New York’s Highest Court Puts the “Brakes” on Asbestos Causation Evidence

Earlier this week, New York’s highest court effectively endorsed the “Forsterite defense” for chrysotile in friction products. By a 4-1 decision, the Court of Appeals affirmed a trial court order setting aside a jury verdict on the basis of plaintiffs’ failure to prove causation. In Juni v. A.O. Smith Water Products, the court ruled that plaintiffs’ expert evidence “was insufficient as a matter of law to establish that respondent Ford Motor Company’s conduct was a proximate cause of the decedent’s injuries.”

The majority opinion is sparse, only two sentences and sixty-eight words long. A concurring opinion by Judge Wilson, however, is more enlightening. Judge Wilson held that while there was no dispute that raw chrysotile asbestos carries increased risk of mesothelioma, plaintiffs did not submit any proof that chrysotile asbestos, as contained in Ford’s friction products, posed any causal relationship to disease. Ford’s experts set forth the “Forsterite defense” – that as a result of high heat in manufacturing and braking, any chrysotile in friction products would be converted into the “biologically inert” substance Forsterite. Plaintiffs did not produce an expert to rebut this opinion. Instead, plaintiff’s own expert conceded that “no one knows whether the friction product dust to which Mr. Juni was exposed when replacing the used products was toxic.”

This decision is a positive development for friction defendants in New York asbestos litigation and elsewhere. It is also authority for the broader proposition that the central issue is whether asbestos as a purported component of another product can cause disease -and not whether asbestos standing alone causes disease. Plaintiffs need to prove the former to establish general causation, and need to prove general causation before they can demonstrate specific causation.

At the same time, the decision emphasized that it was based “on this particular record.” Thus, the decision may be the result of inadequate trial preparation on the plaintiffs’ part rather than some significant shift in asbestos causation law. We expect the plaintiffs’ bar to respond aggressively in working up causation proof in pending and future cases. This may include finding experts who will attempt to dispute the amount of chrysotile converted into Forsterite, or the toxigenic properties of Forsterite.

 

Mediation Practice in the Southern District of New York

Over the past 25 years, the use of mediation by courts and litigants has mushroomed. One might well ask whether efforts at establishing mediation norms and standards have been able to keep up with this growth spurt in mediation’s broad acceptance and popularity. There are multiple forums for conducting ADR. Some “mediations” involve little more than counsel, either with or without their clients present, sitting down before an adjuster” in a no frills attempt to bridge the parties’“bid” and “ask”. Other mediators will talk to the parties, either together or separately, for a couple of hours and then, in the absence of a quick agreement, call it quits. Unless counsel is familiar with the practice of a particular mediator or mediation provider, it may be a challenge to correctly forecast for the client what will take place during the mediation session and what, if anything, may be demanded of them.

There are no widely accepted guidelines concerning the qualifications to be a mediator. A retired professional wrestling referee with no formal mediation training could probably hang out a “mediation” shingle at a store front. At least, in that instance, parties could be assured that this mediator would not tolerate hitting below the belt. Hopefully, counsel will have performed diligence concerning the background, qualifications and methodology of the mediator selected. This research should assist counsel in explaining to the client who the mediator is and what his or her qualifications are.

9-16Although some mediators have no doubt engaged in blatant conflict of interest, coercive behavior or outright fraud, these incidents are thankfully infrequent. In a mediation proceeding in which a client is represented by counsel, counsel can simply terminate an improper or abusive mediation by walking out with the client. However, this is probably not what the nervous client wants to hear from the lawyer before the mediation begins.

A Boston University Law Review article by Professor Michael Moffitt, titled “Suing Mediators” [Vol. 83:147, 154 (2003)] observes that “a clear standard of practice for mediators is difficult to identify. Mediation is a fragmented occupation, with practitioners varying to tremendous degree in their training and methodology. While some have argued that mediation should be treated as a profession, the lack of coherence in admission and practice standards makes the analogy imperfect at best. Instead, mediators operate under a patchwork of standards, promulgated by a range of practice associations, program administrators, and court systems.”

As more and more cases are referred to court-annexed mediation, courts have come to recognize their responsibility to ensure the quality of the mediation services provided. However, very few of the mediation programs that operate on the state or federal level have implemented any kind of systematic, performance-based competency assessment of their mediators. In the absence of competency assessment, court-annexed mediation programs have tended to rely on past training and experience, and participant feedback (when it is available), to determine whether the mediators on their rosters are doing a good job.

