## Facts

- Owens-Illinois, Inc. manufactured “Kaylo,” an asbestos-containing insulation product, from 1948 to 1958 and then transferred the product line to another manufacturer.
- Kaylo insulation was installed and cut in ways that generated heavy airborne dust in ship compartments and boiler/engine spaces.
- Othello Armstrong worked at a Bethlehem Steel shipyard (1942–1963) and alleged repeated exposure to thick clouds of Kaylo dust while working on ships.
- Forrest Wood worked at a Bethlehem Steel shipyard (1941–1975) and alleged exposure to heavy Kaylo dust while assisting insulation work.
- Armstrong and Wood claimed asbestos-related disease and sued multiple manufacturers on negligence and strict liability theories.
- Frederick Stormer and Dominic Celozzi (in consolidated, procedurally distinct actions) alleged asbestos-related conditions, including pleural plaques/thickening; medical testimony indicated such pleural changes were typically asymptomatic and non-disabling.
- A consolidated trial resulted in plaintiff verdicts (including punitive damages against Owens-Illinois) for Armstrong and Wood, and defense verdicts for defendants in Stormer’s and Celozzi’s cases.
- Owens-Illinois appealed the Armstrong/Wood judgments; Stormer and Celozzi appealed the defense verdicts.

## Issues

1. Whether a Bethlehem Steel asbestos “dust count” report was admissible as a business record.
2. Whether the trial court’s “substantial factor” causation instruction was legally sufficient in a multi-exposure asbestos case.
3. Whether evidence of Kaylo exposure and medical testimony was sufficient to support proximate causation findings against Owens-Illinois.
4. Whether punitive damages were supported by evidence of Owens-Illinois’s knowledge and conduct, and whether multiple punitive awards for the same conduct were impermissible.
5. Whether Maryland’s noneconomic damages cap applied to these claims based on when the causes of action arose.
6. Whether the trial court correctly applied settlement offsets in reducing judgments based on other defendants’ settlements.
7. Whether pleural plaques/thickening, without asbestosis, could support a damages award.

## Decision

- Affirmed the Armstrong and Wood judgments largely in full.
- Upheld exclusion of the dust-count report, finding it lacked the reliability required for admission as a business record.
- Held the substantial-factor causation instruction was adequate and did not require additional asbestos-specific elaboration.
- Found the evidence sufficient for the jury to conclude that Kaylo exposure was a substantial factor in causing Armstrong’s and Wood’s injuries.
- Sustained punitive damages against Owens-Illinois based on evidence of knowledge of asbestos hazards and grossly indifferent conduct; rejected a categorical due process bar on multiple punitive awards on these facts.
- Held the noneconomic damages cap did not apply because the causes of action arose before the statute’s effective date.
- Approved the trial court’s calculation of settlement offsets under Maryland’s statutory scheme.
- Affirmed defense verdicts in Stormer’s and Celozzi’s cases and upheld the instruction barring damages for pleural plaques/thickening alone absent a finding of asbestosis.

## Legal Principles

- A business record must be shown reliable and part of a regular, routine record-keeping practice; investigative or study reports may be excluded when reliability and routine maintenance are not established.
- In Maryland asbestos and other multiple-cause toxic exposure cases, causation may be proved by showing a defendant’s product was a “substantial factor” in producing the harm; plaintiffs need not prove precise dose allocation among multiple products.
- Circumstantial evidence of prolonged work in heavy dust conditions linked to a defendant’s asbestos product, combined with competent medical causation testimony, can support a substantial-factor finding.
- Punitive damages in products cases may be awarded where the defendant acted with the equivalent of actual malice—conscious or deliberate disregard of known, serious risks—supported by evidence of knowledge and failure to warn or protect.
- Statutory caps on noneconomic damages apply prospectively; absent clear legislative intent, they do not apply to causes of action arising before the statute’s effective date.
- Settlement credits and judgment reductions in multi-defendant tort litigation are governed by statute; trial courts must apply the statutory offset method to account for other defendants’ settlements.
- Asymptomatic pleural plaques or pleural thickening, without asbestosis or other compensable impairment, may be treated as non-compensable for damages in tort.

## Conclusion

The court affirmed asbestos verdicts against Owens-Illinois, holding that substantial-factor causation may be established through circumstantial exposure evidence and medical testimony, punitive damages were supported by proof of knowing and indifferent conduct, the noneconomic damages cap was not retroactive, settlement offsets were properly applied, and pleural plaques/thickening alone did not justify damages absent asbestosis.


Owens-Illinois, Inc. v. Armstrong, 591 A.2d 544 (Md. Ct. Spec. App. 1991)