Case Title: Williams v. Philip Morris Inc.

Citation: 

Docket Number: S051805

State: oregon

Court: Oregon Supreme Court

Date: 2008-01-31T00:00:00Z

Document:
FILED: January 31, 2008
IN THE SUPREME COURT OF THE STATE OF OREGON
MAYOLA WILLIAMS,
Personal Representative of the
Estate of JESSE D. WILLIAMS, Deceased,
Respondent on Review,
v.
PHILIP MORRIS INCORPORATED,
nka PHILIP MORRIS USA INC.,
Petitioner on Review,
and
RJ REYNOLDS TOBACCO COMPANY,
FRED MEYER, INC.,
and PHILIP MORRIS COMPANIES, INC.,
Defendants.
(CC 9705-03957; CA A106791; SC S051805)
On remand from the United States Supreme Court.*
Argued and submitted September 11, 2007.
William F. Gary, of Harrang Long Gary Rudnick P.C., Eugene, argued the cause
and filed the brief for petitioner on review.  With him on the brief were Sharon A.
Rudnick, and James E. Mountain, Jr.
James S. Coon, of Swanson, Thomas & Coon, Portland, argued the cause and filed
the responses for respondent on review.  With him on the responses were Raymond F.
Thomas, Portland, Robert S. Peck, Center for Constitutional Litigation PC, Washington
D.C., William A. Gaylord, of Gaylord Eyerman Bradley PC, Portland, Charles S.
Tauman, Portland, Kathryn H. Clarke, Portland, and Maureen Leonard, Portland.
Steven C. Berman, of Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed
the brief for amicus curiae Oregon Trial Lawyers Association.  With him on the brief was
David F. Sugerman, Portland.
Janet A. Metcalf, Assistant Attorney General, Salem, filed the brief for amicus
curiae State of Oregon.  With her on the brief were Hardy Myers, Attorney General, and
Mary H. Williams, Solicitor General.
Before De Muniz, Chief Justice, and Gillette, Durham, Walters, and Linder,
Justices.**
GILLETTE, J.
The court's decision in Williams v. Philip Morris Inc., 340 Or 35, 127 P3d 1165
(2006), is adhered to.  The decision of the Court of Appeals is affirmed.  The judgment of
the circuit court is reversed, and the case is remanded to the circuit court for further
proceedings.
*Philip Williams USA v. Williams, 549 US ___, 127 S Ct 1057, 1065, 166 L Ed 2d
940 (2007). 
**Balmer and Kistler, JJ., did not participate in the consideration or decision of
this case.
GILLETTE, J.
This matter is before us on remand from the United States Supreme Court. 
Previously, this court held (among other things) that certain federal constitutional
limitations constraining punitive damage awards did not require a trial court to instruct a
jury that it was not to use an award of punitive damages to punish a defendant for harms
to persons who were not parties to the litigation.  Williams v. Philip Morris Inc., 340 Or
35, 51-54, 127 P3d 1165 (2006).  On certiorari, the United States Supreme Court vacated
that opinion and remanded.  Philip Morris USA v. Williams, 549 US ___, 127 S Ct 1057,
1065, 166 L Ed 2d 940 (2007).  The Court concluded that the Due Process Clause of the
Fourteenth Amendment prohibits the state from using punitive damages to punish for
harms to nonparties, and that states must prevent punitive damages from being misused in
that way.  549 US at ___, 127 S Ct at 1063, 1065.  On remand, we are called upon to
reconsider and reassess our earlier holding, which arose in the context of the trial court's
refusal to give a particular proposed jury instruction that defendant had requested. 
Having reconsidered and reassessed the issue, we now conclude that the proposed jury
instruction at issue here also was flawed for other reasons that we did not identify in our
former opinion.  We therefore reaffirm this court's prior conclusion that the trial court did
not err in refusing to give the instruction.  We otherwise reaffirm our prior opinion in all
respects.
Before we turn to the facts and procedural posture of this particular case,
we first summarize the legal context in which it arose.  The issues in this case revolve
around federal constitutional limitations on punitive damage awards.  Those
constitutional limitations derive from the Due Process Clause of the Fourteenth
Amendment.  See Philip Morris, 549 US at ___, 127 S Ct at 1060; State Farm Mut.
