WASHINGTON - A cigarette maker and a smoker's widow squared off for the third time at the Supreme Court yesterday over a $79.5 million punitive-damages award, but the real battle was between some justices and their counterparts on Oregon's high court.

Twice, the Supreme Court has struck down the judgment against Altria Group Inc.'s Philip Morris USA and ordered the Oregon court to take another look at the case,

Philip Morris USA v. Williams


Each time, the Oregon court has upheld the award to Mayola Williams, widow of a longtime smoker of Philip Morris' Marlboro brand.

In its latest appeal, Philip Morris contended the Oregon court was thumbing its nose at the Supreme Court.

"We're here today because the Oregon court failed to follow this court's decision," the company's lawyer, Stephen Shapiro, told the justices.

Raising a point not previously argued, the Oregon court said Philip Morris had forfeited its chance to challenge the punitive judgment because the jury instructions the company had proposed were technically flawed.

"It's an ambush," Shapiro protested. Chief Justice John Roberts, who sided with Philip Morris in the earlier case, seemed to agree.

"There is something malodorous about the fact that the Oregon Supreme Court waited until the last minute to come up with their objection," Roberts said.

But Justice Stephen Breyer, who sided with the company in the last round, was skeptical of the cigarette maker's arguments yesterday.

At first, he said, "I thought this was a runaround. I'm not sure I think that now."

Still, justices worried that state courts could ignore Supreme Court rulings on constitutional issues.

"How do we guard against making constitutional decisions which are simply going to be nullified by some clever device?" Justice David Souter asked.

Robert Peck, Williams' attorney, tried to allay the concern. "There was no sandbagging here," Peck said. "The Oregon Supreme Court did not act in bad faith."

The case has bounced around appellate courts since 1999, when Williams convinced a jury that Philip Morris should be held accountable for misleading people into thinking cigarettes were not dangerous or addictive.

Williams' husband, Jesse, was a janitor in Portland who started smoking during a 1950s Army hitch and died in 1997, six months after he was found to have lung cancer.

She was awarded $800,000 in actual damages. The punitive damages - intended to punish a defendant for its behavior and deter a repeat - are nearly 100 times greater. The actual damages were later cut to $521,000.

The value of the award has climbed to $145 million with accrued interest, the company said. If Philip Morris wins, a new trial will result.

The Oregon Supreme Court made its first decision in 2002, refusing to hear an appeal from Philip Morris.

Then the U.S. Supreme Court rejected the judgment, saying in another case that punitive damages generally should be held to no more than nine times economic damages.

Next, the Oregon court upheld the punitive damages, citing "reprehensible" conduct of Philip Morris officials.

Then in 2007 came the U.S. Supreme Court's second take on the case.

To read a transcript of the arguments, go to

This article contains information from McClatchy Newspapers.