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C.A. Reverses $3 Million Punitive-Damage Over Talcum
Acting Presiding Justice Grimes Says Evidence Is Lacking of Malice, Oppression or Fraud; Justice Wiley Dissents,
Declares Maker of Old Spice Talc Knew of Presence of Asbestos in Product and Fraudulently Concealed It
By a MetNews Staff Writer
The Court of Appeal for this district yesterday torpedoed a $3 million punitive-damage award against the maker of Old Spice talcum powder, the use of which was found by a jury to have been partially responsible for the plaintiff developing mesothelioma.
While the manufacturer was negligent, the majority determined, there was an insufficient showing that it was guilty of malice, oppression or fraud, as required for such an award to be upheld. A dissenter argued that the defendant, Whittaker, Clark & Daniels, Inc., concealed facts that were known to it as to the dangerousness of the product and should be punished to deter such conduct.
Acting Presiding Justice Elizabeth A. Grimes of Div. Eight authored the majority opinion, which San Diego Superior Court Judge Albert T. Harutunian III, sitting on assignment, signed. Justice John Shepard Wiley Jr. dissented.
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Depicted above is a jar of Old Spice talc, a product that contained asbestos. |
Apportionment of Damages
A jury in the courtroom of Los Angeles Superior Court Judge Stephen M. Moloney assessed economic damages suffered by plaintiff Willie McNeal Jr. at $1,067,719 and his non-economic noneconomic damages at $750,000. The judgment against Whittaker was pared to $133,761.10 in economic damages based on settlements paid by other parties and $315,000 in noneconomic damages based on its proportional fault.
McNeal used the Old Spice product daily from 1958-80, except for a year when he was in Vietnam, unaware that it contained asbestos and was carcinogenic. The product has been discontinued.
Grimes meticulously laid out what was known by Whittier, through the years, as to the dangers from asbestos fibers.
“Questions about the potential contamination of talc with asbestos were raised by 1971,” she said, “but the connection between talcum powder and mesothelioma was not discovered until 1994.”
In 1971, when concerns surfaced, she noted, Whitaker ceased selling raw asbestos and began testing its talc for traces of it.
Limits to Knowledge
The jurist wrote:
“What the evidence does not show is that defendant’s executives knew there were ‘probable dangerous consequences’ from trace levels of asbestos in its talc, and deliberately did nothing to avoid them. Plaintiff tells us that Whittaker executives knew that ‘trace’ amounts of asbestos by weight ‘translated to millions and millions of asbestos fibers per ounce of talc.’ But that begs the question whether defendant’s executives knew before 1980 that ‘millions and millions’ of asbestos fibers in the trace amounts found in talc would cause a high probability of injury, and plaintiff does not explain how the evidence supports that conclusion.
“Yes, defendant knew asbestos was an ‘unsafe ingredient’ if there were enough of it in the talc—meaning amounts experts would consider ‘significant enough to, over time, produce injury or illness.’ But no one knew exposure to talcum powder could cause mesothelioma until 1994—years after plaintiffs exposure to talc ended in 1980. Medical or scientific developments years after plaintiffs injury cannot establish defendant’s executives knew of ‘probable dangerous consequences’ of contaminated talc before plaintiffs injury.”
Wiley’s Dissent
Wiley pointed to a March 11, 1976 letter sent by Whittaker’s executive vice president, Frederick F. Roesch, to the Cosmetic, Toiletry and Fragrance Association, a trade association, for the ultimate use of the U.S. Food and Drug Administration. In it, he told of the company’s testing program and said:
“Our file contains reports on various graces of cosmetic talc from areas in Alabama, North Carolina, Montana, Italy, South Korea and Vermont. These reports were based on approximately 74 ground ore samples analyzed over a period of four years all of which show non-detectable amounts of fibrous asbestos from minerals.”
Roesch’s “reassuring message was false,” Wiley said, noting that the defendant’s corporate representative candidly confirmed to the jury the tests had turned up asbestos.”
The dissenter remarked:
“The reasonable inference is Roesch left out the bad fact to yield to an instinct as old as human nature: deny, deny, deny. Here is a bad fact. Cover it up.”
He went on to say:
“Whittaker says its testing showed only ‘trace’ amounts of asbestos. That defense is feeble. No one contends there is some safe level of asbestos. A ‘trace’ of a toxin is a major problem. Whittaker’s letter could have said it found only a little asbestos, which would have been like a manufacturer saying its corn flakes contain only a little cyanide or the cake flour has just a bit of anthrax. Whittaker took the easy and dishonest route: skip the bad fact entirely.”
Fraud Established
Wiley asked, “Can this evidence support a ‘high probability’ of fraud?” and answered:
“Yes: it is powerful proof of fraud. It puts the lie to all of Whittaker’s many words about being a fine corporate citizen. A fine corporate citizen does not hide bad facts. The mask need slip only once for the audience to see the truth.”
He put forth the proposition that “[i]f the tortfeasor takes steps to minimize the odds it will get caught, tort law must magnify the damages beyond compensation to the victim.” Wiley quoted then-Seventh U.S. Circuit Court of Appeals Judge Richard A. Posner (now retired) as saying in 2007 opinion:
“If a tortfeasor is ‘caught’ only half the time he commits torts, then when he is caught he should be punished twice as heavily in order to make up for the times he gets away.”
Wiley commented:
“Court decisions affect corporate behavior: they establish incentives. Bad incentives can create more danger to the public than is wise. Tort law should encourage firms to come clean. If the law does not penalize concealment, the public will suffer. Certainly the McNeal family wishes the truth about Whittaker’s asbestos had come out sooner.”
Grimes’s Rejoinder
In the majority opinion, Grimes minimized the significance of the letter, which Wiley appended to his dissent. She did so in response to argumentation by McNeal.
Although three independent laboratory tests did show the presence of asbestos in talc which “Mr. Roesch should have mentioned,” Grimes said, McNeal was mistaken in portraying Roesch as having told the FDA that Whittaker “had never found detectable asbestos in its talc,” and the FDA was otherwise made aware of the test results Roesch omitted.
There was no substantial evidence of a deliberate concealment of those results “much less that Mr. Roesch knew his omission of those results was likely to result in asbestos-related injury to the ultimate consumers of defendant’s talc,” she set forth.
The case is McNeal v. Whittaker, Clark & Daniels, 2022 S.O.S. 2898.
Chet A. Kronenberg and Jacob Waschak of the Century City firm of Simpson Thacher & Bartlett, LLP joined with Viiu Spangler Khare and Robert H. Berkes of the downtown Los Angeles form of Berkes Crane Robinson & Seal in representing Whittaker. Arguing for McNeal were Stuart J. Purdy of the Long Beach firm of Simon Greenstone Panatier Barlett and Denyse F. Clancy and Michael T. Stewart of Oakland’s Kazan, McClain, Satterley & Greenwood.
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