Automobile Ins. Co. v. Campbell, 538 US 408, 416, 123 S Ct 1513, 155 L Ed 2d 585
(2003); BMW of North America, Inc. v. Gore, 517 US 559, 562, 116 S Ct 1589, 134 L Ed
2d 809 (1996) (all illustrating proposition).  In those cases, the Supreme Court has held
that states legitimately may use punitive damages to punish and to deter wrongdoing by
defendants in tort cases.  E.g., Philip Morris, 549 US at ___, 127 S Ct at 1062.  However,
the Court also has held that the amount of punitive damages that a jury awards cannot be
arbitrary; the jury's discretion must be limited.  Otherwise, defendants will not have
adequate notice of potential sanctions, the punishments may be arbitrary, and large
punitive damage awards may force one State's policy choices onto other States.  Id.  For
those reasons, the United States Constitution requires both procedural and substantive
limits on punitive damage awards.  Id.
We turn to the facts of this case.  The plaintiff, Mayola Williams, is the
widow of Jesse Williams, a smoker who died of lung cancer.  Plaintiff, as personal
representative of Jesse Williams's estate, sued defendant Philip Morris Inc., asserting that
Philip Morris's fraud and negligence caused Jesse Williams's death.
The parties do not dispute this court's prior overview of the evidence
offered at trial, which was presented in the light most favorable to plaintiff.  See Williams,
340 Or at 38-43 (describing facts of case).  Briefly, the evidence permitted the jury to
conclude that Philip Morris and other tobacco companies had known of the carcinogenic
dangers of smoking since at least the 1950s.  Id. at 41.  Nevertheless, Philip Morris,
operating in conjunction with the rest of the tobacco industry, carried out an extensive
publicity campaign, from the 1950s into the 1990s, to convince the public that doubts
remained about whether smoking actually was dangerous to one's health.  Id. at 40.  No
legitimate controversy existed about whether smoking was harmful to health, although
Philip Morris and the rest of the tobacco industry strove to persuade the public otherwise. 
Id. at 41-42 (issuing press releases, cultivating opinion leaders, using advertising power to
seek favorable treatment from the media, etc.).  Philip Morris and the rest of the tobacco
industry also fostered the sham impression that they were themselves vigorously
investigating the health effects of smoking when, in actuality, their research institution
avoided doing research on that question.  Id. at 40-41.
The jury further could have concluded that this program of disinformation
succeeded in tricking Jesse Williams, who smoked from the early 1950s until he died in
1997.  He was highly addicted to nicotine, eventually smoking three packs of cigarettes --
primarily Philip Morris's Marlboro brand -- a day.  Id. at 38.  Williams resisted his
family's efforts to convince him to quit smoking, because he believed media
representations that the dangers of smoking were overstated or nonexistent.  See id. at 39
(presented with article about dangers of smoking, Williams had found "published
assertions that cigarette smoking was not dangerous"); id. at 42 (Williams rejected
arguments to quit, because "he had learned from watching television that smoking did not
cause lung cancer").  When Williams was diagnosed with lung cancer, however, he
asserted that the "cigarette people" had betrayed him by "lying" to him.  Id. at 39 (internal
quotation marks and citation omitted).  Williams was dead within six months after the
cancer was discovered.  Id.
Near the end of trial, the parties offered proposed jury instructions.  One
instruction submitted by Philip Morris was its proposed jury instruction No. 34, dealing
with punitive damages.  Among other things, that instruction provided:
"The size of any punishment should bear a reasonable relationship to
the harm caused to Jesse Williams by the defendant's punishable
misconduct.  Although you may consider the extent of harm suffered by
others in determining what that reasonable relationship is, you are not to
punish the defendant for the impact of its alleged misconduct on other
persons, who may bring lawsuits of their own in which other juries can
resolve their claims and award punitive damages for those harms, as such
other juries see fit."
(The complete text of the instruction, which was three-and-a-half pages long, is reprinted
as an appendix to this opinion).
The trial court analyzed the proposed jury instructions line-by-line with the
parties, during which time Philip Morris argued that the consider-but-don't-punish part of
proposed jury instruction No. 34 was needed to ensure that this plaintiff did not receive
punitive damages that should be awarded (if they were to be awarded at all) to other
plaintiffs.  After the trial court had reviewed Philip Morris's proposed jury instruction No.
