In Philip Morris USA v. Mayola Williams, etc., decided February 20, the Supreme Court held that punitive damages may not be awarded to punish a defendant for injuries caused to persons not involved in the lawsuit in which such damages are awarded. In that case, where the decedent died from smoking Philip Morris products, the jury found Philip Morris knowingly and falsely led him to believe it was safe to smoke such products. The Oregon jury awarded $821,000 in compensatory damages and $79.5 million in punitive damages, and the Oregon Supreme Court affirmed both awards. In reversing, the United States Supreme Court held that the Due Process Clause of the Constitution requires state courts to provide assurance that jury awards of punitive damages punish only the harm done to those whose interests are actually represented in the lawsuit. It should be noted that this decision will not affect punitive damages awarded in a class action to punish a defendant for harm done to all those who are members of the class, because relief in class actions is granted to the entire class.
As pointed out by the three dissenting justices, a confusing aspect of the majority opinion is that the majority agreed that the jury could take into account damages that Phillip Morris’ conduct caused to all smokers in order to determine how reprehensible Phillip Morris’ conduct was. However, the majority held, the amount of the award cannot not be based on damages other than those suffered by those represented in the particular case. In other words, damages to strangers to the lawsuit can be considered to determine whether to award punitive damages at all, but not to determine how much punitive damages to award. As a practical matter, it may be difficult to determine whether a jury has adhered to this principle.
The significance of Philip Morris may best be understood in light of the Court’s 2003 opinion in State Farm Mutual Automobile Insurance Co. v. Campbell, et al., which, while refusing to adopt any mathematical formula for limiting punitive damages to a particular multiple of compensatory damages, observed,
Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process
This observation would make little sense unless the compensatory damages in question can be ascertained with some certainty. As a practical matter, only damages suffered by parties who are actually represented in a lawsuit can be easily ascertained with such certainty. Further, any other rule would subject a defendant to possible multiple punishments for the same injury. For instance, a number of individual plaintiffs might file separate lawsuits in which punitive damages might be repeatedly assessed against the same defendant for injuries caused to all such plaintiffs.
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