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

521
On petitioner on review's petition for reconsideration filed July 8, petition
for reconsideration allowed; former opinion (348 Or 442, 235 P3d 668) modified
and adhered to as modified; respondent on review's statement of costs and
disbursements allowed in amounts and on conditions described in this opinion
December 30, 2010
The ESTATE OF MICHELLE SCHWARZ, Deceased,
by and through her Personal Representative,
Paul Scott Schwarz,
Petitioner on Review,
v.
PHILIP MORRIS INCORPORATED,
nka Philip Morris USA Inc.,
a foreign corporation,
Respondent on Review.
(CC 000201376; CA A118589; SC S053644)
246P3d479

522 	Estate of Michelle Schwarz v. Philip Morris Inc.
CJS, Appeal and Error § 1005.
Maureen Leonard, Portland, filed the petition for recon-
sideration for petitioner on review. With her were Robert K
Udziela, D. Lawrence Wobbrock, Charles S. Tauman, and
Richard A Lane.
Sharon A 	Rudnick, Harrang Long Gary Rudnick P.C.,
Eugene, filed the reply for respondent on review. With her
were William F. Gary and Susan D. Marmaduke.
Before De Muniz, Chief Justice, and Durham, Balmer,
Walters, and Kistler, Justices.*
WALTERS,J.
The petition for reconsideration is allowed. The former
opinion is modified and adhered to as modified. Respondent
on review's statement of costs and disbursements is allowed
in the amounts and on the conditions described in this
opinion.
* Gillette and Linder, JJ., did not participate in the consideration or decision
of this petition for reconsideration.

Cite as 349 Or 521 	523
WALTERS,J.
The matter before the court is plaintiffs petition for
reconsideration of our decision in Estate of Michelle Schwarz
v. Philip Morris Inc., 348 Or 442, 235 P3d 668 (2010). On
reconsideration, we clarify that the issue on remand is not
whether defendant is liable for punitive damages, but rather
what is the correct amount of those damages. We also
address defendant's statement of costs and disbursements
and allow it in part and disallow it in part. In all other
respects, we adhere to our prior opinion.
At trial of this case, the court instructed the jury
that, to recover punitive damages, plaintiff had to show, by
clear and convincing evidence, that defendant had" 'shown a
reckless and outrageous indifference to a highly unreasona-
ble risk of harm and [had] acted with a conscious indifference
to the health, safety, and welfare of others.'" 348 Or at 447.
By awarding punitive damages in any amount, the jury nec-
essarily found that defendant's conduct was as described and
that defendant was liable for punitive damages. Defendant
did not challenge, on appeal, the sufficiency of the evidence to
support that conclusion, and that conclusion is not subject to
retrial on remand. As we explained in our earlier opinion, id.
at 458, the jury was permitted to use evidence of harm tooth-
ers to assess the reprehensibility of defendant's conduct and,
working from that factual premise, to determine defendant's
liability for punitive damages, and the trial court did not err
in that aspect of its instruction to the jury.
The trial court also instructed the jury that, if it
found that defendant's conduct was as described, it could con-
sider various factors, including the likelihood of serious harm
and the degree of defendant's awareness of that harm, and
award an amount of punitive damages not to exceed $300
million. In doing so, the trial court erred in failing to inform
the jury that, while it could use evidence of harm to others to
determine the reprehensibility of defendant's conduct, it
could not directly punish the defendant for that harm. Id.
Thus, that error likely affected the jury's determination of
the amount of punitive damages to award and that was the
limited reason that we decided that a new trial was neces-
sary. We remanded this case to the trial court for a "new trial

524 	Estate of Michelle Schwarz v. Philip Morris Inc.
limited to the question of punitive damages." Id. at 460. That
wording may lack precision. The logic of our earlier opinion
made it plain that the trial court's instructional error had
incorrectly stated the law that governed the jury's determi-
nation of the amount of punitive damages, not the jury's deci-
sion that punitive damages should be awarded. We therefore
clarify that, in remanding for a new trial, we intended to
remand for a new trial limited to the amount of punitive
damages.
In our earlier opinion, we designated defendant as
the prevailing party on appeal and awarded defendant its
costs on review. Plaintiff requests that we reconsider our
decision awarding costs to defendant and exercise discretion
to deny costs to defendant, or, in the alternative, order that
costs abide the result on retrial, citing ORAP 13.05(4) (allow-
ing costs to abide the outcome on remand in cases "in which
the party who ultimately will prevail remains to be deter-
mined").
We adhere to our ruling awarding costs to defendant.
Defendant was the prevailing party on review by this court
and therefore is entitled to recover the costs it incurred in
this court. ORS 20.310(1) (in any appeal to the Court of
Appeals or review by the Supreme Court, court "shall" allow
costs and disbursements to the prevailing party, with some
exceptions). As to plaintiffs alternative request that we pro-
vide that the award of costs on review abide the result on
retrial under ORAP 13.05(4), we find that that provision does
not apply under the circumstances presented in this case.
The party who ultimately will prevail does not "remain to be
determined." Plaintiff already has obtained a judgment
against defendant, part of which was affirmed on appeal,
and, when a final judgment eventually is entered by the trial
court, plaintiff will be the party who prevails on remand.
Although we therefore decline to provide that the award of
costs on review must abide the result on remand, we do think
it appropriate to provide that the effective date of the cost
award will be the effective date of the trial court's judgment
on remand. We will determine the amount of the allowable
costs on review, but we will not include that amount in the
appellate judgment. Defendant will be entitled to that sum

Cite as 349 Or 521
when the trial court issues its judgment at the conclusion of
this matter on remand.
With regard to the amount of costs and disburse-
ments on review, defendant filed a statement of those costs
and disbursements seeking the total sum of $561,816.84,
plus $638 per day from July 1, 2010, until the letter of credit
procured by defendant is released. Plaintiff filed objections to
the cost bill, including an objection that defendant had
waived any claim for costs incurred before the Court of
Appeals. Plaintiff asserted that defendant did not timely sub-
mit a claim for those costs under ORS 20.320 (cost statement
must be filed 21 days from the date of the appellate court's
decision) and ORAP 13.05(5)(a) (same; also providing that
the filing of a petition for review or reconsideration does not
suspend the time for filing a cost statement). Plaintiffs objec-
tion is well taken, and we disallow defendant's request for
costs that it did not seek within 21 days of the decision of the
Court of Appeals. Those disallowed costs include the tran-
script costs ($10,037.80) and costs related to maintaining the
letter of credit prior to the issuance of the Court of Appeals
decision. We allow the prevailing party fee ($100), the filing
fee ($140), and the cost of filing briefs in the Supreme Court
($255.10). We also allow the cost of maintaining the letter of
credit 	after 	the 	Court 	of Appeals 	issued 	its 	decision
($367,205.82 through June 30, 2010). The total amount of
allowed costs is $367,700.92, plus $638 per day from July 1,
2010, until release of the letter of credit or issuance of the
appellate judgment, whichever occurs first.
The petition for reconsideration is allowed. The for-
mer opinion is modified and adhered to as modified. Respon-
dent on review's statement of costs and disbursements is
allowed in the amounts and on the conditions described in
this opinion.