The ADR Program for the SDNY has taken steps to standardize mediation practice in its court-annexed mediation program. A joint pilot project was created by the New York City Bar Association Committee on Alternative Dispute Resolution and the ADR Program for the SDNY to create a mechanism for continued evaluation of mediators once they are added to the SDNY mediation roster. As a result of the project, a protocol was developed for ongoing evaluation of the SDNY’s panel mediators. In the past, mediators have been assigned by court staff on the basis of their having been previously approved by the court to perform court-annexed mediation. The evaluation protocol, which requires live observation and evaluation of the mediator during a mediation, went into effect in January 2016. Even mediators who have been conducting court-annexed mediations for many years will be subject to evaluation. The SDNY may be the only federal district court that presently conducts ongoing observation and evaluation of court-annexed mediators.

An intrinsic challenge to developing an evaluation protocol is determining what skillsets make for a good mediator in the first instance. For example, is there a place in the mediation room for the mediator to use pushing and prodding? Is there a point when pushing and prodding may be viewed by the participants (or by the evaluator) as coercion? As the planning for the SDNY protocol progressed, project participants identified different components of the mediation process to evaluate.

In identifying these components, however, the ADR Program for the SDNY was more or less communicating to its corps of 300 volunteer mediators that a certain mediation “process” was expected to be adhered to. For example, the components of the process that would be evaluated include: (1) the pre-mediation conference call with counsel; (2) the mediator’s opening statement; (3) the joint session and (4) exploring facts/interests and developing opinions.

The formalization of this checklist made several implicit assumptions about how a mediation should be conducted. First, that a pre-mediation conference call was a good idea and that it was helpful to discuss the mediator’s expectations during that call; second, that the mediator would give an opening statement at the mediation; and third, that the mediator would conduct a joint session with all participants present at the mediation rather than move directly into private caucuses.

Within the protocol’s rubric, there is certainly flexibility to permit the mediators to “do their own thing” at the mediation without the risk of receiving a failing grade from the mediator evaluator. For example, some mediators request that counsel for the parties each make an opening statement in the joint session before private caucuses take place. Some do not use this practice. Some mediators will caucus first with the plaintiff; others prefer to meet first with the defendant. But minor variations aside, a lawyer for a party required to attend a mediation in the SDNY should know what to expect. Far from the Boston University Law Review’s dour assessment of the state of the mediation art in 2003, considerable progress has been made in standardizing mediation practice. Lawyers who have been directed to mediation by the SDNY Mediation Office should be able to provide their clients a solid roadmap of they may expect during the mediation.

Second Circuit Snuffs Out Plaintiff Counsel Misconduct

On August 8, 2016, the Second Circuit issued its much awaited decision affirming the ruling of the Southern District of New York, which held that a $9.5 billion judgment obtained in Ecuador against Chevron Corporation by the indigenous Lago Agrio Plaintiffs in an environmental litigation could not be enforced. The Second Circuit’s 127-page decision represents a stunning rejection of virtually every legal argument advanced by Steven Donziger, who the district court found guilty of corrupt practices violative of the civil RICO statute.

8-22The Second Circuit’s decision will provide legal scholars much to discuss. After all, Donziger’s attorneys attacked the decision as unprecedented in that the trial court allowed Chevron, which had lost its case in Ecuador, to use a U.S. district court to attack the foreign damages award. However, at its roots, the Donziger RICO litigation was not really about issues such as jurisdiction or the enforceability of foreign judgments. Rather, it was about Donziger and his legal team’s brazen violations of ethics and norms when it prosecuted the Chevron case in Ecuador. The Second Circuit’s decision demonstrates that the court simply could not abide the evidence of legal misconduct. Specific instances of ethical misconduct by Donziger cited by the Second Circuit include the following examples:

  • Instructing his environmental consultant to estimate damages under the faulty assumption that Chevron’s predecessor entity, Texaco, was fully liable for all of the contamination, even after it had left the region. Donziger used what the consultant characterized as a “scientific wild ass guess” in the media to generate settlement leverage.
  • Directing Plaintiffs’ environmental consultants to use less probative tests after early environmental testing demonstrated that the pollution was likely not caused by Texaco.
  • Submitting to the court reports with falsified experts’ conclusions, including the charge that Texaco’s remediation was “inadequate or insufficient.”
  • Paying substantial fees to engineering experts to pose as “independent monitors” without disclosing to Chevron or the court that plaintiffs were paying them, which Donziger characterized in his notes as a “bargain with the devil.”
  • Coercing the presiding judge to cancel pollution site inspections due to concern that additional testing would produce pro-Chevron testing results. As coercion, Donziger used knowledge of an accusation that the judge had traded jobs for sex in his court.
  • Persuading the court to designate an independent court-appointed expert who would appear to be “independent”, despite being controlled by the Plaintiffs.
  • Directing plaintiffs’ environmental consultants to 1) perform the technical work supposedly performed by the court-appointed independent expert and 2) submit the report to the court under the independent expert’s name.

