Williams v. Philip Morris Inc.

• Decision Date: 31 January 2008
• Docket Number: (CC 9705-03957; CA A106791; SC S051805).
• Citation: 344 Or. 45,176 P.3d 1255
• Parties: Mayola 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.
• Court: Oregon Supreme Court

176 P.3d 1255

344 Or. 45

Mayola 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.

(CC 9705-03957; CA A106791; SC S051805).

Supreme Court of Oregon.

Argued and Submitted September 11, 2007.

Decided January 31, 2008.

On remand from the United States Supreme Court.^*

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

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

Steven C. Berman, of Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association. With him on the brief was David F. Sugerman, Portland.

Janet A. Metcalf, Assistant Attorney General, Salem, filed the brief for amicus curiae State of Oregon. With her on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.

Before DE MUNIZ, Chief Justice, and GILLETTE, DURHAM, WALTERS, and LINDER, Justices.^**

GILLETTE, J.

This matter is before us on remand from the United States Supreme Court. Previously, this court held (among other things) that certain federal constitutional limitations constraining punitive damage awards did not require a trial court to instruct a jury that it was not to use an award of punitive damages to punish a defendant for harms to persons who were not parties to the litigation. Williams v. Philip Morris Inc., 340 Or. 35, 51-54, 127 P.3d 1165 (2006). On certiorari, the United States Supreme Court vacated that opinion and remanded. Philip Morris USA v. Williams, 549 U.S. ___, 127 S.Ct. 1057, 1065, 166 L.Ed.2d 940 (2007). The Court concluded that the Due Process Clause of the Fourteenth Amendment prohibits the state from using punitive damages to punish for harms to nonparties, and that states must prevent punitive damages from being misused in that way. 549 U.S. at ___, 127 S.Ct. at 1063, 1065. On remand, we are called upon to reconsider and reassess our earlier holding, which arose in the context of the trial court's refusal to give a particular proposed jury instruction that defendant had requested. Having reconsidered and reassessed the issue, we now conclude that the proposed jury instruction at issue here also was flawed for other reasons that we did not identify in our former opinion. We therefore reaffirm this court's prior conclusion that the trial court did not err in refusing to give the instruction. We otherwise reaffirm our prior opinion in all respects.

Before we turn to the, facts and procedural posture of this particular case, we first summarize the legal context in which it arose. The issues in this case revolve around federal constitutional limitations on punitive damage awards. Those constitutional limitations derive from the Due Process Clause of the Fourteenth Amendment. See Philip Morris, 549 U.S. at ___, 127 S.Ct. at 1060; State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); BMW of North America, Inc. v. Gore, 517 U.S. 559, 562, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (all illustrating proposition). In those cases, the Supreme Court has held that states legitimately may use punitive damages to punish and to deter wrongdoing by defendants in tort cases. E.g., Philip Morris, 549 U.S. at ___, 127 S.Ct. at 1062. However, the Court also has held that the amount of punitive damages that a jury awards cannot be arbitrary; the jury's discretion must be limited. Otherwise, defendants will not have adequate notice of potential sanctions, the punishments may be arbitrary, and large punitive damage awards may force one state's policy choices onto other states. Id. For those reasons, the United States Constitution requires both procedural and substantive limits on punitive damage awards. Id.

We turn to the facts of this case. The plaintiff; Mayola Williams, is the widow of Jesse Williams, a smoker who died of lung cancer. Plaintiff, as personal representative of Jesse Williams's estate, sued defendant Philip Morris Inc., asserting that Philip Morris's fraud and negligence caused Jesse Williams's death.

