WASHINGTON - A closely divided US Supreme Court yesterday overturned a US$79.5 million ($115 million) punitive damages award won by the widow of a longtime smoker against Philip Morris.
By a 5-4 vote, the high court ruled the huge damages award was unconstitutional because it was intended to
punish the tobacco company for harming not just the plaintiff but other smokers as well.
The court ruled that the company, a unit of Altria Group Inc, could not be punished for harm to other smokers in a case involving Mayola Williams, an Oregon woman whose husband died of lung cancer in 1997 after smoking for more than 40 years.
The case had been closely watched by business groups that wanted the court to impose new limits on punitive damages designed to punish and deter misconduct. The court last placed limits on such awards in 2003.
Legal experts said the ruling could have a big impact on other types of product liability cases, such as lawsuits against drug companies and car makers..
Businesses have long complained that punitive damages are sky-rocketing, can be arbitrary, and encourage frivolous lawsuits. Lawyers for those who have been injured defend big awards as a way to get companies to fix harmful product defects.
In 1999, a jury awarded Williams US$821,000 in compensatory damages, which was reduced under state law to US$521,000, and US$79.5 million in punitive damages. Philip Morris had challenged the punitive award as excessive and unfair punishment.
But Robert Peck, the lawyer representing the smoker's wife, defended the award she won in her lawsuit for fraud and negligence in which Williams said her husband believed the tobacco industry assurances that smoking did not pose a health threat.
Only the punitive damages were at issue before the Supreme Court.
- REUTERS
