Owens-Corning Fiberglas Corp. v. Golightly

• Decision Date: 18 June 1998
• Docket Number: No. 96-SC-970-DG,OWENS-CORNING,96-SC-970-DG
• Citation: 976 S.W.2d 409
• Parties: Prod.Liab.Rep. (CCH) P 15,292 FIBERGLAS CORPORATION, Appellant, v. Carl GOLIGHTLY; and Dorothy Golightly, Appellees.
• Court: United States State Supreme Court — District of Kentucky

Page 409

976 S.W.2d 409

Prod.Liab.Rep. (CCH) P 15,292

OWENS-CORNING FIBERGLAS CORPORATION, Appellant, v. Carl GOLIGHTLY; and Dorothy Golightly, Appellees.

No. 96-SC-970-DG.

Supreme Court of Kentucky.

June 18, 1998.

Rehearing Denied Oct. 15, 1998.

Donald K. Brown, Jr., Gerald R. Toner, John L. Dotson, James P. Grohmann, Eric A. Paine, O'Bryan, Brown & Toner, Louisville, for appellant.

James W. Owens, Paducah, P. Jay Cone, II, Ness, Motley, Loadholt, Richardson & Poole, Charleston, SC, Kenneth L. Sales, Joseph D. Satterley, Segal, Isenberg, Sales, Stewart, Cutler & Tillman, Louisville, for appellees.

COOPER, Justice.

A McCracken Circuit Court jury returned verdicts in this products liability action in favor of Appellee Carl Golightly against Appellant Owens-Corning Fiberglas Corporation (OCF) in the sums of $290,000.00 for compensatory damages and $435,000.00 for punitive damages. The trial judge overruled OCF's post-judgment motions and the Court of Appeals affirmed. We granted discretionary review primarily to address whether the award of punitive damages was rendered in violation of the Due Process Clause of the Fourteenth Amendment of the United States Constitution.

I. EVIDENTIARY BASIS FOR PUNITIVE DAMAGES.

OCF was formed in 1938 by its two parent companies, Owens-Illinois and Corning Glass Works. It was stipulated at trial that between 1953 and 1958, OCF sold and distributed an asbestos-containing pipecovering manufactured by its parent company, Owens-Illinois, and distributed under the brand name "Kaylo." OCF purchased the product from Owens-Illinois in 1958, and from 1958 to 1972, OCF manufactured, marketed and sold asbestos-containing Kaylo.

From 1951 to 1984, Golightly was employed as a maintenance mechanic and insulator at Martin Marietta, formerly known as Union Carbide. In that employment, he insulated pipes and was thereby exposed to abestos-containing Kaylo. Golightly's work included removing and replacing old Kaylo and installing new Kaylo, both of which required sawing the material, thus creating a dust which he consequently inhaled. At trial, Golightly produced credible medical evidence that he was suffering from asbestosis and throat cancer, and that his exposure to asbestos-containing Kaylo in the 1950's, 60's and 70's was a substantial contributing factor in causing those conditions. There was also substantial evidence that OCF knew both before and during that period that exposure to asbestos could cause asbestosis and lung cancer, but that it continued to manufacture, sell and/or distribute asbestos-containing Kaylo without affixing any warning labels to the product. There was further evidence from which a jury could believe that in marketing Kaylo, OCF intentionally concealed, minimized, and even misrepresented the health effects of working with the product.

The jury found against OCF on the theory of strict liability, i .e., that it designed, manufactured or marketed a product that was defective and unreasonably dangerous. Dealers Transport Co. v. Battery Distributing Co., Ky., 402 S.W.2d 441 (1966). Twenty different defendants were sued in this litigation. All but OCF either settled or were dismissed prior to trial. The jury found under a comparative negligence instruction that the cause of Golightly's injuries was attributable 100% to OCF's conduct, and awarded punitive damages under an instruction incorporating the language of KRS 411.184 and .186. ¹

OCF first asserts that it was entitled to a directed verdict on the issue of punitive damages because of uncontradicted evidence that Kaylo conformed to the "state of the art in existence at the time ... the product was manufactured." KRS 411.310(2). In other words, the fact that other companies were also manufacturing and distributing asbestos-containing products which were inherently dangerous when used in the manner in which they were intended to be used should preclude OCF from being held liable for doing the same thing. The purpose of KRS 411.310(2) is not to insulate an entire industry from liability just because every member of that industry was manufacturing and distributing a product known to be inherently dangerous.

We agree that if an industry adopts careless methods, it cannot be permitted to set its own uncontrolled standard. Herme v. Tway, Ky., 294 S.W.2d 534 (1956). If the only test is to be that which has been done before, no industry or group will ever have any great incentive to make progress in the direction of safety.

