# Amicus Curiae Brief — Philip Morris USA v. Williams

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0249%3A29

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007
- **Citation:** 549 U.S. 346

## Text

ft) gL
No. 05-1256
IN THE Bia. pins ©. Km. te nity
Supreme Court of the Gnited Sutntes

PHILIP MorRIS USA,

Petitioner,

Vv.

MAYOLA WILLIAMS,

Respondent.

On Writ of Certiorari to the
Oregon Supreme Court

BRIEF FOR AMICI CURIAE R.J. REYNOLDS
TOBACCO COMPANY AND LORILLARD
TOBACCO COMPANY IN SUPPORT OF

PETITIONER

JAMES T. NEWSCM MEIR FEDER
SHOOK, HARDY & BACON (Counsel of Record)

LLP CHARLES R.A. MORSE
2555 Grand Blvd. JONES DAY
Kansas City, MO 64108 222 East 4\st Street
(816) 474-6550 New York, NY 10017

(212) 326-3939

Counsel for Amicus Curiae Counsel for Amicus Curiae
Lorillard Tobacco Co. R.J. Reynolds Tobacco Co.

Additional Counsel Listed on Inside Cover
RR ne EE a TT TE ORR a RE: EIR rk
WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

DONALD B. AYER

ROBERT H. KLONOFF

JONES DAY

51 Louisiana Avenue, N.W.

Washington, DC 20001
(202) 879-3939

Additional Counsel for
Amicus Curiae R.J. Reynolds
Tobacco Co.

-

TABLE OF AUTHORITIES
STATEMENT OF INTEREST
SUMMARY OF ARGUMENT
ARGUMENT |
I.

TABLE OF CONTENTS

ALLOWING A SUBJECTIVE FINDING OF
“EXTRAORDINARY REPREHENSIBILITY”
TO OVERRIDE THE RATIO GUIDEPOST
WOULD RENDER THAT GUIDEPOST
MEANINGLESS AS A CONSTRAINT ON

ARBITRARY PUNITIVE DAMAGEBS................

A. Petitioner’s Historic Conduct Norrnally
Does Not Even Give Rise To Liability, Let

Alone Punitive DamInGes ...2..00..5.00000c0rccerceeseses.

B. Petitioner And Other Cigarette
Manufacturers Have Changed The Conduct
That Formns The Basis For The Punitive
Damages Award Below And Are Subject

To Constant Governmental Oversight.............

1. The Major Cigarette Manufacturers Are
Parties To Enforceable Settlement
Agreements With The States That
Prohibit Them From Engaging In A

Broad Range Of Conduct.........................-

2. Federal Regulation Requires Specific

Disclosures By Cigarette Companies ........

3. Petitioner And Its Amici Recognize That

Cigarette Smoking Causes Disease ...........

SOC EEEEEEHTETOeHHEEEH He

SORE EERE EERE EE EEE EEE EET EEE EEE EEE TEETH E HHH EHE EOE HEE

wieigen 8

il

TABLE OF CONTENTS
(continued)
Page

Il. THE OREGON SUPREME COURT’S
APPROACH OF PUNISHING HARM TO ALL
AFFECTED NON-PARTIES IN THE STATE
IN A SINGLE INDIVIDUAL CASE
VIOLATES PROCEDURAL DUE PROCES.G........... 17

A. The Oregon Supreme Court’s Statewide
Approach Invites Systematic Over-
Punishment And Punishment Of Conduct
That Does Not Give Rise To Liability................... 20

B. Oregon’s Limited Statutory Protections Do
Not Redeem Its Supreme Court’s Statewide

Approach To Punishment .............0....0ccsccccecoreroseeee 23

C. Historical Practice Docs Not Validate A
Statewide Approach To Punitive Damages........... 25
SN is nececccsmicnilibienigtlisndinartidmssdbinchieeunisdiinesicininmiatns 28
IE Oi sce ka diciicinceelsclhtginigchaclh shine teednipoeioiednneindatgineiin A-1

TABLE OF AUTHORITIES
Page
CASES
BMW of North America, Inc. v. Gore,
eg te Ft ne ee 5, 6, 7, 8, 10, 11, 20
Bordenkircher v. Hayes, 434 U.S. 357 (1978)...........00c000008 20

Coleman v. R.J. Reynolds Tobacco Co..,
No. 4:01-CV-1698-ERW (E.D. Mo. Aug. 5, 2003)........ 18

Ganssly v. Perkins, 30 Mich. 492 (1874)........0..:ccccccseeeeeeees 27
Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) 0.0.0.0... 20
King v. Armstrong World Industries, Inc.,

ee ee Ee GN tla Se Riceteratiencassstanncsctoqnaveninpesinan 27

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001)......... 11

Mash v. Brown & Williamson Tobacco Corp.,
No. 4:03-CV-485-TCM (E.D. Mo. Sept. 30, 2004)........ 18

Mathews v. Eldridge, 424 U.S. 319 (1976).............22.06+. 20, 21
Phelin v. Kenderdine, 20 Pa. 354 (1853) .........cccccccccseeeneeeees 26
Prado-Alvarez v. R.J. Reynolds Tobacco Co.,

DEST. BUD. BE Ge GAT ee BO onde cvvnss cvoncnssetesocosnsesosacs 10
Roginsky v. Richardson-Merrell, Inc.,

ee ee Ge PE Peictinenscesenmsacinnsctntnapivsirsins 22, 25

Ross v. Philip Morris & Co., 328 F.2d 3 (8th Cir. 1964) ....18
Sanchez v. Liggett & Myers, Inc.,

a EE Te ee eee ee 9
In re School Asbestos Litigation,
Fe ID carcritnctccncccrcrssessstntensesesedenes 25

Schwarz v. Philip Morris Inc., 135 P.3d 409
I as 24

iV

TABLE OF AUTHORITIES
(continued)

Simpson v. Pittsburgh Corning Corp.,
POS FETE CG, FO coceccccstntstscrctserretinteeninenieniann 27

Smith v. Brown & Williamson Tobacco Corp.,
No. 96-459-CV-3, 1999 U.S. Dist. LEXIS 21990

COPD. DR, BG: BG, Ba ecncssintictiniiincanbinchibicnsnclitsiieipatinn 18
State ex rel. Petro v. R.J. Reynolds Tobacco Co.,

SID IE.E.26 DID CIR. FeO asec ccviistsiccssvantecscocectsisbanuintins 13
State Farm Mutual Automobile Insurance Co.

v. Campbell, 538 U.S. 408 (2003).............000. 4,5,6,7,19
Steele v. Brown & Williamson Tobacco Corp.,

No. 4:97-CV-961-ODS (W.D. Mo. May 13, 1999)........ 18
Stevenson v. Belknap, 6 Towa 97 (1858) ..........ccccceeeseeseeeeeeee 26
Thompson v. Brown & Williamson Tobacco Corp.,

No. 00CV220555 (Mo. Cir. Ct. Nov. 3, 2003)................ 18
Tullidge v. Wade, 95 Eng. Rep. 909, 910

et A Sn mCnrere Pree eoccsesescsesssasnesnoeessoasecuotornebines 26
TXO Prod. Corp. v. Alliance Resources Corp.,

SOD UTE. GED CG GOP scccccintsinsstscacisintetstonstaiciatanciaiiiaitien 8, 25
VanDenBurg v. Brown & Williamson Tobacco Corp..,

No. 03CV237238 (Mo. Cir. Ct. Feb. 22, 2006) .............4 8
Watson v. Philip Morris Cos.,

420 F.36 GS2 CBR Civ. BOBS) acrcecesorcnsecrceseessncscetovtenan 14, 15
Welch v. Brown & Williamson Tobacco Corp.,

No. 00CV209292 (Mo. Cir. Ct. June 16, 2%3).............. 18
White v. R.J. Reynolds Tobacco Co.,

109 F. Supp. 2d 424 (D. Md. 2000) ooo... ccccccccceceeeeeeeeee 10

Williams v. New York, 337 U.S. 24°(1949) ooo..occccccccccceeeeees 23

v

TABLE OF AUTHORITIES
(continued)
Page
FEDERAL STATUTES
aN ceanhcandensaieneeaben 13
a aes cirlh eeemmnmennentitenieneianine 13
EE SE ee a a 14
STATE STATUTES
TT Se Ee ET 24
re EE iciicarcrtsdncntncaneinanddnosnensznias Siebel 24

FEDERAL ADMINISTRATIVE MATERIALS

In re R.J. Reynolds Tobacco Co., No. 9285, 1997

WL 281337 (FTC May 28, 1997) ........00.0...... ” aro 15
In re R.J. Reynolds Tobacco Co., No. 9285, 1999
WL 33912978 (FTC Jam. 4, 1999) 2200000... ccccceccce eee 1S

Unfair or Deceptive Advertising and Labeling of Cigarettes
in Relation to the Health Hazards of — 29 Fed.
TE 14

vi

TABLE OF AUTHORITIES
(continued)

Page
MISCELLANEOUS

Thomas B. Colby, Beyond the Multiple Punishment
Problem: Punitive Damages as Punishment for
Individual, Private Wrongs, 87 Minn. L. Rev. 583
GRIND enestecrsectemnecensniniansninintstiteninenniniieameiiniisindnitintiten 26

Michael E. DeBow, The State Tobacco Litigation and the
Separation of Powers in State Governments: Repairing
the Damage, 31 Seton Hall L. Rev. 563 (2001).............. 12

STATEMENT OF INTEREST'

R.J. Reynolds Tobacco Company and Lorillard Tobacco
Company manufacture and sell cigarettes. Reynolds, which
now includes the U.S. cigarette and tobacco business of the
former Brown & Williamson Tobacco Corporation, is the
second-largest tobacco company in the United States. Its
brands account for approximately 33% of U.S. cigarette
sales. Lorillard is the third-largest tobacco company in the
country. Its brands account for approximately 9% of U.S.
cigarette sales.

