Filed 3/26/14

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

PATRICK SCOTT et al.,

Plaintiffs and Appellants,

v.

FORD MOTOR COMPANY,

Defendant and Appellant.

 A137975

 (Alameda County

 Super. Ct. No. RG12613671)

Plaintiff Patrick Scott (Scott) owned and operated vehicle service stations for over 

40 years, during which he was periodically exposed to asbestos from brake and clutch

repair. He eventually developed mesothelioma, a form of cancer uniquely linked to 

asbestos. Scott and his wife Sharon (plaintiffs) filed suit against a wide variety of 

corporate defendants, alleging several causes of action for negligence and products

liability.

The lawsuit ultimately proceeded to trial against only one defendant, Ford Motor 

Co. (Ford). During plaintiffs’ case, the trial court effectively struck plaintiffs’ demand 

for punitive damages, finding Michigan law, which does not permit punitive damages 

unless specifically authorized by statute, applicable to this issue. The jury rendered a 

plaintiffs’ verdict on the negligence and products liability claims, finding Ford 

proportionately liable for Scott’s disease. Following entry of judgment, Ford 

unsuccessfully moved for judgment notwithstanding the verdict (JNOV).

 

*

Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is 

certified for publication with the exception of parts II.A.2. and II.A.3. 
2

Ford raises a number of challenges to the trial court’s denial of its JNOV motion, 

among them that Scott, as a service station owner and mechanic, should have qualified as 

a “sophisticated user” of automotive parts and must be deemed to have been aware of the 

risks asbestos exposure from the repair of brakes and clutches. We conclude the

sophisticated user doctrine did not constitute a complete defense to plaintiffs’ failure to 

warn claims because Ford failed to prove the risks of automotive asbestos exposure

should have been known by mechanics in the 1960’s and early 1970’s, when Scott began 

his career. Because we affirm the judgment on the basis of the failure to warn claims, we 

do not reach Ford’s challenges to the other causes of action.

In a cross-appeal, plaintiffs challenge the trial court’s decision to invoke Michigan 

law to strike their demand for punitive damages. Michigan decisional law denies 

punitive damages on the principle that the award of civil damages for the purpose of 

punishment, rather than compensation, is inappropriate. Applying California’s 

“governmental interest” conflict of laws analysis, we conclude that Michigan courts have 

no interest in seeing the application of this principle in the courts of California, which 

apply a contrary principle in allowing punitive damages. Accordingly, we remand for a 

new trial on the issue of punitive damages.

I. BACKGROUND

Plaintiffs filed suit against more than 30 defendants, among them Ford, alleging 

Scott, an auto mechanic, had developed mesothelioma from exposure to asbestos in 

defendants’ products. The complaint asserted causes of action for negligence, breach of 

implied warranty, product liability, fraud, and others. Plaintiffs settled or otherwise 

resolved their claims against all other defendants, and the case proceeded to jury trial 

against Ford. The trial was a long one, and we summarize only the evidence directly

pertinent to the arguments we consider in this appeal.

A. Scott’s Career

Scott worked as a mechanic for over 40 years. He began working on cars as a 

young teenager. After he joined the United States Air Force in 1961, he was trained at a 

technical school and served as a mechanic for four years. After his discharge, he worked 
3

for eight months at a shipyard, where he suffered significant exposure to a particularly 

harmful form of asbestos. With a friend, Scott opened his first service station in 1966. 

He owned and operated four different service stations over the succeeding years, at one 

time employing as many as 17 workers. While operating the service stations, Scott 

became a member of an automotive trade association and earned certification in electrical 

systems, engine performance, and advanced engine performance from Automotive 

Service Excellence (ASE), and he received some professional training. In the course of 

his work, Scott was exposed to asbestos while servicing brakes and clutches supplied by 

a wide variety of manufacturers and merchants, including Ford. 

B. Knowledge of the Risks of Automotive Asbestos Exposure

Mesothelioma is a cancer of the lining of the lung particularly associated with 

asbestos exposure. Exposure to asbestos does not cause the immediate appearance of 

cancer. Instead, the disease has a long latency period; an exposure can result in the 

development of cancer from 20 to as many as 70 years later. Exposure that occurs earlier 

in a person’s life has greater potential to contribute to the development of mesothelioma 

than later exposure. 

The dangers of asbestos exposure began to be recognized by the scientific

community in the late 1920’s. Consciousness of the connection to cancer grew during 

subsequent decades, with the connection firmly established by 1955. The causation of 

mesothelioma, in particular, by asbestos was recognized by 1960. 

This general knowledge did not necessarily translate to the vehicle service 

industry, however, because the type of asbestos fiber used in the manufacture of auto 

parts is far less potent in causing harm than other industrial types of asbestos. Awareness 

grew throughout the 1940’s, 1950’s, and 1960’s that persons who serviced brakes were 

exposed to asbestos. Plaintiffs’ expert testified that by no later than 1964, the type of 

asbestos fiber used in vehicle brakes and clutches was recognized by the scientific 

community as causing mesothelioma. Yet Ford’s expert testified that the conclusion 

from a major scientific conference in 1969 was that “brake linings are not a problem—or 

not a hazard.” The publication in the mid-1970’s of a further series of scientific studies
4

caused plaintiffs’ expert to conclude it had become “well known” in the scientific 

community that working with brakes exposed workers to dangerous levels of asbestos.1

There is little direct information in the record about the degree to which these 

dangers became known by persons working directly with automobiles, including 

mechanics like Scott. The Occupational Safety and Health Administration did not begin 

to regulate exposure to asbestos in the workplace until 1971. Although by the early 

1970’s, Ford was discussing internally the possible risks of automotive asbestos exposure

and exploring ways to minimize it, its service manuals contained no mention of asbestos 

at that time. The first reference in the record to communications directed at service 

station workers warning of asbestos exposure is the publication in 1975 of bulletins by 

the National Institute of Occupational Health and Safety (NIOSH). There is no indication

how widely known or distributed these publications were at the time.

