Claris Law Legal Blogging Community

Name:

E-mail:

Phone Number:

Zip Code:

Your Question:

Editor: C. Calvin Warriner
Profession: Cigarette & Tobacco Attorney

Perhaps it is the process server, or several hundreds of process servers delivering proper notice from several thousand individual claimants to the corporate offices of Big Tobacco. In our legal system, notice is a very important Constitutional concept behind due process and the prevention of arbitrary Jury awards. Yesterday's US Supreme Court Opinion in Philip Morris v. Williams addressed the notice requirement, and the prospect of strangers to the litigation being awarded punitive damages. As a result, Philip Morris did prevail against William's Estate, but Big Tobacco's victory is limited. In fact in the long run, that victory might turn out to be a serious defeat.

The US Supreme Court reasoned that States can permit punitive damages awards if such awards serve a legitimate State interest, that of punishing unlawful conduct and deterring its repetition. However, punitive damages awards cannot be held against non-parties to a lawsuit, because it would be a taking of property without due process. This means that Big Tobacco must have fair notice of the severity of the penalty that a State might impose for unlawful conduct. Without such notice, a punitive damages award might be arbitrary, and where the amounts are large (perhaps larger than nine times the compensatory damages award), there is a danger that one State might be imposing its own public policies on other States with different public policies.

The Court mentioned that punitive damages cannot be grossly excessive, but did not define "excessive" with any exactitude. In addition, punitive damages cannot be awarded to "strangers to the litigation."

Because Jesse Williams believed the Philip Morris chorus that smoking cigarettes was safe, when such was dangerous, Williams died as a result. The Williams Jury in Oregon awarded Jesse's estate $821,000 in compensatory damages, and another 100 times that amount, or $79.5 Million in punitive damages for the company's deceit. The Oregon trial court reduced the punitive award to $32 Million. The Appeals Court raised the award back up again. PMI took it up to the US Supreme Court the first time, and the Supreme Court remanded it back to the appeals court in Oregon, which did not rule any differently. PMI then appealed to the Oregon Supreme Court, which upheld the appeals court, adding that it did not think that the US Supreme Court would overturn their decision, but it did so, yesterday.

This brings us to the Engle decision in Florida. The Florida Supreme Court decertified the class, which means that every claimant has to file separately, in behalf of themselves and no other. Proper pleading and Jury instructions (to award only the claimant and not to exceed 9 times the compensatory damages in awarding punitive damages) should eliminate repeating the outcome of the Williams case.

If I were Big Tobacco, I would think long and hard about the implications. Even a remittitur to 5 times compensatory for each successful claimant would seem reasonable, and it would not financially break the backs of Big Tobacco; it would set a precedent, nationwide, concerning success with punitive damages pleading. Even if it is downsized...

There ought to be a penalty.