Heather Isringhausen Gvillo Aug. 1, 2014, 1:35pm

PILADELPHIA (Legal Newsline) – Judge Eduardo C. Robreno, who oversees an asbestos multidistrict litigation in Philadelphia federal court, has decided that punitive damages awards are permitted in the maritime docket as a matter of law to seamen bringing unseaworthiness asbestos claims against shipowners.

Robreno delivered the opinion addressing punitive damages in maritime cases on July 9 in the United States District Court for the Eastern District of Pennsylvania.

At one point, Robreno rationalized punitive damages awards by arguing that while the relief won’t necessarily punish or deter asbestos defendants from acting in “egregious” conduct because asbestos is strictly regulated today, it could at least deter future reckless conduct regarding a different risky product.

Citing the U.S. Court of Appeals for the Sixth Circuit, he explained that “‘whether a defendant’s particular course of conduct has ceased is irrelevant to the accomplishment’ of the broader general deterrence function of punitive damages awards.”

Robreno added that while there is no general bar against punitive damages awards in asbestos litigation, the relief must conform to limitations under the Due Process Clause, maritime law and proceeding standards provided by Federal Rule 12.

His decision on punitive damages came in response to 27 of the approximately 1,800 motions for partial judgment on the pleadings regarding punitive damages claims filed as part of the maritime docket in the consolidated asbestos products liability docket pending in the court.

Because most, if not all, of the plaintiffs’ claims fail to satisfy the required standards for punitive damages, Robreno granted the defendants' motions for judgment, but provided certain plaintiffs the opportunity to file amended complaints in order to sufficiently fulfill the requirements.

The plaintiffs in these cases include former merchant marines and their representatives, survivors and families. The defendants are shipowners.

The defendants wanted to know when punitive damages are available under maritime law, arguing they should be unavailable under the general maritime doctrine of unseaworthiness, which is the cause of action upon which plaintiffs base their punitive damages claims.

The plaintiffs, on the other hand, argued punitive damages are appropriate according to the Supreme Court’s decision in Atlantic Sounding.

Robreno concluded that in order to resolve the dispute, he must look at what remedies are permitted under general maritime law, which also requires the court to determine whether punitive damages are appropriate in asbestos-related maritime cases.

Robreno explained that traditionally, general maritime law permitted seamen to bring a claim of unseaworthiness against an employer to receive compensation for an injury resulting from the unseaworthiness of the ship or a defect in its equipment.

Then in 1920, Congress passed the Jones Act and the Death on the High Seas Act, which expanded the protections available to seamen and their families.

The Jones Act allowed seamen to bring negligence claims against their employers, which was not permitted prior to the legislation’s enactment. It also allowed a seaman’s personal representative to file claims against the employer if the seaman died as a result of his injuries.

The Death on the High Seas Act provided similar relief for relatives of seamen who died as a result of his injuries by allowing wrongful death and negligence claims.

Fast forward to 2009, when the Supreme Court decided Atlantic sounding. It concluded seamen could recover punitive damages on a general maritime claim in cases based upon the maintenance and cure doctrine.

Robreno stated that the Atlantic Sounding holding also extended to unseaworthiness cases.

“The opinion expressly states that punitive damages have long been available at common law, and ‘the common-law tradition of punitive damages extends to maritime claims,’” he wrote.

However, Robreno added that punitive damages awards are not appropriate in wrongful death and survival actions, stressing the importance of the chronology of the development of maritime law. Therefore, punitive damages are not available to wrongful death and survival actions do not predate the Jones Act.

Furthermore, the Supreme Court held that a remedy for a seaman’s injury ends with his death unless a statute exists granting such remedies for his wife or kin.

“Therefore,” Robreno wrote, “however unfair or anomalous, the common law discrepancy in available remedies persists in the area of punitive damages.”

Focusing on asbestos cases specifically, Robreno explained that punitive damages today are “imposed for purposes of retribution and deterrence,” rather than compensation.

In other words, punitive damages are used to punish defendants whose “conduct is outrageous, owing to gross negligence, willful, wanton, and reckless indifference for the rights of others, or behavior even more deplorable.”

