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New briefing on tobacco case? Maybe

After spending nearly a full hour Wednesday morning on the minutiae of jury instructions and Oregon state court precedents, the Supreme Court began thinking about a bolder approach: should it start over with a new round of briefing in the major new tobacco punitive damages case?  That was the suggestion thrown out by Chief Justice John G. Roberts, Jr., as the Court was about to wind up its hearing on Philip Morris USA v. Williams (07-1216).  The idea, perhaps, will be explored further when the Court meets in private on Friday to discuss what to do about the case.

Roberts’ suggestion came after three of his colleagues — Justice David H. Souter, doing so fervently, and Justices Anthony M. Kennedy and Stephen G. Breyer, somewhat obliquely — raised a concern that the Court needed a way to assure that when it makes a constitutional ruling, lower courts will not nullify it by coming up with a procedural escape hatch.

That is a concern that Philip Morris has been trying hard to stoke in challenging — for the third time in the Supreme Court — a $79.5 million punitive damages verdict in favor of a smoker’s widow, Mayola Williams.  The tobacco company has argued that the Oregon Supreme Court “defied” a 2007 Supreme Court ruling telling the state tribunal to reconsider that verdict by applying a newly minted constitutional limitation. The state court did not do so, instead upholding the verdict afresh under a state procedural rule for jury instructions.

The state court’s response was the main focus of most of Wednesday’s argument.  The Court, in granting review of Philip Morris’ new challenge last June, had agreed to hear only the validity of that response by the state court. The Court did not grant review on a second issue the company had put forth: whether the $79.5 million verdict was just too high, under Supreme Court constitutional limitations.

But the Chief Justice, reacting to the way the hearing unfolded in late stages on Wednesday, suggested that the Court might now grant review of the second issue, and order new briefing and argument on it (something that still could be accomplished this Term). That, Roberts said, would be one way the Court could avoid a ruling that might encourage state courts to defy constitutional rulings.  In short, the Court would be addressing the constitutionality of the $79.5 million verdict on “excessiveness” grounds rather than on the refusal-to-obey issue that Philip Morris had also raised. (That, incidentally, also would have the virtue of the Court not having to say unpleasant things about the Oregon Supreme Court.)

Both lawyers in the case — Stephen M. Shapiro for Philip Morris, Robert S. Peck for Mrs. Williams — did not embrace the idea with enthusiasm, but both conceded that would be an alternative the Court could pursue.  No member of the Court publicly opposed the idea, although Justice Ruth Bader Ginsburg — who had voted earlier to uphold the $79.5 million verdict — seemed a bit hesitant.

The Chief Justice’s late suggestion marked a dramatic shift in the atmospherics of the hearing, because the Court up to that point had been focused mainly on reexamining the way the Oregon trial judge and appeals courts had handled the jury instruction issue that lies at the core of Philip Morris’ challenge. The company had wanted the jurors told that they could not impose punitive damages for conduct for anyone not a party to the case, but the trial court refused to do so.

In minute detail, the Justices went over the exchanges the lawyers had with the trial judge about that issue, and Justice Breyer, in particular, dwelled at length on just what some 28 Oregon state court precedents had to say on that question.  With that as the focus, the hearing did not go well for Philip Morris’ Shapiro — even from the beginning, when Justice Souter told Shapiro that he had “a steep hill to climb” to keep Mrs. Williams from a chance to raise the procedural rule as she sought to sustain the verdict in her favor.

The argument also covered the issue of whether the state court had the authority to shift to a state law-based ground for affirming that verdict.  Shapiro suggested that the adequacy of its state law explanation was a matter of federal law, and urged the Court to find that the state Supreme Court had not shown its reliance was a proper alternative to facing the constitutional question.  The Justices’ questions and comments, however, suggested that they did not regard the state court as having acted in some deliberately defiant way.

Peck, Mrs. Williams’ counsel, also spent the bulk of his time on the procedural issue, stoutly defending its long pedigree and routine application in Oregon.  He seemed to have difficulty mainly with Justice Breyer and those 28 state-court precedents that bore on the issue.  Those, Breyer said, were not very clear authority.

It was Breyer who, well into Peck’s side of the argument, began exploring the implications of a constitutional ruling by the Court that might get undermined by a state court refusing to follow it.  The Justice wondered about how the Court could ensure, say, in a death penalty case, that a lower court would apply what the Court had decided.

As Peck engaged in an exchange with Breyer, Justice Antonin Scalia jumped in, asking whether the lawyer was claiming that the Supreme Court had been “in error” in ordering the state Supreme Court to apply the new constitutional limitation laid down in the 2007 decision by the Justices.  “Is it up to a state court,” Scalia pressed, “to sit in judgment about whether our remand orders are in error, or not?”

Peck said the mandate was not wrong, but contended that the Court had left room for the state court to do as it did in insisting on its procedural bar.  But, Scalia countered, “that’s not what it says…the Oregon Supreme Court applied the wrong constitutional standard…That has nothing to do with the issue we have been discussing this morning.”

It was at that point that Justice Souter asked: “How do we guard against making constitutional decisions that are simply going to be nullified by some clever device raising a procedural issue or an issue of state law issue when the case goes back?  Is there any  way to assure against, in effect, a bad faith response to our decision…?”  Perhaps, Souter said, the Court might have to tell state courts how they should arrange their procedures for review following a remand, in order to assure that a constitutional ruling gets followed and that no state law issue are left dangling to be raised later.

Peck resisted that point, but then Justice Kennedy said that, “we do it all the time” in criminal cases “because of the importance of the constitutional right.”  When Peck said that the Court could rely on the good faith of state courts in applying their procedural rules, Kennedy shot back: “But it serves very little interest.”

That apparently provided the impetus that led the Chief Justice to comment that “there’s another way to protect our constitutional authority in this case…If we have some concern, if there is something malodorous about the fact that the Oregon Supreme Court waited until the last minute to come up with this rule that was before it all the time…, we can avoid having to address what we do in…that consideration, simply by saying: ‘Look, we are going to go ahead with the questions presented’ “ — that is, review would be granted on the question of the excessiveness of the Philip Morris verdict.

Although Peck said the issue had been briefed in the case’s previous filings, and had at least been discussed briefly in the 2007 oral argument, the Chief Justice ultimately suggested that the way to proceed would be to grant review of that issue and then have “normal briefing” and argument.