Shielding the Powerful

In a milestone win for corporate wrongdoers, the U.S. Supreme Court made an alarming decision yesterday to overturn the landmark $80 million punitive damage award against Philip Morris. The ruling effectively stretches the Constitution’s guarantee of due process in a way that will make it easier for companies that act reprehensibly to sidestep serious punishments. It also provides unsettling new evidence that the court is more concerned about — and more willing to protect — the powerful, as opposed to the powerless.

In 1999, an Oregon jury awarded Mayola Williams, the widow of cigarette smoker Jesse Williams, about $821,000 in compensatory damages and $79.5 million in punitive damages. Ms. Williams argued that Philip Morris had spent 40 years denying the connection between smoking and cancer, even though Phillip Morris executives knew cigarettes were deadly. The Oregon Supreme Court upheld the punitive damages award, saying that Philip Morris’s actions had been “extraordinarily reprehensible.” The ruling justices reasoned that by keeping Oregonians smoking longer than they otherwise would have, the company’s actions would, “naturally and inevitably lead to significant injury or death.”

However, by a 5-to-4 vote that did not follow the usual ideological lines, the Supreme Court ruled yesterday that the award was improper because it punished Philip Morris for harm done to people who were not part of the lawsuit. So, because the Oregon justices took into consideration the well-being of the general public, the Supreme Court overturned their ruling. There is nothing unusual, or wrong, about courts considering the broader impact of a wrongdoer’s misdeeds. As Justice John Paul Stevens noted in dissent, “A murderer who kills his victim by throwing a bomb that injures dozens of bystanders should be punished more severely than one who harms no one other than his intended victim.” The fact that Philip Morris hurt so many other smokers along with Jesse Williams is surely relevant to its punishment.

The court in recent years has become increasingly proactive when it comes to defending the rights of corporations by striking down punitive damage awards. Yesterday’s ruling continues that trend; and while the ruling did not designate such large punitive damage awards to be unconstitutional, it does expand the notion of due process and overturns the decisions of a jury and a state supreme court.

Unfortunately, the court has been far less activist when ordinary people seek protection or challenge their punishments. The ruling stands in particular contrast with the court’s 2003 decision that the Eighth Amendment’s ban on “cruel and unusual punishments” did not bar California, under its “three strikes” law, from sentencing a man to 50 years in prison for stealing $153.53 worth of videotapes. Other idiosyncratic legislation, such as the Digital Millenium Copyright Act, which imposes penalties of up to ten years in prison and fines of up to $250,000 for illegally sharing copywrighted music or video files, illustrates the influence that corporate America wields over the upper echelons of government. Yesterday’s decision is another disturbing sign that America's governing branches are not completely sovereign, and — as the current court reads the Constitution — powerful commercial parties have more rights than common citizens.