OPINION OF THE COURT
PHILIP MORRIS USA V. WILLIAMS
549 U. S. ____ (2007)
SUPREME COURT OF THE UNITED STATES
NO. 05-1256
PHILIP MORRIS USA, PETITIONER
v. MAYOLA
WILLIAMS, personal representative of the ESTATE OF JESSE D.
WILLIAMS, DECEASED
on writ of certiorari to the supreme court of
oregon
[February 20, 2007]
Justice Breyer delivered the
opinion of the Court.
The question we address today
concerns a large state-court punitive damages award. We are asked
whether the Constitution’s Due Process Clause permits a jury to
base that award in part upon its desire to
punish the
defendant for harming persons who are not before the court
(
e.g., victims whom the parties do not represent). We hold
that such an award would amount to a taking of “property” from the
defendant without due process.
I
This lawsuit arises out of the
death of Jesse Williams, a heavy cigarette smoker. Respondent,
Williams’ widow, represents his estate in this state lawsuit for
negligence and deceit against Philip Morris, the manufacturer of
Marlboro, the brand that Williams favored. A jury found that
Williams’ death was caused by smoking; that Williams smoked in
significant part because he thought it was safe to do so; and that
Philip Morris knowingly and falsely led him to believe that this
was so. The jury ultimately found that Philip Morris was negligent
(as was Williams) and that Philip Morris had engaged in deceit. In
respect to deceit, the claim at issue here, it awarded compensatory
damages of about $821,000 (about $21,000 economic and $800,000
noneconomic) along with $79.5 million in punitive damages.
The trial judge subsequently
found the $79.5 million punitive damages award “excessive,” see,
e.g.,
BMW of North America, Inc. v.
Gore,
517
U. S. 559 (1996), and reduced it to $32 million. Both sides
appealed. The Oregon Court of Appeals rejected Philip Morris’
arguments and restored the $79.5 million jury award. Subsequently,
Philip Morris sought review in the Oregon Supreme Court (which
denied review) and then here. We remanded the case in light of
State Farm Mut. Automobile Ins. Co. v.
Campbell,
538 U. S. 408
(2003).
540 U. S.
801 (2003). The Oregon Court of Appeals adhered to its original
views. And Philip Morris sought, and this time obtained, review in
the Oregon Supreme Court.
Philip Morris then made two arguments relevant
here. First, it said that the trial court should have accepted, but
did not accept, a proposed “punitive damages” instruction that
specified the jury could not seek to punish Philip Morris for
injury to other persons not before the court. In particular, Philip
Morris pointed out that the plaintiff ’s attorney had told the
jury to “think about how many other Jesse Williams in the last 40
years in the State of Oregon there have been. … In Oregon, how many
people do we see outside, driving home … smoking cigarettes? …
[C]igarettes … are going to kill ten [of every hundred]. [And] the
market share of Marlboros [
i.e., Philip Morris] is
one-third [
i.e., one of every three killed].” App. 197a,
199a. In light of this argument, Philip Morris asked the trial
court to tell the jury that “you may consider the extent of harm
suffered by others in determining what [the] reasonable
relationship is” between any punitive award and “the harm caused to
Jesse Williams” by Philip Morris’ misconduct, “[but] you are not to
punish the defendant for the impact of its alleged misconduct on
other persons, who may bring lawsuits of their own in which other
juries can resolve their claims … .”
Id., at 280a.
The judge rejected this proposal and instead told the jury that
“[p]unitive damages are awarded against a defendant to punish
misconduct and to deter misconduct,” and “are not intended to
compensate the plaintiff or anyone else for damages caused by the
defendant’s conduct.”
Id., at 283a. In Philip Morris’
view, the result was a significant likelihood that a portion of the
$79.5 million award represented punishment for its having harmed
others, a punishment that the Due Process Clause would here
forbid.
Second, Philip Morris pointed to the roughly
100-to-1 ratio the $79.5 million punitive damages award bears to
$821,000 in compensatory damages. Philip Morris noted that this
Court in
BMW emphasized the constitutional need for
punitive damages awards to reflect (1) the “reprehensibility” of
the defendant’s conduct, (2) a “reasonable relationship” to the
harm the plaintiff (or related victim) suffered, and (3) the
presence (or absence) of “sanctions,”
e.g., criminal
penalties, that state law provided for comparable conduct, 517 U.
