The decisions were handed down as Gov. Whitman and the GOP-controlled legislature prepare to enact controversial changes to the state's civil litigation system, including imposing a ceiling on punitive damages, which are intended to punish and deter.
The unanimous opinions, written by appellate Judge William A. Dreier of Union County, said the system of awarding punitive damages in asbestos and other mass tort litigation had taken on "the attributes of a national lottery" in which, "for essentially the same conduct," some defendants are forced to pay millions of dollars in punitive damages while others pay nothing.
The result, said the court, is that some plaintiffs end up "instant millionaires," and others "merely receive amounts sufficient to pay their attorneys or trial expenses or nothing at all."
Such a result "is highly questionable," the court said, but it noted that ''the lottery wheel still turns."
The court urged the legislature to develop "a more rational solution" to the current "irrational" system, in which a corporation's assets may be so depleted by random punitive awards that later plaintiffs might end up with nothing.
"At some point the punitive damages must be said to have had their adequate punitive effect," the judge wrote of the awards, which can be made when malice or wanton and willful conduct is found.
As an alternative, the court suggested that such damages be deposited in a government fund "for the general benefit of the larger society that the defendant has harmed."
Both cases involved former workers at the New York Shipyard in Camden who were exposed to asbestos there in the 1950s, developed mesothelioma, a cancer of the lung lining linked to asbestos exposure, and died painful deaths.
Pauline Ripa of Stratford, the widow of Peter Ripa, a mechanics helper and machinist at the shipyards, won $5.5 million in punitive damages from a Superior Court jury in Camden County. That award was reversed yesterday and
sent back for a new trial on the damages. The appellate court upheld a $100,000 punitive award to the South Jersey family of Robert Schiavo, a cleaner who swept up dust from asbestos insulation.
In both cases, Owens-Corning Fiberglas Corp. was the asbestos manufacturer. In both cases, the plaintiffs introduced internal company documents from the 1940s and 1950s warning of the dangers of inhaling asbestos fibers. In both cases, the court found that the trial courts had erroneously admitted the documents without a proper legal foundation.
But there the similarities end.
In case of the $5.5 million punitive award, the court found that the admission of the internal documents into evidence "had the capacity to inflate the verdict significantly" because of their "incriminating nature" and thus was not a harmless error.
In the case with the $100,000 award, by contrast, the court noted that only a "minimal" punitive award was returned by the jury and that it was therefore unlikely that the documents had an "adverse effect."
Thus, although the judge erroneously admitted the documents, the court saw ''no basis . . . to require a new, lengthy and costly retrial where there appears to have been no evidence of an adverse effect" on the jury by the admission of the documents.
Pettit, the lawyer for the families of the asbestos victims, complained that the appellate court had taken a "results-oriented approach" in which the judges initially concluded that the $5.5 million award was wrong and then worked "backward to find a (legal) mistake."
No representative for Owens-Corning was available for comment yesterday. The company, which has paid out $1.5 billion to settle 140,000 asbestos cases and still faces 110,000 more cases, has been pushing in Trenton for changes to the state's tort system that would limit damage awards and make it more difficult to collect them. Last year, Owens-Corning paid an influential lobbyist more than $80,000 to push its position at the Capitol.