The fundamental weakness of Donziger’s appeal was his utter failure to attack any of the multiple factual bases for the trial court’s decision of nearly 500 pages. Some of the Second Circuit’s most important pronouncements are recitations of age-old legal precepts that are all too often ignored by our nation’s courts.

The appellants argued that any misdeeds by Donziger, however egregious they may have been, did not provide a basis for the district court to nullify their monetary award. They contended that they were unaware of any misconduct and “simply ‘unsophisticated client-principals following the lawyers’ lead’.” In rejecting this argument, the Second Circuit found that there was no basis for arguing that a party ignorant of the fraudulent actions of its lawyer may enforce a fraudulently procured judgment. To do otherwise, the Second Circuit held, would run afoul of the U.S. Supreme Court’s maxim that fraud “is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society.” Thus, the court noted, even innocent clients may not benefit from the fraud of their attorney.

The Hon. Amalya Kearse, writing for the Second Circuit, quoted the district court: “There is no ‘Robin Hood’ defense to illegal and wrongful conduct. And the defendants’ ‘this-is-the-way-it-is-done-in-Ecuador’ excuses–actually a remarkable insult to the people of Ecuador — do not help them. Evidence that Donziger had actively sought a prohibition in Ecuador of the disclosure ordered by the SDNY, the Second Circuit found, was evidence of bad faith and a justification for sanctions. On this basis, the court affirmed the Rule 37 sanctions granted Chevron by the district court. The district court had found the Donziger parties’ “obdurate and quite possibly contemptuous refusal to comply with their discovery obligation” warranted the striking of personal jurisdiction defenses.

A disturbing post-script to the Donziger saga is that, despite the evidence against his ethics, he retains “rock star” celebrity status in certain legal circles. Notably, after the issuance of Judge Lewis Kaplan’s trial court decision, Harvard Law School hosted Donziger at a panel discussion on Ecuadorian rainforest litigation. One may wonder why Donziger was considered a reputable source and deserving of an invitation. In fact, Paul Barrett in Bloomberg Businessweek (August 8, 2016) suggested that Donziger’s Harvard Law hosts ask him the following questions during his visit:

  • Why haven’t you rebutted or explained the evidence of fraud, bribery and collusion against you, under oath in a court of law?
  • If you did not commit fraud in this case, why did Julio Prieto, one of your Ecuadorian lawyers, email you with fears that if your activities were discovered “all of us, your lawyers, might go to jail”?
  • If you did not commit fraud in this case, how do you explain the bank records that show $1,000 was deposited in an Ecuadorian judge’s bank account on several occasions? Why were the deposit slips signed by a staff member of your organization?
  • If you did not ghostwrite the Ecuadorian judgment against Chevron, how do you explain that text from your internal work product was found word-for-word, typos and all, in the judgment?

Barrett suspects these questions were not addressed at the panel discussion in light of the tone of their event announcement material. Barrett concludes that “[w]hat we really need to find out is how much credibility should be assigned to the folks at Harvard, rather than Donziger himself, if they are willing to ignore the mountain of evidence against the racketeer and treat him as some sort of human rights crusader and victim of big business retaliation.” Harvard’s embrace of a disgraced lawyer, no matter how noble the underlying intention, raises an important question about the ends served by lending credibility to a non-credible individual.

All too often, in our nation’s mass tort litigation, such as in asbestos litigation, a clear judicial finding of fraud or misconduct does not result in the forfeiture of the party’s damages award. For example, despite clear evidence of plaintiff lawyers “gaming the system” in the Garlock bankruptcy case, many state court asbestos trial judges appear willing to take this misconduct in stride and to go about business as usual. There is little awareness in the defense bar of any judicial initiative to ensure that Garlock-like offenses are not proliferating in their courtrooms. A thorough house cleaning often does not take place in the judiciary until a journalist or an insightful jurist has brought unwelcome attention to the court.

