Owens-Corning Fiberglas Corp. v. Ballard
1999 Fla. LEXIS 1458, 24 Fla. L. Weekly Supp. 401, 749 So.2d 483 (1999)
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Rule of Law:
Under Florida law, a punitive damages award that substantially exceeds the statutory cap of three times the compensatory damages is permissible if the claimant demonstrates by clear and convincing evidence that the award is not excessive in light of the defendant's particularly egregious misconduct and substantial financial resources.
Facts:
- During the 1960s and 1970s, Deward Ballard was exposed to Kaylo, an asbestos-containing insulation product manufactured by Owens-Corning, at various job sites outside of Florida.
- Ballard was subsequently diagnosed with mesothelioma, a fatal cancer caused by asbestos exposure.
- Evidence revealed that for over 30 years, Owens-Corning was aware that its Kaylo product was toxic and that asbestos was a carcinogen.
- In 1956, after being privately informed by a laboratory that Kaylo dust was 'toxic,' Owens-Corning publicly advertised the product as 'non-toxic.'
- During the 1960s, Owens-Corning knew of Kaylo's dangers but refused to warn consumers or substitute a readily available, safer, asbestos-free alternative because it was less profitable.
- In 1972, after developing an asbestos-free version of Kaylo, Owens-Corning knowingly contaminated the new product with asbestos debris from the old version and falsely marketed it as asbestos-free.
- At the time of trial, Owens-Corning's net worth was approximately $2.5 billion, and its CEO publicly stated that pending asbestos litigation would not have a 'materially adverse effect' on the company’s financial position.
- The company's CEO also publicly characterized most new asbestos claimants as 'not sick' and their legal actions as driven by lawyers seeking fees.
Procedural Posture:
- Deward Ballard sued Owens-Corning Fiberglas Corporation in a Florida trial court.
- Owens-Corning filed a motion to dismiss for forum non conveniens, which the trial court denied.
- The case proceeded to a bifurcated jury trial, where the jury first awarded Ballard $1.8 million in compensatory damages and found Owens-Corning liable for punitive damages.
- In the second phase of the trial, the jury assessed $31 million in punitive damages against Owens-Corning.
- Owens-Corning filed post-trial motions for a new trial and remittitur, arguing the punitive award was excessive; the trial court denied the motions.
- Owens-Corning, as appellant, appealed the judgment to the Florida Fourth District Court of Appeal.
- The Fourth District Court of Appeal affirmed the trial court's decision and certified a question of great public importance to the Supreme Court of Florida.
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Issue:
Does a punitive damages award that is nearly 18 times greater than the compensatory damages award overcome the statutory presumption of excessiveness under section 768.73(1), Florida Statutes, when the claimant presents clear and convincing evidence of the defendant's egregious, long-term misconduct and its substantial net worth?
Opinions:
Majority - Anstead, J.
Yes. A punitive damages award nearly 18 times greater than the compensatory award is not excessive when supported by clear and convincing evidence of the defendant's reprehensible conduct and its financial ability to pay. The purpose of punitive damages is to punish and deter. Florida Statute § 768.73(1) explicitly provides an exception to the 3-to-1 punitive damages cap where a claimant demonstrates by clear and convincing evidence that a larger award is warranted by the facts. Here, the trial court correctly found such evidence in Owens-Corning's 30-year history of concealing asbestos dangers, knowingly misrepresenting its product's safety, prioritizing profits over human life, and intentionally contaminating its supposedly safe successor product. The $31 million award, representing less than 2% of the company's $2.5 billion net worth, was a justifiable amount to achieve punishment and deterrence against a corporation of such size. This case presents the exact scenario the legislative exception was designed to address.
Dissenting - Overton, Senior Justice
No. The punitive damages award should not be upheld because a Florida court lacks the constitutional authority to impose punitive damages for conduct that occurred entirely outside of Florida for the benefit of a nonresident plaintiff. The plaintiff, Ballard, was a nonresident, and his exposure to the defendant's product occurred in six states other than Florida. Imposing a penalty under these circumstances is beyond the state's jurisdiction, akin to imposing a criminal sentence for a crime committed in another state.
Analysis:
This decision solidifies the exception to Florida's statutory cap on punitive damages, establishing that extremely high ratios of punitive-to-compensatory damages can withstand judicial scrutiny. The ruling emphasizes that the analysis is not merely mathematical but is heavily dependent on the qualitative reprehensibility of the defendant's conduct and its overall net worth. For future cases, this precedent empowers plaintiffs to seek large punitive awards against wealthy corporate defendants by focusing on clear and convincing evidence of long-term, malicious, or fraudulent misconduct. It signals that to meaningfully punish and deter a multi-billion dollar corporation, the punitive award must be substantial enough to register as more than a cost of doing business.
