Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, Kenneth R. Freeman, Judge.
Waters & Kraus, Paul C. Cook and Michael B. Gurien for Plaintiffs and Respondents.
Sedgwick, Detert, Moran & Arnold, Frederick D. Baker, Kelly J. Savage; Brydon, Hugo & Parker, John R. Brydon and James C. Parker for Defendant and Appellant.
KITCHING, J.
Defendant Foster Wheeler LLC (Foster Wheeler) appeals a $2.66 million judgment in favor of plaintiffs Donna Walmach, Jennifer Orchard, and Julie Pitts. Plaintiffs’ decedent, Richard Walmach (Walmach), died of mesothelioma he contracted from breathing asbestos fibers contained in products manufactured by Foster Wheeler. The jury found in plaintiffs’ favor with respect to their strict liability and negligence causes of action. We affirm.
Plaintiff Donna Walmach is Richard Walmach’s widow, and plaintiffs Jennifer Orchard and Julie Pitts are his daughters.
BACKGROUND
1. Walmach’s Career as a Marine Machinist
Richard Walmach began working as an apprentice marine machinist at the Puget Sound Naval Shipyard in Bremerton, Washington (the shipyard) in February 1965. At the shipyard, Walmach worked as a civilian employee of the United States Navy.
In 1967, Walmach began serving on active duty in the Navy. While in the Navy, Walmach worked as a machinery repairman. He spent most of his time in the Navy stationed in Long Beach, California.
In November 1969, Walmach left the Navy and returned to his apprenticeship at the shipyard. Walmach completed his apprenticeship in 1971. He continued to steadily receive promotions as a marine machinist mechanic at the shipyard and eventually became a foreman. Walmach retired in March 2002.
2. Walmach’s Exposure to Asbestos from Sources Other Than Foster Wheeler
During his 37-year career Walmach worked on hundreds of Navy ships. One of Walmach’s primary duties was to maintain and, if necessary, replace valves and other components of various types of equipment within ships, including generators, turbine forced draft blowers, air ejectors, pumps, condensers and distilling plants.
In order to work on the valves and other components, Walmach removed, installed, groomed, or otherwise disturbed asbestos-containing gaskets, insulation, and packing. Walmach was also required to wire brush the remnants of old gaskets baked onto equipment in order to replace them with new gaskets. Walmach’s removal, installation, grooming and disturbance of gaskets, insulation, and packing caused the release of asbestos particles in the air around him, which he breathed on a daily basis during his service in the Navy and while working at the shipyard.
Each piece of equipment on Navy ships had technical manuals written by the manufacturers. Walmach did not see any warnings regarding the hazards of asbestos in the technical manuals, on the equipment itself, or on the asbestos-containing gaskets, insulation and packing material used in and around the equipment and piping on the ships.
Walmach was able to identify the manufacturer of many of the parts, components and pieces of machinery he worked on. Specifically, plaintiff identified Garlock Company (Garlock) gaskets and packing, Flexitallic Company gaskets, John Crane, Inc. (John Crane) packing, Leslie Controls, Inc. (Leslie), Yarway Corporation (Yarway), Henry Company (Henry), and Crane Company (Crane) valves, Westinghouse Company (Westinghouse) turbines, pumps, condensers, and steam generators, General Motors Corporation (GM) diesel and steam generators, Fairbanks More Company (Fairbanks) diesel generators, Carrier Corporation (Carrier) forced air blowers, and C.H. Wheeler Company (CH Wheeler) condensers.
Walmach was also exposed to ambient asbestos while building his home in the mid-1970s. At that time, Walmach used products containing asbestos while installing sheet rock.
3. Walmach’s Exposure to Asbestos Released from Foster Wheeler’s Boilers
Foster Wheeler was one of three companies that supplied boilers to the Navy. Pursuant to Navy specifications, Foster Wheeler manufactured boilers with certain amounts of insulation. Foster Wheeler’s boilers included insulation that contained asbestos particles. The Navy paid Foster Wheeler to supervise the assembly of its boilers on Navy ships, including the installation of asbestos-containing insulation. Foster Wheeler did not place warnings regarding the hazards of asbestos in its operating or instruction manuals that came with its boilers, or on the nameplate placed on the outside of its boilers.
