Owens-Illinois v. Armstrong
591 A.2d 544, 87 Md. App. 699, 1991 Md. App. LEXIS 140 (1991)
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Rule of Law:
In product liability cases, a physical alteration of the body without accompanying functional impairment or detriment does not constitute a legally compensable injury. Furthermore, courts may infer that a plaintiff would have heeded product warnings had they been given, and punitive damages require direct evidence of a manufacturer's substantial knowledge of a danger and gross indifference.
Facts:
- Owens-Illinois, Inc. manufactured and sold Kaylo, an asbestos-containing industrial insulation product, from 1948 to 1958.
- Othello Armstrong worked at Bethlehem Steel shipyards from 1942 to 1963, and Forrest Wood worked there from 1941 to 1975, both extensively exposed to Kaylo dust in enclosed engine and boiler rooms.
- Armstrong and Wood were diagnosed with asbestosis, a progressive pulmonary disease caused by inhaling asbestos fibers, with a latency period of 15-30 years.
- Frederick Stormer worked as a stockman and warehouseman, and Dominic Celozzi worked as a coppersmith, both exposed to asbestos-containing insulation products.
- Stormer and Celozzi developed pleural plaques and pleural thickening from asbestos exposure, but medical experts for both sides agreed these conditions did not cause functional impairment, pain, or shorten life expectancy.
- As early as 1943, Owens-Illinois contacted Saranac Laboratories to investigate Kaylo's health hazards; by 1948-1952, Saranac reported that Kaylo could cause asbestosis and recommended precautions, warning it was a 'first class hazard.'
- Despite these warnings, Owens-Illinois failed to place warnings on its Kaylo products or implement safety programs for product applicators, and took steps to keep its name and Kaylo out of scientific publications.
- Forrest Wood explicitly testified that he would have sought different employment if he had been warned about the dangers of asbestos.
- Armstrong was a smoker for forty years but was unaware of Kaylo's asbestos hazards.
Procedural Posture:
- Othello Armstrong and Forrest Wood (and his wife, Loretta) sued Owens-Illinois, Inc. and other companies (Eagle-Picher Industries, Owens-Corning Fiberglas) in a trial court for negligence and strict liability due to asbestos-containing insulation products.
- A jury returned verdicts in favor of Armstrong and the Woods and against each defendant, awarding compensatory damages.
- The jury also determined there was sufficient evidence to allow an award of punitive damages against Owens-Illinois, Inc. and Owens-Corning Fiberglas.
- Owens-Corning Fiberglas settled with Armstrong for $304,166.33 (including compensatory and punitive components) and with the Woods for $409,625 (including compensatory and punitive components).
- Two days after the settlements, the jury returned punitive damage awards against Owens-Illinois, Inc. of $1,000,000 in each case.
- At a post-trial motions hearing, the trial court reduced the compensatory damage awards for Armstrong and Wood due to the settlements with Owens-Corning Fiberglas, pursuant to the Uniform Contribution Among Tortfeasors Act.
- Owens-Illinois, Inc. and Eagle-Picher Industries filed motions for new trial, revision of judgment, judgment notwithstanding the verdict, and remittitur, which the trial court denied.
- The trial court entered final judgments on the verdicts, from which Owens-Illinois, Inc. appealed.
- Frederick Stormer (and his wife, Alice) and Dominic Celozzi (and his wife, Beatrice) sued various companies, including Eagle-Picher Industries and Owens-Corning Fiberglas.
- The jury found that Stormer and Celozzi did not suffer from asbestosis, and judgment was entered in favor of the defendants.
- Stormer and Celozzi (and their wives) filed motions for new trial, which were denied by the trial court.
- Stormer and Celozzi (and their wives) appealed the judgments in favor of the defendants.
- These multiple appeals were consolidated for consideration by the Maryland Court of Special Appeals.
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Issue:
Does the development of pleural plaques or pleural thickening, without functional impairment or detriment, constitute a legally compensable injury in an action for negligence or strict liability?
Opinions:
Majority - Bishop, Judge
No, the development of pleural plaques or pleural thickening, without functional impairment or detriment, does not constitute a legally compensable injury in an action for negligence or strict liability. The court affirmed the trial court's instruction to the jury on this point, finding that the medical evidence, from experts on both sides, clearly and uncontradictedly demonstrated that these conditions, while an alteration of the pleura, did not cause any 'loss or detriment' as required for 'harm' under Sections 388 and 402A of the Restatement (Second) of Torts § 7. The court emphasized that 'harm' implies a detrimental effect, not a mere physical change without consequence, distinguishing it from intentional torts like battery where mere alteration might suffice. The court also addressed several other issues raised by Owens-Illinois in their separate appeal. It affirmed the trial court's exclusion of a dust count report, holding it did not qualify as a business record under Md.Code Ann. § 10-101 due to a lack of circumstantial guarantees of trustworthiness (not routinely made for daily business operations, not objectively accurate). It affirmed the adequacy of the jury instruction on 'substantial factor' for causation, stating the term is sufficiently intelligent for a jury without further definition. The court affirmed the denial of Owens-Illinois's motion for judgment on proximate cause, applying a 'heeding presumption' that plaintiffs like Armstrong would have heeded warnings had they been given, even without direct evidence, relying on the presumption that people generally act for self-preservation. The court upheld the punitive damage awards against Owens-Illinois, finding sufficient 'direct evidence of substantial knowledge of a danger... and a gross indifference to that danger' (the implied malice standard from Balbos), noting Owens-Illinois's failure to warn and efforts to conceal information, and distinguishing a prior case (Balbos) due to the specific, heavy exposure levels experienced by Armstrong and Wood in enclosed spaces. Furthermore, the court ruled that the statutory cap on non-economic damages (Md.Cts. & Jud.Proc.Code Ann. § 11-108(b)) did not apply to Armstrong because his asbestosis 'arose' (came into existence) prior to the statute's effective date of July 1, 1986, even if discovered later, distinguishing 'arises' from 'accrues' under the discovery rule. Finally, it affirmed that punitive damage portions of settlements with joint tortfeasors do not offset compensatory or punitive damage awards against other tortfeasors under the Uniform Contribution Among Tortfeasors Act (UCATA), as punitive damages are individual liabilities, not joint and several, and found no evidence of abuse in the settlement apportionment.
Analysis:
This case is highly significant for clarifying several key aspects of product liability law, particularly in the context of asbestos litigation. Its ruling that pleural plaques without functional impairment are not a compensable injury sets a critical precedent, defining the minimum threshold for 'harm' in tort actions and limiting potential claims. The affirmation of the 'heeding presumption' for proximate causation eases the burden on plaintiffs in failure-to-warn cases, allowing juries to infer that warnings would have been followed. Furthermore, the detailed analysis of the 'implied malice' standard for punitive damages, distinguishing it from prior rulings based on specific factual exposure, provides important guidance for both plaintiffs and defendants regarding the evidentiary requirements for egregious conduct. Finally, the case offers clarity on the application of statutory damage caps and the apportionment of settlements in multi-defendant tort cases, especially regarding the distinct nature of compensatory and punitive liabilities.