Reynolds and Lorillard face a large volume of tobacco-
related personal injury litigation, and as a result are regularly
at risk of suffering large punitive damages awards based on
claims closely resembling the claims at issue in this case. In
addition, Reynolds and Lorillard, as repeat players in high-
stakes tort litigation, are at risk of being punished repeatedly
(and excessively) for one and the same course of conduct.
For that reason, they have an interest in seeing that the
constitutional limits on the size of punitive awards are not
undermined, and that juries in a single case not be permitted
to punish a defendant broadly for conduct affecting other
alleged victims. |

' No counsel for a party in this case authored this brief in whole or in
part, and no person or entity, other than the undersigned amici and their
counsel, has made a monctary contribution to this briefs preparation and
submission. Both parties have consented to the filing of briefs amicus
curiae in this case. Letters of consent are on file with the Clerk of the
Court.

SUMMARY OF ARGUMENT

1. The reprehensibility of a defendant’s conduct is an
important guidepost by which to judge punitive damages, but
only if it guides the jury’s or court’s discretion in settling on
an amount within the boundaries established by other, more
objective guideposts (most notably the proportionality or
“ratio” guidepost). If, however, a court is allowed to
override the other guideposts upon finding that the
defendant’s conduct is unusually or “extraordinarily
reprehensible”—as happened in this case (Pet. App. 23a,
33a)}—then the guideposts cease to constrain a jury’s or
court’s discretion and thas cease to protect against arbitrary
behavior.

The experience of Petitioner and amici shows just how
standardless the notion of extraordinary reprehensibility is.
The very same behavior that the Oregon Supreme Court
found to be so thoroughly reprehensible as to justify
overriding this Court’s limits on punitive damages—namely,
an alleged fraudulent scheme to obscure the link between
smoking and disease—has been found in the great majority
of similar cases not even to give rise to liability, let alone
punitive damages. A number of courts have gone so far as to
rule as a matter of law that cigarette manufacturers could not
possibly have defrauded smokers because the link between
smoking and disease has long been “common knowledge.”

The Oregon Supreme Court’s notion that a finding of
extraordinary reprehensibility alone can justify overriding
normal constitutional limitations is also flawed in that it
completely ignores the need—or lack of need—for
deterrence: in the present case, it allowed that court to
overlook the many existing impediments to future repetition
of the alleged misconduct, including: (1)a_ settlement
agreement with the States that requires Petitioner and amici
to pay hundreds of billions of dollars in perpetuity and gives
State attorneys general the power to enforce a variety of
prohibitions; (2) requirea warning labels for all cigarette

3

packages and advertisements; (3) strict oversight by the
FTC; and (4) cigarette manufacturers’ public statements
recognizing that smoking causes disease and is addictive.
This highlights a serious problem with the Oregon Supreme
_ Court’s approach, given that deterrence of future misconduct
is one of the two legitimate purposes that punitive damages
serve.

Il. By permitting a jury in an individual tort case to award
punitive damages to punish a defendant for all the, harm it
has allegedly caused within the State, Oregon violates
procedural due process. This “statewide” approach to
punitive damages effectively guarantees two types of error.
First, by allowing multiple juries each to punish a defendant
for an entire statewide course of conduct, that approach
creates a system skewed toward duplicative and excessive
total punishment. Second, since a defendant almost always
will have a good defense to at least some plaintiffs’ claims,
an award that punishes the defendant for every harm
allegedly inflicted on every resident of the State is bound to
end up punishing the defendant for conduct that is found not
to be culpable.

Nor does historical practice ratify statewide or multiple
punishment. The threat of multiple punishment is
overwhelmingly the product of mass tort litigation, which is
a relatively recent phenomenon. To the extent common law
courts ever had occasion to consider multiple punishment—
as they occasionally did in lawsuits for the torts of seduction
and breach of contract to marry—the consensus was that
punitive damages should be confined to punishing the
defendant for the harm to the particular plaintiff.

4

ARGUMENT

Respondent is the widow of Jesse Williams, who began
smoking Marlboro cigarettes in the 1950s. She sued
Petitioner (the manufacturer of Marlboros) after her husband
died of lung cancer in 1997. Among other things, she
brought a claim for fraud and alleged “a massive,
continuous, near-half-century scheme to defraud” Mr.
Williams “and many others.” Pet. App. 33a. Her attorney
repeatedly claimed that cigarette smoking was responsible
for hundreds of thousands of deaths in the United States each
year. See Transcript, Vol. 9-B, at 138, Williams v. Philip
Morri: Inc., No. 9705-03957 (Or. Cir. Ct.); id. Vol. 11-B, at
41; id. Vol. 17-A, at 138. In his closing argument, he
performed a rough calculation intended to show that
Marlboro cigarettes were responsible for more than 30% of
al] fatal smoking-related lung cancers in Oregon, and
suggested to the jury that “[w]hen you determine the amount
of money to award in punitive damages against Philip Morris
... [iJts fair to think about how many other Jesse
Williams[es] in the last 40 years in the State of Oregon there
have been.” /d. Vol. 24-C, at 97; id. Vol. 23-B, at 91.

The jury found for Respondent on her fraud claim and
awarded $821,485 in compensatory damages (later reduced
to $521,485) and $79.5 million in punitive damages. After a
lengthy series of proceedings that included a remand by this
Court, the Oregon Supreme Court affirmed the full punitive
damages award, despite this Court’s admonition that punitive
damages exceeding a “single-digit ratio” to compensatory
damages will rarely pass constitutional muster. State Farm
Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003).
The lower court reasoned that it could overstep the usual
constitutional limits because, in the court’s view (no specific
jury finding was made on the issue) Petitioner’s conduct was
“extraordinarily reprehensible.” Pet. App. 23a, 33a. The
court also rejected Petitioner’s argument that the jury should
have been required to punish only for harm to Mr. Williams

(rather than harm to all Oregon Marlboro smokers), noting
that “ijt is unclear to us how a jury could ‘consider’ harm to
others, yet withhold that consideration from the punishment
calculus.” Pet. App. 18a n.3.

This brief focuses on two key points. First, this case
illustrates that allowing a jury or court to ignore the usual
limits on punitive damages whenever a defendant’s conduct
strikes it as “extraordinarily reprehensible” is so loose an
approach that it would undermine the constraints recognized
by this Court in cases like BMW of North America, Inc. v.
Gore, 517 U.S. 559 (1996), and State Farm. Among other
things, the contrast between the Oregon Supreme Court’s
determination and the more usual determinations of juries
and judges in favor of cigarette manufacturers demonstrates
the inherent subjectivity of any standard satisfied by a
finding that conduct was “extraordinarily reprehensible.”
Second, the holding that a jury should be allowed to punish a
defendant for harm to non-parties violates procedural due
process both by exposing defendants to multiple punishment
for the same conduct and by punishing them for conduct
determined in other cases not to be culpable at all.

I. ALLOWING A SUBJECTIVE FINDING OF
“EXTRAORDINARY REPREHENSIBILITY” TO
OVERRIDE THE RATIO GUIDEPOST WOULD
RENDER THAT GUIDEPOST MEANINGLESS AS
A CONSTRAINT ON ARBITRARY PUNITIVE
DAMAGES

This Court has repeatedly recognized constitutional limits
on the size of punitive damages awards, and has identified
three “guideposts” by which to judge such awards: (1) “the
degree of reprehensibility” of the defendant’s conduct;
(2) “the disparity between the harm or potential harm
suffered by [the plaintiff] and his punitive damages award”;
and (3) “the difference between this remedy and the civil
penalties authorized or imposed in comparable cases.”
BMW, 517 U.S. at 574—75. Standards like these “offer some

6

kind of constraint upon a jury or court’s decision, and thus
protection against purely arbitrary behavior.” /d. at 588
(Breyer,.J., concurring).

