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PORTLAND, Ore. — When Jesse Williams walked into his law office here a decade ago, William Gaylord saw a man who was outwardly healthy but felt deeply betrayed. After 45 years of smoking Marlboros, Williams had just been diagnosed with incurable lung cancer. In all those years, Williams had clung to the addict’s hope that tobacco companies were telling the truth when they cast doubt on the connection between smoking and cancer. “He had taken their side and defended Philip Morris. He is the poster child for the perfect customer of Philip Morris,” says Gaylord, of Gaylord Eyerman Bradley. “But now he recognized that he had been had. He was pissed.” Within six months, Williams, a retired Portland school janitor, was dead at age 67, before his deposition could be taken. But his widow, Mayola, heeding his request to hold the tobacco industry responsible, continued his lawsuit. On Oct. 31, Mayola Williams, frail and reluctant to talk about the case, will be at the U.S. Supreme Court as it hears arguments in Philip Morris USA v. Williams, the latest and possibly most crucial in a line of cases on the constitutionality of high punitive damages. At issue is an Oregon Supreme Court decision upholding the jury award of $79.5 million in punitive damages to Mayola Williams, on top of $821,485 in compensatory damages. The case has both sides on edge, mainly because the Court’s two newest members, Chief Justice John Roberts, Jr. and Justice Samuel Alito, Jr. are unknown quantities when it comes to the hotly contested issue of punitive damages. “It will tell us a great deal about the Roberts Court . . . and its ultimate direction,” says Georgetown University Law Center professor Peter Rubin. The case also marks a major milestone in the decades-long litigation battle against big tobacco. For the first time, the justices will have before them evidence of tobacco-industry misbehavior drawn from the 35 million documents pried from company files in Minnesota’s 1990s lawsuit against the industry. Included are decades of statements from tobacco company executives, scientists, and lawyers acknowledging the dangers of smoking and strategizing ways to keep customers hooked. “Only when the internal documents got broken into did the whole thing begin to unravel,” says Gaylord. The Minnesota evidence could play a strong role in the Supreme Court’s deliberations, because “reprehensibility” of the defendant is a key factor in the Court’s determination whether or not punitive damages are excessive. The Court’s prior rulings on punitive damages have come in cases with less compelling facts — such as a car manufacturer who concealed scratches in new cars or an insurance company’s decision not to settle a claim. “Philip Morris accumulated billions in profits from history’s longest running and deadliest fraud” is how Mayola Williams’ brief summarizes the case. Its author is Robert Peck of Washington, D.C.’s Center for Constitutional Litigation, who will argue on her behalf. The center has financial ties to the Association of Trial Lawyers of America, though Peck says ATLA had “no involvement” in the case except for filing an amicus brief with the Court. As the case arrives before the high court, nearly a decade after Jesse Williams died, his story recedes behind the legal arguments. Issues of stare decisis and the right of states to decide cases their own way, as well as the persistent plea of the business community to stop “runaway juries,” will be pulling Roberts and Alito in different directions. “Many different strains of conservatism” converge in the case, says appellate expert Mark Levy of Kilpatrick Stockton in Washington. “Roberts and Alito are up for grabs.” SEARCHING FOR A BRIGHT LINE The key to winning them and the case itself may lie in the subtle battle over how to view the Court’s most recent precedent on the issue, State Farm v. Campbell. That 2003 ruling suggested, but did not dictate, that a 9-to-1 ratio of punitives to compensatories was the outer limit of acceptability under the 14th Amendment’s due process clause. The punitive-to-compensatory ratio in the award to Williams was closer to 97-to-1, prompting Philip Morris and its allies to argue that the Oregon Supreme Court decision is “impossible to square” with State Farm, in the words of Andrew Frey, the Mayer, Brown, Rowe & Maw partner who will argue the case for Philip Morris. Frey, 68, will be arguing his 64th case before the Court. Peck, 52, will be arguing for his second time. The U.S. Chamber of Commerce and others, hoping to appeal to Roberts’ and Alito’s oft-stated loyalty to precedent, have labored hard to portray Oregon and other states as renegades that are flouting State Farm. “I think the justices took the case because they were getting a little miffed at the lower courts thumbing their nose at the decision,” says Victor Schwartz, general counsel of the American Tort Reform Association. But the other side argues strenuously that the Oregon Supreme Court abided fully by the State Farm ruling. They note that the majority in State Farm never said that punitive damages could not exceed 9-to-1. “We decline again to impose a bright-line ratio which a punitive damages award cannot exceed,” wrote Justice Anthony Kennedy for the majority. The Oregon Supreme Court itself squared its decision with State Farm by pointing to the evidence of reprehensibility, which it said justifies going outside the 9-to-1 formula. “Philip Morris’s conduct here was extraordinarily reprehensible,” the Oregon court said. The tussle over the meaning of State Farm is crucial because of the unusual lineup of justices who decided it. The three justices who dissented in the State Farm case — an odd alliance of Justices Antonin Scalia, Clarence Thomas, and Ruth Bader Ginsburg — are still on the Court, and they probably still hold their view that the Supreme Court should not limit state courts with a fixed formula. Roberts and Alito replaced two justices in the State Farm majority — William Rehnquist and Sandra Day O’Connor — who were generally sympathetic to the campaign by businesses to tamp down punitive damages. Conceivably, Roberts and Alito could join the three State Farm dissenters to form a new majority against Philip Morris. They, like the dissenters, could believe the Constitution does not allow federal courts to impose strict limits on punitive damages or on state courts. To counter that, the tort reform association is arguing that at the time of the Constitution’s Framers, punitive damages were never large and were never used to punish conduct that affected parties not before the Court. That assertion could appeal to Scalia, who based his opposition to State Farm on his understanding of punitive damages in early America. But the main argument advanced by Frey and the rest of the business community is that in modern-day America, basic due process principles do not allow business defendants to be punished for harms suffered by nonparties. To do so would permit multiple punishments for the same conduct — a sort of civil double jeopardy. A compromise outcome that would satisfy the lawyers for Mayola Williams would be for the Court to uphold State Farm but carve out a “tobacco exception” to its 9-to-1 guideline. “Is there likely to be anyone else like the tobacco companies?” asks Joseph Coon of Swanson Thomas & Coon in Portland, who is part of Williams’ team. “It’s hard to imagine a new product doing anything close to the damage that tobacco has done.” But Gaylord, the Portland lawyer, is not so sure — another reason why high punitive damages are needed to deter future bad actors. “History proves that lessons like this never get taught once and for all.”
Tony Mauro can be contacted at [email protected].

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