US: The US Supreme Court re-entered the national debate over tort reform on Tuesday, announcing that it would rule on the constitutionality of an Oregon jury's decision to assess Philip Morris for punitive damages of tens of millions of dollars for civil fraud related to promotion of cigarette smoking.
The court granted Philip Morris's request to review a February 2006 ruling by the Oregon Supreme Court which upheld the award.
Philip Morris versus Williams began with a lawsuit by Mayola Williams, the widow of Jesse Williams, a lifelong Marlboro smoker who died of lung cancer in 1997. She claimed the company had knowingly lied when it minimised the risks of smoking.
At issue is the relationship between compensatory damages (which juries give victims to make up for the pain, suffering or death caused by corporate misconduct) and punitive damages (which juries assess to condemn and deter that misconduct).
For many years, business and its supporters have complained that punitive damages impose crippling financial costs on companies.
Recently, the Supreme Court has sided with business, ruling the constitution prohibits excessive punitive damage awards because they violate companies' rights to due process.
Three years ago, in a Utah case involving $145 million (€113 million) in punitive damages assessed on a $1 million compensatory award, the court specified the ratio between punitive and compensatory damages may not exceed nine to one.
In this current case, the jury's $79.5 million punitive award, later reduced to $32 million, was much more than nine times the compensatory award of $521,485. The Oregon Supreme Court said that was not excessive, given the cigarette-maker's "extraordinarily reprehensible" conduct.
Philip Morris argues the Oregon court's decision violated the Supreme Court's 2003 ruling - and that punitive damages cannot be assessed for the impact of corporate behaviour on people not parties to a particular lawsuit. - (LA Times-Washington Post)