I write
separately to explain the “mass litigation” system that underlies the
majority's opinion, and to state why such a system is necessary. I also write
to explain why the method chosen by the circuit court to assess punitive damages
in this case is constitutional under the federal and state due process clauses.
The instant
case represents a trial judge struggling to do precisely what the Rules of
Civil Procedure and the Trial Court Rules told him to do: to do whatever
was necessary “to secure the just, speedy, and inexpensive determination
of every action.”
W.Va.R.Civ.Pro. Rule 1 [1998]. The defendants,
however, contend that a speedy and inexpensive resolution of the question regarding
whether they should be subject to punitive damages, for allegedly knowingly marketing
a defective product, is contrary to their due process rights under the state
and federal Constitutions. The defendants assert that the trial court
is constitutionally mandated to deny the plaintiffs a just, speedy and inexpensive
resolution of their claims in order that the defendants' property rights may
be fully protected.
The majority opinion properly rejects this ridiculous position. The defendants are certainly entitled to due process. But exactly what process is due is entirely dependent upon the trial judge's discretion, and the trial judge's duty to afford all parties due process.
In the current age, a single mistake by a product manufacturer can injure dozens, hundreds, or even thousands upon thousands of individuals. A few manufacturers take a callous, deliberate, and knowing approach and choose to ignore the injuries caused by their products, or conspire to conceal the problems with their products. Sometimes, the injuries caused by the product cover the nation and span many decades.
The classic example is asbestos. Asbestos is a rock, a wonderful, flexible, fibrous material that is mined from the ground and which gives strength and fire resistance to products. Unfortunately, asbestos is one of the most toxic substances known to the human body. When inhaled over a period of time, it can cause the lungs to form scar tissue that grows and fills the lungs decades after exposure to asbestos stops. Even when inhaled into the lungs in minute quantities, it can cause cancer.
Companies that used asbestos in their products first started learning about asbestos-related diseases in the 1910s and 1920s. But rather than warn the public not to breathe asbestos dust, or stop mixing asbestos into their products, the companies plowed ahead and concealed the dangers. It was not until the 1970s that the government finally took action to prevent the use of asbestos, and required companies to put warnings on their products that breathing asbestos dust was hazardous.
The plaintiffs
who filed lawsuits for their asbestos-related injuries did not sue the defendants
because the products contained asbestos. Instead, the lawsuits focused on the
fact that the products did not bear labels warning the product's users of the
dangers of
inhaling asbestos fibers. In other words, these were “failure to warn” product
defect cases. West Virginia, with its many chemical and power plants, has many
thousands of citizens who were exposed to asbestos dust from the use of asbestos-containing
products in the 1940s through the 1980s. As a result, many citizens have developed
(or are even just now developing) lung diseases and cancers directly related
to asbestos.
Plaintiffs
filed lawsuits in counties across West Virginia. First there were a few cases
in State court, then a few dozen, then hundreds, then thousands. (See
footnote 1) Circuit courts started to try the cases one at a time,
but quickly abandoned that route; trying each case individually would have required
hundreds of years. The same lawyers and the same witnesses were employed, using
the same documents and evidentiary exhibits, on a full-time basis in counties
throughout the State. (See
footnote 2) Every trial involved weeks of testimony to try the
same issues about the same defendants again and again and again. Virtually
everything pertaining to the defendants remained the same. The only issues
that changed concerned the plaintiffs, namely the existence and degree of each
plaintiff's injury and damages, which defendants' products caused the injury,
and the relative fault of each defendant for the plaintiff's damages.
This Court recognized that special procedures were required to address this judicial administrative nightmare, and the current “mass litigation” system grew into being.