The first reference in the record to commercial warnings about exposure to 

asbestos in the auto industry appears in 1973, when one brake manufacturer began to 

label cartons containing its products. The same year, the Chrysler Corporation first 

warned about asbestos exposure in its service manuals. Ford first mentioned asbestos in 

a “technical service bulletin” in 1975, and General Motors Corporation placed 

information in its service manuals the following year. Consistent with this, Scott’s 

business partner, also a mechanic, recalled that warnings about asbestos exposure began 

to appear in the mid-1970’s. Prior to that, in the late 1960’s and early 1970’s, he did not 

recall receiving any information about asbestos exposure. It was not until at least 1980 

that Ford placed warnings on cartons of its replacement brake parts. 

C. Evidence of Ford’s Internal Investigation

As part of their failure to warn and fraud cases, plaintiffs sought the admission of 

evidence of an internal investigation by Ford of the prevalence of mesothelioma among 

its employees, apparently begun in the late-1970’s and continuing through the early 

 

1

Illustrating the difficulty of pinpointing a scientific consensus regarding the 

dangers of automotive asbestos exposure, Ford’s expert testified that these same studies 

from the mid-1970’s were inconclusive. 
5

1980’s. Over Ford’s objection, the trial court admitted several documents and related 

videotaped deposition testimony by a Ford employee. In one handwritten memorandum, 

a Ford employee appears to have calculated the incidence of mesothelioma cases to be 

expected in the general population and compared it to the incidence among Ford 

employees, concluding the incidence at Ford was nearly three times the expected rate. 

Other documents named some of the Ford workers who had been found to have 

contracted mesothelioma and, for many of the workers, described their occupations at 

Ford and their possible military exposure to asbestos, if any. None of the workers 

appears to have worked directly with brake or clutch assembly or service. During the 

deposition that was admitted with the documents, plaintiffs’ counsel repeatedly attempted 

to tie the occurrence of these cases of mesothelioma to Ford’s use of asbestos-containing 

brakes. The Ford employee was able to note, on at least three occasions, that none of the 

employees who contracted mesothelioma was found to have worked with brake 

installation. The employee also noted that many of the employees had other industrial 

experience outside Ford. 

The trial court declined to exclude the investigation evidence as irrelevant, 

reasoning the evidence tended to show Ford “knew that its products increased the 

likelihood that users [would develop] mesothelioma.” Having found the evidence 

relevant, the court rejected a further objection under Evidence Code section 352, noting 

the Ford employee’s testimony was, in part, “helpful” to Ford’s position. 

D. Denial of Punitive Damages

Late in their case, plaintiffs attempted to introduce Ford’s annual report to support 

their claim for punitive damages. Ford had earlier argued to the trial court that Michigan 

law should be applied to bar plaintiffs’ claim for punitive damages, but the court had 

declined to rule on the issue. After lengthy argument by the parties, the court accepted 

Ford’s argument, ruling, “Using the government interest analysis, the court concludes 

that Michigan’s interest as embodied in its prohibition of punitive damages would be 

more impaired if its law were not applied under the circumstances of this case than would 
6

California’s interest” in allowing a claim for punitive damages. Accordingly, the court

ruled the annual report inadmissible and precluded the claim for punitive damages.

The jury returned a special verdict finding Ford liable on theories of failure to 

warn, design defect, and negligence, but it found no fraud. Ford was found 22 percent

liable for Scott’s injuries, while Scott was found comparatively responsible for 19

percent. Various other nonparties were assigned responsibility for the remainder, with 

the largest share, 33 percent, assigned to the United States Navy. Ford moved for JNOV

and a new trial, raising, among others, its arguments on this appeal. The motions were 

summarily denied. 

II. DISCUSSION

A. Ford’s Appeal

1. Sophisticated User Doctrine

Ford argues it should have been granted judgment notwithstanding the verdict 

because the “sophisticated user” doctrine provides a complete defense to plaintiffs’ 

failure to warn and “consumer expectations” design defect claims. The trial court 

instructed the jury on the “sophisticated user” defense, using CACI No. 1244, which 

required Ford to prove “that, at the time of the injury, [Scott], because of his particular 

position, training, experience, knowledge, or skill, knew or should have known of the 

products’ risk, harm or danger.” Because neither party sought a finding on the 

sophisticated user defense in the special verdict form, we have no direct indication from 

the jury of its conclusion about this issue. By rendering a plaintiffs’ verdict on the failure 

to warn claims, however, the jury unequivocally rejected Ford’s present assertion of the 

doctrine as a complete defense to plaintiffs’ failure to warn claims.

On appeal from the denial of a JNOV motion, we “review[] the record in order to 

make an independent determination whether there is any substantial evidence to support 

the jury’s findings.” (Murray’s Iron Works, Inc. v. Boyce (2008) 158 Cal.App.4th 1279, 

1284.) “The scope of the review is limited to determining whether there is any 

substantial evidence, contradicted or not, to support the jury’s verdict. [Citation.] 

Applying the substantial evidence rule, we resolve ‘all conflicts in the evidence and all 
7

legitimate and reasonable inferences that may arise therefrom in favor of the jury’s 

findings and the verdict. [Citations.]’ [Citation.] Thus, this court must accept as true the 

evidence supporting the verdict, disregard conflicting evidence, and indulge every 

legitimate inference to support the verdict. [Citation.] Accordingly, we do not weigh the 

evidence or judge the credibility of the witnesses. [Citation.] If sufficient evidence 

supports the verdict, we must uphold the trial court’s denial of the JNOV motion.” (Id. at 

pp. 1284–1285.)

The sophisticated user defense was adopted by our Supreme Court in Johnson v. 

