Scotus And Exxon-Mobil
Well, Scotus decided it yesterday, and, although the ruling is as clear as mud, it does not appear to have much, if any, applicability to the Exxon-Mobil case.
The Scotus case was Phillip Morris v. Williams, and the first clue that it was a weird case is the fact that Justice Ginsberg wrote a dissent in which Justices Scalia and Thomas fully joined.
In the case Phillip Morris made two arguments. First, that the 100-1 ration of punitive to compensatory damages was unconstitutionally high. Second, that the trial court should have instructed the jury that they could not punish Phillip Morris for harms caused to people who were not parties to the litigation.
What Phillip Morris, Exxon-Mobil and the entire business community really wanted was for Scotus to find in their favor on the first question by saying something like “the ratio can never be more than 2-1.” Sadly, for them, Scotus ignored the first question and ruled only on the second, agreeing with Phillip Morris that juries cannot punish defendants for harm caused to non-parties.
That sounds good, but then the court said juries could consider harms to non-parties when determining the “reprehensibility” of the defendant’s conduct. So they can’t punish them for the harm to non-parties, but they can consider the harm to the non-parties when deciding on the right amount of punitive damages. I’m not making this up:
Respondent argues that she is free to show harm to other victims because it is relevant to a different part of the punitive damages constitutional equation, namely, reprehensibility. That is to say, harm to others shows more reprehensible conduct. Philip Morris, in turn, does not deny that a plaintiff may show harm to others in order to demonstrate reprehensibility. Nor do we. Evidence of actual harm to nonparties can help to show that the conduct that harmed the plaintiff also posed a substantial risk of harm to the general public, and so was particularly reprehensible, although counsel may argue in a particular case that conduct resulting in no harm to others nonetheless posed a grave risk to the public, or the converse. Yet for the reasons given above, a jury may not go further than this and use a punitive damages verdict to punish a defendant directly on account of harms it is alleged to have visited on nonparties.
I pitty the fool who has to apply that “rule” to a hypothetical on a bar exam. And does the all-wise Scotus give would be lawyers, as well as plaintiff’s attorneys, corporate counsel, trial judges or juries, any help whatsoever in making this distinction real? Of course not:
How can we know whether a jury, in taking account of harm caused others under the rubric of reprehensibility, also seeks to punish the defendant for having caused injury to others? Our answer is that state courts cannot authorize procedures that create an unreasonable and unnecessary risk of any such confusion occurring. In articular, we believe that where the risk of that misunderstanding is a significant one because, for instance, of the sort of evidence that was introduced at trial or the kinds of argument the plaintiff made to the jury a court, upon request, must protect against that risk. Although the States have some flexibility to determine what kind of procedures they will implement, federal constitutional law obligates them to provide some form of protection in appropriate cases.
Shorter version: “We needed to decide this case, but we really did not want to drop the 2-1 ratio bomb, so we concocted this silly distinction. Not sure what it means. But you guys have nothing better to do than try to figure it out. Oh, and if you guess wrong, we’ll make you do it over again.” Wow. Good luck with that.
Anyway, I don’t think this is going to impact Exxon-Mobil.
First, so far as I know, the only damages in Exxon-Mobil involved harms to Alabama. I have not seen anything in the papers about arguments that the company’s actions could have damaged anyone else. So whether or not the jury punished them for injuries suffered by non-parties should not even be an issue.
Second, unless Exxon-Mobil had raised this objection in the trial court, they would not be able to argue it now. Appeals are limited to issues previously argued in the trial court. Given the weird nature of the Phillip Morris case, I would be very surprised if Exxon-Mobil had made a similar argument at the trial court. Maybe they did. But I doubt it.
So, I guess the delay is due either to the conspiracy theory or the subjective nature of punative damages review.