Owens-Corning Fiberglas Corp. v. Ballard

• Decision Date: 29 April 1998
• Docket Number: No. 97-1514, No. 97-1684.
• Citation: 739 So.2d 603
• Parties: OWENS-CORNING FIBERGLAS CORPORATION, Appellant, v. Deward BALLARD, Appellee.
• Court: Florida District Court of Appeals

739 So.2d 603

OWENS-CORNING FIBERGLAS CORPORATION, Appellant, v. Deward BALLARD, Appellee.

Nos. 97-1514, 97-1684.

District Court of Appeal of Florida, Fourth District.

April 29, 1998.

Larry L. Simms, Mark A. Perry of Gibson, Dunn & Crutcher LLP, Washington, DC; Steven R. Berger of Berger & Chafetz, Miami; Donna L. Harvey of Speziali, Greenwald, Kueny & Hawkins, Orlando; and Arthur J. England, Jr., of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., Miami, for appellant.

John F. Venable of Venable and Venable, P.A., Tampa; Daniel F. O'Shea and Angel M. Reyes of Ratiner, Reyes & O'Shea, P.A., Miami, for appellee.

POLEN, Judge.

In this products liability action, appellant, Owens-Corning Fiberglas Corp., the manufacturer of Kaylo, a carcinogenic asbestos-containing product, seeks reversal of judgment in favor of appellee, Deward Ballard, including an award of $31 million in punitive damages. We affirm on all points raised.

Ballard, a non-Florida resident, brought the instant action against Owens-Corning, alleging he had been exposed to Kaylo during the 1960's and 1970's in six separate states, but not in Florida. Three years after the complaint was filed, two months after the case was ordered set for trial and three months before the trial actually commenced, Owens-Corning filed a motion to dismiss based on forum non conveniens. The court, finding the case was ready for trial, denied the motion.

The case proceeded to a bifurcated jury trial in January, 1997. After Phase I ended, the jury found that Owens-Corning was negligent and strictly liable to Ballard for selling Kaylo. It assessed compensatory damages of $1.8 million, and determined Owens-Corning also was liable for punitive damages. Owens-Corning immediately moved for a directed verdict on punitive damages, arguing for the first time it could not be punished for conduct outside Florida. The trial court reserved ruling on that issue.

In Phase II, Ballard presented evidence as to the company's financial position, and Owens-Corning testified as to both the small profits from Kaylo sales and the financial burdens placed on the company by a deluge of asbestos claims. The jury awarded $31 million in punitive damages.

Owens-Corning then filed several post-trial motions, including a motion for new trial based on the previous denial of its motion to dismiss for forum non conveniens, and motions alleging that the punitive damages award was unconstitutional and excessive. The court denied its motions and entered final judgment.

I. Forum Non Conveniens

The trial court exercises sound discretion in determining whether or not to dismiss a case for forum non conveniens. Ciba-Geigy Ltd. v. Fish Peddler, Inc., 691 So.2d 1111, 1115 (Fla. 4th DCA), rev. denied, 699 So.2d 1372 (Fla.1997); Fla. R. Civ. P. 1.061(a) (1997). This discretionary power is subject only to the test of reasonableness, which, in turn, requires a determination of whether there is logic and justification for the result. Canakaris v. Canakaris, 382 So.2d 1197 (Fla.1980); Ciba, 691 So.2d at 1115. Under these principles, we do not believe the court abused its discretion in denying Owens-Corning's motion.

Kinney System, Inc. v. Continental Insurance Co., 674 So.2d 86 (Fla.1996), is the seminal case governing the law of forum non conveniens. Kinney requires that, before a court dismisses a case based on forum non conveniens, it must (1) establish whether an adequate alternative forum exists; (2) consider all relevant factors of private interest, with the presumption against disturbing the plaintiffs initial choice of forum; (3) assuming it finds the balance of private interests in equipoise, determine whether factors of public interest tip the balance in favor of trial in another forum; and (4) if the balance favors such a forum, ensure the plaintiff may reinstate his suit in that forum without undue inconvenience or prejudice. Id. at 90.