New York Broadens Personal Injury Statute of Limitations for Waste Sites

On July 21, 2016, Governor Andrew Cuomo of New York signed legislation extending the statute of limitations in New York for personal injury claims related to pollution at superfund sites. The legislation was a response to the concerns of residents of Hoosick Falls, New York whose groundwater was contaminated with PFOA, a chemical compound previously used at manufacturing facilities in Hoosick Falls for several decades. Although the new legislation was specifically tailored to assist residents at Hoosick Falls in bringing PFOA-related personal injury cases, it is likely that the law will have an impact far beyond Hoosick Falls.

7-28The new law resurrects previously time-barred claims. Any time a site is designated a superfund site, potential plaintiffs will now have a new three-year window to bring a personal injury action related to the site. Corporate entities that have been identified as responsible parties at inactive hazardous waste disposal sites may find themselves at increased risk for alleged toxic exposures that may have occurred decades ago. The new law has the potential to generate an enormous windfall for the plaintiff bar.

Prior to the new enactment, New York already had an expansive statute of limitations for toxic tort claimants in latency cases. The period in such cases is computed from the “date of discovery of the injury by the plaintiff or from the date, when through the exercise of reasonable diligence, such injury should had been discovered, which ever is earlier.”

The new statute, codified as CPLR 214-f, supersedes this discovery trigger.

Action to recover damages for personal injury caused by contact with or exposure to any substance or combination of substances found within an area designated as a superfund site. Notwithstanding any provision of law to the contrary, an action to recover personal damages for injury caused by contact with or exposure to any substance or combination of substances contained within an area designated as a superfund site pursuant to either Chapter 103 of Section 42 of the United States Code and/or Section 27-1303 of the environmental conservation law, may be commenced by the plaintiff within the period allowed pursuant to section two hundred fourteen-c of this article or within three years of such designation of such an area as a superfund site, which ever is latest.

The plaintiff may have known about the contamination and alleged illness for years, but no matter. The statute begins anew once the designation takes place.

It is well known that a federal or state site may be designated as a superfund site decades after alleged contamination has taken place. CPLR 214-f may require corporate defendants identified as potentially responsible parties (PRPs), even if de minimis, at newly listed superfund sitesto defend personal injury cases alleging decades-old exposures. The Hoosick Falls litigation will likely target: (1) a single chemical compound, PFOA, (2) used by a small group of defendants, (3) identified in drinking water, and (4) specific diseases that the epidemiologic literature associates with PFOA exposure. As enacted, however, the law may encourage plaintiff lawyers to plead “chemical soup” mass tort toxic tort claims against multiple defendants involving multiple chemical substances and alleging that this “chemical soup” caused a broad range of diseases.

New York ECL 27-1303, which is specifically referenced in the new law, emphasizes the role of New York counties in identifying inactive hazardous waste disposal state sites within their boundaries and submitting annual reports to the NYDEC describing the location of each suspected site and the reasons for such suspicion. Unlike the designation of a superfund site at the federal level, the designation of a superfund site at the state level is a much more localized process that can be subject to political manipulation.

The sponsors of the legislation were clearly influenced, not only by the discovery of water contamination in Hoosick Falls, but the serious problems in Flint, Michigan as well.

The recent discovery of water contamination in Hoosick Falls, New York and Flint, Michigan has raised great alarm across our country and our state. These instances of contamination have been sited as a potential cause of many previously unexplained illnesses suffered by members of those communities. In many cases, the statute of limitations to bring a personal injury action has long since run before any contamination was every discovered. This bill seeks to address this in equity and give those who have been sickened legal recourse to be made whole.”

Although the sponsors claim that their bill would “create a narrowly tailored legal mechanism to address instances where extraordinary circumstances negatively impact public health,” this legislation is anything but narrow. The statute permits recovery “for injury caused by contact with or exposure to any substance or combination of substances.” Plaintiff may argue that the new law applies to any substance at any CERCLA site regardless of whether that substance is subject to regulation under the statute. For example, CERCLA specifically excludes petroleum contamination. Is a company that disposed of petroleum products at a waste site, which is not a proper substance for CERCLA regulation, a proper target of a personal injury action under CPLR 214-f?

