Exxon Mobil Corporation v. Minton

Citation: Not availableDocket: 111775

Court: Supreme Court of Virginia; January 9, 2013; Virginia; State Supreme Court

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Exxon Mobil Corporation faces an appeal following a jury verdict that awarded damages to Connie Minton, executor of Rubert E. Minton's estate, for injuries attributed to mesothelioma, which Minton developed due to asbestos exposure while working at Newport News Shipbuilding and Dry Dock Company. Minton, who was employed at the Shipyard from 1956 to 1993, alleged that Exxon failed in its duty to warn and protect him from asbestos hazards associated with its vessels. Apart from direct exposure to asbestos while not working on Exxon ships, Minton supervised repairs on vessels frequently brought to the Shipyard by Exxon.

The jury awarded Minton $12 million in compensatory damages, plus around $431,000 for medical expenses and $12.5 million in punitive damages. Exxon's appeal asserts several points of error, including claims that the evidence did not sufficiently demonstrate Exxon's active control over Minton's work, that it failed to intervene despite knowledge of safety risks, and that Minton's mesothelioma was not causally linked to Exxon's breach of maritime duty. Exxon also challenged the exclusion of evidence regarding the Shipyard's knowledge of asbestos hazards and existing safety measures, as well as the punitive damages awarded.

The case was reviewed under the standard that evidence is viewed in favor of the jury's verdict, and the court will not overturn the judgment unless it is clearly unsupported by evidence. Ultimately, the appellate court reversed and remanded the decision, indicating that some legal errors may have occurred during the trial regarding the sufficiency of evidence and the court's rulings on damages.

Under 33 U.S.C. 905(b) of the Longshore and Harbor Workers' Compensation Act (LHWCA), vessel owners are required to exercise ordinary care in maintaining their vessels and equipment to ensure safe loading and unloading by experienced stevedores. The LHWCA protects ship repairmen and shipbuilders. Prior to the 1972 amendments, vessel owners could be held liable for a worker's injuries through a negligence standard or by proving the vessel was unseaworthy, with no fault needed for unseaworthiness claims. The 1972 amendments shifted the standard to require proof of negligence and eliminated unseaworthiness claims against vessel owners. Consequently, injured workers must demonstrate that the vessel owner breached a duty owed to them.

The Supreme Court case Scindia Steam Navigation Co. v. De Los Santos established three duties of care owed by vessel owners to shipyard workers: the turnover duty, the active control duty, and the duty to intervene. In the current appeal, Exxon contends that the evidence at trial was insufficient to establish a breach of these duties. The court found sufficient evidence for a reasonable jury to conclude that Exxon breached both the active control duty and the duty to intervene. 

Regarding the turnover duty, the court agreed with Exxon that Minton waived this argument during the trial. Under the active control duty, a vessel can be liable if it actively participates in cargo operations. Exxon argued that its involvement was limited to general oversight and that Minton failed to prove Exxon actively controlled the repair work. However, the court disagreed, indicating that Minton only needed to show that Exxon had substantial control over the area, the instrumentality causing the injury, or the specific activities performed by the stevedores. Evidence of any one of these factors would establish the active control duty.

Exxon exerted significant control over the Shipyard's activities, as evidenced by testimony from C. Lloyd Ware, a former estimating supervisor, who indicated that Exxon's port engineer held 'overall authority,' limiting the Shipyard's ability to direct Exxon's crew. Exxon's 1974 Repair Procedures confirmed this authority, assigning the Repair Inspector the responsibility for supervising the overhaul and issuing instructions. Julian Draper, a pipefitter foreman, corroborated this by detailing how the Shipyard's foremen communicated with Exxon's engineers to ensure job orders were clear and met Exxon's standards, often requiring consultation before commencing work. Even when consultation was not mandated, job orders contained detailed specifications for repairs, supporting a reasonable jury's conclusion that Exxon had a duty to Minton based on its control over Shipyard employees' activities.

