Federal Article Feeds U.S. Supreme Court Limits Punitive Damages Awards
The U.S. Supreme Court decided in Phillip Morris USA v. Williams that a $79.5 million punitive damages award on actual damages of about $800,000 was excessive under the Constitution. This is not an employment law case, but it is relevant to punitive damages claims asserted in employment law cases. This was a product liability case based on Williams’ cigarette smoking. The plaintiff argued at trial that the jury should punish Phillip Morris not only for the harm it caused to Williams, but also to punish Phillip Morris for harm it caused to non-parties. Phillip Morris unsuccessfully argued below that punitive damages should not be assessed on the basis of conduct directed towards non-parties. The Supreme Court, on review from the Oregon Supreme Court, agreed. The Court reasoned that the defendant has no opportunity to defend against claims that others were harmed in the single-plaintiff trial. The Court held that to permit awards based on harm to non-parties amounted to a taking and a violation of the due process clause of the 14th Amendment.