Philip Morris USA v. Williams
127 S. Ct. 1057 (2007)
Rule of Law:
The Due Process Clause of the Fourteenth Amendment prohibits a state from using a punitive damages award to punish a defendant for injuring nonparties to the litigation.
Facts:
- Jesse Williams was a long-term, heavy smoker of Marlboro cigarettes, which are manufactured by Philip Morris.
- Williams smoked in significant part because he believed it was safe to do so.
- Philip Morris engaged in a prolonged campaign of deceit, knowingly and falsely leading Williams and other consumers to believe that its cigarettes were safe.
- As a result of his smoking, Williams contracted a smoking-related illness that ultimately caused his death.
- Williams's widow, Mayola Williams, filed a lawsuit on behalf of his estate against Philip Morris for negligence and deceit.
Procedural Posture:
- Mayola Williams, representing Jesse Williams's estate, sued Philip Morris in an Oregon state trial court.
- A jury returned a verdict for Williams, awarding approximately $821,000 in compensatory damages and $79.5 million in punitive damages.
- The trial court judge found the punitive award excessive and reduced it to $32 million.
- Both parties appealed to the Oregon Court of Appeals, which reinstated the jury's $79.5 million punitive damages award.
- Philip Morris appealed to the Oregon Supreme Court, which initially denied review.
- The U.S. Supreme Court granted certiorari, vacated the judgment, and remanded the case for reconsideration in light of State Farm Mut. Automobile Ins. Co. v. Campbell.
- On remand, the Oregon Court of Appeals again upheld the $79.5 million award.
- Philip Morris appealed to the Oregon Supreme Court, which this time granted review and affirmed the judgment of the Court of Appeals.
- The U.S. Supreme Court granted Philip Morris's petition for a writ of certiorari to review the Oregon Supreme Court's decision.
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Issue:
Does the Due Process Clause of the Fourteenth Amendment permit a state to use a punitive damages award to punish a defendant for injuries inflicted upon nonparties who are strangers to the litigation?
Opinions:
Majority - Justice Breyer
No. The Due Process Clause forbids a state from using a punitive damages award to punish a defendant for injury that it inflicts upon nonparties. Punishing a defendant for harming strangers to the litigation violates due process for three main reasons. First, a defendant has no opportunity to present defenses against the claims of nonparties. Second, allowing punishment for harm to nonparties would introduce a standardless and speculative dimension to the punitive damages equation, magnifying the risks of arbitrariness and uncertainty. Third, there is no legal authority supporting the use of punitive damages for this purpose. While evidence of harm to nonparties is admissible to demonstrate the reprehensibility of the defendant's conduct—as conduct harming many is more reprehensible than conduct harming a few—the jury may not use that evidence to directly punish the defendant for those specific nonparty harms. States must provide procedural safeguards, such as proper jury instructions, to ensure the jury does not confuse these two concepts.
Dissenting - Justice Stevens
Yes. There is no reason why an interest in punishing a defendant for harming persons not before the court should not be taken into consideration when assessing the appropriate sanction for reprehensible conduct. Punitive damages are a sanction for the public harm the defendant's conduct has caused, not just the harm to the plaintiff. The majority's distinction between considering third-party harm for reprehensibility and punishing for it directly is a 'nuance' that is logically elusive; when a jury increases an award based on third-party harm, it is by definition punishing the defendant directly for that harm. Just as a murderer who injures bystanders with a bomb should be punished more severely, a company that deceives thousands of smokers should face a punishment that reflects the full scope of its wrongdoing.
Dissenting - Justice Thomas
Yes. The Constitution does not constrain the size of punitive damages awards. The majority's holding, though styled as 'procedural,' is merely a confusing implementation of the Court's flawed substantive due process jurisprudence in the area of punitive damages. This line of cases is 'insusceptible of principled application' and represents an improper judicial invention of constitutional limits where none exist.
Dissenting - Justice Ginsburg
Yes. The purpose of punitive damages is to punish, and conduct that risks harm to many is more reprehensible and deserving of greater punishment than conduct that risks harm to a few. The distinction the majority draws—allowing a jury to consider harm to others as a measure of reprehensibility but not to mete out punishment for those injuries—is confusing and impractical. The Oregon courts correctly applied this Court's precedents, and the majority's decision vacates their judgment based on an unpreserved objection to a confusing proposed jury instruction, disrespecting the diligent work of the state courts.
Analysis:
This decision significantly refines the constitutional limits on punitive damages established in BMW v. Gore and State Farm v. Campbell. It creates a critical procedural due process protection by forbidding juries from directly punishing defendants for harms to nonparties. The case establishes a fine, and potentially difficult to apply, distinction between using evidence of widespread harm to prove reprehensibility (which is permissible) and using it as a basis for calculating the punishment itself (which is not). This holding places a new burden on trial courts to craft precise jury instructions to guide juries on this distinction, likely leading to more litigation and appeals centered on the adequacy of those instructions.
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