Punitive Damages - On Borrowed Time?
Posted by
Elaine MandelOctober 31, 2006 5:20 PMThe United States Supreme Court takes up the issue of punitive damages - meant to punish corporate wrongdoers - with a new case against cigarette maker Philip Morris USA.
For 45 years, Jesse Williams smoked two packs of Marlboros a day. Williams believed Philip Morris' decades of PR claiming that cigarette smoking was safe. After he died of lung cancer, William's widow sued Philip Morris USA.
An Oregon jury awarded Mrs. Williams $800,000 in damages for the loss of her husband, but they also awarded $79 million dollars in "punitive" damages - meant to punish Philip Morris - for the company's years of lying to the public and convincing people, like Jesse Williams, that smoking wasn't harmful.
Of course Philip Morris doesn't want to take responsibility for Mr. Williams death, and of course Philip Morris doesn't want to pay $79 million.
Now Philip Morris is asking the United States Supreme Court to come to its rescue and overturn the jury's verdict. Philip Morris, supported by the Chamber of Commerce and Big Business, wants the Court to cut the verdict to $3.2 million.
The Supreme Court grappled Tuesday with whether to allow a $79.5 million verdict against a cigarette company, a case that business groups are pointing to in asking the justices to clamp down on large damage awards.
The whole point of punitive damages is to punish a wrongdoer to make sure they don't do it again. What kind of deterrent will it be for Philip Morris to have to pay $3.2 million? Not much. Philip Morris has a 50% market share an annual income in the billions.
Conservative justices on the Supreme Court, like Clarence Thomas and Antonin Scalia, have been against punitive damages for a long time. Now President Bush has added two new conservatives to the Court with Chief Justice John Roberts and Samuel Alito. We'll see how much longer punitive damages are around.