Jones v. Hutchinson Mfg., Inc., Ky., 502 S.W.2d 66, 70 (1973). Rather, the purpose of KRS 411.310(2) is to protect a manufacturer from liability for failure to anticipate safety features which were unknown or unavailable at the time the product in question was manufactured and distributed. Id. at 71. There was substantial probative evidence in this case that OCF knew of the health risks associated with the use of Kaylo both before and during the time it manufactured the product and placed it in the stream of commerce; and that it knowingly marketed Kaylo without warning labels, and concealed, minimized and/or misrepresented in its advertisements the health risks involved in working with the product. That evidence was sufficient to overcome OCF's motion for a directed verdict on the issue of punitive damages. Hanson v. American Nat'l Bank & Trust Co., Ky., 865 S.W.2d 302 (1993); Horton v. Union Light, Heat & Power Co., Ky., 690 S.W.2d 382 (1985).

II. DUE PROCESS IMPLICATIONS.

A. Imposition of Punitive Damages.

In support of its motion for a directed verdict on the issue of punitive damages, OCF produced evidence that sixteen other juries had already awarded over $35,000,000.00 against it for injuries resulting from its manufacture, sale and distribution of Kaylo. ² In essence, OCF argues that it has been punished enough, and that successive punishments for the same course of conduct violates its right to due process of law. For this proposition, OCF relies primarily on the opinion of United States District Court Judge H. Lee Sarokin in Juzwin v. Amtorg Trading Corp., 705 F.Supp. 1053 (D.N.J.1989) ("Juzwin I "), another asbestos-related tort action in which punitive damages were sought.

Due process requires that a limit be placed upon a defendant's liability for punitive damages for a single course of conduct. If a defendant's conduct has been evaluated by a factfinder, and if that factfinder has made an assessment of the amount of punitive damages necessary to deter and punish that conduct, then this court concludes that any further punishment would be unnecessary, repetitive, and a violation of due process. Thus, with respect to those defendants who are able to present competent proof that liability for punitive damages has already been imposed upon them for the conduct alleged to be the basis of a punitive damage claim in this action, the court will dismiss plaintiff's claim for such punitive damages.

Id. at 1065. However, upon reconsideration, Judge Sarokin vacated that order on grounds that he was unable to fashion a suitable remedy, because there was no guarantee that prior awards contemplated the "full" damage caused by the defendant's conduct, or that other courts in other jurisdictions would abide by his "one and only award" theory in subsequent litigation. He concluded that the problem could be solved only through uniformity established by the United States Supreme Court or national legislation. Juzwin v. Amtorg Trading Corp., 718 F.Supp. 1233, 1235 (D.N.J.1989) ("Juzwin II ").

For similar reasons, the vast majority of courts which have considered the issue have held that successive awards of punitive damages for the same course of conduct do not violate the Due Process Clause. E.g., Dunn v. HOVIC, 1 F.3d 1371 (3d Cir.1993), cert. denied, 510 U.S. 1031, 114 S.Ct. 650, 126 L.Ed.2d 608 (1993); Simpson v. Pittsburgh Corning Corp., 901 F.2d 277 (2d Cir.1990), cert. denied, 497 U.S. 1057, 111 S.Ct. 27, 111 L.Ed.2d 840 (1990); Jackson v. Johns-Manville Sales Corp., 781 F.2d 394 (5th Cir.1986), cert. denied, 478 U.S. 1022, 106 S.Ct. 3339, 92 L.Ed.2d 743 (1986); Cathey v. Johns-Manville Sales Corp., 776 F.2d 1565 (6th Cir.1985), cert. denied, 478 U.S. 1021, 106 S.Ct. 3335, 92 L.Ed.2d 740 (1986); Hansen v. Johns-Manville Prods. Corp., 734 F.2d 1036 (5th Cir.1984), cert. denied, 470 U.S. 1051, 105 S.Ct. 1749, 1750, 84 L.Ed.2d 814 (1985); Man v. Raymark Industries, 728 F.Supp. 1461 (D.Haw.1989); Campbell v. ACandS, Inc., 704 F.Supp. 1020 (D.Mont.1989); Stevens v. Owens-Corning Fiberglas Corp., 49 Cal.App.4th 1645, 57 Cal.Rptr.2d 525 (1996); Spaur v. Owens-Corning Fiberglas Corp., 510 N.W.2d 854 (Iowa 1994); Owens-Corning Fiberglas Corp. v. Wasiak, 917 S.W.2d 883 (Tex.App.1996). We have no hesitancy in joining the majority on this issue.

In Kentucky, the assessment of punitive damages requires consideration of not only the nature of the defendant's act, but also the extent of the harm resulting to the plaintiff. Fowler v. Mantooth, Ky., 683 S.W.2d 250, 253 (1984). In other words, the jury is to consider not only the defendant's conduct, but the relationship of that conduct to the injury suffered by this particular plaintiff. The punitive damages instruction given in this case authorized imposition of punitive damages only if OCF acted with "a flagrant indifference to the rights of the Plaintiff," or engaged in misrepresentation deceit or concealment of a known fact "with the intention of causing injury to this Plaintiff." The jury was further instructed that the amount of punitive damages awarded "shall bear a reasonable relationship to your compensatory damage award." In the context of a mass tort, a defendant's conduct may be viewed by a jury as more or less egregious depending on the status or situation of the particular plaintiff. For example, after acquiring knowledge of the health risks associated with exposure to asbestos, OCF distributed a brochure containing the following...