징벌적 손해배상 3

The New York Times



February 21, 2007
Editorial

Shielding the Powerful

The Supreme Court’s decision yesterday overturning a nearly $80 million punitive damage award against Philip Morris is a win for corporate wrongdoers. It stretches the Constitution’s guarantee of due process in a way that will make it easier for companies that act reprehensibly to sidestep serious punishments.

It also provides unsettling new evidence that the court is more concerned about — and more willing to protect — the powerful than the powerless.

An Oregon jury awarded Mayola Williams, the widow of a cigarette smoker, about $821,000 in compensatory damages and $79.5 million in punitive damages. Ms. Williams argued that Philip Morris had spent 40 years denying the connection between smoking and cancer, even though it knew cigarettes were deadly. The Oregon Supreme Court upheld the punitive damages award, saying that Philip Morris’s actions had been “extraordinarily reprehensible.” By keeping Oregonians smoking longer than they otherwise would have, the court said, the company’s actions would, “naturally and inevitably, lead to significant injury or death.”

By a 5-to-4 vote that did not follow the usual ideological lines, the court ruled that the award was improper because it punished Philip Morris for harm done to people who were not part of the lawsuit. There is nothing unusual, or wrong, about courts considering the broader impact of a wrongdoer’s misdeeds. As Justice John Paul Stevens noted in dissent, “A murderer who kills his victim by throwing a bomb that injures dozens of bystanders should be punished more severely than one who harms no one other than his intended victim.” The fact that Philip Morris hurt so many other smokers along with Jesse Williams is surely relevant to its punishment.

The court in recent years has become increasingly activist when it comes to defending the rights of corporations by striking down punitive damage awards. And yesterday’s ruling continues that trend. It expands the notion of due process. And it overturns the decisions of a jury and a state supreme court.

Unfortunately, the court has been far less activist when ordinary people seek protection or challenge their punishments. The ruling stands in particular contrast with the court’s 2003 decision that the Eighth Amendment’s ban on “cruel and unusual punishments” did not bar California, under its “three strikes” law, from sentencing a man to 50 years in prison for stealing $153.53 worth of videotapes. Yesterday’s decision is another disturbing sign that — as the current court reads the Constitution — powerful parties have more rights than regular people.

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2007/02/21 19:57 2007/02/21 19:57
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징벌적 손해배상 2

The New York Times



February 21, 2007

Justices Overturn $79.5 Million Tobacco Ruling

WASHINGTON, Feb. 20 — The Supreme Court on Tuesday overturned an Oregon jury’s award of $79.5 million in punitive damages against Philip Morris on the ground that jurors might have improperly calculated the figure to punish the cigarette maker for the harm it caused to smokers other than the man whose widow brought the case.

Although of limited scope, the 5 to 4 decision was a victory for the cigarette industry and for other corporate defendants whose products or behavior have caused widespread injury and who are thus likely to face skeptical or hostile juries.

The court was tightly focused on a question of procedural fairness: the need, in the majority’s view, to make sure that juries do not punish defendants for harm to others who are not parties to the lawsuit, or who even may have brought their own lawsuits previously and lost. “The due process clause prohibits a state’s inflicting punishment for harm caused strangers to the litigation,” Justice Stephen G. Breyer wrote in the majority opinion.

The court thus steered clear of the issue that most animates the debate over punitive damages: whether a punitive damage award that is much greater than the compensatory damages awarded by the jury can be considered unconstitutionally excessive. In this case, the ratio of punitive to compensatory damages was nearly 100 to one, but the court did not address the issue despite Philip Morris having raised it.

What happens next in this lawsuit may provide an early indication of the practical significance of the court’s ruling, as far as it went. The case now goes back to the Oregon Supreme Court, which has options ranging from reinstating the award to ordering a new trial. The original trial of the suit, brought by Mayola Williams, whose husband, Jesse, died of lung cancer after smoking two packs of Marlboros a day for 45 years, took place in 1999.

Mrs. Williams’s lawyer asked the jury to “think about how many other Jesse Williams in the last 40 years in the state of Oregon there have been.” The trial judge rejected a request by Philip Morris for an instruction warning the jury that “you are not to punish the defendant for the impact of its alleged misconduct on other persons.”

The Supreme Court on Tuesday did not require any particular wording in the form of a jury instruction. But Justice Breyer said that state judicial systems had a constitutional obligation to avoid “an unreasonable and unnecessary risk” that a jury would calculate the punitive damages based on harm to those not before the court.