Starting in the late 1980s, a handful of circuit judges _ myself included _ were specially trained in handling complex, “toxic tort” litigation. Using its constitutional administrative authority, the Court transferred asbestos cases from throughout the state to a handful of counties for these specially-trained circuit judges to resolve. Once the asbestos cases were before a single judge, the judge used the authority provided by Rule 42(a) of the Rules of Civil Procedure [1998] to manage the case. Rule 42 provides, in part:
When
actions involving a common question of law or fact are pending before the court,
it may order a joint hearing or trial of any or all matters in issue in the actions;
it may order all the actions consolidated; and it may make such orders concerning
proceedings therein as may tend to avoid unnecessary costs or delay. . . .
Initially,
instead of trying cases individually, cases with a common theme were grouped
together for trial. The plaintiffs' cases were first placed in groups of twenty
or thirty for trial. Usually, the plaintiffs all worked for the same employer
or at the same work site, around the same time periods, and were therefore usually
injured by the same defendants' products.
But when the numbers of cases began to reach into the thousands, judges adjusted their approach. Several thousand cases were “massed” together into one proceeding, and through the use of Rule 42, the cases were broken down into various sub- proceedings with common issues of law or fact for separate trials.
In run-of-the-mill litigation this Court has indicated that bifurcation of a case into mini-trials is generally disfavored. As we stated in Syllabus Point 4 of Sheetz, Inc. v. Bowles Rice McDavid Graff & Love, PLLC, 209 W.Va. 318, 547 S.E.2d 256 (2001):
West
Virginia jurisprudence favors the consideration, in a unitary trial, of all claims
regarding liability and damages arising out of the same transaction, occurrence
or nucleus of operative facts, and the joinder in such trial of all parties who
may be responsible for the relief that is sought in the litigation.
However,
in mass litigation cases, we have given trial judges substantial leeway to craft
the procedures necessary to avoid unnecessary costs or delay. Asbestos cases
continued be litigated as thousands of individual personal-injury claims against
dozens of asbestos-using manufacturers were filed. The process for managing this
litigation continued to change gradually. For example, by using Rule 42(a), judges
began to bifurcate the asbestos cases into two separate proceedings. The first
proceeding involved questions of law and fact that were common as to the defendants;
the second proceeding involved questions common to the plaintiffs.
In the first proceeding, often called the “liability phase,” one jury would see evidence regarding common questions of law and fact pertaining to the defendants. (See footnote 3) Experts would testify about the uses of asbestos, the diseases caused by asbestos, and would show the jury decades-old documents and discuss what the various defendants knew about the dangers of asbestos and when. The primary question for the jury to consider was this:
considering the state-of-the-art knowledge of manufacturing in the 1940s, 1950s, 1960s, or 1970s, did each defendant manufacture a product that was defective because it failed to come with an adequate warning about the dangers of inhaling asbestos fibers?
With this first phase of the proceeding, the plaintiffs and the defendants avoided thousands of days of courtroom work in individual trials. The same lawyers were not required to use the same witnesses to repeatedly retry the same questions. By trying those questions once for all the plaintiffs, Rule 42(a) permitted a court to avoid “unnecessary costs or delay” _ for both plaintiffs and defendants.
A corollary question addressed by the jury in the first proceeding concerned punitive damages. If the defendant actually knew about the dangers of asbestos in the 1940s, 1950s, 1960s, or 1970s _ and many did _ then the jury was asked a second question: did the defendant callously, deliberately or greedily fail to warn the public of those dangers, and if so should the defendant be punished for its actions?
Many of the same witnesses and documents used to prove that the product was defective were also used to prove an entitlement to punitive damages. Both issues overlap and involve the actual knowledge of the defendant. If the defendant knew the product was inherently dangerous for its intended use, the product was defective. Likewise, if the defendant knew that the product was inherently dangerous for its intended use, and knew that the product was causing harm to individuals, and the defendant recklessly or deliberately kept marketing the defective product _ well, that's grounds for punitive damages. Juries in the first proceeding could easily determine, yes or no, whether punitive damages should be assessed against a defendant. The problem in the first proceeding was with fixing the actual dollar amount of punitive damages. Since the first phase jury knew nothing of the degree of injury or specific financial circumstances of each of the thousands of plaintiffs, the jury could not knowledgeably determine what dollar amount of punitive damages would be fair for each plaintiff.
