Lawyers defending corporations in the nation's largest asbestos personal-injury trial told the jury yesterday that large punitive awards would wipe out the company tills for paying future asbestos victims.
"The money you impose as punishment you essentially are taking away from future asbestos claimants," said E. Donald Elliott, a lawyer for GAF Corp., one of four companies facing punitive damages in the trial's final phase.
Do a little math, he told the jury, and you'll find compensatory damages alone could run to $15 billion in the trial.
"The budget for the state of Maryland for the entire year is $10 billion. We are talking big bucks," Mr. Elliott said. "There is no question GAF nor any other company can pay $15 billion in one fell swoop."
The jury ruled last week that GAF and three other companies must pay punitive damages for disregarding knowledge of the potential health hazards posed by exposure to asbestos in the workplace.
After hearing evidence in the final phase, the jury will determine a "multiplier," or formula for assigning punitive damages based on actual damages awarded to any of the more than 8,000 plaintiffs in the case.
Mr. Elliott, who in passing also told the jury his client employs 147 at its roofing tile plant in Baltimore, was not alone in asking the panel to consider the devastating effect large damage awards would have on the companies.
Warren Weaver, attorney for Porter-Hayden Co., said his client did not have enough resources to pay anticipated compensatory damages, much less punitive damages.
Lawyers for the plaintiffs were not moved by the poor-mouthing, especially when it came from GAF and the Keene Corp.
Attorney Ronald Motley said GAF has been profitable and its chairman, Samuel J. Heyman, said his company could weather the costs stemming from asbestos litigation as recently as May, when the corporation offered $200 million in notes.
"He said it don't matter what happens in Baltimore. We can pay it," Mr. Motley told the jury. "Don't let them tell the [Securities and Exchange Commission] one thing and you another."
Mr. Motley then made a show of summoning Mr. Heyman to the witness stand.
Mr. Heyman was not in the courtroom and, presumably, not even in Baltimore.
The first witness called in the trial's final phase, Washington, D.C.-based management consultant and economist John R. Glennie, said GAF ranked first among U.S. chemical companies in profits as a percentage of sales for 1991.
Much of Mr. Glennie's testimony also involved a $1.5 billion leveraged buyout of the company in 1989 by a management group led by Mr. Heyman.
Mr. Glennie also testified he found no evidence the company ever set aside any money to pay asbestos victims.
But Mr. Elliott, who repeatedly attacked Mr. Glennie's credentials to testify as an expert on economics, may have scored points when he got the witness to acknowledge he had never heard of the Financial Accounting Standards Board -- the "Supreme Court of accounting" that sets criteria for reserving funds, according to the lawyer.
Lawyers for the plaintiffs also renewed efforts, so far unsuccessful, to show Keene Corp. created a number of corporations for the specific purpose of sheltering assets from asbestos victims.
Mr. Glennie is expected to testify Keene may have no money to pay damages.
The plaintiffs' lawyers entered into the public record yesterday corporate documents they say proves their point, but presiding Judge Marshall A. Levin continued to rule they could only ask questions about Keene and not the related corporations.
Noting that the law favored Keene's position on the matter, Judge Levin added, "I say so regretfully because it does look like Keene has done everything necessary to divest itself of assets."
Testimony in the final phase of the trial is scheduled to resume today.