Court May Decide What Size Award Violates Rights

"We are here today because the Oregon court failed to follow this court's directions," Philip Morris lawyer Stephen M. Shapiro told the justices.

But he immediately ran into trouble with Souter, who had been in the majority in last year's decision, and Justice Ruth Bader Ginsburg, who had been one of the dissenters. They suggested that the Oregon justices had been justified in deciding the case on the grounds of state law before considering the constitutional questions.

"What business do we have" telling the Oregon court the sequence of its consideration? Souter wondered.

Even Breyer was open to Oregon's reasoning. He said he thought at first that Oregon was giving the court the "runaround." But after studying the case more closely, he said, "I'm not sure that I think that now."

It is not uncommon for cases to reappear at the Supreme Court, especially on complicated issues involving state laws and constitutional protections. The court often remands cases to the lower courts for further action with instructions that are sometimes specific but other times opaque.

The justices often take pains to decide cases as narrowly as possible -- that has been one of Roberts's goals -- and they think that "legal doctrine should develop incrementally," said former Texas solicitor general R. Ted Cruz, who has argued frequently before the court, including on death penalty cases that have made more than one appearance.

Sometimes, state courts pay little attention to the directives; the reluctance to follow the Supreme Court's lead on civil rights for minorities is the most commonly cited area of past defiance.

But when Shapiro mentioned one of those cases yesterday, Justice John Paul Stevens challenged him to prove the Oregon courts had acted in bad faith.

Williams's lawyer, Robert S. Peck of the Center for Constitutional Litigation, argued that the Oregon justices had complied with the court's directions. But Justice Antonin Scalia said that was not true.

"'We remand so that the Oregon Supreme Court can apply the standard we have set forth,' " Scalia read from the 2007 opinion, adding, "which has nothing to do with the issue we have been discussing this morning."

About then Roberts made the surprising suggestion that perhaps he and his colleagues should settle the punitive damages question themselves, rather than sending it back to the state.

The justices had declined to decide that issue when they accepted Philip Morris's petition earlier this year, and doing so would likely require additional briefing and more arguments.

It would greatly raise the stakes of the case, and would settle a question that big business and trial lawyers have battled over for years. The issue of whether large punitive damages awards are unconstitutional is one that has split the court in a way different from its ideological divide.

Scalia and Justice Clarence Thomas think that a limit on punitive damages cannot be found in the Constitution. Ginsburg disagrees with a limit for other reasons.

Roberts and Justice Samuel A. Alito Jr. have not voted on the issue but were in the majority that sent the Williams award back to Oregon in 2007. And they sided with Souter last term when he wrote that in the Exxon Valdez case, punitive damages should be the same as compensatory damages, which are tied to actual economic loss.

The court has previously suggested that the correct ratio of punitive damages to actual damages might be less than 10 to 1, which is one of the reasons Philip Morris and the tobacco industry have been so vigorous in fighting the Williams award.

The award is nearly 100 times the $821,000 the jury gave Mayola Williams in compensatory damages. With the interest that accumulated during the years of legal wrangling, the award is now more than $145 million, Philip Morris said in court documents.