February 20, 2007

A few key points:

1. The decision doesn't reach whether the punitive damages award is actually excessive. Rather, it remands in light of the Court's clarified position that punitive damages, while permissible to punish "reprehensible" conduct, cannot "punish for harm caused [to]strangers" to the litigation. The Court thus draws a procedural rather than a substantive line, focusing on jury instructions, which may limit the reach of the BMW-Campbell-Williams cases over the long run.


2. Chief Justice Roberts and Justice Alito are with the majority in a 5-4 split--taking the position previously assumed by Chief Justice Rehnquist and Justice O'Connor, in opposition to the position taken by Justices Thomas and Scalia. They are joined by Justices Breyer (author of the opinion), Souter, and Kennedy, all long-standing in their view that the Fourteenth Amendment constrains state punitive damage awards. Justice Ginsburg remains in the Thomas-Scalia camp.


3. Interestingly, Justice John Paul Stevens, in the majority in State Farm v. Campbell and BMW v. Gore, here switches sides. He rejects the majority's formulation that punitive damages cannot "punish for harm caused strangers." In essence, Steven's position is that the tobacco companies' conduct was so "egregious" that it warrants the enormous punitive award.


4. A side note in Justice Stevens' dissent: he analogizes punitive damages to criminal sanctions, saying, "This justification for punitive damages has even greater salience when, as in this case, the award is payable in whole or in part to the State rather than to the private litigant" (citation omitted). Such rationale is a further caution on such reforms, already questioned by our own Walter Olson.