Supreme Court Reins In Punitive Damages

By February 20, 2007Briefly Legal

Good news for legal rationality today from the U.S. Supreme Court, which overturned a $79.5 million punitive damage judgment against Philip Morris USA. A Multnomah County jury had awarded the amount in 1999 in the case of an Oregon janitor, a decades-long smoker, whose family sued after he died of cancer. (Oregonian story here. Marketwatch story here. Supreme Court opinion available here as a .pdf file.)

The NAM filed an amicus brief in this case, objecting to the awarding of the exorbitant damage figure based on the suffering of others, unproved in trial and not relevant to the specific legal suit. Essentially, trial lawyers were trying to get all the benefits of a class-action lawsuit without actually filing such a suit. As Quentin Riegel, the NAM’s vice president for litigation, observed in a statement,

This case is an important milestone toward ending jackpot justice …The opposite decision would have allowed juries to heap punitive damages on a defendant time and time again for alleged injuries to the same people. We don’t allow criminals to be subjected to multiple punishments for the same crimes, and punitive damages should be subject to similar constraints.

Assessing actual punitive damages will also help prevent unnecessary bankruptcies, layoffs and pension losses, which occur from excessive litigation…Because juries will be more properly restrained, they will act less to try to trump legislative and executive branch decisions that regulate business.

CBS Evening News is scheduled to do a piece on the Supreme Court decision tonight, including an interview with the NAM’s Riegel. Check local listings, as they say.

P.S. Altria’s statement is available here.

UPDATE (Feb. 21, 9:35 a.m.): The news warranted an above-the-fold, page one story in today’s Washington Post. With this sentence:

[The decision] continues the reasoning in the court’s recent rulings that punitive damages — aimed at punishing a company and deterring more wrongdoing — must be proportionate to the wrong committed.

Proportionate, huh? Well, fancy that.