# Petition for Writ of Certiorari — Philip Morris USA v. Williams > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0249%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2007 - **Citation:** 549 U.S. 346 ## Text (1) Suprems Cont, 1.5. 05125 6MAR 3 0 2006 No. 05-QFFIGE OF THE CLERK Jn the Supreme Court of the Anited States PHitip Morris USA, Petitioner, V: MAYOLA WILLIAMS, Respondent. On Petition for a Writ of Certiorari to the Supreme Court of Oregon PETITION FOR A WRIT OF CERTIORARI KENNETH S. GELLER ANDREW L. FREY EVAN M. TAGER Counsel of Record Maver, Brown, Rowe ANDREW H. SCHAPIRO & Maw LLP LAUREN R. GOLDMAN 1909 K Street, NW Maver, Brown, Rowe & Washington, DC 20006 Maw LLP (202) 263-3000 - 16725 Broadway New York, New York 10019 WILLIAM F. GARY (212) 506-2500 SHARON A. RUDNICK Harrang Long Gary Rudnick - 360 East 10th Avenue Eugene, OR 9740] (S4]) ANS-U2208 Counsel for Petitioner isos eheneneteniecigeemeneemenatimneteieeenendeeninmnmememeneenetmememmeamenaeeadademmemeeatenmmennuneeeaemenieeeieaees = QUESTIONS PRESENTED In this case brought by the widow of a smoker, the jury held Philip Morris liable for fraud and awarded $79.5 million in punitive damages — 97 times the compensatory damages awarded by the jury. On remand from this Court for recon- sideration in light of State Farm Mutual Automobile Insur- ance Co. v. Campbell, 538 U.S. 408 (2003), the Oregon Supreme Court upheld the trial court’s refusal to instruct the jury that it could not punish Philip Morris for harms to non- parties, concluding that a jury may punish for such harms so long as the conduct that caused those harms is similar to the conduct that harmed the plaintiff. Then, construing the evi- dence in the light most favorable to the plaintiff, the court proceeded to hold that the punitive award was not unconstitu- tionally excessive, despite concluding that the punitive award was not reasonably related to the harm to the plaintiff. The questions presented, each of which is the subject of a conflict in the lower courts, are: 1. Whether, in reviewing a jury’s award of punitive damages, an appellate court’s conclusion that a defendant’s conduct was highly reprehensible and analogous to a crime can “override” the constitutional requirement that punitive damages be reasonably related to the plaintiff's harm. 2. Whether due process permits a jury to punish a defen- dant for the effects of its conduct on non-parties. 3. Whether, in reviewing a punitive award for exces- siveness, an appellate court is permitted to give the plaintiff the benefit of all conceivable inferences that might support a finding of high reprehensibility even if the jury made no such specific factual findings. (I) ) RULE 29.6 STATEMENT Petitioner Philip Morris USA’s corporate parent is Altria Group, Inc. Altria Group, Inc. is the only publicly held com- pany that owns ten percent or more of Philip Morns USA’s stock. QUESTIONS PRESENTED RULE 29.6 STATEMENT TABLE OF AUTHORITIES OPINIONS BELOW I. IT. i TABLE OF CONTENTS THE OREGON SUPREME COURT’S RULING THAT THE RATIO GUIDEPOST CAN BE “OVERRIDDEN” VIOLATES THIS COURT’S PRECEDENTS AND CREATES A CONFLICT AMONG THE LOWER COURTS ............-::::00 A. The Framework Adopted And Applied By The Oregon Supreme Court Conflicts With This Court’s Decisions In BMW And State EIA PEL Ne A EN TO B. The Oregon Supreme Court’s Approach Conflicts With That Of The Ninth Circuit And Deepens The Division Among The Lower EES Ses Cnr edersra tne ane a na THE OREGON SUPREME COURT’S APPROVAL OF THE IMPOSITION OF PUNISHMENT FOR HARMS SUFFERED BY NON-PARTIES VIOLATES STATE FARM AND CREATES A CONFLICT WITH DECISIONS ET sessecncccusatebinininsteinisismeabininei Terre ee eee eee Pee eee eee Eee eee eee eee PoEeP PRTC POPC C OPP eee Pee eee Pee eee eee ESE ORE EEE EERE TEETER HEHEHE ETE ETHER EE since 8 sail 10 1V TABLE OF CONTENTS - continued Page A. The Oregon Supreme Court’s Holding Conflicts With This Court’s Decision In State Farm And With Decisions Of Other Appellate SII IIED csthsccsunshicsiesininisiismaleiiaaiiinsammmiapdinaimasdaasieeata aan 16 B. The Oregon Supreme Court’s Holding Will Have Significant Negative Consequences If PS C0 BE covencccvivicessininivnsicnnniiimiania 20 III. THE OREGON SUPREME COURT'S USE OF A SUFFICIENCY-OF-THE-EVIDENCE STANDARD IN ASSESSING THE CONSTITUTIONALITY OF A PUNITIVE DAMAGES AWARD IS CONTRARY TO THIS COURT’S PRECEDENTS AND CONFLICTS WITH A DECISION OF THE CALIFORNIA ET TEIITTIET « snsccccsneumesscddcentesddmedidasemssindanianeasidall 22 A. The Lower Courts Are Divided As To The Proper Implementation Of De Novo Review. .......... 23 B. The Circular Approach Employed By The Court Below Cannot Be Squared With This CRIES PIII oe cocnscecssnssscsasssesencevessecennstintintons 26 PII sscccescesesscsonensmnineeninsisnsieisiistinancninenmaiaaiie 28 APPENDIX Appendix A: Oregon Supreme Court Opinion..................- la Appendix B: Oregon Court of Appeals Opinion............... 35a Vv TABLE OF AUTHORITIES Page(s) CASES Action Marine, Inc. v. Continental Carbon, Inc., 2006 WL 173653 (M.D. Ala. Jan. 23, 2006)................. 12 Aken v. Plains Elec. Generation & Transmission Co-Op, Inc., 49 P.3d 662 (N.M. 2002).........00ceeeeees 24 BMW of North America, Inc. v. Gore, Pe Cs Be OR cccccescccenenesescenscecesesccscceessssescezen passim Bach v. First Union Nat'l Bank, 2005 WL 2009272, 149 Fed. Appx. 358 (6th Cir. Ba icccrsnncnitinnscdaseenenipsesencevseseosemesnessvesasenesseese 13 Bains LLC v. ARCO Prods. Co., I, SII. cscatippnsacsnsnuneneneene 10 Boeken v. Philip Morris Inc., 26 Cal. Rptr. 3d 638 (Cal. Ct. App. 2005), cert.demied, S.Ct. (Mar. 20, 2006)... 13 Boerner v. Brown & Williamson Tobacco Co., NIE, SETI sccecctnassnecedetsonsesenevcesnnseseseoss 13 Bogle v. McClure, 332 F.3d 1347 (11th Cir. 2003)............ 25 Campbell v. State Farm Mut. Auto. Ins. Co., 98 P.3d 409 (Utah 2004), cert. denied, cess atertmerenmnasntonecs passim Cass v. Stephens, 156 S.W.3d 38 sonic penenerpninnsecnnnnsmeneeonaneosneenen 13 Castano v. American Tobacco Co., EAT TE 21 Ceimo v. General Am. Life Ins. Co., 137 Fed. Appx. 968 (9th Cir. 2005) ...........ccceetceeeees 13 vi TABLE OF AUTHORITIES - continued Page(s) _ Chu v. Hong, 2005 WL 2692464 Sere SE TEE, Ste SIE cisccreesiesesctnsscennsneninninaseavinnins 25 Clark v. Chrysler Corp., 436 F.3d 594 SG CUI hs AI iinintiadaciicintncinipanainencniinininecnisiiiniael 12 ‘Conseco Finance Servicing Corp. v. North Am. Mortgage Co., SP | ll FE 12 Cooper Industries, Inc. v. Leatherman Tool Group, 532 U.S. 424 (2001) .........cccccceeeceeeees passim Diamond Woodworks, Inc. v. Argonaut Insurance Co., - 135 Cal. Rptr. 2d 736 (Ct. App. 2003) ..........cccccccceceeeees 13 Eden Elec., Ltd. v. Amana Co., err 13 Fresh v. Entertainment U.S.A. of Tennessee, Inc., 340 F. Supp. 2d 851 (W:D. Tenn. 2003)..................c0. 13 Gober v. Ralph's Grocery Co., 40 Cal. Rptr. 3d 92 Glee. CR Aga BER. F, FEED ocecceccccesecssccscscccssessccensseese 20 Grefer v. Alpha Technical, 901 So. 2d 1117 GO. GR FR FI cccreseccccnssccccnimmmnesacsvmenncenmananncnne 13 Grvyger v. Burke, 334 U.S. 728 (1948) .........ccccccceeeeeceeeeeees 19 Hangarter v. Provident Life & Accident Ins. Co., i, -P ) ). (+ > 25 In re Rhone-Poulenc Rorer, Inc., EP he fy lk ee 21 Johnson v. Ford Motor Co., pf 6): > = 18, 19, 21 Vil TABLE OF AUTHORITIES — continued Page(s) Mathias v. Accor Econ. Lodging, Inc., Vas [ety (+ } 10 Mission Resources, Inc. v. Garza Energy Trust, 166 S.W.3d 301 (Tex. Ct. App. 2005) .........::cccccceeseees 11 Nichols v. United States, 511 U.S. 738 (1994) ....-.cesss-s000 16 Park vy. Mobil Oil Guam, 2004 WL 2595897 eee 24 Parrott v. Carr Chevrolet, Inc., Be aii riniceneinsntnncenniidgmemnatnnnsiinaenntie 24 Phelps v. Louisville Water Co., ee 12 Planned Parenthood of the Columbia/Willamette, Inc. v. American Coalition of Life Activists, 422 F.3d _ Ns BR entiecnenteceestciiinnnniciananicieiiieitiiimnsas 11,14 Philip Morris USA, Inc. v. Williams, 540 U.S. 801 SETTITTEtschnieadeeeeesen/tinnsitennislaninienssetinindeienaneihipebveininnadintnanaintsdinet 4 Roginsky v. Richardson-Merrell, Inc., eo eee 21 Roth v. Farner-Bocken Co., ee Fe 13 Simon v. San Paolo U.S. Holding Co., rE Minds tcitaiiscinsitecpchnninatiniicanintin 23,24 Staskal v. Symons Corp., 706 N.W.2d 311 Sorts UTIs SIRI cictnescesessiinansieniepmpinanbieidesndlenasainidnaiticiaiabisinde 25 State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003)..................- passim vil TABLE OF AUTHORITIES -— continued Page(s) — Stogsdill \ Healthntark Partners, L.L.C., eg ef ee 13, 25 Superior Federal Bank v. Jones & Mackey Construction Co., 2005 WL 3307074 CREE, CR. AAI. TRG. 7, BD sncncsasecessctcsscenemnsmenenetnnntans 12 Union Pac. R.R. Co. v. Barber, 149 §.W.3d 325 (Ark.), cert. demied, 543 U.S. 940 (2004)... 25 United States v. Watts, 519 U.S. 148 (1997)..........ccccceeeees 18 University Med. Assoc. of the Med. Univ. of South Carolina v. UNUMProvident Corp., 335 F. Supp. 2d 702 (D.S.C. 2004) ...........cccccecceceeteeeeees 20 White v. Ford Motor Co., Slip Op., No. CV-N-95- 279-DWH-(PHA) (D. Nev. Mar. 15, 2005) .................. 12 Williams v. ConAgra Poultry Co., SIS F.3G TOO Coe Cav FOB G) access ny cecessececesccvesssscessscnsee 19 Williams v. Philip Morris, 48 P.3d 824 GED, GR, TI siesrcnntsenesenciecnectsstnccienirernisnemnnimsmnssinsintins 3 Witte v. United States, 515 U.S. 389 (1995) .......cccccceceseesees 18 Wohlwend v. Edwards, 796 N.E.2d 781 Ss ees FR, BD ersicccsetscccrniinceneennnenicentesninnmnniantinaton 20 Wolf v. Wolf, 690 N.W.2d 887 (lowa 2005)...........cccccceeces 23 Young v. DaimlerChrysler Corp., 2004 WL 2538639 (S.D. Ind. Oct. 19, 2004)................ 13 Zhang v. Am. Gem Seafoods, Inc.., 339 F.3d 1020 (9th Cir. 2003), cert. denied, 124 S. Ct. 1602 (2004)... eects 10 ix TABLE OF AUTHORITIES — continued Page(s) STATUTES, RULES AND REGULATIONS a EO 1 MISCELLANEOUS Thomas B. Colby, Beyond the Multiple Punishment Problem: Punitive Damages as Punishment Sor Individual, Private Wrongs 9 CEG, Bn EN, FD CD perccccecscoessevessnanccnsncsesessessns 20 Brief of Respondent, BMW of N. Am., Inc. v. Gore, No. 94-896, 1995 WL 330613 (U.S. May 30, PETITION FOR A WRIT OF CERTIORARI Petitioner Philip Morris USA (“Philip Morris’’) respect- fully petitions for a writ of certiorari to review the judgment of the Supreme Court of Oregon in this case. OPINIONS BELOW The decision of the Oregon Supreme Court (App., infra, la-34a) is reported at 127 P.3d 1165. The decision of the Oregon Court of Appeals (App., infra, 35a-75a) is reported at 92 P.3d 126. JURISDICTIIN The judgment of the Oregon Supreme Court was entered on February 2, 2006. The jurisdiction of this Court is invoked under 28 U.S.C. § 1257(a). STATEMENT I. The Trial. Jesse Williams began smoking cigarettes in 1950 while in the Army in Korea, because other soldiers told him that the smoke would keep mosquitoes away. After 1955, Williams smoked Marlboros, manufactured and mar- keted by petitioner Philip Morris. App., infra, 36a. Williams eventually smoked three packs of cigarettes a day. Williams had been taught as a child that smoking is un- healthy. He and his wife taught their children not to smoke. Citing the dangers of tobacco, his wife and children, in turn, repeatedly urged Williams to stop smoking. So did his phy- sician. Although Williams referred to cigarettes as “cancer sticks,” he reacted angrily when confronted with the risks of smoking. His wife frequently pointed to the warning labels on cigarette packages and told him that cigarettes would kill him. Williams reportedly responded: “Phooey. * * * This is what the Surgeon General says, it’s not what [the] tobacco company says.” According to his wife, Williams said that “cigarettes are not going to kill you, because | just heard this 2 so-and-so guy on TV, and he said that tobacco doesn’t cause you cancer!” Williams’ wife testified that in 1996, when Williams was diagnosed with lung cancer, he said: “Those darn cigarette people finally did it. They were lying all the time.” Williams died in March 1997. App, infra, 36a. Wil- liams’s widow (“plaintiff”) sued Philip Morris, alleging neg- ligence and fraud. At trial, plaintiff mounted a wide-ranging attack on 50 years of Philip Mornis’s conduct, introducing evidence relat- ing not only to the company’s statements concerning smok- ing and health (none of which plaintiff was shown to have heard or seen), but also to its research practices, its litigation positions, and its dealings with competitors. In closing ar- guments, plaintiff explicitly and repeatedly urged the jury to punish Philip Morris not only for the harm caused to Wil- liams, but also for the alleged harms suffered by masses of other, unidentified people who were not before the court - people whose individual circumstances were never presented to any finder of fact. Plaintiff urged the jury to award puni- tive damages based on the supposition that ten out of every hundred smokers in Oregon would get cancer, and three or four of those ten would be Marlboro smokers: In Oregon, how many people do we see outside, driving home, coming to work, over the lunch hour smoking cigarettes? For every hundred cigarettes that they smoke are going to kill ten through lung cancer. And of those ten, four of them, or three of them | should say, because the market share of Marlboros ts one-third * * *. When you determine the amount of money to award in punitive damages against Philip Mor- ris * * * [ijt’s fair to think about how many other Jesse Williams[es] in the last 40 years in the State of Oregon there have been. it’s more than fair to think about how many more are out there im the future. 3 Philip Morris sought an instruction that would have told the jury that any punitive award must bear a reasonable rela- tionship to the harm caused to the plaintiff and that it was not permitted to punish Philip Morris for alleged harms suffered by non-parties. The trial court refused to give this instruc- tion, choosing instead to tell the jury that it was free to award any amount of punitive damages up to $100 million, the amount arbitrarily requested in plaintiff's complaint. The jury found for plaintiff on both her fraud and product design claims and awarded $821,485 in compensatory dam- ages (reduced to $521,485 pursuant to Oregon’s statutory cap on wrongful death damages). The jury also awarded $79.5 million in punitive damages for fraud but refused to award any punitive damages on the claims relating to the design of Philip Morris’s cigarettes. On post-trial motions, the trial court held that the punitive award was “excessive under federal standards.” Accord- ingly, it reduced the punitive damages to $32 million — still 39 times the compensatory damages verdict. 