Evolving Rules on Discovery of Social Media in New York

Personal injury claimants routinely candidly discuss their personal injury travails and who might be responsible for those injuries on Facebook and other social media. They brazenly post photographs depicting exploits on jet skis, bicycles and other recreational equipment that serve to undermine their lawyer’s assertions of irreparable and disabling injury. How then can the defense obtain social media in discovery to defeat specious or exaggerated claims?

4-22The difficulty of obtaining private social media information under New York state practice discovery rules is illustrated by Forman v. Hankin, 134 A.D.3d 529 (1st Dep’t 2015). Plaintiff Kelly Forman alleged that she sustained a serious brain injury as a result of falling off a horse, which left her unable to reason, find words, write or communicate effectively. The trial court acknowledged that photographs of plaintiff engaging in various activities after her accident, particularly activities she claimed she was no longer is able to engage in due to her fall, were of enormous probative value. Therefore, the court ordered her to produce any post-accident photographs on Facebook that did not depict nude or romantic encounters. Because of the cognitive injuries alleged, the trial court ordered plaintiff to provide an authorization to permit defendant to obtain records from Facebook, including archived or deleted records, showing each time plaintiff posted a private message and the number of characters or words in the text of each private message. Defendant was not permitted to obtain the content of the post-accident messages, but only a number or words or characters in the messages. Considering the allegations of injury, just being able to prove that plaintiff was using social media as a form of self-expression would be an accomplishment for the defense.

On appeal, the First Department modified the trial court’s order by vacating that portion of the order directing plaintiff to produce Facebook photographs she did not intend to introduce at trial and the authorization for Facebook records. Sadly, this ruling is consistent with rulings by other appellate courts in New York that require a defendant to make a threshold showing before permitting disclosure of social media no matter how compelling the need.

What then is the most effective strategy for defense counsel in New York to employ to obtain this information in light of Forman? First, the defendant must establish a prima facie showing of relevancy. At a minimum, this can only be accomplished by crafting a narrowly tailored request for information, such as a request limited to social media conversations concerning the claimed injuries. Alternatively, New York courts permit disclosure if defendant can establish that certain social media information contradicts the plaintiff’s claims. In Forman, the First Department held that the mere fact that plaintiff had posted pictures or sent messages did not sustain this burden. Defendant’s argument that the information sought could be relevant to rebut plaintiff’s claimed injuries was dismissed as a “fishing expedition”.

Correctly so, the dissent in Forman lambasted the majority’s requirement that a defendant only be permitted to obtain disclosure “if, and only if, the defendant can first unearth some item from plaintiff’s publically available social media postings that tends to conflict with or contradict the plaintiff’s claims.” This requirement presents defense counsel with a dilemma. If a defendant must produce for the court publically available information to establish a factual predicate to obtain private social media messages, how does defendant obtain that information in the first instance? Arguably, once a defendant has obtained publically available information undermining plaintiff’s claim, private social media disclosure may become superfluous.

What then are strategies that defense counsel can utilize to maximize the likelihood of obtaining discovery of private social media? First, it is axiomatic that a defense lawyer should search plaintiff’s name in as many social media platforms as possible to discover publically available information. For example, there are online search tools available to search for an individual twitter user’s history of tweets. Using these websites, defense counsel can insert the name of the product, the manufacturer of the product, and/or the particular type of product at issue into the search field and locate tweets, if any, referencing those terms.

Does the plaintiff post on a personal blog or message board? Certain message boards may be dedicated to the type of issues or damages being litigated. There may be online sites offering specifics relating to the claimant’s purported personal injury at issue in the litigation. Once information on a personal blog or message board is obtained, it may facilitate the drafting of a demand or a motion to require production of the requested private social media disclosure. Although it may take a little more effort than grinding out a form demand, a specifically tailored discovery request may have a greater likelihood of being upheld.

Finally, it is essential that defense counsel send a preservation letter to plaintiff’s counsel to avoid any altering of the privacy settings of the claimant’s social media profiles or otherwise taking down previously posted information.

Is Sky The Limit In New York City Asbestos Litigation?

In the New York County Asbestos Litigation (“NYCAL”), the value of remittitur is steadily decreasing because courts are willing to accept higher and higher awards.  Although awards in comparable cases are not binding, appellate courts recognize that they offer precedent as to whether an award deviates from reasonable compensation.

Remittitur allows a court to set aside a jury award as excessive if it deviates materially from what would be reasonable compensation. Because personal injury awards, especially for pain and suffering, are subjective opinions which are formulated by the jury without the availability of guidance or precise mathematical quantification, reviewing courts seek guidance from comparable cases in deciding if an award deviates from fair and reasonable compensation.

