Punitive clarity

In listening to arguments in a tobacco case last week, the justices of the U.S. Supreme Court must have felt like the Bill Murray character in the movie “Groundhog Day” (film) who is forced to relive the same day over and over. For the third time, they were asked by Philip Morris USA to overrule an Oregon jury’s award of $79.5 million in punitive damages to the widow of a smoker who died of lung cancer. That sum was in addition to $521,000 the plaintiff received in compensatory damages.

The justices first considered this case in 2003, when they sent it back to Oregon courts. Last year, dissatisfied with their response, the high court ruled that the award was inflated because the jury had been allowed to take into account not only the damage inflicted on Jesse Williams, who died in 1997, but also the illnesses of other smokers. That approach, the justices ruled, violated the due process clause of the Constitution. They returned the case to the Oregon Supreme Court, expecting it to implement their holding. Instead, the Oregon court upheld the original award on spurious state-law grounds. That amounted to what Justice David H. Souter last week characterized as “some clever device” to get around a decision the lower court didn’t like.

high court ruled When the defendant is a much-reviled tobacco company, such an end run might not seem so outrageous. But suppose lower courts in the 1950s had succeeded in frustrating the implementation of the Supreme Court’s Brown vs. Board of Education decision outlawing segregated public schools? The court forestalled such subversion of its mandate in a 1958 decision emphasizing that “the federal judiciary is supreme in the exposition of the law of the Constitution.”

The primary issue in this third round of litigation is whether Oregon’s highest court circumvented last year’s U.S. Supreme Court ruling. But that obscures another important element in this case: the continuing refusal of state courts to take seriously a series of U.S. Supreme Court decisions warning that punitive damage awards may not be “grossly excessive.” That line of cases began in 1996 with a decision striking down a $4-million award to a physician who sued BMW for not disclosing that a “new” car he had purchased had been repainted. His actual damages were only $4,000. Unfortunately, the Supreme Court hasn’t established a clear rule to determine when punitive damages become disproportionate to compensatory damages.

At Wednesday’s argument, Chief Justice John G. Roberts Jr. suggested that using the Oregon case to make a clear statement about the limits of punitive damages might be the best way to reassert the court’s authority. We agree.