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Court reverses punitive damages Asbestos plaintiffs barred from seeking such awards


In a decision that could cost plaintiffs in Maryland's asbestos litigation millions of dollars, the state's highest court yesterday virtually eliminated any chance for asbestos victims to recover punitive damages.

Reviewing a case heard in Baltimore, the Maryland Court of Appeals reversed punitive damage awards totaling $3.5 million for three asbestos victims -- and barred more than 8,500 plaintiffs awaiting future "minitrials" from such awards.

What's more, lawyers in the case said that the ruling means that other asbestos plaintiffs will have almost no chance of winning punitive awards unless they uncover startling new evidence against asbestos companies.

"If the evidence we presented in this case isn't enough, I don't know what is," said Patricia Kasputys, a lawyer with the law firm of Peter G. Angelos who represented the plaintiffs in the appeal case.

The court said in a 106-page opinion that evidence raised against two asbestos companies did not rise to the standard necessary to prove the companies acted with malicious intent in marketing or installing their products.

The ruling came in the appeals court's review of the nation's largest asbestos-personal injury trial, a five-month-long proceeding in 1992 in Baltimore Circuit Court.

In that trial, a jury found seven companies negligent and liable for failing to warn workers about the potential health hazards posed hTC exposure to asbestos fibers. That cleared the way for thousands of plaintiffs, who claimed to suffer from diseases linked to on-the-job exposure to asbestos, to press for damages at mini-trials that are as yet unscheduled.

the trial's second phase, the jury awarded $11.2 million in compensatory damages to three "trial plaintiffs" whose individual claims were included to give the trial a human element.

In the third phase, the jury determined that four companies should pay punitive damages for disregarding knowledge about the hazards of asbestos. The jury ruled those companies should pay up to $2.50 in punitive damages for every dollar of compensatory damages. In yesterday's ruling, the Court of Appeals upheld the compensatory damages awarded to the three plaintiffs.

But it found the evidence to support punitive damages against manufacturer Pittsburgh Corning Corp. and distributor Porter-Hayden Co. to fall short of standards set by a landmark, 1992 Maryland case known as "Zenobia."

Citing a proliferation of "extremely high" punitive damage awards, the court in that case raised the standards to require "clear and convincing evidence" that the defendant wasn't merely recklessly indifferent, but instead acted with "actual malice" -- that is, intentionally injured someone or willingly turned a blind eye toward potential dangers.

Of the other two asbestos companies that had faced punitive damages penalties from the first trial, GAF Corp. settled its cases before the appeal and Keene Corp. has filed for a Chapter 11 bankruptcy reorganization.

In a second consolidated trial, which involves as many as 1,500 plaintiffs, a Baltimore Circuit judge in June struck down much of a jury's assessment of punitive damages against Westinghouse Electric Corp. and Harbison-Walker Refractories. Ms. Kasputys, the lawyer in Mr. Angelos' firm, said a plaintiffs' appeal isn't likely to succeed in light of yesterday's appeals court ruling.

She said that ruling sends a message that egregious behavior will go unpunished.

Roger W. Titus, a Pittsburgh Corning lawyer who represented the companies in the appeal, said the architects of the consolidated litigation had suggested five years ago that the case could be settled if the companies admitted liability for actual damages, and the plaintiffs dropped their pursuit of punitive damages.

Ms. Kasputys said, "That's something we were not willing to concede at the time." She added that the plaintiffs will file a motion for the Court of Appeals to reconsider yesterday's ruling.

"That's how strongly we disagree," she said.

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