The issue is complicated because, under the Supreme Court’s precedents, the “reprehensibility” of a defendant’s conduct is a factor that a jury is explicitly directed to consider in setting a punitive damages award. Justice Breyer acknowledged that harm to others can serve as a measure of reprehensibility, and that jurors will necessarily consider it. That was appropriate, he said, as long as courts “provide some form of protection” against jurors seeking “to punish the defendant for having caused injury to others.”

Sheila L. Birnbaum, a punitive damages specialist with Skadden, Arps, Slate, Meagher & Flom in New York, said the court was requiring jurors to “unring the bell” in a way that might prove difficult. “It’s very hard for jurors to disregard something they have heard,” she said.

Ms. Birnbaum, who successfully argued the most recent punitive damages case heard by the court before this one, on behalf of the State Farm insurance company in 2003, added that the decision was nonetheless “a step in the right direction” for corporate defendants because it would require trial judges and appellate courts to be attentive to the guidance that jurors receive.

Justice Breyer’s majority opinion, Philip Morris USA v. Williams, No. 05-1256, was joined by Chief Justice John G. Roberts Jr. and by Justices Anthony M. Kennedy, David H. Souter and Samuel A. Alito Jr. The dissenters were Justices John Paul Stevens, Ruth Bader Ginsburg, Antonin Scalia and Clarence Thomas.

It is typical for the court’s punitive damages rulings to cut across the usual ideological lines. In fact, the only real surprise was the vote by Justice Stevens, who had previously voted with the court’s majority to support limits on punitive damages.

In his dissenting opinion, Justice Stevens said he was “firmly convinced” that those earlier decisions were correct. But he said that “in my view the Oregon Supreme Court faithfully applied the reasoning in those opinions to the egregious facts disclosed by this record.” He said that “no procedural error even arguably justifying reversal occurred at the trial in this case.”

The court’s two new members, Chief Justice Roberts and Justice Alito, succeeded justices who supported limits on punitive damages, as they themselves did on Tuesday. But the narrowness of the court’s opinion and its avoidance of the excessiveness issue raised the question of whether, beneath the surface stability, the court’s polarity may have shifted.

In the State Farm case that Ms. Birnbaum argued four years ago, the court overturned a punitive damage award that was 145 times greater than the compensatory award. “Few awards exceeding a single-digit ratio” would meet the test of due process, Justice Kennedy wrote then for a 6-to-3 majority, a strong statement that made the court’s failure on Tuesday to address the 97 to one ratio in the Philip Morris case all the more curious. (The Oregon jury awarded Mrs. Williams $821,000 in compensatory damages.)

To hold that a damage award is unconstitutionally excessive requires the court to accept the argument that the due process clause contains a substantive component as well as a procedural one. It is on this basis that Justices Scalia and Thomas, who do not accept the modern doctrine of “substantive due process,” have dissented from the leading punitive damages decisions.

It is not implausible that Chief Justice Roberts and Justice Alito might share that view. Whether they do might become apparent if the Oregon Supreme Court reinstates the punitive damages verdict and Philip Morris comes back before the justices with a new appeal based on excessiveness.

The dissenters tweaked the majority for what they characterized as judicial activism and refusal to give state courts proper respect. “I would accord more respectful treatment to the proceedings and disposition of state courts that sought diligently to adhere to our changing, less than crystalline precedent,” Justice Ginsburg said in an opinion that Justices Scalia and Thomas also signed.

In a prepared statement, William S. Ohlemeyer, vice president and associate general counsel of Philip Morris, a unit of Altria, said the decision would give the company “an opportunity to fully and fairly defend itself in this and other cases.”

Market analysts generally viewed the decision as positive for industry. “Despite a more narrow opinion than we had hoped for, we view the ruling as a positive as it effectively limits the size of punitive damages in future cases,” said Christopher R. Growe, an analyst at A. G. Edwards & Sons, in a note to investors.

In recent months, investors have pushed Altria’s stock to record highs, in part because they believe the litigation environment against tobacco companies has significantly improved. On Tuesday, Altria’s stock closed at $85.95, down 25 cents.

Andrew Martin contributed reporting.

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2007/02/21 19:55 2007/02/21 19:55
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징벌적 손해배상

The New York Times



February 19, 2007
Sidebar

When Lawyers and Juries Mete Out Punishment

The better lawyer often wins. That truism does not offend our sense of justice, except in extreme cases, possibly because the problem is built into the adversary system.

