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`A. GAIL PRUDEN?!
`chm mtnlmrasm Judgo
`
`gfififlcfiéffifigg Wedude:
`NmmChycguns m
`
`SWWEOFNENYDRK
`{ENEFIED (30%.)?! SVSSTEW
`was? wmclm. BISTRSCT
`3159mm CGUHT, QWQL BRANCH
`socENTHESTREET
`NEW YOHK. NY 100074474
`(646) 385-3211
`FAX (212} 227-2919
`
`I
`
`LE
`
`V R
`
`T
`
`SflEHfiY KLEIN HEITLER
`wwmWW
`.
`4 ”8/ 4
`‘ m‘
`”ML-
`
`# of Pages {Including Cover Sheet):
`
`__,;_Q_
`
`TO:
`
`CHARLES FERGUSON, ESQ.
`Weitz & Luxenberg
`MARK BEERENS, ESQ.
`Shook Hardy & Bacon
`ERIC RI. COWLE, ESQ.
`K&L Gaies
`JORDAN FOX, ESQ.
`Befluck & Fox
`ROBERT MALABY, ESQ.
`Malaby & Bradley
`JAMES STENGEL, ESQ.
`Quick Harrington 8: Sutclifi‘e
`JUDITH YAVITZ, ESQ.
`Darger Errante Yavitz & Blau
`
`FAX:
`
`(212) 3414-546"
`
`FAX:
`
`(202) 783-421
`
`FAX:
`
`(212) 536-39C I
`
`FAX:
`
`(212) 681-1574
`
`_
`
`FAX:
`
`(212) 791.0283
`
`‘
`
`FAX:
`
`(212) 5666131
`
`FAX:
`
`(212) 452-530!
`
`‘
`
`FROM:
`
`VALERIE QUALLS
`FOR: HON. SHERRY KLBI‘I‘J HEITLER
`
`RB:
`
`RE:
`
`WEITZ & LUXENBERG CASES
`(Chidester, Milmo, Moritz, Roman, Sadowski, Smith) v.
`CRANE, CLEAVER—BROOKS, DOMCO
`INDEX 1% 4000001’88 (Motion Seq. #010)
`
`WEITZ 8: LUXENBERG CASES
`(Chidester, Milazzo, Moritz, Roman, Sadowski, Smith) v.
`CRANE, CLEAVER-BROOKS, BOMCO
`INDEX # 190293;! 1, et a1
`(Moticn Seq. #013)
`
`Faxed herewith is a copy of an Order rendered with regard to the. above referenced matters.
`Please notify all other interested parties.
`
`ifyau do not receive an pages as indicated, please immediately cantact (646) 386-3211.
`
`

`

`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`INDEX NO. 2016EF1906
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`NYSCEF DOC. NO. 290
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`SUPREME COURT OF THE STATE OF NEW YORK.
`COW OF NEW YORK: PART 30
`....................................... X
`IN RE: NEW YORK CITY ASBESTOS LYI‘IGATION
`
`....................................... x
`
`This Document Relate: to:
`
`CHARLES L. CH!DESTER
`JOSEPH MILAZZO
`WILLIAM L. MORITZ
`ROBERTO ROMAN
`EDWARD SADOWSKI
`GEQRGE W, SMITH
`
`Index No. 40000/1988
`Motion Seq. No. 010
`
`index No. 190293120] 1
`Index No. 19031 {/20} I
`Index No. 190294/20? l
`Index No. 190262/201 i
`index No. 1902! 5/2011
`Index No. 190299/20K 3
`Motion Seq. No. 013
`
`DECISION AND ORDER
`
`_______________________________________ X
`
`SHERRY KLEIN BEETLER, .31.:
`
`The law firm ofWeitz & Luxenberg, P.C., on behalf of the above-capfioned plainu' H's
`
`(“Plasztiffs”), moves by order to show cause for an order lifiing the deferral recited in Sen ion
`
`XVII ofthe New York City Asbestos Litigation (‘WYCAL”) Case Management Order, as
`
`amended May 26, 201 I (“Ch/IO"), which provides that "Mounts for punitive damages an:
`
`deferred until such time as the Court deems otherwise, upon notice and hearing”, in order: to
`
`permit Plaintiffs to try their causes of action for punitive damages against the defendants
`
`remaining in these cases.‘ Plaintiffs’ application is jointly opposed by the NYCAL defendmts’
`
`liaison counsel and various members of the NYCAL dsfendants’ bar (“Defendantg”), anc'
`
`individually opposed by defendants Crane, CEeaver—Bmoks, and Domco. The law firm of Bokert,
`
`Seamans, Cherin & Meilott, LLC also ssparateiy opposes on behalf ofthe NYCAL deferdants it
`
`
`According to Plaintiffs the remaining defendants in abuse cases are Crane Co. ("Crane"}, C}: aver Brooks
`Company, Inc. (“Clem/ct Brooks), and 133ch Products Texas, LP (“Demo”).