As a machinist, it was not Walmach’s job to repair boilers. However, he worked on equipment in close proximity to boilers, and would sometimes sit on boilers to do his work. On many occasions while Walmach was four to ten feet away from a boiler, other workers used jackhammers to remove asbestos-containing insulation in and around the boilers. This caused a tremendous amount of dust that was released into the air which Walmach breathed.
The record is clear that Walmach was exposed to asbestos while working in close proximity to Foster Wheeler boilers and that Walmach was exposed to asbestos while enlisted in the Navy in California. It is unclear, however, whether Walmach worked in or around Foster Wheeler boilers during his tenure with the Navy.
4. Foster Wheeler’s Knowledge of the Hazards of Asbestos
Plaintiffs contend that Foster Wheeler knew or should have known about the hazards of asbestos prior to the time Walmach worked in close proximity to its boilers. By the mid-1960s, information regarding the health hazards of asbestos was available in medical journals. It was clear from the medical literature that exposure to asbestos was associated with respiratory disease, including mesothelioma. Further, plaintiffs introduced evidence that a reasonable jury could have found that Foster Wheeler actually knew about the hazards of asbestos in its products but failed to take any steps to warn individuals who used its products about those hazards.
5. The Navy’s Knowledge of the Hazards of Asbestos
Beginning in the early 1920s, the Navy recognized the potential disease associated with ambient asbestos and identified industrial hygiene measures for controlling asbestos. By 1939, the Navy had a formal industrial health and hygiene program. Dealing with the health hazards of asbestos was an integral part of that program.
By the late 1960s, the Navy was well aware of the hazards related to airborne dust containing asbestos particles. The Navy, however, did not place warning labels on the machinery or equipment Walmach worked on while he was enlisted in the Navy or during the time he worked as a civilian employee at the shipyard.
6. Walmach’s Mesothelioma
Walmach was diagnosed with malignant pleural mesothelioma in January 2006. He died from the disease in June 2006. Walmach contracted mesothelioma as a result of his exposure to asbestos. Plaintiffs’ medical expert testified that Walmach’s exposure to asbestos released from Foster Wheeler’s products was a significant contributing factor to Walmach contracting mesothelioma.
7. The Verdict and Judgment
Plaintiffs initially sued over two dozen defendants. However, plaintiffs reached settlement agreements with, or dismissed, all of the defendants except Foster Wheeler prior to the commencement of opening statements at the trial.
The jury returned a special verdict in favor of plaintiffs on their strict liability and negligence causes of action. In response to questions asked by the court, the jury found the following. Walmach was exposed to asbestos fiber from Foster Wheeler equipment. There was a defect in Foster Wheeler equipment in that there was a failure to warn of the potential risks which were known or knowable. There was also a defect in the design of Foster Wheeler equipment in that it failed to perform as safely as an ordinary user would expect. In addition, Foster Wheeler was negligent. The defects in Foster Wheeler’s equipment and Foster Wheeler’s negligence were substantial contributing factors in causing Walmach’s malignant mesothelioma.
The jury awarded plaintiffs $950,895.26 in economic damages, $2,200,000 in noneconomic damages, and $2,000,000 in punitive damages. The jury apportioned the fault for plaintiffs’ injuries as follows: 30 percent to Foster Wheeler, 60 percent to the Navy, 10 percent to Walmach, and 0 percent to defendants GM, Fairbanks, Crane, Garlock, Yarway, Leslie, John Crane, Westinghouse, Carrier, Flexitallic, Henry and CH Wheeler. The court entered judgment in the amount of $2,660,000 in favor of plaintiffs and against Foster Wheeler.
The $2.66 million award can be arrived at by multiplying plaintiffs’ noneconomic damages by 30 percent and adding the punitive damages. Although the record is not clear, it appears that the trial court offset the entire amount of plaintiffs’ economic damages with settlement proceeds plaintiffs received from other defendants.
Foster Wheeler filed a motion for judgment notwithstanding the verdict and motion for a new trial, wherein it raised the arguments it makes on appeal. Both motions were denied. This appeal followed.
