Clearing the Smoke from Philip Morris v. Williams: The Past, Present, and Future of Punitive Damages

In Philip Morris USA v. Williams, the Supreme Court held that the Constitution does not permit the imposition of punitive damages to Punish a defendant for harm caused to third parties. This Article critiques the reasoning, but seeks ultimately to vindicate the result, of that landmark decision. It argues that, although the Court's procedural due process analysis does not stand tip to scrutiny, punitive damages as punishment for third-party harm do indeed violate procedural due process, but for reasons far more profound than those offered by the Court. To reach that conclusion, the Article confronts the most basic and fundamental questions about punitive damages-questions that the Supreme Court has studiously avoided for more than a century: what, exactly, is the purpose of punitive damages, and how is it constitutional to impose them as a form of punishment in a judicial proceeding without affording the defendant the protection of the Constitution's criminal procedural safeguards? The Article argues that punitive damages arc properly conceptualized as a form of punishment for private wrongs: judicially sanctioned private revenge. As such, it makes both theoretical and doctrinal sense to impose them without affording the defendant criminal procedural protections, which arc necessitated only for the punishment of public wrongs on behalf of society. When, however, courts employ punitive damages as a form of punishment for public wrongs, they become a substitute for the criminal law, which thus makes an intolerable end run around the Bill of Rights. For that reason, Williams was ultimately correct that punitive damages must be limited to punishment for the harm done to the individual plaintiff, not the harm done to the general public. This reasoning suggests that contrary to the emerging conventional wisdom, Williams does not stand in the way of the imposition of nonpunitive extracompensatory damages of the type favored by law and economics scholars as a means of forcing the defendant to internalize the costs of its behavior in order to achieve optimal deterrence.