Real Damages for Imaginary Plaintiffs
Today, in a decision involving an astonishing $79.5 million punitive damage award to the widow of an Oregon man who died of lung cancer after smoking Marlboros for 42 years, the U.S. Supreme Court ruled that a jury in a civil case may not punish a defendant for harm to people who are not parties to the case. To do so, the five-justice majority said, violates the defendant's right to due process because he cannot defend against hypothetical damage claims by people who are not involved in the lawsuit. Furthermore, the Court said, "to permit punishment for injuring a nonparty victim would add a near standardless dimension to the punitive damages equation." Although this makes sense to me, the Court's proposed solution—that juries may consider harm to nonparties in judging the "reprehensibility" of a defendant's conduct but not to "punish a defendant directly" for that harm—seems untenable.
The plaintiff, Mayola Williams, claimed her husband, Jesse, was tricked into smoking by Philip Morris' false assurances of safety. Given all the publicity and official warnings about the health hazards of smoking during the period when Williams was smoking (from the mid-1950s until 1997), this seems like a load of crap to me, but it was a load of crap the jury swallowed. Having determined that Williams smoked at least partly because he was taking medical advice from Philip Morris, the jury awarded $821,000 in compensatory damages and nearly 100 times that amount in punitive damages. Since the Supreme Court has indicated that punitive-to-compensatory ratios exceeding the single digits are constitutionally suspect, it seemed likely that it would consider the $79.5 million award in this case "grossly excessive." But it did not get that far, instead concluding that the Oregon Supreme Court should have more closely scrutinized the role that harm to people other than the plaintiff played in the jury's decision.
During the trial, Mayola Williams' lawyer urged the jury to think about all the people in Oregon who had died or would die from smoking-related illnesses and suggested that Philip Morris was responsible for one-third of those deaths. Philip Morris asked the judge to instruct the jurors that they were "not to punish the defendant for the impact of its alleged misconduct on other persons, who may bring lawsuits of their own in which other juries can resolve their claims." Instead he told them that "punitive damages are awarded against a defendant to punish misconduct and to deter misconduct," and "are not intended to compensate the plaintiff or anyone else for damages caused by the defendant's conduct."
Now the U.S. Supreme Court has sent the case back to the Oregon Supreme Court, which upheld the punitive damage award, instructing it to consider whether there were adequate safeguards to prevent the jury from considering injury to nonparties for the wrong reason:
How can we know whether a jury, in taking account of harm caused others under the rubric of reprehensibility, also seeks to punish the defendant for having caused injury to others? Our answer is that state courts cannot authorize procedures that create an unreasonable and unnecessary risk of any such confusion occurring. In particular, we believe that where the risk of that misunderstanding is a significant one—because, for instance, of the sort of evidence that was introduced at trial or the kinds of argument the plaintiff made to the jury—a court, upon request, must protect against that risk. Although the States have some flexibility to determine what kind of procedures they will implement, federal constitutional law obligates them to provide some form of protection in appropriate cases….Given the risks of unfairness that we have mentioned, it is constitutionally important for a court to provide assurance that the jury will ask the right question, not the wrong one.
The subtle distinction urged by the Court is apt to be lost on many, if not most, jurors. As a result, to quote the Court's decision, "the fundamental due process concerns to which our punitive damages cases refer—risks of arbitrariness, uncertainty and lack of notice—will be magnified." I tend to think those "fundamental due process concerns," which inevitably arise when a jury is asked to impose what amounts to a criminal punishment based on civil standards of proof with little or no statutory guidance, are the real problem.
I was surprised to see that New York Times legal columnist Adam Liptak (writing before this decision came down) seems to agree there is something inherently screwy about punitive "damages." But perhaps I shouldn't have been, given the way this issue has produced unexpected alliances on the Supreme Court. In addition to John Roberts, Samuel Alito, and Anthony Kennedy, the majority in the Philip Morris case included David Souter and Stephen Breyer (who wrote the decision). The dissenters, along with Ruth Bader Ginsburg and John Paul Stevens (who had joined earlier decisions limiting punitive damages), included Clarence Thomas and Antonin Scalia, both of whom have questioned the propriety and feasibility of deciding when punitive damages violate the Due Process Clause.