`
`-1-
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`represents?
`
`Plaitttifi‘s‘ motion is also opposed by Amid the Coalition for Litigation Justice, hm, at
`
`511.} whose request for loavo to file their Amx’m' Curiae brief in opposition to Plaintifi‘s’ motion
`
`was granted by this court. The opposing parties and the Amz’ci request that the court continue to
`
`defer counts for punitive damages indefinitely as CMO § XVII purportedly intends.
`
`The Defendants humor cross—move under the NYCAL global index number
`
`(040000/1988) to vacate and declare inapplicable the entire CMO. Cleaver Brooks and Dmnco
`
`join in the Defendants’ cross-motion.
`
`All sides have presented weiluroasoned, thoughtfill arguments which demonstrate it
`
`considerable amount ofwork and attention to their positions. While Plaintiffs’ motion is ‘maught
`
`on behalf of certain manned individuals, their argument is broad~based and concerns the viability
`
`of the application of 0M0 § XVII to all ‘N‘YCAL plaintiffs. Defendants recognize: this fool and
`
`have tailored their arguments to encompass this larger picture.
`
`{heard oral argument on the motions at which all sides were invited to express their
`
`positions on the record.
`
`BACKGR
`
`The modern industrial use of asbestos‘ began around 1880 and peakod in the l96Cix and
`
`
`
`Consolidated Roll Corporation, Amcriczm i’rotnicr Uodcmitors, Ina, Norfolk Southern Railway
`Company, and CSX Importation, Ind, (collectively, "Railroad Defendants").
`
`The Amid define themselves 33 "organizations that represent companics doing business in N :w York,
`their insurers. and civil justice reform groups.” Amici Brief. 9. l.
`
`Asbestos is the generic name for a group of six naturally occurring fibrous silicate minerals.
`
`~2w
`
`

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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`£9703 when asbestos was used in more than 3,000 industrial applications.‘ Studies sugges; that
`
`all commercial forms of asbestos cause cancer. Id. Asbestos litigation, which has been llkmed
`
`to an “elephantlne mass”; by Supreme: Court Justice David Souter, is quite possibly the largwt
`
`and longest~mnning mass tort litigation in the United Stator.7 The history of asbestos litigation
`
`has been described as “a tale of danger known in the 19305, exposure inflicted upon millicns of
`
`Americans in the 19403 and 19503, injuries that began to take their toll in the 19608, and a flood
`
`of lawsuits. beginning in the £9703.”3
`
`Tons of thousands of complex, time-consuming asbestos personal injury actions have
`
`been filed in the New York County Supreme: Court alone. in order to streamline discover; and
`
`manage the court’s asbestos docket, in March of 1988 Justice Helen B. Freeman of this court
`
`oversaw the origination ofthe 0M0 which governs all NYCAL cases and which was “mailed
`
`with great care by representatives chosen by both the plaintiffs’ and the defendants’ asbestos
`
`personal injury bar and .
`
`.
`
`. bears the imprimatur of the court.” In re NYC Asbestos Litigation
`
`(Ame: 1:: Kamila Floors), Index No. 107574/08, at *2 (Sup. Ct. NY. C0. lune 17, 2009, Hurtler,
`
`3.), a 'a’ 66 AD3d 600 (lst Dept 2009). The original (IMO was silent on the issue of punitive
`
`damages.
`
`
`
`5
`
`é
`
`7
`
`a
`
`National Toxicology Program, Department of Health and Hmmm Services, Report on Carclmgens.
