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Owens-Corning Fiberglas Corp. v. Malone6/5/1998
nitive damage awards against it for manufacturing and distributing Kaylo, continued punitive damage awards, including the ones here, are irrational and arbitrary in violation of the Due Process Clause.
1. Applicable Law
Answering this constitutional argument is no easy task. Professor David Owen, who has studied and written about this issue for the last two decades, has observed that the issue "is a problem of enormous complexity which requires much analysis and ingenuity." Owen II, supra, at 394. Courts have also expressed concern and frustration about this issue. See, e.g., Edwards v. Armstrong World Indus., 911 F.2d 1151, 1155 (5th Cir. 1990)("If no change occurs in our tort law or constitutional law, the time will arrive when Celotex's [asbestos] liability for punitive damages imperils its ability to pay compensatory claims and its corporate existence."). Of the many courts that have faced this challenge, only one has expressly held that multiple awards of punitive damages for the same conduct violate a defendant's due process rights. See Juzwin v. Amtorg Trading Corp., 705 F. Supp. 1053, 1064 (D.N.J. 1989)(Juzwin I), vacated, 718 F. Supp. 1233, 1234 (D.N.J. 1989)(Juzwin II)(vacated but abiding by previous ruling "that repetitive awards of punitive damages for the same conduct violate a defendant's due process rights"). Other courts faced with this argument have rejected it for five principal reasons.
First, courts have rejected due process challenges to multiple punitive damage awards by holding that procedural safeguards provide all the protection that is necessary. See, e.g., Scheufler v. General Host Corp., 126 F.3d 1261, 1272 (10th Cir. 1997); Cathey v. Johns-Manville Sales Corp., 776 F.2d 1565, 1571 (6th Cir. 1985); Fireboard Corp. v. Williams, 813 S.W.2d 658, 686 (Tex. App.--Texarkana 1991, writ denied). However, we believe that courts must consider multiple punitive damage awards for the same conduct against a party's substantive due process rights. Whether "to punish a tortfeasor by means of an exaction of exemplary damages is an exercise of state power that must comply with the Due Process Clause of the Fourteenth Amendment." Honda Motor Co. v. Oberg, 512 U.S. 415, 434-35 (1994). While a punitive damage award "in an individual case may be fair and reasonable, the cumulative effect of such awards may not be." Juzwin I, 705 F. Supp. at 1055. At some point, punitive damages for the same conduct no longer serve to punish and deter, but instead become grossly excessive in violation of the Fourteenth Amendment's Due Process Clause. See BMW, 517 U.S. at 568. Accordingly, we decline to follow these cases.
Second, some courts have rejected substantive due process challenges out of parochial concerns. See In re School Asbestos Litig., 789 F.2d 996, 1001 (3d Cir. 1986). These courts reason that a court-imposed limit on punitive damage awards will only affect claimants within their own jurisdiction, prejudicing those claimants and only providing minimal or arbitrary relief to defendants. See, e.g., Jackson , 781 F.2d at 405 ("We believe that the Mississippi Supreme Court would not deny to its own citizens the right to recover that which citizens of dozens of other states are already entitled to recover."); W.R. Grace & Co.--Conn., 638 So.2d at 505 ("Were we to adopt the position advocated by Grace, our holding would not be binding on other state courts or federal courts. This would place Floridians injured by asbestos on an unequal footing with the citizens of other states with regard to the right to recover damages from companies who engage in extreme misconduct."); Wangen, 294 N.W.2d at 461 (" e do not believe this court [Supreme Court of Wisconsin] should abandon
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