Even if these four factors are met, however, Kinney does not always mandate dismissal. Kinney states that it would be contrary to the doctrine to order dismissal where the parties have substantially completed discovery or are now ready for a Florida trial. Id. at 94. In addition, it specifically directs lower courts not to order dismissal if doing so would actually undermine the interests that the doctrine seeks to preserve, including avoiding a waste of resources, avoiding forcing a plaintiff into a forum where a statute of limitation may have expired, or other similar problems. Id. at 93-94.

In light of these exceptions, and the fact that Owens-Corning waited over three years into litigation and shortly before trial to make the motion, the trial court below apparently concluded that both parties had engaged in sufficient discovery to be ready for trial. As we are constrained by the limited record at bar, we cannot say that denial of its motions on these grounds was an abuse of discretion. See Carenza v. Sun Int'l Hotels, Ltd., 699 So.2d 830 (Fla. 4th DCA 1997).

II. Punishing Conduct Occurring Outside the State of Florida

Owens-Corning next argues that the imposition of punitive damages should have been barred in this case under the Due Process Clause of the Fourteenth Amendment since the conduct of which Ballard complained was wholly unrelated to the State of Florida. In this regard, it cites to BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996).

BMW involved a plaintiff who sued BMW in Alabama based on BMW's failure to disclose that a car that it sold to plaintiff in Alabama had been damaged and then repainted. At trial, BMW acknowledged it had adopted a nationwide policy concerning cars that were damaged, whereby if the repair cost did not exceed 3% of the suggested retail price, the car was sold as new without advising the dealer that any repairs had been made. On review of an award of punitive damages against BMW, the plaintiff argued to the Supreme Court that the large punitive damages award was necessary to induce BMW to change its nationwide policy.

In response to this argument, the Court first looked at other states' disclosure policies regarding repairs to previously damaged cars. It found that several states had legislation which, in essence, allowed similar policies to that of BMW. As such, it concluded that this demonstrated "that reasonable people may disagree about the value of a full disclosure requirement." Id. at 570, 116 S.Ct. at 1597. Accordingly, it reversed the award, holding that Alabama "may not impose economic sanctions on violators of its laws with the intent of changing tortfeasors' lawful conduct in other States." Id. (citing Bordenkircher v. Hayes, 434 U.S. 357, 98 S.Ct. 663, 54 L.Ed.2d 604 (1978) ("To punish a person because he has done what the law plainly allows him to do is a due process violation of the most basic sort.")). However, since the verdict was based in part on out-of-state conduct that was lawful where it occurred, the Court specifically left open the question of whether one State may properly attempt to change a tortfeasor's unlawful conduct in another State. Id., 517 U.S. at 574 n. 20, 116 S.Ct. at 1598 n. 20.

Only one federal case since BMW has addressed this question. In Continental Trend Resources, Inc. v. OXY USA, Inc., 101 F.3d 634 (10th Cir.1996), cert. denied, 520 U.S. 1241, 117 S.Ct. 1846, 137 L.Ed.2d 1049 (1997), which involved tort claims for interference with contracts and prospective business advantage, the Tenth Circuit noted that, unlike in BMW, the defendant's conduct below would be tortious in any state. Still, the court held that, "we read the [BMW] opinion to prohibit reliance upon inhibiting unlawful conduct in other states." Id. at 637.

We do not find Continental's interpretation of BMW helpful or persuasive. The opinion ignores that, in BMW, the record specifically reflected that Alabama was seeking to impose the punitive damages award as a stance against BMW's nationwide policy. Since the policy was not considered tortious in several other states, the Court found that the effect of the award would be to sanction lawful behavior. In contrast, where the defendant's conduct is considered tortious in all 50 states, as here, the same due process concerns implicated in BMW do not arise.

In any event, we can better resolve this dispute by referring to the parties' pretrial stipulation. Owens-Corning stipulated that the amount of punitive damages to be assessed against it under Florida law was an issue to be determined by the jury. Since it never specifically sought relief from the stipulation, we find it waived...