Title: Estate of Michelle Schwarz v. Philip Morris Inc.
Citation: N/A
Docket Number: S053644
State: Oregon
Issuer: Oregon Supreme Court
Date: July 24, 2010

FILED: June 24, 2010
IN THE SUPREME COURT OF THE STATE OF OREGON
THE ESTATE OF MICHELLE SCHWARZ,
Deceased, by and through her Personal Representative,
PAUL SCOTT SCHWARZ,
Petitioner on Review,  
v.
PHILIP MORRIS INCORPORATED,
a foreign corporation
Respondent on Review,
(CC
000201376; CA A118589; SC S053644)
On appeal from the
Court of Appeals.*
Argued and submitted November
2, 2009.
Maureen Leonard,
Portland, argued the cause and filed the briefs for petitioner on review.  With
her on the briefs were Robert K. Udziela, D. Lawrence Wobbrock, Charles S.
Tauman, and Richard A. Lane.
William F. Gary, Harrang
Long Gary Rudnick P.C., Eugene, argued the cause and filed the briefs for
respondent on review.  With him on the briefs were Sharon A. Rudnick and Susan
D. Marmaduke.
W. Eugene Hallman, Pendleton,
filed a brief for amicus curiae Oregon Trial Lawyers Association.
Before De Muniz, Chief
Justice, and Durham, Balmer, Walters, and Kistler, Justices.**
WALTERS, J.
The decision of the
Court of Appeals is affirmed.  The judgment of the circuit court is affirmed in
part and reversed in part, and the case is remanded to the circuit court for
further proceedings.
*On appeal from
Multnomah County Circuit Court, Roosevelt Robinson, Judge. 206 Or App 20, 135 P3d
409 (2006).
** Gillette, J., did
not participate in the decision of this case. Linder, J., did not participate
in the consideration or decision of this case.
WALTERS, J.
The
Due Process Clause of the Fourteenth Amendment(1)
prohibits a jury from imposing punitive damages to punish a defendant directly for
harm caused to nonparties.  However, a jury may consider evidence of harm to
others when assessing the reprehensibility of the defendant's conduct and the appropriate
amount of a punitive damages verdict.  Philip Morris USA v. Williams,
549 US 346, 356-57, 127 S Ct 1057, 166 L Ed 2d 940 (2007) (Williams II). 
In this "low-tar" tobacco case, we decide that the trial court
correctly refused defendant's requested instruction that would have informed
the jury on the impermissible uses of evidence of harm to others without also
instructing the jury on its permissible use, but that the trial court erred in
giving an instruction on punitive damages that was, conversely, incomplete and
therefore incorrect.  We affirm the decision of the Court of Appeals vacating
the jury's punitive damages award, Estate of Michelle Schwarz v. Philip Morris Inc., 206 Or App 20, 135 P3d 409 (2006), and remand the case to the trial court for a new
trial limited to the question of punitive damages.
I.  FACTS AND PROCEDURAL POSTURE
In
2000, plaintiff, the husband and personal representative of decedent Michelle
Schwarz, brought this action against defendant, Philip Morris.  Plaintiff asserted
three claims for relief based on allegations of negligence, strict product
liability, and fraud in the manufacture, marketing, and research of defendant's
brand of low-tar cigarettes.  At trial in 2002, plaintiff adduced the following
evidence.
Michelle
Schwarz began smoking cigarettes in 1964 when she was 18 years old.  She
attempted to quit smoking numerous times but was unable to do so.  In 1976,
defendant introduced a new product, Merit cigarettes, to the market for tobacco
products.  Advertisements for the new brand touted that the cigarettes contained
less tar than existing "full-flavor" cigarettes but still tasted like
the full-flavor brands.  Out of a belief that "low tar and nicotine
filters are better for you," decedent switched from a full-flavor brand that
defendant manufactured to its low-tar Merit brand.  After switching brands,
decedent continued to smoke the same quantity of cigarettes -- approximately
one pack per day -- but subconsciously altered her method of smoking.  She took
longer puffs, inhaled the smoke more deeply, and held it longer in her lungs.  In
1999, at the age of 53, decedent died from a brain tumor that was the result of
metastatic lung cancer.  
