$75 million reversal a strike against “jackpot justice”

Manufacturing News, Source : The Manufacturer US
Published : 05 Mar 2007 21:32

liability: Supreme Court sets precedent for limiting punitive damage awards

Jesse Williams didn’t believe a US company would intentionally sell a dangerous product, so the long-time school janitor never quit his 45-year, two-pack-a-day Marlboro habit. He lived just five months after being diagnosed with lung cancer. His widow, Mayola, sued Marlboro-maker Philip Morris and parent Altria Group for, as she described it, “massive marketing campaigns” that were “misleading people into thinking cigarettes were not dangerous.”

An Oregon jury in 1999 awarded the Williams family $79.5 in punitive damages, the highest verdict against a tobacco company to date. The emotions ran high in court and in the jury room—and that’s what went wrong, according to the US Supreme Court, which in February overturned the judgment. The Court voted 5-4 to overturn the jury verdict, ruling that it violated earlier Court decisions on limits to punitive damages. In earlier rulings, the justices decided that punitive damages should normally match actual damages (e.g., medical bills, loss of work). The $79.5 million verdict was nearly 100 times that of the $880,000 in actual damages the Oregon jury awarded Williams’ estate.

Also at odds: was that Oregon verdict a blow for smokers everywhere? The size of the ruling was more that of a class-action suit, but defense attorney Andrew Frey argued that the Williams family deserved compensation based only on individual harm, not harm to the public at large. Justice Stephen Breyer wrote in the Court’s majority opinion that the Oregon verdict was based in part on a desire to punish a tobacco company.

“It is unfair to allow a lawyer for a single plaintiff to try to turn his or her claim into a stealth class-action case,” said Quentin Riegel, vice president for litigation of the National Association of Manufacturers. “If alleged effects of a defendant’s conduct on third parties are to be used to assess punitive damages, due process requires that those parties be part of the case.

“This case is an important milestone toward ending jackpot justice,” Riegel added. The alternative, says Riegel, would have allowed complainants to “heap punitive damages on a defendant time and time again for alleged injuries to the same people.”

Comments on this story

click here to add a comment