One of the key elements of this system of constraints—
rooted both in this Court’s prior cases and in history “dating
back over 700 years” (State Farm, 538 U.S. at 425)—is the
second guidepost, which imposes a presumptive upper limit
on punitive damages awards of nine times compensatory
damages. As this Court emphasized in State Farm, “few
awards exceeding a single-digit ratio between punitive and
compensatory damages, to a significant degree, will satisfy
due process.” /d. Moreover, while the single-digit limitation
is not a “rigid benchmark[],” this is true only in the sense
that a higher award “may comport with due process” in
certain specified circumstances: i.e., “where ‘a particularly
egregious act has resulted in only a small amount of
economic damages.’” Jd. (emphasis added) (quoting BMW,
517 U.S. at 582).’ Indeed, “[w]hen compensatory damages
are substantial, then a Jesser ratio, perhaps only equal to
compensatory damages, can reach the outermost limit of the
due process guarantee.” /d. (emphasis added).

As argued in detail by Petitioner, the decision below—
approving punitive damages amounting to 97 times the (very
substantial) compensatory award solely because the court
termed Petitioner’s conduct “extraordinarily reprehensible”
(Pet. App. 23a, 33a)—is flatly inconsistent with State Farm
and BMW.

? In addition, a higher ratio “might” be appropriate in other specific
circumstances: “where ‘the injury is hard to detect or the monetary value
of noneconomic harm might have been difficult to determine.’” /d.
(emphasis added) (quoting BMW, 517 U.S. at 582).

However, even if this Court’s prior cases had not
foreclosed the Oregon Supreme Court’s approach, that
approach would have to be rejected because it would render
the ratio guidepost effectively optional. Allowing a massive
punitive award to evade constitutional review whenever a
reviewing court deems the defendant’s. conduct
“extraordinarily reprehensible” would give courts a way to
sidestep the constitutional constraints articulated in BMW
and State Farm through littlk more than semantic
manipulation. Although the “degree of reprehensibility”
(517 U.S. at 575) is an important check on judicial discretion
in setting the appropriate level of punitive damages within
the constraints provided by the other guideposts, it is simply
too subjective a determination to serve as a basis for
overriding or ignoring this Court’s other guideposts.

Indeed, the present case provides a perfect illustration of _
how “extraordinar|y] reprehensib[ility]” is in the eye of the
beholder. Pet. App. 23a, 33a. As detailed below, the Oregon
Supreme Court found that Petitioner’s conduct was
extraordinarily reprehensible despite numerous facts casting
serious doubt on that characterization and on whether
Petitioner’s conduct justified punitive damages at all,
including: _

e Petitioner and other cigarette manufacturers win
the vast majority of personal injury cases
brought to trial against them, and, even when
they lose, their conduct is often found not to
merit punitive damages;

e Many courts have found fraud claims against
cigarette manufacturers insufficient as a matter
of law even to establish liability;

e A variety of factors, including the Master
Settlement Agreement between the States and
the major cigarette manufacturers and continuing
federal oversight of the tobacco industry,
establish that there is no risk that the conduct at

issue will be repeated in the future, and hence no
conduct to deter.

In short, these factors make clear that the lower court’s
extraordinary reprehensibility test provides neither an
objective and meanirigfuf Constraint on runaway punitive
damages nor a basis for identifying those cases in which the
purposes of punitive damages might justify an award that
exceeds the normal constitutional ratio.

A. Petitioner’s Historic Conduct Normally Does Not
Even Give Rise To Liability, Let Alone Punitive
Damages

As Justices O’Connor, White, and Souter noted in calling
for “objective criteria” in this field—-a call answered in
BMW—*[o]ne judge’s excess very well may be another’s
moderation.” TXO Prod. Corp. v. Alliance Res. Corp., 509
U.S. 443, 480-81 (1993) (O'Connor, J., dissenting).
Perhaps the surest sign that the Oregon Supreme Court’s
extraordinary reprehensibility test is inherently subjective is
the fact that the majority of relevant cases have reached
conclusions very different from the one reached by the
Oregon Supreme Court: far\ from yielding large punitive
damages awards, personal injury lawsuits alleging the ill
effects of smoking (‘“smoking-and-health lawsuits’)
overwhelmingly end in findings of no liability or liability
without punitive damages.

Since 1954, when the earliest smoking-and-health lawsuit
was filed, 83 individual Gases involving allegations broadly

* This same passage in Justice O’Connor’s TXO dissent argues for
several of the “objective indicators” that later became the BMW
guideposts. See id. at 481.

~

9

similar to Respondent’s have gone to trial." Defendants have
prevailed in 63 of those cases (76% of the total), mostly by
obtaining defense verdicts (57 cases, or 69% of the total) but
occasionally as result of post-trial or appellate rulings (six
cases, or 7% of the total). Plaintiffs have prevailed in 20
cases (24% of the total), although 12 of those verdicts (14%
of the total) are subject to further review. Nine cases (11%
of the total) have resulted in punitive damages that have not
been overturned, but in only three of those cases (4% of the
total) have defendants exhausted their appeals and satisfied
the judgments. In other words; based on several decades’
experience, defendants have won at trial or on appeal about
75% of the time and avoided punitive damages about 90% of
the time. In addition, most cases against cigarette
manufacturers are dismissed prior to trial. Available records
show that approximately 2,500 cases filed by individual
plaintiffs have been dismissed since 1954. The gulf between
these results and the Oregon Supreme Court’s conclusion
that Petitioner’s conduct was extraordinarily reprehensible
shows just how subjective that court’s approach is.

Further underscoring the subjectivity and unpredictability
of the Oregon Supreme Court’s approach is the fact that in
several jurisdictions, courts have rejected claims based on
essentially the same alleged conduct at issue in this case, and
have done so as a matter of law, on the ground that the
health dangers associated with smoking are common
knowledge and that no rational jury could find that the
plaintiffs were defrauded into believing smoking was safe.
See, e.g., Sanchez v. Liggett & Myers, Inc., 187 F.3d 486,

* A list of these cases appears in Appendix A to this brief.

10

490 (Sth Cir. 1999) (dismissing Texas-law fraud claim of
smoker who began smoking in 1957 because tobacco has
long been “known to be unsafe”); Prado-Alvarez v. R.J.
Reynolds Tobacco Co., 313 F. Supp. 2d 61, 77 (D.P.R. 2004)
(dismissing fraud claim in part because “reliance would be
unreasonable in light of ... the long-standing common
knowledge of the health risks, including cancer, associated
with smoking”), aff'd, 405 F.3d 36 (1st Cir. 2005); White v.
R.J. Reynolds Tobacco Co., 109 F. Supp. 2d 424, 429 n.5
(D. Md. 2000) (“Even if plaintiffs had evidence that Mr.
White relied on any misrepresentations, they could not show
such reliance was reasonable, in light of the overwhelming
evidence of the widesnread knowledge that cigarettes were
dangerous even as early as 1950.”).

The fact that the same alleged conduct is found in one
case to create no liability as a matter of law and in another
case to require extraordinary punitive damages highlights
both the need for meaningful constraints on the size of
punitive damages awards and the /ack of constraint inherent
in a test that turns on whether the defendant’s conduct strikes
the jury or court as “extraordinarily reprehensible.” A
standard so irremediably dependent on the eye of the
beholder is “vague and open ended to the point where [it]
risk{s] arbitrary results.” BMW, 517 U.S. at 588 (Breyer, J.,
concurring). If permitted to override this Court’s ratio
guidepost, the Oregon Supreme Court’s standard would
fatally undermine that guidepost as an independent constraint
on punitive damages.

B. Petitioner And Other Cigarette Manufacturers Have
Changed The Conduct That Forms The Basis For
The Punitive Damages Award Below And Are
Subject To Constant Governmental Oversight

The Oregon Supreme Court did not try to justify its
extraordinary reprehensibility approach in terms of
deterrence, and indeed its approach authorizes departure
from this Court’s ratio guidepost without regard to whether

Ll

the defendant is likely to continue engaging in the conduct at
issue in the future. Given that “deterring [the] repetition” of
“unlawful conduct” is one of the two “legitimate interests”
that punitive damages serve (BMW, 517 U.S. at 568), this is
a serious omission.

In short, any rational approach to justifying extraordinary
punitive damages would necessarily address the need for
deterrence of future misconduct, but the extraordinary
reprehensibility approach does not even attempt to do so.
Had this factor been taken into account, it would have been
clear that there is no meaningful need for extraordinary
deterrence of Petitioner or other major cigarette
manufacturers.

