California Appellate Court Affirms All of Trial Court’s Rulings in Extensive Damages Case Against Kaiser Gypsum Court of Appeal of California, January 21, 2016

The plaintiffs in the case were a married couple who filed a claim for personal injury due to bystander asbestos exposure after the husband was diagnosed with mesothelioma. After a lengthy trial against defendant Kaiser Gypsum, the plaintiffs were awarded $21 million in compensatory damages but the jury could not reach a verdict regarding punitive damages. A retrial was ordered on this issue, and the second jury awarded $20 million in punitive damages, which the court reduced to just under $4 million. Defendant Kaiser Gypsum appealed, arguing various evidentiary and instructional errors and other issues. The plaintiffs challenged the court’s reduction of punitives. The appellate court, in an extensive summary of the first and second trials, and with extensive analysis of each point of appeal, affirmed all the trial court’s rulings.

The plaintiff husband worked as a plumber and pipefitter at numerous construction sites; the evidence showed that he worked with and around various asbestos products and was around when workers used joint compound. At the time of his exposure, the asbestos content of Kaiser Gypsum’s joint compound ranged from 1.5-6 percent. A co-worker testified that Kaiser made 70-80 percent of the drywall at their job sites. The defense experts testified that exposure levels such as those of the plaintiff would be much lower than those of actual users, and that until the 1970s it was believed that asbestos was not harmful unless large-dose exposures were sustained. The plaintiffs presented evidence that the risks of asbestos were well known by 1965.

The court addressed the following arguments on appeal:  (1) the trial court did not abuse its discretion in excluding Kaiser’s construction sequencing expert because this expert did not possess relevant experience; (2) as shown by California case law, the partial retrial on punitive damages with a separate jury did not violate California civil rules; (3) Kaiser failed to show prejudice with the court’s refusal to inform the second jury that the first jury awarded the plaintiffs $21 million in compensatory and Kaiser’s liability was 3.5 percent; (4) the fact that the second jury heard evidence that Kaiser sold asbestos through 1978, and the first jury heard it sold asbestos through 1975, could not have affected the outcome of the trial because there was extensive evidence of Kaiser’s conduct since 1965; (5) the fact that the second jury had no way of knowing what conduct the first jury found tortious, because the plaintiffs asserted three different theories of liability, is irrelevant because this argument was speculative and it improperly mixes the issues of liability and damages – an issue that Kaiser sought to keep separate; (6) the court did not abuse its discretion in excluding evidence of the plaintiff’s other exposures to asbestos, because the salient inquiry was whether Kaiser acted with malice. The court stated: “In sum, we conclude that the partial retrial limited to the issue of malice and the amount of punitive damages was not prejudicially unfair to Kaiser Gypsum.”

The court also addressed the issues of allocating pre-verdict settlement proceeds, and found the trial court did not abuse its discretion in allocating the amount of settlement credits the way it did. Further, the court found there was sufficient evidence of malice or oppression, and the trial court did not err in modifying the jury instruction regarding punitive damages. Finally, the trial court’s decision to reduce the punitive damages award was not an abuse of discretion.

Read the full decision here.


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