1371

William DUNN; Hess Oil Virgin Islands Corp. v.

HOVIC; Amerada Hess Corp.; Keene Corporation v.

The LITWIN CORPORATION; Litwin PanAmerican Corp.; Borinquen Insulation Co.

Owens-Corning Fiberglas Corporation, Appellant. No. 91-3837.

United States Court of Appeals, Third Circuit.

Argued April 22, 1992. Decided July 27, 1993.

Barry S. Simon (argued), Paul Mogin, Williams & Connolly, Washington, DC, for appellant.

Joel H. Holt (argued), Christiansted, VI, Paul S. Minor, Minor & Guice, Biloxi, MS, for appellee.

Before: SLOVITER, Chief Judge, MANSMANN and WEIS, Circuit Judges. Reargued In Bane February 2, 1993.

Before: SLOVITER, Chief Judge, BECKER, STAPLETON, MANSMANN GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS and WEIS, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Chief Judge.

Preliminary Note Before us is the appeal of Owens-Corning Fiberglas Corporation (OCF) from the judgment of the district court of the Virgin Islands awarding William Dunn $500,000 in compensatory damages and $2 million in punitive damages. A panel of this court heard argument on OCF's appeal on April 22, 1992 and issued an opinion affirming the compensatory damages award and remitting the punitive damages award to $1 million. Thereafter, the court granted OCF's petition for

rehearing in bane, limited to the punitive damages issue. The panel's original opinion on the compensatory damages issue, modified in minor respects to reflect the recent procedural events, is refiled contemporaneously with this opinion.^{Footnote 1}

In its petition for rehearing and at oral argument before the in bane court, OCF directed its argument to its contention that multiple awards of punitive damages in asbestos-related injury cases should be prohibited as a matter of Virgin Islands law or federal due process. Accordingly, this opinion essentially restates the opinion of the panel on the issues of the sufficiency of the evidence, Dunn's closing argument, and the jury charge, but contains a more extended discussion of OCF's challenge to the excessiveness of punitive damage awards in asbestos cases.

I.

SUFFICIENCY OF THE EVIDENCE FOR A PUNITIVE DAMAGES AWARD The availability of punitive damages is ordinarily determined by the local law of the relevant jurisdiction, in some instances by statute and in other instances by legal principles developed by courts. Under the Virgin Islands Code: The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the court of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary. V.I.Code Ann. tit. 1, § 4 (1967). Thus we turn to the Restatement for the prevailing standard.

Section 908(2) of the Restatement (Second) of Torts provides that "[pjunitive damages may be awarded for conduct that is outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others." In applying this section, we have previously stated that such conduct must be shown by clear and convincing evidence. acosta v. Honda Motor Co., Ill F.2d 828, 839 (3d Cir.1983). OCF argues that the evidence was insufficient to support the award of punitive damages or, in the alternative, that the verdict went against the clear weight of the evidence, requiring a new trial on whether punitive damages are appropriate.

In support of its argument, OCF points to evidence tending to show that prior to its decision to place warning labels on Kaylo boxes, the prevailing industry belief was that asbestos insulation products were safe. See App. at 1522-24. OCF argues that its Kaylo product was considered an improvement over prior insulation products because it contained a lower percentage of asbestos. It points to an independent study conducted by Union Carbide between 1961 and 1963 which concluded that Kaylo, unlike Johns-Manville and Philip Carey products, could be safely used within the 5 million particles per cubic foot threshold limit value (TLV) established by the American Conference of Governmental Industrial Hygienists in 1946. See App. at 1355-72, 2287-97.

Nevertheless, we conclude that Dunn presented more than sufficient evidence from which a jury could conclude that OCF acted "with reckless indifference" in failing to place adequate warnings on its Kaylo product. Dunn's evidence revealed the following: In the early 1940s, insulation workers threatened to demand higher wages when using OCF's fiberglass material because of perceived health threats. See App. at 725-26. In response to this threat, Edward Ames, OCF's public relations officer and an assistant to its president, developed a plan to resolve this problem. As Ames explained, OCF had learned by this time that exposure to asbestos fibers could cause asbestosis. App. at 726.

In a memorandum to OCF's president and executive vice-president dated January 7, 1942, Ames made the following recommenda-

tion to inform workers of the extent of the hazard posed by asbestos-containing materials: Gather as a weapon-in-reserve an impressive file of photostats of medical literature on asbestosis. Available are two bibliographies covering medical literature to 1938, citing references to scores of publications in which the lung and skin hazards of asbestos are discussed. This file would cover five or six hundred pages.... App. at 2151. This memorandum suggested that if OCF was unsuccessful in convincing union officials of the benefits of fiberglass as opposed to other asbestos-containing insulation products, then this "asbestosis weaponin-reserve" would be sent to union workers to "let them stew." App. at 2152.