But what about the extreme case? No, this is not a column about, say, a death row inmate whose lawyer slept through the trial. It is about the Ford Motor Company, whose hapless lawyer helped it lose a verdict for more than a third of a billion dollars in 2004.

Consider, for instance, how the lawyer, Anthony E. Sonnett, concluded his cross-examination of an important witness. His last question was a legal classic that has echoed through the appeal of the case, which recently arrived on the Supreme Court’s doorstep and may help redefine the way punitive damages are administered.

The witness was Barry Wilson, whose wife, Benetta, was paralyzed when her Ford Explorer rolled over. Mr. Wilson had cut back on his work hours to care for her. He showered her and catheterized her, and he woke several times each night to move her, to avoid bedsores.

Mr. Sonnett saw an opening, and he ended his examination with a flourish.

“The silver lining,” he said to Mr. Wilson, “to the extent that there could be one, it has brought you and Benetta and the family closer together?”

Mr. Wilson did not see the upside. “I don’t think it’s a benefit or a plus in any way,” he said.

It was the silver-lining question, an appeals court later ruled, that “may well have inflamed the passions of the jury.” In their lawsuit, the couple said Ford had made the Explorer dangerously prone to rolling over and then outfitted it with a weak roof. The jury agreed, hitting Ford twice. First, it awarded $123 million to compensate the Wilsons. Benetta Buell-Wilson had been an athletic graduate student, and now she lives in constant and increasing pain.

“This is a big, big, big verdict,” Mr. Sonnett pleaded in trying to avoid punitive damages in the trial’s second phase. “I don’t think you can send us a bigger message than we have got.”

The jury disagreed, adding $246 million in punitive damages to the message.

Compensatory damages compensate: they pay for medical expenses, lost wages and “pain and suffering.” They are meant to make the plaintiff whole. Putting a price on Ms. Buell-Wilson’s suffering is impossible, and a jury is as capable as anyone else in trying.

Punitive damages, by contrast, are by definition the extreme case. They are meant to punish and deter defendants who engage in extraordinary wrongdoing. They are similar in purpose to criminal fines, and they can be a windfall to the plaintiffs.

In a filing last month, Ford asked the Supreme Court to hear the case, saying the punitive-damages award, which lower courts reduced to $55 million, violated its right to due process. Ford said that it had complied with safety regulations and industry standards and that it had no fair warning that its conduct could subject it to any punishment, much less an astronomical one.

The usual play after a big punitive award is to attack its size, and the Supreme Court has started to limit the ratio of compensatory awards to punitive ones. The Ford petition asks more fundamental questions about the very concept of punitive damages.

Before the Wilsons’ case, there had been 11 other trials of cases challenging the safety of the Explorer. Ford won all 11. But punitive damages can turn into a sort of reverse lottery, if not Russian roulette. You need to lose only once to get killed.

Most countries do not use civil cases to punish wrongdoing. Nor do they entrust juries to make cost-benefit policy judgments about how much safety we want. In the United States, we deputize plaintiffs’ lawyers and juries to supplement government safety regulators and law enforcement officials.

The Wilsons’ case suggests that a lot can turn on little things, including flat-footed lawyers and stupid questions. That may be fine for compensation, which is at least supposedly tailored to the particular plaintiffs and their injuries. But damages meant to vindicate society’s general interests in retribution and safety deserve a more sober assessment.

Mr. Sonnett got into one last bit of trouble in the second phase of the trial, when he was trying to avoid a punitive award. He was under considerable stress. His client had already lost more than $100 million, and his wife had just given birth to their first child.

“It’s impossible not to be angry at Ford, Ford Motor Company,” Mr. Sonnett said, according to the court transcript, “for what decisions that in marketing and selling this Ford Explorer it knowingly put a defective product out on the market.”

Plaintiffs’ lawyers immediately crowed that they would use the statement as an admission of fault in other suits against Ford. At the time, Mr. Sonnett said he had been misquoted by the court reporter. In an e-mail message the other day, he said that Ford had asked him to stop talking about the case.

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2007/02/20 11:31 2007/02/20 11:31
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징벌적 손해배상

일반적으로 징벌적 손해배상이란, 원고의 재산상의 손해를 보전해 주기 위한 목적이 아니라 피고나 다른 비슷한 사람이 원고에게 동일한 손해를 가하는 것을 막기 위한 목적의 손해배상을 말한다.