34 together with plaintiff's proposed jury instruction on punitive damages -- the transcript
of that part of the trial court's analysis is 50 pages long -- the trial court declined to give
proposed jury instruction No. 34 as proffered. (1)

The jury returned a verdict for plaintiff.  The jury's unadjusted award was
$821,485.50 in compensatory damages and $79.5 million in punitive damages.  The trial
court, among other things, reduced the punitive damage award to $32 million.  Williams,
340 Or at 44.
Plaintiff and Philip Morris both appealed.  The Court of Appeals reversed
on plaintiff's appeal, concluding that the trial court should not have reduced the punitive
damages award.  Williams v. Philip Morris Inc., 182 Or App 44, 72, 48 P3d 824, adh'd to
on recons, 183 Or App 192, 51 P3d 670 (2002).  The Court of Appeals affirmed on Philip
Morris's cross-appeal, concluding that the trial court did not err in refusing to give Philip
Morris's proposed jury instruction No. 34.  182 Or App at 63-64.  This court denied
review.  Williams v. Philip Morris Inc., 335 Or 142, 61 P3d 938 (2002). 
The United States Supreme Court then granted certiorari, vacated the
judgment of the Court of Appeals, and remanded the case to the Court of Appeals for
further consideration in light of the Supreme Court's opinion in Campbell.  Philip Morris
USA Inc. v. Williams, 540 US 801, 124 S Ct 56, 157 L Ed 2d 12 (2003).  After an
extended analysis on remand, the Court of Appeals again reached the same conclusions
that it had reached in its earlier opinion.  Williams v. Philip Morris, Inc., 193 Or App 527,
530, 92 P3d 126 (2004).  Specifically, the court concluded that the $79.5 million punitive
damage award did not violate due process.  Id. at 563.  The court also rejected Philip
Morris's argument that the trial court erred in refusing to give proposed jury instruction
No. 34.  Id. at 555-57. 
This court then allowed defendant's petition for review, and affirmed the
decision of the Court of Appeals.  Williams, 340 Or at 38.  This court concluded, also
after an extensive analysis, that the $79.5 million punitive damage award comported with
federal due process.  Id. at 54-64.  As pertinent to the present proceeding, this court also
rejected Philip Morris's argument that the trial court should have given proposed jury
instruction No. 34.  Philip Morris had argued that Campbell prohibited courts from
"'adjudicat[ing] the merits of other parties' hypothetical claims against a defendant,'"
because of the "'possibility of multiple punitive damage awards for the same conduct[.]'" 
Id. at 52 (quoting Campbell, 538 US at 423).  This court concluded, however, that those
quotations from Campbell were taken out of context.  "The [full] quote referred only to
dissimilar acts and dissimilar claims; the Court intended to prohibit a punitive damage
award from becoming a referendum on a corporate defendant's general behavior as a
citizen."  Id. at 52 (emphasis in original).  But, this court stated, "evidence of similar
conduct against other parties may be relevant to a punitive damage award."  Id. at 53
(emphasis in original).  Because proposed jury instruction No. 34 therefore incorrectly
stated federal requirements of due process of law (at least as this court understood it), this
court concluded that the trial court did not err in refusing to give the instruction.  Id. at
53-54. (2)
On certiorari, the United States Supreme Court reached a different
conclusion.  Philip Morris USA, 549 US at ___, 127 S Ct at 1057 et seq.  The terms of the
Court's decision are important to understanding the issues presented to this court.  We
therefore review that opinion in some detail.
After reviewing the procedural history of the case, the Court summarized
the limits that due process imposes on punitive damages awards.  Id. at 1060-63. 
Although the United States Constitution requires both procedural and substantive limits
on punitive damage awards, id. at 1062, in this case the Court only addressed the
procedural limits.  Id. at 1063.  As the Court explained, "the Constitution's Due Process
Clause forbids a State to use a punitive damages award to punish a defendant for injury
that it inflicts upon nonparties or those whom they directly represent, i.e., injury that it
inflicts upon those who are, essentially, strangers to the litigation."  Id.  The Court
identified three reasons for that conclusion:  First, a defendant cannot effectively defend
against claims of injuries to nonparties.  Id.  Second, permitting a punitive damages award
to punish for harm to nonparties "would add a near standardless dimension to the punitive
damages equation," with speculation about the nonparties magnifying the risk of arbitrary
treatment.  Id.  And, third, the Court found that no authority existed to permit using
punitive damages to punish for harm to nonparties.  Id.
