Philip Morris USA v. Williams
549 U.S. 346 (2007)

Annotate this Case
  • Syllabus  | 
  • Opinion (Stephen G. Breyer)  | 
  • Dissent (John Paul Stevens)  | 
  • Dissent (Ruth Bader Ginsburg)  | 
  • Dissent (Clarence Thomas)

SYLLABUS
OCTOBER TERM, 2006
PHILIP MORRIS USA V. WILLIAMS


SUPREME COURT OF THE UNITED STATES

PHILIP MORRIS USA v. WILLIAMS, personal representative of ESTATE OF WILLIAMS, DECEASED

certiorari to the supreme court of oregon

No. 05–1256. Argued October 31, 2006—Decided February 20, 2007

In this state negligence and deceit lawsuit, a jury found that Jesse Williams’ death was caused by smoking and that petitioner Philip Morris, which manufactured the cigarettes he favored, knowingly and falsely led him to believe that smoking was safe. In respect to deceit, it awarded $821,000 in compensatory damages and $79.5 million in punitive damages to respondent, the personal representative of Williams’ estate. The trial court reduced the latter award, but it was restored by the Oregon Court of Appeals. The State Supreme Court rejected Philip Morris’ arguments that the trial court should have instructed the jury that it could not punish Philip Morris for injury to persons not before the court, and that the roughly 100-to-1 ratio the $79.5 million award bore to the compensatory damages amount indicated a “grossly excessive” punitive award.

   Held:

   1. A punitive damages award based in part on a jury’s desire to punish a defendant for harming nonparties amounts to a taking of property from the defendant without due process. Pp. 4–10.

      (a) While “[p]unitive damages may properly be imposed to further a State’s legitimate interests in punishing unlawful conduct and deterring its repetition,” BMW of North America, Inc. v. Gore, 517 U. S. 559, 568, unless a State insists upon proper standards to cabin the jury’s discretionary authority, its punitive damages system may deprive a defendant of “fair notice … of the severity of the penalty that a State may impose,” id., at 574; may threaten “arbitrary punishments,” State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U. S. 408, 416; and, where the amounts are sufficiently large, may impose one State’s (or one jury’s) “policy choice” upon “neighboring States” with different public policies, BMW, supra, at 571–572. Thus, the Constitution imposes limits on both the procedures for awarding punitive damages and amounts forbidden as “grossly excessive.” See Honda Motor Co. v. Oberg, 512 U. S. 415, 432. The Constitution’s procedural limitations are considered here. Pp. 4–5.

      (b) The Due Process Clause forbids a State to use a punitive damages award to punish a defendant for injury inflicted on strangers to the litigation. For one thing, a defendant threatened with punishment for such injury has no opportunity to defend against the charge. See Lindsey v. Normet, 405 U. S. 56, 66. For another, permitting such punishment would add a near standardless dimension to the punitive damages equation and magnify the fundamental due process concerns of this Court’s pertinent cases—arbitrariness, uncertainty, and lack of notice. Finally, the Court finds no authority to support using punitive damages awards to punish a defendant for harming others. BMW, supra, at 568, n.11, distinguished. Respondent argues that showing harm to others is relevant to a different part of the punitive damages constitutional equation, namely, reprehensibility. While evidence of actual harm to nonparties can help to show that the conduct that harmed the plaintiff also posed a substantial risk to the general public, and so was particularly reprehensible, a jury may not go further and use a punitive damages verdict to punish a defendant directly for harms to those nonparties. Given the risks of unfairness, it is constitutionally important for a court to provide assurance that a jury is asking the right question; and given the risks of arbitrariness, inadequate notice, and imposing one State’s policies on other States, it is particularly important that States avoid procedure that unnecessarily deprives juries of proper legal guidance. Pp. 5–8.

