Punitive Damages Award Eliminated on Appeal in Take-Home Exposure Case

Court of Appeal of California, Second Appellate District, Division Three, November 19, 2020

The plaintiff, Alfred Mata, alleged he developed mesothelioma as a result of asbestos exposure. Alfred’s father, Francisco, worked as a serviceman for Park Water from 1970 until 1989. Francisco’s responsibility of cutting water pipes with a power saw caused visible dust to settle on his clothing, which he took home to his son. Park Water used both asbestos-containing cement pipes and non-asbestos pipes. The asbestos pipes contained both chrysotile and crocidolite asbestos. After the trial, the jury found that Park Water’s negligence was a substantial factor in Alfred’s asbestos exposure from Francisco’s work. The jury found Park Water 54 percent responsible, and awarded the plaintiffs $6,376,500 in economic and noneconomic damages. The jury also found that “an officer, director, or managing agent of Park Water acted with malice,” and awarded $5 million in punitive damages against Park Water after the punitive damages phase of the trial.

Park Water filed a motion for judgment notwithstanding the verdict (JNOV) on several grounds. Notably, Park Water argued the plaintiffs failed to present evidence of willful, conscious disregard for safety needed to satisfy the malice standard, that an officer or managing agent knew of and consciously disregarded the danger, or ratified an employee’s malicious conduct. Further, Park Water also argued that the punitive damages award was excessive. The trial court granted Park Water’s JNOV motion and modified the judgment to eliminate the punitive damages award. Thereafter, the plaintiffs appealed the modified judgment, and Park Water filed a protective appeal.

Ultimately, the appeals court affirmed the trial court’s modified judgment. The appeals court set forth several cases where defendants were found to have acted with malice. In Pfeifer v. John Crane, Inc., the defendant acted to protect its employees from harmful asbestos dust, but did not warn product users, passed on safety data sheets, or tested its product to determine whether use of the product would generate concentrations of fibers over the regulatory limits. In Hasson v. Ford Motor Co., Ford failed to test, fix, or warn its customers of dangers associated with brakes on its Continental models after receiving customer and dealer complaints. In West v. Johnson & Johnson Products, Inc., the elicited testimony showed that the defendant inadequately tested its product after receiving customer complaints.

In distinguishing this matter, the appeals court noted that no evidence was elicited to show that Park Water’s management knew that their employees were working with asbestos-containing products as “[t]he record is devoid of testimony from anyone in management in the 1970’s and 1980’s about what the corporation knew.” Also, the company was not prompted to test its equipment as Park Water neither manufactured nor supplied asbestos-containing products. In addition, Park Water did not receive any complaints of asbestos-related harm, nor was there any evidence that Park Water acted to protect its employees before 1985 or 1986, when Park Water stopped its employees from handling asbestos-containing pipe. While the plaintiffs contended that the manufacturers of the asbestos-containing pipe warned about the presence of asbestos in the pipes, there was no testimony that a Park Water manager received those warnings. Further, the appeals court noted that while a pipe manufacturer’s technical data sheet noted the presence of asbestos, the sheet did not warn of the risks of cutting the pipe.

The plaintiffs also argued that Park Water should have known that take-home asbestos exposure risked the health of employees’ families in the 1970s. However, the appeals court rejected the plaintiffs’ contention, noting that “the foreseeability of take-home exposure in a vacuum does not constitute clear and convincing evidence that Park Water’s management was aware that it was “making industrial use” of asbestos triggering the obligation to assess whether its employees were exposed to illegal levels of airborne fibers, and to consider the subsequent possibility that its employees might risk taking that asbestos home.” As such, the appeals court held that “absent evidence from which an inference may be drawn that Park Water management knew of the risk posed to its employees in the construction and service departments working with asbestos, it is not reasonable to infer from the company’s general safety consciousness alone, that it is highly probable that the company was aware of the specific risk to its own employees and their families of asbestos, or that it should conduct testing to ascertain the risk.”

In addition, the plaintiffs argued that Park Water’s failure to comply with state and federal regulations, including OSHA regulations, should be considered as clear and convincing evidence of a conscious disregard of the danger of asbestos exposure. However, the plaintiffs produced no evidence that spoke to Park Water’s corporate motive with regard to their failure to follow the regulations, nor was evidence produced that Park Water consciously and intentionally decided to ignore regulations in connection with asbestos. Under California law, the violation of a statute is negligence per se, and cannot be used as a basis to show malice. Thus, the trial court properly modified the judgment as “without actual knowledge by a decisionmaker of the presence of asbestos at work and the consequential danger from failing to protect others from the risk of harm caused by fibers, the mere failure to implement safety measures does not equate with malice.”