Heather Isringhausen Gvillo Jun. 19, 2014, 3:46pm

JACKSON, Miss. (Legal Newsline) - The Supreme Court of Mississippi has remanded an asbestos lawsuit, ruling the punitive damages award was improper because the trial judge influenced the jury when he asked them to clarify their verdict.

Justice Leslie D. King delivered the opinion of the majority with Justices Ann H. Lamar, James W. Kitchens and David A. Chandler concurring. Justices Jess H. Dickinson and Josiah D. Coleman concurred in part and dissented in part, joining each other's separate opinions.

Union Carbide Corporation filed the appeal after a Mississippi jury returned a verdict in favor of claimant Russell E. Nix, Jr., as executor of the estate of Russell E. Nix, Sr.

Nix, Sr., filed the original lawsuit after being diagnosed with mesothelioma, claiming inadequate warnings. The jury awarded him $250,000 in compensatory damages and $500,000 in punitive damages. The court also awarded him nearly $500,000 in attorneys fees and costs.

The Supreme Court affirmed the jury's compensatory damages award based on inadequate warnings; reversed the jury's award of punitive damages because the trial court made improper comments potentially influencing the jury; vacated the award of attorneys fees because they no longer have basis without a punitive damages award; and remanded the case for a new trial on punitive damages.

Nix, Sr., worked for WellTech, a drilling company, from approximately 1980 to 1986 where he was responsible for maintaining the viscosity of drilling mud.

He used two Union Carbide products, Visbestos and Super Visbestos, to carry out his duties. Total, he used about 10 to 12 50-pound bags of Super Visbestos to mix the drilling mud and increase viscosity during loss circulation events. He would do this for several hours on most days for roughly two-and-a-half years, after which he was promoted and only handled the products two to three times a week.

Union Carbide "combined forces" with Montello in the late 1960s to supply Visbestos and Super Visbestos as drilling mud products. Union Carbide would manufacture the products and Montello was their exclusive distributor.

"Correspondence between the two indicated that Union Carbide often took it upon itself to advise Montello as to whether and what safety information to provide its customers," the court wrote.

By June 1968, Union Carbide began providing warning labels on its asbestos products. Then in 1972, when OSHA created a standard for all warning labels, Union Carbide changed its warnings to comply with the required OSHA wording.

Montello made the bags in which the products were packaged but Union Carbide remained the final decision-maker regarding the appearance and labeling of the packaging.

However, by 1983, Union Carbide felt that the OSHA warning "understates the risk associated with exposure to asbestos dust. Therefore, the company began using a separate label which used stronger language, specifically mentioning that asbestos is a "cancer hazard" and urged the use of respirators.

Nix filed a claim against Union Carbide and several other defendants in the 1990s due to asbestos exposure. Nix and Union Carbide settled the case, releasing Union Carbide from future litigation including all asbestos-related diseases, injuries and cancers. However, the Partial Release "expressly exempted claims from mesothelioma not diagnosed as of the date of the execution of the release."

So, when Nix was diagnosed with mesothelioma in 2010, he filed another lawsuit against several more defendants, adding Union Carbide in January 2011.

Eventually all defendants were dismissed except for Union Carbide.

The case went to trial on Oct. 3, 2011, in the Jones County Circuit Court, based on Nix's claims for inadequate warning and design defect under the Mississippi Products Liability Act.

Nix testified at the trial agreeing he had read the warnings provided, but said it was "impossible" to avoid creating dust.

Based on the testimonies, the jury ultimately returned a verdict for Nix on the inadequate warning claim, awarding him $1 million in damages and allocating 25 percent fault to Union Carbide. The remaining 75 percent fault was allocated to various other entities.

When the verdict form was returned, Nix's counsel argued that there may have been some confusion with the verdict form and requested Judge Billy Joe Landrum to "ask the jury if they intended to award the $1,000,000 to the plaintiff as against Union Carbide or did they intend for the $1,000,000 to be the total amount against all of the entities on the verdict form."

After providing the jury with a questionnaire, the jury responded stating, "We intended to award $1 million dollars to the plaintiff to be the total as to all entities on the verdict form. We awarded $250,000 as to Union Carbide. All jurors agree."

The court then immediately addressed the issue of punitive damages and the jury awarded Nix $500,000.

The court then awarded costs and attorneys fees to Nix amounting to roughly $500,000.