징벌적 손해배상은 특정한 경우에만 인정되는데, 피고의 행위가 법이 허용할 수 없을 만큼 사회에 해악을 끼치는 것이거나 그 피해 정도가 극심해서 재산상 손해만으로는 보전되기 힘들 경우 등에 인정된다.

징벌적 손해배상은 피고에게 엄청난 부담을 주는 것이므로 적법절차에 따른 재판 과정이 준수되는 것을 조건으로 하여야만 인정될 수 있다.

Generally, punitive damages, are
damages not awarded in order to compensate the plaintiff, but in order to reform or deter the defendant and similar persons from pursuing a course of action such as that which damaged the plaintiff.

Punitive damages are awarded only in special cases where conduct was egregiously invidious, and are over and above the amount of
compensatory damages.

Great judicial restraint is expected to be exercised in their application. In the
United States punitive damages awards are subject to the limitations imposed by the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution.(by Wikidepia)

미국 대법원이 징벌적 손해배상을 인정하려는데 주저하는 모습을 최근에 보이고 있는데 대한 비판 기사를 소개해 본다.

Fairness for the powerful

Adam Cohen The New York Times

Published: October 30, 2006
NEW YORK
When Jesse Williams died of lung cancer, his widow sued Philip Morris, claiming it misled him about the danger of smoking. A jury agreed, warding her $79.5 million in punitive damages. The Oregon Supreme Court affirmed the award, calling Philip Morris' decades of deception "extraordinarily reprehensible."

The U.S. Supreme Court is now hearing arguments in the case, and the broader business community has joined Philip Morris in asking the court to sharply reduce the damages.

They are relying on a controversial line of recent cases in which the court struck down punitive damages awards that it deemed "excessive."

The Philip Morris case will tell us a lot about the John Roberts court, which may be the most pro-business court in decades. It will reveal whether the court will continue on its current disturbing path of giving corporations more protection from excessive punishment than it gives to people.

The court began its punitive damages crusade in 1996, in the case of a man who sued BMW for failing to tell him that the new car he bought had been damaged and repainted. The man won $4,000 in compensatory damages and $2 million in punitive damages. The Supreme Court set aside the punitive damages award as so "grossly excessive" that it violated due process. But the court declined to lay out any clear standards for when an award was too high.
In 2003, in a fraud case against State Farm Insurance by a policyholder, the court struck down $145 million in punitive damages. It held that the award was excessive since compensatory damages were only $1 million. That 145-1 ratio was unacceptable: due process generally required, the court held, a "single-digit ratio" between punitive and compensatory damages.

These rulings are "activist" by all the traditional measures. They take a vaguely worded constitutional guarantee - that no one shall be deprived of property without "due process of law" - and translate it into a right that is not at all apparent from the words' plain meaning. They attempt to turn the guarantee into a precise mathematical formula. And they substitute the judges' worldview for that of elected officials.

All these activist decisions relied on the votes of conservative justices who are supposedly skeptical of "judge-made" rights.

The contrast with the court's decisions on punishment of human wrongdoers is stark. In 2003, the court considered the sad case of Leandro Andrade, a father of three who was given a minimum of 50 years in prison under California's tough "three strikes" sentencing law for shoplifting $153.53 worth of video tapes. The Supreme Court could find nothing excessive in the punishment.
Based on the Constitution's words, Andrade certainly had a stronger case than BMW or State Farm. The Eighth Amendment expressly bars "cruel and unusual punishments," which might reasonably be interpreted to cover imprisoning a man from age 37 to 87 for stealing $153.53. The companies claimed only that the punitive damages awards violated their "due process" rights, a far greater textual stretch.

Whatever the court decides in the current case, it should develop a constitutional theory of excessive punishment that covers human and corporate wrongdoers equally, as some legal experts have urged. The current doctrines make no sense.

Conservatives like to talk about the "framers' intent." The framers were deeply concerned about excessive punishment, and set forth their views on it in the Eighth Amendment. They would be perplexed that the high court they created believes their Constitution permits a father to remain in jail for 50 years for petty theft, but does not tolerate taking a fraction of the wealth from a company that kills people.

Adam Cohen is a member of the New York Times editorial board.

Posted by Min H.

2006/10/31 11:38 2006/10/31 11:38
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