`New}: Edition (2011), Asbestos, pp. 53-54, available at
`ltttp:i/ntpmichs.uihgov/ntp/mc/melflh/profiles] Asbestospdffiscarchaushcstos
`
`0m: 1: Ftbreboard Cam, 527 US 815, 821 {1999).
`
`Stephm 1. Carroll, et :31, Asbestos Litigation, RAND Inst for Civil Justice, 2005. at 21, avail :ble at
`http://wwrand.org/pubs/mortogrophWGl 62.hm11 ("2005 Ram! Reporr‘).
`
`Georgina v Amchem Prods” 83 FM 610, 618 (3r Cir. 1996) (quoting Judicial Conference. (z‘tltc U.S.
`Ad Hoc Com. (m Asbostos Litig., Report of The Judicial Conference Ad Hoc Committee or Asbestos
`Litigation 2~3 [1991 1}.
`
`.3.
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`

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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`Hereafter, in 1996, Justice Freedman indepoudcritiy added section XVII to the CNS-Z)
`
`which requires ihat all punitive damage claims be deferred until such time as the court (looms
`
`otherwise, upon notice and hearing. Justice Freedman explained her 1996 dctennination to defer ‘
`
`punitive damages in her 2012 Southwestern University La Review article (Helen E. Freeéman,
`
`Selected Ethical Issues in Asbestos Litigation, 37 SW. U.
`
`. Rev. 51 1, 527428):
`
`Many courts, including mine, long ago decided that purii 'vc damages had little or no piano in
`the asbestos litigation. .
`.
`. Because New York allows im osiiion ofpunitive damagoa in tort
`casoc, rather than merely dismissing the claims, I dcfcrr
`all punitive claims indefinitely . .
`
`It seemed like the fair thing to do for a number of reaso
`. First, to charge companies Wt 11
`punitive damages for wrongs committed twenty or thin years before, served no correctivo
`purposo. In many cases, the wrong was commiticd by a redecocsor company, not even the
`company now chargod. Second, punitive damages, infr uently paid as they are, only dinglete
`resources that are better used to compensate injurocl p
`as. Third, since some states did not
`
`permit punitive damages, and the federal [multidisuiotl ligation] court precluded thorn,
`disparate treatment among plaintiffs would rooult. Fin
`y, no company should be punished
`repeatedly for the some wrong. However, deferral of all punitive damages claims byjuc'jcial
`fiat despite the fact that otherjurisdictions allowed the , and, indeed, New Yorkjurios and
`previously awarded thorn, clearly raises ethical and p03 bly equal protection issues!”
`On this motion Plaintiffs assert that the NYCALI dscape has so dramatically changed
`
`
`.
`
`since 1996 that the policies and considerations underlyin CMO § XVII’S deferral ofponitivo
`
`damages no longer apply. Plaintiffs’ central arguments i
`
`this regard are as follows:
`
`~
`
`'
`
`are not denied the right to seek
`
`Prior to 1996 NYC/XL asbestos plaintiffs
`punitive damages at trial”;
`Unlike NYCAL plaintiffs, asbestos plaint ifs in other states and in other counties
`within New York State are pmittod to
`sort claims for punitive damages
`
`
`
`
`Although no appellate review was sought concerning Justice Frecclmao’s 1996 determinaticn. than: have
`been some attempts in Iimr'ne to overcome the CMO XVII ban on punitive damages which were
`unsuccessful. Soc Gadaleto v A.C.&S.. 1:20., Index N . “0739/02 (Sup. Ct. NY. Co. Septeirlaer 22,
`2004, Lchcdcff, 1.); Bernard v Broofigfiela‘ Properties Com, Index No. 10721 1/08 (Sup. C! ‘W. Co.
`Oct. 24, 2011, Shulmnn, J.)
`
`
`Sec Home Ins, Co. v American Home Products Corp , 75 mm 196, 204 (1990) ("no con opt of
`punitive damages has been sanctioned under New Y rlc law in actions based on negligence .
