The blogosphere is filled with rather colorful metaphors and descriptions for what the Oregon Supreme Court was saying to the United States Supreme Court in its recent opinion in Philp Morris v. Williams. See here, here, and here. But, of course, the United States Supreme Court can still have the last word. The Oregon Supreme Court based its holding on the asserted ground of an adequate and independent state law ground to overcome the due process violation found by the United States Supreme Court. However, there are exceptions to that doctrine. The United States Supreme Court has explained that the right of state courts to assert independent state law grounds is not unlimited: “It therefore is within our province to inquire not only whether the right was denied in express terms, but also whether it was denied in substance and effect, as by putting forward nonfederal grounds of decision that were without any fair or substantial support . . . [for] if non-federal grounds, plainly untenable, may be thus put forward successfully, our power to review easily may be avoided.” Thus, it is possible that the United States Supreme Court could reverse (even by summary reversal) the recent Oregon opinion on the basis that the independent state law ground regarding evaluating proposed jury instructions cannot be used as a shield to overcome a plainly unconstitutional trial. In the alternative, the court could grant certiorari and then consider the excessiveness of the award under the Due Process Clause.
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Oregon Voters and the Oregon Supreme Court
Since the Oregon Supreme Court is in the news today, I thought it would be interesting to learn more about that court. It is not every day that a state Supreme Court refuses to find error in a trial after the United States Supreme Court had held that the defendant’s due process rights were violated during the trial. A poll of Oregon voters commissioned in 2006 explored voter attitudes and knowledge of the Oregon Supreme Court. 44 percent thought the court engaged in “judicial activism” while 26 percent said the court did not, and 30 percent did not have an opinion. 70 percent said they had “trust” in the court. Only 20 percent knew how many justices (7) sit on the court. 79 percent could not name a single justice on the court, and only a bare majority realized that justices were elected by the voters. 53% thought voters should have the final say on the validity of laws in Oregon, and only 30% thought the Supreme Court should have that authority.
The poll contains many other questions about specific cases decided before 2006 by the court. It is a very interesting snapshot of how the people who live in Oregon view the Supreme Court.
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Rationale of Oregon Supreme Court Decision in Philip Morris v. Williams Should Not Apply in California
The Oregon Supreme Court’s decision handed down today finding a defendant waived its due process rights to proper calculation of punitive damages (see earlier post here) is based on reasoning which, whether valid or not under Oregon law, should not apply in California. The Oregon Supreme Court concluded that the trial court had an adequate basis under state law for refusing to instruct the jury that “you are not to punish the defendant for the impact of its alleged misconduct on other persons.” The U.S. Supreme Court had held that a defendant is entitled to due process protections such as are reflected in this sort of instruction upon request, but the Oregon Supreme Court said the trial court properly refused the proposed instruction in this case because it included other language, some of which was erroneous under Oregon state law. Apparently, under Oregon law, a trial court can refuse a party’s request for an instruction that correctly sets forth relevant principles of law – even principles essential to ensuring constitutional rights – if the proposed instruction is bundled with other language that is incorrect.
The same reasoning would not apply in California. California courts have held that, even when a proposed jury instruction is flawed, if the subject matter of the instruction is “vital” or “material” to the case and not covered by other instructions, the trial court is required to give a proper instruction that captures the substance of the law. Thus, in California, if no other jury instruction addressed the fundamental due process concerns discussed in Williams, the trial court could not properly reject a proposed instruction on that issue without providing some sort of alternate instruction to protect the defendant’s due process rights. (See, e.g., Orient Handel v. United States Fid. & Guar. Co. (1987) 192 Cal.App.3d 684, 698.)
How Appealing has another post on Williams entitled “The cost to Philip Morris of trying to slant jury instructions too far in its favor — $79.5 million in punitive damages.”
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Philip Morris v. Williams—Oregon Supreme Court Reaffirms $79.5 Million Punitive Damages Award
The Oregon Supreme Court has issued its opinion on remand in Philip Morris v. Williams. Surprisingly, the court reaffirmed the $79.5 million punitive damages award (compared to compensatory damages of $821,000).
