California Court of Appeals Grants Relief to Defendants by Limiting Wrongful Application of Punitive Damages | Harris Beach LLC
Mass tort defendants frequently defend lawsuits in places like Los Angeles County, California, which are favored by corporate plaintiffs because of their plaintiff-friendly law and propensity for large verdicts. In a recent decision clarifying California’s standard for punitive damages, the Los Angeles County Intermediate Court of Appeals awarded relief to tort defendants, particularly those whose products contain only traces of an allegedly harmful substance. See McNeal vs. Whittaker, Clark & Daniels, Inc., No. B313472, 2022 Cal. App. LEXIS 587, at *54 (Ct. App. July 5, 2022).
It is a maxim of toxicology and medical causation that “the dose makes the poison”. However, California trial courts, relying on the law developed primarily to resolve asbestos disputes, sometimes adopt “no safe level” theories espoused by plaintiffs’ attorneys and their experts. Based on these theories, the courts adopted plaintiff’s arguments that knowledge of the mere presence of an allegedly harmful substance in a defendant’s product, no matter how small (for example, traces of benzene in a petroleum-based solvent) is sufficient to create a question of fact that defendant willfully ignored consumer safety and may therefore be liable for punitive damages.
Along the same lines, California trial courts sometimes hold that even if there is no scientific consensus that a given substance causes disease, punitive damages can be imposed. . In both cases above, the courts confuse the standards of negligence – conduct that the jury determines to be unreasonable – and punitive damages, which require “conduct having the character of indignation frequently associated with the crime”, and clear and convincing evidence. Johnson & Johnson Talcum Powder Kits, 37 cal. App. 5th 292, 335 (2019) (aka Echeverria). Such decisions ignore the California precedent. For example, in Echeverriathe court held that punitive damages could not be imposed on a manufacturer of talc products when a scientific consensus had not yet established a causal link between the talc products and the alleged disease.
In McNeal, the Second Appellate District, which hears appeals from Los Angeles County, has confirmed and clarified that holdings like these are erroneous. Defendant in McNeal supplied talc in talc products used until 1980 by the applicant, who then developed mesothelioma. In 1972, the defendant knew that his talc could contain asbestos and that asbestos could cause disease. The defendant also knew that his talc could contain asbestos. In overturning the jury’s award of punitive damages, the court pointed out that the defendant did not know until at least 1994 that talc (as opposed to asbestos) is capable of causing mesothelioma, and that “[t]This is not a case of exposure to raw asbestos or asbestos dust from products made with asbestos. The court also noted the lack of scientific literature until 1980 linking talc (as opposed to asbestos) to mesothelioma. Without knowledge in 1980, or constructive knowledge based on medical or scientific developments, that talc containing traces of asbestos (as opposed to asbestos itself) can cause mesothelioma, the defendant could not be held responsible for the punitive damages even though he knew that asbestos itself can cause mesothelioma.
The plaintiff argued that the “trace” levels translated to millions of asbestos fibers per ounce of talc, but the court replied that the plaintiff then had to show that the defendant knew that this amount had a high probability of wound. Plaintiff also noted a 1972 meeting attended by Defendant where FDA and industry scientists agreed that the presence of asbestos in talcum powder products was a potential safety hazard, arguing that it proves that the defendant knew that there was no safe level of asbestos in talc. The court rejected this, finding that concern over a potential safety risk does not support a conclusion that the defendant knew that any level of asbestos in the talc, no matter how small, is dangerous.
The dissent in McNeal was long and noisy. Consequently, it may influence judges to continue to apply the law in an erroneous way. Dissent may also indicate that McNeal is vulnerable to further calls.
Below McNeal, defendants can argue that in order for punitive damages to be imposed, the plaintiff must demonstrate the defendant’s knowledge (actual or implied) that its product had unsafe levels of the allegedly harmful constituent. Mere knowledge by the defendant that the settlor was present at some level is not sufficient. See McNeal, 2022 Cal. App. LEXIS 587, at *37-38. In the same way Johnson & Johnson/Echeverriadefendants may argue that punitive damages cannot be imposed in the absence of scientific consensus by the end of the alleged exposure period that the entire product and/or traces of the constituent present are capable of causing the alleged disease. See id.; Johnson & Johnson/Echeverria, 37 cal. App. 5e at 335. Defendants can thus resist plaintiffs’ attempts to misframe the question by asking only whether the defendant knew the substance was present, not whether the defendant knew the substance was present at a dangerous level.