High court sets aside award in Philip Morris case

[cal04]

Supreme Court rules the giant tobacco company cannot be punished for harm to other smokers, setting aside $79.5 million award.

WASHINGTON (Reuters) -- A divided Supreme Court set aside Tuesday a $79.5 million punitive damages award won by a longtime smoker's widow against Altria Group Inc.'s Philip Morris unit.

By a 5-4 vote, the high court ruled the giant tobacco company could not be punished for harm to other smokers in a case involving Mayola Williams, an Oregon woman whose husband died of lung cancer in 1997 after smoking for more than 40 years.


http://money.cnn.com/2007/02/20/news/companies/philip_morris.reut/index.htm?cnn=yes

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.

http://abcnews.go.com/Business/wireStory?id=2889150&CMP=OTC-RSSFeeds0312

[samsingh]

1. i would have expected Breyer to vote differently.

[beth9999]

7. I found it interesting how the count split...

... it wasn't along human/repug lines.

Throw out the award:
Roberts (repug)
Alito (repug)
Breyer (human)
Kennedy (human)
Souter (human)

Keep the award:

Thomas (repug)
Scalia (repug)
Ginsburg (human)
Stevens (human)

[Robbien]

2. The only real surprise

is that one of Bush's lower courts didn't set aside the award before it got all the way up to the Supremes.

Can't have capitalism hurt in any way.

[Danieljay]

3. I have mixed thoiughts about this.... Cigarettes are bad for you, Phillip Morris knew it...

and smokers know it. People have to take some responsibility for their health, and corporations need to take responsibility for their products.

Everyone knows that smoking kills and that its addictive. My father said they used to call them cancer sticks back in the 50's.

As much as I despise big tobacco, there has to be personal resonsibility also.

[AndyA]

5. I agree, but the big issue here is that the companies KNEW it was bad, and continued

to market it as a lifestyle choice. Despite the warning on the package, people justify their habit by saying, "if smoking were really all that bad, they wouldn't be allowed in the marketplace."

And then there's always the old "it won't happen to me, it just happens to other people," which is so wrong.

It's amazing to me that people stopped buying the Ford Pinto when they found out how susceptible the car was to exploding in rear end collisions, yet they will continue to risk their lives by smoking.

How many people have died of Pinto rear end collisions?

How many people die of cancer from smoking?

Go figure. :shrug:

[Danieljay]

12. The movie "Thank you for smoking" is a must see... it really presented the argument well...

Ya know, alcohol is bad, causes liver disease, some people become alcoholics, people are killed in alcohol related car accidents, etc. but I dont see class action law suits against the manufacturers of alcohol for the carelessness of those who drink irrresponsibly. Its addictive too, so what's the difference?

Interesting.

[LanternWaste]

14. Additionally, Big Tobacco was disingenuous

Additionally, Big Tobacco was disingenuous by not telling consumers or the relevant watchdog agencies that they were adding carcinogenic substances to the cigarettes simply because it increased both the "rush" and the speed at which the rush hit the brain.

Also, I'm sure anyone over the age of thirty remembers Big Tobacco giving court depositions which emphatically stated that they "believed" cigarettes were a non-addictive substance even though they knew (and were chemically enhancing the cigarettes to further the addiction) that the smokes are, in fact addictive.

And only two months ago, we read that over the past 10 years, big tobacco has been further enhancing the cigarettes to make them eve more so.

[The Stranger]

6. You missed the point of the tobacco litigation, sadly, like many.

The suits were to return the profits corporations reaped from marketing falsely and fraudulently what they admit was a defective product. Under any economics analysis, such profits are a misallocation of resources.

The personal responsibility bullshit is a red herring.

[Danieljay]

11. return the profits to whom? The people who chose to smoke, or the taxpayers who pay their health

care costs. Help me out here. Who actually was to receive the money?

[The Stranger]

15. In the suits brought by the states' attorneys general, it went back to the taxpayers,

or at least to the tax collector, the government. In this particular case, if they are punitive damages, they would go to the injured. And you cannot get any more injured than subject to death by cancer.

One other thing to consider: Punitive damages are not intended to be a windfall to the plaintiff. That is another right wing canard. Rather, and ironically it is another economics argument that the Righties love so much, punitive damages are an instrument by which the court creates an economic disincentive to commit fraud or torts (injuries).

