## Facts

- Multiple asbestos product-liability suits against Owens-Corning Fiberglas Corp. (OCF) were consolidated for trial; OCF manufactured and sold asbestos-containing insulation, including “Kaylo,” for decades.
- Plaintiffs alleged exposure to asbestos dust from OCF products caused serious diseases, including mesothelioma and other lung conditions.
- Trial evidence supported findings that OCF learned over time of severe health risks from asbestos exposure, failed to warn adequately, and concealed hazard information while continuing sales.
- In the Texas-law consolidated cases, the jury awarded about $3.03 million in compensatory damages and $1.5 million in punitive damages; the trial court excluded certain defendant-offered mitigation evidence on punitive damages.
- In the Alabama-law consolidated cases tried in Texas, the trial court awarded about $1.6 million in compensatory damages and $3.7 million in punitive damages after settlement credits.
- OCF challenged (1) the exclusion of mitigation evidence in the Texas-law cases and (2) the constitutionality of the punitive awards in the Alabama-law cases, including a claim that prior punitive payments for the same conduct required an aggregate constitutional limit.

## Issues

1. In a Texas punitive-damages proceeding, what categories of defendant-offered evidence are relevant and admissible to mitigate punitive damages beyond net worth, including profitability of the misconduct and prior punitive payments or settlement amounts tied to punitive exposure for the same conduct?
2. Whether punitive damages in the Alabama-law cases are unconstitutional under the Fourteenth Amendment as “grossly excessive,” either individually or when combined with OCF’s prior punitive awards and settlements for the same course of conduct.

## Decision

- The Supreme Court of Texas affirmed the judgments in both sets of consolidated cases.
- The Court held that evidence of (1) the profitability of the defendant’s misconduct and (2) previously paid punitive damages or settlement amounts attributable to punitive exposure for the same course of conduct is relevant and may be admissible to mitigate punitive damages.
- The Court held the trial court’s exclusion of such mitigation evidence in the Texas-law cases was, at most, harmless error and did not require reversal of the punitive award.
- Applying federal due-process standards, the Court held the punitive awards in the Alabama-law cases were not constitutionally excessive.
- The Court rejected a due-process rule that would impose an aggregate constitutional cap on punitive damages based on a defendant’s prior punitive payments for the same conduct.

## Legal Principles

- Punitive damages serve punishment and deterrence; evidence bearing on these aims may be relevant to the amount of punitive damages.
- In Texas, a defendant may seek to mitigate punitive damages with evidence beyond net worth, including:
  - the profitability or financial gain from the misconduct at issue; and
  - previously paid punitive damages or settlement amounts attributable to punitive exposure for the same course of conduct (subject to ordinary evidentiary limits).
- Erroneous exclusion of mitigation evidence does not warrant reversal absent a showing the error probably caused an improper judgment.
- Federal due process limits punitive damages that are “grossly excessive,” assessed using guideposts that include reprehensibility, the punitive-to-compensatory ratio, and comparable civil or criminal sanctions.
- Due process does not require an aggregate limit that bars or caps punitive damages for later plaintiffs based solely on a defendant’s earlier punitive awards for the same conduct.

## Conclusion

The court affirmed punitive-damages awards arising from asbestos exposure and held that defendants may introduce profitability and prior punitive-payment evidence to mitigate punitive damages, while also rejecting a constitutional aggregate-cap theory under the Due Process Clause.


Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35 (Tex. 1998)