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Philip Morris USA v. Williams - 549 U.S. 346, 127 S. Ct. 1057 (2007)

Rule:

The Due Process Clause of the U.S. Constitution forbids a state to use a punitive damages award to punish a defendant for injury that it inflicts upon nonparties or those whom they directly represent, i.e., injury that it inflicts upon those who are, essentially, strangers to the litigation. For one thing, the Due Process Clause prohibits a state from punishing an individual without first providing that individual with an opportunity to present every available defense. Yet a defendant threatened with punishment for injuring a nonparty victim has no opportunity to defend against the charge by showing, for example, that the other victim was not entitled to damages. For another, to permit punishment for injuring a nonparty victim would add a near standardless dimension to the punitive damages equation.

Facts:

Plaintiff, Jesse Wiiliams’ widow, brought suit in an Oregon state court against defendant Philip Morris USA, the tobacco company that manufactured the brand of cigarettes that Williams had favored. During the trial, the plaintiff's attorney told the jury to think about "how many other" Oregon smokers there might have been whose deaths might be traced to the company's products. The trial court did not accept a jury instruction, proposed by the tobacco company, that would have told the jury that it was permissible to consider the extent of harm suffered by others in determining the amount of punitive damages, but the jury was not to punish the company for the impact of its alleged misconduct on other persons. Instead, the court instructed the jury that punitive damages were awarded against a defendant to punish misconduct and to deter misconduct and were not intended to compensate the plaintiff or anyone else for damages caused by the defendant's conduct. Subsequently, the jury found that smoking had caused Williams’ death, and that Philip Morris had knowingly and falsely led Williams to believe that it was safe to smoke. With respect to the plaintiff's deceit claim, the jury awarded about $821,000 in compensatory damages and $79.5 million in punitive damages. Philip Morris challenged the judgment, asserting that the jury was impermissibly permitted to calculate punitive damages based on harm to parties who were not parties to the litigation.

Issue:

Was the jury impermissibly permitted to calculate punitive damages based on harm to parties who were not parties to the litigation?

Answer:

No determination. The case was remanded for the reconsideration of the award.

Conclusion:

The judgment upholding the punitive damages award was vacated and remanded to the lower court for the reconsideration of the award. The U.S. Supreme Court held that, if the punitive damages award was based in part on the jury's desire to punish the manufacturer for harming nonparties, such an award amounted to a taking of property from the manufacturer without due process. While it was permissible to consider nonparty harm in determining reprehensibility, the punitive damages award to punish a manufacturer for injury inflicted on strangers to the litigation, without an opportunity to defend the charge, violated due process. Thus, procedures were required to inform the jury that, while harm to nonparties was relevant to reprehensibility, punitive damages could not be awarded to punish the manufacturer for such harm.

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