Asbestos Personal Injury, Wrongful Death Plaintiffs May Seek Punitives in NYC Cases

For the first time in 18 years, asbestos personal injury and wrongful death plaintiffs may seek punitive damages in cases filed in New York City.

NYC asbestos cases are managed by a separate docket.  The 1988 Case Management Order (CMO) that governed all NYC asbestos cases was amended in 1996 to require that all punitive damages claims be deferred until such time as the court deems otherwise.  The deferral decision was based on “fairness.”  The court reckoned that it would be unfair to charge companies with punitive damages for wrongs committed 20 to 30 years prior, sometimes by predecessor companies.  Awarding punitive damages would serve no corrective purpose and would deplete resources that could be used to compensate injured parties.  Moreover, it seemed unfair to subject companies to repeated punishment for the same wrong.

On a motion seeking to lift the deferral of punitive damages, the plaintiffs in In re: New York City Asbestos Litigation argued, among other things, that punitive damages are allowed in other counties of New York and in other states, the ban is ethically and constitutionally suspect, and allowing punitive damages would encourage settlements and serves the public policy goal of deterring tortious conduct.

In New York Supreme Court Judge Sherry Klein Heitler’s April 8, 2014, decision, she concluded that the deferral provision of the CMO should be removed and applications for permission to charge the jury on the issue of punitive damages will be made on a case-by-case basis at the conclusion of the evidentiary phase of the trial.  The decision recognized that punitive damages are generally permitted in New York State as a matter of public policy and are a societal remedy rather than a private compensatory remedy.  However, the court noted that punitive damages are only permitted when the defendant’s wrongdoing is not simply intentional but evinces a high degree of moral turpitude and demonstrates such wanton dishonesty as to imply a criminal indifference to civil obligations.  The court noted that it is the “singularly rare case” in which punitive damages are appropriate.

The court also noted that defendants are safeguarded by the due process clause of the Constitution, which has been found to limit the amount of punitive damages that can be awarded.  The judge’s confidence that the Constitution will hold back unwarranted punitive awards is not necessarily borne out in other jurisdictions.

Finally, the court cautioned the plaintiffs’ bar not to overstep requests for punitive damages.  “Punitive damages should only be sought in the most serious cases to correct for the most egregious conduct, and must present a valid reference to correction action.”  It will be interesting to see whether there will be any cases that can meet this standard, i.e., where corrective action is still possible, as asbestos has been largely banned since the 1970s and 1980s.