Philip Morris v. Williams Redux

Early last year the Supreme Court ruled against the plaintiff in a tobacco lawsuit against Philip Morris, holding that an Oregon state court erred in relying on harm to parties other than the plaintiff in determining the amount of damages that could be awarded. In doing so they neatly side-stepped the issue of exactly how much in punitive damages may be awarded under the U.S. Constitution. Here's what I said at the time:

... I'm not exactly sure how much of a victory for Philip Morris this was. It is at least possible that this case could be remanded all the way down to the state district court, where a jury could award the exact same amount of damages, and the state appellate and supreme court would uphold it.

So at this point I think it's premature to say what the fallout of this case will be (though of course pro-business groups are applauding the decision.) Nor does this say much for the Supreme Court's jurisprudence of punitive damages, as the the Court has definitely taken a step to the side as opposed to a step forward or backward.

I was half right. Instead of sending the case back to trial, the Oregon Supreme Court affirmed the trial court's ruling, this time on separate grounds that (they say) support the extent of punitive damages originally awarded. So now the Supreme Court, to which this latest ruling has been appealed, is in a bit of a bind:

Philip Morris appealed to the Supreme Court, arguing that the Oregon court had defied the high court’s 2007 ruling, and the justices took the case. “When I read that petition,” Justice Breyer said Wednesday, “I thought this is a run-around” by the Oregon court. But as the arguments unfolded, he said, “I’m not sure that I think that now.”

Justice Breyer and several of his colleagues seemed concerned by the implications of ruling for either side. If they were to side with Philip Morris, said Justice David Souter, “we implicitly have to say that the Oregon Supreme Court has to confront state law issues in a certain sequence,” that is, all at once. “What business do we have” getting so deep into the weeds of state civil procedure? he asked Stephen Shapiro, of Mayer Brown in Chicago.

On the other hand, affirming the Oregon court could invite state courts to drum up all kinds of state procedural bars to effectively nullify Supreme Court decisions.

Chief Justice John Roberts proposed a solution to the court’s dilemma. The court, he said, could decide to finally decide whether the Constitution permits a nearly 100 to 1 ratio of punitive to compensatory damages. “Why don’t we just do that?” he asked.

So the court must either second-guess the Oregon supreme court, affirm that court's holding and risk state defiance on other rulings, or as Roberts and the other conservatives almost certainly want to do, directly tackle the issue of how much in punitive damages the Constitution permits. Clearly the conservatives would prefer the latter, as they'd almost certainly seek to limit the ratio of punitive to economic damages in cases like these (and reign in large punitive damage awards overall, in all cases like this.) Philip Morris would like the same, as reducing a punitive damage award to somewhere around only four or five or so times the amount of economic damages would completely eviscerate the ability of states to punish corporate malfeasance, especially for large companies like Philip Morris that rake in tnes of millions of dollars of profit in a week. So far the Supreme Court has been hesitant to wade directly into the matter, granting broad latitude in earlier punitive damage cases and relying on procedure to side-step the substantive issue in more recent ones. That may come to an end with any decision in this case.