Another punitive damages award bit the dust last Friday because the district court failed to instruct jurors not to punish the defendants for bad things that happened to other people.  For the second time in a week, the Ninth Circuit held that Philip Morris USA Inc. v. Williams, 127 S. Ct. 1057 (2007), required a new trial on punies.  The court affirmed the award of $1,647,355 in compensatory damages and upheld the jury’s finding that defendants Unum Provident and Paul Revere deserved punishment for denying disability benefits to Clinton Merrick, but it tossed the punitive awards of $8,000,000 and $2,000,000 against the insurers, respectively.  Merrick v. Paul Revere Life Ins. Co., Nos. 05-16380 & 05-17059 (9th Cir. Aug. 31, 2007).

Evidence at trial included the insurers’ routine of rejecting legitimate disability claims.  Under Williams, the court noted, "[t]he Due Process Clause ‘forbids a State to use a punitive damages award to punish a defendant for injury that it inflicts upon nonparties.’"  Slip op. at 11124 (quoting Williams, 127 S. Ct. at 1063).  Without a Williams instruction, the court held, the jury may have punished the insurers for hassling other policyholders.

Blawgletter pauses here to mention that more reversals under Williams appear likely in the coming months.  But we wonder how much effect Williams will exert once the pipeline of pre-Williams punitive awards empties.  Jurors still may consider harm to nonparties in assessing the "reprehensibility" of the defendants’ misdeeds.

Barry Barnett

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