948 F.2d 1546 (10th Cir. 1991), 90-3250, Mason v. Texaco, Inc.

Docket Nº:90-3250, 90-3278.
Citation:948 F.2d 1546
Party Name:Diana L. MASON, Individually and as Administrator of the Estate of Otis W. Mason, Deceased, Plaintiff-Appellee, v. TEXACO, INC., Defendant-Appellant.
Case Date:November 18, 1991
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1546

948 F.2d 1546 (10th Cir. 1991)

Diana L. MASON, Individually and as Administrator of the

Estate of Otis W. Mason, Deceased, Plaintiff-Appellee,

v.

TEXACO, INC., Defendant-Appellant.

Nos. 90-3250, 90-3278.

United States Court of Appeals, Tenth Circuit

November 18, 1991

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[Copyrighted Material Omitted]

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Gerald L. Michaud of Michaud, Hutton & Bradshaw and Richard D. Cordry of Cordry & Hartman (Marlys A. Marshall with them on the brief), Wichita, Kan., for plaintiff-appellee.

Joseph W. Morris (James M. Sturdivant and Richard B. Noulles with him on the brief) of Gable & Gotwals, Tulsa, Okl., and Ken M. Peterson (Robert W. Coykendall and Diane S. Worth with him on the brief) of Morris, Laing, Evans, Brock & Kennedy, Chartered, Wichita, Kan. (Arthur R. Miller, Harvard Law School, Cambridge, Mass., and Eric W. Wiechmann and William H. Narwold of Cummings & Lockwood, Harford, Conn., with them on the brief), for defendant-appellant.

Before McKAY, Chief Judge, BARRETT and BRORBY, Circuit Judges.

BARRETT, Senior Circuit Judge.

Texaco, Inc. (Texaco) appeals from a products (benzene) liability judgment following a jury trial, awarding plaintiff Diana L. Mason, (Mason), individually and as Administrator of the Estate of Otis W. Mason, (Butch), Deceased, $9,025,000 in actual damages, and $25,000,000 in punitive damages. The claims of personal injury and wrongful death were based upon Mason's contention that her husband, Butch, developed leukemia and died after being exposed to benzene produced and marketed by Texaco. Jurisdiction was based upon diversity of citizenship. 28 U.S.C. § 1332. Texaco moved for a judgment notwithstanding the verdict or for a new trial. The motion was denied. This appeal followed.

Our jurisdiction vests under 28 U.S.C. § 1291. Substantially for the reasons set forth in the district court's well-reasoned, 47-page "Opinion and Order Denying Defendant's Post Trial Motion," Mason v. Texaco, Inc., 741 F.Supp. 1472 (D.Kan.1990), (Mason ), we affirm with one exception. We shall remand to the district court with directions to enter a remittitur order on the award of punitive damages.

Background

In June, 1974, Butch and his young wife and child left Wichita, Kansas, for Yorktown, Virginia, where Butch had decided to serve in the United States Coast Guard. As a student in training, Butch was first exposed to benzene in the water and sediment class. He was taught to use a test kit sold by Gerin Corporation which was designed and used to test the levels of water and sediment in engine oil used in Coast Guard vessels. Benzene was a solvent used as a component of the test. Thereafter, commencing in October, 1974, Butch taught the course. He was exposed to a high dosage of benzene while conducting the Gerin lube oil test. He was last exposed on January 10, 1977.

During the time period of Butch's exposure to benzene, Texaco's sole warning of the health hazards of its benzene was contained in a Material Safety Data Sheet (MSDS) which stated that "High concentrations may cause anthestic [sic] effects; prolonged chronic excessive exposure may damage blood forming organs." The same MSDS stated that 25 parts benzene per million (ppm) was the maximum safe exposure limit and that "adequate ventilation" or "local exhaust" should be used. It was not until 1979, some two years after doctors had diagnosed Butch's illness as acute myelocytic leukemia and after various agencies and/or institutes and scientific/medical publications had clearly identified the causal connection between benzene

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exposure and cancer, that Texaco stated that benzene was "suspected" of causing leukemia.

Butch filed suit on August 14, 1978, against the Gerin Corporation, the manufacturer of the kit used to test properties of motor oil. By later amendments, claims were also asserted against Dooner & Smith Chemical Company, Mellen Chemical, Inc., Ashland Chemical Company and Texaco, all suppliers of benzene. At trial, only Texaco and Ashland remained as defendants. At the conclusion of plaintiff's case, Ashland's motion for a directed verdict was granted. The case was thus submitted against Texaco, although the other parties, with the exception of Ashland, were named on the verdict form for comparative fault purposes.

