Justices' irritation with lower court could save tobacco giant millions

McClatchy NewspapersDecember 3, 2008 

WASHINGTON — Tobacco giant Philip Morris USA might be partially freed from a $145 million punitive judgment, from the sounds of some Supreme Court justices Wednesday.

In an epic legal dispute pitting one court's will against another, conservative justices made clear their sympathies with Philip Morris and their dismay over seemingly being ignored by the Oregon Supreme Court. The eventual result could save Philip Morris a lot of money and deliver the Oregon court a rebuke.

"Does the state court sit in judgment on whether (our) orders are in error or not?" a clearly perturbed Justice Antonin Scalia asked one attorney skeptically.

Chief Justice John G. Roberts was even more pointed, suggesting that there was "something malodorous" about how the Oregon Supreme Court previously sidestepped a Supreme Court directive.

"How do we guard against making constitutional decisions which are simply going to be nullified by some clever device?" asked Justice David Souter.

Souter, though, also joined Justice Ruth Bader Ginsburg in pressing questions very critical of Philip Morris's case, and swing-vote Justice Stephen Breyer suggested a decision might be harder than he originally thought. One way or another, a split decision appears likely.

The case called Philip Morris v. Williams began nine years, and has already been heard twice before by the U.S. Supreme Court. It started off as a case about tobacco company behavior and the lung cancer that killed longtime smoker Jesse Williams in 1997, but it's now mutated into something more abstract.

An Oregon jury in March 1999 awarded Williams' widow $79.5 million in punitive damages, as well as more than $500,000 in compensatory damages. The punitive damages came from the jury's conclusion that Philip Morris had made "false representations concerning the causal link between smoking and cancer."

With interest, the original punitive judgment has since grown to about $145 million.

"This case involves a massive market-directed fraud driven by high-level decisions to deceive customers and knowingly endanger their health in order to generate enormous profits," Mayola Williams' attorney, Robert S. Peck, declared in a legal filing.

However, words such as "cancer," "smoking," "fraud" or "death" — or even the full name "Jesse Williams" — did not crop up during the hour-long oral argument Wednesday morning.

Instead, the high court was confronting how the Oregon Supreme Court has handled the case.

Raising a point that hadn't been previously argued, the Oregon court said Philip Morris had forfeited its chance to challenge the punitive judgment because the company's proposed jury instructions had been technically flawed.

"It's an ambush," Philip Morris attorney Stephen Shapiro protested Wednesday. "It was a surprise ruling."

Roberts, who sided with Philip Morris in the earlier case, seemed to agree.

"There is something malodorous about the fact that the Oregon Supreme Court waited until the last minute to come up with their objection," Roberts declared.

Twice before, for different legal reasons, the U.S. Supreme Court sided with Philip Morris and directed the Oregon court to reconsider the jury's stiff punitive damage award. Both times, the Oregon court stuck to its guns.

Last year, by a 5-4 margin that did not split along standard liberal-versus-conservative lines, the Supreme Court agreed with Philip Morris that the Constitution blocked damage awards imposed to punish a defendant for injury inflicted on someone who wasn't part of the litigation.

As is standard, the Supreme Court then remanded the case to the lower court "for further proceedings not inconsistent with this opinion." Rather than lowering the punitive damages, however, the Oregon Supreme Court found another procedural reason to uphold what the jury had done.

A court decision is expected by June.

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McClatchy Newspapers 2008

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