Additionally, evidence indicated the presence of asbestos on Exxon's vessels during Minton's employment from 1966 to 1977, despite Exxon's claims of using substitutes. Minton presented piecework orders for the Exxon New Orleans that listed various asbestos materials, and multiple witnesses testified to the continued use of asbestos during this period, affirming that it was standard practice on Exxon vessels.

The concept of a duty to intervene arises when a shipyard's judgment is clearly flawed, and the vessel owner is aware of a hazardous condition that poses unreasonable risk to longshoremen. To establish this duty, Minton needed to demonstrate that Exxon had actual knowledge of the dangerous condition and that the Shipyard could not be relied upon to address it. Exxon contended that Minton failed to provide evidence of actual knowledge regarding the dangerous conditions he faced, asserting that he only showed Exxon should have been aware of the risks, which does not meet the required standard for establishing a duty to intervene.

Exxon had actual knowledge of the dangerous conditions posed by asbestos exposure dating back to the 1930s, as confirmed by testimonies from key personnel. James W. Hammond, Exxon's director of industrial hygiene, acknowledged awareness of pulmonary injury risks from asbestos, while Dr. Neill Kendall Weaver, Exxon's associate medical director, noted that industrial hygienists were informed of these dangers and that Exxon implemented precautionary measures in its refineries. Dr. Weaver also indicated that during the 1950s, Exxon's hygienists documented asbestos dust levels on vessels. By 1964, the scientific community recognized the link between asbestos and mesothelioma, a fact reinforced by Dr. R.E. Eckhardt’s attendance at a significant asbestos conference, where he concluded that exposure was a serious issue that needed to be addressed to protect workers and bystanders.

Moreover, Minton's evidence demonstrated Exxon's awareness that the Shipyard would not sufficiently safeguard workers from asbestos hazards. A 1972 directive from Exxon’s head port engineer prohibited asbestos use on vessels and mandated safety precautions, yet testimony from Shipyard staff revealed a lack of observed safety measures or warnings from Exxon crew members regarding asbestos hazards during the 1960s and 1970s. This established a substantial risk of injury due to Exxon's failure to act on its knowledge of the dangers associated with asbestos exposure.

Ware testified that Shipyard workers lacked showers and clean clothing while working with asbestos and did not see anyone, including Exxon workers, using respirators or observing safety warnings. Dr. David Egilman, Minton's physician, highlighted the severe risks of these conditions, likening the lack of warnings to a silent fire alarm in a theater. If the jury accepted the evidence regarding Exxon's awareness of asbestos dangers during Minton's employment and the Shipyard's failure to protect workers, it could conclude that Exxon had actual knowledge of the unsafe environment and unreasonably failed to protect Minton.

Exxon challenged the sufficiency of evidence linking its breach of duty to Minton's injury, arguing that expert testimony indicating prior asbestos exposure could independently cause mesothelioma undermined causation claims against them. However, the court disagreed, asserting that evidence was adequate for a reasonable jury to find Exxon’s actions significantly contributed to Minton's injury. Established maritime law permits an injured party to seek full damages for an indivisible injury caused in part by a tortfeasor's negligence, even when other negligence contributed. The jury was tasked with determining if Minton's asbestos exposure on Exxon's vessels was a substantial factor in his mesothelioma development. They were instructed that “substantial” refers to the quality of the exposure, not merely its quantity, allowing them to conclude that the presence of uncontrolled asbestos on Exxon vessels contributed significantly to Minton's harm based on uncontested expert testimony.

Evidence shows that asbestos was present on Exxon vessels during the 1960s and 1970s, with Minton spending significant time on these ships as a ship repair staff supervisor. He was exposed to asbestos without safety protections or awareness of the risks, particularly during daily repairs that involved disturbing asbestos insulation, which released harmful dust into the air. Testimony from Dr. Egilman and Dr. Maddox linked Minton's health issues to his exposure on the vessels, asserting that work on asbestos-insulated pumps significantly contributed to his injuries. 

