Supreme Court Imposes Limits On Punitive Damages Awards

On February 20, 2007, Philip Morris won temporary reprieve when the Supreme Court vacated a jury award of $79.5 million in punitive damages to the widow of a deceased smoker, Jesse Williams. The Court held that the award, which was based at least in part on the jury’s desire to punish Philip Morris for harm its products inflicted on other smokers, not just on Williams, violated the Due Process Clause of the Fourteenth Amendment. Philip Morris USA v. Williams, 549 U.S. ___ (2007) (No. 05-1256, February 20, 2007) (slip op. at 1). The ruling sends the case back to the Oregon Supreme Court for reconsideration. Notably, however, the Court did not decide the issue most pressing for business: whether the nearly 100-to-1 ratio of punitive to compensatory damages was "grossly excessive."