`,
`. and strict
`products iiability . . . 3’)
`
`
`‘0
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`

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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`INDEX NO. 2016EF1906
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`FILED: ONONDAGA COUNTY CLERK 06.132017 11:59 AM
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`*
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`‘
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`~
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`-
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`'
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`without undue adverse effect“;
`The NYCAL punitive damages deferral emboldens certain defendants to res; st
`engaging in reasonable settlement discussions. This clogs: the court’s (lockers,
`wastes judicial resources, and prejudices in~extremis plaintiffs who have limited
`expectations;
`The continued wholesale prohibition ofpunitive damage claims in NYCAI. is
`ethically and consti'mtionally infirm;
`As a matter ofpoblio policy the imposition of punitive damages serves the
`important goal ofdeterring tortious conduct not just by manufacturers ofasliestos~
`containing products but dangerous products of all kinds;
`Defendants‘ concerns that punitive damages will repeatedly be assessed against
`NYCAL defendants is without foundation in fact;
`The particular circumstances ofthe cases at issue herein support an award ul‘
`punitive damages.
`
`Defendants assert that Justice Freedman’s reasons for deferring punitive damages are even
`
`stronger today than they Were almost twenty years ago, and collectively argue:
`
`-
`
`°
`
`'
`
`The spectre of large punitive verdicts will inflate settlement valuos, resuliirsg in
`fewer resources with which to compensate future asbestos claimants;
`Punitive damages would serve no corrective or deterrent purpose in NYCAL since
`nearly all asbestos-containing products have been eliminated in this country either
`bylaw or by practice;
`Several states bar punitive damages in asbestos cases as a matter of law”, and
`courts with large asbestos dockets have precluded punitive damages as a matter of
`
`Wm
`
`H
`
`'2
`
`See, lag, Bankhead v Awful/lemon Ina, 205 Cal. App. 41}: 68, 38 (Apr. i9, 2012); Drabrzi i: vFisher
`Control? but, LLC, 92 A1336 1259, 1260 (4th Dept 2012); Rndarmel anuemo Abex, LLC. 957 maze
`“)7, 109 (Ill. App, Jul 15 2011); Baccus v .4111. Richfield 60., No. 1063-2010, Philn. Ct. Car 1. Pl.
`LEXIS 8, 34 (Inn. 13, 2010); Anderson v AJ. Friedman Supply Co, £210., 416 N3 Super 46. S3 (Aug.
`20, 2010); Stewart v Union Carbide Corp, 190 Cal. 1813134111 23, 27 (Nov. 16, 2016); Boyd to v
`ThZSIaie Packing Suppiy, No. CVm04452, 2007 Me. Super. LEXIS 47, 8913 (Feb. 28, 20 32’); In re
`Seventh Jud. Dist. Asbestos 1,12ng 190 ADZd 1068 (4613351311993).
`
`Nebraska, New Hampshire. Michigan. and Washingion all prohlnil punitive damages generaily. Sec
`Distinctive Priming &Packaging Co. 1! Cox, 2322 Nab. 846, 857 (1989); NH. REV. STAT ANN. §
`507.16; Rqfl‘erry v Markavz‘tz, 602 WM 367 (Mich. 1999); [Bailey v N. CoastLIflz Ins. Co , 9l9 no
`589, 590 (Wash 1996).
`
`.5-
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`-
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`4‘
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`discretiong”
`
`The availability of punitive damages in NYCAL would enhance the advantage
`plaintiffs already receive nationwide in asbestos litigation;
`No company should be repeatedly punished for the some wrong; CMO § X‘y ll is
`Warranted in light of due process constraints;
`Punitive damages pose an increased likelihood ofjuror confusion in oonsoli lated
`asbestos trials;
`
`' The imposition ofpunitive: damages in NYCAL would violate the United St ates
`Constitution’s Ex Post Facto Clause;
`
`Plaintifin negotiated and consented to all ofthc 0M0 provisions, including the
`deferral ofpunitive dnrnagest The lifting of the punitive (images deferral would
`undermine the negotiated and consented-to precepts of the OMB so irrevocably as
`to render the entire document invalid. The Defendants will not consent to my
`such alteration of the CMO. Defendants would also no longer consent to
`accelerated trial clusters, consolidated oinla, the continuation of discovery alter
`filing of the note: of issue, and limitations on the taking of dopositions, all so
`provided for in the 0M0.
