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Availability of Punitive Damages in NYCAL Cases In Limbo

New York’s Appellate Division, First Department, issued its decision yesterday on the New York City Asbestos Litigation (NYCAL) punitive damages/Case Management Order (CMO) issue. While the Appellate Court held that Judge Heitler had the authority to modify the CMO to lift the deferral on punitive damages, it also found that she exceeded that authority to the extent that the order directs applications for a jury charge on punitive damages to be made at the conclusion of the evidentiary phase of trial. As a result, the long-term viability of punitive damages in NYCAL cases is back in question.

The Appellate Court found that the new procedure violates due process in that defendants must be given an opportunity to conduct discovery and prepare a defense with respect a punitive damages claim. The Appellate Court stated that Judge Heitler’s Order “deprives defendants of their rights to due process by leaving them guessing, until the close of evidence at trial, whether or not punitive damages will be sought.”

 

The decision stays the implementation of the Judge Heitler’s Order such that plaintiffs cannot seek punitive damages until such procedural protocols are determined.

The Appellate Court modified Judge Heitler’s Order and remanded the matter to Judge Moulton to determine procedural protocols by which plaintiffs may apply for permission to charge the jury on punitive damages. The decision stays the implementation of the Judge Heitler’s Order such that plaintiffs cannot seek punitive damages until such procedural protocols are determined. Notably, the Court further stated that “this decision does not preclude [Judge Moulton], after consultation with the parties, from reconsidering other aspects of the April Order, including the determination whether to permit claims for punitive damages under the CMO, in the exercise of the court’s discretion, either upon application or at its own instance.”

The Appellate Court’s opinion can be found here.

© 2019 Schiff Hardin LLP

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About this Author

Jill Berry, Litigation Attorney, Schiff Hardin, mass tort resolution lawyer, consumer products legal counsel, manufacturing law, trial representation
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Jill Berry represents companies facing product liability and mass tort risk in some of the most dangerous jurisdictions for defendants in the United States.  Jill is skilled at negotiating complex agreements to control risk, and participates in joint defense initiatives that shape mass tort litigation dockets.  

Jill was a lead member of a team of lawyers that represented The Port Authority of New York and New Jersey in property damage and business loss litigation arising from the collapse of 7 World Trade Center, and in 10,000 lawsuits by first...

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Paul Scudato, LItigation Attorney, Schiff Hardin Law Firm
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Paul A. Scrudato has been a member of Schiff Hardin's Executive Committee since 2015. He has tried numerous successful cases in the New York state and federal courts, and has also been lead trial counsel in federal and state actions in Illinois, Wisconsin, Maryland, Texas, Kentucky, Pennsylvania, and Indiana. Mr. Scrudato focuses his practice in complex litigation, with particular emphasis in product liability and government investigations. He serves as national trial counsel to multiple companies with high-profile litigation and trial exposure, and he has extensive experience in negotiating complex agreements to control clients' trial risk. Mr. Scrudato represented the site owner in the World Trade Center disaster litigation, and negotiated the successful resolution of more than 8,000 lawsuits by first responders.

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