WASHINGTON—The Supreme Court may use an Oregon case it has already reviewed twice to provide more guidance on when a punitive damage award is so disproportionate to the underlying compensatory award that it violates the Constitution's due process provision, Chief Justice John Roberts indicated Wednesday.
The chief justice's comments came after the court heard oral arguments in Philip Morris USA vs. Mayola Williams. The case involves an Oregon court's award of $79.5 million in punitive damages to the widow of a longtime smoker. The punitive award came atop compensatory damages of less than $822,000, an amount later reduced by state court to less than $522,000.
Philip Morris appealed the case to the U.S. Supreme Court, which ruled in 2003 that the Oregon Supreme Court should review the punitive award under standards it had set in State Farm Mutual Automobile Insurance Co. vs. Curtis Campbell et ux, in which it said punitive damages that exceed single-digit multiples of compensatory damages are generally unacceptable. The Oregon Supreme Court upheld the punitive damages award, leading to another appeal and another opinion from the U.S. Supreme Court telling the state court to review the award in the light of due process protections.
The Oregon Supreme Court, however, decided that it did not have to follow the federal standard because Philip Morris had allegedly proposed a flawed jury instruction at the original trial. By doing so, Philip Morris forfeited its federal claim, the state high court ruled.
Philip Morris appealed yet again to the Supreme Court, seeking review of both the ability of Oregon to avoid the federal standard by applying a state procedural rule and whether the punitive damage award was so excessive as to be unconstitutional. The high court agreed only to review whether Oregon could trump a federal standard by applying the state jury instruction rule.
But after nearly an hour of often arcane arguments on Wednesday, Chief Justice Roberts suggested that the high court might be willing to address the question of excessiveness in the punitive damage award as well as the state vs. federal standard question. To do so, the parties would have to submit new briefs addressing that question, with the high court deciding whether to review the issue later in its term.
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