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From Products Liability Law Daily, August 4, 2014

Punitive damages twice the compensatory award not excessive per se

By Pamela C. Maloney, J.D.

A $600,000 punitive damage award against a gasket manufacturer for failing to warn a pipefitter of the dangers of exposure to asbestos from its gaskets was not excessive even though it was twice the amount of the compensatory damages assessed against the manufacturer, the Kentucky Court of Appeals ruled in an opinion designated not for publication. The court initially determined that (1) the pipefitter’s evidence regarding the manufacturer’s knowledge of the dangers of asbestos exposure was sufficient to justify the jury’s compensatory and punitive damage awards against the manufacturer (Garlock Sealing Technologies, LLC, August 1, 2014, Dixon, R.).

Background. During the course of his 38 years of employment as a pipefitter, Dayton Dexter, was exposed to various products and materials that contained asbestos, including gaskets manufactured by Garlock Sealing Technologies, LLC. The pipefitter was diagnosed with lung cancer, which was attributed to a combination of his occupational exposure to asbestos and his long-term cigarette smoking. He and his wife filed a lawsuit against 19 defendants, including Garlock, which was based on products liability failure to warn and common-law negligence. Following the pipefitter’s death, the claim was pursued by his estate against two remaining defendants, Garlock and CertainTeed. An initial jury verdict in the estate’s favor was overturned because the jury failed to apportion any fault among the empty chair defendants. After a second trial, the jury awarded a total of $1,599,749 in compensatory damages and assigned 17 percent of the liability to Garlock. The jury also assessed $600,000 in punitive damages against Garlock, which appealed, contending that the estate failed to prove that (1) Garlock knew or should have known that its gaskets posed a risk of asbestos exposure to consumers, requiring Garlock to warn of the danger, and (2) Garlock engaged in outrageous conduct justifying an award of punitive damages. In the Alternative, the gasket manufacturer argued that the punitive damage award was unconstitutionally excessive.

Manufacturer’s knowledge of risk. The court rejected the gasket manufacturer’s argument that there was insufficient evidence that it knew or should have known that its gaskets posed a danger to users. According to the manufacturer, its gaskets were manufactured with the asbestos encapsulated inside the gasket, which minimized exposure. In support of this theory, the manufacturer’s expert, an industrial hygienist who had studied the air quality during removal of the gaskets, had determined that the asbestos exposure was within the limits established by OSHA. The court found that the estate produced evidence that conflicted with the manufacturer’s theory and that established that the manufacturer knew its gaskets contained asbestos, that asbestos exposure caused cancer, and that the end-user of the gasket might have to grind it during the removal process. From the evidence, the jury could reasonably conclude that the manufacturer should have known of the foreseeable consequence of removing an asbestos-containing gasket and that it failed to warn end users of the risks.

Punitive damages. Evidence supporting the estate’s claim for punitive damages showed that (1) the gaskets contained asbestos; (2) by the 1940s, the manufacturer knew that asbestos exposure was linking to cancer; and (3) that end users had to grind the gasket to remove it; yet, the manufacturer did not put warnings on its asbestos-containing gaskets until 1977. This evidence was sufficient for a jury to conclude that the manufacturer’s failure to warn constituted a wonton or reckless disregard for the health and safety of end-users like the pipefitter. Thus, the manufacturer was not entitled to a directed verdict on the issue of punitive damages.

Excessiveness of punitive damage award. In determining that the punitive damage award was not excessive, the court explained that the evidence showed that the pipefitter had suffered physical harm due in part to his exposure to asbestos and that the manufacturer knew of the risks associated with asbestos in the 1940s but failed to warn users until 1977.It was reasonable to conclude that the manufacturer’s repeated failure to warn prior to 1977 exhibited a reckless disregard for the health and safety of the pipefitters who were grinding and removing the gaskets. There was also evidence that the manufacturer manipulated the study which found asbestos exposure to be within the limits set by OSHA.

Finally, while acknowledging that there was no bright line rule, the court noted that a single-digit ratio between punitive and compensatory damages was more likely to comport with due process. However, the court was not persuaded that a substantial disparity existed between the actual harm to the pipefitter and the punitive award of $600,000. The evidence showed that the pipefitter was enjoying retirement and had been in good health prior to his cancer diagnosis. He lived another 21 months after the diagnosis, during which he underwent two surgeries, including a partial lung removal. His quality of life diminished and he was eventually bed-ridden. After considering all the relevant factors, the court concluded that the punitive damage award was not grossly excessive and that the manufacturer had not been denied due process.

The case number is 2006-CA-000918-MR.

Attorneys: Trevor W. Wells (Miller Wells PLLC) for Garlock Sealing Technologies, LLC. Kenneth L. Sales (Bubalo Goode Sales & Bliss PLC) for Ava Nell Dexter.

Companies: Garlock Sealing Technologies, LLC

MainStory: TopStory DamagesNews AsbestosNews KentuckyNews

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