Calif. Court Upholds $2.6 Million Award Against Foster Wheeler

A California appeals court has affirmed a $2.6 million judgment against Foster Wheeler LLC in a Navy exposure suit, rejecting the company's citing of the "sophisticated user" defense and its argument there should be no punitive damages for conduct that occurred outside the state.

In an unpublished opinion the 2nd District Court of Appeal also said there was sufficient evidence to allow a jury to apportion 30 percent of the fault to Foster Wheeler while assigning no fault to other parties.

A Los Angeles jury returned the verdict in May 2007. Walmach et al. v. Aqua-Chem et al., No. BC336186, verdict returned (Cal. Super. Ct., L.A. County May 23, 2007).

According to the lawsuit, Richard Walmach was exposed to asbestos while serving in the Navy at the Puget Sound Naval Shipyard in Washington and as a civilian machinist. He did not work directly on boilers or steam generators but said he was often present when asbestos insulation was being chipped away from them.

Foster Wheeler was one of three companies that supplied boilers to the Navy.

After developing mesothelioma (a fatal form of lung cancer linked to asbestos exposure) in January 2005, Walmach sued several defendants in the Los Angeles County Superior Court.

He died in 2006, and his family pursued the case.

At the start of trial Foster Wheeler was the sole remaining defendant, the others having settled or been dismissed.

Judge Kenneth R. Freeman entered a $2.66 million judgment against Foster Wheeler, representing $2 million in punitive damages and 30 percent of the $2.2 million awarded in noneconomic damages.

The judge denied the company's motions for judgment notwithstanding the verdict and for a new trial.

Foster Wheeler asked the appeals court to review.

It said it cannot be held liable for negligence or failure to warn about the hazards of asbestos because the Navy was a sophisticated user of asbestos with knowledge of its danger.

While the sophisticated-user defense is allowed in California, the appeals court said it would not reach the merits of Foster Wheeler's argument because the verdict was reached on independent grounds.

While the Navy was an allegedly sophisticated user with a presumed duty to warn Walmach of the dangers of asbestos, the court said, this does not apply to the plaintiffs' theory of liability.

"Foster Wheeler has not convinced us it [the sophisticated-user defense] is relevant to plaintiffs' design defect claim," the panel said.

The appeals court also found sufficient evidence to support the jury's decision on the apportionment of fault.

Neither party presented evidence that Walmach's exposure to other defendants' products was a substantial contributing factor to his risk of developing mesothelioma, the court said.

"A reasonable jury therefore could have found that Foster Wheeler was 30 percent at fault, while the other defendants were 0 percent at fault," the panel said.

Finally, the appeals court said that, absent any federal preemption, a defendant subject to jurisdiction in California can be held liable for out-of-state conduct that injures a California resident. Based on this principle, the punitive damages should stand, the court said.

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The plaintiffs are represented by Paul C. Cook and Michael B. Gurien of Waters & Kraus in Los Angeles.Foster Wheeler is represented by Frederick D. Baker and Kelly J. Savage of Sedgwick, Detert, Moran & Arnold and John R. Brydon and James C. Parker of Brydon, Hugo & Parker, both in San Francisco.