`
`Crane joins in such joint opposition and offers the following additional arguments:
`
`-
`
`°
`
`~
`
`Plaintiffs have failed to set forth a sufficient basis why punitive damages agninSt it
`are warranted in the cases herein”;
`
`The United States Navy, not Crane, specified the content and technical details of
`all gaskets and packing associated with the Crane products alleged to have heart
`present on the ships on which these Plaintiffs worked. Crane simply
`‘
`manufactured and supplied equipment for the Navy in accordance with pma‘Se
`Naval specifications;
`
`Coercing so called rooalcitrant clefendants into reasonable settlements in not a
`legitimate rationale for imposing punitive damages;
`
`-
`
`Punitive damages awards would create an unwarranted and unnecessary recovery
`for NYCAL plaintiffs where compensatory verdicts have already reached
`staggering preportions. Plaintifi‘s have not explained how punitive damages;
`would be more of a deterrent than the large compensatory verdicts NYCAL
`plaintiffs already receive.
`
`
`‘3
`
`H
`
`See In re Collins, 233 FM 869‘ 812 (3d Cir. 2000); In re Mass Tort and Asbestos Frogrmruz General
`Court Regulation No. 20l2-03 (Ct. Coin PL, Philol County, Pa. Feb. 15, 2012), submitted 55
`Defondams' exhibit U.
`
`As more fully set forth lmt‘cll), infia, Plaintifi‘s’ bascs for punitive damages are mom properl} laid before
`the trial Judge at are Crano’n objections tharoto.
`
`n6"
`
`

`

`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`FILED: ONONDAGA COUNTY CLERK 06m2017 11:59 AM
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`
`
`DISCUSSIQN
`
`I.
`
`Plaintiffs’ Motion to Lift the CMCII’s Deferral of Punitive Damages
`
`ln Exxon Shipping Co. v Baker, 554 US 471 (2008) the United States Supreme Con ‘t
`
`outlined the history ofpunitive damages. The Court noted that the doctrine of punitive damages
`
`dates as far back as the 13‘h Century when the Court of Common Pleas in England recognized the
`
`availability ofdamages as compensation “for more than the injury received.” Id. at 490 (quoting
`
`Mike: v Wood, Loffi l, 18, 98 Eng. Rep. 489, 498 [17633)." Some early American cormnm law
`
`cases applied the remedy of punitive damages, also referred to as “exemplary damages”, upon the
`
`perceived need to compensate for “intangible injuries”. Id. at 491. Modern cases have
`recognized the remedy ofpunitive damages to punish for extraordinary wrongdoing and to deter
`
`harmful conduct. Id. at 493. The consensus today is that punitive damages are aimed not it
`
`compensation but at retribution and deierrence.
`
`With the exception ofNYCAL, punitive damage requests are generally permitted i .1 New
`
`York State as a matter ofpublic policy and are a societal remedy rather than a privale
`
`compensatory remedy. The imposition of punitive damages is “discretionary, not mandatory
`
`.
`
`.
`
`. ." Bimbaum v Bimboum, 157 AD2d 177, 192 (4th Dept 1990). Punitive relief must [6
`
`emblematic of more than an individually sustained wrong, and should “reflect pervasive and
`
`grave misconduct affecting the public generally .
`
`.
`
`. 3’ Fabiano v Philip Morris Inca, 54 A 03d
`
`146, 150 (let Dept 2008). This policy is reflected in several New York statutes which support
`
`
`
`‘5
`
`The importance of punitive damages was first recognized inNew York State in lineman v f: (methane, 3
`Johns. 56, 61 (1808), in which a gowmment officer was awarded punitive damages in a Mini suit
`against a publisher.
`
`-7.
`
`

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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`FILED: ONONDAGA COUNTY CLERK 06.132017 11:59 AM
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`
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`the imposition of punitive damages in appropriate eii‘mimstonees.l6
`
`New York’s Pattern Jury Instructions provide that the “puzpose of punitive damages is
`
`not to compensate the plaintiff but to punish the defendant for (wanton and reckless, malicious)
`acts and thereby to discourage the defendant and other (petiole, companies) from acting in 9
`
`similar way in the fixture." NY. Pattern Jury Imam, Civil, No. 2:278, at Bill (2014). They (also
`
`instruct that the “amount of punitive damages .
`
`.
`
`. must be reasonable and proportionate to *he
`
`actuai and potential ham .
`
`. 3’ anti that “other evidence relevant to on awarci ofpunitive du nages
`
`should not be admitted at trial unless and until the jury has brought in a Special verdict that
`
`plaintiff is entitled to punitive damages .