CONTENTIONS
Foster Wheeler argues that the trial court erroneously denied its post-trial motions. Foster Wheeler’s primary substantive argument is that it cannot be held liable under a negligence or strict liability cause of action for failing to warn the Navy or its employees, including Walmach, about the hazards of asbestos because the Navy was a “sophisticated user” of asbestos with full knowledge of its hazards. The trial court therefore should have entered judgment in its favor notwithstanding the verdict. At a minimum, Foster Wheeler argues, the trial court committed reversible error by refusing to instruct the jury on Foster Wheeler’s “sophisticated user” defense. Foster Wheeler contends that this error entitles it to a new trial.
An order denying a motion for JNOV is appealable. (Code Civ. Proc., § 904.1, subd. (a)(4).) “An order denying a motion for new trial is nonappealable. [Citation.] Such an order, however, may be reviewed on appeal from the underlying judgment.” (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 18.)
Alternatively, Foster Wheeler argues that it was entitled to a new trial because substantial evidence does not support the jury’s apportionment of fault. Foster Wheeler contends that no rational jury could have found Foster Wheeler 30 percent at fault for plaintiffs’ damages while finding Foster Wheeler’s co-defendants 0 percent at fault.
In addition, Foster Wheeler argues that the award of punitive damages cannot stand because the trial court was not permitted to punish Foster Wheeler for conduct that occurred outside of California. At a minimum, Foster Wheeler argues, the trial court erroneously denied its proposed jury instruction regarding the limitations of the jury’s power to impose punitive damages based on Foster Wheeler’s out-of-state conduct. We address each of Foster Wheeler’s arguments in turn.
DISCUSSION
1. Standards of Review
“The trial court has limited discretion to grant a motion for judgment notwithstanding the verdict. It may grant it only when there is no substantial evidence to support the verdict.” (Campbell v. Cal-Gard Surety Services, Inc. (1998) 62 Cal.App.4th 563, 570 (Campbell).) “Substantial evidence is not any evidence—it must be reasonable in nature, credible, and of solid value.” (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 51.) “On appeal we resolve conflicts in the evidence and draw all reasonable inferences in favor of the verdict.” (Campbell, at p. 570.)
We review the jury’s apportionment of fault under the substantial evidence standard, resolving all conflicts of evidence in support of the verdict. (Rosh v. Cave Imaging Systems, Inc. (1994) 26 Cal.App.4th 1225, 1234.) We “ ‘may not substitute [our] judgment for that of the jury or set aside the jury’s finding if there is any evidence which under any reasonable view supports the jury’s apportionment. [Citation.]’ ” (Ibid.)
We review de novo whether proposed jury instructions correctly stated the law. (See Isip v. Mercedes-Benz USA, LLC (2007) 155 Cal.App.4th 19, 24.) If a trial court erroneously denies correct, nonargumentative jury instructions, we must reverse the judgment when “there is a reasonable probability that in the absence of the error, a result more favorable to the appealing party would have been reached.” (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574.)
2. We Do Not Reach the Issue of Whether Foster Wheeler Prevails on Its Sophisticated Intermediary Defense Because Plaintiffs Prevailed on Their Design Defect Claim
In Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 61 (Johnson), our Supreme Court held that the “sophisticated user” defense applies in California. “The sophisticated user defense exempts manufacturers from their typical obligation to provide users with warnings about the products’ potential hazards. [Citation.] The defense is considered an exception to the manufacturer’s general duty to warn consumers, and therefore, in most jurisdictions, if successfully argued, acts as an affirmative defense to negate the manufacturer’s duty to warn.” (Id. at p. 65.)
“Under the sophisticated user defense, sophisticated users need not be warned about dangers of which they are already aware or should be aware. [Citation.] Because these sophisticated users are charged with knowing the particular product’s dangers, the failure to warn about those dangers is not the legal cause of any harm that product may cause. [Citation.] The rationale supporting the defense is that ‘the failure to provide warnings about risks already known to a sophisticated purchaser usually is not a proximate cause of harm resulting from those risks suffered by the buyer’s employees or downstream purchasers.’ ” (Johnson, supra, 43 Cal.4th at p. 65.)
