Mayola Williams' products liability case has completed its third journey to the U.S. Supreme Court, as the Court today dismissed Philip Morris' appeal of a $79.5 million punitive damages award.
Williams' husband died in 1997 of cancer after years of smoking cigarettes sold by Philip Morris USA. A Multnomah County jury awarded to Williams $821,485.50 in compensatory damages for wrongful death (later reduced to $521,485) and $79.5 million in puntive damages against Philip Morris. The trial judge reduced the punitive damages to $32 million, but the Oregon Court of Appeals reinstated the jury's award.
The U.S. Supreme Court in two separate appeals directed the Oregon Supreme Court to reconsider whether the punitive damages were excessive under the Due Process Clause of the Constitution. Last year the Oregon Supreme Court declined to reach the constitutional issue, affirming the punitive damages on state law procedural grounds.
Today's dismissal in Philip Morris USA v. Williams ends the U.S. Supreme Court's inquiry into whether the Oregon Supreme Court properly avoided the Due Process issue in its most recent decision. The Court's order states it had "improvidently granted" review last June, and as a consequence the punitive damages verdict stands.
Earlier this month, the Oregon Court of Appeals approved a reduction of a jury's award of punitive damages for violation of the Oregon Unlawful Debt Collection Practices Act. In Lithia Motors, Inc. v. Yovan, the jury found for the buyer of a used car on his unlawful debt collection claim against Lithia Motors. The jury awarded to the buyer $500 in noneconomic damages for emotional injury, and $100,000 in punitive damages, making the ratio of punitive to compensatory damages 200 to 1.
The trial court judge reduced the punitive damages to $2,000, which is four times compensatory damages. The trial court's action was affirmed by an equally divided Court of Appeals sitting en banc. Judge Walter Edmonds wrote for the court, stating that the 4-to-1 ratio is consistent with the "general ceiling for puntive damages when the only harm is financial."
Judge Timothy Sercombe and Judge Rex Armstrong dissented, arguing that $2,000 in punitives was not enough to deter future wrongful conduct.
See our coverage of Goddard v. Farmers Insurance, a 2008 Oregon Supreme Court opinion regarding punitive damages for economic harm, here.
Budget cuts are forcing significant changes at the Oregon Court of Appeals, according to a statement released this week by Chief Judge David Brewer. Due to staffing reductions, the Court of Appeals will curtail its April oral argument calendar and may hear fewer oral arguments in subsequent months as well. The court will consider rule changes that may shorten the maximum length of appeal briefs and end the practice of allowing oral arguments in every attorney-represented case.
See Judge Brewer's full statement here.
Oregon state courts are closed today, but will be open Fridays starting next week, following an agreement by legislators and Chief Justice Paul DeMuniz to shift additional funds to court operations. Last month Justice DeMuniz had announced that budget cuts would require courts to close one day a week.
See this report from The Oregonian.
It's not too late to register for the upcoming Ater Wynne Roundtable event on March 19 titled "The First 100 Days: What Recent Changes in Regulations and the Economy Mean for Employers." Topics will include a discussion of the new FMLA regulations and their impact on existing leave policies, and employment strategies for a down economy. Access an invitation and registration form here.
In an opinion long-awaited in product liability circles, the U. S. Supreme Court today affirmed the Vermont Supreme Court and held that federal food and drug law does not pre-empt state law failure-to-warn tort claims. Wyeth v. Levine is a pharmaceutical case brought by a patient who was injured following administration of Wyeth's drug Phenergan. Wyeth argued that the state law claims were pre-empted because it is impossible for the company to comply with both the state law duties underlying those claims and the company's federal labeling duties. The Court rejected that argument. The Court also rejected Wyeth's reliance on the preamble to a 2006 regulation which declared that state law failure-to-warn claims threaten the FDA's statutorily-prescribed role. Justice Stevens delivered the opinion of the Court. You can find that opinion and the concurrences and dissent here .