2. Appeal and GVR. On appeal, the Oregon Court of Appeals rejected Philip Morris’s contention that the jury should have been given Philip Morris’s proposed instruction that any award of punitive damages had to be reasonably re- lated to the harm caused to Williams himself (as opposed to non-parties), ruling that the proposed instruction misstated the applicable law. Williams v. Philip Morris, 48 P.3d 824 (Or. App. 2002). It further concluded that the jury’s verdict had not been excessive and accordingly reinstated the jury’s $79.5 million award. /d. at 843.' After the Oregon Supreme Court denied review, Philip Morris petitioned for a writ of certiorari, raising both the “punishment for harm to others” issue and an excessiveness Including interest, the award now amounts to nearly $130 mil- lion. 4 claim. This Court granted the petition, vacated the judgment, and remanded to the Oregon Court of Appeals for reconsid- eration in light of State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003). Philip Morris USA, Inc. v. Williams, 540 U.S. 801 (2003). 3. Proceedings On Remand. On remand, the Oregon Court of Appeals once again upheld the $79.5 million award. It rejected Philip Morris’s claims of instructional error, ex- pressly holding that it was both permissible and appropriate for the jury to punish for harms to non-parties. App., infra, 75a. The Court of Appeals then held that the award was not excessive, again relying primarily on unproven harms to non- parties to justify the jury’s massive award. The Oregon Supreme Court affirmed. It stated that, in applying the excessiveness analysis set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), it would “state all facts in the light most favorable to plaintiff.” Jd. at 2a; see also id. at 23a (“[W]e construe all facts in favor of plaintiff, the party in whose favor the jury ruled.”). Proceeding on that basis, the court stated that the jury could have found that Philip Morris had “deceived other smokers in Oregon” besides Mr. Williams and that Philip Morris’s products “caused a significant number of deaths each year in Oregon during the pertinent time period * * * .” Id. at 7a-8a. Although no evidence had been introduced at trial to show whether any Oregon smoker other than Wil- liams smoked and sustained injuries in reliance on the al- leged fraud, the court held that widespread reliance and injury could be inferred. /d. at 8an.1. The court then addressed Philip Morris’s contention that the jury should have been instructed not to punish the com- pany for alleged harms suffered by non-parties. The court rejected the argument “that Campbell prohibits the state, act- ing through a civil jury, from using punitive damages to pun- ish a defendant for harm to non-parties.” /d. at 18a. Indeed, 5 in considering the text of the proposed instruction — which would have permitted the jury to “consider,” but not “punish” for, harm to others — the court stated: “It is unclear to us how a jury could ‘consider’ harm to others, yet withhold that con- sideration from the punishment calculus. If a jury cannot punish for the conduct, then it is difficult to see why it may consider it at all.” /d. at 18a n.3. The court then considered the three BMW “guideposts” for determining whether a punitive award is unconstitution- ally excessive: (i) the degree of reprehensibility of the mis- conduct; (ii) the ratio of punitive to compensatory damages; and (iii) any relevant legislatively established penalties for comparable conduct. 517 U.S. at 574-575. Taking the evidence in the “light most favorable to the plaintiff,” the court concluded that the record supported a finding that Philip Morris’s conduct was “extraordinarily rep- rehensible.” App., infra, 23a. As the court interpreted the evidence, the jury could have found that Philip Morris’s mis- conduct affected “many Oregonians” who kept smoking and became ill or died. /bid. The court further reasoned that the jury could have concluded that the misconduct harmed “a much broader class of Oregonians”: those who “kept buying cigarettes — taking money out of their pockets and putting it into the hands of Philip Morris and other tobacco compa- nies.” Jbid. Therefore, the court concluded, “the first Gore guidepost favors a very significant punitive damage award.” The court similarly held that the third BMW factor — the legislatively established penalties for comparable misconduct — supported a large punitive award: “Viewing the facts in the light most favorable to plaintiff, Philip Morris’s actions, un- der the criminal statutes in place at the beginning of its scheme in 1954, would have constituted manslaughter.” /d. at 27a. Addressing the relationship between the compensatory and punitive awards, the court recognized that “the second 6 Gore guidepost is not met.” /d. at 3la. It acknowledged that “{ajll arguable versions of the ratios substantially exceed the single-digit ratio (9:1) that the [U.S. Supreme] Court has said ordinarily will apply in the usual case.” /bid.“ Nevertheless, the court explained, “the other two guideposts — reprehensi- bility and comparable sanctions — can provide a basis for overriding the concern that may arise from a double-digit ra- tio.” Jd. at 33a. REASONS FOR GRANTING THE PETITION This case, which involves a massive punitive award to a single individual, presents three important constitutional questions bearing on the administration of punitive damages: whether a determination that a punitive award is excessive under the reasonable-relationship guidepost may be trumped by a determination that the other two guideposts support a large punitive award; whether punitive damages may be im- posed to punish for harms to non-parties; and whether a re- viewing court permissibly may assume that the jury drew every inference urged upon it by the plaintiff merely because it awarded the plaintiff a large amount of punitive damages. Each of these questions is important, each recurs with regularity in punitive damages litigation, each has perplexed and divided the lower courts, and each was resolved incor- rectly by the Oregon Supreme Court. First, by holding that the ratio guidepost may be overrid- den by a finding of high reprehensibility, the court below provided courts throughout the country with a roadmap for evading this Court’s efforts to bring predictability and disci- pline to punitive damages jurisprudence. Under the Oregon Supreme Court’s approach, a court need only express the subjective conclusion that the defendant’s conduct was > Indeed, if the statutorily capped amount of compensatory dam- ages is used as the denominator, the ratio in this case rises from 97:1 to 152:1. 7 highly reprehensible and it then can uphold any punitive award no matter how disproportionate to the compensatory damages it may be. But this Court has never treated the three BMW guideposts as independent factors to be traded off against one another. Instead, it has established a range of constitutionally permissible ratios and suggested that the de- gree of reprehensibility (and the amount of compensatory damages) will determine where within that range the consti- tutional cut-off falls in a particular case. The Ninth Circuit has expressly so held; there thus exists a square conflict be- tween a federal circuit court and the supreme court of a state within that circuit on this question. Second, the Oregon Supreme Court’s holding that a jury may punish a defendant for harms to similarly situated non- parties is a dangerous misreading of State Farm. A jury may never punish a defendant for harms to non-parties because doing so would inevitably expose the defendant to the risk of unconstitutional duplicative punishments. The California Supreme Court has expressly construed State Farm to bar punishment on this basis, so once again a square conflict ex- ists. Finally, by presuming that the jury resolved every factual dispute against petitioner notwithstanding the absence of any specific factual findings by the jury, the Oregon Supreme Court rendered de novo review completely toothless. Here, too, a clear conflict exists. As the California Supreme Court recognized in rejecting precisely this approach to post-verdict review, to defer to “findings” not necessarily made by the jury merely because the jury returned a large punitive verdict is to allow the punitive award to “indirectly justify itself,” which is “inconsistent with de novo review.” Because the Oregon Supreme Court’s various holdings collectively defy a decade of this Court’s punitive damages jurisprudence and because each conflicts with decisions of 8 other state supreme courts or federal courts of appeals, re- view is both warranted and necessary. I. THE OREGON SUPREME COURT’S RULING THAT THE RATIO GUIDEPOST MAY BE “OVERRIDDEN” VIOLATES THIS COURT’S PRECEDENTS AND CREATES A CONFLICT AMONG THE LOWER COURTS A. The Framework Adopted And Applied By The Oregon Supreme Court Conflicts With This Court’s Decisions In BMW And State Farm. The Oregon Supreme Court acknowledged that the mas- sive judgment under review did not satisfy the requirements of the BMW ratio guidepost. App., infra, 3la. It neverthe- less affirmed the $79.5 million penalty, which yielded a ratio of almost 100:1, because “the other two guideposts — repre- hensibility and comparable sanctions — can provide a basis for overriding the concern that may arise from a double-digit ratio.” /d. at 33a. That approach directly conflicts with the decisions of this Court. In explaining why “few awards exceeding a single- digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process” (538 US. at 425), the Court specifically enumerated the circumstances that could permissibly give rise to double-digit ratios. Far from creating an exception for all “high reprehensibility” cases, as the Oregon Supreme Court believed, this Court stated that a double-digit ratio was permissible only when “a particularly egregious act has resulted in only a small amount of economic damages.” J/bid. (emphasis added). That, of course, is not the case here. The presence of aggravating reprehensibility factors alone does not override the ratio guidepost or even remove a case from the single-digit-ratio framework described in State Farm (much less justify the 97:1 ratio at issue here). To the 9 contrary, the degree of reprehensibility, among other factors, helps the court to determine which single-digit multiplier is appropriate. In State Farm, this Court explained that nor- “mally a punitive award of four times compensatory damages “might be close to the line of constitutional impropriety.” Ibid. However, the absence of aggravating reprehensibility factors renders any punitive damages award “suspect.” Jd. at 419. State Farm itself involved at least two aggravating rep- rehensibility factors — intentional deceit and a financially vulnerable victim. See id. at 419, 420. Nevertheless, the Court suggested that any award producing a ratio of more than 1:1 would be unconstitutionally excessive on the facts of the case. Jd. at 429.° It makes no sense to consider each guidepost as an inde- pendent and sufficient factor that can “override” one or more of the others, as the Oregon Supreme Court did. Rather than “competitive tools,” as the Oregon Supreme Court described them (App., infra, 32a), the guideposts are constructs that must be considered together in assessing the excessiveness of a punitive award. Reprehensibility may move the acceptable ratio up the single-digit range; it does not render the ratio guidépost inapplicable. By treating the ratio guidepost as an abstract inquiry that could be overridden by high reprehensi- bility, the Oregon Supreme Court’s decision sets punitive damages free of any concrete “reasonable relationship” re- quirement and conflicts with this Court’s punitive damages jurisprudence. * On remand, the Utah Supreme Court held that a 9:1 ratio was permissible after finding all five reprehensibility sub-factors to have been established. Campbell v. State Farm Mut. Auto. Ins. Co., 98 P.3d 409 (Utah), cert. denied, 543 U.S. 874 (2004). 10 B. The Oregon Supreme Court’s Approach Conflicts With That Of The Ninth Circuit And Deepens The Division Among The Lower Courts. The Oregon Supreme Court’s ruling conflicts with the far different approach taken by the Ninth Circuit, which assesses the BMW guideposts in tandem with one another. That court recently explained: Although the Supreme Court has eschewed any spe- cific formula, we discern from BMW and its prog- eny a rough framework for evaluating whether there is a reasonable relationship between the punitive damages award and the actual or likely harm associ- ated with the wrongful conduct. In cases where there are significant economic damages and punitive damages are warranted but behavior is not particu- larly egregious, a ratio of up to 4 to | serves as a good proxy for the limits of constitutionality. See, e.g., State Farm, 538 U.S. at 425, 123 S.Ct. 1513 (acts of bad faith and fraud warranted something closer to a | to | ratio). In cases with significant economic damages and more egregious behavior, a single-digit ratio greater than 4 to | might be consti- tutional. See, e.g., Zhang [v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1043-1044 (9th Cir. 2003)] (post-State Farm case upholding 7 to | ratio where the wrongful conduct involved significant racial dis- crimination); Bains LLC v. ARCO Prods. Co., 405 F.3d 764, 776-777 (9th Cir. 2005) (post-Siate Farm case indicating that ratio between 6 to | and 9 to | would be constitutional where underlying wrongful conduct was racial discrimination). And in cases where there are insignificant economic damages but the behavior was particularly egregious, the single- digit ratio may not be a good proxy for constitution- ality. See, e.g., Mathias v. Accor Econ. Lodging. Inc., 347 F.3d 672, 677 (7th Cir. 2003) (upholding a lI punitive damage award with a 37 to | ratio of puni- tive damages to compersatory damages as constitu- tional because defendant’s behavior was outrageous but the compensable harm” was nominal and diffi- cult to quantify). Planned Parenthood of the Columbia/Willamette, 'nc. v. American Coalition of Life Activists, 422 F.3d 949, %2 (9th Cir. 2005). The Ninth Circuit’s approach, with its apprecia- tion that the reprehensibility analysis operates within limits set by the ratio guidepost, is irreconcilable with Oregon’s, which simply tosses out the ratio consideration when high reprehensibility is found. The existence of a conflict such as this one, between a federal appellate court and the high court of one of its con- stituent states, is a compelling reason to grant review. See Baldwin v. Alabama, 472 U.S. 372, 374 (1985). That is be- cause such conflicts may lead to forum shopping and will produce different results based on nothing more than whether a particular lawsuit is removable. A number of other courts agree with the Oregon Supreme Court that reprehensibility (a highly subjective criterion) may trump the ratio guidepost. These courts have expressly dis- regarded the single-digit limitation in cases in which none of the exceptions identified in State Farm was present, on the theory that high reprehensibility suffices to break the single- digit barrier. In Mission Resources, Inc. v. Garza Energy Trust, 166 S.W.3d 301 (Tex. Ct. App. 2005), for example, the Texas Court of Appeals upheld a $10 million punitive award for trespass where the compensatory damages were $543,667. The court “{a}dmitted[}” that the ratio “of approximately 20 to | * * * exceeds the ‘single-digit multiphers,’ which, ac- cording to the Supreme Court, ‘are more likely to comport with due process.” /d at 319. It nevertheless upheld the award because the trespass was “highly unlawful.” /bid. 12 Similarly, in Superior Federal Bank v. Jones & Mackey Con- struction Co., 2005S WL 3307074 (Ark. Ct. App. Dec. 7, 2005), the Arkansas Court of Appeals upheld a $3.08 million punitive damages award for defamation that was 17.6 times the $175,000 compensatory damages awarded on that claim. The court recognized that “this ratio is greater than the sin- gle-digit ratio mentioned in Campbell,” and therefore was “constitutionally suspect.” Jd at 6-7. But it upheld the award simply because “a 17.6-to-1 ratio is not breathtaking.” Id. at 7. And in White v. Ford Motor Co., Slip Op., No. CV- N-95-279-DWH-(PHA) (D. Nev. Mar. 15, 2005), the district court upheld a $52 million punitive damages award that was 22.6 times the $2.3 million compensatory award on the ground that “a single-digit multiplier does not necessarily form an appropriate limitation upon a punitive damages award” in a “malicious-conduct wrongful death action.” Slip Op. at 42.