Williams v. Philip Morris Inc.

• Decision Date: 07 August 2002
• Parties: Mayola WILLIAMS, Personal Representative of the Estate of Jesse D. Williams, Deceased, Appellant-Cross-Respondent, v. PHILIP MORRIS INCORPORATED, Respondent-Cross-Appellant, and RJ Reynolds Tobacco Company, Fred Meyer, Inc., and Philip Morris Companies, Inc., Defendants.
• Court: Oregon Court of Appeals

51 P.3d 670

183 Or.App. 192

Mayola WILLIAMS, Personal Representative of the Estate of Jesse D. Williams, Deceased, Appellant-Cross-Respondent, v. PHILIP MORRIS INCORPORATED, Respondent-Cross-Appellant, and RJ Reynolds Tobacco Company, Fred Meyer, Inc., and Philip Morris Companies, Inc., Defendants.

9705-03957; A106791.

Court of Appeals of Oregon.

Petition for Reconsideration June 19, 2002.

Petition for Reconsideration June 26, 2002.

Decided August 7, 2002.

William F. Gary, and Harrang Long Gary Rudnick, P.C., Eugene, for petition.

James S. Coon, and Swanson, Thomas & Coon, Portland, contra.

Before EDMONDS, Presiding Judge, and ARMSTRONG and KISTLER, Judges.

On Respondent-Cross-Appellant's Petition for Reconsideration June 19, 2002.

Appellant-Cross-Respondent's Response to Petition for Reconsideration June 26, 2002.

EDMONDS, P.J.

Defendant petitions for reconsideration of our previous opinion in this case. Williams v. Philip Morris Inc., 182 Or.App. 44, 48 P.3d 824 (2002). It asks us to modify our discussion of the effect of the consent judgment that defendant entered into with the State of Oregon as part of its settlement of the state's claims against it and other tobacco companies.¹ We allow the petition in order to respond to defendant's arguments, and we adhere to our previous opinion.

After the jury returned its verdict awarding punitive damages of $79.5 million, defendant offered the consent judgment in support of its argument that the trial court should reduce or eliminate the award of punitive damages. The trial court refused to consider it for that purpose, and we affirmed. As we explained in our previous opinion:

"Finally, defendant argues that the trial court erred in refusing to exercise its discretion under ORS 18.537(3) to reduce the jury's award to reflect a settlement that it and other cigarette manufacturers had reached with all 50 states. That statute authorizes a court to reduce an award if the defendant establishes that it has taken reasonable remedial measures to prevent recurrence of the conduct that gave rise to the punitive damages award. Defendant argues that the settlement with the state qualifies under the statutory criteria. The trial court denied the motion on the ground that the settlement did not constitute an unequivocal acceptance of responsibility, which it believed was necessary to meet the criteria for a reduction in the jury's award under the statute. Plaintiff also argues that, to the extent that the statute permits a court to reduce a jury's award based on evidence that was not before the jury, the statute violates Article VII (Amended), section 3, of the Oregon Constitution.

"We do not need to decide whether either defendant or plaintiff correctly understands the import of the statute. The factual foundation of defendant's argument is the Consent Decree and Final Judgment that resolved the litigation between defendant and the State of Oregon. Section VI(G) of that judgment provides, in part:

"`Neither this Consent Decree and Final Judgment nor any public discussions, public statements or public comments with respect to this Consent Decree and Final Judgment by the State of Oregon or any Participating Manufacturer or its agents shall be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Consent Decree and Final Judgment.' (Emphasis added.)

"The trial court could not use the settlement as a basis for reducing the jury's verdict without the consent judgment somehow being in evidence. By its own terms, which reflect defendant's agreement with the state and the other parties to the litigation that led to the judgment, the settlement was not admissible for the purpose for which defendant seeks to use it in this case. The trial court did not err." Williams, 182 Or.App. at 72-73, 48 P.3d 824 (footnote omitted).

In its petition for reconsideration, defendant argues that plaintiff was not entitled to rely on Section VI(G) in opposing the admission of the consent judgment.² In defendant's view, defendant may use the consent judgment against third parties in this fashion without their being able to object. In support of that position, defendant points to Section III(B) of the consent judgment, which provides:

"This Consent Decree and Final Judgment is not intended to and does not vest standing in any third party with respect to the terms hereof. No portion of this Consent Decree and Final Judgment shall provide any rights to, or be enforceable by, any person or entity other than the State of Oregon or a Released Party. The State of Oregon may not assign or otherwise convey any right to enforce any provision of the Consent Decree and Final Judgment."

Defendant argues that, under that provision, plaintiff has no standing to enforce the consent judgment. From that proposition, it then attempts to draw the corollary that plaintiff may not invoke Section VI(G) in opposing defendant's attempt to use the consent...