July 12, 2015

New York appellate court addresses punitive damages in asbestos litigation

In California, a number of punitive damages cases in recent years have involved asbestos exposure.  See, for example, Bankhead v. Arvinmeritor, Pfeifer v. John Crane, and Izell v. Union Carbide

New York has its share of asbestos litigation as well, but a long-standing case management order prevented plaintiffs from seeking punitive damages in those cases, at least in New York City.  Recently, a new presiding judge modified that order and allowed punitive damages claims to proceed in asbestos cases.  In fact, she ruled that plaintiffs could wait until the close of evidence to indicate whether they will seek punitives.

A slew of defendants challenged that modification, leading to this appellate opinion.  The appellate court ruled that the trial court had the authority to modify the case management order, but she exceeded her authority when she allowed plaintiffs to wait until the close of evidence.  That was improper, according to the Appellate Division, First Department, because due process requires that a defendant be provided with an opportunity to conduct discovery and establish a defense to a claim for punitive damages.  The order deprived defendants of their due process rights by leaving them guessing, until the close of trial, whether the plaintiffs would seek punitive damages.

The National Law Review reports that the decision puts the long-term viability of punitive damages in New York City asbestos cases back in question.