* The majority of lower courts, on the other hand, have heeded this Court’s admonition that “few awards ex- ceeding a single-digit ratio between punitive and compensa- tory damages, to a significant degree, will satisfy due process.” 538 U.S. at 425.° See also, e.g., Phelps v. Louisville Water Co., 103 S.W.3d 46, 55 (Ky. 2003) (upholding $2 million punitive award for wrongful death that was 11.3 times the $176,361.64 compensatory award); Action Marine, Inc. v. Continental Carbon, Inc., 2006 WL 173653, at *8 n.6 (M.D. Ala. Jan. 23, 2006) (upholding $17.5 million puni- tive award for release of carbon black resulting in property dam- ages of $1.9 million; noting that “the facts of this case could have supported an even higher multiplier [than 9.14:1]" because “a strong state interest in deterrence of a particular wrongful act may justify ratios higher than might otherwise be acceptable”). * See, e.g., Clark v. Chrysler Corp., 436 F.3d 594, 596, 612 (6th Cir. 2006) (reducing $3 million punitive award to $471,258.26, the amount of compensatory damages); Conseco Fin. Servicing Corp. v. North Am. Mortgage Ca., 381 F.3d 811, 825 (8th Cir. 2004) (re- ducing $18 million punitive award to $7 million, for a ratio of 2:1), 13 The courts are also in conflict as to how to apply the guideposts when the misconduct is especially reprehensible (militating in favor of a high ratio) and the amount of com- pensatory damages is substantial (militating in favor of a low ratio). In such circumstances, some courts have held that a ratio at the lower end of the single-digit range is appropriate. See, e.g., Boerner v. Brown & Williamson Tobacco Co., 394 F.3d 594, 598 (8th Cir. 2005) (“approximately 1:1”) and Ceimo v. General Am. Life Ins. Co., 137 Fed. Appx. 968, 970 (9th Cir. 2005) (affirming reduction to approximately 1:1) with Grefer v. Alpha Technical, 901 So. 2d 1117, 1152 (La. Ct. App. 2005) (reducing 18:1 ratio to 2:1); Eden Elec., Ltd. v. Amana Co., 370 F.3d 824, 829 (8th Cir. 2004) (affirming reduction to 4.5:1 ratio). Other courts, however, have upheld awards at the upper end of that range even where the com- pensatory award is in seven figures. See, e.g., Boeken v. Philip Morris Inc., 26 Cal. Rptr. 3d 638, 687 (Cal. Ct. App. 2005) (reducing 18:1 ratio to 9:1), cert. denied, S.Ct Bach v. First Union Nat'l Bank, 149 Fed. Appx. 354, 366 (6th Cir. 2005) (6.6:1 ratio was “alarming” where compensatory damages were $400,000); Stogsdill v. Healthmark Partners, L.L.C., 377 F.3d 827, 834 (8th Cir. 2004) (in wrongful death case, remitting $5 million punitive award to$2 million, for a ratio of 4:1); Fresh v. Entm 't U.S.A. of Tenn., Inc., 340 F. Supp.2d 851, 860 (W.D. Tenn. 2003) (holding that 4:1 ratio was constitutional maximum in as- sault case); Young v. DaimlerChrysler Corp., 2004 WL 2538639, at *4 (S.D. Ind. Oct. 19, 2004) (holding that 3:1 was maximum permissible ratio in discrimination case); Roth v. Farner-Bocken Co., 667 N.W.2d 651, 671 (S.D. 2003) (vacating punitive award that was 20 times the $25,000 compensatory award and suggesting that 1:1 ratio was constitutional maximum); Cass v. Stephens, 156 S.W.3d 38, 77 (Tex. Ct. App. 2004) (holding, in fraud and mali- cious conversion case involving $200,082 in compensatory dam- ages, that 4:1 ratio was constitutional limit); Diamond Woodworks, Inc. v. Argonaut Ins. Co. 135 Cal. Rptr. 2d 736, 760-761 (Ct. App. 2003) (holding that 4:1 was maximum ratio in insurance bad-faith case). 14 (Mar. 20, 2006); Planned Parenthood, 422 F.3d at 962 (hold- ing that 9:1 was constitutional maximum). The Constitution does not require a “one size fits all” ap- proach to assessing the ratio guidepost. But the current level of conflict and confusion on the ratio question in the lower courts is intolerable. The bottom line is that the guidepost ts not being applied in any principled or predictable manner. The Oregon Supreme Court’s doctrinal holding — that the reasonable-relationship requirement can be “overridden” whenever the conduct is highly reprehensible — promises to exacerbate that disarray and to undermine the constitutional principles established in BMW and State Farm. The impor- tance of this issue could not be greater, and the need for re- view could not be more pressing. Il. THE OREGON SUPREME COURT’S APPROVAL OF THE IMPOSITION OF PUNISHMENT FOR HARMS SUFFERED BY NON-PARTIES VIO- LATES STATE FARM AND CREATES A CON- FLICT WITH DECISIONS OF OTHER COURTS The jury returned an enormous punitive award because it was urged and permitted to punish Philip Morris for the harms suffered by every Oregonian who smoked the com- pany’s cigarettes. Philip Morris asked the trial court to in- struct the jury that it could not punish Philip Morris for the effects of its conduct on non-parties. The proposed instruc- tion stated: The size of any punishment should bear a reason- able relationship to the harm caused to Jesse Wil- liams by the defendant’s punishable conduct. Although you may consider the extent of harm suf- fered by others in determining what that reasonable relationship is, you are not to punish the defendant for the impact of its alleged misconduct on other persons, who may bring lawsuits of their own in 15 which other juries can resolve their claims and award punitive damages for those harms, as those other juries see fit. App., infra, 17a-18a. The trial court refused to give the in- struction, and plaintiff's counsel exploited that ruling by re- peatedly urging the jury to punish Philip Morris for harms suffered by anyone in Oregon who smoked Philip Morris's cigarettes. See page 2, supra. The Oregon Supreme Court held that State Farm does not prohibit punishing for harms to similarly situated non-parties. Accordingly, it rejected the claim of instructional error: Philip Morris’s proposed jury instruction would have prohibited the jury from ‘punishing the defen- dant for the impact of its alleged misconduct on other persons,’ even if those other persons were Oregonians who were harmed by the conduct that had harmed Williams, and in the same way. As we noted, that is not correct as an independent matter of Oregon law respecting the conduct of jury trials and instructions that are given to juries. Neither, as we read in [sic] Campbell, does it correctly state federal due process law. App., infra, 20a-2la. The Oregon Supreme Court’s holding that punitive dam- ages may properly be awarded to punish for harms to non- parties conflicts with State Farm and decisions of the Cali- fornia Supreme Court and the Eighth Circuit. It is a recipe for multiple punishments for the same harms, and it will spawn confusion in future punitive damages litigation. Re- view is needed to resolve the split and prevent the further erosion of the principles enunciated in State Farm. 16 A. The Oregon Supreme Court’s Holding Conflicts With This Court’s Decision In State Farm And With Decisions Of Other Appellate Courts. In State Farm, this Court held that juries could consider the effect of the defendant’s conduct on persons other than the plaintiff for purposes of assessing the reprehensibility of that conduct, but may not impose punitive damages to punish the defendant for harms to non-parties. See 538 U.S. at 422- 423. This distinction is not new in the law, but in fact is ap- plied by courts every day in implementing recidivism stat- utes. See, e.g., Nichols v. United States, 511 U.S. 738, 747 (1994) (repeat-offender laws “penalize only the last offense committed by the defendant”). The Oregon Supreme Court did not understand the dis- tinction between punishing the defendants for harm to non- parties and considering such harm for purposes of assessing reprehensibility. The court stated that “[i]t is unclear to us how a jury could ‘consider’ harms to others, yet withhold that consideration from the punishment calculus. If a jury cannot punish for the conduct, then it is difficult to see why it may consider it at all.” App., infra, 18a n.3. The distinction between gauging reprehensibility and im- posing punishment, however, is central to this Court’s puni- tive damages jurisprudence. It is a critical protection against duplicative punishment. The Court made clear in State Farm that a defendant may be punished only for the harm to the plaintiff before the court — and not for harms that may have been suffered by non-parties. The Oregon Supreme Court's contrary position is identical to the Utah Supreme Court’s rationale for upholding the $145 million punitive award that this Court found grossly excessive in State Farm. See 53% U.S. at 423 (quoting Utah Supreme Court’s statement that “fe]ven if the harm to the Campbells can be appropriately characterized as minimal, the trial court’s assessment of the situation is on target: ‘The harm is minor to the individual 17 399 but massive in the aggregate’). This Court expressly re- jected the aggregate approach to assessing punitive damages, explaining: Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other par- ties’ hypothetical claims against a defendant under the guise of the reprehensibility analysis. Punishment on these bases creates the possibility of multiple punitive damages awards for the same conduct; for in the usual case nonparties are not bound by the judgment some other plaintiff obtains. ‘Ibid. At the same time, the Court in State Farm explained that, under certain circumstances, evidence of a defendant’s simi- lar wrongs might nevertheless be admissible to assist the jury in assessing the degree of reprehensibility of the defendant’s conduct. /d. at 422. Due process allows a range of permissi- ble punishments in any given case — a range that is generally limited by the ratio guidepost. According to this Court, in most cases, the maximum allowable penalty will run from zero to nine times the amount of compensatory damages (de- pending upon the reprehensibility of the defendant’s miscon- duct, the size of the compensatory award, and other factors). Id. at 423-425. In determining where within the permissible range a punitive damages award should fall, juries can ap- propriately take into account whether the specific conduct that injured the plaintiff is more blameworthy because it also endangered others. And in deciding what the outer limit ts in - a particular case, a reviewing court too can weigh the charac- ter of the defendant’s conduct, including the magnitude of the harms to which it exposed the public. However, both jury 18 and court may punish the defendant only for the harm that its misconduct inflicted on the plaintiff in the case before it.° While the court below claimed to be baffled by this dis- tinction, it is commonplace in other areas of the law. For ex- ample, evidence of similar wrongs in punitive damages cases plays a role akin to the role of other uncharged criminal con- duct in sentencing. A defendant’s entire course of conduct may be relevant in determining where, within a range of po- tential sentences, the penalty for the particular conviction should fall. But the defendant cannot be punished for past or contemporaneous uncharged offenses, or indeed for anything other than the offense of conviction. See, e.g., United States v. Watts, 519 U.S. 148, 154 (1997) (“sentencing enhance- ments do not punish a defendant for crimes of which he was not convicted, but rather increase his sentence because of the manner in which he committed the crime of conviction”).’ ° The Court drew a similar distinction in BMW when addressing the role of evidence of conduct affecting individuals outside of the forum state. See 517 U.S. at 574 n.21 (“Of course, the fact that the Alabama Supreme Court correctly concluded that it was error for the jury to use the number of sales in other States as a multiplier in computing the amount of its punitive sanction does not mean that evidence describing out-of-state transactions is irrelevant in a case of this kind. To the contrary, * * * such evidence may be relevant to the determination of the degree of reprehensibility of the defen- dant’s conduct.”’). ” See also Witte v. United States, 515 U.S. 389, 401-403 (1995) (“[C]onsideration of information about the defendant’s character and conduct at sentencing does not result in ‘punishment’ for any offense other than the one of which the defendant was convicted.” Rather, the defendant is “punished only for the fact that the present offense was carried out in a manner that warrants increased pun- ishment * * *.”) (emphasis in original); Johnson v. Ford Motor Co., 113 P.3d 82, 92 n.6 (2005) (“An enhanced punishment for recidivism does not directly punish the earlier offense; it is, rather, a stiffened penalty for the last crime, which is considered to be an 19 By the same token, the degree of wantonness reflected in the defendant’s conduct may warrant an enhanced penalty for that conduct, but that is fundamentally different from punish- ing the defendant for harms to other people. The former weighs the degree of reprehensibility of a defendant’s con- duct; the latter runs a significant risk of “double count[ing] by including in the punitive damages award some of the com- pensatory, or punitive, damages that subsequent plaintiffs would also recover.” BMW, 517 U.S. at 593 (Breyer, J., con- curring). The Oregon Supreme Court’s ruling not only is contrary to State Farm, it also conflicts with the holdings of the Cali- fornia Supreme Court and the Eighth Circuit. In Johnson v. Ford Motor Co., 113 P.3d 82 (Cal. 2005), the California Su- preme Court ruled that in an individual action, punitive dam- ages cannot be used to punish a defendant for alleged harm to non-parties because such an award would allow the individ- ual plaintiff to recover without ever proving the specifics of those “hypothetical claims.” /d. at 95. As the California Su- preme Court explained in Johnson, the jury, and a reviewing court, may consider “[t]he scale and profitability of a course of wrongful conduct” in assessing reprehensibility, but only within the framework established by the other two guide- posts; the defendant cannot be punished for harms to anyone other than the plaintiff before the court. /d. at 93. Similarly, the Eighth Circuit has held that “{p]unishing systematic abuses by a punitive damages award in a case brought by an individual plaintiff * * * deprives the defendant of the safe- guards against duplicative punishment that inhere in the class action procedure.” Williams v. ConAgra Poultry Co., 378 F.3d 790, 797 (8th Cir. 2004). aggravated offense because a repetitive one.”) (quoting Gryger v. Burke, 334 U.S. 728, 732 (1948)) (internal quotation marks omit- ted). 20 The issue of how to deal with harm to non-parties has en- gendered confusion among other courts as well. Compare, e.g., University Med. Assoc. of the Med. Univ. of South Caro- lina vy. UNUMProvident Corp., 335 F. Supp. 2d 702, 711 (D.S.C. 2004) (relying on subsequent wrongful conduct to enhance punitive award because such conduct “would result in precisely the type of repetitive harm contemplated in State Farm as ripe for larger punitive damage awards”) with Gober v. Ralph's Grocery Co., 127 Cal. App. 4th 204, 223 (Cal. Ct. App. Mar. 5, 2006) (refusing to consider defendant’s subse- quent wrongful conduct as evidence of recidivism or in com- parable penalties analysis because the victims of that conduct could sue in their own right) and Wohlwend v. Edwards, 796 N.E.2d 781, 783 (Ind. Ct. App. 2005) (trial court erred in admitting evidence of subsequent wrongful conduct because relevance of that evidence was substantially outweighed by the danger that the jury would use it to punish defendant for his subsequent conduct rather than for the act that gave rise to plaintiffs actual damages). This Court’s guidance is plainly needed. B. The Oregon Supreme Court’s Holding Will Have Significant Negative Consequences If Permitted To Stand. The Oregon Supreme Court’s determination that the Con- stitution permits a jury in one case to punish for injuries pre- sumed to have been suffered by non-parties will have substantial, negative repercussions if not corrected. It sub- jects defendants to all the risks of a class action, while afford- ing them none of the safeguards required by due process.® It * See, e.g., Thomas B. Colby, Beyond the Multiple Punishment Problem. Punitive Damages as Punishment for Individual, Private Wrongs 87 MINN. L. REV. 583, 654-656 (2003) (“Because punitive damages are properly recoverable for each individual injury only if ail of the elements of the underlying cause of action are present and there are no affirmative defenses, the defendant must be per- 21 creates a grave risk of excessive, multiple punishment.’ It also works as a one-way ratchet that guarantees that corpo- rate defendants will continue to be exposed to the risk of massive penalties for a course of conduct no matter how many times they are exonerated by courts and juries. See Johnson, 113 P.3d at 94-95 (imposing punitive damages for harms to others- would “present a problem of ‘successive prosecution’ in which a defendant that loses a single case would also lose the benefit of all previous victories against the same claim of misconduct”). Indeed, the Oregon Su- preme Court’s approach threatens to turn every case into a “bet-the-company” event, thereby distorting the legal system by creating inordinate pressure to settle even weak cases.'° In addition, a defendant in an individual case cannot rea- sonably be expected to fend off allegations of misconduct affecting individuals who are not before the court. This case mitted to contest causation and other elements of the alleged tort On an individual basis with respect to each victim and to raise all affirmative defenses that it might have against particular vic- tims.”’). * See Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832, 839- 840 (2d Cir. 1967) (Friendly, J.) (describing multiple-punishment problem). '° See, e.g., In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298 (7th Cir. 1995) (observing that aggregating the claims of multiple alleged victims in a single case can place a defendant that has won the lion’s share of individual cases “under intense pressure to set- tle” rather than “roll these dice” and risk potentially bankrupting liability); Castano v. Am. Tobacco Co. 84 F.3d 734, 746 (Sth Cir. 1996) (“[a]ggregation of claims * * * makes it more likely that a defendant will be found liable and results in significantly higher damage awards,” which in turn “creates insurmountable pressure on defendants to settle” because the prospect of “an all-or-nothing verdict presents too high a risk, even when the probability of an adverse judgment is low”). 22 perfectly illustrates the problem. The record here contains no evidence whatsoever regarding the extent to which other smokers were induced by any Philip Morris misconduct to begin or continue smoking. Yet both the arguments of coun- sel and the opinions of the Oregon courts rested on the facile assumption that Philip Morris could properly be punished for the injuries of everyone in Oregon who became ill as a result of smoking its cigarettes. That assumption is indefensible: It is entirely lawful to sell cigarettes, notwithstanding the known dangers to health; and people who smoke knowin ng the risks have no claim to have been unlawfully injured.’ The position of the courts below not only invites, it ulti- mately rests on, impermissible speculation about the circum- stances of all other potential “victims” as to whom there is no evidence one way or another. There thus are important practical reasons, in addition to the conflicts with decisions of this and other courts, to grant review on this issue. This Court should do so and should re re- verse the decision below. Ill. THE OREGON SUPREME COURT’S USE OF A SUFFICIENCY-OF-THE-EVIDENCE STANDARD IN ASSESSING THE CONSTITUTIONALITY OF A PUNITIVE DAMAGES AWARD IS CONTRARY TO THIS COURT’S PRECEDENTS AND CON- FLICTS WITH A DECISION OF THE CALIFOR- NIA SUPREME COURT. This case raises a third critical issue that arises in virtu- ally every punitive damages appeal and is the subject of a split of authority: whether, when reviewing a punitive award for excessiveness, a court is permitted to assume that the jury decided all disputed facts in favor of the plaintiff. This is a threshold question that arises whenever an appellate court 1s '' For that reason (among others), most of the juries that have heard cases against Philip Morris have found for the defense. 23 tasked with evaluating an excessiveness challenge to a puni- tive award but lacks the benefit of specific fact-findings by the jury or the trial court. In Cooper Industries, Inc. v. Leatherman Tool Group, 532 U.S. 424 (2001), the Court held that appellate courts must conduct a de novo review of trial courts’ application of the three BMW excessiveness guideposts. 532 U.S. at 436. The Court reiterated that mandate in State Farm, observing that “[e]xacting appellate review ensures that an award of punitive damages is based upon an application of law, rather than a decisionmaker’s caprice.” 538 U.S. at 418 (internal quotation marks omitted). In neither Cooper Industries nor State Farm, however, did the Court instruct lower courts how to implement this de novo review when the jury has not ren- dered any specific factual findings. This Court should re- solve the issue once and for all. A. The Lower Courts Are Divided As To The . Proper Implementation Of De Novo Review. In Simon v. San Paolo U.S. Holding Co., 113 P.3d 63, 70 (Cal. 2005), the California Supreme Court ruled that, when the jury has made “no * * * express finding” on a particular issue bearing on application of the BMW guideposts, an ap- pellate court should not simply assume that all relevant facts were resolved by the jury in the plaintiff's favor. It explained that to infer a factual finding unfavorable to the defendant “from the size of the award would be inconsistent with de novo review, for the award’s size would thereby indirectly justify itself.” /bid. Accordingly, “{wJhile [courts must] de- fer to express jury findings Supported by the evidence, in the absence of an express finding on the question [they] must independently decide” whether the fact at issue has been es- tablished. /d. at 72.’ '? See also Wolf v. Wolf, 690 N.W.2d 887, 894 (lowa 2005) (as- sessing reprehensibility on the basis of a “de novo review of the 24 Many other courts, however, including the Oregon Su- preme Court, have taken a fundamentally different position, choosing instead to apply a sufficiency-of-the-evidence stan- dard. Under traditional sufficiency analysis, reviewing courts assume the existence of any fact necessary to support liability so long as the record contains “substantial evidence” from which a reasonable jury could have made the required finding. The Oregon Supreme Court adopted this approach for assessing punitive damages awards in Parrott v. Carr Chevrolet, Inc., 17 P.3d. 473, 485 (Or. 2001), a decision that predates Cooper Industries. Drawing all inferences in favor of the prevailing party makes perfect sense in addressing evidentiary sufficiency questions. However, the rationale for the practice simply does not apply to the fundamentally different context of ex- cessiveness analysis. When the jury renders a liability ver- dict, the reviewing court shauld presume that the jury made all factual findings necessary to uphold that verdict, provided sufficient evidence exists for those findings in the record. By contrast, when the jury awards punitive damages, no particu- lar factual findings are “necessary” to its assessment of the amount. See Cooper Industries, 532 U.S. at 437 (the amount of punitive damages that wil! punish and deter is “not really a ‘fact’ tried by the jury”). It is erroneous to infer from the size of the award findings of fact that the jury did not make — thereby, in the words of the California Supreme Court, allow- ing the punitive award to “indirectly justify itself” (Simon, 113 P.3d at 70). The decision below is emblematic of this circular ap- proach. The Oregon Supreme Court repeatedly emphasized that, in performing its excessiveness review, it would “con- record’); Park v. Mobil Oil Guam, Inc., 2004 WL 2595897, at *13-14 (Guam Nov. 16, 2004) (evaluating the record de novo in excessiveness analysis); Aken v. Plains Elec. Generation & Transmission Co-Op, Inc., 49 P.3d 662, 668 (N.M. 2002). 25 strue all facts in favor of plaintiff, the party in whose favor the jury ruled.”"’ App., infra, 23a; see also id. at 2a; ibid."* The Oregon Supreme Court is not alone in deferring to the plaintiff's version of events in assessing the degree of reprehensibility of the punishable conduct. See, e.g., Stogs- dill v. Healthmark, L.L.C., 377 F.3d 827, 831 (8th Cir. 2004) (“viewing the evidence in the light most favorable to the plaintiffs” as part of state and federal excessiveness review); Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1014 (9th Cir. 2004) (same); Staskal v. Symons Corp., 706 N.W.2d 311, 333 (Wis. App. 2005) (same); Union Pac. R.R. Co. v. Barber, 149 $.W.3d 325, 346 (Ark.) (same), cert. denied, 543 U.S. 940 (2004); Bogle v. McClure, 332 F.3d 1347, 1361 (11th Cir. 2003) (reprehensibility analysis rested on what “a reasonable jury could have concluded from the evidence”); Chu v. Hong, 2005 WL 2692464, at *6 (Tex. '? This characterization of the jury verdict is itself debatable. The jury awarded $79.5 million in punitive damages on plaintiff's fraud claim but it unanimously chose not to award punitive dam- ages on plaintiff's product-design-based claims. Although defen- dant “prevailed” on the latter claim, the Oregon Supreme Court nevertheless viewed evidence of the defendant’s product-design conduct in the light most favorable to plaintiff in order to justify the punitive award. See, e.g., App., infra, 6a; id. at 8a. '* The opinion is replete with instances in which the court stated that the jury “could have found” for plaintiff on a hotly disputed issue, rather than making an independent determination on that issue. See, e.g., App., infra, Sa; id. at 6a; id. at 7a. The Oregon Supreme Court's statement that “the parties do not dispute the way that the Court of Appeals framed the facts” (App., infra, 2a) is flatly inaccurate. Philip Morris expressly stated in its brief that it “adopt[ed] and incorporate[d] by reference the State- ment of Facts in its opening brief in the Court of Appeals,” which sharply contested the version of the record put forth by plaintiff and ultimately adopted by the Court of Appeals. 26 App. Oct. 20, 2005) (“[A] reviewing court must assume that the factfinder resolved disputed facts in favor of its finding if a reasonable factfinder could do so.”’). B. The Circular Approach Employed By The Court Below Cannot Be Squared With This Court’s Precedents. The practice of lower courts simply to assume from the size of the punitive award that the jury has found the defen- dant’s conduct to be highly reprehensible, and then to assume that the jury supported that finding with factual conclusions that the jury nowhere expressed, cannot be reconciled with this Court’s punitive damages jurisprudence. In BMW, for example, the plaintiff's theory was that “BMW was palming off damaged, inferior-quality goods as new and undamaged, so that BMW could pocket 10 percent more than the true value of each car.” Brief of Respondent at 17, BMW of N. Am., Inc. v. Gore, No. 94-896, 1995 WL 330613, at *17 (May 30, 1995). Had a sufficiency-of-the- evidence standard been applicable, the Court would have had to accept this inference as one that the jury reasonably could have reached. Instead, the Court reviewed the record for it- self and, in the course of concluding that the case implicated “none of the aggravating factors associated with particularly reprehensible conduct,” found “no evidence that BMW acted in bad fa:th when it sought to establish the appropriate line between presumptively minor damage and damage requiring disclosure to purchasers.” 