If there were any lingering doubts about whether the Supreme Court's February 2007 decision on punitive damages in Philip Morris USA v. Williams had teeth, the Court has moved quickly to remove those doubts.
On May 14 it ordered a California appeals court to reconsider its $82.6 million award in Ford Motor Co. v. Buell-Wilson. The California court must now consider whether the $55 million punitive damages component of its award took into account harm to individuals other than the plaintiff. Philip Morris established the principle that courts can take into account harm to non-parties in determining the reprehensibility of the defendant's conduct, but cannot factor that harm directly into a punitive damages award.
"Either plaintiffs' lawyers will have to stop making suggestions that lead juries to punish defendants for harm to others or courts will have to stop them from doing so," says Evan Tager, a partner at Mayer, Brown, Rowe & Maw who intervened on behalf of the U.S. Chamber of Commerce in Buell-Wilson. "While plaintiffs' attorneys will still be able to argue that the defendant's conduct was especially egregious because it injured many people other than the plaintiff, they will not be entitled to argue that the punitive damages should be set by multiplying the plaintiff's compensatory damages by the total number of alleged victims. Nor should they be allowed to make the marginally more subtle argument that the defendant should be punished on behalf of 'all of the other Jesse Williamses [the plaintiff in Philip Morris] out there.'"
Indeed, this consideration in itself should put an end to the arguments that have persisted about the significance of Philip Morris.