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The NAM filed an amicus brief supporting the appeals of several companies seeking to vacate or modify a New York City Case Management Order (CMO) that rejected the New York City Asbestos Litigation practice of deferring punitive damages claims. In 2017, a New York City administrative judge issued a CMO governing certain procedures for handling complex asbestos litigation. If upheld, the CMO could jeopardize compensation for future plaintiffs and threaten the viability of companies involved in the litigation. The NAM’s brief argued that 1) the CMO should be rejected, or at a minimum modified to continue the longstanding practice, 2) that the court should also modify the CMO to require plaintiffs to file all eligible asbestos trust claims early in the discovery process and 3) the court should specify that trust claims materials are admissible in asbestos cases which would help prevent manipulation and abuse of the trust claim and litigation process. Unfortunately, the court declined to modify the CMO.

The NAM filed an amicus brief 11/1/2013 in a trial court in New York City in a case where a nearly 20-year case management order deferring the imposition of punitive damages in asbestos cases is being reconsidered. The rule has been in effect to help preserve limited assets so that future asbestos claimants will be able to recover something for their injuries. The NAM supported continuation of the order to encourage settlements, prevent longer and more complex trials, and discourage delays for further appeals.

Punitive damages are designed to punish wrongful acts, but to charge companies with such damages today for acts committed some 40 or 50 years earlier, serves no corrective purpose. Also, many suits today are against companies that were not responsible for the asbestos in the first place.

We argued that punitive damages in asbestos cases deplete available funds for current and future victims, particularly when imposed in multiple cases. Even today, the influx of asbestos claims shows no signs of abating, and projections are that they will continue for the next 35 to 50 years. Giving some current claimants punitive damages not only forces later victims to bear the punishment, but also negatively affects the defendants’ employees, who may lose their jobs, other businesses that rely on the defendant companies for income, and shareholders such as pension funds and retirement funds.

Finally, we warned that punitive damages are wild cards that present significant obstacles to settlement negotiations, and changing the order will encourage more plaintiffs to file their suits in New York, particularly since there is no cap on punitive damages there.

Unfortunately, on 4/8/14, the judge modified the case management order to allow punitive damages claims to be made after the evidentiary phase of each trial, and if the jury determines that punitive damages are warranted, there will be a separate trial before the same jury to assess the amount to be awarded. The judge questioned how much allowing punitive damages would force businesses into bankruptcy, but emphasized the constitutional limits on them and warned the plaintiffs' bar "not to overstep this permission by attempting to seek punitive damages indiscriminately," but rather only for the "most egregious conduct," and to present "a valid reference to corrective action." It remains to be seen whether the plaintiff's bar will heed this caution.