Supreme Court Overturns Philip Morris Damage Award

The Supreme Court has given Big Tobacco a big victory today.

The Supreme Court threw out a $79.5 million punitive damages award to a smoker’s widow Tuesday, a boon to businesses seeking stricter limits on big-dollar jury verdicts. The 5-4 ruling was a victory for Altria Group Inc.’s Philip Morris USA, which contested an Oregon Supreme Court decision upholding the verdict.

In the majority opinion written by Justice Stephen Breyer, the court said the verdict could not stand because the jury in the case was not instructed that it could punish Philip Morris only for the harm done to the plaintiff, not to other smokers whose cases were not before it. States must “provide assurances that juries are not asking the wrong question … seeking, not simply to determine reprehensibility, but also to punish for harm caused strangers,” Breyer said.

An interesting result and one that seems reasonable enough on its face. Here’s what’s more interesting:

Dissenting were Justices Ruth Bader Ginsburg, Antonin Scalia, John Paul Stevens and Clarence Thomas.

So, the Court’s two most liberal justices were joined by its two most conservative justices in the minority? In a case where the majority sided with the interests of Big Business over a poor little old widow?

The opinions are available in PDF format. Stevens, Thomas, and Ginsburg all filed separate dissents, with Thomas and Scalia also joining Ginsburg’s dissent. Indeed, Thomas says he joins Ginsburg’s dissent “in full” but “I write separately to reiterate my view that ‘the Constitution does not constrain the size of punitive damages awards.’”

The Ginsburg-Scalia-Thomas dissent begins:

The purpose of punitive damages, it can hardly be denied, is not to compensate, but to punish. Punish for what? Not for harm actually caused “strangers to the litigation,” ante, at 5, the Court states, but for the reprehensibility of defendant’s conduct, ante, at 7–8. “[C]onduct that risks harm to many,” the Court observes, “is likely more reprehensible than conduct that risks harm to only a few.” Ante, at 9. The Court thus conveys that, when punitive damages are at issue, a jury is properly instructed to consider the extent of harm suffered by others as a measure of reprehensibility, but not to mete out punishment for injuries in fact sustained by nonparties.

That’s a sound enough analysis and may well make sense from a constitutional standpoint as well. From a public policy standpoint, though, it’s incredibly problematic. Under the Ginsburg-Scalia-Thomas logic, the tobacco companies could be repeatedly made to pay for the same damages with each individual suit. That’s simply unreasonable.