Williams v. Philip Morris Inc.

Decision Date02 February 2006
Docket Number(CC 9705-03957; CA A106791; SC S51805).
Citation340 Or. 35,127 P.3d 1165
PartiesMayola WILLIAMS, Personal Representative of the Estate of Jesse D. Williams, Deceased, Respondent on Review, v. PHILIP MORRIS INCORPORATED, nka Philip Morris USA Inc., Petitioner on Review, and RJ Reynolds Tobacco Company, Fred Meyer, Inc., and Philip Morris Companies, Inc., Defendants.
CourtOregon Supreme Court

William F. Gary, of Harrang Long Gary Rudnick P.C., Eugene, argued the cause and filed the briefs for petitioner on review. With him on the briefs were Sharon A. Rudnick and James E. Mountain, Jr.

James S. Coon, of Swanson, Thomas & Coon, Portland, argued the cause and filed the briefs for respondent on review. With him on the surreply brief were Raymond F. Thomas, Portland, Robert S. Peck, of Center for Constitutional Litigation PC, pro hac vice, Washington, D.C., William A. Gaylord, of Gaylord Eyerman Bradley PC, Portland, Charles S. Tauman, Portland, Kathryn H. Clarke, Portland, and Maureen Leonard, Portland.

Thomas W. Brown, of Cosgrave Vergeer Kester LLP, Portland, filed the briefs for amicus curiae Associated Oregon Industries.

Thomas W. Sondag, of Lane Powell PC, Portland, filed the brief for amicus curiae Chamber of Commerce of the United States of America.

Steven C. Berman, of Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed the brief for amici curiae Alliance for Lung Cancer Advocacy, Support and Education; American Cancer Society (Greatwest Division); American Heart Association; American Lung Association of Oregon; and Tobacco Free Coalition of Oregon.

David F. Sugerman, of Paul & Sugerman, PC, Portland, filed the brief for amici curiae Oregon Trial Lawyers Association and Oregon Consumer League.

Charles F. Adams and James A. Zehren, of Stoel Rives LLP, Portland, filed the brief for amicus curiae Oregon Business Association.

Before CARSON, Chief Justice,** and GILLETTE, DURHAM, RIGGS, and De MUNIZ,*** Justices.****

GILLETTE, J.

This tort case arose out of the death of Jesse Williams, a smoker, who died of lung cancer. Plaintiff Mayola Williams is the widow of Jesse Williams and personal representative of his estate. Plaintiff sued defendant Philip Morris Inc. for, inter alia, negligence and fraud, asserting a causal connection between Jesse Williams's smoking habit and his death. A jury found for plaintiff on both causes of action. The jury awarded both economic and noneconomic damages; it also awarded plaintiff punitive damages of $79.5 million. The issue before us is whether that punitive damage award violates the Due Process Clause of the Fourteenth Amendment to the United States Constitution. The Court of Appeals concluded that it did not. Williams v. Philip Morris Inc., 182 Or.App. 44, 48 P.3d 824 (2002) (Williams I), adh'd to on recons., 183 Or.App. 192, 51 P.3d 670, rev. den., 335 Or. 142, 61 P.3d 938 (2002), vac'd and rem'd, 540 U.S. 801, 124 S.Ct. 56, 157 L.Ed.2d 12 (2003), on remand, 193 Or.App. 527, 92 P.3d 126 (2004) (Williams II). For the reasons that follow, we agree.

I. FACTS

Because the jury ruled in favor of plaintiff, we state all facts in the light most favorable to plaintiff. See Parrott v. Carr Chevrolet, Inc., 331 Or. 537, 556, 17 P.3d 473 (2001) ("[W]hen reviewing a punitive damages award for excessiveness, the reviewing court must view the facts in the light most favorable to the jury's verdict if there is evidence in the record to support them."). Because the parties do not dispute the way that the Court of Appeals framed the facts, we quote extensively from that court's opinions.

Jesse Williams was a lifelong smoker who eventually died of lung cancer. The cancer was caused by Williams's smoking.

