Orders: Court to hear tobacco appeal

UPDATE 11:10 a.m.

The Supreme Court on Tuesday agreed to clarify or reinforce its 2003 decision laying down guidelines on the amount of punitive damages that juries may award for corporate wrongdoing. The Justices agreed to so in a case appealed by tobacco giant Philip Morris. This was the only case granted review Tuesday.

The Court said it would rule on two issues raised in Philip Morris USA v. Williams (05-1256). The first: if a court finds that a company’s misconduct was outrageous, does that override the constitutional limit that holds punitive damages closely to the actual harm done — the so-called “ratio” issue. The second is whether the Constitution forbids juries to provide damages to punish a company for the effects of its conduct on others, not directly before the court.

A third issue raised by the appeal, challenging the appeals court’s deference to the factual claims made by the plaintiff, was not granted review.

The case involves two rulings by the Oregon Supreme Court — one decided after the Supreme Court had ordered the state tribunal to reconsider its earlier ruling in the wake of constitutional standards laid down by the Justices in their 2003 decision in State Farm v. Campbell. In both of its decisions, the Oregon court upheld a $79.5 million punitive damages award to a woman whose husband had died of lung cancer. The punitive award far exceeded the $521,485.40 ordered in compensatory damages. The widow’s lawsuit was a wide-ranging attack on 50 years of Philip Morris’ conduct in marketing cigarettes, and the Oregon court ruled that the punitive damages could be based in part upon injuries it found had been done to many Oregon smokers, not involved in the case.

The company’s appeal said that each of the issues raised in the case arises regularly in punitive damages cases, and those questions have resulted in widely varying lower court rulings.

Once again, the Court took no action on a pair of cases seeking to test whether the Court’s affirmative action rulings in 2003 apply to K-12 public schools. The Court has examined cases from Seattle and Louisville, Ky., five times without taking action. The cases are Parents Involved v. Seattle School District (05-908) and Meredith v. Jefferson County School Board of Education (05-915).

The Court also did not act, again, on a pair of appeals by journalists seeking protecfion from forced disclosure during a civil lawsuit of their confidential news sources. Those cases, however, are likely to be affected by ongoing settlement discussions on the underlying civil lawsuit, and the Court may simply be holding them awaiting developments. The cases are Drogin v. Lee (05-969) and Thomas v. Lee (05-11140.

The Court denied review in a number of significant cases. Among them were tests of prison officials’ authority to deny inmates who have been convicted of child sex abuse the right to have children visitors and to bar inmates from using hostile or abusive language when they file complaints or grievances, and a case seeking to have the Boy Scouts of America treated as a “state actor” and thus subject to constitutional limits on its membership policies when it teams up with public schools to foster Scouting in the schools.