On June 24, 2010, the Oregon Supreme Court unanimously affirmed the Oregon Court of Appeals in setting aside a $100 million punitive damages award imposed against Philip Morris USA. At the time of the original verdict, it was the largest punitive damages award in an individual smoker case in the country, Schwarz v. Philip Morris USA. Philip Morris USA was represented in the appellate courts by Bill Gary, Sharon Rudnick, and Susan Marmaduke.
The Oregon Supreme Court held that, as a result of improper jury instructions, the trial court violated the U.S. Constitution by allowing the jury to impose punitive damages to punish for harm to people who were not parties to the litigation. In Williams v. Philip Morris USA, the United States Supreme Court ruled that the Constitution forbids imposing punitive damages on such a basis. Bill Gary, Sharon Rudnick, and Susan Marmaduke represented Philip Morris before the Oregon appellate courts and the United State Supreme Court in the Williams case.