In Konstantin v. 630 Third Avenue Associates, an award for pain and suffering was reduced by the trial court to $4.5 million for 33 months of pain and suffering and $3.5 million for an estimated 18 months of future pain and suffering. Similarly, in Dummit, the court sustained an award of $5.5 million for 27 months of past pain and suffering and $2.5 million for an estimated 6 months of future pain and suffering. On appeal, the Appellate Division, First Department, (July 3, 2014), upheld both the Konstantin and Dummit post-remittitur awards, in a much anticipated decision. On a similar scale, in Estate of Peraica (March 2013), after a jury awarded damages to a 63 year-old deceased mesothelioma plaintiff, the trial court reduced a $35 million jury verdict to $18 million for two years of pain and suffering.

In NYCAL (Assenzio v. A.O. Smith), Index No. 190008/12 (Sup. Ct., NY Co. February 5, 2015), the Hon. Joan Madden continued the judicial policy of remittitur inflation by pushing upward the accepted “per month” value of a pain and suffering award on remittitur. Judge Madden urged the parties to stipulate to an award that included for multiple plaintiffs $5.5 million for 20 months of past pain and suffering and $3.2 million for 6 months of future pain and suffering; $4 million for 18 months of past pain and suffering and $3.5 million for an estimated 24 months of future pain and suffering; $4.5 million for 30 to 36 months of past pain and suffering and an estimated $3 million for 18 months of future pain and suffering; and $5 million for 18 months of pain and suffering. The facts of each plaintiff’s course of treatment and disease purportedly warranted the court applying varying pain and suffering calculations.

There remains some hope for defendants to win significant remittiturs.  The Matter of New York Asbestos Litig. v. John Crane, Inc., 28 A.D.3d 255 (N.Y. App. Div. 1st Dept. 2006) involved two plaintiffs: One was awarded $7 million for past pain and suffering and $7 million for future pain and suffering, while the other (a decedent’s estate) was awarded $8 million for past pain and suffering.  Defendant appealed the decision, and the trial judge, the Hon. Paula J. Omansky, vacated the awards, suggesting the plaintiffs stipulate a reduction of their awards to $3 million for past pain and suffering and $1.5 million for future pain and suffering for the living plaintiff.  This decision underscores the view that asbestos related verdicts can result in significant remittitur, although it is not clear from a review of the case law how or why a favorable result may be achieved in any particular case.

Nevertheless, seeking a verdict reduction in some NYCAL courts may seem like a futile exercise.  The Matter of New York City Asbestos Litig. Alfred D’Ulisse v. Amchen Products, Inc., 842 N.Y.S.2d 333 (Sup. Ct. N.Y. Cty. 2007) reminds us of how large post-verdict awards can be.  Plaintiff D’Ulisse was awarded $10,000,000 for past pain and suffering and $10 million for future pain and suffering.  As if those awards were insufficient, the Hon. Louis B. York further awarded D’Ulisse’s wife $5 million for loss of her husband’s services and society.  The judge held that the $25 million award did not “shock the conscience” of the court.  Although there is no disagreement that this plaintiff suffered a gruesome degree of suffering, an award this gargantuan is certainly subject to debate and undoubtedly shocks the conscience of many.

On the other hand, in a similar battlefield just outside the purview of NYCAL, the Second Department has at least on occasion considered inflated jury verdicts unreasonable.  In Aguirre v. Long Island Railroad Co., 847 N.Y.S.2d 895 (Sup. Ct. 2nd Dept. 2007), a Brooklyn jury awarded three plaintiffs $2 million, $3 million and $4 million, respectively, for past pain and suffering, and the same amounts for future pain and suffering.  Defendant LIRR moved for a new trial on damages, or at the very least the grant of a remittitur.  Although declining the latter option, the Hon. Lawrence S. Knipel granted a new trial for damages, deeming the awards to have “materially deviate[d] from what would be reasonable compensation.”  The judge did, however, give plaintiffs the option to reduce the award on their own accord by a total of $300,000 each.  Nevertheless, this evidences the understanding, at least by some members of the bench, that asbestos awards can at times be inexplicably exaggerated.