The parties do not dispute this court's prior overview of the evidence offered at trial, which was presented in the light most favorable to plaintiff. See Williams, 340 Or. at 38-43, 127 P.3d 1165 (describing facts of case). Briefly, the evidence permitted the jury to conclude that Philip Morris and other tobacco companies had known of the carcinogenic dangers of smoking since at least the 1950s. Id. at 41, 127 P.3d 1165. Nevertheless, Philip Morris, operating in conjunction with the rest of the tobacco industry, carried out an extensive publicity campaign, from the 1950s into the 1990s, to convince the public that doubts remained about whether smoking actually was dangerous to one's health. Id. at 40, 127 P.3d 1165. No legitimate controversy existed about whether smoking was harmful to health, although Philip Morris and the rest of the tobacco industry strove to persuade the public otherwise. Id. at 41-42, 127 P.3d 1165 (issuing press releases, cultivating opinion leaders, using advertising power to seek favorable treatment from the media, etc.). Philip Morris and the rest of the tobacco industry also fostered the sham impression that they were themselves vigorously investigating the health effects of smoking when, in actuality, their research institution avoided doing research on that question. Id. at 40-41, 127 P.3d 1165.

The jury further could have concluded that this program of disinformation succeeded in tricking Jesse Williams, who smoked from the early 1950s until he died in 1997. He was highly addicted to nicotine, eventually smoking three packs of cigarettes—primarily Philip Morris's Marlboro brand—a day. Id. at 38, 127 P.3d 1165. Williams resisted his family's efforts to convince him to quit smoking, because he believed media representations that the dangers of smoking were over-stated or nonexistent. See id. at 39, 127 P.3d 1165 (presented with article about dangers of smoking, Williams had found "published assertions that cigarette smoking was not dangerous"); id. at 42, 127 P.3d 1165 (Williams rejected arguments to quit, because "he had learned from watching television that smoking did not cause lung cancer"). When Williams was diagnosed with lung cancer, however, he asserted that the "cigarette people" had betrayed him by "lying" to him. Id. at 39, 127 P.3d 1165 (internal quotation marks and citation omitted). Williams was dead within six months after the cancer was discovered. Id.

Near the end of trial, the parties offered proposed jury instructions. One instruction submitted by Philip Morris was its proposed jury instruction No. 34, dealing with punitive damages. Among other things, that instruction provided:

"The size of any punishment should bear a reasonable relationship to the harm caused to Jesse Williams 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 other juries can resolve their claims and award punitive damages for those harms, as such other juries see fit."

(The complete text of the instruction, which was three-and-a-half pages long, is reprinted as an Appendix to this opinion.)

The trial court analyzed the proposed jury instructions line-by-line with the parties, during which time Philip Morris argued that the consider-but-don't-punish part of proposed jury instruction No. 34 was needed to ensure that this plaintiff did not receive punitive damages that should be awarded (if they were to be awarded at all) to other plaintiffs. After the trial court had reviewed Philip Morris's proposed jury instruction No. 34 together with plaintiff's proposed jury instruction on punitive damages—the transcript of that part of the trial court's analysis is 50 pages long—the trial court declined to give proposed jury instruction No. 34 as proffered.¹

The jury returned a verdict for plaintiff. The jury's unadjusted award was $821,485.50 in compensatory damages and $79.5 million in punitive damages. The trial court, among other things, reduced the punitive damage award to $32 million. Williams, 340 Or. at 44, 127 P.3d 1165.

Plaintiff and Philip Morris both appealed. The Court of Appeals reversed on plaintiffs appeal, concluding that the trial court should not have reduced the punitive damages award. Williams v. Philip Morris Inc., 182 Or.App. 44, 72, 48 P.3d 824, adh'd to on recons., 183 Or.App. 192, 51 P.3d 670 (2002). The Court of Appeals affirmed on Philip Morris's cross-appeal, concluding that the trial court did not err in refusing to give Philip Morris's proposed jury instruction No. 34. 182 Or.App. at 63-64, 48 P.3d 824. This court denied review. Williams v. Philip Morris Inc., 335 Or. 142, 61 P.3d 938 (2002).

The United States Supreme Court then granted certiorari, vacated the judgment of the Court of Appeals, and remanded the case to the Court of Appeals for further consideration in light of the Supreme Court's opinion in Campbell. Philip Morris USA Inc. v. Williams, 540 U.S. 801, 124 S.Ct. 56, 157 L.Ed.2d 12 (2003). After an extended analysis on remand, the Court of...