Court Sets Aside Punitive Damages in Toxic Tort Case

The federal court in a toxic tort case has set aside the jury's punitive damages award. Garner v. BP Products North America, 2010 WL 1049794 (S.D.Tex.)(3/16/10).

The plaintiffs and over 100 other individuals filed suit against the defendant asserting that the defendant released an unidentified toxic substance into the atmosphere at its refinery causing personal injuries to workers. Several workers were transported to local hospitals where they were examined, treated, and released. At the time, the plaintiffs were employees of various sub-contractors at the site. In the trial of the first group of plaintiffs, a jury found for plaintiffs and went on to find that the conduct of the defendant was such that punitive damages should be awarded. It awarded punitive damages of $10 million to each plaintiff.

The punitive damages, inter alia, were challenged on post-trial motions. Under Texas law, in order to recover exemplary damages, the plaintiffs must establish at least gross negligence. The statute requires that the evidence pass both an objective and subjective test. The objective test requires a showing of an extreme risk of harm-- one that involves both high probability and high potential severity of an occurrence. Here, the trial court found the evidence failed to establish a legal connection between the event at issue and a known and extreme risk. The nature of refinery work is such that workers are subject to a variety of toxic odors at all times. The defendant, its employees and contractors, are generally aware of the potential hazards that exists in a refinery.  A disconnect existed here, however, said the court, because while there may have been some probability that a worker will be exposed to a toxic substance, the evidence did not support the high potential severity side of the test. Most of the exposures are minor and not harmful.

Nor did the evidence show a high probability of exposure from the same source. The source here was never identified, and in the prior releases or spills at the site, injuries were not always associated with each event and there was no showing of a recurring source.

Also missing from the equation, said the court, was the element of specific intent. The statute requires that the plaintiff establish a “specific intent” by clear and convincing evidence.  Specific intent requires more than a showing that a defendant had an awareness of the possibility of a spill or release. See Diamond Shamrock Refining Co. v. Hall, 168 S.W.3d 164, 171 (Tex.2005). It requires a showing that a defendant ignored the obvious or known risk and took no precautions that would minimize or arrest the harm anticipated. Id. at 171-72. The evidence showed that the defendant implemented safety precautions, such as requiring each worker to wear a monitor to detect the most toxic chemicals present at the refinery. And, there was evidence that monitors were installed and operational on the ground as well as on the towers in the refinery.

Therefore, the court concluded, as a matter of law, that gross negligence was not proved by clear and convincing evidence, and thus the jury's exemplary damage award must be set aside.