cancer of her husband, Jesse, a lifelong smoker of Marlboro cigarettes. As the Oregon Supreme Court put it, Philip Morris and other tobacco companies “engaged in a massive, continuous, near-half-century scheme to defraud the plaintiff and many others, even when Philip Morris always had reason to suspect—and for two or more decades absolutely knew—that the scheme was damaging the health of a very large group of Oregonians—the smoking public—and was killing a number of that group.” 127 P.3d at 1181-882.
The jury found Philip Morris’s scheme of deceiving the public about the dangers of smoking constituted fraud and granted $821,000 in compensatory damages (which the trial court reduced to $521,000) and $79.5 million in punitive damages. The jury’s award was upheld by an
In Philip Morris, the Supreme Court was faced with the issue of whether a jury, in awarding punitive damages, can consider the harm suffered by persons other than the victim in the particular case—whether, for example, it could consider the harm posed to the tens of thousand of other Oregonians who smoked.
The Court held that a jury cannot punish a wrongdoer for harm suffered by victims not directly involved in the cases. To do so, the Court said, would be to deprive the defendant of a sufficient chance to refute the allegations of harm and to “add a near standardless dimension to the punitive damages equation.” This is a victory for business interests; Philip Morris could be punished for injuring Jesse Williams through its fraudulent scheme but not for imposing the same harm on other smokers.
The victory was only partial, however. One of the BMW standards for assessing the amount of punitive damages is how reprehensible the defendant’s conduct was. Although the jury cannot punish for imposing harm on others, it can consider the actual or potential harm suffered by others in determining reprehensibility. Therefore, a victim’s lawyer can present evidence and argue to the jury about the harm suffered by others for that purpose.
This is where the Court’s decision is confusing. As Justice Stevens, Justice Thomas, and Justice Ginsburg point out in their dissents, it is hard to understand how juries will be able to weigh the evidence of harm to others in determining how reprehensible the defendant’s conduct was without punishing the defendant for that conduct. Justice Breyer’s majority opinion expresses confidence that states will be able to provide adequate direction, but that confidence seems largely unjustified.
Philip Morris USA v. Williams is, therefore, an uncertain guidepost for the future. Lawyers for the victims of corporate wrongdoing should be able to continue to offer evidence of the impact of that wrongdoing. It will be up to the lower courts to sort out just how they can do so, and how the jury should weigh the evidence, consistent with the Supreme Court’s confusing standards.
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