February 02, 2006

The Oregon Supreme Court, in a 5-0 decision (with two recusals) has affirmed a $79.5 million punitive damages award against Philip Morris, notwithstanding the defendant's arguments that the 151:1 ratio exceeded by far the constitutional limits of BMW v. Gore and State Farm v. Campbell. (And of the $521,000 compensatory damages, only $21,000 were economic damages.) (Williams v. Philip Morris (Ore. Feb. 2, 2006)). If Philip Morris appeals to the U.S. Supreme Court, it will be the first opportunity to see what Justices Roberts and Alito think about those two decisions and the question of constitutional limits on punitive damages. State Farm, a 6-3 decision, had departed justices O'Connor and Rehnquist in the majority, but Scalia, Thomas, and Ginsburg in the dissent.

Oregon law requires 60% of punitive damages to go to the state, but Oregon has already foresworn its share as part of the multi-billion-dollar tobacco settlement, so Philip Morris will only be on the hook for $32 million.