Tobacco Verdict Overturned

The Supreme Court has overturned a $79.5 million punitive damages verdict against Philip Morris for the death of a smoker. The verdict came from an Oregon jury who had awarded the verdict to the widow of a man who was a longtime smoker of Marlboro cigarettes.

In Philip Morris USA v. Williams, the Court narrowly decided in a 5-4 decision to overturn the award, basing its ruling on a finding that the jury may have improperly based its punitive damages decision on the harm that the defendant had caused to persons other than the plaintiff in the lawsuit. Essentially, the Court found that the jury might have improperly considered the harm caused to smokers in the general public, as opposed to the plaintiff, in setting the punitive damages portion of the award, and used such evidence to punish Philip Morris. This was based, at least in part, on the attorney for the plaintiff asking the jury to think about other people in Oregon injured by tobacco when setting the punitive award.

The jury awarded $821,000 in compensatory damages, and then tacked on another $79.5 million in punitive damages.

The case has been sent back to the Oregon courts for further litigation consistent with the ruling. Notably, the Court did not act in a way that many business interests had hoped. It did not set a hard and fast rule for the ratio of punitive damages to compensatory damages. In fact, the ultimate precedent set by the Court’s ruling is unclear. The Court has indicated that it is impermissible for the jury to punish a defendant for conduct injuring persons other than the plaintiff, but has also held that the jury may consider such evidence in determining the reprehensibility of the defendant’s conduct.