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Supreme Court of the United States




There is no dispute that the punitive damages award that was upheld by the Oregon Supreme Court in this case satisfies the most rigorous law and economic standards for rationality. The Court need not credit the analysis of the undersigned amici on this score; the fact that Petitioner’s own amici – most notably law and economics scholars A. Mitchell Polinsky and Steven Shavell – have been unable to find anything economically amiss in the decision below speaks volumes. To be sure, Professors Polinsky and Shavell have filed an amicus brief in support of Philip Morris in this case, just as they filed one in support of the Petitioner in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003).

Significantly, however, unlike the Polinsky-Shavell brief in State Farm, which repeatedly asserted that the Utah Supreme Court’s decision in that case was fundamentally “irrational,” Professors Polinsky and Shavell have found nothing to criticize about the decision below, nothing at all. Instead of criticizing that decision as irrational and the award upheld by the court below as excessive and as an example of overdeterrence, the only thing Professors Polinsky and Shavell find fault with in this case are the arguments advanced by plaintiff’s counsel – which they concede were “eschewed” by the court below – regarding the use of “Philip Morris’s wealth as a basis for upholding the punitive damages.” Thus Professors Polinsky and Shavell state that

"Although the Oregon Supreme Court eschewed reliance on Philip Morris’ wealth as a basis for upholding the punitive damages, the plaintiff consistently relied on it in arguing that the punitive award was not excessive. Because she can be expected to do so again in this Court and because the issue of the proper role of corporate financial condition [sic] is an important and recurring one, amici believe that addressing that issue may be of assistance to the Court."

Amici agree with Professors Polinsky and Shavell that the question of what role a defendant’s wealth should play in calculating punitive damages awards is both an important and a recurrent problem. Amici further agree that it would be inappropriate for a court to rely solely on a tortfeasor’s wealth in determining the appropriate size of a punitive damages award. Nevertheless, inasmuch as the Oregon Supreme Court did not rely on Philip Morris’s wealth, to any degree, in undertaking its de novo review of the jury’s award of punitive damages in this case, Professors Polinsky and Shavell have not identified and we have not found any reason in law and economics theory and practice to overturn the decision below.



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