      (c) The Oregon Supreme Court’s opinion focused on more than reprehensibility. In rejecting Philip Morris’ claim that the Constitution prohibits using punitive damages to punish a defendant for harm to nonparties, it made three statements. The first—that this Court held in State Farm only that a jury could not base an award on dissimilar acts of a defendant—was correct, but this Court now explicitly holds that a jury may not punish for harm to others. This Court disagrees with the second statement—that if a jury cannot punish for the conduct, there is no reason to consider it—since the Due Process Clause prohibits a State’s inflicting punishment for harm to nonparties, but permits a jury to consider such harm in determining reprehensibility. The third statement—that it is unclear how a jury could consider harm to nonparties and then withhold that consideration from the punishment calculus—raises the practical problem of how to know whether a jury punished the defendant for causing injury to others rather than just took such injury into account under the rubric of reprehensibility. The answer is that state courts cannot authorize procedures that create an unreasonable and unnecessary risk of any such confusion occurring. Although States have some flexibility in determining what kind of procedures to implement to protect against that risk, federal constitutional law obligates them to provide some form of protection where the risk of misunderstanding is a significant one. Pp. 8–10.

   2. Because the Oregon Supreme Court’s application of the correct standard may lead to a new trial, or a change in the level of the punitive damages award, this Court will not consider the question whether the award is constitutionally “grossly excessive.” P. 10.

340 Ore. 35, 127 P. 3d 1165, vacated and remanded.

   Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Souter, and Alito, JJ., joined. Stevens, J., and Thomas, J., filed dissenting opinions. Ginsburg, J., filed a dissenting opinion, in which Scalia and Thomas, JJ., joined.

Primary Holding
A jury cannot issue a punitive damages award because it wants to punish a defendant for harming people not involved in the case.
Facts
The widow of Jesse Williams sued Philip Morris USA, which had made the Marlboro cigarettes that her husband had smoked at the rate of three packs per day for most of his life until he died of lung cancer. This wrongful death action was based on the assertion that Philip Morris had deliberately misinformed consumers about the health risks of smoking. Williams prevailed at trial and received about $800,000 in compensatory damages as well as $79.5 million in punitive damages. After the trial judge reduced the punitive damages award to $32 million because it was found to be excessive, the higher state courts reinstated the original award. They found that the conduct of Philip Morris merited imposing a larger damages award because it was thoroughly egregious.

Philip Morris argued that the award exceeded constitutional restrictions on the scale of punitive damages. It also pointed out that the jury had based the award in part on harm to other smokers, who had not been involved as parties in the case.

Opinions

Majority

  • Stephen G. Breyer (Author)
  • John G. Roberts, Jr.
  • Anthony M. Kennedy
  • David H. Souter
  • Samuel A. Alito, Jr.

Punitive damages may not be awarded to people who are not involved in the litigation because judges and juries have no opportunity to make findings on those potential disputes. An award of this nature would be a taking in violation of due process. Defendants cannot be expected to defend themselves from allegations of harm to the general public, even though it may be relevant in determining the level of egregiousness of a defendant's actions.

Dissent

  • John Paul Stevens (Author)

Punitive damages are similar in function and purpose to criminal sentences. They are distinct from compensatory damages because they are related to the public harm caused by the defendant. This means that a judge or jury, if it sees fit, is entitled to punish a defendant for harming people who are not involved in the litigation.

Dissent

  • Clarence Thomas (Author)

There are no constitutional limits on punitive damages awards.

Dissent

  • Ruth Bader Ginsburg (Author)
  • Antonin Scalia
  • Clarence Thomas

Punitive damages are based on the defendant's conduct rather than the harm suffered by the individual plaintiff. This conduct reasonably may be assessed in view of the extent of the harm that the defendant caused.

Case Commentary

A party not involved in the lawsuit cannot be punished by the outcome of the lawsuit because it lacked the opportunity to be heard. Otherwise, a punitive damages award would be too arbitrary and unpredictable, preventing a defendant from making an argument for the appropriate situation. However, past instance of harm are appropriate foundations for punitive damages.

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