Class Actions in Drag
The Supreme Court splits more differences on punitive damages.
Wednesday, February 21, 2007 12:01 a.m. EST
The Supreme Court dealt another blow against runaway tort damages yesterday in a long-running case between Philip Morris and the late Jesse Williams, a heavy smoker whose Marlboro habit killed him. Maybe next time the Justices will go even further and provide some clearer guidance to lower courts.
The question before the High Court was how far a jury could go in awarding "punitive" damages, especially where the behavior being punished was deemed "reprehensible." In the original lawsuit, the jury awarded Mr. Williams's widow $79.5 million in punitive damages on top of $821,000 in compensatory damages, a tidy ratio of 97 to 1.
The opinion of the 5-4 majority, written by Justice Stephen Breyer, never addressed whether this ratio was "excessive," as the court has done in other recent cases. Instead the majority, which included Chief Justice John Roberts and Justices Samuel Alito, Anthony Kennedy and David Souter, ruled that Philip Morris had been punished not only for harm to Williams, the deceased, but to other smokers in the state--a back-door class action, in effect.
This seems a sound impulse on a number of grounds. Our courts are already riddled with enough class actions without turning single-plaintiff cases into more of the same through the punitive-damages process. And awarding damages based on harm to what Justice Breyer calls "strangers to the case" risks seeing businesses dunned many times over when multiple plaintiffs sue over the same harm. The majority opinion concluded that harm to others could be taken into account in determining how "reprehensible" a tort was, but could not be figured into the punitive-damages award "directly."
Ruth Bader Ginsburg was joined in dissent by Clarence Thomas, Antonin Scalia and John Paul Stevens. She argued, with some cause, that Justice Breyer's opinion was trying to maintain a distinction without much difference. And it is true that the Court offered little in the way of objective standards--such as a firm ratio between compensatory and punitive damages--to determine when a defendant was likely being punished for harm to others. But in affirming that procedural safeguards against excessive damages were necessary, at least the Court took another step in the direction of reining in huge punitive awards.
It is noteworthy, too, that the Court's two newest members joined the majority here. Justices Thomas and Scalia have long been skeptics of limitations on punitive damages and of the "substantive due process" arguments that lie behind yesterday's ruling. But in joining the majority, the Court's newest Justices demonstrated their awareness that when punitive-damage awards grow large enough, real issues of justice and fairness (and thus due process) are implicated.
The Court currently has a petition before it to hear another punitive-damages case, this one involving a rollover in a Ford Explorer SUV. The case would give the Justices another opening to address what safeguards are necessary to ensure that the rights of defendants and plaintiffs alike are respected when it comes to the evidence and arguments that can be presented to ring up huge damage awards. In the long run, it may be that procedural safeguards on how these cases are argued and how juries are told to weigh the evidence could make judicial limits on outsize punitive damages less important, but yesterday's ruling in Philip Morris v. Williams is unlikely to be the final word.
Yesterday's ruling looks to be one more example of what Fourth Circuit Court of Appeals Judge J. Harvie Wilkinson III has astutely called the High Court's recent tendency toward "split the difference" jurisprudence. Rather than rooting decisions in the Constitution or statutory text, such reasoning tends to "relax constraints on judicial discretion" and thus augment the power of judges over the other branches, as Judge Wilkinson put it last year in the Stanford Law Review. We'd add that this habit is a specialty of Justices Breyer and Kennedy, both of whom love to play the role of King Solomon.
In any case, inflicting gigantic damages in civil cases without standards to guide either judges or juries are a real problem, despite what Justices Thomas and Scalia seem to believe. And in ruling that standards have to be applied in how these cases are argued--and not only in the number that is finally arrived at--the Court may have hit upon an important area for reform. But thanks to the Court's willingness to split too many differences, Philip Morris can't exhale just yet.
opinionjournal.com |