The U.S. Supreme Court’s opinion last year strongly suggested that a new trial, or at least a reduction of the punitive damages award, would be necessary because the Oregon Supreme Court’s prior opinion improperly relied on harm to nonparties as a justification for the award. (From the conclusion of the court’s opinion: “Because the application of this standard may lead to the need for a new trial, or a change in the level of the punitive damages award, we shall not consider whether the award is constitutionally “grossly excessive.”)
Hat tip to Howard Bashman.
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More on Bullock v. Philip Morris
This 60-page opinion covers a lot of ground, but the core of the court’s rationale for reversing the $28 million punitive damages award is that the trial court erred when it refused to instruct the jury, “You are not to impose punishment for harms suffered by persons other than the plaintiff before you.” By requesting that instruction, Philip Morris invoked the due process protection recognized by the U.S. Supreme Court in Philip Morris v. Williams, namely, that the Due Process Clause forbids states from imposing punitive damages to punish a defendant for injury inflicted on nonparties. Contrary to the arguments of Bullock and her amici, Philip Morris was not required to include in its instruction a statement that the jury could consider harm to others in evaluating the reprehensibility of the conduct that harmed Bullock. Philip Morris had no duty to qualify its proposed instruction to encompass a rule of law favorable to Bullock – – each party in a civil case has a duty to propose instructions that accurately state the law supporting its own theory of the case.
Interestingly, the opinion states in a footnote that although Philip Morris’s proposed instruction was sufficient, the official California jury instructions (also known as “CACI“) should be modified to more accurately reflect the holding of Williams. The court’s criticism of the CACI instructions is notable because the author of the Bullock opinion, Justice Walter Croskey, is the current chair of the Judicial Council’s Advisory Committee on Civil Jury Instructions, which is responsible for keeping the CACI instructions up to date. That committee modified the CACI instructions just a few months ago to reflect the holding of Williams. If I recall correctly, Justice Croskey recused himself from that process because the Bullock case was pending before him. Now Justice Croskey says in his opinion that the committee didn’t go far enough. The opinion says the instructions could do a better job of conveying the distinction that a jury may consider evidence of harm to others for the purpose of determining reprehensibility, but not for the purpose of punishing the defendant directly for harm caused to others. I’m going to go out on a limb and predict that the next set of proposed revisions to the CACI instructions will include a modification based on the Bullock opinion. -
Bullock v. Philip Morris—California Court of Appeal Reverses $28 Million Punitive Damages Award
We blogged here about this pending appeal involving the intersection of California law and the U.S. Supreme Court’s decision in Philip Morris v. Williams. This afternoon, the Court of Appeal (the Second Appellate District, Division Three) issued a published opinion reversing the $28 million punitive damages award and remanding the case for a new trial on the amount of punitive damages. The same court had previously approved the $28 million award, but the U.S. Supreme Court vacated that decision and remanded for reconsideration in light of Williams.
We’ll post further about this opinion after we’ve had a chance to digest it. For now, here’s the Court of Appeal’s summary of its disposition:
“We conclude that Philip Morris has shown no error with respect to its liability for fraud and products liability, but that the refusal of Philip Morris’s proposed instruction not to impose punishment for harm caused to nonparties to the litigation was error. We therefore affirm the judgment as to the finding of liability, the award of compensatory damages, and the finding that Philip Morris was guilty of oppression, fraud, or malice, and reverse the judgment as to the amount of punitive damages, with directions to conduct a new trial limited to determining that issue.”
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More Punitive Damages Scholarship
David Bernstein at the Volokh Conspiracy has an interesting post on a recent law review article critical of the Philip Morris v. Williams opinion. The article begins: “The history of the Fourteenth Amendment is one of hierarchy and capitalism. In the Amendment’s first 139 years, courts have consistently used it to perpetuate dominant notions of class and culture–to maintain deeply rooted inequality and resist meaningful changes in the areas of poverty, race, and gender. While the Amendment’s beautiful language and spirit could have been used to ensure quality and meaningful participation in all aspects of a civil community, its words have instead been employed as a tool for just the opposite.”
