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April 8th, 2014

NYC Asbestos Ruling Favors Personal Injury Lawyers over Those Who’ll Become Sick in Future

At the behest of powerful personal injury law firm Weitz & Luxenberg, New York Supreme Court Justice Sherry Klein Heitler Tuesday reintroduced punitive damages to New York City’s asbestos litigation (NYCAL) with an order that will enrich those lawyers at the expense of the many who will develop asbestos-related illnesses in the future.

Punitive damages have been “deferred” in NYCAL cases since 1996 for good reason. When awarded in asbestos cases, punitive damages give a windfall to a single plaintiff and his or her lawyer, but jeopardize limited resources available to compensate thousands of future claimants. Justice Helen Freedman, who previously oversaw New York’s asbestos docket, also recognized that punishing companies over and over for wrongs committed decades ago “served no corrective purpose” and, “in many cases, the wrong was committed by a predecessor company, not even the company now charged.” It is for these reasons that the federal judiciary as well as many jurisdictions that are centers for asbestos litigation, such as Baltimore, Philadelphia and, until now, New York City, “defer” (do not rule on) requests for punitive damages.

Justice Heitler’s order suggests that concerns of “large, repetitive punitive damages” in New York City are “exaggerated.” She correctly observes that plaintiffs must meet a high standard to receive punitive damages and that such awards are infrequent. But Justice Heitler misses the point. The mere availability of punitive damages will inflate settlement values in every case and place even greater pressure on companies named as defendants to settle even questionable cases, needlessly depleting resources available to future claimants.

As documented in the 2013-14 Judicial Hellholes report, the average jury award for plaintiffs in all NYCAL cases since 2007 is $21.7 million, roughly seven times larger than the $3.1 million average award in courts throughout the rest of New York State. The only purpose piling on punitive damages serves is to make NYC’s asbestos lawsuit industry even more lucrative for plaintiffs’ lawyers. ATRA last year had submitted an amicus brief, hoping to convince Judge Heitler of that.

Justice Heitler also finds concerns with the impact of exposure to unlimited, repetitive punitive damages overstated because “punitive damages indisputably are limited by constitutional constraints.” These constraints, however, have not stopped over 100 businesses from declaring bankruptcy due to asbestos liability. And, while the U.S. Supreme Court has gradually adopted helpful measures to control punitive damages that have “run wild,” the high court has not yet squarely and effectively addressed the due process implications of repeatedly punishing a business for the same conduct.

Meanwhile, though more than half of the states have placed an upper limit on punitive damage awards, providing some measure of predictability, the New York legislature, dominated by the personal injury bar, has not done so. In fact, New York State Assembly Speaker Sheldon Silver on the payroll of Weitz & Luxenberg, the same firm that made the motion to bring punitive damages back into the picture. Silver is paid hundreds of thousands of dollars a year by the firm but, court records show, has performed no function other than blocking tort reform legislation in Albany.

The result of this ruling will be that lawyers at a handful of personal injury law firms that dominate NYC’s asbestos litigation, such as Weitz & Luxenberg and Belluck & Fox, will become even more wealthy at the expense of the due process rights of defendants and compensation for future victims of asbestos exposure. Justice Heitler should be ashamed of herself, especially since Speaker Silver appointed his law firm colleague Perry Weitz to the committee that recommended Heitler for her seat on the bench.

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