In Johnson, the plaintiff was a trained and certified heating, ventilation, and air conditioning (HVAC) technician. (Johnson, supra, 43 Cal.4th at p. 61.) The plaintiff asserted negligence, strict liability failure to warn, strict liability design defect, and breach of implied warranties causes of action based on the defendant’s alleged failure to warn the plaintiff of the potential hazards of exposure to R-22, a refrigerant commonly used in large air conditioning systems. (Id. at p. 62.) The California Supreme Court held that as an HVAC technician, the plaintiff knew or should have known about the hazards of R-22 exposure. (Id. at p. 74.) The court thus affirmed the granting of summary judgment in favor of the defendant. (Id. at p. 75.)
The Johnson court did not address the situation we face here. Foster Wheeler does not claim that Walmach was a sophisticated user in the same way the plaintiff was in Johnson. Instead, Foster Wheeler contends that Walmach’s employer, the Navy, was a “sophisticated user.” Plaintiffs do not dispute that the Navy was sophisticated, that is, it knew or should have known about the dangers of asbestos. Rather, relying on comment n to section 388 of the Restatement Second of Torts, plaintiffs argue that Foster Wheeler cannot escape liability unless it shows that it reasonably believed that the Navy warned or would warn Walmach. Foster Wheeler disputes that it must make any such showing.
Plaintiffs refer to the Navy as a “sophisticated intermediary.” Whether the Navy is called a “user,” “intermediary,” or “purchaser” is of little importance; the substantive issues remain the same. We find that the term “intermediary” more accurately describes the Navy’s role in the context of product liability cases than the term “user.”
We do not reach the merits of Foster Wheeler’s sophisticated intermediary defense. A judgment is presumed correct unless the appellant affirmatively shows otherwise. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Further, an appellant has the burden to show not only that the trial court erred but also that the error is prejudicial. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475; Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1069.) An error is not prejudicial if independent grounds unaffected by the error support the judgment. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 19; Estate of Beard (1999) 71 Cal.App.4th 753, 776-777.)
Here, in addition to prevailing on its causes of action for negligence and strict liability based on a failure to warn (failure to warn claim), plaintiffs also prevailed on their strict liability cause of action based on a design defect (design defect claim), which is an independent basis for the judgment. The jury was given separate instructions regarding plaintiffs’ design defect claim. Those instructions did not include any statements regarding Foster Wheeler’s alleged failure to warn Walmach about the hazards of asbestos. The jury was also asked questions relating to each of plaintiffs’ causes of action. With respect to the design defect claim, the jury found that there was “a defect in design of Foster Wheeler equipment in that it failed to perform as safely as an ordinary user would [expect].”
With respect to plaintiffs’ failure to warn claim, the jury found that there was “a defect in Foster Wheeler equipment in that there was a failure to warn of the potential risks which were known or knowable in light of generally recognized and prevailing best medical and scientific knowledge at the time of manufacture and distribution.”
While the sophisticated intermediary defense is relevant to plaintiffs’ negligence and failure to warn claims, Foster Wheeler has not convinced us it is relevant to plaintiffs’ design defect claim. (See Morgen Industries, Inc. v. Vaughan (Va. 1996) 471 S.E.2d 489, 493.) Moreover, apart from its sophisticated intermediary defense, Foster Wheeler did not argue that there was insufficient evidence to support the jury’s verdict regarding plaintiffs’ design defect claim. Accordingly, we must presume that there was sufficient evidence to support the jury’s verdict with respect to that claim, and we must affirm the judgment regardless of whether the trial court committed errors with respect to plaintiffs’ failure to warn and negligence claims. (See Leoni v. Delany (1948) 83 Cal.App.2d 303, 309; Berger v. Southern Pac. Co. (1956) 144 Cal.App.2d 1, 6; Bresnahan v. Chrysler Corp. (1998) 65 Cal.App.4th 1149, 1153-1154.)
Foster Wheeler’s reliance on Bojorquez v. House of Toys, Inc. (1976) 62 Cal.App.3d 930 is misplaced. There, the plaintiff brought a failure to warn claim, not a design defect claim. (Id. at p. 932.) Likewise, Johnson is distinguishable because in that case the plaintiff apparently did not dispute that all of his causes of action were based on the defendant’s failure to warn. (See Johnson, supra, 43 Cal.4th at p. 62 [“In each cause of action, plaintiff’s theory was that defendant knew that servicing the evaporator would create harmful phosgene gas, but defendant failed to provide plaintiff with an adequate warning”].) In this case, by contrast, plaintiffs contend that their design defect claim is independent of their failure to warn and negligence claims.
