July 19, 2011

Are lower courts thumbing their noses at SCOTUS guidelines for reviewing large punitive damages awards?

University of Iowa College of Law professor N. William Hines was intrigued by the creative approach that the Oregon Supreme Court followed in 2008 when reaffirming a 97-to-1 punitive award against Philip Morris after the United States Supreme Court decision in Philip Morris v. Williams. (See our original post on that development.) The latter decision had seemed at first blush to dictate a reversal and retrial due to instructional error, but the Oregon court found an end run around that result. Upon contemplating the procedural history of Williams, Professor Hines undertook a study (abstracted here) to see "whether lower courts could be counted upon to faithfully implement the Supreme Court's new constitutional jurisprudence regarding punitive damages." To that end, he "decided to collect and study all of the reported punitive damages cases decided by lower courts since the 2003 State Farm decision."

The results of the study are interesting, leading Professor Hines to conclude, among other things, that the more than 400 cases analyzed show "much wider diversity in the types of modern cases in which punitive damages are sought and awarded" than one might assume. The professor's ultimate conclusion is that court review of those awards has generally reflected a high degree of faithfulness to the guidance from the Supreme Court (notwithstanding the Oregon court's approach in Williams): "In case after case, the lower courts correctly invoked the new constitutional doctrine based on Due Process and dutifully proceeded to analyze the reasonableness and size of the punitive damages award before them by applying the three Guideposts."

For those tracking Due Process jurisprudence as applied to punitive damages awards, the full study, including the appendix charting objective data about the types of cases and ratios between compensatory and and punitive damages, is worth a read. The July 2011 paper is titled, "Marching to a Different Drummer? Are Lower Courts Faithfully Implementing the Evolving Due Process Guideposts to Catch and Correct Excessive Punitive Damages Awards?"