Tuesday, February 20, 2007

Court Rewards Corporate Murder

Lest anyone hold out hope that the current Supreme Court of the United States, headed by Justice John "Pretty Lips" Roberts is going to be a patrician avuncular court, let him or her read this verdict:
WASHINGTON (Reuters) - A closely divided Supreme Court on Tuesday overturned a $79.5 million punitive damages award won by the widow of a longtime smoker against Philip Morris.

By a 5-4 vote, the high court ruled the huge damages award was unconstitutional because it was intended to punish the tobacco company for harming not just the plaintiff but other smokers as well.

The court ruled that the company, a unit of Altria Group Inc., could not be punished for harm to other smokers in a case involving Mayola Williams, an Oregon woman whose husband died of lung cancer in 1997 after smoking for more than 40 years.
For more than 40 years, it's also been uncovered that cigarettes are the only product that, when used as directed, will kill you.

Not "can". Not "might". "Will".

So if there was ever a case that cried out for punitive damages, it was this one.

You may recall this was the case where the victim smoked for forty years because the cigarette companies fraudulently and knowingly misled people about the health risks of cigarettes. This was the first case that was successful after the Congress of the United States grilled tobacco executives and uncovered numerous internal documents revealing that, in fact, cigarette companies knowingly and willfully published misleading and even illegal information regarding the dangers of smoking.

Ergo, it seems clear to me that, given a reprehensible and illicit pattern of behavior bordering on the criminal, a criminally punitive damage award is in order.

Not according to a very bizarre coalition of moderates and conservatives on the Court, however, who pointed out that the Oregon award was made in large part to punish a defendant for harming those who are not parties to the lawsuit, e.g. other Oregonians who smoke.

The dissent is where the truth really lies:
Ginsburg in her dissent cited "abundant evidence" of the potential harm the company's conduct caused. Stevens said he saw no reason why a wrongdoer should not be punished for harming persons who are not parties before the court.
Which I believe it true. If, say, General Electric pollutes nearly an entire county of upstate New York, say, Love Canal, then everyone in that county PLUS the surrounding counties, suffers.

Likewise, when a tobacco company puts out a deadly product then lies about its effects, those lies don't just harm that smoker: his family, friends, co-workers, fellow commuters, all have inhaled his second-hand smoke, but not enough to warrant a class action suit. There are other costs to the community that cannot possibly be accurately measaured, and yet are part of the ultimate cost of the lies and deceptions of the product in question, it's manufacturer and distributor.

This is a shameful example of how corporations in America have the government in their back pockets.

For the full year 2005, cigarette shipment volume for Philip Morris International Inc. (PMI), Altria Group, Inc.'s international tobacco business, increased 5.7% to 804.5 billion units. Widespread volume gains in many markets, particularly Egypt, France, Mexico, the Philippines, Russia, Thailand, Turkey and Ukraine, coupled with acquisitions in Indonesia and Colombia, were partially offset by lower shipments in the EU. Excluding the impact of acquisitions, PMI's cigarette shipment volume increased 0.7% versus 2004. PMI's total tobacco volume, which included 7.1 billion cigarette equivalent units of other tobacco products (OTPs), grew 6.1% versus the prior year, and 1.2% excluding acquisitions.

Operating companies income rose 19.2% to $7.8 billion due primarily to higher pricing, as well as the impact of acquisitions of $341 million, positive currency of $331 million, higher income from the return of the Marlboro license in Japan, the impact of a one-time inventory sale in Italy and a favorable comparison with 2004 when PMI recorded a $250 million charge for the E.C. agreement. These were partially offset by unfavorable volume/mix, higher R&D, manufacturing, distribution, trade and selling expenses and higher asset impairment and exit costs.