Philip Morris USA v. Williams

The Supreme Court dismissed Philip Morris' appeal against a $79.5 million punitive damages judgment.

Jesse Williams was a devoted husband and father who worked as a school custodian in Portland, Ore. He began smoking Marlboro cigarettes in his early twenties. Over the next 47 years, he developed a three pack-a-day habit, ignoring the large amounts of evidence compiled in that time that documented tobacco's hazardous health effects.

The undeniable proof for Williams, unfortunately, came in the form of an inoperable lung cancer diagnosis. Six months later, he was dead. He was 67.

In May of 1997, Williams' widow, Mayola, filed a lawsuit in an Oregon trial court against Philip Morris Inc., the parent company of Marlboro brand cigarettes, claiming the company knew for 50 years of the potential health risks its product posed, but failed to inform the public of those risks.

The trial began in February1999. Attorneys representing Williams argued that the efforts by Philip Morris to hide the dangers of smoking went well beyond simply ignoring the evidence. Rather a deliberate, clandestine campaign to dispel public concerns by instilling false impressions of serious debate going on within the scientific community over smoking's hazardous effects. 

On March 31, a jury found Philip Morris had engaged in negligent and fraudulent practices, which made the company, along with Jesse Williams, equally at fault for his death and awarded $821,485 in compensatory damages.

In addition to compensatory damages, the jury found the fraud Philip Morris had perpetrated to be systemic, affecting a large group of individuals over a 50-year period, and awarded $79.5 million in punitive damages.

The trial judge in the case found that though the large punitive award "...was within the range a rational juror could assess based on the record as a whole," it was "...excessive under federal standards," and reduced the amount to $32 million.

The ruling was appealed by both Williams and Philip Morris to the Oregon Court of Appeals, where on June 5, 2002, the court reversed the trial judge's decision to reduce the award and reinstated the $79.5 million, rejecting Philip Morris's appeal. An appeal to the Oregon Supreme Court produced the same result for the tobacco giant.

Philip Morris sought review from the U.S. Supreme Court where the judgment of the Court of Appeals was vacated and sent back to that court to reconsider the punitive amount, in light of the Supreme Court's 2003 decision in State Farm v. Campbell.

In that case, the Court ruled awards for punitive damages could be restricted if it greatly exceeded the amount of the compensatory award. It also took the additional step of applying a mathematical test in determining a punitive damage award limit. Awards could not be more than nine times the amount of the compensatory amount, and in cases where the compensatory damages award was sizeable, the award amount for punitive damages was not to go beyond the compensatory amount.

The Oregon Supreme Court re-reviewed Philip Morris' appeal under these new qualifications, and again upheld the jury's punitive damage award of $79.5 million.

Philip Morris returned to the U.S. Supreme Court, which on May 30, 2006, accepted review in the case, limiting consideration to the first and second questions in Philip Morris' petition for certiorari.

On Feb. 20, 2007, by a vote of 5-4, the Supreme Court threw out the damages award, finding that the Oregon jury could not punish the tobacco company for injuring people, whom the court called "strangers to the litigation."

In so holding, the majority said it was not deciding whether the punitive award was unconstitutionally excessive, as Philip Morris had asked it to do. Instead, it ordered the state Supreme Court to reconsider, applying the new constitutional standard outlined in the decision.

In January 2008, the Oregon Supreme Court upheld the $79.5 million award, stating that Philip Morris' proposed jury instructions were flawed under state law, which negated its claim of a constitutional error.

Philip Morris appealed to the U.S. Supreme Court. In accepting the case for review, the high court announced it will limit consideration to whether the Oregon Supreme Court ignored its previous ruling.

On March 31, the justices issued a one-sentence order throwing out
the appeal of the case, which was argued in
December. The decision leaves in place the Oregon Supreme
Court decision.

Question presented:

Whether the Supreme Court of Oregon, on remand from the Court’s 2007 decision on the constitutionality of a $79.5 million punitive damages award based on harms done to non-named plaintiffs, improperly asserted a state law procedural bar having the effect of precluding Phillip Morris from asserting a constitutional claim.