Court Opinion

ID: 9710143
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:02:57.104008+00
Date Added: 2024-06-11T18:22:54.601974
License: Public Domain

BELL, Judge,
concurring and dissenting.
I have no quarrel with any of the substantive conclusions of the majority opinion except the one reached in Part III.F., pertaining to the punitive damages award against Owens-Corning Fiberglas Corporation (“OCF”).4 With respect to Part III. F., I am firmly of the view that there was ample evidence presented to the jury to justify its verdict awarding punitive damages against OCF and in favor of appellee Scruggs. Accordingly, I dissent from that part of the opinion and judgment.
In a products liability case, an award of punitive damages may be sustained only if the evidence adduced by the plaintiff establishes “the equivalent of the ‘evil motive,’ ‘intent to defraud,’ or ‘intent to injure,’ which generally characterizes ‘actual malice,’ [i.e.] actual knowledge of the defect and deliberate disregard of the consequences.” Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 462, 601 A.2d 633, 653 (1992).1 The actual knowledge component of the test is satisfied where there is, on the part of the defendant, a “willful failure to know,” that is, where the defendant “believes that it is probable that something is a fact, but deliberately shuts his or her eyes or avoids making reasonable inquiry with a conscious purpose to avoid learning the truth.” State v. McCallum, 321 Md. 451, 458, 583 A.2d 250, 253 (1991) (Chasanow, J. concurring). Thus, in order for the plaintiff to prevail on the issue of punitive damages, the plaintiff must establish that the defendant, having the requisite knowledge, nevertheless, acted in *553bad faith in distributing its product. ACandS v. Godwin, 340 Md. 334, 358-9, 667 A.2d 116, 128 (1995).
Whether the defendant had the requisite knowledge and acted in bad faith are questions of fact to be determined by the trier of fact, in this case, the jury. Such matters are not matters of law reserved for the trial court and, thus, most assuredly, are not matters to be resolved by an appellate court. Moreover, those facts need not be established by direct evidence. Because a party’s state of mind is peculiarly within the power of that party to disclose, or not, as he or she chooses, the other party cannot prove that party’s knowledge or bad faith except by circumstantial evidence. Certainly, the party whose actions are under scrutiny cannot, and should not, be permitted, by requiring that the proof be by direct evidence, to determine the outcome of the inquiry. The issue for our determination then is whether the evidence the appellee Scruggs adduced as to OCF’s state of mind and knowledge was sufficient to sustain the jury’s award of punitive damages. As to that issue, the jury had before it the following evidence in addition to that set out in the majority opinion. See 343 Md. 500, 541-549, 682 A.2d 1143, 1163-1167 (1996).
The appellee Scruggs, an insulator for a time, as to whom the hazard from exposure was greatest, and a by-stander thereafter, first was exposed to asbestos in 1968. By that time, OCF was well aware of the dangers associated with asbestos. It had known, by that time for more than two decades, that dust containing asbestos should not be breathed and that if it were, it represented a real danger because it was a carcinogen.
OCF had knowledge, through its parent companies, that asbestos was dangerous as early as 1938. In that year, one of its parent companies, Owens-Illinois, was informed, by letter from a Doctor from the Saranac Laboratory that asbestos “is known to produce fibrosis of the lungs [and] also cause[s] fibrosis in other tissues when injected in sufficient quantities.” The year before, the other parent, Corning Glass Works, quoted the same Doctor’s work to the same effect. That OCF *554had direct knowledge of the hazardous nature of asbestos was evident in 1941, when one of the lawyers in its Legal and Patent Department, having received a letter from a Saranac. Doctor, expressed his gratification at the Doctor’s belief, referring to OCF’s main product at the time, fiberglas, that “we are not going to encounter any evidence of an asbestos-like reaction because none of the fiber reaches the lungs.” Moreover, OCF has admitted that, in that same year, it was aware of a case of asbestosis or cancer in a user of an insulation product which contained asbestos.
Thereafter, OCF developed a “germ of a major strategy.” It was to put together an asbestos file to be held as a “weapon in reserve.” The file would be “an impressive file of photostats of medical literature on asbestos,” to comprise some 500-600 pages, including “two bibliographies covering medical literature to 1938, citing references to scores of publications in which the lung and skin hazards of asbestos are discussed.” The file was to be used should the unions balk at working with fiberglas or should they require OCF to pay a premium for doing so. It compiled the file, although it never had to resort to its use. Thus, it is clear that, by 1942, more than 10 years before it began to market a product containing asbestos, OCF had a wealth of knowledge concerning the hazards of asbestos and that the knowledge it had was actual and not constructive.
