Jesse Williams started to smoke during the Korean war, when fellow soldiers told him the acrid stench would keep away the bugs. Now his ancient addiction – born half a century and half a world away – has provoked a crisis of conscience over how America should punish corporate wrongdoing in the 21st century.
The tale of Mr Williams and his smokes – taken together with an oddly similar case about a pair of Canadians who were bitten by bedbugs in Chicago – is testing one of the most fundamental principles of the US justice system: that private lawsuits are a fair, effective and efficient way of regulating corporate behaviour.
Just this week, the US Supreme Court agreed to reconsider this quintessentially American proposition by reviewing the case of Williams v Big Tobacco, in which Williams’s widow won nearly $80m from Philip Morris for its fostering of the addiction that eventually killed her husband. The future of the American economic model – light on government regulation, heavy on private litigation – could be profoundly affected by the outcome.
The questions before the justices are ones they have faced before: is it fair to let juries impose huge punitive damages awards against companies that make things that hurt people – damages that are out of all proportion to the harm caused to the person bringing the lawsuit? Should jurors be allowed to punish defendants for harm they may cause to people who are not party to the suit? Is that necessary to deter corporate wrongdoing? Or is it economically counter- productive – and constitutionally unconscionable – to hit corporate defendants with damages in three-figure millions for each case of wrongdoing?
That is where the bedbugs come into it: Judge Richard Posner, a federal appeals court judge famed for applying an economics- based approach to the law, recently defended a jury award of $186,000 in punitive damages against the down-market American hotel chain, Motel 6. The case involved a Canadian brother and sister attacked by bedbugs at a downtown Chicago Motel 6. They were awarded $5,000 for the pure indignity of it, and 37 times that in punitive damages.