2. There Was Substantial Evidence Supporting Jury’s Apportionment of Fault
We turn to Foster Wheeler’s argument regarding the jury’s apportionment of fault. This argument is interwoven with the issue of causation. We thus begin our analysis by reviewing the relevant law relating to causation in product liability cases arising from asbestos exposure.
Causation is an element of both negligence and strict liability causes of action. (Thomas v. Lusk (1994) 27 Cal.App.4th 1709, 1716, fn. 3.)
Although there is consensus in the scientific community that exposure to asbestos can cause mesothelioma and other respiratory disease, it is often difficult to trace the etiology of the disease in a particular individual. “At the most fundamental level, there is scientific uncertainty regarding the biological mechanisms by which inhalation of certain microscopic fibers of asbestos leads to lung cancer and mesothelioma.” (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 974 (Rutherford).) Plaintiffs therefore are not required “to prove the scientifically unknown details of carcinogenesis, or trace the unknowable path of a given asbestos fiber.” (Id. at p. 976.)
“In the context of a cause of action for asbestos-related latent injuries, the plaintiff must first establish some threshold exposure to the defendant’s defective asbestos-containing products, and must further establish in reasonable medical probability that a particular exposure or series of exposures was a ‘legal cause’ of his injury, i.e., a substantial factor in bringing about the injury. In an asbestos-related cancer case, the plaintiff need not prove that fibers from the defendant’s product were the ones, or among the ones, that actually began the process of malignant cellular growth. Instead, the plaintiff may meet the burden of proving that exposure to defendant’s product was a substantial factor causing the illness by showing that in reasonable medical probability it was a substantial factor contributing to the plaintiff’s or decedent’s risk of developing cancer.” (Rutherford, supra, 16 Cal.4th at pp. 982-293, fn. omitted.)
The etiology of cancer is beyond the experience of laymen and can only be explained through expert testimony. (Jones v. Ortho Pharmaceutical Corp. (1985) 163 Cal.App.3d 396, 403.) Hence, in order to establish a reasonable medical probability that exposure to a defendant’s product was a substantial contributing factor to the plaintiff’s or decedent’s risk of developing mesothelioma, the plaintiff must present expert testimony. (Id.; Money v. Manville Corp. Asbestos Comp. Fund (Del. 1991) 596 A.2d 1372, 1377.)
If the defendant seeks to assert the defense of concurrent or alternative causes of the plaintiff’s or decedent’s injury, it is the defendant’s burden to show that the plaintiff or decedent was exposed to defective asbestos-containing products of other companies and that the defects of the other companies’ products were legal causes of the plaintiff’s or decedent’s injuries. (Sparks v. Owens-Illinois, Inc. (1995) 32 Cal.App.4th 461, 478.) The defendant also has the burden of proving the percentage of legal cause attributable to the other companies. (Ibid.)
Allocating fault among various defendants is often difficult and complex in asbestos cases. “ ‘Asbestos-containing products do not create similar risks of harm because there are several varieties of asbestos fibers, and they are used in various quantities, even in the same class of product.’ ” (Rutherford, supra, 16 Cal.4th at p. 972.) Further, asbestos products have widely divergent toxicities. (Ibid.) “ ‘This divergence is caused by a combination of factors, including: the specific type of asbestos fiber incorporated into the product; the physical properties of the product itself; the percentage of asbestos used in the product.’ ” (Ibid.)
In this case, there was substantial evidence supporting plaintiffs’ claim that Walmach’s exposure to asbestos contained in Foster Wheeler’s products was a legal cause of Walmach’s death. Viewing the evidence in a light most favorable to plaintiffs, Walmach testified that he was repeatedly exposed to substantial quantities of airborne asbestos from Foster Wheeler products. Further, plaintiffs’ expert testified that within a reasonable degree of medical certainty this exposure was a substantial contributing factor in the development of Walmach’s mesothelioma.