American Standard, Inc. (2008) 43 Cal.4th 56 (American Standard). In very general 

terms, it bars strict liability and negligence claims based on the failure to warn about a 

particular risk in a defendant’s product if (1) the plaintiff is shown to be a “sophisticated 

user” of the product and (2) the general class of similar sophisticated users knew or 

should have known of the particular risk alleged by the plaintiff at “the time of the 

plaintiff’s injury.” (See generally American Standard, at pp. 65, 71, 74.)

Substantial evidence exists to support the jury’s rejection of the defense in Ford’s

failure to satisfy the second requirement of American Standard—proof that the claimed 

class of sophisticated users were or should have been aware of the risks associated with

professional asbestos exposure throughout the period of Scott’s exposure. There was no 

evidence that Scott, or others like him, were instructed in the claimed risks as part of their

training, in contrast to the plaintiff in American Standard. (American Standard, supra,

43 Cal.4th at p. 62 [discussion of the risks the plaintiff asserted in the litigation contained 

in the standard industry training manual].) On the contrary, the nature of the risks of 

automotive asbestos exposure had not even become clear to the scientific community 

when Scott opened his first service station. Based on the evidence presented at trial, the 

earliest possible dates from which constructive knowledge of those risks could be 

attributed to the general community of service station owners are 1973, when the first 

brake manufacturer placed a warning on its cartons and Chrysler warned in its service 

manual, or 1975, at the time of the NIOSH publications. Further, it could easily be 

argued that these scattered examples of notice are not evidence of the type of industry 
8

recognition necessary to impute knowledge to individual participants under the 

sophisticated user doctrine. As noted, Ford did not begin to place a warning on its 

cartons of brake parts until 1980, suggesting the industry consensus continued to form 

throughout the second half of the 1970’s.

This is significant because, under American Standard, the constructive knowledge 

of sophisticated users is to be measured at “the time of the plaintiff’s injury.” (American 

Standard, supra, 43 Cal.4th at p. 74.) Because of the cumulative effects of asbestos 

exposure, it is impossible to pinpoint a single time at which Scott was “injured” by 

asbestos. As plaintiffs’ expert testified, the time between exposure to asbestos and the 

appearance of the disease can be many decades, and earlier exposure is more likely to 

contribute to disease than later exposure. In the absence of evidence suggesting 

otherwise, Scott must be presumed to have been in the process of being injured by 

asbestos throughout his career, and the exposure that occurred earlier in his career weighs 

more heavily.

2

 As a result, in order for the sophisticated user doctrine to provide a 

complete defense to plaintiffs’ claims, Ford was required to show that service station 

owners knew or should have known of the risks of vehicle repair exposure to asbestos 

from the mid-1960’s on. For the reasons discussed above, there is no such evidence for 

the first decade of Scott’s career, at a minimum.

Ford argues “the undisputed evidence . . . demonstrated that, throughout the 

relevant time period, there was widely disseminated publicly available information that 

brakes contained asbestos, that asbestos presented health risks, and that brakes therefore 

might present a potential risk.” By failing to distinguish among types of asbestos, this 

greatly overstates the evidence as it relates to the risks of automotive asbestos exposure. 

From 1966, the beginning of the relevant time period, there appears to have been a 

scientific consensus that industrial exposure to the type of asbestos used in insulation was 

dangerous. There was no similar consensus about exposure to asbestos through 

 

2 By finding the United States Navy 33 percent responsible for Scott’s injury, the 

jury implicitly attributed a portion of his disease to his work at the shipyard, which 

preceded most his automotive exposure to asbestos.
9

automotive work, given the far less potent type of asbestos involved. Ford’s own expert 

testified as much. While it was certainly possible to speculate on the basis of available 

information that automotive exposure to asbestos carried risk, thereby supporting Ford’s 

contention that “brakes therefore might present a potential risk” (italics added),

speculation about a risk does not give rise to constructive knowledge of a risk under the 

“should have known” test. The jury was not required to find Scott “should have known” 

of a risk about which even specialists had not yet reached agreement.3

Ford bases its argument that sophisticated users should be deemed to have 

constructive knowledge of speculative dangers on the Supreme Court’s references in 

American Standard to users’ knowledge of the “potential” dangers of a product. (E.g., 

American Standard, supra, 43 Cal.4th at p. 65.) Most industrial dangers are, of course, 

“potential.” Explosives are dangerous, but the danger is not realized—i.e., is 

“potential”—unless they are mishandled. The American Standard court’s references to 

“potential” dangers throughout the decision demonstrate it was referring to this type of 

known but contingent danger, rather than the unproven and merely speculative dangers to 

which Ford refers. For example, the court referred to the “potential hazards of [welding 

chemical] exposure,” which were well known within the industry at the relevant time, 

and the “potential harms associated with firing a pellet gun,” which the court deemed to 

be “obvious.” (Id. at pp. 62, 67.)

We note that by finding Scott contributorily negligent in causing his injury, the 

jury likely concluded that at some point in his career, Scott should have become aware of 

the dangers of asbestos exposure and taken action to protect himself. Our conclusion that 

 

3

Ford also appears to argue Scott should have known of the risks of asbestos 

exposure from the start of his work as a mechanic because he was aware coworkers at the 

shipyard developed asbestosis. The two situations are sufficiently different that the 

knowledge cannot be deemed transferrable, at least as a matter of law. That workers with 

relatively heavy and constant exposure to one type of asbestos fiber develop asbestosis 

does not necessarily mean that workers with intermittent, lower level exposure to a 

different type of asbestos fiber will also be adversely affected, particularly by an entirely 

different disease.
10

Ford failed to prove the type of constructive knowledge that would entitle it to invoke the 

sophisticated user doctrine as a complete defense to Scott’s failure to warn claims is not 

inconsistent with the jury’s probable conclusion on this issue.

