Owens-Corning Fiberglas Corp. v. Ballard
Decision Date | 26 August 1999 |
Docket Number | No. 92,963.,92,963. |
Citation | 749 So.2d 483 |
Court | Florida Supreme Court |
Parties | OWENS-CORNING FIBERGLAS CORPORATION, Petitioner, v. Deward BALLARD, Respondent. |
Arthur J. England, Jr. of Greenberg Traurig, P.A., Miami, Florida, and Larry L. Simms of Gibson, Dunn & Crutcher LLP, Washington, D.C., for Petitioner.
John F. Venable of Venable and Venable, P.A., Tampa, Florida, and Daniel F. O'Shea of Ratiner, Reyes and O'Shea, P.A., Miami, Florida, for Respondent.
We accepted jurisdiction to answer the following question certified to be of great public importance:
Owens-Corning Fiberglas Corp. v. Ballard, 739 So.2d 603, 608 (Fla. 4th DCA 1998). We answer the certified question in the affirmative and approve the decision of the court below.
Respondent Deward Ballard, a nonresident of Florida, brought the instant action against petitioner Owens-Corning, alleging that during the 1960s and 1970s he had been exposed to a dangerous asbestos product manufactured by Owens-Corning. 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 trial court denied the motion.
The case proceeded to a bifurcated jury trial in January 1997. According to the evidence at trial, Ballard was diagnosed with mesothelioma, a rare form of cancer of the lining of the chest, due to exposure to Owens-Corning's product containing asbestos fibers. The evidence indicates that Owens-Corning produced Kaylo, a product containing asbestos fibers, for approximately thirty years, or until 1972 when Owens-Corning finally ceased using asbestos in its products. During the time that Owens-Corning produced Kaylo, Ballard worked on numerous job sites around the nation where he was exposed to Kaylo. After the trial on the liability issue, the jury found 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.1
During the punitive damages portion of the trial, Ballard presented evidence as to the company's financial position and reaction concerning the asbestos litigation. The evidence included a 1996 Fact Sheet, a 1995 Annual Report, and a copy of 1992 Annual Meeting Remarks by CEO Glen H. Hiner. The 1996 Fact Sheet provides Owens-Corning's income statement and balance sheet and indicates Owens-Corning's projected goal to reach some $5 billion in total sales by the year 2000. At the time of trial, the company's net income for 1995 was $231 million and its most recent market value was $2.5 billion (based on the number of outstanding shares of common stock). As for the company's response concerning the asbestos litigation, the 1995 Annual Report revealed Hiner's belief that the "vast majority of new claimants are not sick" and that "many of the cases were filed by lawyers eager to maximize their fees before tort reform legislation goes in effect." Hiner also remarked that the company had placed the asbestos litigation behind it and will focus instead on building the company's enterprise and not on "shedding tears about the past." Finally, the 1995 Annual Report indicates that due to reserved funds and insurance coverage, the pending and future asbestos litigation claims "will not have a materially adverse effect on the company's financial position." A representative from 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 factors instructed upon by the judge to the jury to consider in resolving the punitive damages issue included: (1) an amount reasonable in relation to the harm likely to result from Owens-Corning's conduct as well as the harm that actually has occurred; (2) the degree of reprehensibility of Owens-Corning's conduct, the duration of that harmful conduct, Owens-Corning's awareness, any concealment and the existence and frequency of similar past conduct; (3) the profitability to Owens-Corning of the wrongful conduct and the desirability of removing that profit and of having Owens-Corning also sustain a loss; (4) the financial condition of Owens-Corning and the probable effect thereon of a particular judgment; (5) all the costs of litigation to defendant and to the plaintiff; (6) the total punishment Owens-Corning has or will probably receive from other sources, as a mitigating factor; (7) the seriousness of the hazard to the public, the attitude and conduct of Owens-Corning upon discovery of the misconduct; (8) the degree of Owens-Corning's awareness of the hazard and of its excessiveness; (9) the number and level of employees involved in causing or covering up the marketing misconduct; (10) the duration of both the improper marketing behavior and its cover-up; and (11) the existence of other civil awards against Owens-Corning for the same conduct. Thereafter, the jury deliberated and subsequently assessed $31 million in punitive damages against Owens-Corning.
Owens-Corning then filed several motions for new trial, including a motion contesting the excessive amount of the punitive damages award. The trial court denied the various motions, specifically finding that clear and convincing evidence supported the jury's punitive damages award. On appeal, the Fourth District held, in part, that the punitive damages award against Owens-Corning was not against the manifest weight of the evidence based on the actual harm to the respondent and others where the evidence showed that "Owens-Corning knew of the deleterious health risks associated with Kaylo for decades, yet failed to warn its consumers, change its process, remove the asbestos, and/or replace the fibers with readily available, asbestos-free fibers." Ballard, 739 So.2d at 608. The district court also noted that the punitive award was less than two percent of Owens-Corning's net worth, which was measured in billions of dollars. Accordingly, the district court held that the trial court did not abuse its discretion in failing to reduce the punitive damages award. Id.2 In certifying the question to this Court, the district court, in essence, asks us to check its work here.3
In 1986, the Florida Legislature enacted section 768.73, Florida Statutes (1997), which created statutory criteria for judicial review of punitive damage awards exceeding three times the amount awarded for compensatory damages. See § 768.73(1)(b), Fla. Stat. (1997). Section 768.73 states in pertinent part:
See id. § 768.73(1)(a)-(b) (emphasis added). While the statute provides an initial cap on punitive damages of three times the amount of compensatory damages, it also provides for an exception to the cap where clear and convincing evidence establishes that the plaintiff is entitled to the excess verdict.4 It is the application of the exception that is at issue here.
In essence, we are called upon to determine whether the award of punitive damages in excess of the statutory cap overcomes the legislative presumption of excessiveness.5 Under Florida law, the purpose of punitive damages is not to further compensate the plaintiff, but to punish the defendant for its wrongful conduct and to deter similar misconduct by it and other actors in the future. See W.R. Grace & Co.-Conn. v. Waters, 638 So.2d 502, 504 (Fla.1994)
; see also White Constr. Co., Inc. v. Dupont, 455 So.2d 1026, 1028 (Fla.1984); St. Regis Paper Co. v. Watson, 428 So.2d 243, 247 (Fla.1983). In White Construction Co., we reaffirmed the standard necessary to justify the imposition of punitive damages:
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