The method
of smoking that decedent had adopted after switching to defendant's low-tar
brand was consistent with the behavior of smokers generally.  Persons addicted
to nicotine in cigarettes tend to develop a certain "comfort level"
of nicotine, and, when smoking cigarettes that contain less nicotine, those
smokers are likely to "compensate" -- that is, adjust subconsciously the
manner in which they smoke -- in order to achieve that "comfort level." 
Compensation causes smokers of low-tar cigarettes to inhale the same levels of tar,
the primary carcinogen found in cigarettes, as they would ingest by smoking a full-flavored
brand.  Defendant was not only aware of that phenomenon, that awareness played
a major role in the development of its low-tar brand.  A primary purpose of defendant's
decision to bring low-tar cigarettes to market was to give smokers what one
tobacco executive labeled a "crutch," that is, a product that enabled
smokers to rationalize continued indulgence of a habit that they otherwise
would consider to be deadly.   
Defendant's
behavior with respect to the development and marketing of low-tar cigarettes
was but one iteration of a larger pattern of deceiving smokers and the rest of
the public about the dangers of smoking.  See Schwarz, 206 Or App at
29-35; Williams v. Philip Morris Inc., 340 Or 35, 39-43, 127 P3d 1165
(2006) (Williams I) vacated on other grounds by Williams II, 549
US 346, 127 S Ct 1057, 166 L Ed 2d 940 (2007), on remand, 344 Or 45, 176 P3d
1255 (2008), cert dismissed, ___ US ___, 129 S Ct 1436, 173 L Ed 2d 346
(2009) (explaining in greater detail defendant's conduct).  Beginning in the
mid-1950s (when reports first emerged about a link between smoking and lung cancer
and other deadly diseases) and enduring throughout decedent's smoking life, defendant
conspired with other cigarette manufacturers to wage a massive disinformation
campaign designed to create the perception of uncertainty about the health
risks of cigarettes, when in fact secret research by those same tobacco
companies confirmed the adverse health consequences of smoking.   
Plaintiff offered expert testimony on the substantial
harm that that pattern of fraud and deception had imposed on others not party
to the litigation in this case.  Each year, in the United States, there are
approximately 400,000 deaths attributable to cigarette smoking, and
approximately 15 million Americans have died from cigarette smoking in the last
century.  
At the
close of evidence, the trial court gave the jury the following instruction on
punitive damages, tailored on Uniform Civil Jury Instruction (UCJI) 75.05A (Oct
1997) (the uniform jury instruction):
"To recover punitive damages, [plaintiff]
must show by clear and convincing evidence that defendant Philip Morris 
"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
that makes you believe that the truth of the claim is highly probable.
"If you decide that the defendant has acted
as claimed by the plaintiff, you have the discretion to award punitive damages.
"Punitive damages, if any, shall be
determined and awarded based on the following:
"(1)  The likelihood at the time that
serious harm would arise from the defendant's misconduct;
"(2)  The degree of the defendant's
awareness of that likelihood;
"(3)  The profitability of the defendant's
misconduct;
"(4)  The duration of the misconduct and
any concealment of it;
"(5)  The attitude and conduct of the
defendant upon discovery of the misconduct;
"(6)  The financial condition of the
defendant; and 
"(7)  The total deterrent effect of other
punishment imposed on the defendant as a result of the misconduct, including,
but not limited to, punitive damages awards to persons in situations similar to
the claimant's and the severity of criminal penalties to which the defendant
has been or may be subjected.
"The amount of punitive damages you award
may not exceed $300,000,000.00."
