Supreme Court to Consider Tobacco Damages

Oct. 30, 2006 — -- On his death bed, Jesse Williams, who had smoked for more than 40 years, blamed the tobacco companies.

He told his wife, "Those darn cigarette people finally did it. They were lying all the time."

After Williams succumbed to lung cancer, his widow, Mayola, sued Philip Morris, alleging that the cigarette manufacturer had misrepresented the dangers of tobacco.

A jury awarded Mayola, who lives in Oregon, $821,485 in compensatory damages and a whopping $79.5 million in punitive damages.

It is the punitive damage award that is at issue in Tuesday's Supreme Court case, Philip Morris vs. Williams.

The court will examine whether Philip Morris' right to due process was violated when the jury awarded a punitive damage that was 97 times larger than the compensatory damage.

The court will also review whether the jury was right to consider the harm to all other Oregonians in its deliberations.

Calling the award "excessive," Philip Morris argues that the award is disproportionate to the injury.

Mayola Williams responds that Philip Morris' actions were so reprehensible that there should not be a limit on the punitive damages.

In briefs, she argues that Philip Morris downplayed the evidence that smoking is harmful and denied that smoking caused lung cancer so that "addicted smokers like Jesse Williams would cling to the denials and keep smoking."

Furthermore, she argues that Philip Morris' "web of lies" ensnared a large number of Oregonians.

Her attorney, Robert Peck, says "punitive damages have to be high enough to vindicate the state's own interests."

By Oregon statute, 60 percent of the punitive damage award goes not to the plaintiff, but to the state to be used for public purposes.

Peck argues that "Philip Morris got enormous profits by spending enormous amounts of money on this fraud."

Altria, Philip Morris' parent company, would not comment for this story.

In briefs, their lawyers point out, "Williams did not like to be reminded about the risks of smoking."

They argue that "under long established practice" when the compensatory damages are substantial, the punitive damages can be no greater than four times the amount of the compensatory damage.

Mayola Williams' punitive award was 97 times the compensatory award.

Furthermore, Philip Morris argues that when the lower court found that the punishment could take into consideration the damage to all Oregonians subject to the ill effects of smoking, the fine was "duplicative."

"Other Oregonians remain free to sue Philip Morris for smoking-related injuries … even though the punitive award in this case may already punish for those harms."

The case is being closely watched by the business community, particularly because of the recent additions to the court of Chief Justice John Roberts Jr. and Justice Samuel Alito.

Ted Boutrous, a lawyer for the Product Liability Advisory Council, says that if Mayola Williams prevails "it could open the floodgates to massive punitive damages."

Boutrous says that the case will affect litigation across the country at companies such as Merck and Ford, which are battling punitive damage awards.

"You can't punish Philip Morris for everything in every case. There have to be reasonable, fair restraints," Boutrous said.