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Upcoming Exxon Valdez Decision May Have Little Impact Outside Maritime Law
When the U.S. Supreme Court agreed to review the Ninth Circuit’s latest decision in the Exxon Valdez litigation, the grant of certiorari grabbed headlines mostly because of the $2.5 billion punitive damages award (which was actually a reduction from the $5 billion in punitive damages originally awarded by the jury). But a closer look at the issues and the briefing suggests that the case (scheduled for oral argument on Wednesday, Feb. 27) may have only a limited impact on punitive damages litigation outside the context of maritime law. Exxon’s brief on the merits is focused exclusively on maritime law issues, as are some of the amicus briefs filed in support of Exxon.
Two of the amicus briefs, one filed by the Washington Legal Foundation and one by the Products Liability Advisory Committee, urge the Supreme Court to take a broader approach and impose limits on punitive damages under federal common law. Even that proposal would have a limited impact, however, as it would not apply to punitive damages imposed under state law.
One amicus brief, filed by the American Petroleum Institute and others, advocates an even more expansive approach; it asks the court to articulate a universal test for excessiveness that applies not only to maritime cases but to any case posing an excessiveness issue. That approach, if the Supreme Court adopted it, would obviously have a tremendous impact on all punitive damages cases. But recent history, particularly Philip Morris v. Williams, suggests the Roberts Court is more likely to confine its decision to the maritime issues addressed in Exxon’s brief.
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Article Mulls Practical Effect of Philip Morris v. Williams
In an article titled “Punitive Damages Shrink as High Court Reins in Trial Lawyers,” Ellis Horvitz predicts that, after Williams, “We will not see the wildly excessive punitive damages sustained at the appellate level, and many will be cut down at the trial level.”
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Three Pending Cases Involving Application of Philip Morris v. Williams
Readers of this blog are no doubt aware of the United States Supreme Court’s decision, roughly one year ago, in Philip Morris v. Williams. In a nutshell, the Court held that juries must be instructed not to punish a defendant for conduct towards nonparties. The Court allowed juries to consider harm to nonparties for the limited purpose of evaluating the reprehensibility of the defendant’s conduct, but the Court held that if such evidence is admitted at trial, the court must give a limiting instruction explaining that harm to others is relevant only to reprehensibility and should not be used as a basis for imposing punishment.
Many commentators complained that the Williams opinion was confusing. The primary complaint was that two aspects of the Court’s holding are fundamentally inconsistent; critics complained that a jury cannot consider harm to others for reprehensibility purposes (which is part of determining the proper degree of punishment) without running afoul of the court’s prohibition against punishing a defendant for harm to others. In our view, the two aspects of Williams are easily reconciled. A jury can consider harm to others in determining whether the defendant’s conduct was reprehensible enough to support a three-to-one ratio versus a one-to-one ratio, but the denominator in the ratio must be the harm to the plaintiff, and cannot include harm to others. For example, if the plaintiff presents evidence that the defendant caused the plaintiff to suffer $100,000 in actual harm, and also presents evidence that the defendant caused similar harm to 9 nonparties, the jury could properly consider the evidence of harm to others in determining that the ratio should be three-to-one instead of one-to-one, but the jury could apply the three-to-one ratio multiplier only to the plaintiff’s actual harm ($100,000), not the total harm allegedly caused to the plaintiff and all the nonparties ($1 million).
In the near future, the California Court of Appeal may clarify the proper application of Williams. We are aware of three pending appeals in which the defendants are seeking reversal based on Williams. Holdgrafer v. Unocal is pending in the Second Appellate District, Division Six (Ventura). It was argued on May 23, 2007, but the court subsequently accepted two rounds of supplemental briefing and resubmitted the case on December 21, 2007. Buell-Wilson v. Ford Motor Co. is pending in the Fourth Appellate District, Division One (San Diego). It was argued on December 11, 2007. Bullock v. Philip Morris is pending in the Second Appellate District, Division Three (Los Angeles). It was argued December 12, the day after the Buell-Wilson argument. Under the California rule requiring courts to issue an opinion within 90 days after submission, we should see opinions in all three cases by the end of March.
In Bullock, the court of appeal took the unusual step of inviting the parties to submit names of amici who might be interested in submitting briefs. After receiving lists from both parties, the court invited and received a wide range of amicus briefs on the effect of Williams. Copies of the briefing can be found at this link.
In the interests of full disclosure, we should mention that the authors of this blog are counsel of record for Unocal in the Holdgrafer appeal and we have an attorney-client relationship with Philip Morris.