At the
time of trial, the United States Supreme Court had not yet indicated that the
constitution required any particular instruction on punitive damages. Indeed,
the leading punitive damages cases at that time had arisen in the context of
post-verdict judicial review of jury awards.  See, e.g., Cooper
Industries, Inc. v. Leatherman Tool Group, Inc., 532 US 424, 121 S
Ct 1678, 149 L Ed 2d 674 (2001) (conducting post-verdict analysis of jury
award); Pacific Mut. Life Ins. Co. v. Haslip, 499 US 1, 7, 111 S Ct 1032;
113 L Ed 2d 1 (1991) (same); see also BMW of North America, Inc. v. Gore,
517 US 559, 586, 116 S Ct 1589, 134 L Ed 2d 809 (1996) (leaving
to states to determine in the first instance whether adjustment to
"grossly excessive" award should be made by independent appellate review
or remanded for new trial on punitive damages).  Consistent with those cases,
the uniform jury instruction informed jurors of the factors that Oregon law
permitted them to consider in awarding punitive damages.  If a jury returned a
verdict for any amount of punitive damages, then a defendant could
seek judicial review on the constitutionality of the amount of that award.  See
Parrott v. Carr Chevrolet, Inc., 331 Or 537, 555, 17 P3d 473 (2001)
(federal constitution requires the availability of post-verdict judicial adjustment
of grossly excessive punitive damages awards).  
Defendant
acknowledged that the uniform jury instruction correctly stated Oregon law, and
that, as a descriptive matter, courts in Oregon and elsewhere had tended to
reserve for themselves the gate-keeping function of ensuring that punitive damages
awards were constitutional.  However, defendant argued that the uniform jury
instruction was incomplete.  In order to be an adequate instruction, defendant
asserted, the instruction also must inform the jurors of the limits that the
constitution places on the jury's discretion to award punitive damages.  Specifically,
defendant asserted that the uniform jury instruction was incomplete because it "allow[ed]
the finder of fact to award or calculate punitive damages based on harms to
persons other than Michelle Schwarz."  
To
rectify the problem it perceived, defendant offered its proposed instruction
41, which provided:
"You are not to impose punishment for harms suffered by
persons other than the plaintiff before you."
As an alternative to proposed
instruction 41, defendant also offered its proposed instruction 42, which
provided:
"You are not to punish a defendant for the impact of
its conduct on individuals in other states."
When defendant advanced its
request for those instructions, it stated that it was 
"incorporat[ing] the argument [it] already made [when
objecting to the uniform jury instruction] that Philip Morris can't be punished
in this case based on harms to others.  Harms to others can be considered in
terms of the reprehensibility of Philip Morris's conduct, but we cannot be
punished for harms suffered by people who, themselves, could sue because
inevitably it would result in over punishment."
Without supplementation to the
uniform jury instruction, defendant contended, "we're really inviting the
jurors to make an unconstitutional ruling and only have the court be a check on
it."
The
trial court declined to give defendant's requested instructions, in part on the
basis that "when I tell them who the plaintiff is and who the defendant is,
I think the jury is going to limit their findings to those two entities." 
The trial court also overruled defendant's objection to the adequacy of
the uniform jury instruction, reasoning that
instructing the jury on the factors that enter into a constitutional
determination "may confuse or mislead them."  Instead, the court
stated that the constitutionality of a punitive damages award "is more of
a legal determination" for the court to make after a jury has returned a
verdict.
In a
special verdict, the jury found defendant liable on all three claims for relief
asserted.  However, on the negligence and strict product liability claims, the
jury apportioned 49 percent of the fault to plaintiff.  The jury awarded $118,514.22
in economic damages, $50,000 in noneconomic damages, and punitive damages on
each of plaintiff's three claims:  $25 million on the negligence claim, $10
million on the strict product liability claim, and $115 million on the fraud
claim, for a total punitive damages award of $150 million.  Defendant made a post-verdict
motion to reduce the punitive damages award.  The trial court ruled that that
award was "grossly excessive" and, without apportionment among the
claims, reduced the punitive damages award to a total of $100 million.   