Finally, we note that counsel for Ford suggested for the first time at oral argument 

that if Scott was not a sophisticated user, then Ford had no duty to warn about the risks of 

asbestos exposure in its brakes. Although counsel did not fully articulate this argument, 

he appeared to be suggesting that if Scott is not deemed to have known of the risks of 

asbestos exposure from automotive brakes, then Ford could not be deemed to have 

sufficient knowledge of those risks to trigger a duty to warn. The contention fails, at least 

as a matter of law, because the standards for constructive knowledge are different. While 

the precise contours of the sophisticated user defense have yet to be worked out, Scott’s 

constructive knowledge is judged by, at most, the information reasonably available to 

him as a local mechanic or, as Ford argues, a local employer of mechanics.4 That is 

unlikely to have included every nook and cranny of the scientific and medical literature. 

Ford, in contrast, had a duty to warn of risks that were “ ‘known or knowable in light of 

the generally recognized and prevailing best scientific and medical knowledge available 

at the time of manufacture and distribution.’ ” (Coleman v. Medtronic, Inc. (2014) 

223 Cal.App.4th 413, 428.) Determining what was “ ‘known or knowable’ ” to Ford

requires an evaluation not merely of the information reasonably available to a local 

automotive business, like Scott’s, but also the best available scientific knowledge and

Ford’s own knowledge, public or not, as a large international business directly involved 

in the manufacture of the product under discussion. Whether these two sets of 

knowledge were the same here is a question of fact, not of law, but there is no reason to 

 

4 At oral argument, Ford emphasized Scott’s status as an employer, suggesting this 

status placed on him a greater degree of awareness than is required of a non-employer. 

We do not reach this issue because, as discussed above, we conclude there was 

substantial evidence to support a finding that no one in the automotive mechanic 

business, whether employer or otherwise, was deemed to have known that exposure to 

automotive asbestos presented a serious health risk during at least the first few years of 

Scott’s career.
11

assume they were. We decline to engage in any further factual review of the issue

because Ford raised the argument for the first time at oral argument, without providing 

proper briefing or an opportunity for plaintiffs to respond.

Because we find Ford failed to demonstrate the sophisticated user doctrine 

provides a complete defense to plaintiffs’ failure to warn claims, we need not address its 

further contention the trial court erred in refusing to apply the defense to Scott’s 

consumer expectation design defect cause of action. Even if the defense is applicable to 

the consumer expectation test, Ford’s failure to prove the defense precludes reversal of 

the JNOV denial on this ground. We also decline to address in further detail Ford’s claim 

that, wholly apart from the sophisticated user defense, the “relevant class of consumers” 

knew or should have known of the dangers of asbestos exposure. For the same reasons 

discussed above, the argument is not supported by the evidence.

2. Efficacy of a Warning

Ford also argues it should have been granted JNOV on the failure to warn claims 

because there was no evidence demonstrating a warning would have prevented Scott’s 

exposure to asbestos in Ford products. The argument is premised on Ford’s contention 

there was no evidence to suggest “the presence of a warning would have caused Scott to 

alter his behavior in such a way as to avoid the harm,” since “the evidence 

overwhelmingly shows that, during the relevant time period, Scott was oblivious to, and 

ignored, all warnings made available to him.”5

 

5 While we entertain this argument, we have some doubts about its legal validity. 

The premise of Ford’s argument, that a defendant’s failure to warn must be a proximate 

cause of the plaintiff’s injury, is certainly correct. (Conte v. Wyeth, Inc. (2008) 

168 Cal.App.4th 89, 112.) The sole case cited by Ford finding that an absent warning 

was not a proximate cause of injury, however, was based on the impracticality of 

effectively communicating a warning, not on the plaintiff’s likely resistance to it. (Huitt 

v. Southern California Gas Co. (2010) 188 Cal.App.4th 1586, 1604.) It risks 

undercutting the policy underpinnings of product liability law to allow a defendant to 

argue it was excused from liability for its failure to warn because the plaintiff was 

unlikely to have conformed his or her conduct in accordance with the warning.
12

Substantial evidence supports the jury’s finding that a timely warning to Scott 

could have prevented harmful exposure. Scott was described by a former employee at his 

service station as safety conscious, and other former employees described safety 

precautions he followed in his business. He testified he did not recall ever seeing a 

warning regarding the dangers of vehicle-related asbestos exposure. The jury was 

entitled to infer that, had he become aware of the risks of automotive asbestos exposure,

he would have taken appropriate precautions.

Ford argues the jury should have found Scott immune to safety warnings about 

asbestos because (1) he took no protective action while working at the shipyard, despite 

being aware a fellow worker had developed asbestosis and wore a mask for protection 

from further exposure; and (2) he could not recall ever having seen any warnings about 

vehicle-related asbestos exposure, despite an overwhelming amount of information on the 

subject available over the years, including warnings on other, similar products. While 

Scott’s insensibility to warnings is an inference that could be drawn from these 

circumstances, the jury was not required to draw that inference. The nature and duration 

of Scott’s asbestos exposure at the shipyard was not comparable to his exposure during 

his career as a mechanic. It therefore provides a limited basis for comparison. As to the 

second argument, the jury could have concluded Scott would have been more susceptible 

to an appropriate warning earlier in his career, when Ford failed to provide one. In any 

event, this was a judgment of fact properly left to the jury.

Because we conclude there is no basis for overturning the jury’s verdict on the 

failure to warn claims, we need not address Ford’s argument it should have been granted 

JNOV on plaintiffs’ other claims. Their success on the failure to warn claims fully 

supports the judgment.
13

3. The Internal Investigation Documents

Ford contends the evidence regarding its internal investigation of mesothelioma 

deaths should have been excluded as irrelevant or as more prejudicial than probative.6

Evidence is relevant if it has “ ‘any tendency in reason to prove or disprove any 

disputed fact that is of consequence to the determination of the action.’ ” (People v. 

