Oregon Supreme Court Reverses $100 Million Punitive Award Against Philip Morris Based on US Supreme Court Decision Re Punitive Limits

The $100 million punitive damage award against Philip Morris got reversed by the Oregon Supreme Court last week, with the state's high court returning the case back to the trial court for yet another consideration of how much the tobacco company should pay the family of Michelle Schwartz in punitives for her lung cancer death. (The opinion is available online in pdf format.)

The trial court judge already reduced the jury's initial $120,000,000 punitive award to $100 million; now, who knows where it will end up.

Why this second reduction by the Oregon Supreme Court?

Apparently, the tobacco company's defense argument - that jury instructions failed to stop the jurors from awarding punitives against Philip Morris for cancer deaths other than Michelle Schwartz's - prevailed upon appeal.

This, even though the jury's verdict was totally valid under the law that existed at the time that the verdict was reached and the judgment was signed by the trial judge.

What happened?

It wasn't a case of reevaluation of the court's charge: the defense's proposed jury instructions didn't get approved by the trial court judge, either. This decision is a direct result and reaction to the United States Supreme Court's decision that due process requires limitation on punitive damages.

Problem is, the US Supreme Court didn't give any clear help to lower courts in how they are to determine the due process parameters on punitive damage awards. As Oregon Justice Martha Walters explains in last week's opinion, the United States Supreme Court "... has thrust upon state courts the role of determining whether a jury award of punitive damages exceeds the outer limits that substantive due process allows."

Here's what the U.S. Supreme Court opined in State Farm Mut. Automobile Ins. Co. v. Campbell, 538 US 408, 422, 423 (2003):

"[a] defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties' hypothetical claims against a defendant under the guise of the reprehensibility analysis[.]"

Would the same result happen if this case had been filed in another state?

Gotta wonder if another state supreme court, say Texas, would see things the same way as Oregon in the application of this warning from the Supremes. And, will this result simply mean that Plaintiff's lawyers are going to be much more thoughtful about where they file suit against huge, monolithic corporations like Philip Morris?

Nothing like certainty in litigation.