Monday, October 06, 2003
Punitive Damages and a Smoking Lawsuit
The Supreme Court has ordered an Oregon court to reconsider an award of $79.5 million in punitive damages from
Philip Morris to the family of a deceased smoker. Not at issue are $800,000 of compensatory damages in the case, though Philip Morris
will seek to have the entire case re-litigated. The Court remanded the case to bring it in line with its April, 2003 ruling in STATE FARM MUT.
AUTOMOBILE INS. CO. V. CAMPBELL; this Utah case involved punitive damages 145 times as great as the compensatory damages. Here is an
excerpt from the conclusion of the majority opinion in State Farm v. Campbell:
"An application of the Gore guideposts to the facts of this case, especially in light of the substantial compensatory damages awarded (a portion of which contained a punitive element), likely would justify a punitive damages award at or near the amount of compensatory damages. The punitive award of $145 million, therefore, was neither reasonable nor proportionate to the wrong committed, and it was an irrational and arbitrary deprivation of the property of the defendant. The proper calculation of punitive damages under the principles we have discussed should be resolved, in the first instance, by the Utah courts."