Punitive Damage Awards Guarantee Public Safety -- Cases That Made A Difference
Responsibility is an important value in our democratic society. When a child misbehaves, the parent will punish the child by grounding him or taking away an allowance or some other privilege. Why does the parent punish the child? In order for the child to learn the importance of taking responsibility for her actions. Similarly, our civil justice system requires corporations as well as individuals to be accountable for their actions. One of the must effective methods of deterring bad corporate behavior is an award of punitive damages. Punitive awards bring accountability to the free market without additional government regulation or interference.
Proponents of tort reform contend that innovation is stifled by our products liability system. However, American products are bought around the world because they are the safest products available. In fact, our product liability system often provides the impetus for getting companies to remove dangerous products from the market. The Dalkon Shield IUD is an excellent example of how the system worked to protect the lives of millions of women. Eight punitive awards were made before A.H. Robins recalled the product.
The Dalkon Shield cases are particularly disturbing because they illustrate a pervasive pattern of cover up and deceit. The original Shield was manufactured for $.30 and sold for $4.35. The inventor of the device originally contended that the Shield had a 1.1% pregnancy rate per year making it as effective as oral contraceptives and resulting in an effective advertising campaign. Evidence at trial showed that Robins knew that the failure rate was at least 7-8%. When Robins received reports from doctors regarding problems with septic abortions, it issued a press release denying the connection between the IUD and septic abortion, even though it had at least 250 reports from doctors of septic abortions in its files. When Robins was made aware that the string or tail of the device "wicked," essentially carried bacteria into the uterus and caused pelvic inflammatory disease (PIDs), it ignored changing the composition of the string because it felt that it was too expensive to change the manufacturing process. After the first case involving PIDs reached trial, the president of the company ordered documents destroyed.
Cases such as the Dalkon Shield cases make a difference in the health and safety of millions of women. While punitive damages are rare, the products involved in these cases -- high-estrogen birth control pills, silicone gel implants, Accutane, Oraflex, Merital -- are used exclusively or predominately by women. The one thing that these cases do have in common is that the product manufacturers ignored known dangers. In the end, punitive awards, not the FDA, provided the incentive to manufacturers to remove these dangerous products from the stream of commerce.
Toxic shock syndrome (TSS) cases further illustrate the callous attitude taken by some corporations regarding the health and safety of women. Some women even died from the disease.
The most notorious case involving a punitive award is the Ford Pinto. In the early 1970s, engineers at Ford Motor Company did an analysis of the costs and benefits of relocating the gas tank on the Pinto to take it out of the "crush zone" and greatly reduce the likelihood of fires and explosions in rear-end collisions. The cost: $11 per vehicle. The benefits: 180 lives saved and 180 serious burn injuries prevented each year. Ford engineers decided that the benefits did not justify the costs. A jury, indignant over Ford's callousness, awarded $125 million in punitive daages. While this is a large award, it has virtually no impact on a billion-dollar company. Ford made more than two times the punitive award in profits from the sale of Pintos during the last quarter of the year of appeal and only paid $3.5 million in punitives, 0.5% of its assets.
Exploding fuel tanks are not limited to the Ford Motor Company. In 1972, GM engineers made a similar cost/benfit analysis on their "A" body cars and concluded that a cost of more than $2.40 per vehicle would not be justified in order to save lives. Toyota also experienced problems with defectively designed fuel systems. While cars have become more high-tech, auto manufacturers have continued to disregard the safety of millions of Americans in an effort to save a few dollars.
Between 11 million and 13 million workers have been exposed to asbestos. Asbestos will kill an estimated 200,000 to 300,000 people in the next two decades. Two million now have X-ray evidence of asbestos disease. The lung diseases related to the inhalation of asbestos dust are permanent, irreversible, progressive, and ultimately fatal. The asbestos industry knew of the hazards as early as the mid-30's and devoted concerted efforts to conceal those hazards from the public and from their own workers. This industry includes more than 250 different asbestos manufacturers, from small local companies to Fortune 500 firms like Johns-Manville. A conspiracy is the only way to describe the cover-up by the asbestos industry. Warnings and prtective devices would have prevented hundreds of thousands of deaths, but the industry sacrificed those lives in the name of profit.
Although the most exhaustive study ever on punitive awards in products cases found only 355 cases in 25 years, 95 of those cases were asbestos cases. The first reported award of punitive damages in an asbestos case was in Hammond v. North Am. Asbestos Corp., 454 N.E.2d 210 (Ill. 1982). In Hammond, a 54-year-old asbestos worker developed asbestosis as a consequence of unprotected exposure during his employment in an asbestos processing plant from 1953 to 1972. The worker's widow sued contending that the defendant knew as early as 1931 of the dangers to workers caused by inhalation of raw asbestos fibers. The basis of the punitive award was the company's knowledge of the dangers to workers posed by unprotected exposure, its continued marketing of the product without a warning until 1972, and its active concealment of the risk of asbestos exposure.
Smoking gun evidence in asbestos cases dates back to the 1930s. A 1935 letter from the publisher of an asbestos newsletter to the head of a major manufacturer of asbestos products requested the manufacturer's permission to go public with the known connection between asbestos and the lung disease known as asbestosis. The manufacturer denied permission. A medical study concluded that long-term exposure to asbestos dust caused a progression of fibrosis and then asbestosis. Doctors even recommended that workers whose chest X-rays had been taken for the study and who were diagnosed with asbestosis not be told of their condition until they complained. This cover up continued for over 40 years. A 1966 letter from the Director of Purchases at Johns-Manville illustrates the extent of the industry's heartlessness: "My answer to the problem is: if you have enjoyed a good life while working with asbestos products why not die from it."
The conspiracy within the asbestos industry to conceal information from asbestos workers and from the general public was largely successful for several decades. However, in the 1970s, workers suffering from asbestosis, lung cancer, and other ailments began filing successful suits against asbestos manufacturers. Their stories were often tragic; suits were filed by workers who, after years of loyalty to their company, underwent years of suffering due to the lung diseases which the companies knew would inevitably strike down many of their workers. Many more suits were filed by the widows and children of workers who had succumbed to asbestos-related diseases.
Finally, there is a category of case that stands alone.
Reprinted with the permission of the Association of Trial Lawyers of America.
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