`
`.
`
`. ." Id. at 832-33.
`
`The New York plaintiff has a heavy burden to meet before punitive damages may be
`
`awarded. In New York, punitive damages are only permitted when “the defmidant’s wrongdoing
`
`is not simply intentional but ‘evincelsl a high degree ofmoral turpitude and demonstratefiil such
`
`Wanton dishonesty as to imply a criminal indifference to civil obligations.m Ross v Louisa» Wise
`
`SQWS., Inc., 8 NY3d 478, 489 (2007) (quoting Walker v Sheldon, l0 NY2d 401, 405 [196 l 3); see
`
`also Prozeraiz'k v Capital Cities Communs., 82 NY2d 466, 479 (1993) (quoting Presser an;
`
`Keeton, Torts § 2, at 9 {5th ed 1984]) (punitive (images may be sought when the wrongdoing
`
`was deliberate “and has the character of outrage frequently associated with crime”). ”Flier: are
`
`also clue process: “limits which a jury cannot exceed and ‘it is the duty of the courts to keep a
`
`verdict for punitive damages within reasonable bounds, considering the purpose to be achieved
`
`
`
`‘5
`
`See, e.g,, Agriculture and Markets Law ti 378(3)(b); Arts and Cultural Affaim Law § 3l.Gl($); Banking
`Law § 619(5); Civil Rights Law §§ 51, 70~a(l){c); Environmental Conservation Law§ 71-l 205(2);
`Estates, Power & Trusts Law § 54.3{3X2}; Executive Law § 297(4)(c); General Municipal lnw§ 50%;
`General Obligation Lauri} I i—lfi3(l)(b); Public Health Law§ 2BOl-d(2); Real Pmperty Law I} 2354(2);
`Social Services Low§ Bil—0(3); Tax Law ii 3038(2)(c).
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`“3-
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`as well as tho mlafldes ofthe defendant in the particular case.” Bell v Helmley, index No.
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`l 1 1085/01, 2003 NY Misc. LEXIS 192, at *8 (Sup. Ct. NY. Co. Mar. 4, 2003) (quoting Foalk v
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`Aware Inc, 19 ADM 464, 472 [15: Dept 1963}, afi‘d M 14de 899 [1964]).
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`With these precepts in mind, and in light of the safeguards imposed thereby, the
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`Defendants’ fear of large, repetitious punitive verdicts in NYCAL may be exaggerated.
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`in
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`Drabczfic v Fisher Controls International, LLC, 92 AD3d 1259 (4th Dept 2012), in additioo to
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`compensatory damages, a jury awarded the plaintiff $750,000 in punitive damages based m. the
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`decedent’s exposure to asbestos~eontaining valves. in vacating the punitive damages awaf-i, the
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`Fourth Department found that the evidence did not present one of the “singularly rare case-ta”
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`which permitted the imposition ofpunitive damages. Id Notably, however, the court hel:x that
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`the trial court did not abuse its discretion in charging the jury on the punitive damages issue. In
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`an earlier asbestos-related case, Maltese v Westinghozwe Elec. Core” 225 AD2d 414, 415 r [st
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`Dept 1996), the First Department vacated a punitive damages verdict for the same reason. The
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`court found that “the evidence does not show this to he one of the 'sitiguiaxly rare cases‘ it here
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`punitive damages are warranted by ‘extremc aggravating factors such as improper state of mind
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`or malice’. .
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`. ." (citations omitted).
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`As the Defendants submit, nearly all asbestos-containing products have been elimioated
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`in this country and in that regard punitive damage awards may not serve a strictly correcti'««*c or
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`deterrent purpose. Moreover, it is noteworthy that during the eight year period between W88
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`when the CMO was first established anti 1996 when CMO § XVII was implemented, Delimdants
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`have proffered only one instance where punitive damages were awarded in NYCAL (See Maltese.
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`supra). As set forth above, this award was vacated by the First Department.