517 U.S. at 576, 579. In Cooper Industries, the Court observed that “the level of punitive damages is not really a ‘fact’ ‘tried’ by the jury,” but instead “is an expression of (the jury’s] moral condemna- tion.” 532 U.S. at 432, 437 (internal quotation marks omit- ted). The Court accordingly held that appellate review of a trial court’s application of the BMW guideposts is de novo. In the course of so holding, it indicated that reviewing courts must accept “specific findings of fact” by the jury (id. at 439 27 n.12 (emphasis added)), thereby implying that, in the absence of such findings, reviewing courts must resolve for them- selves factual issues bearing on the application of the three guideposts. The Court then did just that, expressly rejecting the plaintiff's assertion that, for purposes of the second guidepost, the potential harm was $3 million. /d. at 441-442. And in State Farm, after reiterating the importance of “fe]xacting appellate review” (538 U.S. at 418), the Court gave no deference to findings that the jury could have made but did not necessarily make, instead concluding from its own review of the record that there was “scant evidence of repeated misconduct of the sort that injured [the plaintiffs].” Id. at 423. The fact that the jury had seen fit to award the plaintiff $145 million in punitive damages did not persuade this Court that State Farm’s conduct had in fact been highly reprehensible. The present case demonstrates that the concern about phantom factual determinations is not hypothetical. Philip Morris’s net worth was a focal point of the punitive damages phase of the trial. The trial court instructed the jury — in reli- ance on the complaint’s ad damnum - that it could award up to $100 million in punitive damages. It is simply impossible to tell from the bare fact of the jury’s $79.5 million verdict which if any of the inferences urged by plaintiff was accepted by the jury. The jury may well have believed, especially on the record before it, that Philip Morris had not done most of what the plaintiff had accused it of doing (see note 13, sw- pra), but that $79.5 million was an appropriate award in view of the plaintiff's exhortation to exact punishment for every Oregon smoker who ever has or ever will become ill from smoking, as well as Philip Morris’s substantial financial re- sources. Indeed, the one thing that we do know is that the jury decided that it did not need to award the full amount that the plaintiff had requested. 28 The bottom line is that when - as here — the jury has not been asked to respond to special interrogatories bearing on the degree of reprehensibility of the defendant’s conduct and other considerations relevant to setting the amount of puni- tive damages, reviewing courts may not simply assume that every relevant factual dispute was resolved against the de- fendant and indulge every inference urged by the plaintiff. Instead, reviewing courts must independently assess the dis- puted factual issues before applying the three BMW guide- posts. This is, as previously noted, an issue that arises in every punitive damages appeal ~ as well as one on which there is a clear split of authority. This Court should grant review fo address this highly important, frequently recurring issue. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. KENNETH S. GELLER ANDREW L. FREY EVAN M. TAGER Counsel of Record Mayer, Brown, Rowe & ANDREW H. SCHAPIRO Maw LLP LAUREN R. GOLDMAN 1909 K Street, NW Mayer, Brown, Rowe & Maw Washington, DC 20006 LLP (202) 263-3000 1675 Broadway New York, NY 10019 WILLIAM F. GARY (212) 506-2500 SHARON A. RUDNICK Harrang Long Gary Rudnick 360 East 10th Avenue Eugene, OR 97401 (541) 485-0220 MARCH 2006 APPENDIX APPENDIX A OREGON SUPREME COURT OPINION 340 Ore. 35, 127 P.3d 1165 Supreme Court of Oregon. MAYOLA WILLIAMS, PERSONAL REPRESENTATIVE OF THE ESTATE OF JESSE D. WILLIAMS, Deceased, Respondent on Review, V. PHILIP MORRIS INCORPORATED, NKA PHILIP Morris USA INC., Petitioner on Review, and RJ REYNOLDS TOBACCO COMPANY, FRED MEYER, INC., AND PHILIP MORRIS COMPANIES, INC., Defendants. (CC 9705-03957; CA A106791; SC $51805). Argued and Submitted May 10, 2005. Decided Feb. 2, 2006. This tort case arose out of the death of Jesse Williams, a smoker, who died of lung cancer. Plaintiff Mayola Williams is the widow of Jesse Williams and personal representative of his estate. Plaintiff sued defendant Philip Morris Inc. for, inter alia, negligence and fraud, asserting a causal connection between Jesse Williams’s smoking habit and his death. A jury found for plaintiff on both causes of action. The jury awarded both economic and noneconomic damages; it also awarded plaintiff punitive damages of $79.5 million. The issue before us is whether that punitive damage award vio- lates the Due Process Clause of the Fourteenth Amendment to the United States Constitution. The Court of Appeals con- cluded that it did not. Williams v. Philip Morris Inc., 182 Or.App. 44, 48 P.3d 824 (2002) (Williams 1), adh'd to on re- 2a cons., 183 Or.App. 192, 51 P.3d 670, rev. den., 335 Or. 142, 61 P.3d 938 (2002), vac'd and rem'd, 540 U.S. 801, 124 S.Ct. 56, 157 L.Ed.2d 12 (2003), on remand, 193 Or.App. 527, 92 P.3d 126 (2004) (Williams II). For the reasons that follow, we agree. I. FACTS Because the jury ruled in favor of plaintiff, we state all facts in the light most favorable to plaintiff. See Parrott v. Carr Chevrolet, Inc., 331 Or. 537, 556, 17 P.3d 473 (2001) (“[Wjhen reviewing a punitive damages award for exces- siveness, the reviewing court must view the facts in the light most favorable to the jury’s verdict if there is evidence in the record to support them.”). Because the parties do not dispute the way that the Court of Appeals framed the facts, we quote extensively from that court’s opinions. Jesse Williams was a lifelong smoker who eventually died of lung cancer. The cancer was caused by Williams’s smoking. “From the early 1950s until his death from a smoking- related lung cancer in 1997, Williams smoked [Philip Morris]’s cigarettes, primarily its Marlboro brand, even- tually developing a habit of three packs a day. At that point, he spent half his waking hours smoking and was highly addicted to tobacco, both physiologically and psy- chologically. Although, at the urging of his wife and children, he made several attempts to stop smoking, each time he failed, in part because of his addiction. Despite the increasing amount of information that linked smoking to health problems during that 40-year period, Williams resisted accepting or attempting to act on it. When his family told him that cigarettes were dangerous to his health, he replied that the cigarette companies would not sell them if they were as dangerous as his family claimed. When one of his sons tned to get him to read articles about the dangers of smoking, he responded by finding 3a published assertions that cigarette smoking was not dan- gerous. However, when Williams learned that he had in- operable lung cancer he felt betrayed, stating ‘those darn Cigarette people finally did it. They were lying all the time.’ He died about six months after his diagnosis.” Williams II, 193 Or.App. at 530-31, 92 P.3d 126. Plaintiff based her fraud claim against Philip Morris on a 40-year publicity campaign by Philip Morris and the tobacco industry to undercut published concerns about the dangers of smoking. /d. at 531, 92 P.3d 126. Philip Morris and the to- bacco industry had known for most of those 40 years, if not all of them, that smoking was dangerous. /d. Nevertheless, they tried to create in the public mind the impression that there were legitimate reasons to doubt the danger of smoking. Id. Philip Morris and the tobacco industry did so to give smokers a reason to keep smoking (or, perhaps more accu- rately, to undermine one of the main incentives for smokers to stop smoking). /d. The Court of Appeals summarized the evidence regarding the campaign as follows: “The industry established its strategy and began develop- ing its public image in response to a decline in cigarette sales in 1953 that was the apparent result of studies that showed that cigarette tar could cause cancer in mice and that established the existence of statistical correlations between smoking and lung cancer. The first public joint effort by the industry occurred in January 1954, when [Philip Morris] and other tobacco companies published a joint statement in 448 newspapers throughout the coun- try. In that statement, among other things, they an- nounced the creation of the Tobacco Industry Research Committee (TIRC), one of whose stated goals was to conduct research into ‘all phases of tobacco use and health.” In 1964, the year of the Surgeon General’s report on the hazard of smoking to health, the industry divided 4a the TIRC into two parts, one of which, the Council on Tobacco Research (CTR), continued to support scientific research. The other part, named the Tobacco Institute, focused on public relations and lobbying. “Between 1954 and the 1990s, those organizations devel- oped and promoted an extensive campaign to counter the effects of negative scientific information on cigarette sales. The individual tobacco companies, including [Philip Morris], were part of the organizations and acted im cooperation with them. At first, the industry publicly denied that there was a problem; for example, in the 1950s and early 1960s, [Philip Morris]’s officials told the public that [Philip Morris] would ‘stop business tomor- row’ if it believed that its products were harmful. For most of that period, however, the industry did not attempt to refute the scientific information directly; rather, it tried to find ways to create doubts about it. The industry’s goal was to create the impression that scientists disagreed about whether cigarette smoking was dangerous, that the industry was vigorously conducting research into the is- sue, and that a definitive answer would not be possible until that research was complete. As one of [Philip Mor- ris}'s vice-presidents explained in an internal memo, the purpose was to give smokers a psychological crutch and a self-rationale that would encourage them to continue smoking. A Tobacco Institute internal memorandum similarly described the industry’s purpose to provide smokers ‘ready-made credible alternatives’ to the evi- dence of the dangers of smoking. “Both the industry as a whole and [Philip Morris] acted consistently with those purposes. Among other things, they avoided developing contradictory information. De- spite the industry’s nominal emphasis on the need for fur- ther research, the CTR designed its research program to avoid studying the biological effects of tobacco use, the very question that, according to the industry’s statements, Sa required more research. To the extent that [Philip Mor- ris] conducted research on that issue independently of the CTR, it did so in a European laboratory that it purchased, and it was careful to avoid preserving records of the re- sults in this country. [Philip Morris]’s director of re- search in the late 1970s and 1980s explained to a subordinate that his job was to’ attack outside research that was inconsistent with the industry’s position by cast- ing doubt on it. The jury could also have found that there was a ‘gentleman’s agreement’ not to conduct research beyond what the CTR did. The primary purpose of the CTR’s research was to provide expert witnesses for con- gressional hearings and lawsuits, not to determine the re- lationship between smoking and disease. The CTR’s lawyers, rather than its scientists, established its research priorities; developing accurate information on the bio- logical effects of smoking was not one of the lawyers’ priorities. “The jury could have found that, throughout this period of time, (Philip Morris] and the other tobacco companies actually had little doubt that cigarette smoking was caus- ally related to a number of diseases. In 1958, three Brit- ish researchers found that the American tobacco scientists with whom they spoke believed that cigarette smoke could cause cancer. In 1961, [Philip Morris]’s director of research stated that cigarette smoke contained so many carcinogens that the best that the company could do was to reduce their amounts. Internal company memoranda agreed and suggested that it could not admit those facts publicly because of adverse legal consequences. At least by the 1970s, there was absolutely no scientific basis for denying the connection between cigarette smoking and cancer and other diseases. However, [Philip Morris] con- tinued to assert that the hazard of cigarette smoking to health was uncertain when it actually knew that there was no legitimate controversy about that subject. 6a “The jury could also have found that [Philip Morris] rec- ognized both that nicotine was addictive and that its ad- dictive effect was the primary reason that people continued to smoke. [Philip Morris] spent considerable effort discovering ways to deliver the optimal dose of nicotine in each cigarette without actually adding nicotine to its product. It also concluded that, because of nico- tine’s addictive effect, smoking cessation programs and technologies would be unlikely to work without signifi- cant behavioral therapy. In its view, providing smokers a reason to believe that there were serious doubts that to- bacco was harmful would discourage smokers from mak- ing the effort that was necessary to quit smoking. “Also, the jury could have found that [Philip Morns] and the industry used a large number of methods to create the public impression of a legitimate controversy, despite the lack of supporting scientific evidence. They issued press releases, influenced the content of apparently neutral arti- cles, cultivated opinion leaders, attempted to use their ad- vertising power to get favorable treatment from the print media, and appeared on commercial and public television to put forth that message. Those individuals who spoke for [Philip Morris} and the industry emphasized that the evidence concerning the dangers of smoking was primar- ily based on statistical relationships, and they argued that there was no proof that a specific component of tobacco smoke caused a specific disease. Even after the early 1990s, when the industry finally had to admit that to- bacco could be a risk factor associated with a number of diseases, it argued that there was a long chain of interven- ing events before a disease actually arose from cigarette smoking. The industry, including [Philip Morris], also continued to deny that cigarette smoking was addictive and publicized that message throughout the country, in- cluding Oregon.” : Id. at 531-34, 92 P.3d 126. 