S., at 575–585. And in
State Farm, this Court said that
the longstanding historical practice of setting punitive damages at
two, three, or four times the size of compensatory damages, while
“not binding,” is “instructive,” and that “[s]ingle-digit
multipliers are more likely to comport with due process.” 538 U.
S., at 425. Philip Morris claimed that, in light of this case law,
the punitive award was “grossly excessive.” See
TXO Production
Corp. v.
Alliance Resources Corp.,
509 U. S. 443, 458
(1993) (plurality opinion);
BMW,
supra, at
574–575;
State Farm,
supra, at 416–417.
The Oregon Supreme Court rejected these and
other Philip Morris arguments. In particular, it rejected Philip
Morris’ claim that the Constitution prohibits a state jury “from
using punitive damages to punish a defendant for harm to
nonparties.” 340 Ore. 35, 51–52, 127 P. 3d 1165, 1175 (2006).
And in light of Philip Morris’ reprehensible conduct, it found that
the $79.5 million award was not “grossly excessive.”
Id.,
at 63–64, 127 P. 3d, at 1181–1182.
Philip Morris then sought certiorari. It asked
us to consider, among other things, (1) its claim that Oregon had
unconstitutionally permitted it to be punished for harming nonparty
victims; and (2) whether Oregon had in effect disregarded “the
constitutional requirement that punitive damages be reasonably
related to the plaintiff’s harm.” Pet. for Cert. (I). We granted
certiorari limited to these two questions.
For reasons we shall set forth, we consider
only the first of these questions. We vacate the Oregon Supreme
Court’s judgment, and we remand the case for further
proceedings.
II
This Court has long made clear
that “[p]unitive damages may properly be imposed to further a
State’s legitimate interests in punishing unlawful conduct and
deterring its repetition.”
BMW,
supra, at 568.
See also
Gertz v.
Robert Welch, Inc.,
418 U. S. 323, 350
(1974);
Newport v.
Fact Concerts, Inc.,
453 U. S. 247, 266–267
(1981);
Pacific Mut. Life Ins. Co. v.
Haslip,
499 U. S. 1, 22
(1991). At the same time, we have emphasized the need to avoid an
arbitrary determination of an award’s amount. Unless a State
insists upon proper standards that will cabin the jury’s
discretionary authority, its punitive damages system may deprive a
defendant of “fair notice … of the severity of the penalty that a
State may impose,”
BMW,
supra, at 574; it may
threaten “arbitrary punishments,”
i.e., punishments that
reflect not an “application of law” but “a decisionmaker’s
caprice,”
State Farm,
supra, at 416, 418
(internal quotation marks omitted); and, where the amounts are
sufficiently large, it may impose one State’s (or one jury’s)
“policy choice,” say as to the conditions under which (or even
whether) certain products can be sold, upon “neighboring States”
with different public policies,
BMW,
supra, at
571–572.
For these and similar reasons,
this Court has found that the Constitution imposes certain limits,
in respect both to procedures for awarding punitive damages and to
amounts forbidden as “grossly excessive.” See
Honda Motor
Co. v.
Oberg,
512 U. S. 415, 432
(1994) (requiring judicial review of the size of punitive awards);
Cooper Industries, Inc. v.
Leatherman Tool Group,
Inc.,
532 U. S.
424, 443 (2001) (review must be
de novo);
BMW,
supra, at 574–585 (excessiveness decision
depends upon the reprehensibility of the defendant’s conduct,
whether the award bears a reasonable relationship to the actual and
potential harm caused by the defendant to the plaintiff, and the
difference between the award and sanctions “authorized or imposed
in comparable cases”);
State Farm,
supra, at 425
(excessiveness more likely where ratio exceeds single digits).
Because we shall not decide whether the award here at issue is
“grossly excessive,” we need now only consider the Constitution’s
procedural limitations.