When asked if OCF's then-president, Harold Boeschenstein, knew that asbestos products might pose a hazard to the lungs, Ames answered, "Mr. Boeschenstein knew everything." App. at 727. In addition, OCF's attorney thought that Ames's plan'was "a germ of a major strategy" and approved compiling an asbestosis file. App. at 729.

In 1943 Ames wrote another memorandum in which he criticized a proposal for adding asbestos to fiberglass, see App. at 732-33, writing: In formulating our policy on admixtures with asbestos, we should keep on the alert because otherwise we will run the risk of smearing fiherglas [sic] with the hazards of exposure to asbestos. Fabrication of asbestos (in both textile and pre-textile form) is a dusty process, and exposure to asbestos fly involves the danger of asbestosis, a pathological lung condition ... minimized by the use of hoods and ... respirators. App. at 2154.

In 1944 Ames received a letter from a physician informing OCF that a patient of his, who had worked as an insulator, had developed asbestosis from exposure to insulation products. The letter stated in pertinent part: pipe coverer handling ... asbestos ... products on industrial insulation jobs [was] suffering from asbestosis, a condition that results from exposure to asbestos dust. The disease is a well recognized form of lung pathology that manifests itself in a diminution of lung capacity resulting in dyspnea or shortness of breath. App. at 2155.

OCF began distributing Kaylo products in 1953, and from 1958 until 1972 manufactured Kaylo insulation. App. at 1068. In the 1950s, Dr. Garret Schepers, head of the Saranac Laboratory in New York, warned OCF that Kaylo contained material that would be hazardous to human beings. App. at 1018. Dr. Schepers also wrote two letters to Dr. M.D. Burch, director of personnel and industrial relations at OCF at the time, advising him that "asbestos is fairly well incriminated as a carcinogen," App. at 2198, and that asbestos dust caused fibrosis. App. at 2207. Despite these warnings, OCF published brochures which repeatedly represented Kaylo as "non-toxic." App. at 2209, 2210, 2211, 2212, 2215. In addition, OCF touted Kaylo's "ease of application," see App. at 2211, and its "pleasant handling characteristics." App. at 2212. These brochures contained no warning of potential hazards.

A 1960 study of one of OCF's Kaylo manufacturing plants revealed that excessive asbestos dust exposure resulted from simply packing Kaylo into boxes. App. at 220-22. In 1963 the head of OCF's product development laboratory informed various corporate officers around the country that "[ajsbestos (as found in Kaylo) when breathed into the lungs causes asbestosis which often leads to lung cancer." App. at 2221. In 1964 the National Insulation Manufacturers Association, of which OCF's representative was a director, noted that Johns Manville had decided to place warnings on its asbestos products. App. at 2225. OCF, however, declined to do so, see App. at 2229, even though it knew that insulators had a six to seven times greater incidence of lung cancer than the general male population. App. at 2226.

In early 1965, Dr. F.H. Edwards of OCF wrote to OCF's medical director as well as other corporate officials urging that serious consideration be given to labelling Kaylo products since "the amounts requested [by claimants] are usually sizeable." App. at

2229. Dr. Edwards reiterated this suggestion in a memorandum dated August 6, 1966 in which he also acknowledged that "[i]t is impossible to guess the amount of dust created by the cutting, sawing, etc. of Kaylo. There are too many local factors involved." App. at 2230-31. Although OCF claimed that by December 1966 it had placed warning labels on its products,^{Footnote 2} see App. at 1230,

Dunn testified that he did not see warning labels on any of the cartons holding Kaylo that he observed in the Virgin Islands. App. at 870, 873. This testimony was echoed by McComely Bully, one of Dunn's co-workers at HOVIC. See App. at 623-34, 645. OCF did not offer the testimony of any HOVIC worker to the contrary.

Dr. Egilman testified about the medical literature available at the time concerning the potential harm of exposure to asbestos dust. He noted that in the 1930s medical literature questioned the health effects of exposure to asbestos by insulators, particularly if the dust could be seen. App. at 16771. In 1947 the confidential Hemeon Report was issued to the Asbestos Textile Institute, of which OCF has never been a member. This report questioned whether the thengenerally acknowledged TLV for levels of exposure to asbestos provided "complete assurance[s]" of "thorough[ ] safe[ty]." App. at 2181. Finally, Dr. Egilman testified about a 1949 article in the Journal of the American Medical Association which recognized that asbestos workers were at risk of developing cancer. App. at 233. In his opinion, that article "established] that the general medical community was aware of the fact that asbestos caused cancer." App. at 233.

In light of this evidence, we agree with the recent conclusion of the Virginia Supreme Court that [t]he jury may have concluded ... that Owens-Corning knew that inhalation of dust from its Kaylo product could cause lung disease in humans, that it actively concealed this danger, and it did not warn insulators of this hazard....