Exxon contested the circuit court's exclusion of evidence regarding the Shipyard's knowledge of asbestos risks and its safety measures, arguing that this omission led the jury to mistakenly believe Exxon had exclusive knowledge and responsibility for Minton's safety. Minton countered that such evidence was irrelevant, asserting that it aimed to shift blame to a statutorily immune employer and did not pertain to Exxon's duty of care or the necessary proof elements regarding the Shipyard's conduct. Minton maintained that the exclusion was appropriate as it did not affect the core issues of the case.

Discretionary exclusion of evidence by a trial court is upheld on appeal unless there is clear evidence of an abuse of discretion, which occurs if significant factors are not considered. The 1972 amendments to the Longshore and Harbor Workers' Compensation Act (LHWCA), as interpreted by the Supreme Court, outline the vessel owner's standard of care towards injured workers, comprising three duties: the turnover duty, the active control duty, and the duty to intervene. 

The turnover duty requires the vessel owner to ensure the vessel is free from hidden dangers. The active control duty mandates that the owner must take reasonable care to prevent injuries to longshoremen in areas under the vessel's control. The duty to intervene necessitates that the vessel owner must act if they have actual knowledge of an unsafe condition that the stevedore is failing to remedy, especially if the stevedore's actions are deemed obviously improvident.

Although all three duties relate to the vessel owner's actions, the duty to intervene uniquely considers the employer's role in allowing unsafe conditions to persist. For a jury to assess if the vessel owner unreasonably failed to intervene, evidence is needed to demonstrate that the vessel owner could not reasonably rely on the shipyard's provision of safety measures. The shipyard has its own duty to ensure a safe working environment and is expected to perform this without the vessel owner's oversight. A vessel owner's duty to intervene is contingent upon the employer's knowledge and capability to protect its employees; without evidence showing the employer's failure to act, the vessel owner is not obligated to anticipate or counteract any inaction by the ship repairer.

Sufficient evidence must demonstrate that a vessel owner could not rely on an employer's expertise to necessitate the owner's overrule of a ship repairer's judgment regarding hazards. The circuit court deemed the Shipyard's knowledge of asbestos exposure and its intent to address it irrelevant; however, such evidence is crucial in assessing Exxon's duty to intervene for worker Minton's safety. Evidence presented by Exxon included the Shipyard's safety programs, such as annual physicals, use of respirators, and wet-down techniques, which could support Exxon's argument that it reasonably relied on the Shipyard's protections. The trial court's exclusion of this evidence was an error, as it could have influenced the jury's decision on Exxon's duty to intervene versus a separate active control duty. Consequently, the judgment was reversed.

Regarding punitive damages, Exxon argues that 33 U.S.C. 905(b) limits remedies against vessel owners for negligence, precluding punitive damages. Minton counters that the statute is silent on punitive damages, thus allowing for their recovery under common law, which is applicable to federal maritime claims. There is precedent supporting Minton's interpretation, with courts finding the statute does not preclude punitive damages, affirming their availability under maritime law.

The interpretation of 33 U.S.C. 905(b) as allowing punitive damages was rejected, based on the statute's plain language. The court reviewed this legal question de novo, referencing established Supreme Court precedent that punitive damages are available under federal maritime law unless explicitly restricted by legislation. The Longshore and Harbor Workers' Compensation Act (LHWCA) was identified as such legislation, as its wording confines remedies for negligence claims to those specified within the statute, excluding punitive damages. Prior case law supports this interpretation, confirming that the LHWCA creates an exclusive workers' compensation framework for maritime workers without provision for punitive damages. Consequently, the court concluded that the $12,500,000 punitive damages award was improperly granted and that punitive damages are not available under the LHWCA. The court reversed the circuit court's judgment, including its exclusion of evidence regarding the Shipyard's knowledge of asbestos danger, and remanded for further proceedings. Justice McClanahan concurred in part and dissented in part, agreeing with the majority's findings on Exxon’s violations of certain duties.