For example, if the cigarette companies know that only 1 in 10 people whom they injure will die, and only 1 in 10 of those will bring suit, and suit can be settled for amount "x," then all they do is factor into the cost of doing business a fraction of amount "x." They would have an economic incentive to market fraud and profit from a defective product.

Punitive damages destroy that incentive by making it unprofitable, despite the fact that under the formula above, they could continue doing so with impunity. Punitive damages allow the court and the jury to look at all the facts and to police the market failure by issuing the only kind of penalty a corporation understands -- a monetary penalty -- to ensure it operates efficiently and without fraud.

[Turbineguy]

13. Well OK, but is it right

that a very few individuals reap huge rewards that could be better put to use paying for the many who need heatlthcare as a result of smoking?

In my own industry it's asbestos. Lots of people have gotten settlements (after the lawyers skimmed their 40%), but the health plans have gotten nothing. People go out and buy a new car with their money and when they get sick, they turn to their health plan to cover the costs. It's idiocy.

The latest money making scheme is manganese poisoning. Since it seems to produce very symptom known, everybody's got it. Line up and get your share (subject to a small 40% fee).

[The Stranger]

16. Two different types of suits. See post above.

[SteppingRazor]

4. Meh, I think it's actually a good point of law.

If osmoking kills other smokers, then those smokers' families should bring their own suits. The lawsuit mentioned in the OP was not a class-action suit, so a reward taking into account the deaths of smokers outside the frame of the lawsuit wasn't merited.

[depakid]

8. Haven't read the case, but

My guess is that jurors were presented the usual instructions on punitive damages that take into account a company's net worth. I reckon that we'll see in the dissent that this case is basically corporatist cover- and that the majorities framing of the point of law is incorrect.

[gratuitous]

9. Fascinating

Exactly the opposite ruling from the Supreme Court's previous punitive damages ruling in Campbell v. State Farm.

I worked on this case at trial (managing exhibits) and during the state court appeals, and have a pretty good knowledge of the issues and law involved. Punitive damages are intended to punish a bad actor not only for the harm done to the individual plaintiff, but to all people who could have potentially been plaintiffs. The civil wrong done to Jesse Williams was reprehensible in and of itself, but the punitive damages claim is intended to be to the benefit of all the smokers Philip Morris harmed with its 45 year campaign of public deceit. It's important to note that this case was brought on a fraud theory, not a product liability theory. And the fraud was perpetrated not just on Jesse Williams, but on more than 400,000 other Oregonians who also died from using Philip Morris' products as they were advertised and as the manufacturer intended those products to be used.

The Supreme Court is apparently now saying that punitive damages can only inure to the benefit of the individual plaintiff who brings a case, without taking into account the larger societal harm inflicted by the manufacturer's misconduct. This is precisely the opposite tack the Supreme Court has taken in other punitive damages cases, notably Campbell v. State Farm, Gore v. BMW and others.

More judicial gymnastics from a Court remarkably flexible in defending the rights of corporations, ballots, and governments against the rights of the people.

[CatWoman]

10. Supreme Court Nixes Award Against Philip Morris

The Supreme Court today discarded a $79.5 million jury award against the Philip Morris tobacco company, the latest in a decade-long series of ruling that limit punitive damage verdicts against corporations.

In a decision closely watched by manufacturing and other industries, the court ruled 5-4 to throw out the punitive damages that jurors in an Oregon case had awarded to a woman who sued Philip Morris USA after her husband died of lung cancer. The company is now part of the Altria Group.

The jury awarded Mayola Williams $821,000 in compensation, then tacked on the punitive award in part to penalize the company for what was termed a "massive market-directed fraud" that convinced people smoking was not dangerous and did harm to many other people.

In reviewing the case, however, the Supreme Court ruled that juries considering such damage claims can focus only on the harm done to the individual involved in the litigation.

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/20/AR2007022000470.html

[Supersedeas]

17. disregard the wreckless disregard for life in general--jury needs instruction to focus on

disregard on this particular life??

Who were the four dissenters?

[Supersedeas]

18. Thomas and Scalia joined Ginsberg dissent with Stevens filing separately

Of course, Robert and Alito are all about Corporate Protections.