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`.9~
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`Defendants’ argument that punitive damages awards wiil force businesses into
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`bankruptcy and deplete resources that would otherwise be nsed to compensate future asbestszg
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`victims may similarly be unwarranted at this stage of the litigation, While the asbestos iitigation
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`phenomenon ted to the bankruptcy nationwide ofover one hundred companies”, Defendasis
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`have failed to show, empiricaily or otherwise, that such bankruptcies were caused by punitive
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`damages awards. Rather, available information indicates that these banimzptcies were causod by
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`initial mass fiiings as well as projections of future filings and awards ofcompensatory dam ages.18
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`As concerns future asbestos victims, they are protected by a fimdamental element of our legal
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`system which, following a hearing, places restraints on the maximum amount of punitive
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`damages that is tolerabie under the Due Process Clause of the US. Constitution, either
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`individually or in the aggregate as against any patticutar defendant. See, e.g., Simpson v
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`Pittsburgh Coming Corp, 901 FZd 2'77, 281 (2d Cir), cert denied 497 US 105.? (1990); IV re
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`Joint Eastern and Southern Dist. Asbestos Ling, 87~CV-0537, 1991 WL 4420, at *2 (EDNY
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`Jan. 1 l, 1991). As for those entities that see the need to file for bankruptcy protection duo to the
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`number of asbestos claims and potontiai asbestos claims against them, it appeam that they iiainly
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`file for Chapter ll reorganization protection”, which in many instances provides for the creation
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` u
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`Defondants‘ joint oppooition brief; dated October 31, 2013, pp. 14-15 (citing Mark. D. Plavn, at at,
`{More are They Now, Part Six: An Update on Development: in Asbestos-Related Bankruptzgé Casay,
`Manley‘s Ash. Bank. Rep“ V03. I1, No. 7, p. 31 [February 2012], submitted as Defendants' exhibit C3,
`“Mcaicy’s Report").
`
`’8
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`Lloyd Dixon and Gcoffi'ey MoGovcm, Asbestos mommy 77mm and Tart Compensation PAN!)
`Inst for Civil Justice, 2011. at xi, 2; see generalb' Mcaiey's Report, supra; Lloyd Dixom Out-iffmy
`McGovern, & Amy Coomine, Asbestos Hoithuptcy T111323: An Overview offing: Structure andActivity
`with Detailed Report: on the Largest 27mm, RAND lost. for Civil Instioc, 2010, at 2, 5, at n a}; 2005
`Rand Report. supra. at xxiii. et seq.
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`19
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`See Mcaiey’s chort, supra.
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`-10.
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
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`ofa trust to be: applied towards compensating future asbestosfirelatad personal injury claimants?u
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`See 1: use § 524(g).
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`Punitive damage awards indisputably are limited by constitutional constraints. See State
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`Farm Mal. Ania. Ins. Co. v Campbell, 538 US 408, 425 (2003) (“. .
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`. in practice, few award;
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`exceeding a single-digit ratio between punitive ami compensatory damages, to a significant
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`degree, will satisfy due. process?) Contrary to Defendants’ arguments such constraints are not
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`designed to deter plaintiffs from seeking them; the casclaw highlights the fact that punitive:
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`damages may only be awarded under certain circumstances. See BMW ofN. Am v Gore, 5 E? US
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`4559, 568 (1996) (punitive damages may “properly be imposed to further a State’s legitimazz:
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`interests in punishing mflawfizl conduct and deterring its tepeti’dcn .
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`. .
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`. Only when an award can
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`fairly be categorized as ‘grossly excessive’ in relation to these interests does it enter the zone of
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`I arbitrariness tha: violates the Due Process Clause of the Fourteenth Amendment.”). Similarly,
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`Defendants’ charge that punitive damagm imposed upon strict liability causes of action at:
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`unconstituticnal under the Ex-Post Facto Clause2t is diluted by the fact that, like punitive
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`damages, the: aluty to warn of dangers in respect of one‘s products is a longstanding princi file of
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`the law ofthis state.“2
`
`
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`2“
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`3‘
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`3‘
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`According to Meaicy’s Report (pp. 33-34). "a substantial amount of money has buxom: availablc fi'om
`confirmed asbestos paracnal injury masts for (In: payment of claims ~ estimated to be between $25 and
`$40 billion . . . l"
`
`See Landgmfv Usi Film Pmds., 511 vs 244, 221 (1994) {"Remactivc imposition ofpunliis-c damages
`would misc a serious constitutional question”); Rein v Socialisf People ’5 Libyan Arab Jam i‘lrz‘ya, 162
`F.3d 748, 762 (2d Cir. 1998) ("Where a retroactive law is civil rather than criminal, it is only the
`imposition of panifive damages that might, ln particular circumstances, misc. a ccnatitulicnal
`:roblem.”}
`
`See Thomas v Winclzesten 6 NY 397 (1852); Loop vLithyleld, 42 NY 351 (1870); Maui-7h“ can v
`Buick Motor Co., 217 NY 382 (1916).
