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January 31, 2008 OREGON SUPREME COURT UNANIMOUSLY
RESINSTATES
Decision may hold great significance for the future of tobacco litigation
and Commentary and Background Mark Gottlieb, Director of the Tobacco Products Liability Project noted: "If the U.S. Supreme Court denies Philip Morris's petition to review this decision later this year, and it most likely will, it will send a clear signal that there is no bright line ratio test on punitive to compensatory damages when the level of reprehensibility of the defendant's conduct reaches that of the cigarette company defendants. This will loom large for the thousands of pending Florida claims recently filed in the wake of of the Engle class action and should encourage more attorneys to take on individual tobacco products liability cases. It distinguishes cigarette claims from other products liability actions but may, in certain circumstances, apply to other verdicts where reprehensibility rises to a breathtaking level." Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston, noted that, "the unanimous opinion by the Oregon Supreme Court in the case of Williams v. Philip Morris is a resounding victory not only for the Williams family, but also for the principle of corporate accountability. The complete reinstatement of the jury’s 1999 verdict against Philip Morris for its fraudulent, negligent and reprehensible misconduct is consistent with Due Process, Oregon law and fundamental justice. IN THE SUPREME COURT OF THE STATE OF OREGON MAYOLA WILLIAMS, PHILIP MORRIS INCORPORATED, RJ REYNOLDS TOBACCO COMPANY, (CC 9705-03957; CA A106791; SC S051805) The lawsuit was originally brought by the family of Jesse Williams, who smoked Marlboro cigarettes for 47 years, and resulted in a jury finding that Mr. Williams and Philip Morris were equally at fault for the fatal lung cancer suffered by Mr. Williams. The jury awarded the family $800,000 in compensatory damages in 1999. In addition, the jury found that Philip Morris was guilty of common law fraud for its 50 years of lies and awarded $79.5 million in punitive damages. Boston, MA: The cigarette industry suffered a potentially significant litigation setback today when the Oregon Supreme Court, on remand form the U.S. Supreme Court, reinstated the full punitive damages award stemming from a lung cancer trial that concluded nearly 9 years ago. In 1999, an Oregon jury awarded the estate of Mr. Jesse Williams $800,000 in compensatory damages for Mr. Williams wrongful death caused by smoking Marlboro cigarettes. The jury also punished defendant Philip Morris for its conduct by instituting a $79.5 million punitive damages award meant to both punish the defendant and deter future misconduct. Shortly after the U.S. Supreme Court modified the standards for punitive damages in the State Farm Insurance v. Campbell case in 2003, defendant Philip Morris petitioned the U.S. Supreme Court for review on the Williams verdict. The nation's high court declined to review the case other than to send it back to the Oregon Court of Appeals to consider the impact of the State Farm decision. The Appeals court upheld the verdict in 2004 and then the Oregon Supreme Court did the same in 2006. Philip Morris immediately petitioned the U.S. Supreme Court to review the verdict again and, in October of that year, oral arguments were heard in Washington, DC. The U.S. Supreme Court issued its decision remanding the case back to the Oregon Supreme Court on February 20, 2007. The two questions that the U.S. Supreme Court reviewed were:
The U.S. Supreme Court, significantly, did not address the first question. Justice Breyer, who authored the Majority Opinion, stated: In our view, the Constitution’s Due Process Clause 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. Justice Breyer is referring to a proposed jury instruction that the trial judge rejected and whether the rejection of that instruction allowed the possibility that the jury's punitive damages verdict might have been to punish Philip Morris for the effects of its conduct on non-parties to the case. Such a result would have the effect of a class action without the due process protections for the defendant that are part of the class certification process. The U.S. Supreme Court, on remand, asked the Oregon Supreme Court to reconsider its previous ruling and clarify the legal basis for permitting the exclusion of the proposed jury instruction at issue. The Oregon Supreme Court today found that the exclusion of the proposed jury instruction was proper because, while the instruction did properly state the limits on punitive damages, it was defective in other respects which would have made it improper to permit the instruction to be presented to the jury. The basis for affirming the trial judge's decision to disallow the instruction was based solely on Oregon law. Philip Morris will certainly appeal today's decision by petitioning the U.S. Supreme Court a third time for review of the Williams punitive damages verdict. The impact of today's ruling will not be known until the U.S. Supreme Court decides whether or not to accept an appeal of this ruling. But the fact that it did not take on the first question in the 2006 review dealing with Constitutional limits on punitive damages suggests that Philip Morris and the tobacco industry will have to deal with high punitive damages in the future. View today's Decision.
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