Reward to Smoker's Widow Nixed by Top Court; but Bench Sets No Limit on Punitive Damages
Byline: Gregory Lopes, THE WASHINGTON TIMES
The Supreme Court yesterday took away almost $80 million awarded to the widow of a longtime smoker and threw into doubt the prospects of future high-dollar jury awards against businesses.
A divided Supreme Court ruled 5-4 in favor of Altria Group, the parent of Richmond company Philip Morris USA and Kraft Foods, which contested an Oregon Supreme Court's upholding of an earlier verdict that forced the maker of the popular Marlboro cigarette to pay $79.5 million in damages.
Justice Stephen G. Breyer, writing for the majority, said a punitive-damages award based on a jury's desire to punish a defendant for harming those who are not parties to the lawsuit amounted to taking property from the defendant, which would be a violation of the constitutional right of due process. Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr., Anthony M. Kennedy and David H. Souter made up the rest of the majority.
However, the court refused a request from the tobacco giant that it set a clear limit on the size of punitive damages awarded in tobacco cases.
"This decision is a big deal because it will have a tremendous impact on other industries facing similar litigation," said Robin Conrad, senior vice president of the National Chamber Litigation Center at the U.S. Chamber of Commerce. "The court's decision now provides businesses with additional protection against juries' arbitrary awards of punitive damages."
Jonathan S. Franklin, a D.C. lawyer, agreed, saying the ruling that juries can't consider the harm to others "limits the ability of plaintiffs to argue for enormous damage awards."
"This is not just a victory for the tobacco companies," he told the Associated Press, but it's good for any company that might be subject to product liability suits in which punitive awards might be involved.
But Justice Clarence Thomas, in his dissent, said the ruling leaves the court with no clear stance on punitive damages.
"Today's opinion proves once again that this court's punitive damages jurisprudence is 'insusceptible of principled interpretation.' "
The court's decision leaves U.S. juries to ponder punitive damages under this rule: The jury may consider actual or potential harm to others in deciding how reprehensible a company's conduct was, but may not punish the company for the harm caused to others.
"The court took a big wooden spoon and stirred up the swamp, making the view muddier than ever," said Steve Emmert, chairman of the appellate practice subcommittee for the Virginia state bar's litigation section. …