Jones (2013) 57 Cal.4th 899, 947.) Even relevant evidence can be excluded under 

Evidence Code section 352 if “ ‘its probative value is substantially outweighed by 

concerns of undue prejudice, confusion, or consumption of time. “Evidence is 

substantially more prejudicial than probative [citation] if, broadly stated, it poses an 

intolerable ‘risk to the fairness of the proceedings or the reliability of the outcome 

[citation].’ ” ’ ” (People v. Edwards (2013) 57 Cal.4th 658, 713.) “ ‘The prejudice which 

exclusion of evidence under Evidence Code section 352 is designed to avoid is not the 

prejudice or damage to a defense that naturally flows from relevant, highly probative 

evidence. . . . “The ‘prejudice’ referred to in Evidence Code section 352 applies to 

evidence which uniquely tends to evoke an emotional bias against the defendant . . . and 

which has very little effect on the issues.” ’ ” (People v. Lopez (2013) 56 Cal.4th 1028, 

1059.) We review the trial court’s decision to admit evidence for abuse of discretion. 

(Ibid.)

We find no abuse of discretion in the trial court’s conclusion that the investigation 

evidence was relevant. As part of their failure to warn case, plaintiffs were required to 

 

6

It is not entirely clear what evidence is the subject of Ford’s appellate argument. 

In the introduction to this argument in its opening brief, Ford claims it is concerned with 

the admission of “documents and deposition testimony that identified Ford employees 

who reportedly died of mesothelioma,” which evidence it defines as the “employee list.” 

Yet on the next page of the brief, Ford states that “[t]he ‘employee list’ is actually four 

exhibits that were admitted into evidence and published to the jury . . . , as well as the 

related video deposition testimony of Ford’s corporate representative . . . .” This 

explanation encompasses virtually all of the investigation evidence, rather than the simple 

listing of employee names Ford initially defined as the “employee list.” We take the 

second, more comprehensive definition to state the scope of Ford’s appellate argument 

and consider the investigation evidence as a whole, rather than limiting our consideration 

to the lists of Ford employee names.
14

prove Ford was aware exposure to asbestos in Ford products presented a health risk. The 

investigation evidence demonstrated both Ford was sufficiently aware of the dangers of 

asbestos to have instigated an internal investigation into the possibility of asbestos 

disease among its own employees and Ford employees were three times more likely than 

the public at large to have contracted mesothelioma, a disease uniquely linked to asbestos 

exposure. The greater-than-expected prevalence of an asbestos-linked disease gave Ford 

reason to suspect exposure to asbestos in its products or its manufacturing operations 

created a higher level of risk.

In finding the evidence relevant, we do not rely on the trial court’s reasoning that 

admission was justified under the “substantially similar” rationale of Hasson v. Ford 

Motor Co. (1982) 32 Cal.3d 388, disapproved on other grounds in Soule v. General 

Motors Corp. (1994) 8 Cal.4th 548, 574, 580. In that Hasson, evidence of a design defect 

in the 1965 version of Ford’s brakes was admitted to prove the same defect in the 1966 

version of the brakes because the brake design and the reason for failure were 

“substantially similar.” (Id. at p. 404.) Because, as Ford argues, there was no evidence 

exposure to asbestos in brake- or clutch-related operations was the cause of mesothelioma 

among any of the Ford workers, it is difficult to argue the reported mesothelioma cases 

were substantially similar to Scott’s disease in the manner found probative in Hasson. 

(See, e.g., Stephen v. Ford Motor Co. (2005) 134 Cal.App.4th 1363, 1371–1372.) 

Nonetheless, for the reason stated above, the evidence was relevant to plaintiffs’ case. 

We are not required to affirm the trial court’s reasoning in order to affirm its ruling. 

(People v. Cowan (2010) 50 Cal.4th 401, 473, fn. 25 [“ ‘ “we review the ruling, not the 

court’s reasoning and, if the ruling was correct on any ground, we affirm” ’ ”].)

Admission of the evidence over Ford’s Evidence Code section 352 objection is a 

closer call. While the evidence was relevant to plaintiffs’ case, it was by no means 

critical. The issues of which it was probative, knowledge and notice, were supported by a 

large amount of other evidence. Further, the investigation evidence carried a risk of 

confusion and undue consumption of time. While none of the deaths found by Ford was 

proven to have been related to on-the-job exposure to asbestos through brake or clutch 
15

operations, there was a risk the jury could have mistakenly understood the greater 

prevalence of asbestos-related disease to have been probative on the issue of the 

causation of Scott’s illness. To have wholly eliminated this confusion would have 

required Ford to present further evidence regarding each mesothelioma victim’s personal 

circumstances, unnecessarily burdening the record.

We decline to decide whether the trial court abused its discretion in overruling 

Ford’s Evidence Code section 352 objection because we conclude the investigation 

evidence was not prejudicial under the test of People v. Watson (1956) 46 Cal.2d 818

(Watson), which permits reversal due to the erroneous admission of evidence “only when 

the court, ‘after an examination of the entire cause, including the evidence,’ is of the 

‘opinion’ that it is reasonably probable that a result more favorable to the appealing party 

would have been reached in the absence of the error.” (Id. at p. 836.) The investigation 

evidence was not inherently prejudicial. While, as stated above, it was subject to a risk of 

misunderstanding, the documents themselves made clear that none of the employees who 

contracted mesothelioma had worked directly in brake or clutch operations. Further, as 

noted above, the Ford employee whose deposition testimony was presented made this 

exact rhetorical point on three different occasions, informing the jury at one point that 

“these individuals were not brake mechanics that are in this production [sic], and so there 

is really no link between these employees and brake work at Ford Motor Company.” As 

the trial court noted, this significantly mitigated the risk of misunderstanding. In any 

event, there was a substantial quantity of other, more pertinent evidence regarding the 

relationship between brake- and clutch-related asbestos exposure and disease and Ford’s 

knowledge of this connection. There is no significant likelihood that admission of this 

evidence resulted in a less favorable verdict for Ford.

