Yesterday the U.S. Supreme Court granted certiorari to Philip Morris in Philip Morris USA, Inc. v. Williams (No. 07-1216, U.S. Sup.).

 

If you’re getting a strong sense of déjà vu, don’t worry — it actually has happened before.  Twice, in fact.

 

Briefly, Mayola Williams sued Philip Morris after her husband Jesse, a long-time smoker, died from lung cancer; family and friends had repeatedly tried to get Jesse to quit, to which he responded by pointing to tobacco industry advertisements implying, if not actually stating, that cigarettes were not harmful.  Williams won a relatively modest $821,485 in compensatory damages at trial, which was further reduced by the court, but a whopping $79.5 million in punitives.

 

The case then traveled up and down the state and federal appellate ladders more times than Sisyphus with his boulder on his hill.  The last time it was before the U.S. high court, a majority of that body vacated the damages award on the ground that the trial court’s failure to give one of Philip Morris’ requested jury instructions raised due process concerns by letting the jury think it could punish the tobacco company for harm caused to third parties.  The majority then tossed the case back to the Oregon Supreme Court to reconsider in light of the correct constitutional standard.

 

Now, here’s where it gets really interesting: the Oregon Supreme Court reinstated the entire punitive damages award based on concerns that the proposed instruction “was flawed for other reasons that we did not identify in our former opinion.”  The state high court said that Philip Morris’ instruction would have misled the jury that the factors to be considered when justifying a punitive damage award are discretionary when they are in fact mandatory. It also found that one factor to be considered in awarding punitive damages was Philip Morris’ “motiv[ation]” to make “illicit profits.”

 

Naturally Philip Morris went back to the U.S. Supreme Court and complained that the Oregon high court was thumbing its nose at the former’s mandate, and this is essentially the issue the Supremes decided to review.  This aspect of the case is loaded with federalism, comity and due process concerns and should attract quite a bit of attention on that basis.

 

Just as interesting, however, is what the Court decided not to review in taking a pass on Philip Morris’ second issue: the 97:1 ratio of punitive to compensatory damages.  This is the second time in this case that the Court has sidestepped an opportunity to clarify the ratio question, and it raises the possibility that the Court has given de facto approval to a near-three-digit multiplier when it comes to punitive damages in tobacco litigation.

 

And by the way, thanks to the length of time this drama is taking to play out, the interest on the original $79.5 million punitive award has ballooned higher than the price of gasoline to somewhere near $145 million. I would get out my calculator and figure out what the ratio of that number to the compensatory damages would be — but I have this strange feeling I’ve done that before.