January 15, 2008

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.