One of the hottest issues in NYCAL asbestos litigation has been Justice Heitler’s decision to amend the existing Case Management Order (CMO) that historically deferred any trial of punitive damages in an asbestos case. Justice Heitler amended the CMO to permit punitive damages to be tried along with compensatory damages and permitted plaintiffs to make such a request  “at the conclusion of the evidentiary phase of the trial upon notice to the affected defendant(s), to which such defendant(s) shall have an opportunity to respond.” On appeal, the First Department upheld Justice Heitler’s authority to amend the CMO, stating: “The motion court had the authority to modify the CMO. New York’s Uniform Rules for Trial Courts Section 202.69 (see 22 NYCRR 202.69) allows the Coordinating Justice to ‘issue case management orders after consultation with counsel.’ The court reached its determination after consulting with counsel, and hearing and considering defense counsel’s objections.” The First Department rejected the argument that amending the CMO was an advisory opinion.

The court went on to hold, however, that to allow a plaintiff to insert punitive damages into the case at trial after evidence had been introduced is a violation of the defendants’ due process rights. The court stated: “However, we find that the court exceeded its authority to the extent that the April Order directs that applications for permission to charge the jury on the issue of punitive damages ‘shall be made at the conclusion of the evidentiary phase of the trial upon notice to the affected defendant(s), to which such defendant(s) shall have an opportunity to respond.’ Due process requires that a defendant be provided with an ‘opportunity to conduct discovery and establish a defense with respect to this damage[s] claim’ since such claims involve ‘different elements and standards of proof and potentially subject defendants to a far greater and different dimension of liability than would otherwise [be] the case’ (Heller v Louis Provenzano, Inc., 303 AD2d 20, 23 [1st Dept 2003]). The April Order deprives defendants of their rights to due process by leaving them guessing, until the close of evidence at trial, whether or not punitive damages will be sought. Even plaintiffs, in their proposed modification of Section XVII, recognized the need for pre-trial resolution of the punitive damages issue. We therefore modify to delete the second sentence of the first decretal paragraph of the April Order and remand the matter to the Coordinating Justice for a determination of procedural protocols by which plaintiffs may apply for permission to charge the jury on the issue of punitive damages.”

Lastly, the First Department stayed implementation of the punitive damage modification and remanded to “the Coordinating Justice for a determination of procedural protocols by which plaintiffs may apply for permission to charge the jury on the issue of punitive damages.”

Read the full decision here.

If you have questions about how this decision may impact your business, please contact:

• Joseph J. Welter (716.566.5457; jwelter@goldbergsegalla.com)
• Jason A. Botticelli (716.566.5460; jbotticelli@goldbergsegalla.com)
• Or another member of Goldberg Segalla’s Toxic Torts Practice Groups