Although it is a closer question, we also conclude that there was substantial evidence supporting the jury’s findings that Foster Wheeler was 30 percent at fault, and that the other defendants were 0 percent at fault. Plaintiffs’ expert, Dr. Arnold Brody, testified that the more an individual is exposed to asbestos the more likely that individual will develop a disease. Dr. Brody further testified that each and every exposure to asbestos “contributes to cause... disease.” However, Dr. Brody did not testify that there was a reasonable medical probability that Walmach’s exposure to the other defendants’ products was a substantial factor contributing to the risk of Walmach developing mesothelioma. Moreover, Foster Wheeler presented no expert testimony of its own regarding the causal nexus, if any, between Walmach’s exposure to the asbestos from the other defendants’ products and Walmach’s mesothelioma. A reasonable jury therefore could have found that Foster Wheeler was 30 percent at fault, while the other defendants were 0 percent at fault.
In its closing argument, Foster Wheeler only briefly alluded to Walmach’s exposure to asbestos from the other defendants’ products. Foster Wheeler did not expressly argue that the other defendants were at fault for Walmach’s death or that the other defendants’ products were defective.
3. The Trial Court Had Authority to Award Punitive Damages Against Foster Wheeler and Did Not Erroneously Deny Foster Wheeler’s Proposed Jury Instruction Regarding Punitive Damages
Foster Wheeler argues that as a matter of law the trial court could not award punitive damages because its alleged tortious conduct occurred in Washington, not California. Alternatively, Foster Wheeler contends that, at a minimum, the trial court committed reversible error by refusing a proposed instruction regarding the limitations of the jury’s authority to award punitive damages. We reject both arguments.
As a preliminary matter, it is important to recognize what this case does not involve. Foster Wheeler does not dispute that the Superior Court of the State of California had personal jurisdiction over Foster Wheeler and there is nothing in the record indicating that Foster Wheeler attempted to change the venue for this case. Further, there is no choice of law issue. Foster Wheeler did not request the trial court or this court to apply Washington law to any issue in the case, including the issue of punitive damages.
Washington does not permit the imposition of punitive damages. (McKee v. AT & T Corp. (Wash. 2008) 191 P.3d 845, 860.)
Foster Wheeler primarily relies on two United States Supreme Court cases. The first is BMW of North America, Inc. v. Gore (1996) 517 U.S. 559 (BMW). In BMW, the defendant BMW, a national distributor of automobiles, implemented a nationwide policy of not advising its dealers, and hence its customers, of predelivery damage to new cars when the costs of repair amounted to less than 3 percent of the car’s suggested retail price. (Id. at p. 562.) The plaintiff sued BMW for compensatory and punitive damages after discovering that his new car had been repainted, without his knowledge, for a cost of about 1.5 percent of its price. (Id. at pp. 563-564.) The plaintiff was awarded punitive damages in the amount of $4 million, which the Alabama Supreme Court reduced to $2 million. (Id. at pp. 564, 567.)
Although BMW introduced evidence that its nondisclosure policy was consistent with the laws of roughly 25 states (BMW, supra, 517 U.S. at p. 565), the plaintiff argued that the large punitive damages award was necessary to induce BMW to change its nationwide policy. (Id. at p. 572.) In rejecting this argument, the United States Supreme Court recognized that the lawmakers of the 50 states made different policy judgments regarding the disclosure obligations of automobile distributors. (Id. at pp. 569-570.) The court further stated that under “principles of state sovereignty and comity... a State may not impose economic sanctions on violators of its laws with the intent of changing the tortfeasors’ lawful conduct in other States.... [B]y attempting to alter BMW’s nationwide policy, Alabama would be infringing on the policy choices of other States.... Alabama does not have the power, however, to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its residents. Nor may Alabama impose sanctions on BMW in order to deter conduct that is lawful in other jurisdictions.” (Id. at pp. 572-573, fns omitted.)
The second Supreme Court case Foster Wheeler relies on is State Farm Mut. Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408 (State Farm). There the plaintiffs brought a bad faith action in Utah state court against their insurance carrier, State Farm, and obtained a $145 million punitive damages award. (Id. at pp. 412-413.) The plaintiffs introduced evidence that State Farm’s conduct was a result of a national scheme to meet corporate fiscal goals, as well as evidence of State Farm business practices in other states that bore no relation to the type of insurance claim underlying the plaintiffs’ bad faith action. (Id. at p. 415.) Much of State Farm’s out-of-state conduct was lawful where it occurred. (Id. at p. 422.) Nevertheless, in affirming the punitive damages award, the Utah Supreme Court explicitly indicated that “State Farm was being condemned for its nationwide policies rather than for the conduct directed toward the [plaintiffs].” (Id. at p. 420.)
