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FEATURED CASE

MESOTHELIOMA TRIAL RESULTS IN $13.2 MILLION AWARD, INCLUDING $6 MILLION IN PUNITIVE DAMAGES


James Mills, a Robert W. Johnson testifying economist, was retained to provide economic testimony on the financial condition (economic health, wealth & status) and ability to pay of punitive damages for Kaiser Gypsum Co., Inc.

Location: San Francisco, California

Case: Melvin Desin v. Asbestos Corporation Limited, et al.

Court: Superior Court of San Francisco County, Case No. CGC-11-275881.

Plaintiff’s Attorneys: Gilbert L. Purcell of Brayton Purcell, L.L.P. and Christopher Hersom (second chair).

Judge: Honorable Suzanne Bolanos.

Case Synopsis: Mr. Desin has been battling asbestos-caused mesothelioma, an invariably fatal cancer of the lining of the lungs caused exclusively by asbestos, since his diagnosis in April of 2011.

Mr. Desin served in the United States Coast Guard and worked as an electrician at numerous residential sites and commercial buildings throughout San Francisco between 1953 and 1997, when he retired from working in the electrician trade. Mr. Desin worked directly with asbestos-containing products and near others that used and distributed asbestos-containing products.

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At trial, plaintiffs presented evidence showing that the knowledge of hazards of exposure to asbestos dates from prior to the 1920’s. Indeed, knowledge of its dangers had progressed to the point of knowing it caused cancer as early as the 1950’s.

Mr. Desin sued Kaiser Gypsum Company, Inc., a manufacturer of asbestos-containing joint compounds, and Union Carbide Corporation, a supplier of asbestos fiber to joint compound manufacturers. Mr. Desin’s counsel argued that Union Carbide was negligent for supplying the asbestos fiber to Kaiser Gypsum and that Kaiser Gypsum was negligent for continuing to create the asbestos containing products without any warnings.

Kaiser Gypsum’s counsel argued that Mr. Desin’s exposure to Kaiser asbestos-containing joint compounds was not large enough in dose to cause Mr. Desin’s mesothelioma. Counsel also argued that exposure to the type of asbestos used in Kaiser Gypsum’s joint compounds, chrysotile asbestos, does not cause mesothelioma.

Mr. Desin sought recovery of $260,939 in damages for his medical costs and an additional, unspecified amount of damages for this pain and suffering. In addition, Mr. Desin sought punitive damages for Kaiser Gypsum’s alleged oppression and malice.

Result: On October 25, 2012, after a nine week trial and 2½ days of deliberations, the San Francisco jury found Gypsum Kaiser Company, Inc. negligent. In addition, they found that the Company’s asbestos-containing joint compounds were defectively designed and that the company failed to warn of the defects. The verdict consisted of $507,939 in economic damages and $6,720,000 in non-economic damages for a total of $7,227,939.

Punitive Damages Testimony: Mr. Mills testified not only to Kaiser Gypsum’s current financial health, wealth and economic status, but also as to the history of their financial condition and specifically, the current value of the assets the company had divested in the 1970’s and 1980’s.

Mr. Mills was provided documentation showing that Kaiser Cement & Gypsum received net cash of $28 Million in 1978 for the sale of “almost all of its Gypsum assets…”, and that Kaiser Cement & Gypsum had an after-tax gain of $7.8 Million on that sale. Further evidence in the case showed that, also in 1978, Kaiser Gypsum Co., Inc. sold its St. Helens, WA plant to Owens-Corning Fiberglass for $6 Million. Finally, these same documents showed that Kaiser Gypsum Co, Inc. sold its Delanco, NJ plant to U.S. Gypsum Co. in 1981 for over $4 Million.

Mr. Mills then estimated the current value of the proceeds from each of these sales, assuming that they had been invested in either U.S. Government Treasuries, the stock market (Dow Jones Index), or in investments that mirrored inflation. The result of these calculations was that the current value of the combined assets would have been between $155.0 Million and $666.1 Million.

Additionally, during trial and while on the witness stand, Mr. Mills was shown Kaiser Gypsum’s income tax returns. Without having time to completely analyze the documents, Mr. Mills was able to explain to the jury that the only way for the company to maintain a constant net worth, while at the same time setting aside funds to pay asbestos claims, was if another entity was funding those claims through Kaiser Gypsum. On November 2, 2012, the jury awarded Mr. Desin $6 million in punitive damages.

Attorney’s Comments: "Mr. Mills helped the jury to understand the true financial condition of the defendant. Although the defendant has not operated for decades, Mr. Mills was able to examine historical documents, including old news releases, and explain to the jury in clear and understandable terms how that information revealed the defendant’s actual financial condition. Mr. Mills was able to take tax return information received during trial and convey that data to the jury in a way that supported his opinions and assisted them in their task.”