127 S. Ct. 1057 (2007), argued 31 Oct. 2006, decided 20 Feb. 2007 by vote of 5 to 4; Breyer for the Court, Stevens, Thomas, and Ginsburg in dissent. Mayola Williams sued Philip Morris, the manufacturer of Marlboro cigarettes, for the wrongful death (from lung cancer) of her husband Jesse, a lifelong Marlboro smoker. The decedent had allegedly smoked only because he believed Philip Morris's representations that smoking was safe. An Oregon jury awarded the plaintiff $821,000 in compensatory damages (reduced to $521,000 because of a statutory cap on pain and suffering) and $79.5 million in punitive damages (of which 60 percent was diverted to the state government pursuant to another statute). The award was ultimately upheld by the Oregon Supreme Court, even after the U.S. Supreme Court ordered that the punitive component of the award be reconsidered in light of State Farm Mutual Automobile Insurance Co. v. Campbell (2003). The Oregon Supreme Court sustained the award because it found Philip Morris's behavior to be “extraordinarily reprehensible.”
A sharply divided Supreme Court found that the punitive award deprived Philip Morris of property without due process of law. Justice Stephen Breyer's majority opinion declared for the first time that a fact finder may not award punitive damages for harm caused to nonparties. Such harm is, Breyer conceded, relevant to the reprehensibility of the defendant's actions (and thus a legitimate consideration in the decision to award punitive damages), but it cannot directly determine the amount of the award. The majority declined to consider a separate question—whether the 100-to-1 relationship between punitive and compensatory awards met the constitutional standards of BMW of North America, Inc. v. Gore (1996)—presumably because it expected the amount to be reduced upon remand to the Oregon courts now that nonparties are excluded from caluclations.
Justice John Paul Stevens found the majority's distinction between considering third-party harm in order to assess reprehensibility and considering it in order to punish defendants “directly” to be unintelligible. Justice Ruth Bader Ginsburg noted that Philip Morris's proposed jury instruction (the rejection of which was the basis for its appeal) itself allowed the consideration of harm suffered by others. Justice Clarence Thomas insisted that Supreme Court jurisprudence on punitive damages was not susceptible of principled application, and that the Oregon result could not therefore be termed unconstitutional.
Arguably, the most coherent argument for overturning punitive damage awards is the Eighth Amendment's ban on excessive fines, but this option was rejected by the Court in *Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc. (1989) on the ground that fines are payable to the government, not to private parties. The fact that 60% of Williams's award will go to Oregon (whose statute declares that the 40% it leaves to plaintiffs is meant to pay attorneys’ contingent fees, undercutting the claim that punitives are not compensatory) makes the “excessive fines” claim more compelling.
In light of Williams, judges must tell jurors to assess harm to others in deciding whether a defendant's conduct was sufficiently awful to merit punitive damages. When calculating such damages, however, jurors must consider only the harm to the individual plaintiff. In 2008, on remand of this case, the Supreme Court of Oregon adhered to its prior decision, setting the stage for further Supreme Court consideration of the constitutional limits on punitive damage awards.