Asbestos payouts held back by judge Bankruptcy risk cited in ruling

December 12, 1992|By Jay Apperson | Jay Apperson,Staff Writer

In an article Saturday, The Sun reported incorrectly that the judge overseeing the nation's largest asbestos personal-injury case had ruled that none of the more than 8,000 plaintiffs could receive punitive damages until all compensatory damages had been paid.

In fact, the order may apply only to the 6,000 claims that originated in Baltimore. Lawyers for the plaintiffs and the defendant asbestos companies are to argue the scope of Judge Marshall A. Levin's ruling.

The Sun regrets the error.

The judge overseeing the nation's largest asbestos personal-injury case has ruled that none of the more than 8,000 plaintiffs can receive punitive damages until all of them have had their claims heard at "minitrials" scheduled to begin in March.

FOR THE RECORD - CORRECTION

Baltimore Circuit Judge Marshall A. Levin said he was taking the step to be fair to all of the current and future claimants.

"There is a very real threat that the unrestricted and simultaneous payment of punitive damages and compensatory damages will inevitably bankrupt all of the defendants in the asbestos litigation," the judge wrote in his 29-page order. "The stark fact is that, unless the payment of punitive damages is deferred, future deserving plaintiffs will be unable to collect even compensatory damages."

The ruling was not welcomed by Peter G. Angelos, the lawyer for most of the plaintiffs.

"I reject the argument that Judge Levin is making that Maryland victims should be penalized to protect the interests of billion-dollar corporations and their billion-dollar insurers," Mr. Angelos said. He described the ruling as the "functional equivalent" of denying punitive damages because the plaintiffs, whose average age is 60, could die before all the claims are heard.

Noting that the jury in the consolidated trial considered the companies' financial conditions in assessing punitive damages, dTC Mr. Angelos said the judge is merely speculating on the potential effect of the damage awards on the companies. He also said it restricts the rights of Maryland victims while allowing claimants in trials in other states to receive punitive damages.

"We had absolutely no indication that Judge Levin was considering making such a ruling," Mr. Angelos said yesterday. He said he will file a motion challenging the order within 10 days.

The ruling received a warmer response from at least one lawyer for a defendant company. Louis G. Close Jr., general counsel for Porter-Hayden Co., called it an "innovative approach" that will give the last of the 8,550 plaintiffs a chance to collect on valid claims. "It takes a little of the lottery out of it in terms of where you are in line," Mr. Close said, adding that the ruling could help encourage claims to be settled.

A Baltimore jury assessed millions of dollars in punitive damages against four asbestos companies in August to end the huge asbestos trial. In ruling the companies will have to pay up to $2.50 for every dollar of compensatory damages, the jury apparently dismissed arguments from the companies' lawyers that high awards could put them out of business or mean that future asbestos victims could not be paid.

Lawyers for the plaintiffs had demanded that the companies be punished for disregarding knowledge that they were endangering workers. But only time will tell how many millions will be assessed against the companies. Jurors were only asked to decide on a "multiplier" -- a formula for assigning punitive damages based on actual awards to any of the plaintiffs.

In July, the jury found seven companies negligent and liable for failing to warn workers about the potential health hazards posed by exposure to asbestos.

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