Punitive damages: Philip Morris further limits punitive damages

Der nachfolgende Artikel ist zwar aus 2007, ungedachtet dessen ist er hinsichtlich Stand der Rechtsprechung zur möglichen Höhe von US.Strafschadensersatz immer noch relevant: American Bar Association / Business Law Today / Volume 16, Number 6 July/August 2007

The U.S. Supreme Court recently reversed a $79.5 million punitive damages award against tobacco giant Philip Morris in a case that will have far-reaching effects in state and federal tort cases. Philip Morris USA v. Williams, No. 05-1256, 127 S. Ct. 1057 (Feb. 20, 2007). The 5-4 opinion, written by Justice Breyer, further refined the Court’s jurisprudence concerning the constitutional limits on punitive damages, as set forth in BMW v. Gore, 517 U.S. 559 (1996), and State Farm v. Campbell, 538 U.S. 408 (2003). However, it also created new issues that no doubt will challenge courts, juries, and practitioners.

Williams, the widow of a life-long smoker who died of lung cancer, sued in Oregon state court, claiming that Philip Morris deliberately concealed the dangers of smoking from the public. Williams alleged that the company’s conduct far exceeded ignoring evidence of the product’s danger—she claimed that Philip Morris engaged in a deliberate campaign to falsely minimize the dangers of smoking.

The jury agreed and found that Philip Morris knowingly and falsely led the decedent to believe that smoking was safe. The jury awarded $821,000 in compensatory damages and $79.5 million in punitive damages. The trial court ruled that the punitive award was unconstitutionally excessive and reduced it to $32 million.

Both parties appealed to the Oregon Supreme Court, which restored the full $79.5 million punitive award. On a first visit to the U.S. Supreme Court, the case was remanded in light of the State FarmState Farm because it exceeded the 9-1 ratio identified in that opinion. The Oregon Supreme Court rejected these arguments and again upheld the jury’s punitive damage assessment of $79.5 million. opinion. Again before the Oregon Supreme Court, Philip Morris argued that the jury should not have been allowed to consider harm to nonparties in deciding the extent to which to punish Philip Morris. The tobacco company also argued that the punitive award was unconstitutionally excessive under

In the second appeal to the U.S. Supreme Court, Philip Morris argued (1) it is unconstitutional to punish defendants for harm to nonparty victims and (2) the punitive award exceeded the 9-1 ratio identified in State Farm, and was therefore unconstitutionally excessive.

The Court first held that the Due Process Clause prohibits a state from using punitive damages to punish a defendant for injury to nonparties to the litigation. In reaching this conclusion, the Court pointed out that a defendant being punished for harm to nonparties has no opportunity to defend against the charge, and expressed concern for the …