Philip Morris USA v. Williams

Background

A tobacco maker, Philip Morris, was sued by the widow of Jesse Williams, a heavy smoker, for negligence and deceit. A jury found the company had misled Williams, awarded about $821,000 in compensatory damages and $79.5 million in punitive damages. The trial judge reduced the punitive award to $32 million, but an Oregon appeals court restored $79.5 million. Philip Morris argued the jury had been allowed to punish the company for harm to other people who were not parties to the case.

Reasoning

The Court asked whether the Due Process Clause allows juries to punish a defendant for harms to people not before the court. The Court held this is forbidden because the defendant cannot defend against those unrepresented claims, juries would have to guess about scope and number of victims, and such punishment risks arbitrariness and unfair surprise. The Court said juries may still consider harm to others only as evidence of how reprehensible the defendant’s conduct was, not as a direct basis for punishment. The Court vacated the Oregon decision and sent the case back for further proceedings, and did not decide whether the award was excessively large.

Real world impact

States must ensure jury procedures and instructions prevent punitive awards based on punishment of nonparties. Companies facing large punitive awards may get retrials or reductions if juries were influenced by harm to strangers. Plaintiffs may still present evidence about harm to others to show how blameworthy conduct was, but courts must guard against juries using that evidence to set punishment.

Dissents or concurrances

Several Justices dissented, arguing the Court’s new rule is novel and unnecessary. They said punitive damages properly punish public harm and that Oregon had followed existing precedents, so the state judgment should have been affirmed.