1. The Major Cigarette Manufacturers Are
Parties To Enforceable Settlement
Agreements With The States That Prohibit
Them From Engaging In A Broad Range Of
Conduct

In 1998, 46 States, the District of Columbia, and several
U.S. territories entered into the “landmark” Master
Settlement Agreement (“MSA”) “with major manufacturers
in the cigarette industry,” including Petitioner and its amici.
Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 533 (2001).°
“The signatory States settled their claims against these
companies in exchange for monetary payments and
permanent injunctive relief.” /d In particular, the
companies agreed to subject themselves to constant oversight

> A copy of the MSA can be found at the website of the National
Association of Attorneys General: http://www.naag.org/backpages/
naag/tobacco/msa.__

12

by State attorneys general and to pay billions of dollars in
perpetuity-to the settling States (estimated to amount to more
than $200 billion over the course of the first quarter century).
In addition, the companies agreed to pay $1.45 billion for a
“coordinated program of public education and study.” MSA
§§ VI(b), VI(c), LX(c). Separate agreements with the other
four States also call for strict governmental oversight and for
payments in perpetuity (amounting to approximatcly $40
billion over the first 25 years). These agreements likely
represent the largest redistribution of wealth through
litigation in world history. See Michael E, DeBow, The State
Tobacco Litigation and the Separation of Powers in State.
Governments: Repairing the Damage, 3\ Seton Hall L: Rev.
563, 564 (2001).

The MSA directly prohibits cigarette manufacturers from
engaging in various forms of conduct. Some of these
prohibitions, such as a near ban on outdoor advertising of
cigarettes, could not be constitutionally imposed without
cigarette manufacturers’ consent. Most relevant for present
purposes, the MSA prohibits any “material misrepresentation

_ of fact regarding the health consequences of using any
Tobacco Product.” MSA § III(r). And it expressly prohibits
suppression of information about smoking’s health effects:

No Participating Manufacturer may enter into any
contract, combination or conspiracy with any
other Tobacco Product Manufacturer that has the
purpose or effect of: (1) limiting competition in
the production or distribution of information
about health hazards or other consequences of the
use of their products; (2) limiting or suppressing
research into smoking and health; or (3) limiting
or suppressing research into the marketing or
development of new products... .

~ Id. § W(q).

”

13

The MSA is enforceable in the courts of signatory States,
which retain jurisdiction over enforcement actions brought
by State attorneys general. See id. § VII(a). The MSA also
provides for the National Association of Attorneys General
(“NAAG”) to coordinate and facilitate the MSA’s
implementation and enforcement by the states. See id.
§ VIII. The cigarette manufacturers themselves have placed
$50 million in escrow to fund this enforcement apparatus.
See id. § VIIl(c) & Ex. J. NAAG and the State attorneys
general actively monitor the signatory cigarette
manufacturers’ compliance with the MSA. The parties often
are able to resolve concerns without having to resort to the
courts, but NAAG and the States have not hesitated to pursue
formal enforcement action when they deemed it appropriate.
See, e.g., State ex rel. Petro v. R.J. Reynolds Tobacco Co.,
820 N.E.2d 910 (Ohio 2004) (holding, in context of -
enforcement action by Ohio attorney general, that the MSA
prohibits cigarette advertising on matchbooks).

2. Federal Regulation Requires Specific

Disclosures By Cigarette Companies
Federal legislation has required warning labels on
cigarette packages since 1966. See 15 U.S.C. §§ 1331-41.
The Federal Cigarette Labeling and Advertising Act
(“FCLAA”) of 1965 established “a comprehensive Federal
Program to deal with cigarette labeling and advertising with
respect to any relationship between smoking and health.”
15 U.S.C. § 1331. The FCLAA presently requires cigarette
manufacturers to place one of the following four warning
labels in a specific format on cigarette packages and in most

related advertising:

SURGEON GENERAL’S WARNING: SMOKING
CAUSES LUNG CANCER, HEART DISEASE,
EMPHYSEMA, AND MAY COMPLICATE
PREGNANCY.

14

SURGEON GENERAL’S WARNING: QUITTING
SMOKING NOW GREATLY REDUCES SERIOUS
RISKS TO YOUR HEALTH.

SURGEON GENERAL’S WARNING: SMOKING BY
PREGNANT WOMEN MAY RESULT IN FETAL
INJURY, PREMATURE BIRTH, AND LOW BIRTH
WEIGHT.

SURGEON GENERAL’S WARNING: CIGARETTE
SMOKE CONTAINS CARBON MONOXIDE.

The Federal Trade Commission also regulates cigarette
manufacturers’ speech about smoking and health. Congress
created the FTC in 1914 to redress every “unfair method of
competition or unfair or deceptive act or practice in or
affecting commerce.” 15 U.S.C. § 45(b). This extends to
“regulation of unfair and deceptive tobacco advertisements.”
Watson v. Philip Morris Cos., 420 F.3d 852, 855 (8th Cir.
2005). The FTC also has a long and continuing history of
eens in this field:

Since [1955], the Commission has maintained a
close and continuous scrutiny of cigarette
advertising practices, and has been deeply
attentive to the progress of medical research into
the health aspects of smoking. The
Commission’s staff has monitored all cigarette
advertising during this period, and continues to
monitor it today. Close contact has been
maintained with the officials of the cigarette
industry and with the public and private bodies
that have been engaged in scientific research in
this field.

Unfair or Deceptive Advertising and Labeling of Cigarettes in
Relation to the Health Hazards of Smoking, 29 Fed. Reg. 8324,
8325 (July 2, 1964). In addition, “the FTC itself conducted the
entire testing process [to determine the tar and nicotine content of
light cigarettes] for twenty years and now requires the cigarette

i)

manufacturers to conduct the testing to its specifications. The
FTC continues to inspect the industry labs, independently verify
the results, and publish the ratings.” Watson, 420 F.3d at 858.

The FTC has not hesitated to use its authority to police
cigarette manufacturers’ advertising practices. For example,
the Commission undertook an investigation of amicus
Reynolds’s former Joe Camel advertising campaign to
determine whether it had the effect of promoting Camel
brand cigarettes to children. The FTC scoured tens of
thousands of Reynolds’s documents, enlisted multiple
experts, and conducted numerous market surveys, before
concluding that the Joe Camel campaign did not lead
children to smoke. See /n re R.J. Reynolds Tobacco Co., No.
9285, 1997 WL 281337 (FTC May 28, 1997) (attaching June
1994 joint statement of Commissioners Azcuenaga, Owen,
and Starek). Subsequently, the FTC reopened and then
dismissed the investigation on the ground that the MSA’s
prohibitions rendered the investigation moot. See In re RJ.
Reynolds Tobacco Co., No. 9285, 1999 WL 33912978 (FTC
Jan. 4, 1999).

3. Petitioner And Its Amici Recognize That
Cigarette Smoking Causes Disease

Petitioner and its amici each expressly recognize that
smoking can cause various diseases, including lung cancer,
and is addictive. For example, Petitioner states on its
website that “Philip Morris agrees with the overwhelming
medical and scientific consensus that cigarette smoking
causes lung cancer, heart disease, emphysema and other

16

_-

serious diseases in smokers.” Similarly, Petitioner states
that it agrees “with the overwhelming medical and scientific
consensus that cigarette smoking is addictive.”

* - a * baal

In short, there is no prospect of a continuing scheme to
defraud smokers by “creat[ing] in the public mind the
impression that there were legitimate reasons to doubt the
danger of smoking” (Pet. App. 3a, 33a)—even assuming for
the sake of argument that there was such a prospect at any
time in recent memory. This greatly reduces the need for
punitive damages, since it removes one of the two reasons
for awarding them. The failure of the Oregon Supreme
Court’s “extraordinary reprehensibility” approach even to
take this into account makes clear that that approach—aside
from its subjectivity and manipulability—provides an
inadequate basis for distinguishing cases meriting
extraordinary punishment from those meriting only
“ordinary” levels of punishment.

* Philip Morris USA, Smoking and Health Issues: Cigarette Smoking
and Disease, http://www.philipmorrisusa.com/ en/ health issues/
cigarette smoking and disease.asp; see also Martin L. Owalsky,
€hairman, Lorillard Tobacco Co., Statement on Smoking and Health
Issues, http://www.lorillard.com/index.php?id=32; RJ. Reynolds
Tobacco Co., Smoking and Health: Summary of Opinions,
http://www.rrt.com/smoking/summaryCover.aspx.

" Philip Morris USA, Smoking and Health Issues: Addiction,
http://www.philipmorrisusa.com/ervhealth_issucs/addiction.asp, see also
Martin L. Owalsky, Chairman, Lorillard Tobacco Co., Statement on
Smoking and Health Tssues, http://www .lorillard.com/index.php?id—372;
RJ. Reynolds Tobacco Co., Smoking and Health: Addiction and
Quitting, http://www.nrt.com/smoking/quittingCover.aspx.