7a Philip Morris and the tobacco industry intended to de- ceive smokers like Williams, and it did in fact deceive him. “As a smoker, Williams was one of the intended recipi- ents of the industry’s message, and, in fact, the jury could have found that he received its message and relied on its representations. [The jury further could have found that t]hose representations affected his decision to continue smoking and not to make greater efforts to overcome his addiction. When his family urged him to stop smoking, he responded that he had learned from watching televi- sion that smoking did not cause lung cancer. After his diagnosis, he blamed the ‘cigarette people’ for betraying him—which, given his exclusive use of [Philip Morris]’s products, must at least have included [Philip Morris]. The jury could have found on the evidence before it that, as a result of [Philip Morris]’s representations, Williams suffered his fatal lung cancer. The jury also could have found that Williams was one of thousands of Oregonians who received [Philip Morris]’s message, acted on it, and, like him, suffered cancer or other diseases as a result.” Id. at 534, 92 P.3d 126. Furthermore, Philip Morris also deceived other smokers in Oregon: “Although a tobacco industry survey indicated that 85 percent of smokers wished that they had never started smoking, [Philip Morris] concealed information that the addictive effects of nicotine made it difficult for them to stop without significant assistance. The fraudulent statements from [Philip Morris] and the rest of the indus- try reinforced those addictive effects by giving smokers a reason not to make the necessary effort to break the ad- diction. The jury could [have found] on this record that [Philip Morris]’s public relations campaign had precisely the effect that [Philip Morris] intended it to have and that it affected large numbers of tobacco consumers in Oregon 8a other than Williams. It is also reasonably inferable from the evidence that [Philip Morris]’s products, used as [Philip Morris] intended them to be used, caused a sig- nificant number of deaths each year in Oregon during the pertinent time period, together with other serious but non- fatal health problems with their attendant economic con- sequences.” Williams I, \82 Or.App. at 66-67, 48 P.3d 824.' ' These last statements reflect the one real disagreement between the parties over the record. Philip Morris claims repeatedly that the record does not show that its fraud injured any party other than Williams. However, its opening brief indicates that Philip Morris does not contest how the Court of Appeals summarized the record. Rather, it argues that plaintiff did not put on any specific evidence to show that any particular person (other than Williams) continued smoking because of the fraud. “There is nothing in the record that supports the Court of Ap- peals’ assumption that any Oregon smoker other than Wi!!iams smoked and sustained injuries in reliance on the alleged fraud. At most, plaintiff introduced evidence that smoking per se in- jured non-parties. However, the mere act of selling cigarettes is lawful conduct.- Plaintiff never connected the injuries of non-parties to the fraud alleged in this case.” (Emphasis in original.) In essence, Philip Morris is claiming that one cannot reasona- bly infer that anyone was actually fooled by its 40-year advertising campaign directed to thousands of Oregonians. Yet even the sim- plest assessment of human nature, viewed in light of the design- edly addictive properties of cigarettes, tells any reasonable person that those lies would have been very persuasive. We think that such an appreciation of human nature fairly may be attributed to jurors, including the ones who heard this case. Moreover, Philip Morris’s own conduct belies its protestations. As a for-profit cor- poration, it would not spend over 40 years of time, effort, and money to deceive people, unless it thought it was succeeding. 9a Il. PROCEDURAL POSTURE At trial, the jury found in favor of plaintiff on both the negligence and fraud claims, and it awarded compensatory damages of $821,485.50—$21,485.80 in economic damages and $800,000 in noneconomic damages. As to the negligence claim, the jury found Williams 50% responsible for the damages. The jury declined to award any punitive damages respecting that claim. As to the fraud claim, however, the jury awarded punitive damages of $79.5 million. The trial court significantly reduced the amounts awarded to the plaintiff. The court “capped” the noneconomic dam- ages at $500,000 pursuant to former ORS 18.560 (1999), re- numbered as ORS 31.710 (2003), thereby producing a total compensatory damage award of $521,485.80.’ The court also reduced the punitive damage award. The court did con- clude that $79.5 million “was within the range a rational ju- ror could assess based on the record as a whole and applying the Oregon common law and statutory factors.” Neverthe- less, the court concluded, the $79.5 million punitive damage award “was excessive under federal standards.” The tral court therefore reduced the punitive damage award to $32 million. Both plaintiff and Philip Morris appealed to the Court of Appeals. In Williams I, the Court of Appeals reversed the trial court on plaintiff's appeal and reinstated the $79.5 mil- lion punitive damage award. 182 Or.App. at 72, 48 P.3d 824. it affirmed on Philip Morris’s cross-appeal. /d. at 47, 48 P.3d 824. The court later adhered to its opinion on reconsid- eration. Williams, 183 Or.App. at 197, 51 P.3d 670. This court denied review. 335 Or. 142, 61 P.3d 938 (2002). * There is no issue in this case as it comes before us respecting the propriety of the trial court’s application of former ORS 18.560. 10a The United States Supreme Court then granted certiorari, vacated the Court of Appeals’ judgment, and remanded the case to the Court of Appeals for that court to reconsider the amount of the punitive damages award in light of State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). Philip Morris USA Inc. v. Williams, 540 U.S. 801, 124 S.Ct. 56, 157 L.Ed.2d 12 (2003). The Court of Appeals did so in Williams I], again reversing on plaintiff's appeal and affirming on Philip Mor- ris’s cross-appeal. We allowed review. Ill. ISSUES ON REVIEW On review, Philip Morris asks us to consider four issues, which it states as follows: “A. Is a defendant entitled to have the jury instructed that any award of punitive damages must bear a reasonable relationship to the harm caused to the plaintiff and that punitive damages cannot be imposed for alleged harm to non-parties? “B. Are the punitive damages assessed in this case un- constitutionally excessive in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution? “C. Must a plaintiff prove receipt of and reliance upon the defendant’s allegedly fraudulent communications when he or she claims that a defendant committed fraud by communicating a false impression to the general pub- lic through mass media? “D. Does the Federal Cigarette Labeling and Advertising Act, 15 USC §§ 1331 ef seg., preempt the ‘false impres- sion’ theory relied upon by the Court of Appeals, which is based in part upon a defendant’s failure to disclose in- formation beyond that prescribed by the congressionally mandated warnings?” lla We will not consider the third and fourth issues. This court earlier declined review of all the issues decided in Wil- liams I. The appeal remained alive only because of, and to the extent that, the United States Supreme Court later di- rected the Court of Appeals to reconsider its decision respect- ‘ing the amount of punitive damages in light of Campbell. The Court of Appeals performed that limited function in Wil- liams II, and we allowed review of that decision. We decline to go beyond the Supreme Court’s mandate, and the Court of Appeals’ opinion in Williams II, to consider issues that this court previously determined were not review-worthy. See ORAP 9.20(2) (this court’s opinion need not address every question presented on review). The Supreme Court’s decision in Campbell clearly relates to the second issue presented by Philip Morris. Philip Morris asserts that Campbell also relates to the first issue, regarding jury instructions. Because of that, and because the Court of Appeals addressed both issues in Williams I], we will con- sider those issues here. IV. DISCUSSION A. Overview of State Farm v. Campbell We begin by reviewing the United States Supreme Court’s opinion in Campbell. The punitive damage award at issue in Campbell arose from an insured’s action against an insurer for bad faith, fraud, and intentional infliction of emotional distress. 538 U.S. at 414, 123 S.Ct. 1513. Campbell, the insured, had caused an automobile accident that killed one person and permanently disabled another. /d. at 412-13, 123 S.Ct. 1513. When Campbell was sued, Campbell’s insurer, State Farm, chose to contest liability. /d. at 413, 123 S.Ct. 1513. It re- fused settlement offers that were within policy limits and took the case to trial despite the advice of one of its own in- vestigators, in the process assuring Campbell and his wife l2a that they would face no personal liability. /d. When the jury returned a verdict substantially above the policy limits, State Farm initially refused to cover the excess, telling the Camp- bells to put “for sale” signs on their property. Jd. State Farm also refused to post a supersedeas bond to appeal the verdict. Id. In their action against State Farm, the Campbells intro- duced evidence that State Farm’s decision to try the case was part of a nationwide effort to limit payouts on insurance claims. /d. at 415, 123 S.Ct. 1513. The evidence “concerned State Farm’s business practices for over 20 years in numer- ous States. Most of these practices bore no relation to third- party automobile insurance claims, the type of claim underly- ing the Campbells’ complaint against the company.” /d. The jury awarded the Campbells $2.6 million in compensatory damages and $145 million in punitive damages. /d. The tnal court reduced the compensatory damages to $1 million and the punitive damages to $25 million. /d. On appeal, the Utah Supreme Court reinstated the $145 million punitive damage award. Jd. The United States Supreme Court granted certiorari. /d. at 416, 123 S.Ct. 1513. The Court first noted that compensatory damages are in- tended to compensate for a loss, while punitive damages “are aimed at deterrence and retribution.” /d. However, the Court noted, the Fourteenth Amendment’s Due Process Clause prohibits imposing “grossly excessive or arbitrary punish- ments” on a tortfeasor. /d. A person must have fair notice, not just that the state will punish certain conduct, but also how severely it will do so. Jd. at 417, 123 S.Ct. 1513. The Court identified two risks peculiar to punitive dam- ages. First, although punitive damage awards are similar to criminal sanctions, defendants do not receive the procedural protections required of criminal trials. /d. Second, vague jury instructions can leave the jury with too much . iscretion in choosing the amount of punitive damages, allowing it to ex- 13a press preexisting biases or to rely too much on tangential or inflammatory evidence. /d. at 417-18, 123 S.Ct. 1513. For those reasons, the Court had directed “[e]xacting appellate review” of a jury’s punitive damage award, considering three “guideposts” identified in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996): “(1) the degree of reprehensibility of the defendant’s mis- conduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive dam- ages awarded by the jury and the civil penalties author- ized or imposed in comparable cases.” Campbell, 538 U.S. at 418, 123 S.Ct. 1513. The Court then applied those guideposts. The first guidepost, the repr *hensibility of defendant’s conduct, repre- sents “ ‘[t]he most .mportant indicium of the reasonableness of a punitive damages award.’” /d. at 419, 123 S.Ct. 1513 (quoting Gore, 517 U.S. at 575, 116 S.Ct. 1589). In analyz- ing reprehensibility, courts should consider whether “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reck- less disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct in- volved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.” Id. (citing Gore, 517 U.S. at 576-77, 116 S.Ct. 1589). In analyzing that guidepost in Campbell, however, the Court did not itself focus on those five considerations. In- stead, 1t concentrated on how evidence of out-of-state con- duct and dissimilar conduct had skewed the reprehensibility analysis against State Farm. The state wrongly relied on such conduct, the Court ruled, because a state cannot punish 14a a defendant for its lawful conduct in another state, or for conduct that “occurred outside [the state] to other persons.” Id. at 421, 123 S.Ct. 1513. In Campbell, most of the out-of- state conduct was lawful where it took place, and it was not connected to the harm to the Campbells. /d. at 422, 123 S.Ct. 1513. Furthermore, the Court held, a state cannot punish a defendant for “dissimilar acts”: ““A defendant should be pun- ished for the conduct that harmed the plaintiff, not for being an unsavory individual or business.” /d. at 423, 123 S.Ct. 1513. In sum, the Court held that, because the Campbells- showed “no conduct by State Farm similar to that which harmed them, the conduct that harmed them is the only con- duct relevant to the reprehensibility analysis.” /d. at 424, 123 S.Ct. 1513. The second Gore guidepost examines the ratio between the punitive damage award and the actual or potential harm to the plaintiff. Campbell, 538 U.S. at 424, 123 S.Ct. 1513. The ratio, however, is no mechanical formula. /d. (“we have been reluctant to identify concrete constitutional limits on the ratio’), id. at 425, 123 S.Ct. 1513 (“[w]e decline again to im- pose a bright-line ratio”); id. (“there are no rigid benchmarks that a punitive damage award may not surpass’’). That*said, the Court proceeded to give some guidance re- garding the second guidepost. Twice in the past, the Court noted, it had suggested that a punitive damage award more than four times compensatory damages “might be close to the line of constitutional impropriety.” /d. at 425, 123 S.Ct. 1513 (citing Gore, 517 U.S. at 581, 116 S.Ct. 1589, and Pa- cific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 23-24, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991)). The Court also had noted previously that, for 700 years, legislatures had author- ized double, treble, or quadruple damages as a sanction. Campbell, 538 U.S. at 425, 123 S.Ct. 1513 (citing Gore, 517 U.S. at 581 & n. 33, 116 S.Ct. 1589). The Court concluded that, “in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant 15a degree, will satisfy due process.” 