Phillip Morris U.S.A. v. Williams
549 U.S. 346, 127 S.Ct. 1057 (2007)
Williams was a smoker. After
he died, his estate sued the cigarette maker (Phillip Morris) for
negligence and deceit.
Williams argued that Phillip
Morris hid the fact that smoking was a health hazard.
The Trail Court found for
Williams and awarded $821k in compensatory damages, and $79.5M in punitive
damages. Phillip Morris appealed.
The punitive damages were in
part based on the idea that lots of other people out there had died from
smoking as well.
Phillip Morris argued that
this was unfair because those other people (or their estates) could bring
lawsuits and get their own damages.
The Oregon Supreme Court
affirmed. Phillip Morris appealed.
The US Supreme Court
overturned the punitive damages award.
The Court found that due
process bars punitive damages for
harm caused to individuals not involved in the litigation.
Due process requires that Phillip Morris be allowed to
present a defense, but how could they defend themselves against someone
who wasn't even in court suing them?
The Court found that it was
impossible to know exactly how many people were smoking because of
Phillip Morris' negligence. Therefore it was unfair to estimate a damage
amount.
BMW of North America v.
Gore (517 U.S. 559 (1996)), suggested
a three-part test in determining whether a damage award violated due
process:
The degree of
reprehensibility of the defendant's conduct.
The ratio or harm to the
compensatory damages awarded.
A comparison of the punitive
damages award to civil or criminal penalties that could be imposed for
comparable misconduct.