Saturday, March 03, 2007

US Supreme Court Vacates Absurd Punitive Damages Award in Oregon Tobacco Case : What American Law Should Learn from European Law

Perhaps Phillip Morris USA v. Williams, No. 05-1256 (U.S. Feb. 20, 2007) is the turning point. After changes in style, perhaps we have changes in substance.

Perhaps Phillip Morris USA v. Williams is the case that marks the hoped-for change from the hopelessly antiquated SCOTUS envisioned by such outdated theoreticians as Marjorie Cohn.

FINALLY, at long last, the United States Supreme Court for the first time in decades is saying that "enough is enough" of the absurd money judgments which pervade the American legal system and which have made American jurisprudence the laughing-stock of the legal world.

As written by Professor Stephen B. Presser at the Manhattan Institute for Policy Research:

"As the twenty-first century unfolds and commerce becomes more and more globalized, there is a need to harmonize the law of products liability across nations. So far, unfortunately, efforts at harmonization have too often been in the direction of reproducing the costly features of United States tort doctrines — doctrines that have imposed spiraling costs on American manufacturers. [emphasis added]

Even though the European Community recently altered its tort doctrines from a pure fault-based system to strict products liability, there are features of the European legal system that lessen the effects of even strict liability. Consequently, European courts are much less likely to hand out unpredictable and disproportionate damage judgments—unlike American courts, where ruinous verdicts are a potential in too many lawsuits.
[emphasis added]

Europe has escaped an American style litigation explosion by erecting barriers to excessive litigation. Such barriers include:

* Absence of contingent fees
* Loser pays winner’s attorney fees
* Discouragement of massive discovery filings
* Lower damage judgments
* Absence of punitive damages
* Non-use of juries in civil cases
* Lower expectations of damages
[emphasis added]

Unless similar barriers to excessive litigation are created in the U.S., American companies face an ongoing competitive disadvantage relative to European manufacturers who operate in a more predictable, less costly, and less litigious legal environment. In one case, probably typical, Dow Chemical Corporation estimates that it spends 100 times as much on litigation costs in the U.S. as opposed to Europe.

America prides itself on being the world’s pre-eminent economic superpower, but if American economic preeminence is to survive in a highly competitive global marketplace, there must be changes in the American legal system. We should seek to reproduce here some of the features of the European system of litigation. It is time, in short, to give American firms the same legal protections that European firms enjoy, rather than waiting for Europeans to harmonize their legal systems with their aberrant American cousins.
" [emphasis added]

As political centrists, we have been waiting for over a year now for a sign from the United States Supreme Court under new Chief Justice John Roberts and new Justice Samuel Alito that things are going to turn for the better in America's highest court.

Phillip Morris USA v. Williams gives us that hope. Absurd punitive damages judgments will be fewer as a result of this absolutely correct decision by the new Roberts-led United States Supreme Court.

It is a court burdened by the legacy of an ineffectual and inconsistent Rehnquist Court, whose main mark is "unfinished business" in a legal system left in turmoil, lagging far behind modern technological developments and unprepared judicially for the digital age. As noted by Joan Biskupic in USA Today:

"Rehnquist helped transform a bench preoccupied with the rights of the poor and disenfranchised into one that usually prefers to leave society's problems to elected legislators."

That conservative, hands-off Rehnquist strategy backfired for over three decades as the legislative qualifications of members of the United States Congress constantly dropped, with the percentage of law-trained representatives becoming ever smaller and necessary legislation becoming rarer and rarer. Additionally, the technological competence that is required in the modern age is simply not present in Congress, either in the legislators or in their staff:

"The United States Congress is increasingly called upon to legislate on a host of technologically complex matters. Unfortunately, relatively few of the 535 Senators and Representatives holding seats in Congress have technical backgrounds or have staff with technical qualifications."

We hold out little hope for the US Congress to improve on this score, since the populist popular election of Congressmen and Congresswomen by a largely uninformed and ignorant public - conditioned to stupidity by soap box television and news media geared to the lowest common denominator - will over the years inevitably lead to increasingly less competent people filling Congressional seats. (The decline of empires in this regard is thus quasi pre-programmed.)

Can the United States Supreme Court pick up the slack in the coming years?

What did the court decide in Williams? The US Supreme Court vacated the egregious punitive damages award in the Oregon tobacco case of Phillip Morris USA v. Williams, as Justice Breyer (age 68), who delivered the opinion of the Court, and Chief Justice Roberts (age 52) and Justices Kennedy (age 70), Souter (age 67) and Alito (age 56), joined in the 5-4 opinion. See here e.g. Robert Barnes at the Washington Post for details.

Justices Stevens (age 86), Ginsburg (age 74), Scalia (age 70) and Thomas dissented, none of these latter Justices apparently understanding the difference between civil and criminal law, and we can only hope that some of those Justices soon go into retirement. Justice John Paul Stevens will be 87 in April and he long ago should have retired. Justice Ginsburg turned 74 in March and Scalia is 70, but two centuries back in his constitutional originalist opinions. Except for Thomas, who often votes octogenerically with Scalia for reasons quagmired in past centuries, the opinions in this case again run pretty much along the lines of age, with the youngest Justices voting for the majority and the oldest Justices dissenting. We pointed to this age factor previously here at LawPundit as something which should be corrected in the future so that Justices and Judges face manadatory retirement age at 70. Period. No exceptions. They should go fishing and enjoy their retirement years rather than making critical decisions in a time which has passed them by.

For those of our readers who do not understand our tirades against the courts and the legislatures, we refer to a book by Professor Larry Kramer, a constitutional scholar who recently became the Dean of the Stanford Law School.

That book,
The People Themselves: Popular Constitutionalism and Judicial Review,New York, Oxford University Press, 2004, ISBN: 0-19-516918-2,
is reviewed in Law and Politics Book Review, Vol. 14 No.11 (November 2004), pp.916-926,
by John Michael Eden, Duke University School of Law,, and
by John Paul Ryan, The Education, Public Policy, and Marketing Group, Inc., where they write:

"It is in light of these baleful features of judicial supremacy that PEOPLE advocates an approach to judicial review that restricts the authority of the Supreme Court. This approach Kramer calls “departmental” or “coordinate” construction. The main virtue of coordinate construction is that the authoritativeness of any particular decision depends “on reactions from the other branches and, through them, from the public” (p.252). While it is unclear precisely how individual citizens are supposed to make their preferences known so that the “other branches” can check particular decisions rendered by the Court, PEOPLE suggests that citizens in the early republic, meaning the period from about 1760 to 1840, “had both a right and a responsibility to act when the ordinary legal process failed,” provided that those very citizens continue to “profess loyalty to the government” and follow the ordinary laws the legitimacy of which was not currently in dispute (p.25)."

We agree with Kramer on the fact that the authority of the Supreme Court (or any court for that matter) is constrained by their impression on us (and you, and everyone else) and our commentary at LawPundit proceeds in that spirit. When the courts commit great blunders and when things are not in order, we call them on it. And that is one element of what Kramer is talking about. WE are the governed, but to be governed in a democracy, we have to give our consent, and for our consent to exist, the RESULTS in the three government branches have to have some semblance of common sense and sanity. Otherewise, you have revolution - and that in part is what we are facing, for example, in the intellectual property law sector, where the institutions of government have been falling on their noses in regulating that area of law, so that a "free" law-free zone of sorts has developed which the law is going to have a difficult time in getting in its grasp again. Caveat emptor.

Crossposted to LawPundit.

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