That said, the Court also went on to acknowledge that harm to nonparties
(to the extent that it exists) may play a role in the punitive damages calculus in the sense
that it is relevant to showing the degree of reprehensibility of a defendant's conduct.  Id.
at 1063-64.  The Court distinguished, however, between legitimate use of evidence of
such harm to establish reprehensibility and illegitimate use of that evidence to punish
defendant for harm it caused to nonparties.  As the Court explained:
"Evidence of actual harm to nonparties can help to show that the conduct
that harmed the plaintiff also posed a substantial risk of harm to the general
public, and so was particularly reprehensible * * *.  Yet for the reasons
given above, a jury may not go further than this and use a punitive damages
verdict to punish a defendant directly on account of harms it is alleged to
have visited on nonparties."
Id. at 1064.  The Court repeated the same point later in its opinion:
"We have explained why we believe the Due Process Clause prohibits a
State's inflicting punishment for harm caused strangers to the litigation.  At
the same time we recognize that conduct that risks harm to many is likely
more reprehensible than conduct that risks harm to only a few.  And a jury
consequently may take this fact into account in determining
reprehensibility."
127 S Ct at 1065 (citation omitted).
All in all, the Court concluded, the risks of unfairness inherent in punitive
damage awards mean that state courts must "provide assurance that juries are not asking
the wrong question, i.e., seeking, not simply to determine reprehensibility, but also to
punish for harm caused strangers."  Id. at 1064.  The Court noted that that distinction
raised practical difficulties for reviewing courts, difficulties that should be met by
appropriate procedures:
"How can we know whether a jury, in taking account of harm caused others
under the rubric of reprehensibility, also seeks to punish the defendant for
having caused injury to others?  Our answer is that state courts cannot
authorize procedures that create an unreasonable and unnecessary risk of
any such confusion occurring.  In particular, we believe that where the risk
of that misunderstanding is a significant one -- because, for instance, of the
sort of evidence that was introduced at trial or the kinds of argument the
plaintiff made to the jury -- a court, upon request, must protect against that
risk.  Although the States have some flexibility to determine what kind of
procedures they will implement, federal constitutional law obligates them to
provide some form of protection in appropriate cases."
Id. at 1065 (emphasis in original).
Having explained the general principles of law, the Court then applied those
principles to this case.  "The instruction that Philip Morris said the trial court should have
given distinguishes between using harm to others as part of the 'reasonable relationship'
equation (which it would allow) and using it directly as a basis for punishment."  Id. at
1064.  The Court reviewed this court's opinion in Williams, 340 Or at 35 et seq., and
concluded that that opinion permitted direct punishment for harm to others, without
limiting the use of such harm to determine reprehensibility.  127 S Ct at 1064-65.  For
that reason, the Court vacated this court's opinion and remanded for further proceedings. 
The Court specifically explained its conclusion, and the nature of the remand, as follows:
"As the preceding discussion makes clear, we believe that the
Oregon Supreme Court applied the wrong constitutional standard when
considering Philip Morris' appeal.  We remand this case so that the Oregon
Supreme Court can apply the standard we have set forth.  Because the
application of this standard may lead to the need for a new trial, or a change
in the level of the punitive damages award, we shall not consider whether
the award is constitutionally 'grossly excessive.'"
Id. at 1065 (emphasis added).
Under the Supreme Court's remand, then, it is our task to apply the
constitutional standard set by the Supreme Court in our consideration of the sole issue
raised by Philip Morris, viz., whether the trial court erred in refusing to give proposed jury
instruction No. 34. (3)  As we shall explain, however, there is a preliminary,
independent state law standard that we must consider, before we address the
constitutional standard that the United States Supreme Court has articulated.