Owens-Corning Fiberglas Corp. v. Watson, 243 Va. 128, 413 S.E.2d 630, 642 (1992). The jury could reasonably have found that OCF acted with "reckless indifference to the rights of others" in this case, Restatement (Second) of Torts § 908(2) (1977), and thus, the district court appropriately denied OCF's motion for JNOV and did not abuse its discretion in refusing to grant unconditionally the motion for a new trial.

II.

DUNN'S CLOSING ARGUMENT

OCF claims that it was denied a fair trial on the issue of punitive damages because of several remarks made by Dunn's counsel during closing arguments to the jury. Specifically, OCF argues that the following remarks or actions were improper: (1) the D v 8r T!ment that the "*ur should return a lar°"e punitive award to force OCF to stop defending asbestos cases, see App. at 1761; (2) the suggestion by Dunn's counsel that counsel for OCF lied to the jury,^{Footnote 3} see App. at 1755; (3) the argument that the jury should award punitive damages as a reward to Dunn for bringing this lawsuit, see App. at 1756; (4) the request that the jury draw an analogy to the criminal fine imposed on Michael Milken earlier that week, see App. at 1758-59; and (5) the appeal to the jury's local prejudice against "this big multi-national company." ^{Footnote 4} See App. at 1762.

At the outset, we note that there are aspects of the plaintiffs closing argument that we believe crossed the line between acceptable advocacy and imprudent zeal. However, our disapproval of portions of the closing is not enough to warrant reversal on that ground. We note that OCF failed to make a timely objection with respect to the statements referred to in (1), (3) ^{Footnote 5} above, and thus has waived its challenge to these statements on appeal. See Woods v. Burlington N.R.R.,. 768 F.2d 1287, 1292 (11th Cir.1985) (per curiam) (when party fails to object to improper closing argument, court of appeals only "retain[s] the authority to review for plain error[, the exercise of which] is seldom justified in reviewing argument of counsel in a civil case"), rev'd on other grounds,  480 U.S. 1, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987); Hyman v. Life Ins. Co.,  481 F.2d 441, 444 (5th Cir.1973) (same); see also DeRance, Inc. v. PahieWebber, Inc.,  872 F.2d 1312, 1326 (7th Cir.1989) (motion for mistrial on grounds of improper closing argument did not preserve issue for appeal when motion lacked requisite specificity).

Although OCF did preserve its claims with respect to points (2) and (4), ^{Footnote 7} in general "the trial judge is in a better position than an appellate court to determine whether remarks of counsel are prejudicial," Hemian v. Hess Oil Virgin Islands Corp.,  524 F.2d 767, 772 (3d Cir.1975), and "at least for civil trials, ... improper comments during closing arguments rarely rise to the level of reversible error." Littlefield v. McGuffey,  954 F.2d 1337, 1346 (7th Cir.1992) (internal quotation omitted); see Lewis v. Penn Cent. Co.,  459 F.2d 468, 470 (3d Cir.1972), (trial judge has broad discretion in determining whether counsel's closing remarks were proper).

Here, the district court concluded that the remarks about corporate lies "are not improper in a summation regarding punitive damages," Dunn v. Owens-Corning Fiberglass, 774 F.Supp. 929, 949, relying on the trial court's statement in Herman that "[i]n and (5) ^{Footnote 6} attempting to convince a jury that a defendant's conduct was outrageous and should be punished, an advocate must go beyond the kind of argument necessary to establish ordinary negligence." 379 F.Supp. 1268, 1276 (D.V.I.1974) (footnote omitted), affd,  524 F.2d 767 (3d Cir.1975); see also Arnold v. Eastern Air Lines, Inc.,  681 F.2d 186, 197-98 (4th Cir.1982) (permissible range in punitive damage arguments is wide and inescapably volatile), cert, denied,  460 U.S. 1102, 103 S.Ct. 1801, 76 L.Ed.2d 366 (1983), rev'd in part on other grounds,  712 F.2d 899 (4th Cir.1983) (in bane), cert, denied, 464 U.S. 1040, 104 S.Ct. 703, 79 L.Ed.2d 168 (1984).

OCF relies on Draper v. Airco, Inc.,  580 F.2d 91 (3d Cir.1978), to support its claim that Dunn's reference to "corporate lies" constituted reversible error. However, that case is distinguishable. In Draper, [c]ounsel for the plaintiff ... committed the following improprieties: (1) he attempted to prejudice the jurors through repeated inappropriate references to the defendants' wealth; (2) he asserted his personal opinion of the justness of his client's cause; (3) he prejudicially referred to facts not in evidence; and (4) without provocation or basis in fact, he made several prejudicial, vituperative and insulting references to opposing counsel.

