PUNITIVE DAMAGES STANDARDS IN SELECT JURISDICTIONS EMERGING TRENDS IN ASBESTOS LITIGATION April 7, 2011

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1 PUNITIVE DAMAGES STANDARDS IN SELECT JURISDICTIONS EMERGING TRENDS IN ASBESTOS LITIGATION April 7, 2011 Michael Drumke, HeplerBroom LLC Lisa L. Oberg, McKenna, Long & Aldridge LLC Christopher Placitella, Cohen, Placitella & Roth Deborah Schwetzer, Clapper, Patti, Schwetzer & Mason PUNITIVE DAMAGES BY STATE California punitive damages is proof of malice, oppression, or fraud. Malice means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. Oppression means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person s rights. Fraud means an intentional misrepresentation, deceit, or California permits injured persons to recover punitive damages to set an example, to deter similar acts, and to punish the wrongdoer. Adefendant in California may request a bifurcated trial in an action where the plaintiff has sought punitive damages. In the first phase of trial, evidence pertaining to the defendant s profits or financial condition is not admissible. However, evidence concerning the defendant s financial condition may be made available to the trier of fact in the second phase of the trial if the trier of fact Page 1of 7

2 concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. has found the defendant guilty of malice, oppression or fraud. Punitive damages are not permitted in wrongful death actions unless a survival claim is plead. Delaware punitive damages is ill will, malice, or intention to cause injury to the injured party. Malice must be proven. Punitive damages have been upheld in Delaware cases in a variety of litigation contexts, including product liability and personal injury. However, recovery of punitive damages is not permitted in wrongful death actions. Florida punitive damages is gross negligence. That is, negligence of a gross and flagrant character evincing reckless disregard of human life, or of the safety of persons exposed to its dangerous effects, or conscious indifference to consequences, or wantonness or recklessness, or a grossly careless disregard of the safety and welfare of the public, where that reckless Florida courts have upheld punitive damages awards in actions for product liability and wrongful death. Florida punitive damage statute places specific limits on the amount of awards. Punitive damage awards may not exceed three times the amount of the compensatory damage award. If an award exceeds these limitations, the punitive damages assessed are presumed to be excessive. Page 2of 7

3 indifference is equivalent to an intentional violation of the rights of others. Illinois punitive damages is gross negligence. Punitive damages may be awarded when torts are committed with fraud, actual malice, deliberate violence or oppression, or willfulness, or with gross negligence indicating a wanton disregard of the rights of others. Illinois courts have approved punitive damage awards in product liability actions. Punitive damages are not permitted in wrongful death actions. Recovery of punitive damages in an action brought pursuant to a survival statute has been permitted where the underlying cause of action was based upon a statute which allowed for punitive damages. Louisiana Punitive damages are prohibited in asbestos/toxic tort cases. Former Louisiana Civil Code art provided for punitive damages if it was proven that plaintiff s injuries were caused by the defendant s wanton or reckless disregard for public safety in the storage, handling, or transportation of hazardous or toxic substances. On April16, 1996, legislation passed which entirely repealed this article. Page 3of 7

4 Maryland The conduct that is required to sustain an award of punitive damages is actual malice. To show actual malice in products liability cases, a plaintiff must prove: (1) actual knowledge of the defect on the part of the defendant, and (2) the defendant s conscious or deliberate disregard of the foreseeable harm resulting from the defect. The standard to show actual malice in products liability cases was set forth in an asbestos matter, Owens-Illinoisv. Zenobia. The court reasoned that actual knowledge of the defect and deliberate disregard of the consequences isthe equivalent of the evil motive, or intent to injure, which constitutes actual malice. New Jersey The conduct required for recovery of punitive damages is actual malice, or harm that resulted from a wanton and willful disregard of the rights of others. The willful and wanton disregard elements require proof that the defendant deliberately acted or failed to act with knowledge of a high probability that the conduct would harm another and reckless disregard of this knowledge. New Jersey courts have upheld punitive damage awards in bodily injury and product liability cases. However, New Jersey courts have held that punitive damages may not be recovered in actions for wrongful death. Nonetheless, punitive damages are permitted in cases brought pursuant to survival statute for pain and suffering of a decedent prior to death. The Punitive Damages Act limits punitive damages to five times compensatory damages or $350,000, whichever is greater. If punitive damages are awarded,the case gets referred to the New Jersey Attorney Page 4of 7

5 General s officeand local authoritiesfor criminal investigation. New York Recovery of punitive damages requires a showing of conduct that is reckless and wanton, or without regard to others. One must prove conduct more egregious than gross negligence, but malice need not be proved. New York courts have upheld punitive damage awards in product liability actions. Simpson v. Pittsburg Corningaffirmed the assessment of punitive damages against an asbestos products manufacturer in a personal injury action. This case set the burden of proof for punitive damages in products liability cases to be a preponderance of the evidence. If reckless conduct is proved, joint and several liability for compensatory damages can be imposed in an asbestos case. Ohio The conduct that is required to sustain an award of punitive damages is malice - intentional, reckless, wanton, and willful, or acts from which malice may be inferred from conduct and surrounding circumstances. The statute governing product liability claims provides for punitive damages. However, the statute does not permit punitive damage awards in product liability cases unless an injured party establishes by clear and convincing evidence that the harm for which he is Page 5of 7

6 entitled to recover was the result of misconduct that manifested a flagrant disregard of the safety of persons who might be harmed by the product in question. Pennsylvania The conductrequired to sustain an award of punitive damages is outrageous conduct, such as acts committed with an evil motive or reckless indifference to the rights of others. In Martin v. Johns-Manville Corp., a personal injury action against an asbestos manufacturer, the Pennsylvania Supreme Court held that in assessing punitive damages, the trier of fact can properly consider the character of the defendant s act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause, and the wealth of the defendant. Under these principles, the imposition of damages to punish a civil defendant is appropriate only where the conduct complained of is especially egregious. Page 6of 7

7 Texas In order to recover punitive damages, one must prove fraud, malice or gross negligence. Fraud means fraud other than constructive fraud. Malice means a specific intent by the defendant to cause substantial injury or harm to the claimant. Gross negligence means an act or omission: (A) which when viewed objectively from the standpoint of the actor at the time of its occurrence involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and (B) of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others. Under this requirement, at a minimum, gross negligence must be proved. By statute, Texas limits the amount that can be assessed as punitive damages. Additionally, a defendant may request a bifurcated trial in a case where there is a claim for punitive damages. In determining the amount of punitive damages to award, the trier of fact must consider evidence concerning the nature and character of the misconduct, the defendant s culpability, the parties situation, the defendant s financial condition, and the extent to which the conduct offends a public sense of justice. Page 7of 7