Despite having this knowledge and being concerned with avoiding having its fiberglas product “smear[ed] with the hazards of asbestos,” OCF began mixing fiberglas and asbestos, which it sold as Kaylo, in 1953. When OCF was reminded, in 1956, by a Doctor from whom an opinion was solicited concerning favorable past experiments with fiberglas, that “asbestos is fairly incriminated as a carcinogen and the asbestos causes damage by virtue of the length of its fibers,” the concern it expressed was about the “general tenor” of the letter containing the reminder and the fact that “[i]t is certainly nothing that we could show customers or a union.” A similar concern was expressed in response to Dr. Selikoffis 1964 study of insulation workers. In a confidential memorandum, OCF’s Director of Industrial & Personnel Relations, *555wrote: “our present concern is to find some way of preventing Dr. Selikoff from creating problems and affecting sales.” Indeed, it appears that the purpose for which OCF monitored the medical experiments and studies was to keep tabs on how the public perceived its product and to gauge the effect of the experiments and studies on the profitability of the product.
OCF was aware that asbestos was more dangerous to the insulation worker because that worker handled it directly and, therefore, was exposed to a greater extent than a by-stander. And it knew that it was the dust generated during the insulation process that posed the danger. The September 17, 1963 memorandum by William Lotz of OCF’s Product Development Laboratory is illustrative. He wrote: “Asbestos (as found in Kaylo) when breathed into the lungs causes asbestosis which often leads to lung cancer.... All insulations are dusty and insulators seldom complain except when the dust is particularly irritating to them.”
There was a view between 1968 and 1972 that asbestos dust was hazardous only above a certain level of concentration. The indicator of the average concentration of dust particles per cubic foot of air to which a worker could be exposed safely was characterized by a threshold limit value. The evidence before the jury was that OCF did not accept as gospel the accuracy of that value. In a 1966 memorandum, the Director of Industrial and Personnel Relations wrote:
Asbestos is recognized as a health hazard causing asbestosis. Asbestosis requires 12 years or more of exposure to cause objective symptoms. The threshold limit value set by the A.C.G.I.H. is 5 million particles per cubic foot. However, Dr. Selikoff has stated that only one fiber in the body can cause cancer ...
Asbestos bodies sometimes develop into mesotheliomas, a tumor with considerable carcinogenic potential.
Because of asbestosis (if for no other reason), asbestos fibers should be removed from the atmosphere by adequate ventilation. If ventilation is impossible, suitable respirators *556should be worn by workmen. At this point, I believe there is reason to question the A.C.G.I.H. threshold limit.... It is impossible to guess the amount of dust created by the cutting, sawing, etc. of Kaylo----
This same evidence is relevant to and tends to prove OCF’s bad faith in marketing Kaylo. Having assembled extensive evidence concerning the dangers of asbestos for the purpose of acquiring, and maintaining, a competitive edge and, thus, being acutely aware of its defects, OCF nevertheless marketed a product containing asbestos, touting it as safe. This marketing continued even in the face of evidence that even small amounts of asbestos were dangerous, i.e., Dr. Selikoffs conclusion that only one fiber in the body could cause cancer, OCF’s questioning of the accuracy of the threshold limit value relative to asbestos dust, and despite its knowledge of the “impossibility of] guess[ing] the amount of dust created by the cutting, sawing, etc. of Kaylo.” Notwithstanding that it now contained asbestos, after 1956, OCF marketed its product as having “pleasant handling characteristics” and being “nontoxic.”
The evidence before the jury also disclosed that OCF, having developed a non-asbestos containing material for use in Kaylo, declined to use it upon determining that the profit margin it produced was insufficient. Similarly, the jury was informed of OCF’s profit-motivated decision not to treat Kay-lo with a spray that reduced the amount of dust its handling generated. Furthermore, appellee Scruggs presented evidence concerning OCF’s attitude toward replacing the asbestos content of Kaylo. That attitude is exemplified in an internal memorandum:
D.W. Ladd pointed out we have a ten million dollar Kaylo operation. He wants “us” as a team to be in the position to tell management what fibers we can use to reinforce Kaylo if and when the day arrives when the whole industry is “forced” to remove asbestos from their products. He doesn’t want OCF to wait until “D” day to start looking for substitute fibers.
*557I told Dale we are conducting a “low gear” program in finding substitutes for asbestos. Most of our efforts are being directed toward stress corrosion.
It was also pointed out by Mr. Ladd that if and when “D” day for the removal of asbestos arrives, we won’t be alone. The whole industry would be in the same boat with us. The industry may be forced, at that point, to accept a [sic] and softer product as a price they must pay for the removal of asbestos.
It is clear to me that, contrary to the majority’s conclusion, the foregoing evidence, and that detailed in the majority opinion as supportive of appellee Scruggs’s entitlement to compensatory damages, could have, as it did, convinced the jury by clear and convincing evidence that the appellee Scruggs was entitled to punitive damages. As such, it was more than enough to permit the jury to return the verdict that it did. To be sure, there was evidence, which had the jury believed it, would have supported a defendant’s verdict; however, that evidence, as the majority recognized when evaluating its sufficiency with regard to the compensatory aspect of the case, was not such as to require a judgment in favor of OCF as a matter of law.
After conceding that the evidence in this case “ ‘cuts both ways,’ ” 343 Md. 500, 549, 682 A.2d 1143, 1167 (1996) (quoting Godwin, supra, 340 Md. at 378, 667 A.2d at 137), the majority observes:
Evidence of OCF’s awareness of state of the art medical knowledge about asbestos includes evidence of OCF’s general agreement with the state of the art knowledge that controlled and limited asbestos exposure could be safe. Evidence that OCF was concerned enough about asbestos hazards to label its Kaylo packages also demonstrates that OCF believed safe handling of asbestos would eliminate health hazards, and that OCF intended to make workers aware of the risks of Kaylo when improperly handled. Evidence that OCF was actively working to preserve its market share of thermal insulation by designing an asbes*558tos-free Kaylo provides evidence that OCF was worried about the health hazards asbestos presented and affirmatively sought to protect its users.
Id. Then noting that the standard of proof is clear and convincing evidence, which “requires the plaintiff to prove much more than negligence,” Zenobia, supra, 325 Md. at 465, 601 A.2d at 655, the majority offers its view of the state of the evidence in this case:
“At all relevant times the widespread belief was that the extent of the health risk depended, in large part, on the length and intensity of exposure---- It may be that a jury would believe that the corporate decision to adopt health warnings came too late and, even then, that it was motivated only by the desire to minimize tort liability. It may also be that a jury would believe that PCC [OCF] was not only negligent in these respects, but that it was grossly negligent. These possible inferences or conclusions, however, do not demonstrate that PCC [OCF] made a bad faith decision to market Uniberstos [Kaylo] in conscious or deliberate disregard of the threat to the safety of the consumer. Plaintiffs have not shown by clear and convincing evidence that ... PCC [OCF] did not in good faith believe that its recommendations for exhaust ventilation, ... housekeeping,and use of respirators were reasonable protections for users. ”
Id. at 550, 682 A.2d at 1167 (quoting Godwin, 340 Md. at 378-79, 667 A.2d at 137).
The majority focuses only on the evidence and the permissible inferences from that evidence favorable to OCF. It totally fails to consider the evidence which it acknowledges is favorable to appellee Scruggs or the inferences that evidence produces. Thus, the majority does not acknowledge that it was possible for the jury to draw an inference unfavorable to OCF from the evidence that it had before it indicating that OCF began the distribution of a product containing asbestos after it had amassed tremendous evidence of the dangers associated with asbestos and that, prior to the exposure of the appellee to asbestos, OCF had reason to question both the *559accuracy of the applicable threshold limit value, and whether the dust generated by cutting or sawing its product was sufficient to expose users to those dangers. Certainly, a jury with that evidence could find that OCF acted in bad faith in continuing to distribute Kaylo without further study; it could have concluded that OCF, remaining willfully blind to the suspected consequences of continued use of asbestos, distributed it in conscious disregard of those consequences. Nor was the jury bound to draw the conclusions that the majority does. In any event, it is clear that the majority simply fails to explain its conclusion that the evidence is insufficient.
Moreover, the majority mischaracterizes the record in this case. Unlike the situation in Godwin, this case is far from a “labeling” or negligence case. Instead, in my view, the evidence in this case is such that it is the level of the knowledge possessed by OCF that is dispositive. That is so because what OCF did, it did in the name of maximizing profits and with very little, if any, regard for anything else.
I dissent.
Judges CHASANOW and RAKER have authorized me to say that they join in the views expressed herein.

. I dissented from this formulation of the test for punitive damages, believing that the system was not broke and, therefore, was not in need of fixing. See Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 478-86, 601 A.2d 633, 661-65 (1992) (Bell, J. concurring and dissenting).