U.S. District Court for the Northern District of California, May 10, 2021
In this asbestos action, Mr. Toy (the plaintiff) alleged that he worked with asbestos-containing brakes manufactured by Bendix in the 1950s and 1970s. Defendant Honeywell as successor-in-interest to Bendix moved for summary judgment on several grounds. The plaintiff only opposed the defendant’s motion for summary judgment on the punitive damages claim.
Under California Civil Code § 3294(a), “a plaintiff may recover punitive damages “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.” The Code defines malice as 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.” Further, conscious disregard is shown when a defendant has “actual knowledge of the risk of harm it is creating and, in the face of that knowledge, fail to take steps it knows will reduce or eliminate the risk of harm.” Butte Fire Cases, 24 Cal. App. 5th 1150, 1159 (Cal. Ct. App. 2018). When seeking to impose punitive damages against a corporation, a plaintiff must show “the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice … on the part of an officer, director, or managing agent of the corporation” under the Code.
The defendant argued that the plaintiff could not proffer specific evidence that showed it had “actual knowledge of the risk of harm from asbestos in its products or that it failed to take steps to mitigate such risk.” In opposition, the plaintiff submitted several pieces of evidence to support its contention that the defendant had knowledge of the hazards of asbestos since the 1930s. The court considered each piece of evidence in turn.
First, the plaintiff submitted several articles from national publications such as the New York Times (1948 and 1965) and Newsweek (1950), as well as articles from the scientific community by Dr. W.C. Huerper (1950) and Dr. Irving J. Selikoff (1965). While the plaintiff could not show that one of the the defendant’s officer, director, or managing agents read one of these pieces, the court determined that a reasonable jury could “infer knowledge” from the publications and conclude that the managing agents would have been aware that asbestos was “a known carcinogen.”
Second, the plaintiffs submit a letter dated September 12, 1966 from the defendant’s Director of Purchases which attached the “Asbestos: Awaiting Trial” article from Chemical Week. The article’s writer notes that asbestos “has been accused … as a significant health hazard.” The article also observed that motor vehicle brake linings and clutch plates were a source of airborne asbestos exposure. The court cited a California court of Appeals case, which held that the trial court did not abuse its discretion by admitting the letter at trial, and found that a jury could reasonably interpret this letter as raising safety questions about asbestos.
Third, the plaintiff submitted letters sent from Johns Manville to the defendant dated 1968 and 1969 which highlighted the need for warning labels on bags of chrysotile asbestos, the use of protective devices for those exposed to asbestos, and the increased publicity and attention given to inhaling all kinds of dust and fumes. In 1972, Johns Manville held a seminar at the defendant’s executive offices. As such, the court determined that this information could show that the defendant’s managing agents were aware of the hazards of asbestos while continuing to sell asbestos-containing products.
Finally, the plaintiffs submitted internal memoranda discussing the risks of asbestos from 1979 until 1980. The defendant argued that the internal memoranda was irrelevant as they began placing warning labels on their products beginning in 1973. However, the court noted that the sufficiency and adequacy of the defendant’s warnings was at issue in this case, as a reasonable jury could determine that the defendant’s warnings was not sufficient or adequate.
The defendant argued that the scientific literature currently remains unsettled as to the risk of harm of asbestos exposure from brakes. The defendant argued that the proper use of their specific product would not have posed a health hazard to end users as “asbestos fibers were bound together with a resin binder system.” the defendant also proffered their own set of articles and literature which they argued showed no asbestos exposure from brakes. Ultimately, the court found that these arguments raised at least one disputed issue of fact, which should be resolved by the factfinder and not the court at the summary judgment stage. Thus, the court denied the defendant’s motion for partial summary judgment.