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`-13-
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`Defendants raise particular concerns about the imposition of punitive damages in
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`clustered groups of cases because the conduct at issue will vary from claim-tauclaim within a
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`gimp based upon factors such as the products at issue, the years of exposure, and the plaintiff’s
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`occupation. In this regard Defendants contend that jurors can not he expected to fairly evaluate
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`the issue of punitive damages against one or more defendants in a consolidated asbestos trial
`because: the presentation ofevidence as to one defendant‘s wrongful riots would improperly
`influence each plaintiff’s claims against all ofthe defendants in the trial cluster. While this court
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`appreciates the Defendants’ concerns, at the end of the day the decision and the circumstwt was
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`under which to consolidate lies within the discretion of the NYCAL trial Judgcs in accordance
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`with the facts of the cases before them.
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`Techoically Plaintiffs’ motion is restricted to specific NYCAL cases, but the issue; raised
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`herein affect the landscape of this litigation.” As such, the parties’ arguments have been most
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`carefislly considered. lrecognize that even without punitive damages, resources available 0
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`persons injured by asbestos are naturally being depleted and that bankruptcy filings by ash :stos
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`defendants continue. While the argument could be made that priority should be given to
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`compensatory claims over punitive damage awards, I am mindful that in this state the decision to
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`deny plaintiffs the opportunity to seek punitive damages lies with the legislature What I cannot
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`ignore is the fact that victims of asbestos exposure are permitted to apply for punitive damages in
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`every New York state court except this one. ifor one cannot justify a situation in which as:
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`asbestos plaintiff is permitted to apply for punitive damages in Buffalo but not in this court. This
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`
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`23
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`As one attorney suggested at oral argument, Pleintiffs' motion can he likened to a camel‘s more. peeking
`under the: tent,
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`.12-
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`raises serious constitutional equal protection concerns which should not be overlooked.
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`I therefore hold that pursuant to CMO § XVII, following notice and a hearing, the oct‘errni
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`ofcounts for punitive damages in NYCAL cases is lified, and CMO § XVII shall be deemol
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`modified as hereinafter set forth. As such plaintiffs are no longer barred from applying to ire
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`NYCAL trial lodges for permission to Seek punitive damages.
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`While Plaintiffs have evinced their intention not to abuse this opportunity, it is
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`appropriate for the court to caution the plaintiffs' bar not to overstep'this permission by
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`attempting to seek punitive damages indiscriminately. Punitive damages should only be sought
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`in the most serious cases to correct for the most egregious conduct, and must present a valid
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`reference to corrective action. One need only refer to current events to understand that products
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`harmful to consumers are still being introduced into the stream of commerce. Even in such
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`circumstances, plaintiffs’ burden is a very heavy one.
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`H.
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`Defendants’ Cross-Motion to Withdraw from the CMO
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`This court has consistently embraced the concept that the CMO is a negotiated agnomont
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`which embodies the partiw’ mutual consent to the various provisions toward the ultimate
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`objective of bringing about “the fair, expeditious, and inexpensive resolution to those comm.”
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`(IMO § If. As i noted in a prior decision, “(while the plaintiffs‘ bar is not completely satisfied
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`with some ofthe CMO’s provisions, the dofendants’ bar is similarly not content with (idiots.
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`That is the reality of any bargained for position, to which the parties have signed on.” In 99 New
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`York City Asbestos Ling, 37 Misc. 3d 1232(A), 2012 NY Misc. LEGS 5646, at *le (Sup Ct.
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`NY. Co. Nov. 15, 2012). Notwithstanding the great desirability of having the parties mutually
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`-13-
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`FILED: ONONDAGA COUNTY CLERK 06/16/2017 11:59 AM
`NYSCEF DOC. NO. 290
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`FILED: ONONDAGA COUNTY CLERK 06m2017 11:59 AM
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