Working the Unworkable Rule Established in Philip Morris: Acknowledging the Difference Between Actual and Potential Injury to Nonparties

Brigham Young University Law Review, 2007 by Agle, Daniel Sulser

One of the principal justifications for assessing punitive damages awards is to punish defendants for the potential injury to nonparties that could have resulted from the defendant's misconduct. In fact, case law from the nineteenth century shows that potential injury to nonparties (the public) was a factor considered when assessing punitive damages. More recently, one commentator noted that punitive damages are a form of societal damages.37 Essentially, these damages can be viewed as a punishment for the potential injury to nonparties.38 This section presents nineteenth-century punitive damages opinions to illustrate the emphasis on assessing punitive damages for potential injury to nonparties and also presents modern court opinions that considered potential injury to nonparties when awarding punitive damages.

1. Historical view

In 1832, the United States Supreme Court decided Conrad v. Pacific Insurance Co., and provided insight into how far the state could reach to protect its citizenry:

[When a defendant's misconduct is effected] in a wanton, rude, and aggravated manner, indicating malice or a desire to injure, a jury ought to be liberal in compensating the party injured . . . . In such cases . . . a jury may properly take into view, not only what is due to the party complaining, but to the public, by inflicting what are called in law speculative, exemplary, or vindictive damages.39

Although the Court did not explicitly state that defendants could be punished for injury to nonparties, the Court does stress the jury's ability to consider what is due to the public. One reasonable inference from this statement is that the jury should be able to look beyond the injury to the plaintiff and look to the potential injury to the public in order to assess what is due to the public. Unfortunately, because the Court did not find the necessary malice, it did not address punitive damages and potential injury to the public.40

However, the Federal Circuit Court for the Western District of Pennsylvania clarified this point of law in Bishop v. Stockton.41 This case involved injuries sustained when a stagecoach overturned.42 The plaintiff, who suffered a broken arm and multiple cuts and bruises, requested both compensatory and punitive damages.43 The request for punitive damages was based on the plaintiff's assertion that the accident occurred because the driver of the coach was drunk.44 The judge provided the following instruction to the jury, which ultimately awarded punitive damages of $6500:45

But further vindictive or exemplary damages may be given to indemnify the public for past injuries and damages, and to protect the community from future risks and wrongs. Contracts for carrying passengers are made not only with the party to the transaction, but they are also made with the public as strongly as if they were so expressed and signed and sealed. But to justify exemplary damages, the injury must be more than a mere private loss or injury, it must have been occasioned by such negligence, unskilfulness or recklessness as concerns the safety of the traveling public.46