SAN FRANCISCO (CN) - Ford Motor Co. may owe punitive damages to a mechanic whose contact with asbestos gave him mesothelioma, a California appeals court ruled Wednesday.
Patrick Scott had sued more than 30 companies including Ford in Alameda County court after he developed mesothelioma from asbestos-laden parts during his time owning and operating service stations.
When the case went to trial against Ford alone, Scott argued that, although the automaker knew about the risks of asbestos by 1964, warning labels did not appear on cartons of its brake-replacement parts until at least 1980.
A jury ultimately found Ford 22 percent liable for Scott's cancer and assigned the bulk of the blame to the U.S. Navy because of the significant amount of asbestos he encountered while working at a shipyard. In denying a request for punitive damages, the trial court credited Ford's claim that Michigan law - which bars damages as punishment in civil suits - controlled on that issue.
Ford appealed for judgment notwithstanding the jury verdict because it said Scott - a mechanic and service-station owner - was a "sophisticated user" who did not require asbestos warnings.
The California Supreme Court hammered out the sophisticated-user defense in 2008's Johnson v. American Standard Inc., barring strict liability and negligence claims for failure to warn in cases where plaintiffs know or should know about the inherent risks of a product they use frequently.
A three-judge panel of the state's First Appellate District found Wednesday, however, that Ford failed to satisfy a key requirement of the sophisticated-user doctrine: Scott's knowledge of the asbestos risk.
"There was no evidence that Scott, or others like him, were instructed in the claimed risks as part of their training, in contrast to the plaintiff in American Standard," Judge Sandra Margulies wrote for the panel. "On the contrary, the nature of the risks of automotive asbestos exposure had not even become clear to the scientific community when Scott opened his first service station. Based on the evidence presented at trial, the earliest possible dates from which constructive knowledge of those risks could be attributed to the general community of service station owners are 1973, when the first brake manufacturer placed a warning on its cartons and Chrysler warned in its service manual, or 1975, at the time of the National Institute for Occupational Safety and Health publications. Further, it could easily be argued that these scattered examples of notice are not evidence of the type of industry recognition necessary to impute knowledge to individual participants under the sophisticated user doctrine. As noted, Ford did not begin to place a warning on its cartons of brake parts until 1980, suggesting the industry consensus continued to form throughout the second half of the 1970s."
Because of the long latency period for mesothelioma, Scott's exposure to asbestos in the early part of his career figures more heavily in his cancer, the court found. This means that Ford had to show it had informed mechanics of the risks by the mid-1960s to prevail with the sophisticated-user defense, according to the ruling.
Though the automaker contended that warning labels were pointless based on evidence suggesting that Scott would have ignored them, the panel disagreed.
"Scott was described by a former employee at his service station as safety conscious, and other former employees described safety precautions he followed in his business," Margulies wrote. "He testified he did not recall ever seeing a warning regarding the dangers of vehicle-related asbestos exposure. The jury was entitled to infer that, had he become aware of the risks of automotive asbestos exposure, he would have taken appropriate precautions."
The trial court did, however, incorrectly apply Michigan law to bar Scott's claim for punitive damages. Since Michigan does not allow such damages in tort cases, the court should have applied California's "governmental interest analysis" to resolve the conflict of law, according to the ruling.
"Reasonable states can and do differ over the efficacy and appropriateness of punitive damages as a civil remedy," Margulies wrote. "Michigan's ban on punitive damages is the expression of a particular view of the appropriate role of the courts in adjudicating civil disputes: to compensate, rather than to punish. It represents a declaration of public policy about the wisdom of granting punitive damages as a legal remedy for noncriminal conduct. In California, our Legislature has resolved the debate in precisely the opposite manner. While Michigan has a strong interest in seeing its view of the appropriate policy carried out in its own courts, it has a correspondingly minimal interest in seeing the same policy implemented in the courts of California."
More than 40 other states allow punitive damages, so adopting the automaker's argument would lead to absurd results, the court found.
Ford would enjoy "a nationwide shield from liability, because the state in which it maintains its headquarters has decided punitive damages are poor public policy," Margulies wrote. "We cannot agree, any more than we expect a Michigan court would yield to a plaintiff's plea to impose punitive damages on a California-based corporation because its home state has made the opposite policy judgment."
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