E Point Perfect
Law \ Legal

The Not-So-Thin Line Between Negligence and Punitive Damages


In our experience, plaintiffs in product liability cases always seek punitive damages.  Even when their claimed injuries are quite modest or their state does not permit punitive damages, they give it a shot.  We have had cases with partial summary judgment on punitive damages, with directed verdict on punitive damages, and with jury verdicts for the plaintiff on liability and for our client on punitive damages.  We have had cases with complete defense verdicts.  We have certainly heard about many cases where juries awarded punitive damages along with compensatory damages.  Were you to read enough plaintiff-side “news” accounts of trials in this space, you might think punitive damages were almost as automatic an addition as post-verdict interest.  But there is no entitlement to punitive damages and the bar is, at least on paper, much higher for punitives than for liability.  And this is without talking about the states with special screening procedures for pleading punitive damages, provisions to bar punitives for certain types of products, and other statutory hurdles.  In the average product liability case that goes to trial, if there is such a thing, you will probably have a series of negligence claims and a punitive damages claim that requires something like “negligence-plus.”  State formulations of that “negligence-plus” vary, often using terms like “wanton indifference” or even the unhelpful “gross negligence.”  As a lawyer for the defendant heading to trial, it is rare that you feel comfortable predicting the jury will find that middle ground of determining the actionable conduct was negligent but not something more.

In McNeal v. Whittaker, Clark & Daniels, Inc., — Cal. Rptr. 3d –, 2022 WL 2436710 (Cal. Ct. App. July 5, 2022), a panel of the California Court of Appeal took the deepest dive into that middle ground that we can recall.  We will skip some irrelevant details, though.  The jury found for the plaintiff that defendant, a talc supplier, for a cosmetic talcum powder product he used to use, had negligently failed to test its talc for asbestos and warn its purchaser of its inability to rule out some asbestos in its talc.  That negligence was found to have contributed to plaintiff’s ultimate diagnosis with mesothelioma thirty-seven years after stopping the use of the talcum powder product.  The talc supplier, as the sole defendant left at trial, was also hit with punitive damages.  It chose not to appeal any issue other than whether sufficient proof had been offered to meet California’s punitive damages standard, which the appellate court boiled down to:

The evidence must allow a reasonable person to conclude it is highly probable that an officer, director, or managing agent of defendant was aware of the probable dangerous consequences of his conduct in connection with the company’s distribution of its talc to [the purchaser] and willfully failed to avoid those consequences.

Id. at *12 (citation and quotation omitted).  The focus was on what the defendant knew and did in the 1970s, and court walked through the testimony of two corporate witnesses and twenty five key documents, all with the overlay that the defendant did not contest on appeal that this evidence demonstrated negligence.

We will not recap that evidence, except to say that, as presented, there was evidence to suggest the defendant’s executives were aware of the possibility of trace amounts of asbestos in their talc, knew asbestos was generally harmful, and had reason to doubt testing methodologies at the time were sufficient to rule out asbestos in their talc.  What they did not have was any medical literature describing any association between cosmetic talcum powder and mesothelioma until 1994.  This was important in the conclusion that “the evidence does not show [] that defendant’s executives knew there were ‘probably dangerous consequences’ from trace levels of asbestos in its talc, and deliberately did nothing to avoid them.”  Id. at *13.  It is hard to have knowledge of a “high probability” of a particular risk, even if that risk came to be accepted later.  “Medical or scientific developments years after plaintiff’s injury cannot establish defendant’s executives knew of ‘probable dangerous consequences’ of contaminated talk before plaintiff’s injury.”  Id.  (We would probably generalize that to something like “medical or scientific developments years after plaintiff’s use of the product cannot establish that a risk was knowable, let alone known and ignored, prior to the use because the defendant did not possess a functioning time machine, but that is us.)

Plaintiff offered two arguments that should sound familiar to those versed in drug and device cases.  The first was that warnings of “no safe level of exposure to asbestos” were enough to elevate the negligence to “willful failure” to avoid known dangerous consequences.  FDA and industry had discussions about “possible hazards” if asbestos was in cosmetic products at significant levels, but that is different than knowing “that any level of asbestos in talc, however small, would have ‘probable dangerous consequences’ for the consumer.”  Id. (emphasis in the original).  FDA also later found no asbestos in cosmetic talk products after its own testing.  Id. at *14.  It also stated that no recall of any cosmetic talc products because “obviously, the potential hazard did not warrant a recall.”  Id..  In addition, plaintiff pointed to actions by OSHA to reduce workplace exposure limits in part because there was “an absence of data to establish a safe level.”  Id.  The court easily saw the difference between “OSHA’s concern about workers’ exposure to raw asbestos and asbestos dust” and “probable dangerous consequences” to consumers from using a finished cosmetic product.  Id.  (The irony of how some courts allow OSHA-related evidence in medical device cases is not lost on us.)

Plaintiff’s second argument was that the entire talc industry was engaged in a massive conspiracy to hide the presence of asbestos in talk from the scientific community.  “That argument is, of course, wholly unsubstantiated.  The entire record is a testament to the various technologies available or being used for testing talc samples for asbestos.”  Id.  The court proceeded to recap the back-and-forth between defendant, industry, FDA, and outside scientists about the precise issues plaintiff claims were hidden from the scientific community.  Again, this sounds like a dynamic that sometimes plays out with drugs or devices.  There can be honest scientific debates about whether a drug causes a particular condition that go on for years.  If the science eventually swings in favor of there being a causal relationship or even a strong enough association (short of causation) to include a warning in the label, then the history of debate is not tantamount to proof of negligence by the manufacturer.  It certainly does not equate to wanton indifference without much, much more.  While defense lawyers never want to be arguing about the adequacy of evidence offered in support of punitive damages, especially on appeal, it is nice to have McNeal as an example of how a court should assess that evidence.

 



Source link

Related posts

Learning By Doing: The Summer Associate Work Experience

Dawn Zuniga

The New Stock Buyback Tax: What It Means For Apple, S&P 500

Dawn Zuniga

Where Do the Supreme Court’s Civil Cases From the Second District Originate (Part 1 – 1990-1999)

Dawn Zuniga

Healthcare & Life Sciences Private Equity Deal Tracker: Latticework Acquires Catalina Research Institute

Dawn Zuniga

Employers, Are You Ready for a Possible Post-Roe Workplace?

Dawn Zuniga

E. coli at San Diego State University

Dawn Zuniga