Defendant
appealed and plaintiff cross-appealed.  Defendant asserted 21 assignments of
error.  Relevant to the issue before this court, defendant assigned error to
the trial court's refusal to include defendant's proffered instructions.(2) 
Plaintiff sought reinstatement of the jury's total punitive damages award.        
A
divided Court of Appeals sitting en banc vacated the punitive damages award. 
The majority held that the trial court had erred in refusing to give defendant's
requested instruction that "[y]ou are not to punish a defendant for the
impact of its conduct on individuals in other states."  Schwarz,
206 Or App at 57.  The majority relied primarily on a Supreme Court case that
was decided after the trial of this case and during the pendency of appeal, State
Farm Mut. Automobile Ins. Co. v. Campbell, 538 US 408, 123 S Ct 1513, 155 L
Ed 2d 585 (2003).  In Campbell, the Court stated that due process
dictates that
"[a] defendant should be punished for the conduct that
harmed the plaintiff, not for being an unsavory individual or business.  Due process
does not permit courts, in the calculation of punitive damages, to adjudicate
the merits of other parties' hypothetical claims against a defendant under the
guise of the reprehensibility analysis[.]"
Id. at 423.  In Campbell, the Court for the first
time definitively stated that a trial court was required, upon request, to
instruct the jury on at least some aspects of the limits that due process
places on punitive damages awards.  Id. at 422.  
The Court
of Appeals divided over whether the instruction that defendant had proffered
accurately stated the law.  Schwarz, 206 Or App at 48.  See Hernandez
v. Barbo Machinery Co., 327 Or 99, 106, 957 P2d 147 (1998) (party is
entitled to jury instructions on its theory of case only if proffered
instructions are accurate).  The majority held that
defendant's proposed instruction 42 met that standard and accurately informed the
jury that it could not punish defendant for the impact of its conduct on
individuals in other states.  Schwarz, 206 Or App at 50.  The majority
stated that "no party under Oregon law is required to request a jury
instruction that advances the use of evidence in a way that benefits the party's
adversary."  Id. at 49.  The dissent contended that it was defendant's
burden to propose a jury instruction that was not misleading.  In the dissent's
view, defendant's proposed instructions "would have misled the jury into
thinking that it could not consider defendant's out-of-state conduct for any
purpose."  Id. at 85-86 (Rosenblum, J., concurring in part, dissenting
in part) (emphasis in original).  The court vacated the punitive damages award
and remanded the case for a new trial on punitive damages.  Id. at 67. 
The court's disposition rendered plaintiff's cross-appeal moot.  Id.
II.  DEFENDANT'S CLAIM OF INSTRUCTIONAL ERROR
In
this court, defendant asserts two interrelated objections to the trial court's
rulings on jury instructions:  that the court erred in failing to give either
of its proffered instructions 41 and 42, and that the court erred in giving the
uniform jury instruction without informing the jury of the purposes for which the
jury could consider harm to nonparties.(3) 
Oregon law recognizes 
"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)." 
Williams v. Philip Morris
Inc., 344 Or 45, 55-56, 176 P3d 1255
(2008) (Williams III).  
A.        Refusal to Give Defendant's Proposed
Instructions
With respect to the first of the
errors asserted by defendant -- error in the failure to give its proposed jury
instructions -- Oregon law entitles a party to have a proffered instruction
given only if that instruction correctly states the law and engages the
pleadings and the evidence.  Hernandez, 327 Or at 106.  In Williams II, decided after the decision of
the trial court and the Court of Appeals, the Supreme Court concluded that
"a jury may not * * * use a punitive damages verdict to punish a defendant
directly on account of harms it is alleged to have visited on nonparties"
to the litigation.  549 US at 355.  However, the Court held that evidence of
harms to others could be appropriate and relevant to determining the reprehensibility
of defendant's conduct.  Id.  The Court went on to explain:
"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 357 (emphases in original).  Defendant argues
that, by virtue of its request, the trial court was required to eliminate the
risk of jury misunderstanding and give its proposed instructions, which correctly
stated the law.
