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The high court voted 5-4 to overturn the jury verdict, ruling it violated earlier high court decisions on limits to punitive damages. The decision could further curb the size of product liability awards against companies beyond new limits the high court outlined in its 2003 State Farm ruling.

Try to wrap your mind around this vote:

Chief Justice John Roberts Jr. and Justices Anthony Kennedy, David Souter and Samuel Alito were in the majority. Justices John Paul Stevens, Clarence Thomas, Ruth Bader Ginsburg and Antonin Scalia dissented.

In 2003 the Supreme Court put clear limits on punitive damages in State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U. S. 408, since then, questions have arisen about what the limits need to be. Today's decision in Philip Morris USA v. Williams gives us a better idea, and does it in such a way that I think we will see a major improvement in the uses of punitive damages in civil cases.

While I wasn't surprised that it was close, I was surprised to see the split and the justifications for the split. I'm not convinced that punitive damages are a good thing in our legal system at all, so I am clearly going to be sympathetic to the arguments of the majority, but I accept that we offer that. The question comes about how much they should be limited.

Within the past week, I made a comment that appellate courts always legislate. It's their job to do so because laws, no matter how carefully drafted, eventually conflict with other laws. This is one such time. Do courts and juries in civil trials have the right to impose an economic punishment that would be substantially greater than could ever be imposed if this were a criminal trial, while doing so with the civil trial standards? The decision isn't simple, but it is what has to happen in courts every day. It is the job of the courts to weigh rights and conflicting laws and strike the best balance they can. Not surprisingly, many of these decisions are split 5-4, very surprisingly this one took its five from the middle.

This isn't a terribly important case, but it is an excellent example of what courts face, why they always legislate from the bench, with a less politically charged question (though Altria is hardly a boy scout).

Originally posted to freelunch on Tue Feb 20, 2007 at 09:35 AM PST.

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