538 U.S. at 425, 123 S.Ct. 1513. “Single-digit multipliers are more likely to comport with due process, while still achieving the State’s goals of de- terrence and retribution, than awards with ratios in [the] range of 500 to 1, or, in this case, of 145 to 1.” Jd. (citation omitted). The Court did acknowledge, however, that even those tentative ratios might be adjusted up or down. A greater ratio might comport with due process if “ ‘a particularly egregious act has resulted in only a small amount of economic dam- ages,’” if “ ‘the injury is hard to detect,’ ” or if “ ‘the mone- tary value of noneconomic harm might have been difficult to determine.’” Jd. at 425, 123 S.Ct. 1513 (quoting Gore, 517 U.S. at 582, 116 S.Ct. 1589). With a “substantial” compen- satory damage award, however, due process might require “‘a lesser ratio, perhaps only equal to compensatory damages.” Id. But “{t}he precise award * * * must be based upon the facts and circumstances of the defendant’s conduct and the harm to the plaintiff.” /d. In applying the second Gore guidepost, the Court stated that there is “a presumption against an award that has a 145- to-1 ratio.” Jd. at 426, 123 S.Ct. 1513. The Campbells had received a substantial compensatory damage award; they were injured economically, not physically; and State Farm paid the excess verdict before the Campbells sued them, so their economic injuries were minor. /d. Additionally, the outrage and humiliation that State Farm caused the Camp- bells may have been considered twice—once in the compen- satory damage award and again in the punitive damage award. Id. The Court also rejected several other factors that the Utah Supreme Court had identified in support of the punitive dam- age award. For example, the Utah Supreme Court had l6a pointed to State Farm’s wealth. The Court concluded that wealth should not have been considered: “While States enjoy considerable discretion in deducing when punitive damages are warranted, each award must comport with the principles set forth in Gore. * * * The wealth of a defendant cannot justify an otherwise uncon- stitutional punitive damages award. Gore, 517 U.S., at 585, 116 S.Ct. 1589 (‘The fact that BMW is a large cor- poration rather than an impecunious individual does not diminish its entitlement to fair notice of the demands that the several States impose on the conduct of its business’); see also id., at 591, 116 S.Ct. 1589 (Breyer, J., concur- ring) (‘(Wealth] provides an open-ended basis for inflat- ing awards when the defendant is wealthy ***. That does not make its use unlawful or inappropriate; it simply means that this factor cannot make up for the failure of other factors, such as “reprehensibility,” to constrain sig- nificantly an award that purports to punish a defendant’s conduct’).” Id. at 427-28, 123 S.Ct. 1513. The third guidepost compares the punitive damage award to comparable civil and criminal penalties. /d. at 428, 123 S.Ct. 1513. Criminal penalties, however, do not help as much in determining “the dollar amount of the award”: Id. “Great care must be taken to avoid use of the civil proc- ess to assess criminal penalties that can be imposed only after the heightened protections of a criminal trial have been observed, including, of course, its higher standards of proof. Punitive damages are not a substitute for the criminal process, and the remote possibility of a criminal sanction does not automatically sustain a punitive dam- ages award.” 17a The comparable civil sanctions in Campbell fell well be- low the punitive damage award. The Court identified only one, a $10,000 fine for fraud. /d. The Utah Supreme Court had pointed to other, more substantive penalties, but they were all based on evidence of out-of-state and dissimilar conduct. /d. In all, the Court in Campbell found the case “neither close nor difficult,” id. at 418, 123 S.Ct. 1513, and concluded that $145 million in punitive damages violated due process, see id. at 429, 123 S.Ct. 1513 (concluding award was “irra- tional and arbitrary deprivation” of property). The Court suggested that the guideposts, “especially in light of the substantial compensatory dam- ages awarded (a portion of which contained a punitive element), likely would justify a punitive damages award at or near the amount of compensatory damages.” Id. However, the Court concluded, Utah state courts should calculate punitive damages in the first instance. /d. at 429, 123 S.Ct. 1513. With the foregoing principles in mind, we turn to the questions presented on review. B. The Trial Court's Refusal to Give Philip Morris's Proposed Jury Instruction No. 34 Philip Morris first argues that the trial court erred in re- fusing to give its proposed jury instruction number 34. That instruction stated, in part: “The size of any punishment should bear a reasonable re- lationship to the harm caused to Jesse Williams by the defendant’s punishable misconduct. Although you may consider the extent of harm suffered by others in deter- mining what that reasonable relationship is, you are not to punish the defendant for the impact of its alleged mis- conduct on other persons, who may bring lawsuits of 18a their own in which other juries can resolve their claims and award punitive damages for those harms, as such other juries see fit.” In Williams I, the Court of Appeals concluded that that in- struction was incorrect under state law. 182 Or.App. at 63- 64, 48 P.3d 824. We agree. See Parrott, 331 Or. at 563, 17 P.3d 473 (evaluating punitive damage award; “Because de- fendant’s tortious conduct was a routine part of its business practice that it was unwilling to change, we also consider the potential injury that its misconduct may have caused to past, present, and future customers.”). That is, the jury could con- sider whether Williams and his misfortune were merely ex- emplars of the harm that Philip Morris was prepared to inflict on the smoking public at large. Philip Morris, however, contends that Campbell over- rules state rules like the one set out in Parrott. Specifically, Philip Morris asserts that Campbell prohibits the state, acting through a civil jury, from using punitive damages to punish a defendant f to nonparties.’ In support of that argu- ment, Philip Morris quotes the following from Campbell: “Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other par- ties’ hypothetical claims against a defendant under the guise of the reprehensibility analysis ** *. * * * Pun- ishment on these bases creates the possibility of multiple punitive damages awards for the same conduct; for in the usual case nonparties are not bound by the judgment some other plaintiff obtains. Gore, supra, [517 U.S.] at 593 (Breyer, J., concurring) (‘Larger damages might also > Philip Morris does not explain how its instruction summarizes its interpretation of Campbell. \t is unclear to us how a jury could “consider” harm to others, yet withhold that consideration from the punishment calculus. If a jury cannot punish for the conduct, then it is difficult to see why it may consider it at all. 19a “double count” by including in the punitive damages award some of the compensatory, or punitive, damages that subsequent plaintiffs would also recover’).” 538 U.S. at 423, 123 S.Ct. 1513. We think that Philip Morris takes the foregoing quoted material from Campbell out of context. The quote referred only to dissimilar acts and dissimilar claims; the Court in- tended to prohibit a punitive damage award from becoming a referendum on a corporate defendant’s general behavior as a citizen. The full paragraph in Campbell states: “For a more fundamental reason, however, the Utah courts erred in relying upon this and other evidence: The courts awarded punitive damages to punish and deter conduct that bore no relation to the Campbells’ harm. A defendant’s dissimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages. A defendant should be pun- ished for the conduct that harmed the plaintiff, not for be- ing an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypo- thetical claims against a defendant under the guise of the reprehensibility analysis, but we have no doubt the Utah Supreme Court did that here. [Campbell v. State Farm Mut. Auto. Ins. Co.,} 65 P.3d [1134], at 1149 [ (Utah 2001) ] (‘Even if the harm to the Campbells can be ap- propriately characterized ‘as minimal, the trial court’s as- sessment of the situation is on target: “The harm is minor to the individual but massive in the aggregate” ‘). Pun- ishment on these bases creates the possibility of multiple punitive damages awards for the same conduct; for i the usual case nonparties are not bound by the judgment some other plaintiff obtains. Gore, supra, [517 U.S.] at 593, 116 S.Ct. 1589 (Breyer, J., concurring) (‘Larger damages might also “double count” by including in the 20a punitive damages award some of the compensatory, or punitive, damages that subsequent plaintiffs would also recover’).” 538 U.S. at 422-23, 123 S.Ct. 1513 (emphasis added). Considering the foregoing material as a whole, we con- clude that evidence of similar conduct against other parties may be relevant to a punitive damage award. The Court criticized the Utah courts only for allowing in evidence of dissimilar conduct: “The Campbells have identified scant evidence of re- peated misconduct of the sort that injured them. ** * Although evidence of other acts need not be identical to have relevance in the calculation of punitive damages, the Utah court erred here because evidence pertaining to claims that had nothing to do with a third-party lawsuit was introduced at length *** The reprehensibility guidepost does not permit courts to expand the scope of the case so that a defendant may be punished for any malfeasance, which in this case extended for a 20-year period. In this case, because the Campbells have shown no conduct by State Farm similar to that which harmed them, the conduct that harmed them is the only conduct relevant to the reprehensibility analysis.” Id. at 423-24, 123 S.Ct. 1513 (emphasis added). See also id. at 427, 123 S.Ct. 1513 (“The failure of the company to report the Texas award is out-of-state conduct that, if the conduct were similar, might have had some bearing on the degree of reprehensibility, subject to the limitations we have de- scribed.” (emphasis added)). Philip Morris’s proposed jury instruction would have prohibited the jury from “punish{ing] the defendant for the impact of its alleged misconduct on other persons,” even if those other persons were Oregonians who were harmed by the same conduct that had harmed Williams, and in the same 2la way. As we noted, that is not correct as an independent mat- ter of Oregon law respecting the conduct of jury trials and instructions that are given to juries. Neither, as we read in Campbell, does it correctly state federal due process law. Be- cause the proposed jury instruction did not accurately reflect the law, the trial court did not commit reversible error when it refused to give it. See Hernandez v. Barbo Machinery Co., 327 Or. 99, 106, 957 P.2d 147 (1998) (trial court’s refusal to give requested jury instruction “is no[t] error if the requested instruction is not correct in all respects”). Philip Morris also claims that the trial court committed reversible error because the jury instructions that were given did not accurately reflect some aspects of Campbell's hold- ing. But Philip Morris did not preserve that argument before the Court of Appeals. See ORAP 5.45(1) (“No matter claimed as error will be considered on appeal unless the claimed error * * * is assigned as error in the opening brief ***”): Ailes v. Portland Meadows, Inc., 312 Or. 376, 380, 823 P.2d 956 (1991) (to preserve error, “the adversely af- fected party must have * * * raised the issue on appeal by an assignment of error in its opening brief”). Fairly read, Philip Morris’s assignment of error in the Court of Appeals claimed only that the trial court erred in refusing to give requested instruction number 34. That narrow assignment of error did not give the Court of Appeals notice that it needed to con- sider any challenge to the instructions actually given. Based on the foregoing discussion, we affirm the Court of Appeals on the first issue. C. The Punitive Damage Award and Federal Due Process On review of a punitive damage award under the Due Process Clause of the Fourteenth Amendment, a court must determine whether the punitive damage award is “ ‘grossly excessive’.” Parrott, 331 Or. at 554, 17 P.3d 473 (emphasis deleted; citing Gore, 517 U.S. at 568, 116 S.Ct. 1589). 