Plaintiff contends that the instructions that defendant proffered were
inaccurate, incomplete, and misleading because the instructions not to
"punish" defendant for harms suffered by nonparties or for the impact
of its conduct on nonparties, without saying more, directed the jury not to use
evidence of such harm or impact for any purpose.  Plaintiff asserts that a
complete, accurate, and correct instruction "would have told the jury that
the evidence [of harm to others] was relevant to reprehensibility, but it could
not be used to increase the amount of punitive damages in order to punish directly
for harm to others."  To illustrate that point, plaintiff notes that,
since the Supreme Court's decision in Williams II, the Oregon State Bar
Committee on Uniform Civil Jury Instructions has developed a uniform civil jury
instruction that captures the Court's ruling.  UCJI 75.02B (Nov 2009) states:
"Evidence has been received of harm suffered by persons
other than the plaintiff as a result of the defendant's conduct.  This evidence
may be considered in evaluating the reprehensibility of defendant's conduct. 
However, you may not award punitive damages to punish the defendant for harm
caused to persons other than the plaintiff."(4)
Defendant
argues that each of the instructions that it proffered were accurate statements
of the law and that, particularly when considered in the context of the uniform
jury instruction that the trial court gave, its proffered instructions
communicated to the jury the distinction between the proper and improper use of
evidence of harm to others.  Defendant notes that the uniform jury instruction
told the jury that it had discretion to award punitive damages if it found that
defendant 
"ha[d] shown a reckless and outrageous indifference to
a highly unreasonable risk of harm and ha[d] acted with a conscious
indifference to the health, safety, and welfare of others."
(Emphasis added.)  Thus,
defendant asserts, the court did instruct the jury that it could consider harm
to others in its analysis of the reprehensibility of defendant's conduct.  
As
noted, a proposed instruction must be complete and accurate in all respects.  Hernandez,
327 Or at 106.  That standard must be understood in the context of the general purpose
of jury instructions, which is to "reduce the relevant law to terms readily
grasped by the jury without doing violence to the applicable legal rule."  Rogers
v. Meridian Park Hospital, 307 Or 612, 616, 772 P2d 929 (1989).  For
appellate courts reviewing claims of instructional error, the touchstones are
legal accuracy and clarity: 
"The parties to any jury case are entitled to have the
jury instructed in the law which governs the case in plain, clear, simple
language. The objective of the mold, framework and language of the instructions
should be to enlighten and to acquaint the jury with the applicable law.
Everything which is reasonably capable of confusing or misleading the jury
should be avoided. Instructions which mislead or confuse are ground for a
reversal or a new trial."
Williams et al. v. Portland
Gen. Elec., 195 Or 597, 610, 247 P2d
494 (1952).
The distinction that the Supreme Court has created
between constitutionally permissible and impermissible uses of evidence of harm
to others is a fine one that easily may be lost.  See
Williams II, 549 US at 360 (Stevens, J., dissenting) ("This nuance
eludes me."); White v. Ford Motor Co., 312 F3d 998, 1016-17 n 69
(9th Cir 2002) (the distinction recognized by the Supreme Court "might be
so gossamer as to be difficult for a jury to apply").  Although it is
possible that a jury could glean that distinction from defendant's
proposed instructions in combination with the uniform jury instruction, it is
not probable.  Defendant's proposed instructions expressly directed the jury to
refrain from using evidence of harm to nonlitigants to "punish"
defendant.  The uniform jury instruction was not similarly clear in permitting
the jury to use that evidence in assessing the reprehensibility of defendant's
conduct and arriving at a punitive damages award.  When the law draws a line
between the proper and improper use of evidence, a jury instruction must be
equally explicit in describing what falls on each side of that line.
