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Oregon Court reverses $100M penalty over jury error

June 30, 2010

Oregon Supreme Court takes away $100 million in punitive damages due to flawed jury instruction
Ater Wynne
Oregon Law Firm

When the US Supreme Court decided Williams v. Philip Morris in 2007, it created a challenge for judges instructing juries on punitive damages.  The Due Process Clause prevents a jury from imposing punitive damages to punish a defendant directly for harm it causes to non-parties.  But a jury can consider evidence of harm to others when assessing the reprehensibility of defendant’s conduct as part of  setting the amount of punitive damages.  How to instruct juries to avoid improper use of evidence of harm to others is where the problem lies.

On Thursday, the Oregon Supreme Court in Schwarz v. Philip Morris vacated a $100 million punitive damages award in a tobacco products liability case because the jury instructions didn’t appropriately distinguish between proper and improper uses of evidence of harm to third parties.  The court determined that the Uniform Civil Jury Instruction in effect at the time of the 2002 trial could have led the jury to believe that it could “use evidence of harm to others in arriving at its punitive damages verdict” and lacked an explanation of the limits of permissible use.

The court remanded for a new trial limited to the question of punitive damages.

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