Philip Morris Bid to Have Punitive Award Reduced in Smoking Death Case Derailed by Supreme CourtApr 1, 2009 | Parker Waichman LLP
The U.S. Supreme Court has dismissed Philip Morris' appeal of the punitive damages awarded to a plaintiff in a tobacco injury lawsuit a decade ago. The dismissal means that Philip Morris must pay an Oregon widow $79.5 million in punitive damages for her husband's tobacco-related death.
According to Bloomberg.com, Philip Morris could end up paying more than $150 million in damages and interest in the case. If the full amount is ultimately paid, the Philip Morris judgment would set a record in an individual smoker case, Bloomberg.com said.
The punitive damages in the case, Philip Morris vs. Williams, were in addition to $821,485 in compensatory damages awarded by an Oregon jury in 1999, Bloomberg.com said. The Oregon court lowered that amount to $521,485 because of Oregon’s limits on awards. But with the punitive award, it was the largest verdict ever levied against a tobacco maker up until that time.
The high court's decision has come as a surprise to many, as the justices had twice sent the case back to the Oregon Supreme Court, implying that the damage award was too high, according to a report on SFGate.com. But both times, the Oregon court allowed the award to stand.
The second time around, the U.S. Supreme Court ruled 5 to 4 that the Oregon court had applied the wrong constitutional standard in reviewing the punitive award, SFGate said. But the Oregon Supreme Court then rejected Philip Morris' challenge on the grounds of state law, saying the company's proposed jury instructions nearly 10 years before had been insufficient.
In appealing to the U.S. Supreme Court for a third time, Philip Morris had asked that the justices "vindicate" their authority because the Oregon court "failed to follow this court's directions."
But in a one-sentence decision, the Supreme Court said it should not have accepted the case for a third time, and dismissed the case as "improvidently granted."
The ruling is a victory for consumers, and a blow for the business interests that had hoped the Supreme Court would use it as a means of capping punitive damages in lawsuits.
While Philip Morris is now officially on the hook for $150 million in this case, it is unclear how much it will actually pay. According to Bloomberg.com, the company still has the right to argue at the lower court level that it shouldn’t have to pay the 60 percent of the award that under Oregon law goes to the state.