17

Il. THE OREGON SUPREME COURT’S APPROACH
OF PUNISHING HARM TO ALL AFFECTED
NON-PARTIES IN THE STATE IN A SINGLE
INDIVIDUAL CASE VIOLATES PROCEDURAL
DUE PROCESS

In the present case, Respondent’s counsel urged the jury to
punish Petitioner for the alleged harm to all Marlboro smokers in
Oregon. After saying several times during trial that smoking
kills between 300,000 and 500,000 Americans each year, and
arguing in closing that one in ten smokers dies of lung cancer
and 30% of Oregon smokers smoke Marlboros, he suggested to
the jury that “[wjJhen you determine the amount of money to
award in punitive damages against Philip Morris . . . [i]t’s fair to
think about how many other Jesse Williams[es] in the last 40
years in the State of Oregon there have been.” See supra at 4
(citing trial transcript).

Exacerbating this appeal for statewide punishment, the trial
court rejected Petitioner’s request for an instruction that it should
not “punish the defendant for the impact of its alleged
misconduct on other persons, who may bring lawsuits of their
own in which other juries can resolve their claims and award
punitive damages for those harms, as those other juries see fit.”
Pet. App. 17a—-18a. The Oregon Supreme Court likewise
rejected this instruction as “incorrect under state law” and
“federal due process law.” /d. at 18a, 2la. The court reasoned
that if a jury can “consider” harm to others” within the State, it
must be able to punish for that harm. Pet. App. 18a & n.3.

This sort of appeal for statewide punishment is not an isolated
phenomenon. To take just one recent example, Petitioner and
amici are facing the same problem in Missouri in connection
with a series of dozens of cases based on essentially the same
course of conduct at issue here—an alleged multi-decade
fraudulent scheme designed to obscure the link between cigarette
smoking and disease. In one recent case on behalf of the
survivors of a deceased smoker, the plaintiffs’ lawyer asked the
jury to award punitive damages based on the purported effect of

18

Brown & -Williamson’s conduct on thousands of Missouri
smokers over a ten-year period, despite the fact that in a whole
series of recent cases— including an earlier federal lawsuit by the
smoker himself, see Smith v. Brown & Williamson Tobacco
Corp., No. 96-459-CV-3, 1999 U.S. Dist. LEXIS 21990 (W.D.
Mo. Jan. 29, 1999)}—cigarette manufacturers had prevailed:*

{[A]s a cost of their business, a thousand
Missourians die every year. It’s just part of their
business. And you’ve already found that they’re
conscious of it, and they are indifferent to it. In
other words, they don’t care about that.

Ten thousand people died during the time that
[the smoker] was sick. Ten thousand people died.
Their sales are $80 million a year. During the
time that [the smoker] was sick, that’s $800
million ... over 10 years, over the decade, $800
million is how much that they sold in this state.

* Missouri juries rejected plaintiffs’ claims in their entirety in four
recent smoking-and-health cases. See Mash v. Brown & Williamson
Tobacco Corp., No. 4:03-CV-485-TCM (E.D. Mo. Sept. 30, 2004);
Steele v. Brown & Williamson Tobacco Corp., No. 4:97-CV-961-ODS
(W.D. Mo. May 13, 1999); VanDenBurg v. Brown & Williamson
Tobacco Corp., No. 03CV237238 (Mo. Cir. Ct. Feb. 22, 2006); Welch v.
Brown & Williamson Tobacco Corp., No. 0O0CV209292 (Mo. Cir. Ct.
June 16, 2003). Another Missouri jury awarded modest compensatory
_ damages in one of the cases, but rejected a claim for punitive damages.
See Thompson v. Brown & Williamson Tobacco Corp., No. OOCV220555
(Mo. Cir. Ct. Nov. 3, 2003), appeal docketed, No. WD 63897 (Mo. Ct.
App. Mar. 9, 2004). Other Missouri courts have rejected similar claims
as a matter of law. See, e.g., Ross v. Philip Morris & Co., 328 F.2d 3, 10
(8th Cir. 1964); Coleman v. R.J. Reynolds Tobacco Co., No. 4:01-CV-
1698-ERW (E.D. Mo. Aug. 5, 2003).

19

And their profit in just one year nationally is a
billion dollars.

... I’m asking you to assess the damages at $200
million so that they will understand clearly, when
they read this transcript, what you were doing;
that you said we’re going to take away the profit
of what you did in this state for the 10 years that
[the smoker] was sick.

[Take] away the profit from Brown &
Williamson Tobacco Company because they
killed 10,000 of our citizens.

Transcript on Appeal, Vol. 5, at 3318-23, Brown & Williamson
Tobacco Corp. v. Smith, No. WD 65542 (Mo. Ct. App. June 2,
2005). The jury responded favorably to this argument—the
plaintiff won a $20 million punitive award.”

As Petitioner argues in detail, this type of “statewide”
course-of-conduct approach, which contemplates that a jury
can use a single punitive damages award in an individual
lawsuit to punish a defendant for the harm it has done to
non-parties throughout the State, is inconsistent with State
Farm. See 538 U.S. at 423 (“A defendant sould be
punished for the conduct that harmed the plaintiff, not for
being an unsavory individual or business. Due process does
not permit courts . . . to adjudicate the merits of other parties’
hypothetical claims against a defendant under the guide of -

* Brown & Williamson has appealed this verdict. See Notice of
Appeal, Brown & Williamson Tobacco Corp. v. Smith, No. WD 65542
(Mo. Ct. App. June 1, 2005).

20

the reprehensibility analysis .... Punishment on these bases

creates the possibility of multiple punitive damages awards
for the same conduct... .”’). |

Amici believe it is important to recognize that even though
excessive punitive damages are sometimes regarded as being
contrary to principles of substantive due process, statewide
punishment also violates basic principles of procedural due
process.

A. The Oregon Supreme Court’s Statewide Approach
Invites Systematic Over-Punishment And
Punishment Of Conduct That Does Not Give Rise To
Liability

Under Mathews vy. Eldridge, 424 U.S. 319, 335 (1976),
“identification of the specific dictates of due process generally
requires consideration of three distinct factors,” with a particular
focus on “the risk of an erroneous deprivatior” of a protected
interest and “the probable valuc, if any, of additional or substitute
procedural safeguards.” /d There is no dispute that a defendant
has an interest in not being “unjustly punished,” Honda Motor
Co. v. Oberg, 512 U.S. 415, 429 (1994), including an interest in
avoiding a punitive damages award that is excessive in relation
to “the State’s legitimate interests in punishing unlawful conduct
and deterring its repetition.” BMW, 517 U.S. at 568. A
defendant also has an interest in not being punished for conduct
that does not give rise to legal liability. See id. at 573 n.19 (“To
punish a person because he has done what the law plainly allows
him to do is a due process violation of the most basic sort.’”’
(quoting Bordenkircher v. Hayes, 434 U.S. 357, 363 (1978))).
Oregon’s statewide approach to punitive damages creates a near-
certainty that defendants will be erroneously deprived of these
interests.

First, a system like Oregon’s that permits juries in a single
case to punish a defendant for an entire course of conduct
throughout the State is all but certain to produce excessive
punishment, even by the State’s own measure of what

21

punishment is optimal. If the first jury to award punitive
damages for a particular course of conduct awards the
amount appropriate to achieve the State’s goals of punishing
and deterring the entire course of conduct, any succeeding
award necessarily results in total punishment for the course
of conduct that exceeds the appropriate amount. A system
that allows successive juries to impose course-of-conduct
punishment is therefore necessarily skewed toward
punishing excessively. In Mathews’ terms, such a system’s
“risk of error” (424 U.S. at 344) in imposing appropriate
punishment approaches 100%.

To avoid this error, a State could impose a limit of one
award of punitive damages for any given course of conduct.'®
But Oregon law does not offer that protection. See infra at
24-25. Without any effective impediment to the entry of
multiple punitive damages, a statewide punishment approach
is inherently biased toward excessive punishment. As Judge
Friendly once noted, “[t]he legal difficulties engendered by
claims for punitive damages on the part of hundreds of
plaintiffs are staggering.... We have the gravest difficulty
in perceiving how claims for punitive damages in such a
multiplicity of actions throughout the nation can be so

'° A system that simply banned multiple statewide awards would still
have other procedural defects, including: (a) the near-certainty that a
statewide award would violate the defendant's rights by punishing it for
conduct that docs not give rise to liability, see infra at 22-24; (b) the
impossibility of giving what amounts to class action treatment to
allegations implicating numerous individual issues; and, relatedly, (c) the
impossibility of ensuring that the defendant wi!l not be deprived of
defenses, such as lack of reliance or assumption of risk, that can be
addressed only in individual cases.