Ford notes plaintiffs’ counsel used this evidence in closing argument to suggest 

Ford was aware its employees were dying of mesothelioma due to workplace exposure, 
16

based on mere speculation about the nature and cause of the employees’ exposure.7 

While we agree the evidence did not support such an argument, Ford did not object to the 

line of argument, and it had the opportunity to respond to the argument in its own closing. 

More importantly, as noted above, there was substantial other evidence unrelated to the 

investigation evidence from which the jury could have concluded automotive asbestos 

exposure posed risks and Ford was aware of these risks. Plaintiffs’ attorney’s misuse of 

the investigation evidence in closing argument was not prejudicial in the manner required 

by Watson.

B. Plaintiffs’ Appeal

Plaintiffs contend the trial court erred in applying Michigan law to bar their claim 

for punitive damages. We agree.

California’s “governmental interest analysis” for resolving conflicts of law was 

described most recently in Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191 (Sullivan). 

“We typically summarize governmental interest analysis as involving three steps: ‘First, 

the court determines whether the relevant law of each of the potentially affected 

jurisdictions with regard to the particular issue in question is the same or different. 

Second, if there is a difference, the court examines each jurisdiction’s interest in the 

application of its own law under the circumstances of the particular case to determine 

whether a true conflict exists. Third, if the court finds that there is a true conflict, it 

carefully evaluates and compares the nature and strength of the interest of each 

jurisdiction in the application of its own law “to determine which state’s interest would 

be more impaired if its policy were subordinated to the policy of the other state” 

[citation], and then ultimately applies “the law of the state whose interest would be the 

more impaired if its law were not applied.” ’ ” (Id. at p. 1202.) Because this is an issue 

 

7

For example, plaintiffs’ attorney argued the investigation documents showed 

Ford “know[s] that asbestos is causing people to die, and they decide to keep on using the 

product,” despite the attorney’s acknowledgment moments later it was not known 

whether any of the cases of mesothelioma was actually associated with brake work. 
17

of law, we review the trial court’s decision de novo. (Brown v. Grimes (2011) 

192 Cal.App.4th 265, 274.)

There is little doubt the asserted conflict of law exists; at least, no one contends 

differently. Punitive damages may not be awarded as a tort remedy in Michigan. (Burns 

v. Van Laan (1962) 367 Mich. 485 [116 N.W.2d 873, 877].) The unavailability of 

punitive damages in tort actions is an application of the more general rule that, unless 

expressly allowed by statute, Michigan courts do not permit the award of damages whose 

purpose is to punish defendants. (McAuley v. GMC (1998) 457 Mich. 513 [578 N.W.2d 

282, 285–286 & fn. 8], disapproved on other grounds in Rafferty v. Markovitz (1999) 

461 Mich. 265 [602 N.W.2d 367, 370 & fn. 6].) Michigan courts do allow the award of 

“exemplary” damages, which “ ‘compensate[] a plaintiff for the “humiliation, sense of 

outrage, and indignity” resulting from injuries “maliciously, wilfully and wantonly” 

inflicted by the defendant,’ ” but punitive damages based on the same conduct are 

unavailable. (Birkenshaw v. Detroit (1981) 110 Mich.App. 500 [313 N.W.2d 334, 339].) 

Even the award of exemplary damages, however, has been restricted as actual damages 

have evolved to include compensation for the type of mental distress formerly covered by 

exemplary damages. (Eide v. Kelsey-Hayes Co. (1988) 431 Mich. 26 [427 N.W.2d 488, 

498–500] (conc. & dis. opn. of Griffin, J.); Veselenak v. Smith (1982) 414 Mich. 567 [327 

N.W.2d 261, 264].)

In contrast, California courts, pursuant to statute, allow the award of punitive 

damages in tort actions. (Civ. Code, § 3294, subd. (a).) Underlining the direct conflict 

between the policies of the two states, California courts acknowledge “ ‘[p]unitive 

damages . . . are not intended to compensate the injured party, but rather to punish the 

tortfeasor whose wrongful action was intentional or malicious, and to deter him and 

others from similar extreme conduct.’ ” (Ferguson v. Lieff, Cabraser, Heimann & 

Bernstein (2003) 30 Cal.4th 1037, 1046.) “California law has long endorsed the use of 
18

punitive damages to deter continuation or imitation of a corporation’s course of wrongful 

conduct.”8 (Johnson v. Ford Motor Co. (2005) 35 Cal.4th 1191, 1207.) 

Recognizing the conflict, we proceed to the second step of the governmental 

interests analysis, to examine “ ‘each jurisdiction’s interest in the application of its own 

law under the circumstances of the particular case to determine whether a true conflict 

exists.’ ” (Sullivan, supra, 51 Cal.4th at p. 1202.) To assess “ ‘whether either or both 

states have an interest in applying their policy to the case,’ ” we “examine the 

governmental policies underlying [each state’s] laws.” (Offshore Rental Co. v. 

Continental Oil Co. (1978) 22 Cal.3d 157, 163.) In doing so, “ ‘we may make our own 

determination of [the relevant] policies and interests, without taking “evidence” as such 

on the matter.’ ” (Sullivan, at p. 1203.) 

The Michigan prohibition on punitive damages is premised on a simple principle 

of public policy: damages awarded by civil courts are appropriate to compensate, but not 

to punish. (Association Research & Development Corp. v. CNA Financial Corp. (1983) 

123 Mich.App. 162 [333 N.W.2d 206, 210].) The policy was established in two

Michigan Supreme Court decisions dating to 1884, Watson v. Watson (1884) 53 Mich. 

168 [18 N.W. 605] and Stilson v. Gibbs (1884) 53 Mich. 280 [18 N.W. 815]. (See 

Veselenak v. Smith, supra, 327 N.W.2d 261, 264.) As the court explained in Watson v. 