A state court decision like the decision of the trial judge in this case to
refuse to give proposed jury instruction No. 34 may be affirmed, without reaching the
federal question, if there is an independent and adequate state ground for doing so.  See,
e.g., Osborne v. Ohio, 495 US 103, 123, 110 S Ct 1691, 109 L Ed 2d 98 (1990) (Ohio
Supreme Court, applying state law, had held that defendant had waived due process
challenge by failing to object to jury instructions at trial:  "We have no difficulty agreeing
with the State that [defendant's] counsel's failure to urge that the court instruct the jury on
scienter constitutes an independent and adequate state-law ground preventing us from
reaching [defendant's] due process contention on that point.").  We believe that this is
such a case, i.e., one resting on an independent and adequate state ground for affirming
the trial judge's ruling. (4)  
Under Oregon law, there are two different types of error respecting jury
instructions:  (1) error in the failure to give a proposed jury instruction, and (2) error in
the jury instructions that actually were given.  See Bennett v. Farmers Ins. Co., 332 Or
138, 152-53, 26 P3d 785 (2001) (so indicating).  As noted, Philip Morris failed to
preserve for our review any claim that the jury instructions actually given were erroneous. 
See Williams, 340 Or at 54 (unpreserved in Court of Appeals).  This case, therefore,
involves only the failure to give a proposed jury instruction.  
In Oregon, there is a well-understood standard governing claims of error
respecting a trial judge's refusal to give a proffered instruction:  An appellate court will
not reverse a trial court's refusal to give a proposed jury instruction, unless the proposed
instruction was "clear and correct in all respects, both in form and in substance, and * * *
altogether free from error."  Beglau v. Albertus, 272 Or 170, 179, 536 P2d 1251 (1975)
(citations omitted); see also Hernandez v. Barbo Machinery Co., 327 Or 99, 106, 957 P2d
147 (1998) ("there is no error [in refusing to give a proposed instruction] if the requested
instruction is not correct in all respects"); Owings v. Rose', 262 Or 247, 258, 497 P2d
1183 (1972) ("The trial court is not obliged to give an incorrect instruction, or to give the
correct portions of one which includes errors.").  The effect of that standard is to require
that a party to litigation take responsibility for the jury instructions that a trial court either
gives or refuses to give.  That means that, in the case of the refusal to give an instruction -- and we repeat that that is all that is at stake here -- the party seeking a particular
instruction must be correct respecting the rule of law stated in the instruction.  In this
case, the United States Supreme Court has opined that there is a risk that a jury will be
confused about how to take into account harm that the defendant may have caused to
others.  A trial court must, "upon request," protect against that risk.  But, as with any other
request for an instruction, the question that we first must address is whether the rest of
Philip Morris's requested instruction correctly stated Oregon law.  It is not enough, for
example, to offer a proposed instruction that is correct in part and erroneous in part,
leaving the trial court to solve the problem for itself.  Beglau, 272 Or at 179.  We also
note, in passing, that asking the court to give a multiple-page instruction -- essentially
placing all the party's eggs in one instructional basket -- involves a significant danger that
the proffered instruction will be erroneous in some aspects.  We turn to an examination of
proposed instruction No. 34 in light of the standard just discussed. 
Proposed instruction No. 34 addressed a range of issues relating to punitive
damages, and plaintiff contends that it was erroneous in a number of ways that are
unrelated to the issues addressed by the United States Supreme Court.  Among other
things, plaintiff contends that proposed instruction No. 34 would have instructed the jury
erroneously that (1) the Oregon statutory factors that the jury must find in order to justify
a punitive damage award were discretionary, when they are mandatory; and (2) one factor
to be considered in awarding punitive damages was Philip Morris's "motiv[ation]" to
make "illicit profits." As we will explain, we agree with plaintiff on both points.
