Oye Vey

The last time Andrew Frey argued a punitive damages case before the U.S. Supreme Court, the veteran litigator saved the State Farm insurance company $136 million. Today, though, his clients might not be so lucky in challenging the $79 million punitive damages award in Philip Morris v. Williams. Either Frey overslept or he simply thought the whole debate would be about math--i.e., whether the constitution has a "bright line" that limits how big punitive damages can be relative to compensatory damages.

Frey can be forgiven for making that mistake. In his 2003 case, State Farm v. Campbell, the court came close to spelling out a fixed ratio between compensatory and punitive damages--something in the single digits--as a constitutional limit on punitive awards. As a result, state courts have been slashing away at those rare, big awards to make sure they don't exceed something like nine times the compensatory damages. Except the Oregon supreme court, that is.

After State Farm, the U.S. Supreme Court sent the Williams case back to Oregon for reconsideration because the compensatory award was only $821,000, compared with the $79 million punitive award, a 97 to 1 ratio. On a second take, the Oregon justices decided that the ratio was just fine, because what Philip Morris did was really, really awful.

Naturally, Philip Morris appealed, arguing among other things, that the ratio violated the company's due process rights. But the math question barely came up this morning. Instead, Frey barely got through his opening remarks before Justice Ruth Bader Ginsburg dug in to him about jury instructions. Much of Frey's time was tied up answering questions about whether the jury was properly instructed that they couldn't use punitive damages to punish a defendant for harm to, in this case, other Oregon smokers who weren't plaintiffs even though they were allowed to consider the potential harm to all those people in deciding how reprehensible Philip Morris's conduct was. The confusion over State Farm led Justice Souter to remark at one point that "Maybe it's a good thing we weren't instructing a jury" when they wrote the decision.

In any event, Frey, who was reportedly prepping for his argument right up through the swearing in of some new bar members, never got to the ratio question. Beleaguered, he sounded a little whiny when he complained at one point that Philip Morris gets sued a lot, even though it wins all its cases. "When do we get credit?" he asked. Given who his client is, I don't think I would have gone there.

In fact, if the court were only deciding the case on the oral arguments, I'd put my money on Bob Peck and the Williams team. Far more prepared, Peck, the president of the Center for Constitutional Litigation, even managed to get in a few states' rights points for Alito and Roberts about the thoughtful guidelines Oregon state legislators and courts had created for constraining punitive damages on their own. The consensus in the peanut gallery, from everyone from ATRA's Victor Schwartz to the grande dame of the defense bar, Sheila Birnbaum, to the folks at Peck's firm, is that the court won't use the case to make any global pronouncements but is basically going to punt the case back to Oregon on the jury instruction issue. In the end, though, Philip Morris is going to have to pay something..

Maybe it's just reading too much into the tea leaves, but the tobacco company couldn't have been too pleased with today's performance. Neither Frey nor any reps from the tobacco company appeared on the steps of the courthouse for press comments, leaving the plaza to Peck, some guy dressed up in a  Ghostbusters Halloween costume, and later, to Mayola Williams, the widow of the plaintiff, who arrived in a wheelchair for the arguments.

I would love to tell you what Mrs. Williams had to say, but in perhaps a cigarette company conspiracy, a bulldozer was driving back and forth across the road next to the press mob, blasting its back-up horn at key moments so that virtually no one could hear her speak...

A HUGE CORRECTION AND APOLOGY:  I inadvertenly credited Andrew Frey here with arguing the State Farm case before the court. Frey actually argued the other big punitive damages case, BWM v. Gore, and was not the lead attorney on State Farm, but did represent the U.S. Chamber of Commerce on its amicus brief in the case. Sheila Birmbaum argued State Farm. Ouch! Sorry Sheila.

Comments

[David Lee]

I am not sure if we were watching the same Supreme Court case. I agree Frey was unprepared as to the questions that the Supreme Court Justice were asking. However, victory is not based on presentation but on results and I believe Frey will come out ahead as the Supreme Court will return this case back to Oregon with instructions that PM should have had their instructions read to the juror and that you can only collect punitive damage on the one person and not the entire Oregon smoking population. Case dismiss! If they do that than the second item ratio is a non-issue which is why it never came up.