Watson, which ruled inadmissible evidence of a defendant’s financial resources in a suit 

for wrongful seduction, “the measure of [a plaintiff’s] redress ought not to depend on a 

circumstance unimportant to the injury. . . . The anomaly, that a jury may have liberty to 

punish at discretion for a tort, when, if the act were a crime, the penalty would be 

carefully limited by law, and that they may award the penalty they agree upon to a private 

 

8

In introducing this topic, we stated there is “little doubt” a conflict of law exists. 

We qualified the statement because Michigan common law allows punitive damages if 

authorized by statute, and punitive damages are authorized by statute in California. It 

could therefore be argued that punitive damages would be permitted in this case even 

under Michigan law. Because plaintiffs do not make this argument, we do not explore it 

further, but it illustrates one of the difficulties associated with the narrow importation of 

Michigan law advocated by Ford.
19

suitor to swell his actual damages, has never received much countenance in this State. 

Compensation for the wrong done has always been held to be the object to be attained; 

and while all circumstances of aggravation have been received in evidence, the reception 

has been for the very sufficient reason that the injury to the plaintiff was the greater in 

consequence thereof, and that his compensation ought to be in proportion.” (Id. at 

p. 609.) The logic was echoed in Stilson, in which the court disapproved a jury 

instruction suggesting damages could be awarded to punish the defendant: “The purpose 

of an action for tort is to recover the damages which the plaintiff has sustained from an 

injury done him by the defendant. In some cases the damages are incapable of pecuniary 

estimation; and the court performs its duty in submitting all the facts to the jury, and 

leaving them to estimate the plaintiff’s damages as best they may under all the 

circumstances. In other cases there may be a partial estimate of damages by a money 

standard, but the invasion of the plaintiff’s rights has been accompanied by circumstances 

of peculiar aggravation, which are calculated to vex and annoy the plaintiff and cause 

him to suffer much beyond what he would suffer from the pecuniary loss. Here it is 

manifestly proper that the jury should estimate the damages with the aggravating 

circumstances in mind, and that they should endeavor fairly to compensate the plaintiff 

for the wrong he has suffered. But in all cases it is to be distinctly borne in mind that 

compensation to the plaintiff is the purpose in view, and any instruction which is 

calculated to lead them to suppose that besides compensating the plaintiff they may 

punish the defendant is erroneous.” (Stilson, supra, 18 N.W. at p. 817.) We have found

no Michigan decision articulating any other or different rationale for the disallowance of 

punitive damages in the state’s courts.9

 

9 Although some federal trial courts have attributed a pro-business economic 

motive to Michigan’s prohibition of punitive damages (e.g., In re Disaster at Detroit 

Metro. Airport (E.D.Mich. 1989) 750 F.Supp. 793, 806), no Michigan court has ever 

articulated this rationale, at least to our knowledge. (See Kelly v. Ford Motor Co.

(E.D.Pa. 1996) 933 F.Supp. 465, 468 [acknowledging that no Michigan case has actually 

expressed an economic rationale for the ban on punitive damages].)
20

Given this rationale, we have difficulty pinpointing any interest of Michigan in the 

application of its law to this dispute. While all conflicts of law are, at bottom, conflicts of 

public policy between judicial systems, the prominence of the debate over punitive 

damages highlights that aspect of the conflict here. Reasonable states can and do differ 

over the efficacy and appropriateness of punitive damages as a civil remedy. Michigan’s 

ban on punitive damages is the expression of a particular view of the appropriate role of 

the courts in adjudicating civil disputes: to compensate, rather than to punish. It 

represents a declaration of public policy about the wisdom of granting punitive damages 

as a legal remedy for noncriminal conduct. In California, our Legislature has resolved 

the debate in precisely the opposite manner. While Michigan has a strong interest in 

seeing its view of the appropriate policy carried out in its own courts, it has a 

correspondingly minimal interest in seeing the same policy implemented in the courts of 

California.

Ford argues we should set aside the judgment of the California Legislature and 

import Michigan’s policy because the conduct underlying its failure to warn occurred in 

Michigan on behalf of a corporation domiciled in that state. Because the same argument 

would hold in all 40-odd other states permitting punitive damages, Ford effectively 

argues it should be found to carry a nationwide shield from punitive damage liability

because the state in which it maintains its headquarters has decided punitive damages are 

poor public policy. We cannot agree, any more than we expect a Michigan court would 

yield to a plaintiff’s plea to impose punitive damages on a California-based corporation

because its home state has made the opposite policy judgment.10 On a matter of public 

policy as significant as the imposition of punitive damages, states have the prerogative to 

 

10 When asked to follow the example of a sister state in allowing punitive 

damages, the Michigan Supreme Court commented, “So far, [except] when the legislature 

ordains otherwise . . . , the policy of Michigan’s law of damages in negligence cases has 

been compensation—not punishment. . . . So if Georgia permits recovery of punitive 

damages in negligence cases, so Georgia has that right; yet we liking our own policy of 

compensatory damages need not follow her guide.” (Burns v. Van Laan (1962) 

367 Mich. 485 [116 N.W.2d 873, 877, fn. omitted].)
21

establish a uniform rule applicable to all enterprises that elect to do business there, but

they have no legitimate interest in imposing that policy decision on the courts of a sister 

state. (Sullivan, supra, 51 Cal.4th at p. 1205.)

In an effort to justify its invocation of the state’s policy, Ford claims Michigan has 

an interest in protecting “ ‘Michigan-domiciled defendants from excessive financial 

liability,’ ” citing the conclusion of federal district courts. (Kelly v. Ford Motor Co., 

supra, 933 F.Supp. 465, 468; see similarly In re Disaster at Detroit Metro. Airport, 

supra, 750 F.Supp. 793, 805–806.) With due respect to those courts, that is manifestly 

not the purpose of the punitive damages ban as it is implemented in Michigan, nor is it an 

interest that has ever been articulated by Michigan courts. The Michigan ban on punitive 

damages applies equally to all defendants, regardless of their state of domicile. As a 

result, “Michigan-domiciled defendants” are provided no more protection from punitive 

damages in Michigan courts than persons and corporations resident elsewhere.

