Williams v. Philip Morris - the Latest from Oregon on the $79.5 million Punitive Damages Award
On remand from the U.S. Supreme Court, the Oregon Supreme Court has reinstated the $79.5 million punitive award in Williams concluding that the trial court did not err in refusing to give a proposed jury instruction concerning whether the jury could use punitive damage to punish Philip Morris for the impact of its misconduct on other persons, for independent state law grounds unrelated to the issues addressed by the US Supreme Court in its 2007 decision. Williams involved a claim by the widow of a longtime smoker that died of lung cancer against Philip Morris for fraud and negligence. At trial, Williams presented evidence that Philip Morris and other tobacco companies knew of the health dangers of smoking since the 1950s but nevertheless carried out an extensive campaign to convince the public that doubts remained about whether smoking actually was harmful to health. Near the end of trial, Philip Morris offered a proposed jury instruction that would have told the jury that it could not use punitive damages to punish Philip Morris for the alleged impact of its misconduct on other persons that could bring lawsuits of their own where a jury may award punitive damages. The trial court refused to give the instruction. The jury ultimately returned a verdict awarding Williams, among other things, $79.5 million in punitive damages.
Philip Morris appealed and, after a lengthy appeal process, the Oregon Supreme Court concluded the punitive award comported with federal due process and that the proposed jury instruction incorrectly stated the requirements of federal due process and therefore the trial court did not err in refusing to give the instruction. On certiorari, the US Supreme Court concluded that due process prohibits a jury from using a punitive damage verdict to punish a defendant directly for harm to nonparties. Determining that the Oregon Supreme Court had applied the wrong constitutional standard to the proposed jury instruction proffered by Philip Morris, the Court vacated the Oregon Supreme Court’s earlier decision and remanded.
On remand, the Oregon Supreme Court determined that the trial court correctly refused to give the instruction because it contained several other errors completely unrelated to the issues addressed by the US Supreme Court. The Oregon Supreme Court found that the instruction misstated Oregon law in that it incorrectly told the jury that the factors to be used in awarding punitive damages were discretionary when they are mandatory according to state statute and that the instruction mischaracterized this statutory language by referring to a defendant’s “motivation to make illicit profits” as compared to the “profitability of the defendant’s misconduct” as set forth in the statute. The Oregon Supreme Court therefore reaffirmed its prior decision. Shortly after the release of this decision last week, Philip Morris vowed to appeal to the US Supreme Court. A substantive due process issue that the US Supreme Court found unnecessary to address in its decision last year will likely be the subject of the Philip Morris petition.