Disagreement exists regarding the trial court's exclusion of evidence concerning the Shipyard's knowledge of asbestos dangers and its protective policies for workers. The assertion is made that this evidence is irrelevant to Exxon's duty to protect shipyard workers, as established by Minton's proof that Exxon had a duty to intervene. Under Title 33 U.S.C. 905(b) of the Longshore and Harbor Workers' Compensation Act (LHWCA), a shipyard worker can seek punitive damages in a negligence action against a shipowner.

The Scindia duty to intervene is outlined as the shipowner's obligation to act if it is aware of a dangerous condition arising from an independent contractor's operations and recognizes that the contractor will not adequately protect its workers. Evidence presented by Minton indicates that Exxon was aware of asbestos hazards since the 1930s and that the Shipyard took no action to control asbestos exposure during Minton's eleven-year tenure on Exxon's ships. 

Despite the majority's conclusion that the Shipyard's knowledge and policies were relevant to Exxon's duty to intervene, this position is deemed inconsistent with the finding that the Shipyard failed to protect its workers. The Shipyard's inaction triggered Exxon's duty to intervene, which cannot be negated by evidence of the Shipyard's policies or knowledge that were not implemented. For evidence to be relevant, it must logically pertain to a fact at issue, and in this case, the Shipyard's knowledge and policies do not relate to Exxon's duty to act. The majority's assertion that a shipowner only has a duty to intervene if the Shipyard lacks knowledge or intent contradicts established standards for the duty to intervene.

The shipyard's failure to protect its workers from a dangerous condition during shipboard operations negates any requirement for the shipowner to have prior knowledge or intent regarding the shipyard's inaction. Once the shipowner becomes aware of the hazardous situation, it has a duty to intervene on the workers' behalf. The trial court correctly excluded evidence regarding the shipyard's asbestos knowledge and policies, as the shipowner's initial lack of duty to anticipate the shipyard's inaction is irrelevant.

Additionally, a shipyard worker covered under the Longshore and Harbor Workers' Compensation Act (LHWCA) is legally permitted to pursue punitive damages against a shipowner for negligence under 33 U.S.C. § 905(b). This section allows injured workers to sue the vessel for negligence, independent of any claims related to unseaworthiness. The 1972 amendment to § 905(b) preserved the right to recover for negligence while eliminating the right to recover for unseaworthiness. Furthermore, federal courts have recognized the availability of punitive damages in maritime tort actions, affirming that such damages can be pursued under general maritime law unless explicitly excluded by Congress.

Section 905(b) of the Longshore and Harbor Workers' Compensation Act (LHWCA) does not specify the types of damages recoverable for injuries caused by a vessel's negligence, allowing an injured party or their representatives to file a lawsuit against the vessel. The accompanying House Report from the 1972 amendments clarified that the vessel remains responsible for addressing known dangerous conditions and that negligence determinations should follow established tort law principles. Federal statutory construction principles dictate that statutes should not alter common law beyond their explicit wording. The Supreme Court in *Townsend* affirmed that punitive damages are available under general maritime law unless explicitly removed by legislation. Supporting this view, at least one federal court has ruled that punitive damages can be sought under 905(b). 

While the last sentence of 905(b) restricts a worker's remedy against a shipowner to a negligence action, it does not limit the types of damages that can be claimed. The distinction between "remedies" and "damages" is emphasized, noting that a statutory restriction on remedies does not equate to a restriction on damages. The section does not explicitly depart from the common law practice of permitting punitive damages in maritime claims, and legislative history suggests that courts should continue to apply common law tort principles. Therefore, the author concludes that punitive damages should be permissible for Minton upon remand for further proceedings.