Although there can be no question that mesothelioma plaintiffs endure horrendous pain and suffering, it is nonetheless difficult to justify how reviewing courts can assign pain and suffering valuations on remittitur that so greatly exceed the valuations assigned to similar cases only a few short years ago. It may appear to corporate defendants, particularly those with marginal liability, that NYCAL penalizes defendants that go to trial rather than give in to extortionate settlement demands.  It is more or less impossible for corporate defendants to create a reliable matrix of potential exposure based upon “per month pain and suffering” because the post-trial valuation of pain and suffering continues to go up and up, seemingly without rhyme or reason.  It is therefore all the more challenging for an in-house counsel or an insurance claims examiner to provide management an accurate forecast of liability exposure.  The recent decision to permit punitive damages in NYCAL only further complicates the exposure calculus.

Important Recent Decisions From New York City Asbestos Litigation

As 2014 draws to a close, the New York City asbestos litigation (“NYCAL”) has seen reaffirmation of the recent decision to allow punitive damages claims to go forward, and two summary judgments that show the court is requiring solid, non-speculative evidence of exposure to a defendant’s products.

Punitive Damages

On December 15, 2014, Justice Sherry Klein Heitler denied the NYCAL defendants’ motion to renew and reargue the court’s April 8, 2014 decision to allow punitive damages to be pursued in NYCAL cases.  Prior to the April 8 ruling, defendants and plaintiffs had an agreed-upon Case Management Order (“CMO”) that stayed claims for punitive damages.  In the motion to renew and reargue, defendants asserted that the April 8  ruling created mass confusion among the asbestos judges and counsel, and undermined the parties’ voluntary CMO which was designed to provide a fair, expeditious and inexpensive means to resolve asbestos claims. Defendants also argued that Judge Heitler exceeded her authority because the CMO was a negotiated, agreed-upon compromise of the parties.   Judge Heitler rejected these arguments, ruling that the court has the authority to correct what in its view was “a fundamental inequality in the CMO.”

In rejecting defendants’ arguments, Judge Heitler and relied on the overarching principle that New York public policy recognizes that an asbestos plaintiff has a right to seek punitive damages in appropriate circumstances.  The court noted that punitive damages are not deferred in any other county in the State, and denied there was any confusion among the asbestos judges.  Judge Heitler ruled that each trial judge has the authority and responsibility to determine whether a jury instruction for punitive damages should be permitted.

Justice Heitler also rejected defendants’ equal protection and due process claims.  She noted that asbestos defendants in NYCAL are not treated any differently than in any other county and reiterated that the April 8 ruling made clear that punitive damages are only recoverable if the proof establishes there was ‘such gross, wanton or willful fraud or other morally culpable conduct to a degree sufficient to justify such an award.’  Moreover, neither the April 8 ruling nor the CMO prohibited a defendant from moving to dismiss a punitive damage claim.

Lack of Nexus and Causation

In Falkenmeyer v. A.O. Smith Water Products Co., defendant Cleaver-Brooks moved for summary judgment based on the absence of evidence of exposure.  The court recognized that a plaintiff must demonstrate that there was actual exposure to asbestos fibers released from the defendant’s product.  Plaintiff’s decedent died of lung cancer attributed to an occupational exposure to asbestos.  To prove liability, plaintiff proffered the testimony of decedent’s co-worker, who testified that both he and the decedent worked on boilers and burners and were thereby exposed to asbestos.  The co-worker generally recognized the name of defendant’s product, but also admitted that he didn’t know which particular boilers and burners that he or the decedent worked on. Falkenmeyer granted summary judgment, ruling that the nexus to defendant’s product was speculative and liability could not be reasonably inferred from co-worker testimony.

Similarly, in Casaregola v. 3M Company, defendant Cleaver Brooks moved for summary judgment after two-co-workers of the plaintiff’s decedent failed to demonstrate that the decedent was exposed to asbestos from defendant’s product.  Casaregola was a carpenter and worked on various Navy ships.  One ship, the Mormac Cargo, did use defendant’s evaporator and acid-cleaning pumps.  However, there was no showing that the decedent worked on the Mormac Cargo or that similar ships that decedent actually worked on had the same equipment.  Moreover, even if these ships had the same equipment, there was no evidence of Mr. Casaregola’s actual exposure.  The court rejected a co-worker’s affidavit because it failed to demonstrate Mr. Casaregola’s actual exposure.  The court ruled that “plaintiff cannot show that Mr. Casaregola was exposed to asbestos from the products for which the defendant bears responsibility without resorting to speculation” and granted summary judgment.