April 1 (Bloomberg) -- Companies are in a slump at the normally business-friendly U.S. Supreme Court.

The high court’s order yesterday dismissing Philip Morris USA Inc.’s appeal of a $79.5 million smoker award left companies winless in the three biggest business cases resolved so far in the court’s 2009-10 term. The justices, who declined to rule on the Philip Morris case, said in earlier decisions that consumers can sue over “light” cigarettes and prescription drugs.

Those actions came from the same nine justices who only two years ago wrapped up the most pro-business term in decades, according to the U.S. Chamber of Commerce.

“We’ve really been faced with some very tough cases” this term, said Robin Conrad, executive vice president of the Chamber of Commerce’s litigation unit. “It does belie the stories that we’ve read that this court has a bias toward business.”

Business groups had looked to the Philip Morris case as a chance for the justices to send a stronger message to lower courts about the importance of putting limits on punitive damages. The Altria Group Inc. unit argued that the Oregon Supreme Court, in upholding the award, circumvented an earlier U.S. Supreme Court ruling governing damages in the case.

The high court action is “disappointing because it allows the Oregon courts to get away with that sleight of hand,” said Richard Samp, chief counsel of the Washington Legal Foundation, which supported Philip Morris, the largest U.S. cigarette maker.

Litigation Setbacks

The recent decisions against companies don’t mark a new trend or an emerging sympathy toward plaintiffs’ lawyers, according to attorneys who appear before the court. The rulings nonetheless underscore how the court’s pro-business tendencies don’t always translate into litigation victories.

“It is a court generally sympathetic to business interests, but the occasional case comes before the court where those interests don’t have the best legal argument,” said David Frederick, a Washington lawyer who was on the winning side of two decisions earlier this term backing consumer lawsuits.

In one of those cases, the court ruled 5-4 that a federal labeling law doesn’t shield cigarette makers from suits accusing them of deceiving consumers by describing cigarettes as “light” or “low tar.”

In the second case, a 6-3 court said patients can sue drugmakers for failing to provide adequate safety warnings. The justices upheld a $7 million award to a musician who lost her arm after being injected with Wyeth’s Phenergan nausea treatment.

Federalism Concerns

The Wyeth case illustrated one of the challenges companies face in some Supreme Court cases: persuading members of the court’s conservative wing to limit the powers of state courts and legislatures.

Clarence Thomas, a justice who typically joins the court’s conservatives on social issues, sided with the pro-consumer majority in the Wyeth case. Thomas wrote that the high court shouldn’t block state product-liability lawsuits simply because they interfere with federal objectives.

Similarly, Thomas and Justice Antonin Scalia, another conservative on social issues, have said the Constitution doesn’t put any limits on damage awards.

“Federalism cuts across business interests,” said Washington appellate lawyer Carter Phillips. “Justices who you might expect to be pro-business in general will not be pro- business if it means violating federalism principles or other strongly held views on the law.”

One-Sentence Order

The justices didn’t explain their reasoning in yesterday’s Philip Morris case, dismissing the appeal in a one-sentence order that sets no legal precedent. The rebuff left intact an award that has grown to more than $150 million with interest and, if paid in full, would set a record in an individual smoker case.

Companies won victories in two decisions the court issued today. The court ruled that federal regulators may balance business costs against benefits in deciding whether to impose new requirements on power plants to protect aquatic wildlife. In the other case, the justices said workers can’t sue for age discrimination when the union representing them has agreed that any bias claims should go to arbitration rather than court.

Still, the term as a whole has mostly provided setbacks for business. The justices ruled against the Chamber of Commerce in a pair of cases earlier in the term involving employment lawsuits and arbitration.

That is in contrast to the court’s 2006-07 term, when the trade group’s position prevailed in 13 of its 15 cases before the nation’s highest tribunal.

“We see a court that takes them as they see them,” Conrad said.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

Last Updated: April 1, 2009 11:27 EDT