22

~ administered as to avoid overkill.” Roginsky v. Richardson-
Merrell, Inc., 378 F.2d 832, 839 (2d Cir. 1967).

Second, the Oregon procedure irrationally permits the jury
to punish the defendant even for harm to individuals to
whom it may have no liability—including individuals as to
whom its conduct is vindicated by another jury, or found not
worthy of a punitive sanction. As the discussion in Part LA
demonstrates, there is ample precedent in lawsuits asserting
claims resembling Respondent’s for defense verdicts or
plaintiffs’ verdicts without punitive damages. But the
Oregon Supreme Court’s statewide appioach (coupled with
Respondent’s counsel’s argument to the jury) allowed the
jury to punish Philip Morris on the assumption that every
harm to every Oregonian who smoked Marlboro cigarettes
was worthy of punishment. Thus, even one statewide
punitive damages award in Oregon deprives a defendant of
much of the benefit of prior and subsequent defense verdicts
arising out of the same course of conduct.

The Missouri example discussed earlier provides an
excellent illustration of this problem. The Missouri jury that
awarded $20 million in punitive damages did so in response
to counscl’s express-invitation to punish the defendant for
harm to an estimated 10,000 Missourians who died from
smoking cigarettes, despite the defendant’s consistent record
of winning or (avoiding punitive damages) in previous
Missouri cases based on the same course of conduct. See
supra at 18-20 & n.8.

This error is inherent in the very notion of statewide
course-of-conduct punishment. Unless the defendant
entirely lacks valid defenses, a statewide award is bound to
punish conduct that does not give rise to liability. Thus, in
this respect, too, the risk of error inherent in a statewide
approach is overwhelmingly high.

In short, statewide course-of-conduct punishment violates
due process both because it is systematically skewed toward

23

excessive punishment through multiple penalties for the
same conduct and because it results in punishment. for
conduct that is not even wrongful (and often has been
adjudicated to give rise to no liability). To avoid this
violation of procedural due process, an instruction like the
one Petitioner proposed in this case should have been given:
i.e., that while jurors “may consider the extent of harm
suffered by others” in evaluating the harm /o the plaintiff,
they should not “punish the defendant for the impact of its
alleged misconduct on other persons, who may bring
lawsuits of their own in which other juries can resolve their
claims and award punitive damages for those harms, as those
other juries see fit.” Pet. App. 17a—18a.

The Oregon Supreme Court’s objection to _ this
instruction—that “[iJt is unclear to us how a jury could
‘consider’ harm to others, yet withhold that consideration
from the punishment calculus” (Pet. App. 18a n.3)—makes
little sense in light of longstanding criminal sentencing
doctrine. It has long been understood that a court may
consider uncharged conduct in judging the blameworthiness
of the crime of conviction, but may not punish for uncharged
conduct. See Williams v. New York, 337 U.S. 241, 245-46,
251 (1949) (although judge could not sentence defendant for
prior uncharged crimes, judge could consider defendant’s
other conduct as bearing on the appropriate punishment for
the crime before the court). The same principle applies
equally here: a jury may consider the defendant’s broader
course of conduct in determining how severely to punish the
defendant for the harm to the plaintiff, but the jury may not
be asked—as it was here—to punish the defendant for that
harm to others. .

B. Oregon’s Limited Statutory Protections Do Not
Redeem Its Supreme Court’s Statewide Approach To
Punishment

Oregon’s limited statutory protections against excessive
punishment do not obviate the constitutional problem created

24

by its statewide approach. Oregon has two relevant statutory
provisions: One calls for the fact-finder imposing punitive
damages to consider “[t}he total deterrent effect of other
punishment imposed upon the defendant as a result of the
misconduct, including ... punitive damage awards to
persons in situations similar to the claimant’s.” Or. Rev.
Stat. § 30.925(2). The other directs reviewing courts to
“consider the amount of any previous judgment for punitive
damages entered against the same defendant for the same
conduct giving rise to a claim for punitive damages.” /d.
§ 31.730(3). Neither of these provisions purports to preclude
excessive multiple punishment or punishment of lawful
conduct, and there is no reason to expect Oregon courts to
interpret them that way. See Schwarz v. Philip Morris Inc.,
135 P.3d 409, 443 n.4 (Or. Ct. App. 2006) (Armstrong, J.,
dissenting) (statement by four judges from nine-judge en
banc panel that Section 31.730(3) did not require reduction
of a $150 million punitive award against Petitioner in fraud
lawsuit brought by the estate of Oregon smoker who died of
lung cancer). Indeed, Section 30.925(2) arguably
exacerbates the problem by bringing to the second jury’s
attentior the fact that an earlier jury considered defendant’s
conduct reprehensible enough to warrant punitive damages.
In many instances, this could act as an incitement to multiple
punishment rather than a check upon it.

'' The majority in Schwarz vacated the punitive damages award on
other grounds and so did not reach the question whether Section
31.730(3) might require reducing or vacating the punitive award.

25

C. Historical Practice Does Not Validate A Statewide
Approach To Punitive Damages

It is also worth emphasizing that the course-of-conduct
approach to punitive damages has none of the historical
pedigree that has helped to validate some traditional aspects
of punitive damages practice that would otherwise be
constitutionally suspect. See, e.g., TXO, 509 U.S. at 457
(relying on historical practice); Haslip, 499 U.S. at 24-25
(Scalia, J., concurring) (on/y historical pedigree justifies
standardlessness of typical punitive damages instructions to
jury); id. at 40 (Kennedy, J., concurring) (“Jury
determination of punitive damages has such long and
principled recognition as a central part of our system that no
further evidence of its essential fairness or rationality ought
to be deemed necessary.”). Indeed, if any approach has an
historical pedigree, it is the one championed by Petitioner
and amici that limits punishment to the amount appropriate
to the harm visited on the injured party before the court.

Until after the middle of this century, mass torts affecting
hundreds or thousands of individuals were essentially
unknown to the law. See, e.g., In re School Asbestos Litig.,
789 F.2d 996, 1003 (3d Cir. 1986) (“In an era when most tort
suits were ‘one-against-one’ contests, a single act triggered a
single punishment.”); Roginsky, 378 F.2d at 838 (“[W]hat
strikes one is not merely that these torts are intentional but
that usually there is but a single victim; a punitive recovery
by him ends the matter.”’).

Common law courts thus had little occasion to address the
unique issues of overkill and punishment of lawful conduct
presented by a single course of conduct affecting large
numbers of people. But the issue of multiple punishments
arose occasionally, and when it did, courts generally took the
view that an award of punitive damages should address harm
to the plaintiff alone. As Professor Thomas Colby explains,
“the earliest decisions to raise the specter of multiple
punishment” are “those addressing the question whether, in

26

cases involving seduction and breach of a promise to marry,
it was permissible for both the seduced woman and her
father to obtain punitive damages from the seducer for the
same wrongful conduct.” Thomas B. Colby, Beyond the
Multiple Punishment Problem: Punitive Damages as
Punishment for Individual, Private Wrongs, 87 Minn. L.
Rev. 583, 623 (2003). In most cases, the answer was yes,
provided the award to the woman punished only for the harm
she suffered and the award to her father punished only for
the harm he suffered. See, e.g., Tullidge v. Wade, 95 Eng.
Rep. 909, 910 (C.P. 1769) (Bathurst, J.) (affirming punitive
damages award in favor of father but explaining that it would
have been improper for the jury to have punished the
defendant, in the father’s suit, for harm to the daughter);
Stevenson v. Belknap, 6 lowa 97, 101 (1858) (holding that “if
actions are brought by both the father and daughter,” the jury
should confine itself to awarding “damages resulting to the
plaintiff alone, and not to another”); Phelin v. Kenderdine,
20 Pa. 354, 362 (1853) (“[T]he only instruction which the
defendant has a right to require in regard to such evidence
[concerning the seduction] is, that the jury must not award fo
the father any part of the damages which belong to the
daughter, by reason of the breach of the contract of”
marriage.”).

As Colby notes, the Michigan Supreme Court confronted
the issue of multiple punishment squarely in a case arising
under a statute authorizing “every wife, child, parent,
‘guardian, husband, or other person” injured by an intoxicated
person to recover “actual and exemplary damages” from the
vendor who sold the alcohol to the intoxicated person. The
court concluded that any punitive damages award given
under this statute should focus exclusively on the wrong to
the plaintiff:

The foundation of exemplary damages ...
rests on the wrong done willfully to the
complaining party, and not to wrong done -

27

without reference to that party. Otherwise, every
one entitled under the statute to bring an action
might bring his or her separate action for the
same wrong, and while each would recover as his
own actual damages no more than his own injury,
the same exemplary damages would be
multiplied and recoverable in addition to actual
damages in every one of those actions. No such
consequence can have been intended.

