“When a tort defendant is found liable for a plaintiff’s injuries, a second jury is frequently convened to decide whether the defendant should also be required to pay punitive damages. All too often, however, the trial judge fails to provide proper guidance to the jury—with the result that the defendant is unprotected from irrationally large awards.”
—Richard Samp, WLF Chief Counsel
WASHINGTON, DC—Washington Legal Foundation today filed a brief urging the California Supreme Court to review and reverse a lower-court decision that upheld a massive punitive damages award against a manufacturer that 40 years ago marketed a product containing asbestos—even though the courts had previously determined that the manufacturer was only responsible for 3.5% of the plaintiffs’ injuries. WLF’s amicus brief in Casey v. Kaiser Gypsum Co. argued that lower courts are in urgent need of guidance regarding how they can conduct punitive-damages-only retrials in a manner that provides fundamental fairness to all litigants.
John Casey was exposed to a broad range of asbestos products during his career as a plumber and pipefitter at numerous construction sites. He eventually contracted mesothelioma, a form of cancer associated with exposure to asbestos. Because most of the manufacturers of asbestos-laden products with which pipefitters frequently work (e.g., gaskets and packing) have long since been driven into bankruptcy, Casey was forced to go to trial against Kaiser Gypsum, which until the 1970s produced an asbestos-containing joint compound used in putting up wallboard.
Although Casey had no recollection of ever having been exposed to a Kaiser Gypsum product, a fellow employee recalled that nearby workers installing wallboard at several construction sites used Kaiser’s product. Based on that evidence, the jury at an initial trial awarded $21 million in damages, but concluded that Kaiser was only 3.5% responsible. The jury was deadlocked on whether Kaiser acted with sufficient maliciousness to warrant a punitive damages award.
At a retrial before a second trial limited to the punitive damages issue liability against an oil refiner for having (at the direction of federal environmental officials) added MTBE to its gasoline. MTBE is a chemical that reduces the level of pollution emitted by a car’s exhaust, but it also can contaminate groundwater if it accidentally leaks or spills from storage facilities. WLF argues that state tort judgments of this sort conflict with federal law and thus are preempted.
The New Hampshire courts determined that Exxon (along with every other American oil company) acted negligently when it complied with the federal reformulated gas (RFG) program by including MTBE in the gasoline it distributed in New Hampshire. WLF’s amicus brief in Exxon Mobil Corp. v. State of New Hampshire argues that the state courts should have held that federal law preempted the state tort claim, because it was impossible for oil companies to comply simultaneously with federal law and the New Hampshire mandate not to distribute MTBE within the State. While federal officials nominally permitted refiners to choose from among several possible gasoline additives to reduce air pollution, refiners’ only feasible option was MTBE. Exxon now faces a $236 million New Hampshire judgment (plus similar lawsuits in numerous other states) for having obeyed federal law.
WLF also urged the Supreme Court to consider whether New Hampshire violated Exxon’s due process rights by conducting a “trial by formula” that prevented Exxon from raising individualized defenses to allegations that its conduct caused the contamination of groundwater throughout the State. WLF noted that the Supreme Court held in its 2011 Wal-Mart decision that the trial-by-formula approach is impermissible in federal court because it violates federal statutory law. WLF urged the Court to hold that the Due Process Clause of the U.S. Constitution requires that similar procedural fairness be afforded defendants in state-court proceedings.
Upon filing its brief, WLF issued the following statement by Chief Counsel Richard Samp: “For 15 years, oil refiners added MTBE to their gasoline because they were required to do so by federal environmental officials. Yet, because they obeyed federal law, they now face billions of dollars in legal claims arising under state law. The Supreme Court should call a halt to this jackpot justice. New Hampshire seeks to recover a huge judgment from Exxon despite not presenting evidence that Exxon was responsible for any oil spills in the State.”
WLF is a public-interest law firm and policy center that advocates against state tort judgments that undermine uniform federal regulations that promote safety and protect interstate commerce.