III
In our view, the Constitution’s
Due Process Clause forbids a State to use a punitive damages award
to punish a defendant for injury that it inflicts upon nonparties
or those whom they directly represent,
i.e., injury that
it inflicts upon those who are, essentially, strangers to the
litigation. For one thing, the Due Process Clause prohibits a State
from punishing an individual without first providing that
individual with “an opportunity to present every available
defense.”
Lindsey v.
Normet,
405 U. S. 56, 66 (1972)
(internal quotation marks omitted). Yet a defendant threatened with
punishment for injuring a nonparty victim has no opportunity to
defend against the charge, by showing, for example in a case such
as this, that the other victim was not entitled to damages because
he or she knew that smoking was dangerous or did not rely upon the
defendant’s statements to the contrary.
For another, to permit punishment
for injuring a nonparty victim would add a near standardless
dimension to the punitive damages equation. How many such victims
are there? How seriously were they injured? Under what
circumstances did injury occur? The trial will not likely answer
such questions as to nonparty victims. The jury will be left to
speculate. And the fundamental due process concerns to which our
punitive damages cases refer—risks of arbitrariness, uncertainty
and lack of notice—will be magnified.
State Farm, 538 U.
S., at 416, 418;
BMW, 517 U. S., at 574.
Finally, we can find no authority supporting
the use of punitive damages awards for the purpose of punishing a
defendant for harming others. We have said that it may be
appropriate to consider the reasonableness of a punitive damages
award in light of the
potential harm the defendant’s
conduct could have caused. But we have made clear that the
potential harm at issue was harm potentially caused
the
plaintiff. See
State Farm,
supra, at 424
(“[W]e have been reluctant to identify concrete constitutional
limits on the ratio between harm, or potential harm,
to the
plaintiff and the punitive damages award” (emphasis added)).
See also
TXO, 509 U. S., at 460–462 (plurality opinion)
(using same kind of comparison as basis for finding a punitive
award not unconstitutionally excessive). We did use the term
“error-free” (in
BMW) to describe a lower court punitive
damages calculation that likely included harm to others in the
equation. 517 U. S., at 568, n. 11. But context makes clear
that the term “error-free” in the
BMW footnote referred to
errors relevant to the case at hand. Although elsewhere in
BMW we noted that there was no suggestion that the
plaintiff “or any other BMW purchaser was threatened with any
additional potential harm” by the defendant’s conduct, we did not
purport to decide the question of harm to others.
Id., at
582. Rather, the opinion appears to have left the question
open.
Respondent argues that she is free to show
harm to other victims because it is relevant to a different part of
the punitive damages constitutional equation, namely,
reprehensibility. That is to say, harm to others shows more
reprehensible conduct. Philip Morris, in turn, does not deny that a
plaintiff may show harm to others in order to demonstrate
reprehensibility. Nor do we. Evidence of actual harm to nonparties
can help to show that the conduct that harmed the plaintiff also
posed a substantial risk of harm to the general public, and so was
particularly reprehensible—although counsel may argue in a
particular case that conduct resulting in no harm to others
nonetheless posed a grave risk to the public, or the converse. Yet
for the reasons given above, a jury may not go further than this
and use a punitive damages verdict to punish a defendant directly
on account of harms it is alleged to have visited on
nonparties.
Given the risks of unfairness that we have
mentioned, it is constitutionally important for a court to provide
assurance that the jury will ask the right question, not the wrong
one. And given the risks of arbitrariness, the concern for adequate
notice, and the risk that punitive damages awards can, in practice,
impose one State’s (or one jury’s) policies (
e.g., banning
cigarettes) upon other States—all of which accompany awards that,
today, may be many times the size of such awards in the 18th and
19th centuries, see
id., at 594–595 (Breyer, J.,
concurring)—it is particularly important that States avoid
procedure that unnecessarily deprives juries of proper legal
guidance. We therefore conclude that the Due Process Clause
requires States to provide assurance that juries are not asking the
wrong question,
i.e., seeking, not simply to determine
reprehensibility, but also to punish for harm caused strangers.
