S053644, Opinion — Estate of Michelle Schwarz v. Philip Morris Inc.

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Argued and submitted November 2, 2009, decision of Court of Appeals affirmed;
judgment of circuit court affirmed in part and reversed in part, and case remanded
to circuit court for further proceedings June 24, 2010

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)
235 P3d 668

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CJS, Damages § 188.

On appeal from the Court of Appeals .*

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.

\* On appeal from Multnomah County Circuit Court, Roosevelt Robinson,
Judge. 206 Or App 20, 135 P3d 409 (2006).

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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 judg-
ment of the circuit court is affirmed in part and reversed in
part, and the case is remanded to the circuit court for further
proceedings.

** Gillette, J., did not participate in the decision of this case. Linder, J., did not
participate in the consideration or decision of this case.

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# WALTERS, J.

The Due Process Clause of the Fourteenth
Amendment1 prohibits a jury from imposing punitive dam-
ages to punish a defendant directly for harm caused to non-
parties. 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 per-
missible use, but that the trial court erred in giving an
instruction on punitive damages that was, conversely, incom-
plete 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 repre-
sentative 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

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[.]"

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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 defen-
dant manufactured to its low-tar Merit brand. After switch-
ing brands, decedent continued to smoke the same quantity
of cigarettes-approximately one pack per day-but subcon-
sciously 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 other-
wise would consider to be deadly.

Defendant's behavior with respect to the develop-
ment and marketing of low-tar cigarettes was but one itera-
tion 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), vac'd 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

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deadly diseases) and enduring throughout decedent's smok-
ing life, defendant conspired with other cigarette manufac-
turers 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 conse-
quences 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 mil-
lion 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 con-
scious 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 conceal-
ment of it;

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"(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) (conduct-
ing 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 dam-
ages). Consistent with those cases, the uniform jury instruc-
tion 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 constitutional-
ity 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

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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, defen-
dant asserted that the uniform jury instruction was incom-
plete because it "allow[ed] the finder of fact to award or cal-
culate 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 con-
duct 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 reprehen-
sibility of Philip Morris's conduct, but we cannot be pun-
ished 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 determi-
nation "may confuse or mislead them." Instead, the court
stated that the constitutionality of a punitive damages award

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"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 negli-
gence 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 mil-
lion. 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,

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 defen-
dant's assignments of error except the one that addressed the jury instructions per-
taining to the constitutionality of punitive damages awards.

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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 cal-
culation 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 defini-
tively 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 prof-
fered 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 defen-
dant 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 con-
tended 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

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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 nonpar-
ties.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 con-
cluded that "a jury may not * * * use a punitive damages ver-
dict 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 evi-
dence 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

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.

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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 defen-
dant 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 non-
parties, without saying more, directed the jury not to use evi-
dence 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 oth-
ers] was relevant to reprehensibility, but it could not be used
to increase the amount of punitive damages in order to pun-
ish 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 con-
duct. 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

4 The Committee on Uniform Civil Jury Instructions also has developed a uni-
form 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 evi-
dence 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 con-
duct upon which you found the defendant liable to the plaintiff."

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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 dam-
ages 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 vio-
lence 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 touch-
stones 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 con-
fuse 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

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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 instruc-
tion was not similarly clear in permitting the jury to use that
evidence in assessing the reprehensibility of defendant's con-
duct and arriving at a punitive damages award. When the
law draws a line between the proper and improper use of evi-
dence, a jury instruction must be equally explicit in describ-
ing 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 pro-
posed 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 par-
ticular evidence, an instruction that does not completely and
accurately describe those parameters is erroneous and objec-
tionable, 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 discre-
tion 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

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questions properly before the Court of Appeals that the peti-
tion or the response claims were erroneously decided by that
court." Plaintiff petitioned for review in this court, and defen-
dant submitted a response to the petition. In that response,
defendant did not present the issue of the accuracy of the uni-
form jury instruction. Therefore, plaintiff contends, defen-
dant 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, defen-
dant 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 defen-
dant took the necessary steps to place the accuracy of the uni-
form 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 defen-
dant'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 char-
acterization and asserted that "[t]he trial court also erred in

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giving instructions [on punitive damages] that were affirma-
tively misleading."

In Dunlap v. Dickson, 307 Or 175, 180 n 4, 765 P2d
203 (1988), this court indicated that it would exercise its dis-
cretion 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 con-
ditions 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 nonpar-
ties. 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 instruc-
tions 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 assess-
ing 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

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).

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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 under-
stood 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. Plain-
tiff argues that, notwithstanding any error in jury instruc-
tion, 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 errone-
ously instructed on an aggravating factor to be considered in
sentencing, "careful appellate weighing" of whether the evi-
dence supported the jury verdict was sufficient to meet con-
stitutional objections). Plaintiff further indicates that, with
respect to punitive damages awards, the Supreme Court has

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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 fac-
tual 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 ordi-
nary two-party personal-injury case" the same jury that
determined fault should consider the question of damages.

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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 fur-
ther proceedings.

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.