Monday, March 5, 2007

Supreme Court Limits Punitive Damages

Last month the Supreme Court reversed the Oregon Supreme Court's decision upholding a huge ($79.5 million) verdict against Philip Morris. The Court said that punitive damages can, as a constitutional matter, only be based on injuries to the parties to the litigation -- not "strangers to the litigation." The case is remanded to the Oregon Supreme Court for further consideration. Court limits punitive damages, SCOTUSblog, Feb. 20, 2007.

The opinion, Philip Morris USA v. Williams, --- U.S. --- (Feb. 20, 2007) is here.

Justice Breyer wrote for a five-judge majority (including Chief Justice Roberts and Justices Kennedy, Souter, and Alito). Justices Stevens, Thomas, and Ginsburg filed dissenting opinions; Justices Thomas and Scalia joined Ginsburg's opinion. (Just when you think you can predict voting alignments based on stereotypes about political leanings or judicial philosophy, the justices go and mix it up.)

Update (March 5): Former district court judge H. Lee Sarokin thoughtfully discusses this issue (can punitive damages punish a defendant for harm to people other than the plaintiff?) in his blog. Punishing Punitive Damages, X Judge, Feb. 23, 2007. He faced the issue himself in Juzwin v. Amtorg Trading Co., 705 F. Supp. 1053 (D. N.J. 1989):

[I] concluded that multiple awards of punitive damages based upon injuries to others violated the due process clause, the only decision I ever made that was praised by the Wall Street Journal. Despite that praise, I eventually and unilaterally withdrew the decision, concluding that I did not have the power or authority to effectuate such a decision---that it required the Supreme Court or the Congress to do so. The Supreme Court has now spoken, but I continue to have the same concerns expressed above. The ability of citizens to punish others for outrageous conduct in instances in which government cannot or will not is a power worth preserving, but it is essential that guidelines be established so as to lead courts through this current quagmire.

No comments: