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More on the Oregon Case Now Before the Supremes

As Ted Frank has pointed out here, an Oregon case against Philip Morris, where $800K in damages was accompanied by almost $80 million in punitives, is now before the U.S. Supreme Court. At issue is the survival of the recent (State Farm) single-digit multiplier, which the Oregon Supreme Court casually (in my opinion) dissed.

Here is the core of the rationale invoked by the Oregon supremes to allow a punitives-to-compensatories ratio eight times the normal maximum indicated in State Farm:

In summary, Philip Morris, with others, engaged in a massive, continuous, near-half-century scheme to defraud the plaintiff and many others, even when Philip Morris always had reason to suspect -- and for two or more decades absolutely knew -- that the scheme was damaging the health of a very large group of Oregonians -- the smoking public -- and was killing a number of that group. Under such extreme and outrageous circumstances, we conclude that the jury's $79.5 million punitive damage award against Philip Morris comported with due process, as we understand that standard to relate to punitive damage awards.

When the smoke is cleared (sorry), the "scheme" at hand boils down to selling cigarettes to willing buyers. The "fraud" is difficult to discern to these eyes, which have read of centuries-old warnings about tobacco, including of course the warning on every pack of cigarettes for almost all those fifty years.

This "scheme" is comparable to McDonald's "scheme" in selling fatty hamburgers, candy bar makers' "scheme" of "addicting" us to sugar, and of course beer-makers massive "scheme" to fatten and addict us against our will.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.