Phillip Morris USA v. Williams – How Will The Latest SCOTUS Punitive Damages Decision Play Out in California?

The US Supreme Court issued its latest effort aimed at curbing punitive damages this morning, ruling 5-4 that state courts violate due process if they permit juries to punish defendants for injuring non-parties.  At the same time, the Court authorized state mechanisms by which juries consider injury to non-parties for purpose of measuring “reprehensibility.”  In the real world of the trial court, this may prove to be a fine distinction without a difference.  But how will this play out in California, particularly in product liability cases?

More after the jump

So now, it has been established that if a state permits the award of punitive damages, it must establish mechanisms to ensure that the jury does not punish the defendant because of its conduct toward others. E.g., as in the case of cigarettes, the jury can award punitive damages against the manufacturer to punish it for what it did to the plaintiff, but not for what it did to other smokers.  On the other hand, its actions toward other smokers are admissible to show how reprehensible the manufacturer's conduct was.

In California, punitive damages are covered by our standard jury instructions, CACI 3940 through 3949.  You can find all the California jury instructions here. The punitive damages instructions are in the 3900 series,  and CACI 3940, which includes all the elements relevant to the Phillip Morris case, is here.

As it stands now, juries in California are instructed, in part,  as follows:

If you decide to award punitive damages, you should consider all of the following in determining the amount:
 
(a)    How reprehensible was [name of defendant]'s conduct? In deciding how reprehensible [name of defendant]'s conduct was, you may consider, among other factors:
 
1.  Whether the conduct caused physical harm;
 
2.  Whether [name of defendant] disregarded the health or safety of others;
 
3.  Whether [name of plaintiff] was financially weak or vulnerable and [name of defendant] knew [name of plaintiff] was financially weak or vulnerable and took advantage of [him/her/it];
 
4.  Whether [name of defendant]'s conduct involved a pattern or practice; and
 
5.  Whether [name of defendant] acted with trickery or deceit.
 
(b)    Is there a reasonable relationship between the amount of punitive damages and [name of plaintiff]'s harm [or between the amount of punitive damages and potential harm that [name of defendant] knew was likely to occur because of [his/her/its] conduct]?
 
(c)    In view of [name of defendant]'s financial condition, what amount is necessary to punish [him/her] and discourage future wrongful conduct? You may not increase the punitive award above an amount that is otherwise appropriate merely because [name of defendant] has substantial financial resources. [Any award you impose may not exceed [name of defendant]'s ability to pay.]   

It would be my thought that, to comply with Phillip Morris, a trial court must now instruct the jury, immediately after this instruction, as follows:

While you may consider evidence of the defendant’s conduct toward persons other than [name of plaintiff] for the purpose of considering the reprehensibility of [name of defendant]’s conduct, you may not include in an award of punitive damages any amount for the purpose of punishing [name of defendant] for its conduct toward persons other than [name of plaintiff].

I’m not at all sure this new requirement does the defense any big favors.