Court Nixes Award Against Philip Morris

Mayola Williams, in wheelchair, widow of Jesse Williams, who died of lung cancer, leaves the Supreme Court in Washington in this Oct. 31, 2006 file photo, following oral arguments in her lawsuit against Philip Morris. The Supreme Court threw out a $79.5 million punitive damages award to Williams, Tuesday, Feb. 20, 2007, a boon to businesses seeking stricter limits on big-dollar jury verdicts. (AP Photo/Dennis Cook, file) (Dennis Cook - AP)

Punitive damages are money intended to punish a defendant for bad behavior and deter repetition.

Lawyers who defend companies against product-liability claims said Tuesday's ruling would help curtail large jury awards.

A jury will have to be told "that it cannot punish for conduct that may be directed to others. That's really the crucial part of this decision," said Sheila Birnbaum, who won a punitive damages case in 2003 when the Supreme Court struck down a $145 million verdict against State Farm Mutual Automobile Insurance Co.

Yet trial lawyers on the other side of the issue said the court could have severely restricted plaintiffs if it had chosen to spell out how high punitive damages could go in relation to actual damages. Philip Morris argued that punitive damages should not exceed four times the amount of actual damages, also known as compensatory damages.

The court instead put forward a principle that defendants can be punished only for the harm they do to plaintiffs, which state courts already adhere to widely, these lawyers said.

"There is almost no court in this country that has been applying a standard that you punish someone for harm done to others," said Arthur Bryant, executive director of Trial Lawyers for Public Justice. "I don't think it's a setback at all."

Philip Morris vice president William Ohlemeyer said the decision gives the company "an opportunity to fully and fairly defend itself in this and other cases."

The Chamber of Commerce, National Association of Manufacturers and trade associations representing car and drug makers have weighed in on behalf of tighter restrictions on damage awards.

The case also was watched closely as a test of whether the new makeup of the Supreme Court would lead to changes in its prior rulings limiting punitive damages.

Roberts and Alito, the two newest members, were in the majority Tuesday, giving no hint of a change in the court's approach to punitive damages.

The case is Philip Morris USA v. Williams, 05-1256.