Blawgletter noted on Tuesday that the U.S. Supreme Court ruled for defendants in two significant business cases.  But now we wonder about one of the two defense victories — the one about punitive damages, Philip Morris USA v. Williams, No. 05-1256 (U.S. Feb. 20, 2007).

Readers will recall that the Court threw out a $79 million punitive damages award in a case involving actual damages (to a cigarette smoker) less than $1 million.  The more than 80-to-1 ratio between the punies and actuals struck many as high and fired hopes among the chamber of commerce set that the Court would adopt a bright line limit on such ratios.  A clear standard would assure proportionality between real harm and punishment and promote economic efficiency (at the expense, some would say, of a just result).

The Court’s decision dashed those expectations.  The 5-4 decision turned not on proportionality but on the wording of jury instructions.  (See ABA Journal article here.)  The trial court in Williams erred, the majority held, in allowing jurors to consider harm to non-parties in setting the amount of punitive damages.  The opinion thus affirmed the jury’s primacy in determining appropriate punishment.

So the case may signal a healthy reluctance on the Court to undo the work of juries.  Blawgletter hopes so.

Barry Barnett

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