Ganssly v. Perkins, 30 Mich. 492, 495 (1874).

Similarly, the few modern courts that identify any
purportedly “traditional manner” of assessing punitive
damages in the mass-tort context have spoken of jurors’
“confining their consideration of the appropriate punishment
to the injury inflicted upon the plaintiffs in [the] particular
litigation.” Simpson v. Pittsburgh Corning Corp., 901 F.2d
277, 281 (2d Cir. 1990); see also King v. Armstrong World
Indus., Inc., 906 F.2d 1022, 1030 (Sth Cir. 1990).

Thus, to the extent historical practice has anything
relevant to say in this case, it is that punitive damages should
focus on the harm to the plaintiff before the court and not the
harm to absent parties.

28

CONCLUSION
The judgment of the Oregon Supreme Court should be

reversed.

JAMES T. NEWSOM |

SHOOK, HARDY & BACON
LLP

2555 Grand Blvd.

Kansas City, MO 64108

(816) 474-6550

Counsel for Amicus Curiae
Lorillard Tobacco Co.

July 28, 2006

Respectfully submitted,

MEIR FEDER

(Counsel of Record)
CHARLES R.A. MORSE
JONES DAy
222 East 41st Street
New York, NY 10017
(212) 326-3939

DONALD B. AYER

ROBERT H. KLONOFF

JONES DAY

51 Louisiana Avenue, N.W.
Washington, D.C. 20001
(202) 879-3939

Counsel for Amicus Curiae
R.J. Reynolds Tobacco Co.

APPENDIX

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A-1l
APPENDIX A

DEFENSE VERDICTS (57)

Allen v. R.J. Reynolds Tobacco Co., No. 01-4319 (S.D. Fla. Feb.
28, 2003).

Anderson v. Am. Tobacco Co., No. 42821/97 (N.Y. Sup. Ct. June
27, 2000).

Apostolou v. Am. Tobacco Co., No. 34734/00 (N.Y. Sup. Ct. Jan.
16, 2001).

Beckum v. Philip Morris USA, Inc., No. 02-1836 (Fla. Cir. Ct.
Apr. 29, 2005).

Carter v. Philip Morris USA, No. 00-4567 (Pa. Ct. C.P. Jan. 27,
2003).

Conley v. R.J. Reynolds Tobacco Co., No. 00-01740 (N.D. Cal.
Dec. 31, 2002).

Coolidge v. Philip Morris USA, No. RIG 361063 (Cal. Super. Ct.
Apr. 21, 2005).

Covert v. Lorillard Tobacco Co., No. 87-131 (M.D. La. Jan. 27,
1994).

DuJack v. Brown & Williamson Tobacco Corp., No. 07-99-
728255 (Conn. Super. Ct. Nov. 13, 2001).

Eiser v. Brown & Williamson Tobacco Corp., No. 4367 (Pa. Ct.
C.P. Aug. 15, 2003).

Galbraith v. R.J. Reynolds Tobacco Co., No. 144417 (Cal. Super.
Ct. Dec. 23, 1985).

Gilboy v. R.J. Reynolds Tobacco Co., No. 314,002 (La. Cir. Ct.
July 9, 1999).

Girton v. Am. Tobacco Co., No. 85-7180 (E.D. Pa. June 24,
1988).

Gordon v. RJ. Reynolds Tobacco Co., No. 96-1133 (Mass.
Super. Ct. Sept. 26, 1997).

Green v. Am. Tobacco Co., No. 8505 (S.D. Fla. Aug. 2, 1960)
(first trial).

Green v. Am. Tobacco Co., No. 8505 — Fla. Nov. 27, 1964)
(second trial).

Grinnell v. Am. Tobacco Co., No. E-122,878 (Tex. Dist. Ct. Mar.
7, 2001).

Hall v. R.J. Reynolds Tobacco Co., No. 00-1061 (Fla. Cir. Ct.
Dec. 10, 2003).

Hyde v. Philip Morris, Inc., No. 97-359 (D.R.1. Mar. 21, 2002).

Inzerilla v. Philip Morris USA, Inc., No. 11754/96 (N.Y. Sup. Ct.
Feb. 20, 2003).

Karbiwnyk v. RJ. Reynolds Tobacco Co., No. 95-4697 (Fla. Cir.
Ct. Oct. 31, 1997).

Karney v. Philip Morris, Inc., No. 89196-8 (Tenn. Cir. Ct. May
10, 1999).

Kimball v. RJ. Reynolds Tobacco Co., No. 03-664 (W.D. Wash.
May 15, 2006).

Kotler v. Am. Tobacco Co., No. 86-810 (D. Mass. Mar. 7, 1990).

Kueper v. R.J. Reynolds Tobacco Co., No. 91-734 (Ill. Cir. Ct.
Jan. 29, 1993 and Sept. 1, 1994).

Lartigue v. R.J. Reynolds Tobacco Co., No. 5271 (E.D. La. Oct.
11, 1960).

Little v. R.J. Reynolds Tobacco Co., No. 2:98-1879 (D.S.C. Feb.
6, 2001).

Longden v. Philip Morris USA, Inc., No. 00-442 (N.H. Super. Ct.
Nov. 24, 2003).

Lucier v. Philip Morris, Inc., No. 02-1909 (Cal. Super. Ct. Feb. 7,
2003).

Martinez v. Liggett Group, Inc., No. 2002-20943 (Fla. Cir. Ct.
Feb. 11, 2005).

Mash v. Brown & Williamson Tobacco Corp., No. 03-485 (E.D.
Mo. Sept. 30, 2004).

McDaniel v. Brown & Williamson Tobacco Corp., No. 90832-8
(Tenn. Cir. Ct. May 10, 1999).

Mehlman v. Philip Morris, Inc., No. 1141-99 (N.J. Super. Ct.
May 16, 2001).

Newcomb v. R.J. Reynolds Tobacco Co., No. 88913-8 (Tenn. Cir.
Ct. May 10, 1999).

Nunnally v. R.J. Reynolds Tobacco Co., No. 92-270 (Miss. Cir.
Ct. July 12, 2000).

Peters v. Brown & Williamson Tobacco Co., No. 69-2340 (N.D.
Ill. July 19, 1972).

Pritchard v. Liggett & Myers Tobacco Co., No. 12820 (W.D. Pa.
May 4, 1960) (first trial).

Pritchard v. Liggett & Myers Tobacco Company, No. 12820
(W.D. Pa. Nov. 9, 1962) (second trial).

Pritchard v. Liggett & Myers Tobacco Co., No. 12820 (W.D. Pa.
Oct. 8, 1968) (third trial).

Raulerson v. R.J. Reynolds Tobacco Co., No. 95-1820 (Fla. Cir.
Ct. May 5, 1997).

Reller v. Philip Morris, Inc., No. 261796 (Cal. Super. Ct. July 31,
2003) (first trial).

Reller v. Philip Morris, Inc., No. 261796 (Cal. Super. Ct. Mar. 4,
2005) (second trial).

Rogers v. R.J. Reynolds Tobacco Co., No. 87-2106 (Ind. Super.
Ct. Aug. 23, 1996).

Rosen v. Brown & Williamson Tobacco Corp., No. 97-18589
(N.Y. Sup. Ct. June 20, 2005).

Ross v. Philip Morris Co., No. 9494 (W.D. Mo. July 10, 1962).

Roysdon v. R.J. Reynolds Tobacco Gompany, Case 3-84-606
(E.D. Tenn. Dec. 6, 1985).

Schwartz v. Liggett Group, Inc., No. 03-2078 (Fla. Cir. Ct. Mar.
2, 2006).

Settle v. Brown & Williamson Tobacco Corp., No. 89226-8
(Tenn. Cir. Ct. Mar. 17, 1999).

Steele v. Brown & Williamson Tobacco Corp., No. 4:97-961
(W.D. Mo. May 13, 1999).

Thaver v. Liggett & Myers Tobacco Company, No. 5314 (W.D.
Mich. Dec. 12, 1969).

Tompkin v. Am. Tobacco Co., No. 5:94-1302 (N.D. Ohio Oct. 5,
2001).

Tune v. Philip Morris Inc., No. 97-4678 (Fla. Cir. Ct. May 24,
2002).

VanDenBurg v. Brown & Williamson Tobacco Corp., No. 03-
237238 (Mo. Cir. Ct. Feb. 22, 2006).

Weaver v. Am. Tobacco Co., No. 456 (Mo. Cir. Ct. Apr. 3, 1970).

Welch v. Brown & Williamson Tobacco Corp., No. 00-209292
(Mo. Cir. Ct. June 17, 2003).

