Cyrus Dugger

NY Times Sees The Light: “Assessing the Damages”

Here's an excerpt of the great NY Times Editorial on the Supreme Court case (Philip Morris v. Williams) being argued today on the limits of punitive damages.

This case has been discussed previously on Tort Deform by Professor Alan Morrisson. You can also read The Supreme Court’s Crusade: Fairness for the Powerful and Calculations and the Constitution: Punitive Damages by Scott Lemieux.

The Supreme Court has already indicated that at some point punitive damages become so large that they violate due process. But it has done a poor job of identifying that point. Originally, it laid down some reasonable factors for lower courts to consider, including how reprehensible they considered the defendant’s conduct. But in 2003, the court put forth the dubious proposition that punitive damages should generally be in a “single digit” ratio to actual damages — so with actual damages of, say, $100,000, punitive damages should be under $1 million.

Constitutional principles can seldom be boiled down to a formula, and it is difficult to see why the court should rein in juries so tightly. The purpose of punitive damages is, the Supreme Court has noted, “punishing unlawful conduct and deterring its repetition.” In cases of extremely bad conduct, particularly when a defendant is large and willful, a bigger award may be necessary. In this case, $79.5 million does not strike us as unreasonable. Nor do we see any basis for holding that this jury verdict, affirmed in a thoughtful decision by Oregon’s highest court, is a denial of Philip Morris’s due process rights.

A final problem with the Supreme Court’s rule of thumb on punitive damages is that it has been far less restrictive when it comes to punishing people. In 2003, the court held that California did not violate the ban on cruel and unusual punishment when it sentenced a man under its three-strikes law to 50 years for a theft of $153.53 worth of videotapes. That is a far more disproportionate punishment than Philip Morris got, for far less offensive conduct. (link)

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Posted at 9:38 AM, Oct 31, 2006 in
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