National Association of Manufacturers vice president for litigation Quentin Riegel applauded the Supreme Court ruling that alleged injuries to third parties should not be the basis for assessing punitive damages in certain cases.
“It is unfair to allow a lawyer for a single plaintiff to try to turn his or her claim into a stealth class-action case,” Riegel explained. “If alleged effects of a defendant’s conduct on third parties are to be used to assess punitive damages, due process requires that those parties be part of the case. The court’s nuanced approach to reprehensibility – how serious the conduct was – means that juries will still be able to hear about how many people may have been affected by the defendant’s conduct. However, they can’t use that to assess punitive damages based on injuries to others.
“This case is an important milestone toward ending jackpot justice. The opposite decision would have allowed juries to heap punitive damages on a defendant time and time again for alleged injuries to the same people. We don’t allow criminals to be subjected to multiple punishments for the same crimes, and punitive damages should be subject to similar constraints. Assessing ‘actual’ punitive damages will also help prevent unnecessary bankruptcies, layoffs and pension losses – which occur from excessive litigation. Because juries will be more properly restrained, they will act less to try to trump legislative and executive branch decisions that regulate business.”
The case, Philip Morris USA v. Williams, involved the death of man who smoked cigarettes for 47 years. His widow sued Philip Morris, alleging her husband’s death was influenced by the company’s campaign to undercut the effect of public information about the risks of smoking. The jury awarded Williams $21,485.80 in economic damages, $800,000 in non-economic damages and $79.5 million in punitive damages. The latter was based upon an argument that the company’s alleged misconduct must have harmed thousands of others. The trial court reduced the award to $32 million, but the Oregon Court of Appeals reinstated it in full, and the Oregon Supreme Court affirmed the
“The decision lets companies at least have a chance of keeping punitive damages verdicts within reasonable bounds,” Riegel said. “While there will still be considerable litigation to flesh out how to properly instruct a jury to limit its power to punish, there is hope that defendants of all kinds will get a fair deal when it comes to punitive damages.”
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The National Association of Manufacturers is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in