Butch died from leukemia on December 10, 1979. Mason was substituted as plaintiff in the personal injury action for pain and suffering and as plaintiff/administrator of Butch's estate in the wrongful death action. As regards the defendants, it was alleged that Butch had been exposed to benzene, manufactured and/or distributed by them and that they had failed to properly and adequately warn him of the cancer risks from benzene exposure.

At the conclusion of the four-month trial, the jury answered official verdict interrogatories, finding by a preponderance of the evidence, that: Butch's leukemia was caused by exposure to benzene; the benzene which caused Butch's leukemia was produced by Texaco; Texaco either knew or should have known of scientific knowledge that benzene was considered to be cancer causing at the time of Butch's exposure; Texaco's actions were insufficient to warn its immediate purchaser of benzene of its cancer propensity; Texaco did not take reasonable measures to determine that its immediate purchaser, Mellen, was capable of conveying adequate warning to others in the chain of distribution of benzene; and, Texaco's failure to adequately warn Mellen or to take reasonable measure to see that Mellen passed on an adequate warning was a direct cause of Butch's leukemia.

Based upon fault at one hundred percent, the first jury attributed fault as follows:

Otis Mason 3%

U.S. Coast Guard 26%

Gerin Corporation 25%

Dooner and Smith 5%

Mellen Chemicals 6%

Texaco, Inc. 35%

The jury determined that the total actual damages on the wrongful death claim amounted to $3,500,000 based upon pecuniary damages of $3,475,000 and non-pecuniary (a $25,000 maximum under Kansas law) of $25,000. In addition, the jury returned a personal injury verdict of $5,000,000. The jury found that it was not appropriate to award punitive damages. Mason's motion for a new trial on the jury's denial of punitive damages was denied.

Texaco appealed. Mason did not cross-appeal from the district court's denial of her motion for new trial on the jury's denial of an award of punitive damages. This court reversed and remanded for a new trial because of erroneous jury instructions which obligated Texaco, contrary to Kansas law, to take reasonable steps to "see that its distributor knew and complied with its duty to inform," and to "instruct and train [its] salesmen" in conveying the health warning. We concluded that these instructions imposed a greater duty on Texaco than Kansas law required. See Mason v. Texaco, Inc., 862 F.2d 242, 246-48 (10th Cir.1988), (Mason I ). Our remand was general, reading "The judgment against Texaco is REVERSED and the case is REMANDED for a new trial." Id. at 250.

Upon remand, Texaco filed a motion to preclude the submission of punitive damages to the jury on retrial. Texaco argued then, as it does now, that the unappealed finding/ruling on punitive damages became the law of the case as a consequence of Mason's failure to preserve the issue by cross-appeal. The trial court denied Texaco's motion, finding that resubmission of the issue of punitive damages upon retrial was appropriate.

Following many pre-trial motion hearings and depositions, retrial commenced on September

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26, 1989, and concluded with special verdict accompanied by interrogatories on January 24, 1990, approximately a four-month trial. The jury answered special verdict interrogatories, finding that by a preponderance of the evidence: Butch's leukemia was caused by his exposure to benzene; the benzene produced by Texaco was the cause of Butch's leukemia; the benzene produced by other manufacturers did not contribute in part to Butch's leukemia; Texaco knew or should have known at the time of Butch's exposure to benzene that there existed scientific knowledge that benzene was cancer-causing; the actions taken by Texaco were insufficient and inadequate to warn Texaco's immediate purchaser, Mellen, of the dangerous carcinogenic propensity of benzene; Texaco did not take reasonable measures to determine that its immediate purchaser, Mellen, was capable of conveying adequate warning to others in the chain of distribution of benzene; Texaco's negligent failure to warn caused, either in whole or in part, Butch's exposure to benzene; and, considering all of the fault at one hundred percent, the evidence dictates that Texaco was 100% at fault and that none of the fault, as a contributing cause to Butch's leukemia, was attributable to Ashland Chemical, Union Amoco, Mellen Chemicals, Dooner & Smith, Gerin Corp., U.S. Coast Guard or Butch.

The jury awarded Mason and her children $5,000,000 pecuniary damages and $25,000 (maximum allowable) non-pecuniary damages in their wrongful death action. The jury also awarded $4,000,000 for personal injuries suffered by Butch before his death. Finally, the jury awarded $25,000,000 against Texaco as punitive damages.

The district court entered judgment in favor of Mason for $9,025,000 compensatory damages and $25,000,000 in punitive damages for a total award of $34,025,000. Texaco moved for judgment notwithstanding the verdict, or, in the alternative, for a new trial. The motion was denied by the district court. See Mason, supra.

Contentions on Appeal

On appeal, Texaco contends that: (1) the trial court erred in retrying punitive damages, (2) because the Coast Guard's fault was undisputed, the trial court committed multiple critical errors in denying...

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