IV
Respondent suggests as well that
the Oregon Supreme Court, in essence, agreed with us, that it did
not authorize punitive damages awards based upon punishment for
harm caused to nonparties. We concede that one might read some
portions of the Oregon Supreme Court’s opinion as focusing only
upon reprehensibility. See,
e.g., 340 Ore., at 51, 127
P. 3d, at 1175 (“[T]he jury could consider whether Williams
and his misfortune were merely exemplars of the harm that Philip
Morris was prepared to inflict on the smoking public at large”).
But the Oregon court’s opinion elsewhere makes clear that that
court held more than these few phrases might suggest.
The instruction that Philip
Morris said the trial court should have given distinguishes between
using harm to others as part of the “reasonable relationship”
equation (which it would allow) and using it directly as a basis
for punishment. The instruction asked the trial court to tell the
jury that “you
may consider the extent of harm suffered by
others
in determining what [the] reasonable relationship
is” between Philip Morris’ punishable misconduct and harm
caused to Jesse Williams, “
[but] you are not to punish the
defendant for the impact of its alleged misconduct on other
persons, who may bring lawsuits of their own in which other
juries can resolve their claims … .” App. 280a (emphasis
added). And as the Oregon Supreme Court explicitly recognized,
Philip Morris argued that the Constitution “prohibits the state,
acting through a civil jury, from using punitive damages to punish
a defendant for harm to nonparties.” 340 Ore., at 51–52, 127
P. 3d, at 1175.
The court rejected that claim. In doing so, it
pointed out (1) that this Court in
State Farm had held
only that a jury could not base its award upon “dissimilar” acts of
a defendant. 340 Ore., at 52–53, 127 P. 3d, at 1175–1176. It
added (2) that “[i]f a jury cannot punish for the conduct, then it
is difficult to see why it may consider it at all.”
Id.,
at 52, n. 3, 127 P. 3d, at 1175, n. 3. And it stated
(3) that “[i]t is unclear to us how a jury could ‘consider’ harm to
others, yet withhold that consideration from the punishment
calculus.”
Ibid.
The Oregon court’s first statement is correct.
We did not previously hold explicitly that a jury may not punish
for the harm caused others. But we do so hold now. We do not agree
with the Oregon court’s second statement. We have explained why we
believe the Due Process Clause prohibits a State’s inflicting
punishment for harm caused strangers to the litigation. At the same
time we recognize that conduct that risks harm to many is likely
more reprehensible than conduct that risks harm to only a few. And
a jury consequently may take this fact into account in determining
reprehensibility. Cf.,
e.g.,
Witte v.
United
States,
515 U.
S. 389, 400 (1995) (recidivism statutes taking into account a
criminal defendant’s other misconduct do not impose an
“ ‘additional penalty for the earlier crimes,’ but instead …
‘a stiffened penalty for the latest crime, which is considered to
be an aggravated offense because a repetitive one’ ” (quoting
Gryger v.
Burke,
334 U. S. 728, 732
(1948))).
The Oregon court’s third statement raises a
practical problem. How can we know whether a jury, in taking
account of harm caused others under the rubric of reprehensibility,
also seeks to
punish the defendant for having caused
injury to others? Our answer is that state courts cannot authorize
procedures that create an unreasonable and unnecessary risk of any
such confusion occurring. In particular, we believe that where the
risk of that misunderstanding is a significant one—because, for
instance, of the sort of evidence that was introduced at trial or
the kinds of argument the plaintiff made to the jury—a court, upon
request, must protect against that risk. Although the States have
some flexibility to determine what
kind of procedures they
will implement, federal constitutional law obligates them to
provide
some form of protection in appropriate cases.
V
As the preceding discussion makes
clear, we believe that the Oregon Supreme Court applied the wrong
constitutional standard when considering Philip Morris’ appeal. We
remand this case so that the Oregon Supreme Court can apply the
standard we have set forth. Because the application of this
standard may lead to the need for a new trial, or a change in the
level of the punitive damages award, we shall not consider whether
the award is constitutionally “grossly excessive.” We vacate the
Oregon Supreme Court’s judgment and remand the case for further
proceedings not inconsistent with this opinion.
It is so ordered.
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