Philip Morris must have thought that April Fool’s Day came one day early when the Supreme Court yesterday issued its opinion in Philip Morris USA v. Williams, (No. 07-1216) and dismissed as "improvidently granted" the appeal that was granted last June and argued in December. Philip Morris was appealing a punitive damages verdict of $79.5 million that was returned by an Oregon jury in 1999 on behalf of the widow of a smoker who died of lung cancer in 1997. The jury also had awarded compensatory damages of $821,485.50, which were reduced to $521,485 under a state law capping wrongful death damages. With accrued interest, the verdict has grown to $150 million.
The business community had hoped that the Court would use the case to be more explicit about the permissible ratio of punitive damages to compensatory damages. The Court had stated in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), that, "in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process[,]" and with a ratio of 97-1, the case seemed to present an ideal opportunity for the Court to refine its holding in State Farm.
Howard Bashman, who writes How Appealing, has a round-up of news articles about the decision, and Philip Thomas, who writes the MIssissippi Litigation Review and Commentary blog, weighed in yesterday with this post about the case.
Both Bashman and Thomas (in his post today) linked to an article by Bloomberg.com writer Greg Stohr about the business community’s disappointing record before the Court during this term. Stohr points to the decisions in Altria Group, Inc. v. Good, 129 S.Ct. 538 (2008) and Wyeth v. Levine, 129 S.Ct. 1187 (2009), and yesterday’s decision in Philip Morris USA as demonstrating that businesses don’t always prevail before a court that has pro-business tendencies.