It is axiomatic that punitive damages must bear a “reasonable relationship” to the potential of harm caused by the defendant's actions. Syllabus Point 1, Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991). To meet this reasonable relationship requirement, we indicated in Syllabus Point 3 of Garnes that juries must be instructed using the following language:
Punitive
damages should bear a reasonable relationship to the harm that is likely to occur
from the defendant's conduct as well as to the harm that actually has occurred.
If the defendant's actions caused or would likely cause in a similar situation
only slight harm, the damages should be relatively small. If the harm is grievous,
the damages should be greater.
Judges
dealing with asbestos cases determined that the mandate of Garnes could
be met by letting the jury in the first phase assess a “punitive damage
multiplier.” The jury was asked to calculate a multiplier such that the
final dollar amount of punitive damages paid by the defendant would bear a reasonable
relationship to the harm that was likely to occur from the defendant's conduct
as well as the harm that actually occurred. The punitive damage multiplier would
be used in the second phase to multiply the amount of the plaintiff's
compensatory damages to actually determine the dollar amount of the defendant's
punitive damage liability.
In the second phase proceeding, questions of law and fact common to the plaintiffs would be resolved. The plaintiffs' cases would be broken down _ into groups by the plaintiff's asbestos-related disease or by the plaintiff's work place, or even individually _ and juries would hear evidence unique to each plaintiff. For instance, medical experts would discuss whether or not the plaintiff had an injury, and whether that injury was caused by asbestos. Economic experts would discuss the plaintiff's loss. Other experts would present evidence concerning the particular asbestos products that caused the plaintiff's injuries.
The second, “individual issues” or “damage phase” trials would begin with a brief statement to the jury by the lawyers about what happened in the first, “liability phase” trial. The juries would be instructed by the judge that the defendant's product was defective; the jury would only be charged with sorting out whether the defendant's product caused the plaintiff's injury, and the amount of the plaintiff's compensatory damages.
After the trial was complete, the judge would take the punitive damages multiplier determined in the first trial, multiply the plaintiff's compensatory damages by that multiplier, and thereby know the dollar amount of the punitive damages due and owing to the plaintiff. Furthermore, the judge would then conduct a post-trial review of the punitive damages award to ensure that the award was constitutionally fair and reasonably related to the harm that the defendant caused and could have caused to the plaintiff. (See footnote 4)
By the mid-1990s, this Court recognized that other individual personal-injury actions with characteristics similar to asbestos were being filed. The Court therefore took steps to codify the procedures that evolved in the context of asbestos litigation.
In 1999,
the Court adopted Trial Court Rule 26.01, formalizing the “mass litigation” system.
Rule 26.01 created a “Mass Litigation Panel” consisting of six judges,
and empowered the Panel to resolve any “mass litigation” case that
the Chief Justice of this
Court referred to the panel. (See
footnote 5) Essentially, the judges on the Panel are the specially
trained judges who are ready and willing to take on cases with common questions
of law or fact where large numbers of individuals have potentially been harmed,
physically or economically, as a result of a catastrophe or as a result of
a defective product.
The trial judge in the instant case has been an active participant on the Panel, and has aggressively worked to resolve mass litigation cases. In the instant case, it appears that he adopted the two-phase trial model that was used by judges in asbestos cases.
The defendants, however, insist that the bifurcation of these cases is improper. The defendants argue that they are entitled, pursuant to the due process clauses of the State and federal Constitutions, to try the question of punitive damages one case at a time, so that the jury can assess each defendant's culpability to each plaintiff individually. The defendants insist that the only way punitive damages may be reasonably related to the potential harm caused to an individual plaintiff is by a jury hearing evidence about both a defendant's conduct and the actual or potential harm to the plaintiff at the same time. In sum, the defendants assert that punitive damages can never be assessed in a “mass” litigation under Rule 42(a), or for that matter in a class action under Rule 23.
