Analysis: Tobacco case going back?
on Oct 31, 2006 at 11:31 am
If Justices of the Supreme Court cannot understand an instruction written for a jury in a civil case, what are the chances that the jury would have understood it? And, if it was an instruction that actually was never given, why does it matter? Those were the principal issues with which the Court grappled on Tuesday in what had looked to be the biggest test case to come along on punitive damages — a unique test of the right amount of punishment of a major tobacco company for creating hazards to smokers. But, illustrating that “great cases” sometimes can come down to an eccentric detail, the hearing on Philip Morris USA v. Williams (05-1256) did not live up to expectations. In fact, the case may be on its way back to the Oregon Supreme Court for a clarification — and one that could make the case go away altogether.
The case had reached the Court as a significant test of the constitutionality of a punitive damages award that, in appearance at least, rewarded a single injured party for harms done to others not involved in the case. Philip Morris, in its appeal, had complained of “a massive punitive award to a single individual.” And, secondarily, this was a case about how high punitive damages could go, in comparison to compensatory damages, when the corporate misconduct was considered to be especially egregious. Those issues were big enough that the case had drawn a wide participation by business groups on one side and consumer and health groups on the other.
But less than a minute into the one-hour argument Tuesday, the constitutional drama drained out of the case as it settled on the meaning of what Philip Morris had wanted the jurors told in an instruction, complicated by the fact that it was an instruction that the judge had refused to give.
The tobacco company’s attorney, Andrew L. Frey of New York, had opted to make that proposed instruction his opening thrust at the podium, but he was immediately forced to try to explain what it meant, and what jurors might have concluded from it had it been given. Along the way, the Court also seemed to grow confused about just how the Oregon Supreme Court had dealt with the denial of the requested instruction. This prompted a number of Justices — beginning early on with Antonin Scalia — to suggest that the case be returned to the state court with a request to say what it meant; that was an idea that seemed to gather momentum as the hearing unfolded. The prospect loomed that the state court might then resolve the entire case on state law grounds, perhaps insulating it from further Supreme Court review.
That outcome, should it occur, would be more remarkable because there seemed to be a considerable degree of agreement among the Justices — and perhaps by the two arguing lawyers — that juries should not be free to impose extra damages designed to punish a corporation when its misconduct harmed non-parties. And there even appeared to be a common understanding on a somewhat more puzzling proposition: that juries could consider the risk that corporate wrongdoing posed to others, so long as they did not directly assess damages based on any actual harms done to others, leaving it to them to pursue their own lawsuits. Both of those, it appears, would have to be constitutional declarations, but the Court might prefer not to address them in a case in which the record had grown as opaque as this one has — a record that might be clarified if sent back.
At the trial of the Williams case in Oregon state court, part of Philip Morris’ legal strategy — after the evidence had ranged widely over a half-century of alleged company wrongdoing — was to keep the jury’s discretion to award punitive damages in check. It wanted jurors told that they could not punish the company for harms to non-parties — people not joined in the lawsuit. The attorneys, however, fashioned a two-part instruction that also indicated that the jurors might “consider” the wider impact of the wrongdoing. The judge rejected the instruction, and the Oregon Supreme Court said it was not an error to do so. The state court said the instruction actually was incorrect under state law.
As soon as Frey put that instruction in play Tuesday, Justice Ruth Bader Ginsburg, followed immediately by Justice David H. Souter, said the proposal was confusing. Ginsburg said the jurors would have been told in one sentence to consider the spread of the misconduct, but in the next sentence not to. Souter chimed in: “I don’t know how a juror is supposed to figure this out.” When Frey tried to counter by arguing that the Oregon Supreme Court had “held it was proper to punish non-parties,” Ginsburg immediately pressed him to point out where it had said that.
Scalia suggested then that the case could be remanded to the state Supreme Court, and Souter echoed that, saying “in effect, that would give you another chance.” When Frey tried to defend the proposed instruction as merely implementing the commands of prior Supreme Court precedent, Souter countered: “Maybe it was a good thing we weren’t instructing jurors.”
Along the way, Frey sought ways to bring the case back to the core complaint about a verdict reaching beyond the parties. One of his rhetorical thrusts, for example, was against a “jury that thinks of itself as a punishment agent to impose state-wide punishment.” But the Court remained focused on the issue of the instruction and its treatment by the Oregon Supreme Court. Justice Ginsburg commented that the Court did not know what Oregon state law had to say on that issue.
Soon, Justice Stephen G. Breyer picked up on the suggestion that the case go back to Oregon for clarification. Breyer said the Court might find that “you cannot take money from a defendant for something he did to a different person who was not there; that may not have happened here. We could remand to the state court with that instruction — you can’t let this happen, if it happened.” Frey answered that Philip Morris’ team had tried to anticipate that very thing at trial, and that is why they offered the proposed instruction.
Robert S. Peck, of Washington, the lawyer for the widow of a smoker of Philip Morris brands, Mayola Williams, started his side of the argument on the instruction question. That led the Justices into a more concentrated focus on what the wording meant. Chief Justice John G. Roberts, Jr., suggested that instructions in such cases ought to draw a fine line between how reprehensible a defendant conduct may have been, and actual punishment of the defendant for harms others did suffer.
Justice Breyer tried out an instruction along those lines, and Peck found it acceptable. The Chief Justice commented that “without an instruction, you are telling the jury you can punish for harm to others” — a comment that at once bolstered Philip Morris’ desire to have had an instruction, but brought the focus back to the question of whether the words its lawyers had offered would accomplish the goal.
Peck tried to persuade the Court that, under Oregon law, the power of the jury to impose punitive damages was closely restrained. He finished with some rhetorical flourishes, including the suggestion that what Philip Morris was advocating — in terms of new constitutional limits on punitive damages — “guarantees a regime of the undeterred.”
Frey, in a brief rebuttal, ended where he began: “The heart of our case was the denial of this insturction.”
(NOTE: The proposed instruction was No. 34. Here is the text: “The size of any punishment should bear a reasonable relationship to the harm caused to Jesse Williams [the deceased smoker] by the defendant’s punishable misconduct. Although you may consider the extent of harm suffered by others in determining what that reasonable relationship is, you are not to punish the defendant for the impact of its alleged misconduct on other persons, who may bring lawsuits of their own in which juries can resolve their claims and award punitive damages for those harms, as such other juries see fit.”)