It
is of course true that, under Oregon law, no party is required to request a
jury instruction that advances the other party's theory of the case.  So, for
instance, a plaintiff's proposed instructions would not be incomplete simply
because they failed to inform the jury that the defendant had asserted an
affirmative defense.  But the Court of Appeals overstated that principle when
it observed that no party is required to request a jury instruction that
"advances the use of evidence in a way that benefits the party's
adversary."  Schwarz, 206 Or App at 49.  Where an instruction is necessary
to inform the jury of the parameters that it must apply in considering
particular evidence, an instruction that does not completely and accurately
describe those parameters is erroneous and objectionable, even if the omitted
portion of those parameters would benefit the opposing party.  We hold that the
trial court did not err in refusing to give the instructions that defendant proffered.
B.        Error in Giving Uniform
Jury Instruction
We
next consider defendant's argument that the trial court erred in giving the
uniform jury instruction.  As a threshold matter, plaintiff argues that the
rules of appellate procedure preclude this court from reaching that argument.  
ORAP
9.20(2) defines the scope of this court's discretion to consider questions on
review.  It provides, in part, that unless the court otherwise limits the
questions before it on review, "the questions before the Supreme Court
include all questions properly before the Court of Appeals that the petition or
the response claims were erroneously decided by that court."  Plaintiff petitioned
for review in this court, and defendant submitted a response to the petition.  In
that response, defendant did not present the issue of the accuracy of the
uniform jury instruction.  Therefore, plaintiff contends, defendant abandoned the
argument it now urges.
Defendant
acknowledges that it did not include a question about the adequacy of the
uniform jury instruction in the eight supplemental questions that it listed in
its response to plaintiff's petition for review.  Nonetheless, defendant
asserts, ORAP 9.20(2) recognizes additional authority for this court to "consider
other issues that were before the Court of Appeals."  In this case, the
question whether defendant took the necessary steps to place the accuracy of
the uniform jury instruction properly before the Court of Appeals is a close
one.
Although
the record plainly reveals that, at the trial court level, defendant objected
and took proper exception to the uniform jury instruction, defendant's opening
brief to the Court of Appeals did not raise the uniform jury instruction issue
as a discrete claim.  In that brief, defendant asserted as its sixteenth
assignment of error:
"The trial court erred by instructing the jury solely
on the Oregon statutory factors for assessing punitive damages without also
providing defendant's proposed instructions on constitutional limits."
In the preservation section of its opening brief, defendant
noted that it had objected in the trial court to the uniform jury instruction
and, in the argument section, defendant asserted that, as a result of omissions
in that instruction, the court had given the jury "a roadmap to
error."  Plaintiff understood defendant's
sixteenth assignment of error to assert that the trial court had erred in
failing to give defendant's proposed instructions 41 and 42.  As to the giving
of the uniform jury instruction, plaintiff, in his answering brief, argued that
defendant "ha[d] waived any challenge to this instruction."  In a
reply brief, defendant disputed that characterization and asserted that
"[t]he trial court also erred in giving instructions [on punitive damages]
that were affirmatively misleading."
In
Dunlap v. Dickson, 307 Or 175, 180 n 4, 765 P2d 203 (1988), this court
indicated that it would exercise its discretion to reach an issue presented to
the Court of Appeals (1) when there was a "close connection" between
the issues, and (2) "to avoid unnecessary technicality when we may do so
and doing so resolves issues fairly raised below."(5) 
Those conditions also are present here and militate for review.  Although defendant's
statement of its sixteenth assignment of error did not present a clear
objection to the trial court's giving of the uniform jury instruction, defendant's
briefs did disclose its intent to assert that error.  More importantly, both the
court's failure to give defendant's proposed instruction and its giving of the
uniform jury instruction raised precisely the same legal issue:  whether the
trial court correctly instructed the jury on the use of evidence of harm to
nonparties.  Having accepted review of the decision of the Court of Appeals and
having decided that defendant's proffered instructions were incomplete and
thereby inaccurate, we think it important also to decide the accuracy of the
instructions that the jury did receive.