First, however, we must consider an initial objection, because Philip Morris
contends that plaintiff cannot now raise those alternative reasons to affirm the trial court's
judgment.  The trial court reviewed the proposed jury instructions line-by-line, but Philip
Morris claims that plaintiff failed to make the additional objections to the trial court on
which it now relies.  For that reason, Philip Morris asserts, the trial court cannot be
affirmed as having been "right for the wrong reasons."  We reject that argument, because
the plaintiff need not have made any objection at all in order for the trial court to have
been legally justified in rejecting the instruction, if it did not correctly state the law.  The
correctness of the instruction, in light of the factual record that both parties had a full
opportunity to develop, was purely a legal issue, and the burden was on defendant to offer
a legally sufficient instruction.  If defendant did not do so, then there was a legally correct
justification for the trial court's decision to refuse the proffered instruction.  Under such
circumstances, the trial court's ruling should be sustained. (5)  
Finally, before we examine what proposed instruction No. 34 actually
would have done, we examine what it appears that defendant intended the instruction to
accomplish.  Oregon law provides that, in product liability actions (such as the present
case), punitive damages should be awarded (if at all) based on seven criteria.  ORS
30.925(2), which sets out that requirement, provides:
"Punitive damages, if any, shall be determined and awarded based
upon the following criteria:
"(a) The likelihood at the time that serious harm would arise from the
defendant's misconduct;
"(b) The degree of the defendant's awareness of that likelihood;
"(c) The profitability of the defendant's misconduct;
"(d) The duration of the misconduct and any concealment of it;
"(e) The attitude and conduct of the defendant upon discovery of the
misconduct;
"(f) The financial condition of the defendant; and
"(g) The total deterrent effect of other punishment imposed upon the
defendant as a result of the misconduct, including, but not limited to,
punitive damage awards to persons in situations similar to the
claimant's * * *." (6)
Proposed jury instruction No. 34 restated most of the foregoing factors --
often drastically.  It provided:
"(2) The size of the punishment may appropriately reflect the degree
of reprehensibility of the defendant's conduct -- that is, how far the
defendant has departed from accepted societal norms of conduct.  Factors
that you may find to bear upon the degree of reprehensibility include:
"(a) The likelihood at the time that serious harm would arise from the
defendant's misconduct, beyond the harms generally understood to inhere in
cigarette smoking;
"(b) The degree of the defendant[']s awareness of that likelihood;
"(c) The degree to which the defendant was motivated by a desire to
obtain illicit profits from its misconduct;
"(d) The duration of the misconduct and any concealment of it;
"(3) In determining how much punishment is necessary to achieve
the goal of appropriate deterrence, you may consider the extent to which the
obligation to pay compensatory damages will suffice to cause defendant and
others to refrain from similar misconduct in the future.
"(4) Finally, you may also consider the defendant's financial
condition as part of the process of arriving at an appropriate punishment. 
However, you may not punish the defendant simply because it is large. 
Rather, the paramount consideration remains the degree of reprehensibility
of any misconduct and the extent of any harm caused by such misconduct."
We turn to plaintiff's critique of that proposed instruction.  Plaintiff first
argues that proposed jury instruction No. 34 incorrectly indicates that the statutory factors
are discretionary and nonexclusive -- "[f]actors that you may find to bear * * * include"
(emphasis added) -- while ORS 30.925(2) actually makes those factors mandatory and
exclusive -- "shall be determined and awarded based upon the following criteria." 
(Emphasis added.)  Philip Morris offers no argument against plaintiff's proposed reading
of the statute.  
We agree with plaintiff that proposed jury instruction No. 34 is defective in
the way that plaintiff argues.  ORS 30.925(2) uses the word "shall," which generally
indicates that something is mandatory.  See, e.g., Preble v. Dept. of Rev., 331 Or 320, 324,
14 P3d 613 (2000) (so noting).  The legislature's instruction that any punitive damage
award "shall be determined and awarded based upon the following criteria" thus limited
the scope of the jury's authority to the list that followed.  Altering that list in a jury
instruction (as defendant proposed to do) would therefore fly in the face of the statute. 
Defendant might have a constitutional right to a further instruction of the kind suggested by
the United States Supreme Court in Williams, but nothing in that right negated the trial
court's duty to follow ORS 30.925(2) in all other respects.  To have given the instruction
in the form proffered by defendant thus would have been error under Oregon law.
Plaintiff also maintains that proposed jury instruction No. 34 misstates one
of the statutory factors in ORS 30.925(2).  While the proposed jury instruction would
have permitted the jury to consider "[t]he degree to which the defendant was motivated by
a desire to obtain illicit profits from its misconduct," ORS 30.925(2)(c) actually directs
the jury to consider "[t]he profitability of the defendant's misconduct."  That is, proposed
jury instruction No. 34 focuses on motive or intent, while the statute instead focuses on
outcome.  Again, to have given the instruction in the form proffered by defendant would
have been error under Oregon law. 
