BY RACHEL CHEESEMAN

SALEM- The Oregon State Supreme Court released an opinion Thursday on a case involving Philip Morris Inc., a large tobacco company, and the estate of a woman who died from complications with lung cancer.

Michelle Schwartz died after smoking cigarettes for 45 years. Her husband, the personal representative of her estate, sued Philip Morris for marketing an addictive product that caused adverse health effects. Punitive damages are awarded to change the behavior of the defendant, which was Philip Morris Inc. in this case.

The trial court awarded $170,000 to offset medical costs as well as emotional suffering and $100 million in punitive damages. Going along with the Court’s ruling, the case has been sent back to the trial court for a reevaluation of the punitive damages.

Philip Morris appealed saying that Schwartz’s attorney did not adequately instruct the jury of the constitutional limits of awarding punitive damages. By the Court’s ruling, the instructions were “incomplete and therefore incorrect.”

He argued that the instructions should explicitly state that the jury could not “impose punishment for harms suffered by persons other than the plaintiff” or “for the impact of its conduct on individuals in other states.” This precedent was established by the United States Supreme Court in the case Williams v. Philip Morris Inc.

While such information cannot be used directly in determining the amount awarded in punitive damages, it is usable in determining the reprehensibility of the defendant’s conduct.

The Court ruled that this must also be made clear to the jury through implicit instruction. It wrote “when the law draws a line between the proper and improper use of evidence, a jury instruction must be equally explicit in describing what falls on each side of that line.”

Norman Williams, a law professor at Willamette University and unrelated to the plaintiff in Williams v. Philip Morris Inc., was involved with punitive damage litigation before he was a professor. He said that the ruling, while constitutionally consistent, could potentially confuse a jury and more guidance would have been useful.

The Oregon Trial Lawyers Association filed a brief in this case and has filed brief in support of Mayola Williams in Williams v. Philip Morris Inc. but could not be reached for comment.

The case also represents a substantial departure from the US Supreme Court’s guidelines for punitive damage awards. In previous cases, the US Supreme Court has ruled that punitive damage awards 10 times the compensatory damage awards should be suspect, and in some cases even a one to one award for punitive damages might be excessive.

The punitive damages awarded in this case are more than 500 times the amount awarded in compensatory damages after it was reduced. The original amount of $150 million would have been more than 880 times the compensatory damages.

Williams described the awarded amount as “shocking” and “grossly excessive.”

“That’s not even close to permissible,” Williams said.

Williams said that juries in cases like this “typically act reasonable and don’t award mammoth punitive damage awards,” but large defendant’s like tobacco corporations, motor companies and insurance providers were equally likely to be hit by a “runaway jury.”

As the issue that reached the court was on the instruction of the jury, not the appropriateness of the punitive damage awards, there is potential for this case to be re-appealed after the remand of the case.

“I would be surprised if on remand, there isn’t a significant battle regarding just how much punitive damages could be awarded,” Williams said.