The inherent flaw with the defendants' argument is the assumption that due process, particularly to protect property rights, is a concrete concept. Instead, what process is due under the due process clause is determined under a sliding scale, and changes with the facts of each case. “When due process applies, it must be determined what process is due and consideration of what procedures due process may require under a given set of circumstances must begin with a determination of the precise nature of the government function involved as well as the private interest that has been impaired by government action.” Syllabus Point 2, Bone v. W.Va. Dept. of Corrections, 163 W.Va. 253, 255 S.E.2d 919 (1979). “(D)ue process is flexible and calls for such procedural protections as the particular situation demands.” Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). Necessarily implicit in the above quote, which was also expressed in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), is the principle that due process issues must be decided on the facts of the particular case. Once it is determined that due process applies, the question to be answered is “What process is due?”
The courtroom process that is due someone who has a few parking tickets is different from the procedural protections due a shoplifter, and vastly different from the process to be accorded someone who is accused of murder. And the due process protections for someone accused of a single murder are going to be different from someone accused of being a mass murderer, like Herman Goering or Saddam Hussein. Likewise, the amount of process that is due in a criminal case, where personal liberty or life is at stake, is different from the process that is due in a civil case, where only property interests are at stake.
The defendants argue that State Farm v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), mandates that all evidence of punitive damages must be presented to the jury and heard in relation to the injury caused to each specific plaintiff. Ignoring the fact that Campbell involved one defendant who had caused harm to a husband and wife in one instance (and not dozens of defendants who caused harm to thousands of plaintiffs over several decades), the defendants argue that Campbell preempts West Virginia's system of mass litigation. The inevitable result of accepting the defendants' argument is that it creates a judicial administrative nightmare. The same lawyers would be working for years, probably decades, to present the same witnesses to testify using the same documents in each separate plaintiff's case.
If the majority opinion had accepted this reasoning by the defendants, we would essentially be saying that the more people a defendant injures with its defective product, the less likely the defendant is ever going to have to pay compensatory or punitive damages to the people injured by the product. The defendant would therefore be accorded a right to thousands upon thousands of individual trials that would cause the legal system to grind to a halt. At the same time, we would be telling the individual plaintiffs that they have no rights to any process _ because of administrative gridlock, the individual plaintiffs would de facto be denied their day in court. The majority opinion rightly rejected this position.
As the members of this Court have noted before, State Farm v. Campbell presented no new law in the field of punitive damages. The case was nothing more than a summary, a collation, of prior case law. See Boyd v. Goffoli, 216 W.Va. 552, 608 S.E.2d 169 (2004) (Davis, J., concurring) and (Starcher, J., concurring); Jackson v. State Farm Mut. Auto. Ins., 215 W.Va. 634, 600 S.E.2d 346 (2004) (Davis, J., concurring) and (McGraw, J., concurring).
The due process protections mandated by State Farm v. Campbell and its predecessors are, as the majority opinion indicates, encompassed in the trial plan which the circuit court initially adopted. The first phase trial permits a jury to examine a defendant's relevant misconduct, and determine whether punitive damages should be assessed. If the jury believes that punitive damages are warranted, then the jury also determines a punitive damages multiplier that establishes a numerical relationship between the potential harm of a defendant's conduct and each plaintiff's compensatory damages. In the second phase proceeding, the trial judge actually multiplies the plaintiff's actual compensatory damages by the multiplier and establishes a punitive damage dollar figure. The circuit judge is then obligated by Garnes to review the punitive damages award to assess its fairness under the circumstances.
Under this process, thousands of allegedly injured plaintiffs will be permitted their day in court. The defendants will be permitted, in one proceeding instead of thousands, to contest the plaintiffs' claim that the defendants should pay punitive damages. And, if the trial judge determines this is the best course to take, the plaintiffs and the defendants will have secured the just, speedy, and inexpensive determination of every action.
I therefore concur in the majority's decision.