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WASHINGTON � The U.S. Supreme Court on Tuesday tossed out a $79.5 million punitive damage award won by a smoker’s widow against Philip Morris, ruling that Oregon jurors improperly considered harm to other smokers in punishing the tobacco giant. By a 5-4 vote, the court said that a state violates the Constitution’s due-process clause when it uses a punitive damage award to punish a defendant for injuries suffered by “strangers to the litigation,” in the words of Justice Stephen Breyer, who wrote the majority opinion. “A defendant threatened with punishment for injuring a nonparty victim has no opportunity to defend against the charge,” Breyer wrote. Business advocates applauded the ruling as a major body blow, grounded in the Constitution, against high punitive damage awards. “This is a huge, huge win for corporate defendants,” said Lori Nugent, chair of the enterprise risks practice of Cozen O’Connor in Chicago, and author of a state-by-state guide on punitive damages. “Lawyers who exhort jurors to send a message; that has to stop now. It rips the guts right out of a case.” But plaintiffs’ groups say the decision won’t change much, especially since the court on Tuesday also said that harm to others could still be considered by jurors in determining the defendant’s level of “reprehensibility.” “Ultimately, I don’t think this is going to be very significant. The court was slaying dragons that don’t exist,” said Robert Peck, who argued the case on behalf of Mayola Williams, widow of longtime Oregon smoker Jesse Williams, whose estate won the case against Philip Morris. On remand to Oregon, Peck said, the case could still result in a significant punitive damage award.
‘This is a huge, huge win for corporate defendants. Lawyers who exhort jurors to send a message; that has to stop now. It rips the guts right out of a case.’

LORI NUGENT Cozen O’Connor


The ruling also disappointed some business groups because it explicitly stopped short of setting numerical limits on excessive punitive damages � a holy grail for critics of the tort system. The court’s sidestep caused some tobacco-company stocks to dip on Wall Street after the ruling. The decision in Philip Morris USA v. Williams represented the first time Chief Justice John Roberts and Justice Samuel Alito showed their stripes on an issue that scrambles the usual alliances on the court. Both Roberts and Alito joined the Breyer majority, along with Justices Anthony Kennedy and David Souter. In dissent were Justices Clarence Thomas � who sees no limit to punitive damages written in the Constitution � and Justices John Paul Stevens, Antonin Scalia and Ruth Bader Ginsburg. It was also the first time that evidence of tobacco-company misconduct, dug up by years of discovery in litigation, was before the court, albeit in the background. But Breyer’s majority made scant mention of the evidence or of any particulars of Williams’ case. Commentators and dissenters questioned how the court’s ruling will be applied in real courtrooms. Breyer said judges will have to be vigilant in ensuring that jurors only consider harm to others in assessing reprehensibility, not in deciding the level of punitive damages. “State courts cannot authorize procedures that create an unreasonable and unnecessary risk of any such confusion occurring,” Breyer said. “It seems, then, that jurors can think about harm to others in deciding that the conduct was awful enough to merit punitive damages” in the first place, said Michael Krauss, torts professor at George Mason University School of Law. “But then they can’t think about it anymore, because when they set the amount of the damage award, the court is saying it has to reflect only the harm to the plaintiff. You’ll have to wash your brain out” between steps. Krauss adds, “How you force the jury into this intellectual straightjacket isn’t clear. What is clear is that this issue will be back before the court.” Ginsburg in her dissent also predicted that the task of guiding jurors will be difficult. “A judge seeking to enlighten rather than confuse surely would resist delivering the requested charge.” She added that the majority should have shown greater respect to the Oregon Supreme Court and other state courts that have tried “diligently to adhere to our changing, less than crystalline precedent.” In another key business ruling from the Northwest on Tuesday, the court ruled unanimously in favor of Weyerhaeuser, the timber company, in a dispute over “predatory bidding.” Ross-Simmons, a sawmill company, claimed that Weyerhaeuser tried to drive it out of business by bidding up the price of red alder logs to a level that Weyerhaeuser could afford to pay, but Ross-Simmons could not. In a ruling by Thomas, the court agreed that the same standard used in antitrust “predatory pricing” cases should apply to bidding or buying cases � a standard that is difficult for plaintiffs like Ross-Simmons to meet. Tony Mauro is the U.S. Supreme Court correspondent for Legal Times, a Recorder affiliate based in Washington, D.C. His e-mail address is [email protected].

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