May 16, 2016

Supreme Court declines to address due process question arising from partial retrial on punitive damages

The Supreme Court has denied Philip Morris' petition for certiorari in the Schwarz case, in which an Oregon jury awarded $25 million in punitive damages after a previous award of $150 million was reversed on appeal.  The $25 million award was still 148 times larger than the compensatory damages awarded by the first jury.

PM's petition raised the following due process question that arises when a court allows punitive damages to be awarded by a separate jury that did not decide the liability issues in the case:

[W]hether it violates due process for a jury in a partial retrial to determine the amount of punitive damages, but not the threshold question of liability for punitive damages, where the first jury did not specify which of multiple possible tort theories was the basis for its finding that the defendant was liable for punitive damages.
This question touches on just one of the many problems that can arise when punitive damages and compensatory damages are awarded by separate juries.  Courts have disagreed about how juries should be instructed in these situations, and what evidence the second jury should be permitted to hear.  For now these questions will remain unanswered.