Id. at 95. ^{Footnote 8}

The remarks of Dunn's counsel, while arguably intemperate, did not approach the unprofessional and prejudicial conduct of the attorney in Draper, the reference to lies told in the courtroom hardly qualifies as a "vituperative and insulting" reference to counsel for OCF. When read in context, Dunn's counsel's argument regarding "corporate lies" referred to statements made by OCF and its witnesses, not its attorneys.

Our review of Dunn's closing argument reveals that his counsel referred to Milken to stress the point that OCF as a wrongdoer should be punished. Punishment is one of the goals of punitive damages. See Restatement (Second) of Torts § 908 cmt. a (1977). The district court was in the best position to assess any potential prejudicial impact of this reference. In light of the evidence presented as to OCF's conduct and the closing argument as a whole, we cannot conclude that the district court abused its discretion in not providing a curative instruction or in declining to order a mistrial.

III.

JURY CHARGE

OCF claims that the jury charge was defective both under Virgin Islands law and the federal constitution for failing adequately to explain how to determine the amount of the punitive damages.

A. Virgin Islands Law OCF argues that the court's instruction was inadequate under Virgin Islands law because it did not inform the jury of the relevance of plaintiffs actual injuries in calculating punitive damages. We need not decide whether Virgin Islands law requires such an instruction, ^{Footnote 9} because OCF failed to make a timely and specific objection challenging the charge as erroneous under Virgin Islands law. Thus, this issue was not properly preserved for appeal under Federal Rule of Civil Procedure 51. ^{Footnote 10}

See Don Kemper Co. v. Beneficial Standard Life Ins. Co.,  425 F.2d 221, 222 & n. 4 (3d Cir.1970); Bogacki v. American Mach. & Foundry Co., 417 F,2d 400, 407 (3d Cir.1969). OCF's only suggestion that "[t]he amount of punitive damages must bear a reasonable relationship to the actual damages suffered by the plaintiff appeared in a proffered supplemental jury instruction, App. at 1497, which the district court did not consider because it was tendered after the cut-off for submitting instructions. See App. at 159294, 1605. In addition, despite being specifically informed by the district court at the time it proffered the supplemental instruction that "[alfter [the] charge [to] the jury, you'll have a chance to make any exceptions you want to the charge," App. at 1594, OCF nevertheless failed to challenge the charge as deficient under Virgin Islands law after the charge was given. OCF's post-charge objections were limited to constitutional grounds,

see App. at 1778, 1779, 1783, and the district court responded to OCF's objection on those grounds only. See App. at 1781, 1783; see also Hoffman v. Sterling Drug, Inc.,  485 F.2d 132, 139 n. 22 (3d Cir.1973) (rejecting under Rule 51 appeal where defendant objected to charge on one ground but sought to appeal on another).

As we have noted in the past, the purpose of Rule 51 is to " 'afford the trial judge an opportunity to correct the error in h[er] charge before the jury retires to consider its verdict' and to lessen the burden on appellate courts by diminishing the number of rulings at the trial which they may be called on to review." McAdam v. Dean Witter Reynolds, Inc.,  896 F.2d 750, 769 n. 29 (3d Cir.1990) (quoting Porter v. American Export Lines, Inc.,  387 F.2d 409, 412 (3d Cir.1968)). In this case, a curative instruction could have remedied any infirmity in the charge. OCF's failure to make a specific objection to the court's instruction under Virgin Islands law subverted the purpose of Rule 51, ^{Footnote 11} thus decline to review OCF's objections to the charge on that ground. See United States v. Logan, 111 F.2d 84, 91 (3d Cir.1983) (absent objection, charge reviewed for plain error only); Trent v. Atlantic City Elec. Co.,  334 F.2d 847, 859 (3d Cir.1964) (same).

B. Constitutional Law OCF also argues that the charge was constitutionally infirm. It complains of the trial court's alleged (1) inadequate instruction on the dual goals of punitive damages; (2) failure to instruct the jury that it must take into consideration the character and degree of the wrong as shown by the evidence; and (3) inadequate post-trial review.

Before turning to the merits of OCF's constitutional challenge, we conclude that OCF failed to preserve the objection in (2) above under Rule 51. Following the jury charge, OCF objected that it was "unconstitutionally uninformed" because "it does not provide standards for the jury upon which to base an award of punitive damages." App. at 1778. This general objection alone was not specific enough to inform the court how to provide clearer standards.

OCF's proposed jury instruction did not contain language requiring the jury to consider the character and degree of the wrong to the plaintiff, see App. at 1636-38, and it never objected on that ground. The only objection we can find that remotely resembles the point now urged on appeal stems from OCF's suggestion that the amount of punitive damage