On remand, Philip Morris makes no argument that proposed jury instruction
No. 34 accurately states the law in that respect.  In the prior briefing in this case,
however, Philip Morris had addressed that issue in part.  As to the words "illicit profits,"
Philip Morris had contended that those words were necessary to "prevent[] the jury from
relying on [Philip Morris's] 'profits' -- without regard to whether they were derived from
lawful or unlawful conduct -- as an indirect way of punishing lawful cigarette sales."
  In
support, Philip Morris cited Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532
US 424, 441-42, 121 S Ct 1678, 149 L Ed 2d 674 (2001), in which the Court stated that
"it would be unrealistic to assume that all of [defendant's] sales of [a competing product]
would have been attributable to its misconduct in using a photograph of [plaintiff's
product] in its initial advertising materials."  Id. at 442. 
Again, we agree with plaintiff that Philip Morris's justification fails, and
proposed jury instruction No. 34 misstated the law.  While the statutory factor requires an
examination of the profitability of the misconduct -- an objective fact -- proposed jury
instruction No. 34 instead focuses on Philip Morris's subjective state of mind regarding
profit -- i.e., whether Philip Morris was "motivated by a desire" to profit from
misconduct.  And, while ORS 30.925(2)(c) directs the jury to consider all "profitability of
the misconduct," the proposed jury instruction permits the jury to consider only "illicit
profits from its misconduct" (emphasis added), thus implicitly directing the jury to try to
subdivide the profits from misconduct into legal and illegal parts -- a circular inquiry, at
best.  
We see no merit to Philip Morris's argument that the jury instruction needed
to refer to "illicit profits" to keep the jury from considering lawful profits, because that
simply misreads the statutory factor.  ORS 30.925(2)(c) does not allow the jury to
consider profitability generally -- it instead limits the jury's inquiry to a consideration of
"the profitability of the misconduct."  (Emphasis added.)  But, once the profitability of the
misconduct is identified, it makes no difference whether it was otherwise licit (not against
law) or illicit (against law).  Either way, it was relevant to the jury's inquiry.
We think that it follows from the foregoing analysis that, even assuming
that proposed jury instruction No. 34 clearly and correctly articulated the standard
required by due process, it contained other parts that did not state the law correctly. 
Accordingly, the trial court did not err in refusing to give it.  Our previous conclusion to
that effect is reaffirmed.  And, because our ruling respecting the trial judge's refusal to
give proposed jury instruction No. 34 was correct, it follows that the remaining aspects of
the judgment against defendant should be reaffirmed.  That latter point is true, not only
because reconsidering the remaining aspects of the judgment would lie outside the scope
of the Supreme Court's remand, but also because defendant has not advanced any separate
arguments for doing otherwise.  We therefore reaffirm our previous decision in this case
in all particulars.
The court's decision in Williams v. Philip Morris Inc., 340 Or 35, 127 P3d
1165 (2006), is adhered to.  The decision of the Court of Appeals is affirmed.  The
judgment of the circuit court is reversed, and the case is remanded to the circuit court for
further proceedings.
APPENDIX
The text of Philip Morris's proposed jury instruction No. 34 reads as follows
(emphases in original):
"DEFENDANT'S REQUESTED JURY INSTRUCTION NO. 34 
"PUNITIVE DAMAGES - PRODUCTS LIABILITY
"I will now instruct you on punitive damages.  If you find that Marlboro
cigarettes are a defective product or that the defendant is guilty of negligence or fraud,
you must consider whether to award punitive damages. 
"Punitive damages may be imposed only if the plaintiff has satisfied you by
clear and convincing evidence that the defendant, in engaging in the conduct that caused
Jesse Williams' death, has shown a reckless and outrageous indifference to a highly
unreasonable risk of harm and has acted with a conscious indifference to the health,
safety and welfare of others.
"Clear and convincing evidence is evidence of such weight and quality that,
even when considered in light of any conflicting evidence, leaves you with a firm
conviction that the truth of the matter in question is highly probable.
