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The Supreme Court’s long-awaited oral argument in the “Big Tobacco” punitive damages case appeared to fizzle on Tuesday, with several justices hinting that they’d like to kick the case back to the Oregon Supreme Court for clarification. Instead of delving deeply into the contentious debate over the constitutionality of high punitive damages in the context of tobacco litigation, the justices seemed troubled over more technical matters during hourlong arguments in Philip Morris USA v. Williams. But there were some signs that if the high court decides to keep the case and rule on it, the justices might be willing to uphold the large verdict in the Philip Morris case, in spite of Court precedents that point toward limiting punitive damages. In the State Farm v. Campbell decision in 2003, the high court suggested that a 9-to-1 ratio between punitive and compensatory damages was the outer limit of acceptability under the Constitution, though it said some cases could warrant higher punitive damages. But at oral argument Tuesday, there was scant mention of ratios and a greater climate of deference toward state courts and how they handle punitive damages without federal strictures. The result could be the Court tolerating a “tobacco exception” to State Farm that would allow higher damages because of evidence of decades of industry fraud and deception over the dangers of smoking. But much of the argument Tuesday was taken up with the smaller-gauge issue of jury instructions that were not allowed in the 1999 trial at issue in the case. Portland, Ore., jurors awarded Mayola Williams $821,485 in compensatory and $79.5 million in punitive damages levied against Philip Morris — a 97-to-1 ratio between punitives and compensatories. Her husband, Jesse, died in 1997 after four decades of smoking Marlboros. Philip Morris had sought a jury instruction at trial that would keep jurors from imposing punitive damages for harm suffered by nonparties, namely other Oregon smokers besides Williams. The trial judge’s denial of that request figured in the tobacco company’s appeal of the verdict, but the Oregon Supreme Court said the trial judge’s decision was proper under state law. Justices on Tuesday seemed bothered by the fact that the jury instruction sought by Philip Morris would have told jurors that they could consider the harm to others inflicted by Philip Morris but could not punish the company for that harm. That seemingly confusing instruction led in turn to puzzlement over the Oregon Supreme Court’s basis for rejecting it. “I don’t know how a juror is supposed to figure this out,” said Justice David Souter, adding later, “Isn’t perhaps the better course to send this back to them [the Oregon Supreme Court] and say, �We don’t know what you mean’?” He and other justices appeared reluctant to supersede the Oregon court’s reading of Oregon law, but they wanted to be sure exactly what the Oregon Supreme Court was saying about that law. “We’re going to be in a kind of bog of mixtures of constitutional law, unclear Oregon state law, not certain exactly what was meant by whom in the context of the trial,” said Justice Stephen Breyer at one point. Andrew Frey, the Mayer, Brown, Rowe & Maw partner arguing on behalf of Philip Morris, tried with mixed success to steer the debate back to his main argument that punishing his client for harm to nonparties violates the due process clause of the 14th Amendment. “What you’re doing is . . . you’re allowing a potentially aberrational verdict to pre-empt the work of other juries,” Frey said. Pressed by Justice Antonin Scalia, Frey acknowledged that if a jury found that actions by a defendant risked harming other people, “they could punish this more severely. What they cannot do is punish it globally.” In advance of the arguments, there was suspense over how the Court’s new members, Chief Justice John Roberts Jr. and Justice Samuel Alito Jr., would respond to the case, because they do not have much of a track record on the punitive damages issue. But their comments did not tip their hands. Alito seemed concerned about the confusing jury instructions and may be one of the justices considering sending the case back to Oregon. More significantly, Roberts pointedly asked Robert Peck, the lawyer for Williams, whether he was asking the Court to reconsider State Farm and other precedents. Peck said no, adding that “this judgment is valid under those precedents.” He said Oregon had enacted procedural safeguards to guarantee that defendants are not unfairly punished, and he urged the Court to allow the states to “address any concerns with due process” by allowing them to continue to experiment legislatively without strict federal constraints. For example, under Oregon law, juries in future tobacco cases would be required to consider the high damages in the Williams case in determining the appropriateness of punitive damages against the same defendant for the same conduct.
Tony Mauro can be contacted at [email protected].

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