22a ' Whether the verdict exceeds the gross excessiveness standard is a question of law. Jd. at 555, 17 P.3d 473. In Parrott, this court identified five factors to be consid- ered to determine whether a punitive damage award is grossly excessive: “(T]he range that a rational juror would be entitled to award depends on the following: (1) the statutory and common-law factors that allow an award of punitive damages for the specific kind of claim at issue; (2) the state interests that a punitive damages award is designed to serve; (3) the degree of reprehensibility of the defen- dant’s conduct; (4) the disparity between the punitive damages award and the actual or potential harm inflicted; and (5) the civil and criminal sanctions provided for comparable misconduct.” Id. (citations omitted). Parrott has been superseded some- what by Campbell, but the last three Parrott factors are, of course, the Gore guideposts as they have been further eluci- dated by Campbell. We consider only those guideposts in the following analysis. The first guidepost directs us to consider, based on the facts contained in the record, how reprehensible Philip Mor- ris’s conduct was. As noted, we consider whether: “the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reck- less disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct in- volved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.” Campbell, 538 U.S. at 419, 123 S.Ct. 1513 (citing Gore, 517 U.S. at 576-77, 116 S.Ct. 1589). And, as we have explained, the jury, in assessing the reprehensibility of Philip Morris’s 23a actions, could consider evidence of similar harm to other Oregonians caused (or threatened) by the same conduct. Again, we construe all facts in favor of plaintiff, the party in whose favor the jury ruled. Doing so, there can be no dis- pute that Philip Morris’s conduct was extraordinarily repre- hensible. Philip Morris knew that smoking caused serious and sometimes fatal disease, but it nevertheless spread false or misleading information to suggest to the public that doubts remained about that issue. It deliberately did so to keep smokers smoking, knowing that it was putting the smokers’ health and lives at risk, and it continued to do so for nearly half a century. Philip Morris’s fraudulent scheme would have kept many Oregonians smoking past the point when they would other- wise have quit. Some of those smokers would eventually become ill; some would die. Philip Morris's deceit thus would, naturally and inevitably, lead to significant injury or death. Although it weighs less in our analysis, we also note that Philip Morris harmed a much broader class of Oregonians. Every smoker tricked by its scheme, even those who never got ill, kept buying cigarettes—taking money out of their pockets and putting it into the hands of Philip Morris and other tobacco companies. And every one of those smokers risked serious illness or death for as long as they remained deceived. Of the five reprehensibility factors listed in Gore and re- cited—if not precisely used—in Campbell, four certainly are met here. The harm to Williams was physical—lung cancer cost Williams his life. Philip Morris showed indifference to and reckless disregard for the safety not just of Williams, but of countless other Oregonians, when it knowingly spread false or- misleading information to keep smokers smoking. Philip Morris’s actions were no isolated incident, but a care- fully calculated program spanning decades. And Philip Mor- 24a ris’s wrongdoing certainly involved trickery and deceit.* We conclude, then, that the first Gore guidepost favors a very significant punitive damage award. We also conclude that the third Gore guidepost— comparable civil or criminal sanctions—favors plaintiff. In examining that guidepost, however, we believe that it is im- portant to correct two errors that the Court of Appeals com- mitted in applying it. In Williams I, the Court of Appeals suggested that, be- cause the comparable sanctions guidepost was about notice to a prospective defendant, “the established Oregon law of pu- nitive damages, including ORS 30.925(2),” gave Philip Mor- ris adequate notice here. 182 Or.App. at 72, 48 P.3d 824. That was not correct. Courts consider comparable sanctions for two reasons. First, comparable sanctions suggest a legislative determina- tion about what constitutes an appropriate sanction for the conduct, a determination that ts entitled to “substantial defer- ence.” Gore, 517 U.S. at 583, 116 S.Ct. 1589 (internal quo- tation marks and citation omitted). Second, comparable sanctions may give a defendant fair notice of the penalties that the conduct may carry. /d. at 584, 116 S.Ct. 1589 (“None of these statutes would provide an out-of-state dis- tributor with fair notice that the first violation—r, indeed the * Only one factor arguably is not met: There is no evidence that Williams was especially financially vulnerable. Plaintiff argues that Williams was vulnerable in another way, because he was ad- dicted to cigarettes and so more susceptible to Philip Morris's de- ceptive message. Gore indirectly suggests that reprehensibility may include other sorts of vulnerability than financial. See 517 U.S. at 576, 116 S.Ct. 1589 (suggesting that higher punitive dam- ages are appropriate, even though the injury is solely economic, if “the target is financially vulnerable”). However, as we will dis- cuss, we would affirm this punitive damage award even if that fac- tor was not met. 25a first 14 violations—of its provisions might subject an of- fencer to a multimillion dollar penalty.”’). Those reasons explain why we conclude that the Court of Appeals misunderstood the guidepost. Neither Oregon law generally, nor ORS 30.925(2) specifically,’ suggest how se- verely the state may choose to punish Philip Morris’s con- duct. Thus, they do not independently provide a legislative standard entitled to substantial deference. If the Court of Appeals’ analysis were correct, then the third Gore guidepost would always support any punitive damage award, i.e., the mere existence of the award would justify itself automati- * ORS 30.925 provides, in part: “(2) Punitive damages, if any, shall be determined and awarded based upon the following criteria: “(a) The likelihood at the time that serious harm would arise from the defendant’s misconduct; “(b) The degree of the defendant’s awareness of that likeli- hood; “(c) The profitability of the defendant’s misconduct; “(d) The duration of the misconduct and any concealment of it; “(e) The attitude and conduct of the defendant upon discovery of the misconduct; “(f) The financial condition of the defendant; and “(g) The total deterrent effect of other punishment imposed upon the defendant as a result of the misconduct, including, but not limited to, punitive damage awards to persons in situa- tions similar to the claimant's and the severity of criminal pen- alties to which the defendant has been or may be subjected.” Of course, those criteria were established without the benefit of the Campbell decision, and may be applied only to the extent that they comport with that decision. 26a cally, regardless of the amount awarded. That reasoning is circular, and we reject it. In Williams I, the Court of Appeals also suggested that the comparable sanctions guidepost does not “play[ ] a major role one way or the other,” because it concluded that there were no comparable civil penalties and that criminal penal- ties were not truly comparable. 182 Or.App. at 72, 48 P.3d 824. Although it is not clear to us that the foregoing state- ment correctly interprets and applies the law as Campbell now explicates that law, we need not pursue that issue defini- tively iiere. That is true, because applying the comparable sanctions guidepost involves more than just asking whether the dollar amount of the sanction equals or exceeds the puni- tive damage award. Campbell proves that. There, the most relevant civil sanction was $10,000; the Court found that civil sanction was “dwarfed” by the $145 million punitive damage award. 538 U.S. at 428, 123 S.Ct. 1513. Yet the Court approved a punitive damage award “at or near the amount of compensatory damages,” id. at 429, 123 S.Ct. 1513, i.e., an award somewhere around $1 million. And a $1 million punitive damage award was still 100 times the com- parable sanction. So far as we can discern from Campbell, then, the “com- parable sanctions” guidepost requires three steps. First, courts must identify comparable civil or criminal sanctions. Second, courts must consider how serious the comparable sanctions are, relative to the universe of sanctions that the legislature authorizes to punish inappropriate conduct. Third, courts must then evaluate the punitive damage award in light of the relative severity of the comparable sanctions. The guidepost may militate against a significant punitive damage award if the state’s comparable sanctions are mild, trivial, or nonexistent. However, the guidepost will support a more significant punitive damage award when the state’s compara- ble sanctions are severe. 27a We tum, then, to consider the facts of this case, in light of _ the guideposts and the Fourteenth Amendment. If there are comparable civil sanctions, the parties did not cite them to us and we have not found them by independent investigation. There are what we consider to be comparable criminal sanctions, but we must exercise care when relying on them. As the Court took pains to caution in Campbell: “The existence ofa criminal penalty does have [a] bear- ing On the seriousness with which a State views the wrongful action. When used to determine the dollar amount of the award, however, the criminal penalty has less utility. Great care must be taken to avoid use of the civil process to assess criminal penalties that can be im- posed only after the heightened protections of a criminal trial have been observed, including, of course, its higher standards of proof. Punitive damages are not a substitute for the criminal process, and the remote possibility of a criminal sanction does not automatically sustain a puni- tive damages award.” 538 U.S. at 428, 123 S.Ct. 1513. That admonition is impor- tant, of course. But the basis for holding that Philip Morris’s actions in this case compare to a familiar crime is not specu- lative or remote. Viewing the facts in the light most favor- able to plaintiff, Philip Morris’s actions, under the criminal Statutes in place at the beginning of its scheme in 1954, would have constituted manslaughter. See ORS 163.040 (1953).° Today, its actions would constitute at least second- * In 1953, that statute provided, in part: “(2) Any person who, in the commission of * * * a lawful act without due caution or circumspection, involuntarily kills an- other, is guilty of manslaughter. * * * “(3) Every killing of a human being by the act, procurement or culpable negligence of another, when the killing is not murder in the first or second degree, or is not justifiable or excusable 28a degree manslaughter, a Class B felony. See ORS 163.125(1)(a).’ Individuals who commit Class B felonies may face up to 10 years in prison and a fine of up to- $250,000. ORS 161.605(2) (term of imprisonment); ORS 161.625(1)(c) (fine). Corporations that commit a felony of any class may be fined up to $50,000, or required to pay up or negligent homicide as provided in ORS 163.090 [negligent homicide by operation of motor vehicle], is manslaughter.” ” The Oregon statutes generally define criminal homicide as fol- lows: | “A person commits criminal homicide if, without justification or excuse, the person intentionally, knowingly, recklessly or with criminal negligence causes the death of another human being.” ORS 163.005(1). Second-degree manslaughter is a specific category of criminal homicide: “(1) Criminal homicide constitutes manslaughter in the second degree when: “(a) It is committed recklessly[.} “eee “(2) Manslaughter in the second degree is a Class B felony.” ORS 163.125. Reckless conduct is defined in ORS 161.085(9): “ *Recklessly,’ when used with respect to a result or to a cir- cumstance described by a statute defining an offense, means that a person is aware of and consciously disregards a substan- tial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and de- gree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.” 29a to twice the amount that the corporation gained by commit- ting the offense ORS 161.655(1)(a) and (3). Thus, the pos- sibility of severe criminal sanctions, both for any individual who participated and for the corporation generally, put Philip _ Morris on notice that Oregon would take such conduct very seriously.* We conclude that the third guidepost, like the first, supports a very significant punitive damage award. The same cannot be said of the second Gore guidepost. As noted, that guidepost considers the ratio between the puni- tive damage award and the compensatory damage award. The numerator of the ratio is fixed by the punitive damage award: $79.5 million. To determine the denominator of the ratio, we consider not only the harm actually suffered by plaintiff, but also the potential harm to plaintiff. See Campbell, 538 U.S. at 418, 123 S.Ct. 1513 (“actual or potential harm suffered by the plaintiff’); id. at 424, 123 S.Ct. 1513 (ratio “between harm, or potential harm, to the plaintiff and the punitive damages award”). Plaintiff suffered relatively small economic dam- ages for Williams’s wrongful death—less than $25,000. However, that low figure occurred only because Williams died shortly after being diagnosed with cancer. If Williams had lived long enough to incur substantial medical bills, for example, economic damages could easily have been 10 or more times the amount awarded here. Only chance saved * The fines and periods of imprisonment have changed over the many years that Philip Morris carried out its scheme. In 1953, for example, manslaughter carried a much longer prison term (15 years), but a much lower fine ($5,000). ORS 163.080 (1953). The point, however, is that reckless conduct like Philip Morris’s, when it resulted in death (as it did here), always has constituted a crimi- nal act to which attached a severe potential criminal penalty. 30a Philip Morris from a much higher compensatory damage award.” In analyzing the ratio of punitive to compensatory dam- ages, the Court of Appeals also added to the compensatory damages calculus the estimated harm to others. Williams II, 193 Or.App. at 562, 92 P.3d 126 (estimating that 100 Orego- nians had been harmed by Philip Morris’s scheme, and so concluding ratio was less than 4:1). Using harm to others as part of the ratio may have been correct under the plurality opinion in TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 460, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (Stevens, J., joined by Rehnquist, C. J., and Blackmun, J.) (relationship between actual and punitive damages should consider “the possible harm to other victims that might have resulted if similar fu- ture behavior were not deterred”). However, it no longer ap- * One sentence in Campbell suggested that a small award of “ ‘economic damages’ ” might, when combined with particularly egregious conduct, justify a higher ratio. 538 U.S. at 425, 123 S.Ct. 1513 (quoting Gore, 517 U.S. at 582, 116 S.Ct. 1589; em- phasis added). We conclude, however, that the Court meant compensatory damages generally, not economic damages specifically. See id. (“The converse is also true, however. When compensatory dam- ages are substantial, ther « \esser ratio * * * can reach the outer- most limit of the due process guarantee.” (emphasis added)); see also id. at 426, 123 S.Ct. 1513 (expressing concern that compensa- tory damages might have included outrage or humiliation compo- nent duplicated in punitive damage award). That accords with Gore, 517 U.S. at 582, 116 S.Ct. 1589 (“[L}ow awards of compen- satory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages.” (em- phasis added)). 3la pears to be permissible (if it ever was) to factor in that con- sideration. Although Campbell held that similar acts could bear on reprehensibility (discussed above), it now appears that harm to others should not be considered as part of the ratio guidepost. See 538 U.S. at 426-27, 123 S.Ct. 1513 (“Since the Supreme Court of Utah discussed the Texas award when applying the ratio guidepost, we [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0249%3A02. Public record. Not legal advice.