Wilkes v. Am. Tobacco Co. , No. 91-123-55 (Miss. Cir. Ct. June
17, 1993).

Zagurski v. Am. Tobacco Co., No. 9988 (D. Conn. June 15,
1967).

A-5

PLAINTIFF’S VERDICTS REVERSED BY A POST-
TRIAL MOTION OR ON APPEAL (6)

Cipollone v. Liggett Group, Inc., No. 83-2864 (D.N.J. June 13,
1988), rev'd, 893 F.2d 541 (3d Cir. 1990), aff'd in part and
rev'd in part, 505 U.S. 504 (1992).

Engle v. R.J. Reynolds Tobacco Co., No. 94-8273 CA 22 (Fla.
Cir. Ct. Apr. 7, 2000), rev'd sub nom. Engle v. Liggett
Group, Inc., 853 So. 2d 434 (Fla. Dist. Ct. App. 2003), aff'd
in part and rev'd in part, No. SC03-1856, 2006 WL
1843363, at *21 (Fla. July 6, 2006) (claims of plaintiff
Amodeo dismissed by Florida Supreme Court as time-
barred; opportunity for further appellate review has not
expired)."”

Figueroa-Cruz v. R.J. Reynolds Tobacco Co., No. 00-2334
(D.P.R. Sept. 25, 2002) (motion for judgment
notwithstanding the verdict granted Oct. 11, 2002), aff'd,
348 F.3d 271 (ist Cir. 2003).

Jones v. R.J. Reynolds Tobacco Co., No. 97-4966 (Fla. Cir. Ct.
Oct. 12, 2000) (defendant’s motion for new tal granted,
Dec. 28, 2000).

Whiteley v. Raybestos-Manhattan, Inc., No. 303184 (Cal. Super.
Ct. Mar. 20, 2000 and Mar. 27, 2000), rev'd and remanded

'2 Engle was tried pursuant to a multi-phase trial plan. In Phase I-A,
the jury decided the claims of three individual smokers. The Florida
Supreme Court, in addition to decertifying the class, reversed the verdict
that awarded damages to one of the three individual smokers but affirmed
the damages awarded to the other two. See 2006 WL 1843363, at *22.

A-6

sub nom. Whiteley v. Philip Morris Inc., 1\ Cal. Rptr. 3d 807
(Cal. Ct. App. 2004).

Widdick v. Brown & Williamson Tobacco Corp., No. 97-3522
(Fla. Cir. Ct. June 10, 1998), rev'd, 717 So. 2d 572 (Fla.
Dist. Ct. App. 1998).

PLAINTIFF’S VERDICTS (20)

Plaintiff's verdicts with punitive damages awards
remitted on appeal:

Boeken v. Philip Morris Inc., No. 226593 (Cal. Super. Ct. June 6,
2001) ($3 billion), remitted by 26 Cal. Rptr. 3d 638, 687
(Cal. Ct. App. £005) ($50 million).

Boerner v. Brown & Williamson Tobacco Co., 4:98-427 (E.D.
Ark. May 23, 2003) ($15 million), remitted by 394 F.3d 594,
603 (8th Cir. 2005) ($5 million).

Henley v. Philip Morris Inc., No. 995172 (Cal. Super. Ct., Feb. 9,
1999, and Feb. 10, 1999) ($50 million), remitted by 9 Cal.
Rptr. 3d 29, 75 (Cal. Ct. App. 2004) ($9 million).

Plaintiff's verdicts with punitive damages awards in
which the award of compensatory damages was affirmed
but the punitive damages verdict was reversed on appeal:

Burton v. Am. Tdbacco Co.,205 F. Supp. 2d 1253, 1263-65 (D.
Kan. 2002) ($15 million punitive damages award as to R.J.
Reynolds Tobacco Company), rev’d in part, 397 F.3d 906,
914 (10th Cir. 2005) (striking punitive damages award).

Plaintiff's verdicts without punitive damages awards:
Carter v. Brown & Williamson Tobacco Corp., No. 95-934 (Fla.
Cir. Ct. Aug. 9, 1996).

Eastman v. Brown & Williamson Tobacco Corp., No. 97-5968
(Fla. Cir. Ct. Apr. 3, 2003).

)

Kenyon v. R.J. Reynolds Tobacco Co., No. 00-5401 (Fla. Cir. Ct.
Dec. 12, 2001).

Plaintiff's verdicts in which the jury awarded $0
damages:

Horton v. Am. Tobacco Co., No. 12325 (Miss. Super. Ct. Sept.
24, 1990).

Plaintiff's verdicts with punitive damages awards in
which appeals are ongoing:

Bullock v. Philip Morris USA, Inc., No. BC249171 (Cal. Super.
Ct. September 26, 2002, October 4, 2002) ($28 billion),
remitted by 2002 WL 31833905 (Cal. Super. Ct. Dec. 18,
2002) ($28 million), aff'd, 42 Cal. Rptr. 3d 140 (Ct. App.
2006) (petitions for review to California Supreme Court filed
by both parties).

Frankson v. Brown & Williamson Tobacco Corp., No. 24915/00
(N.Y. Sup. Ct. Dec. 18, 2003 and Jan. 9, 2004) ($20 million
apportioned among four defendants, remitted to $5 million
among three defendants by tnal judge), aff'd, 2006 WL
1851266 (App. Div. July 5, 2006) (opportunity for further
appellate review has not expired).

Rose v. Brown & Williamson Tobacco Corp., No. 11996-02
(N.Y. Sup. Ct., Mar. 18, 2005 and Mar. 28, 2005) ($17.1
million punitive damages award against Philip Mormis only)
(appeal to intermediate appellate court pending).

Schwarz v. Philip Morris Inc., No. 0002-1376 (Or. Cir. Ct. Mar.
22, 2002) ($150 million, remitted to $100 million by tral
judge), vacating and remanding for new trial, 135 P.3d 409
(Or. Ct. App. 2006) (en banc) (petition for review to Oregon
Supreme Court filed by plaintiff).

A-8

Smith v. Brown & Williamson Tobacco Corp., No. 03-212922
(Mo. Cir. Ct. Feb. 1, 2005 and February 2, 2005) ($20
million) (appeal to intermediate appellate court pending).

Williams v. Philip Morris USA Inc., No. 9705-3957 (Or. Cir. Ct.
Mar. 30, 1999) ($79.5 million, reduced by trial court to $32
million), rev'd and remanded, 48 P.3d 824 (Or. Ct. App.
2002) (reinstating $79.5 million award), adh 'd to on recons.,
51 P.3d 670 (Or. Ct. App. 2002), rev. denied, 61 P.3d 938
(Or. 2002), vacated, 540 U.S. 801 (2003), adh’d to on
remand, 92 P.3d 126 (Or. Ct. App. 2004), aff'd, 127 P.3d
1165 (Or. 2006), cert. granted, 126 S. Ct. 2329 (2006).

Plaintiff's verdicts without punitive damages in which
appeals are ongoing:

Arnitz v. Philip Morris USA Inc., No. 00-4208 (Fla. Cir. Ct. Oct.
21, 2004), aff'd, No. 2D05-826, 2006 WL 2033902 (Fla.
Dist. Ct. App. July 21, 2006) (opportunity for further
appellate review has not expired).

Davis v. Liggett Group, Inc., No. 02-18944 05 (Fla. Cir. Ct. Apr.
28, 2004).

Thompson v. Brown & Williamson Tobacco Corp., No. 00-
220555 (Mo. Cir. Ct. Nov. 4, 2003).

Plaintiff's verdicts for compensatory damages in which
punitive damages have not been resolved: _

Engle v. R.J. Reynolds Tobacco Co., No. 94-8273 CA 22 (Fla.
Cir. Ct. Apr. 7, 2000), rev'd sub nom. Engle v. Liggett
Group, Inc., 853 So. 2d 434 (Fla. Dist. Ct. App. 2003), aff'd
in part and rev'd in part, No. SC03-1856, 2006 WL
1843363, at *21 (Fla. July 6, 2006) (verdict in favor of
plaintiff Della Vecchia reinstated).

Engle v. R.J. Reynolds Tobacco Co., No. 94-8273 CA 22 (Fla.
Cir. Ct. Apr. 7, 2000), rev'd sub nom. Engle v. Liggett

A-9

Group, Inc., 853 So. 2d 434 (Fla. Dist. Ct. App. 2003), aff'd
in part and rev'd in part, No. SC03-1856, 2006 WL
1843363, at *21 (Fla. July 6, 2006) (verdict in favor of
plaintiff Farman reinstated).

Lukacs v. Brown & Williamson Tobacco Corp., No. 01-03822
CA 23 (Fla. Cir. Ct. June, 11, 2002).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0249%3A29. Public record. Not legal advice.