"From the early 1950s until his death from a smoking-related lung cancer in 1997, Williams smoked [Philip Morris]'s cigarettes, primarily its Marlboro brand, eventually developing a habit of three packs a day. At that point, he spent half his waking hours smoking and was highly addicted to tobacco, both physiologically and psychologically. Although, at the urging of his wife and children, he made several attempts to stop smoking, each time he failed, in part because of his addiction. Despite the increasing amount of information that linked smoking to health problems during that 40-year period, Williams resisted accepting or attempting to act on it. When his family told him that cigarettes were dangerous to his health, he replied that the cigarette companies would not sell them if they were as dangerous as his family claimed. When one of his sons tried to get him to read articles about the dangers of smoking, he responded by finding published assertions that cigarette smoking was not dangerous. However, when Williams learned that he had inoperable lung cancer he felt betrayed, stating `those darn cigarette people finally did it. They were lying all the time.' He died about six months after his diagnosis."

Williams II, 193 Or.App. at 530-31, 92 P.3d 126.

Plaintiff based her fraud claim against Philip Morris on a 40-year publicity campaign by Philip Morris and the tobacco industry to undercut published concerns about the dangers of smoking. Id. at 531, 92 P.3d 126. Philip Morris and the tobacco industry had known for most of those 40 years, if not all of them, that smoking was dangerous. Id. Nevertheless, they tried to create in the public mind the impression that there were legitimate reasons to doubt the danger of smoking. Id. Philip Morris and the tobacco industry did so to give smokers a reason to keep smoking (or, perhaps more accurately, to undermine one of the main incentives for smokers to stop smoking). Id.

The Court of Appeals summarized the evidence regarding the campaign as follows:

"The industry established its strategy and began developing its public image in response to a decline in cigarette sales in 1953 that was the apparent result of studies that showed that cigarette tar could cause cancer in mice and that established the existence of statistical correlations between smoking and lung cancer. The first public joint effort by the industry occurred in January 1954, when [Philip Morris] and other tobacco companies published a joint statement in 448 newspapers throughout the country. In that statement, among other things, they announced the creation of the Tobacco Industry Research Committee (TIRC), one of whose stated goals was to conduct research into `all phases of tobacco use and health.' In 1964, the year of the Surgeon General's report on the hazard of smoking to health, the industry divided the TIRC into two parts, one of which, the Council on Tobacco Research (CTR), continued to support scientific research. The other part, named the Tobacco Institute, focused on public relations and lobbying.

"Between 1954 and the 1990s, those organizations developed and promoted an extensive campaign to counter the effects of negative scientific information on cigarette sales. The individual tobacco companies, including [Philip Morris], were part of the organizations and acted in cooperation with them. At first, the industry publicly denied that there was a problem; for example, in the 1950s and early 1960s, [Philip Morris]'s officials told the public that [Philip Morris] would `stop business tomorrow' if it believed that its products were harmful. For most of that period, however, the industry did not attempt to refute the scientific information directly; rather, it tried to find ways to create doubts about it. The industry's goal was to create the impression that scientists disagreed about whether cigarette smoking was dangerous, that the industry was vigorously conducting research into the issue, and that a definitive answer would not be possible until that research was complete. As one of [Philip Morris]'s vice-presidents explained in an internal memo, the purpose was to give smokers a psychological crutch and a self-rationale that would encourage them to continue smoking. A Tobacco Institute internal memorandum similarly described the industry's purpose to provide smokers `ready-made credible alternatives' to the evidence of the dangers of smoking.

"Both the industry as a whole and [Philip Morris] acted consistently with those purposes. Among other things, they avoided developing contradictory information. Despite the industry's nominal emphasis on the need for further research, the CTR designed its research program to avoid studying the biological effects of tobacco use, the very question that, according to the industry's statements, required more research. To the extent that [Philip Morris] conducted research on that issue independently of the CTR, it did so in a European laboratory that it purchased, and it was careful to avoid preserving records of the results in this country. [Philip Morris]'s director of research in the late 1970s and 1980s explained to a subordinate that his job was to attack outside research that was inconsistent with the industry's position by casting doubt on it. The jury could also have found that there was a `gentleman's agreement' not to conduct research beyond what the CTR did. The primary purpose of the CTR's research was to provide expert witnesses for congressional hearings and lawsuits, not to determine the relationship between smoking and disease. The CTR's lawyers, rather than its scientists, established its research priorities; developing accurate information on the biological effects of smoking was not one of the lawyers' priorities.

"The jury could have found that, throughout this period of time, [Philip Morris] and the other tobacco companies actually had little doubt that cigarette smoking was causally related to a number of diseases. In 1958, three British researchers found that the American tobacco scientists with whom they spoke believed that cigarette smoke could cause cancer. In 1961, [Philip...

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