Punitive damages and excessive punishment
Next week the Supreme Court will hear Philip Morris USA v. Williams, which is yet another challenge to a punitive damages award that a corporation complains is excessive. Today, in this great piece in the the New York Times, Adam Cohen astutely spotlights that the case 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.” Here’s a big part of the last section of Cohen’s powerful commentary:
These rulings [in BWM and State Farm limiting punitive damages] are remarkably “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. If Oregonians believe punitive damages are too high, their legislature can impose a legal cap.
These activist decisions, which give corporations valuable constitutional privileges, relied on the votes of conservative justices, who are supposedly skeptical of “judge-made” rights. Justices Sandra Day O’Connor and Anthony Kennedy provided key votes for BMW. Justice Kennedy wrote the State Farm “single-digit ratio” opinion, and Justice O’Connor and former Chief Justice William Rehnquist joined it.
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 videotapes from Kmart. He argued that his prison term violated the Eighth Amendment. The Supreme Court — in a majority joined by Justices O’Connor and Kennedy and Chief Justice Rehnquist — could find nothing excessive in the punishment.
Based on the Constitution’s words, Mr. 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.
On the issue of what is “excessive” punishment, Mr. Andrade’s claim is also stronger. It is hard to see how it is excessive to make Philip Morris, whose market capitalization is $166 billion, pay a mere $79.5 million for “extraordinarily reprehensive” and lethal conduct, but not excessive to make Mr. Andrade spend what is likely to be the entire second half of his life in prison for a petty theft.
The question of whether there should be constitutional limits on punitive damages has proved difficult to resolve, and it has caused divisions in both the court’s liberal and conservative blocs. (It is one of the very few issues in which John Paul Stevens votes with corporations and Antonin Scalia votes against them.) Whatever the court decides, it should develop a constitutional theory of excessive punishment that covers human and corporate wrongdoers equally, as the Duke Law School Professor Erwin Chemerinsky and others have urged.
The current doctrines make no sense, least of all by the standards of conservative constitutional interpretation. 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.