Turning
to the merits of defendant's argument, we observe that, when this case was
tried, neither Campbell nor Williams II had been decided.  We therefore
understand the reason for the trial court's failure to instruct the jury on the
law regarding evidence of harm to nonparties.  Nevertheless, we must
acknowledge that omission and the fact that the trial court did, in giving the
uniform jury instruction, permit the jury to consider evidence of harm
to nonparties in assessing punitive damages.  In giving the uniform jury
instruction, the court informed the jury:
"To recover punitive damages, [plaintiff]
must show by clear and convincing evidence that defendant Philip Morris 
"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.
"* * * * *
"Punitive damages, if any, shall be
determined and awarded based on the following:
"(1)  The likelihood at the time that
serious harm would arise from the defendant's misconduct;
"(2)  The degree of the defendant's
awareness of that likelihood[.]"
Plaintiff
contends that the jury would have understood from that instruction the fine
distinction that the law makes; namely, that evidence of harm to others may be
used only in the assessment of reprehensibility and not to impose direct
punishment for harm to nonparties.  Plaintiff asserts that the other general
instructions that the court gave focused the jury's attention on damage to the
named plaintiff and prevented a misunderstanding of the punitive damages
instruction that the court gave.  We do not agree.  The jury could have
understood the uniform jury instruction to permit it to use evidence of harm to
others in arriving at its punitive damages verdict and, without an explicit
statement of the impermissible use of that evidence, such as that included in UCJI
75.02B (Nov 2009), the instruction was incomplete and unclear.  The trial court
erred in giving the uniform instruction.
III.  REMEDY
The
question of appropriate remedy remains.  Plaintiff argues that, notwithstanding
any error in jury instruction, this court may affirm the jury's verdict if,
upon "careful appellate weighing," that verdict accords with the
limits that substantive due process places on the punitive damages award.  See
Clemons v. Mississippi, 494 US 738, 748, 110 S Ct 1441, 108 L Ed 2d 725
(1990) (where the jury was erroneously instructed on an aggravating factor to
be considered in sentencing, "careful appellate weighing" of whether
the evidence supported the jury verdict was sufficient to meet constitutional
objections).  Plaintiff further indicates that, with respect to punitive
damages awards, the Supreme Court has been careful to preserve "some
flexibility" in the procedures that states craft to give effect to the
constitutional protections that due process provides.  See Williams
II, 549 US at 357-58 (stating that Oregon Supreme Court's application of
the wrong constitutional standard "may lead to the need for a new
trial, or a change in the level of the punitive damages award")
(emphases added).  See also Campbell, 538 US at 429 ("proper
calculation of punitive damages * * * should be resolved, in the first
instance, by the Utah courts"); BMW of North America v. Gore, 517
US 559, 586, 116 S Ct 1589, 134 L Ed 2d 809 (1996) ("Whether
the appropriate remedy requires a new trial or merely an independent
determination by the Alabama Supreme Court of the award necessary to vindicate
the economic interests of Alabama consumers is a matter that should be
addressed by the state court in the first instance.").
Plaintiff's
argument has its draw.  However, the Oregon Constitution makes plain that this
court does not have the authority in the first instance to make its own factual
determination of the appropriate punitive damages award that should be imposed
in light of defendant's conduct and the harm that it caused decedent:  "In
all civil cases the right of Trial by Jury shall remain inviolate."  Or
Const, Art I, § 17.  This court has interpreted that provision to create a
right for litigants to have "a jury determine all issues of fact[.]" 
Lakin v. Senco Products, Inc., 329 Or 62, 69, 987 P2d 463 (1999)
(internal quotation marks omitted).  The Supreme Court has thrust upon state
courts the role of determining whether a jury award of punitive damages exceeds
the outer limits that substantive due process allows, but it is still the
constitutional role of the jury to decide all facts, including those necessary
to assess punitive damages in the first instance.  We cannot decide the damages
that a correctly instructed jury would award, and we therefore must remand this
case for a jury's decision.  