Union Carbide filed its appeal raising several issues:

-Whether Nix failed to prove a prima facie product liability failure-to-warn claim;

-Whether punitive damages were improper;

-Whether the award of attorney fees and costs is improper; and

-Whether the post-judgment interest rate is improper.

The court first addressed whether Nix failed to prove his product liability failure-to-warn claim. Union Carbide claimed it did not owe Nix a duty to warn about potential hazards of asbestos because it included warnings on the packaging and relied on Nix's employer to relay those warnings and instructions to Nix.

According to the common law defense, the court stated that when manufacturers provide information to a third party and reasonably relies on the party to communicate that information to the end user, the manufacturer's duty to warn may be discharged.

However the court noted that while Union Carbide points to communications it and Montello had with various companies regarding the hazards, it failed to show that the two companies informed Nix's employer or anyone in the direct distribution chain of the hazards.

"Union Carbide points this court to no evidence that it specifically provided WellTech or anyone in its direct chain of distribution with information regarding the hazards of asbestos," the court wrote. "It certainly cannot then claim that it reasonably relied on WellTech to warn Nix, when it is unclear form the record whether it even provided WellTech with a warning."

Union Carbide further argues that it complied with OSHA standards and therefore the warnings were adequate.

Regardless, the jury was presented with a sample of Union Carbide's warnings as well as OSHA's regulations to determine whether the warnings were sufficient. The jury ultimately decided that the warnings did not comply with the requirements.

Union Carbide also asserted Nix read the warnings but failed to rely upon them. However, the court wrote that there was nothing to rely on because the warnings only instructed users to avoid creating dust.

"Union Carbide essentially argues that Nix failed to rely on instructions that did not exist," the court wrote.

The court next addressed the punitive damages awarded to Nix.

In addition to Union Carbide's arguments about providing adequate warnings based on OSHA standards, it also argued that Nix released his punitive damages claims in the prior litigation. It explained that punitive damages are conduct-specific, not disease-specific, adding that nix released the company from claims arising out of his asbestos exposure in general.

However, the court found that the settlement was vague, stating that it does not specifically state that Nix was releasing future claims for punitive damages.

"Without specific language in the release releasing the punitive damages claim that are tethered to the exempted future claims for mesothelioma, it cannot be said that the language of the release clearly and unambiguously releases Union Carbide from liability for these punitive damages," the court wrote.

Dickinson and Coleman agreed that the release "clearly" allowed Nix to pursue a mesothelioma claim, but also disagreed with the majority's conclusion, stating that the settlement released Union Carbide from any other claims for asbestos-related diseases.

"In my view, releasing 'any and all claims, causes or rights of action, demands of every kind and nature whatsoever' unambiguously releases claims for punitive damages and attorney's fees," Dickinson wrote. "I would reverse the punitive damages and attorney fees awards and affirm the compensatory damages award."

Coleman added that while he agrees there can be no claim for punitive damages without a valid claim for compensatory damages, he explained that punitive damages punish conduct rather than compensate for an injury.

"However, it does not follow that, because compensatory damages are a prerequisite for punitive damages, punitive damages are awarded for a successful claim of a specific injury," Coleman wrote. "In fact, semantically speaking, the fact that two separate terms - compensatory and punitive - exist would indicate that the former is to compensate for an injury and the latter is for, well, something else."

Union Carbide also argued that punitive damages were improperly rewarded because the judge influenced the jury verdict by implying that the compensatory damages award was insufficient.

Judge Landrum added the word "only" into the jury questionnaire when clarifying the verdict.

The court held that "[questioning the jury was unnecessary, and it was certainly unnecessary and inappropriate to use the word 'only' in the questionnaire to describe the amount the jury awarded Nix."

As a result of the judge's possible influence on the jury's award, the appeals court reversed the punitive damages award and remanded the case for a new trial on punitive damages only.

The court next focused on the award of attorneys fees, finding them to be improper.

"Because this court reverses the punitive damages award and remands for a new trial on punitive damages, it also vacates the award of attorney's fees," the opinion states. "If punitive damages are again awarded, then attorney's fees would be an appropriate consideration."

As for post-judgment interest the appeals court upheld the 8 percent rate, saying the trial judge "is given wide latitude to determine both the interest rate and the date from which it runs, provided that the date is not a date prior to the date the complaint was filed."

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com

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