In McCann v. Foster Wheeler LLC (2010) 48 Cal.4th 68, the Supreme Court 

cautioned against assuming the interest of a state in enforcing laws that are domicileneutral is restricted to promoting the well-being of its own businesses: “When a state 

adopts a rule of law limiting liability for commercial activity conducted within the state 

in order to provide what the state perceives is fair treatment to, and an appropriate 

incentive for, business enterprises, we believe that the state ordinarily has an interest in 

having that policy of limited liability applied to out-of-state companies that conduct 

business in the state, as well as to businesses incorporated or headquartered within the 

state. . . . In the absence of any explicit indication that a jurisdiction’s ‘business friendly’ 

statute or rule of law is intended to apply only to businesses incorporated or 

headquartered in that jurisdiction (or that have some other designated relationship with 

the state—for example, to those entities licensed by the state), as a practical and realistic 

matter the state’s interest in having that law applied to the activities of out-of-state 

companies within the jurisdiction is equal to its interest in the application of the law to 

comparable activities engaged in by local businesses situated within the jurisdiction.” 

(Id. at pp. 91–92.)
22

Even if Michigan had expressed an intent to protect its resident businesses from 

punitive damages, the state would have no legitimate interest in imposing that intent in 

California. A somewhat similar situation was considered in Sullivan, supra, 51 Cal.4th 

1191, which rejected the application of the labor laws of other states to work performed 

in California. The Sullivan plaintiffs were employees of Oracle, a corporation 

headquartered in California, but they resided in Colorado and Arizona. Their job for 

Oracle required them to travel for work in several states, including California. (Id. at 

p. 1195.) The plaintiffs claimed that while working in California they were required to 

be paid pursuant to the overtime laws of California; Oracle contended their compensation 

should be governed by the overtime laws of their home states, regardless of the site of 

their work. (Ibid.) Responding to Oracle’s argument that Colorado and Arizona “have 

an interest in shielding their own businesses from more costly and burdensome regulatory 

environments in other states,” the court held, “We do not doubt the premise that a state 

can properly choose to create a business-friendly environment within its own boundaries. 

‘[T]he federal system contemplates that individual states may adopt distinct policies to 

protect their own residents and generally may apply those policies to businesses that 

choose to conduct business within that state.’ [Citation.] However, every state enjoys the 

same power in this respect. Therefore, ‘[i]t follows from this basic characteristic of our 

federal system that, at least as a general matter, a company that conducts business in 

numerous states ordinarily is required to make itself aware of and comply with the law of 

a state in which it chooses to do business.’ [Citation.] The federal Constitution does not 

require a state ‘ “to substitute for its own [laws], applicable to persons and events within 

it, the conflicting statute of another state” ’ [citation] or permit one state to project its 

regulatory regime into the jurisdiction of another state [citation]. Consequently, neither 

Colorado nor Arizona has a legitimate interest in shielding Oracle from the requirements 

of California wage law as to work performed here.” (Id. at p. 1205.) For the same 

reasons, Michigan has no interest in shielding its resident corporations from punitive 

damages when those corporations chose to do business in states permitting the imposition 

of such damages.
23

Ford also argues Michigan has an interest in regulating the legal consequences of 

conduct that occurs within its borders.11 In Ford’s telling, the Michigan ban on punitive 

damages represents a declaration that corporate conduct occurring in Michigan should 

not be subject to punitive damages, regardless of its nature. That argument, however,

suffers from a similar weakness. Michigan has never articulated this as a motive for 

banning punitive damages, and Michigan courts do not preclude punitive damages based 

on conduct occurring only within the state. Rather, the ban on punitive damages is 

entirely independent of the location of the alleged conduct in connection with which 

punitive damages are sought and applies to any defendant’s conduct, regardless of where 

it occurred.

Because we find no Michigan interest in the implementation of its policy in the 

courts of California, no “true” conflict of law exists. We therefore need not proceed to 

the third step of the governmental interests analysis, the relative impairment of interests. 

(Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 920.)

Plaintiffs were entitled to present their demand for punitive damages to the jury, in 

compliance with California law. Because the trial court declined to permit adjudication 

of punitive damages, we must remand for a trial limited to that issue. (See Torres v. 

Automobile Club of So. California (1997) 15 Cal.4th 771, 776; Cloud v. Casey (1999) 

76 Cal.App.4th 895, 912–913.)

III. DISPOSITION

The judgment of liability and award of compensatory damages against Ford is 

 

11 The decisions when and whether to place a warning on Ford’s parts were 

presumably made by executives located in Michigan, although, of course, the relevant 

supply of unlabeled products occurred here in California.
24

affirmed. The matter is remanded to the trial court for a trial on liability and amount, if 

any, of punitive damages.

_________________________

Margulies, Acting P.J.

We concur:

_________________________

Dondero, J.

_________________________

Becton, J.*

 

*

Judge of the Contra Costa County Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.
Trial Court: Alameda County Superior Court

Trial Judge: Hon. George C. Hernandez, Jr.

Counsel: 

Kazan, McClain, Satterley, Lyons, Greenwood & Oberman, Joseph D. Satterley, Dianna 

Lyons, Justin A. Bosl, Ted W. Pelletier, and Michael T. Stewart for Plaintiffs and 

Appellants Patrick Scott and Sharon Scott. 

Nixon Peabody, Ronald Frank Lopez, David A. Pereda, Ross M. Petty; Munger, Tolles & 

Olson, Daniel P. Collins, Nicholas C. Soltman; Dykema Gossett, and Eric C. Tew for 

Defendant and Appellant Ford Motor Company.

The Product Liability Advisory Council, Inc., Hugh F. Young, Jr.; Snell & Wilmer and 

Mary-Christine Sungaila as Amici Curiae on behalf of Defendant and Appellant Ford 

Motor Company.