## Facts

- Louis L. Dickerson and William L. Zenobia, workers exposed to asbestos-containing products, sued Owens-Illinois, Inc. and other entities for personal injuries.
- The claims against Owens-Illinois were tried primarily as strict products liability for failure to warn, with requests for compensatory and punitive damages.
- The cases were consolidated for trial.
- The jury awarded compensatory damages to both plaintiffs.
- The jury also awarded punitive damages against Owens-Illinois after being instructed that punitive damages could be based on “implied malice,” described as gross negligence or reckless disregard.
- The intermediate appellate court affirmed the punitive damages award.
- Owens-Illinois sought review in Maryland’s highest court, challenging the punitive-damages standard, burden of proof, and related instructions.

## Issues

1. In non-intentional tort cases, including strict products liability failure-to-warn, may punitive damages be awarded on implied malice (gross negligence/reckless disregard), or must the plaintiff prove actual malice?
2. What burden of proof applies to punitive damages claims in Maryland: preponderance of the evidence or clear and convincing evidence?
3. Should Maryland retain a separate punitive-damages rule depending on whether the tort “arose out of” a contract?
4. Under the proper standards, could the punitive damages award stand on this trial record and instructions?

## Decision

- The court held that punitive damages in products liability and other non-intentional tort cases require proof of actual malice, not implied malice.
- The court defined actual malice in this context as actual knowledge of the defect and a conscious or deliberate disregard of the foreseeable harm that might result.
- The court adopted a clear and convincing evidence standard for proving punitive damages.
- The court overruled prior Maryland doctrine that applied different punitive-damages rules depending on whether the tort arose from a contractual setting.
- The court vacated the punitive damages judgment against Owens-Illinois and remanded for a new trial limited to punitive damages under the correct standards, leaving compensatory awards largely intact.

## Legal Principles

- Punitive damages in Maryland non-intentional tort cases are available only upon clear and convincing evidence of actual malice.
- “Actual malice” in a products-liability failure-to-warn setting requires: (1) actual knowledge of the defect and (2) conscious or deliberate disregard of the foreseeable risk of harm.
- Gross negligence, recklessness, or “implied malice” is insufficient to support punitive damages in non-intentional tort cases.
- The same punitive-damages standards apply regardless of whether the tortious conduct occurs in a contractual context; the contract/tort distinction does not control.

## Conclusion

Maryland tightened punitive-damages doctrine by requiring clear and convincing proof that the defendant actually knew of a defect and consciously disregarded foreseeable harm, rejecting gross negligence as a basis for punitive liability and eliminating contract-based variations; because the jury was instructed under the wrong standard, the punitive award was vacated and retried.


Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 601 A.2d 633 (Md. 1992)