As a
final matter, defendant asserts that common law and state constitutional law
require a retrial of the entire case on remand.  Defendant points to a
case in which this court held that, as a matter of general fairness, "[i]n
the ordinary two-party personal-injury case" the same jury that determined
fault should consider the question of damages.  Maxwell v. Port. Terminal
RR. Co., 253 Or 573, 577, 456 P2d 484 (1969).  However, in instances when
this court has vacated a punitive damages award because it could not "determine
the standard actually used by the jury in arriving at its verdict for punitive
damages," it has remanded for the limited purpose of retrial on punitive
damages only.  Wolf v. Nordstrom, 291 Or 828, 835-36, 637 P2d 1280 (1981).  See
also Weiss v. Northwest Accept. Corp., 274 Or 343, 358, 546 P2d
1065 (1976) (remanding for a new trial on punitive damages only).(6) 
We adopt the same disposition in this case.
In
summary, we hold that the trial court erred in its instructions to the jury on
punitive damages.  We vacate the punitive damages award and remand this case to
the trial court for a new trial limited to the question of punitive damages.       
The
decision of the Court of Appeals is affirmed.  The judgment of the circuit
court is affirmed in part and reversed in part, and the case is remanded to the
circuit court for further proceedings.
1. The
Fourteenth Amendment to the United States Constitution provides, in part: 
"No State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United States; nor
shall any State deprive any person of
life, liberty, or property, without due process of law[.]"
2. Defendant's
other assignments of error covered numerous aspects of the trial, including:
"challenges to the denial of motions for directed
verdicts for defendant on plaintiff's claims, challenges to the trial court's
decision to give or not to give certain jury instructions regarding those
claims, [and] a challenge to the court's failure to grant a mistrial[.]"
Schwarz, 206 Or App at 26.  The Court of Appeals
unanimously rejected all of defendant's assignments of error except the one
that addressed the jury instructions pertaining to the constitutionality of
punitive damages awards.    
3. We
decline to reach the other questions that defendant listed in its response to
plaintiff's petition for review and briefed in this court.
4. The
Committee on Uniform Civil Jury Instructions also has developed a uniform
instruction on the proper use of evidence of a defendant's out-of-state conduct
in the imposition of punitive damages.  UCJI 75.02A (Nov 2009) states:
"Evidence has been received of conduct by
the defendant occurring outside Oregon.  This evidence may be considered in
evaluating the reprehensibility of the defendant's conduct in Oregon if the
out-of-state conduct is reasonably related to the conduct of the defendant
directed toward the plaintiff in Oregon.
"You may not award punitive damages against
the defendant based on evidence of out-of-state conduct that was lawful in the
state where it occurred.  Further, when considering reprehensibility, you may
not consider conduct of the defendant, wherever it might have occurred, that is
not similar to the conduct upon which you found the defendant liable to the
plaintiff." 
5. The
court cited former ORAP 10.15(2) (1988) as a description of its
discretion to reach the issue.  That rule was nearly identical to the current
ORAP 9.20(2).  
6. Defendant
also argues, citing Clark v. Strain et al., 212 Or 357, 364, 319 P2d 940
(1958), that "the minimum number of jurors required for a valid verdict
must be the same jurors voting on each separate issue demanding
resolution."  Clark involved the unusual circumstance in which one
group of nine jurors found that the defendant was liable for damages, but one
member of the majority refused to agree on the level of damages.  Id. at
360-63.  The jury broke the stalemate by cobbling a different group of nine
jurors who concurred on damages.  Id.  Defendant contends that the
constitutional provision on which the court in Clark relied, Article VII
(Amended), section 5(7), requires a complete new trial here.  That provision
requires that "[i]n civil cases three-fourths of the jury may render a
verdict."  Again, defendant raises concerns that this case does not
present.  We remand this case for a new trial on a limited issue, and
three-fourths of the jury that considers that issue is sufficient to render a
verdict on that issue.