Question

4. This chapter described two lawsuits in which juries initially gave awards of $100 million or more. Is there any point at which the raw number of dollars is just too large? Was the original jury award excessive in Boeken o. Philip Morris or the Exxon Valdes case?

Answer 1

Punitive damage is a controversial topic in the legal profession and in the field of economics.The recent landmark supreme court decision addressing punitive damages in the infamous Exxon Valdez oil spill case has brought the issue of punitive award back into the legal limelight.Moderm Supreme Court jurisprudence ,most notabily in case of Philip Morris and Exxon Shipping Co. has concluded that such judgements are justified to punish morally reprehensible behaviour and to send a message to evildors.The court however ,has increasingly emphasised that the US constitutions due process clause presumptively limits punitive awards ,drawing an arbitrary  line in the sand of no more than ten times the actual damages .

In Beoken v. philip Morris case ,the jury found that Philip Morris products consumed by Beoken were defective either in design or by failure to warn prior to 1969, resulting in injuries to Beoken based upon fraud by international misrepresentation , fraudulent concealment , false promise and negligent misrepresentation , concluding that B eoken had justifiabily relied upon fraudulent utterances and concealment by Philip Morris .Compensatory damages in the amount of $5539127 were awarded by the jury.It also assumed punitive damages in the sum of $ 3 billion dollars.

The Exxon Valdez oil spill , spread oil to morethan 1200 miles of coastline ,closed fisheries and killed thousands of marine mammals and hundreds of thousadnds of sea birds.A federal jury in Alaska awarded $5 billion in punitive damages in 1994. A federal judge later reduced the punitive damages to $4.5 billion and the appeals court further cut it to $2.5 billion .

The original jury award was excessive in Exxon Valdes oil spill case ($5 billion) but later on it was reduced to $2.5 billion .Where as in case of Beoken v. Philip Morris it is $3 billion.