"You have the discretion to award, or not to award, punitive damages.  In
the exercise of that discretion, you may consider whether the imposition of punitive
damages is necessary to punish and deter similar misconduct by defendant and others in
the future. 
"In considering punitive damages, I remind you that the sale of cigarettes
has in itself been at all times a lawful activity in this State.  You are not to punish the
defendant on account of the propensity of cigarettes to cause illness and death for some of
those who smoke them, or the defendant's knowledge of that propensity, except to the
extent that the risks from smoking were not a matter of general public knowledge but
were known to and unlawfully misrepresented by the defendant. 
"In determining whether the defendant's conduct is such as to subject it to
punitive damages, you must not allow your decision to be influenced by the defendant's
financial condition, corporate status, or place of business. 
"If you determine that some amount of punitive damages should be imposed
on the defendant, it will then be your task to set an amount that is appropriate.  This
should be such amount as you believe is necessary to achieve the objectives of deterrence
and  punishment.  While there is no set formula to be applied in reaching an appropriate
amount, I will now advise you of some of the factors that you may wish to consider in this
connection.
"(1) The size of any punishment should bear a reasonable relationship to the
harm caused to Jesse Williams by the defendant's punishable misconduct. 
Although you may consider the extent of harm suffered by others in
determining what that reasonable relationship is, you are not to punish the
defendant for the impact of its alleged misconduct on other persons, who
may bring lawsuits of their own in which other juries can resolve their
claims and award punitive damages for those harms, as such other juries see
fit. 
"[ALTERNATIVE]
"(1) You are not to punish the defendant for the impact of its conduct on
individuals in other states.
"(2) The size of the punishment may appropriately reflect the degree of
reprehensibility of the defendant's conduct -- that is, how far the defendant
has departed from accepted societal norms of conduct.  Factors that you
may find to bear upon the degree of reprehensibility include: 
"(a) The likelihood at the time that serious harm would arise from the
defendant's misconduct, beyond the harms generally understood to
inhere in cigarette smoking;
"(b) The degree of the defendant[']s awareness of that likelihood;
"(c) The degree to which the defendant was motivated by a desire to
obtain illicit profits from its misconduct;
"(d) The duration of the misconduct and any concealment of it; 
"(3) In determining how much punishment is necessary to achieve the goal of
appropriate deterrence, you may consider the extent to which the obligation
to pay compensatory damages will suffice to cause defendant and others to
refrain from similar misconduct in the future. 
"(4) Finally, you may also consider the defendant's financial condition as part of
the process of arriving at an appropriate punishment.  However, you may
not punish the defendant simply because it is large.  Rather, the paramount
consideration remains the degree of reprehensibility of any misconduct and
the extent of any harm caused by such misconduct."
1. That is, the trial court did not give proposed jury instruction No. 34 in the form in
which Philip Morris proffered it.  The trial court did, however, incorporate some concepts
from Philip Morris's proposed jury instruction No. 34 into its final instructions to the jury.
2. Plaintiff also had argued, in the alternative, that the
refusal to give proposed instruction No. 34 was not error,
because that instruction misstated other points of law.  Given
this court's holding that the instruction was erroneous with
respect to federal due process law, however, this court did not
need to address those alternative arguments.  Now, in light of
the remand from the United States Supreme Court, we must consider
those alternative reasons for affirmance.
3. Defendant did not preserve any issue as to the instructions
that the trial court did give.  See Williams, 340 Or at 54 (so
explaining).
4. Put differently, we understand the Court's use of the
phrase, "upon request," Philip Morris USA, 127 S Ct at 1065, to
be an acknowledgment of the authority of states to place
reasonable procedural requirements on any request for
instructions, including requests like the one at issue here.  Our
treatment of this topic in the pages that follow is based on that
understanding, and on the belief that Oregon's rule concerning
the correctness of requested instructions is a reasonable
allocation of responsibility to parties to a jury trial.
5. We also reject defendant's assertion that any further or
different effort by it respecting the instruction would have been
"futile."  The record throughout belies that idea:  The trial
judge was solicitous of, and at pains to consider, the views of
both parties respecting instructions.
6. The parties agreed at trial that the jury did not need to
be instructed about subsection (g), because no evidence had been
presented on that point.