However, some have argued that such punishment does not apply to asbestos litigation because there is nothing left to deter. The Occupational Safety and Health Administration began regulating occupational asbestos exposure in 1971. Now, asbestos use is tightly regulated.

Furthermore, unable to keep up with the increasing pace of asbestos lawsuit filings, more than 100 companies have declared bankruptcy as a result of growing asbestos litigation.

“Critics of punitive damages say that, because of those numerous and high-profile bankruptcies, the ‘message of deterrence, both specific and general, has been heard loud and clear,’ obviating the deterrent effect of punitive damages award,’” Robreno wrote.

Defendants also argue that most, if not all, companies involved in asbestos litigation are not the same organizations that allegedly exposed the claimants to asbestos decades ago, as many companies have been bought out or liquidated.

As a result, punitive damages typically don’t punish the individuals responsible for the alleged conduct, but instead affect current shareholders, customers and employees of the present-day corporation, they argue.

Therefore, the defendants argue “use of that weapon is no longer justified.”

Additionally, such relief is not appropriate because today’s defendants are often “peripheral players” who neither manufactured nor distributed asbestos-containing products and that enormous litigation spending in addition to punitive damages awards only deplete available funds, penalizing future claimants, they argue.

However, Robreno cited the Sixth Circuit, which rejected this argument and held that “punitive damages are the risk that accompanies investment.”

Still, just because punitive damages are theoretically available, Robreno added it does not mean they are always appropriate in every case. Plaintiffs must prove that a defendant committed the “outrageous” conduct necessary for punitive damages awards.

“Because courts are able to consider these factors in the context of individual cases, the decision regarding the overall propriety of punitive damages in asbestos cases seems more like a legislative determination based on social policy than a judicial one,” Robreno concluded.

However, Robreno noted that the court may still impose certain limitations as to the kind of conduct which would warrant punitive damage awards.

Specifically, the Due Process Clause and federal maritime law governs the extent of punitive damages.

The Due Process Clause prohibits “grossly excessive or arbitrary” punishments.

While the measure of punishment hasn’t been specified, courts must ensure that the punishment is “reasonable and proportionate to the amount of harm to the plaintiff.

Under federal maritime law, on the other hand, federal courts have “considerably more latitude.”

The Supreme Court concluded in its Baker decision that “its review of punitive damages in maritime law ‘considers not their intersection with the constitution, but the desirability lies with this court as a source of judge-made law in the absence of statute.’”

Under maritime law, the court may determine whether punitive damages is a reasonable penalty that people would consider excessive for the alleged harm, considering the conduct at issue “is not as blameworthy” as other conduct warranting punitive damages might be.

The Supreme Court added that “reckless conduct is not intentional or malicious, nor is it necessarily callous toward the risk of harming others, as opposed to unheedful of it.”

Robreno concluded that because the cases at issue here arise under maritime law, allowed punitive damages awards must adhere to the Baker decision.

“That does not necessarily mean that a 1:1 ratio is the outer limit, as plaintiffs could conceivably demonstrate that defendants’ blameworthiness is more ‘exceptional’ than the conduct at issue in Baker,” Robreno wrote. “But it does mean that the court has greater ability to limit the type of conduct which warrants them and the size of punitive damage awards in this context than it has under the Due Process Clause.”

As a result, he held that punitive damages are permitted as a matter of law to seamen bringing claims of unseaworthiness in asbestos cases. However, the awards may be subject to limitations under the specific circumstances of the individual cases.

As for the specific cases on hand, Robreno reiterated that requests for punitive damages must include pleadings of “factual content sufficient to support the reasonable inference that the defendant is liable for the misconduct alleged,” and acted recklessly, Civil Procedure 12 states.

He concluded that most, if not all, of the allegations in the complaints in these case do not meet the standard.

The plaintiffs only made general allegations that the defendants “maintained their ships in an unseaworthy condition with reckless indifference and disregard for plaintiffs’ safety.”

However, because the cases were filed before the Supreme Court issued its decisions on the matter, Robreno believes the claimants could reasonably have thought their pleadings complied with Rule 12.

“The court will therefore afford plaintiffs the opportunity, if appropriate under the facts of the specific case, to file an amended complaint that complies with the current pleadings standard,” Robreno wrote.

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

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