The Supreme Court held that the punitive damages award violated State Farm’s right to due process. The court reasoned: “A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypothetical claims against a defendant....” (State Farm, supra, 538 U.S. at p. 423, italics added.)
The high court further stated that in reviewing punitive damages, the courts must consider, among other factors, the degree of reprehensibility of the defendant’s misconduct. (State Farm, supra, 538 U.S. at p. 418.) With respect to the reprehensibility of the defendant’s conduct, the court stated that “[l]awful out-of-state conduct may be probative when it demonstrates the deliberateness and culpability of the defendant’s action in the State where it is tortious, but that conduct must have a nexus to the specific harm suffered by the plaintiff.” (Id. at p. 422.)
The holdings of BMW and State Farm do not support Foster Wheeler’s position. California has not imposed sanctions on Foster Wheeler to deter lawful conduct in Washington. There is no statute or regulation in Washington that expressly makes Foster Wheeler’s conduct “lawful.” In fact, Foster Wheeler’s act of selling a defectively designed product was a tortious act in Washington. (Simonetta v. Viad Corp. (Wash. 2008) 197 P.3d 127, 134.)
The consumer expectation test is used in Washington to determine whether a product is defectively designed. (Thongchoom v. Graco Children’s Products (Wash.Ct.App. 2003) 71 P.3d 214, 217-218.)
Moreover, Foster Wheeler was not punished for a nationwide policy that harmed individuals other than plaintiffs. Foster Wheeler was instead punished only for Walmach’s death and the losses plaintiffs incurred as a result of his death. Indeed, the jury was specifically instructed that “[p]unitive damages may not be used to punish Foster Wheeler for the impact of its alleged misconduct on persons other than Richard Walmach.”
Foster Wheeler’s proposed jury instruction stated: “In considering an award of punitive damages, if any, in this case you may consider only the conduct of Defendant Foster Wheeler, LLC which occurred in the State of California. You may not award punitive damages against Foster Wheeler to punish the defendant for conduct that occurred outside of California.”
The trial court acted within its discretion in rejecting this jury instruction because, as we will explain, it is not a correct statement of the law. “ ‘It is the responsibility of counsel to propose correct instructions and the court has no duty to modify erroneous instructions submitted to it, and there is no error if it simply rejects such instructions. [Citation.]’ ” (Roberts v. City of Los Angeles (1980) 109 Cal.App.3d 625, 630.)
Foster Wheeler’s proposed jury instruction is overbroad. As we previously explained, out-of-state conduct affecting individuals other than the plaintiff may be considered in connection with the issue of reprehensibility so long as there is a nexus to the harm suffered by the plaintiff. (Boeken v. Philip Morris, Inc. (2005) 127 Cal.App.4th 1640, 1693-1694; Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 691.) A fortiori, out-of-state conduct directly affecting the plaintiff is probative with respect to the reprehensibility of the defendant’s conduct.
Furthermore, as a general rule, “[i]n the absence of any federal preemption, a defendant who is subject to jurisdiction in California and who engages in out-of-state conduct that injures a California resident may be held liable for such conduct in a California court.” (Yu v. Signet Bank/Virginia (1999) 69 Cal.App.4th 1377, 1391 (Yu).) Here, while Walmach was a resident of California he was exposed to asbestos supplied by defendants, although the record is unclear as to whether he was exposed to asbestos from Foster Wheeler’s products during that time.
Assuming, arguendo, that Foster Wheeler’s tortious acts only occurred in Washington, the trial court was not prohibited from imposing punitive damages on Foster Wheeler for that conduct. Foster Wheeler does not dispute that the trial court had personal jurisdiction over Foster Wheeler and does not challenge the application of California law to plaintiffs’ claim for punitive damages. Further, plaintiffs only sought punitive damages for conduct that directly related to Walmach, and not for conduct that related to other out-of-state residents or any nationwide policy implemented by Foster Wheeler. Under these circumstances, the comity and due process considerations discussed in BMW and State Farm did not prohibit the trial court from awarding plaintiffs punitive damages.
“Choice of law principles may dictate that California law be applied to out-of-state conduct, even if the conduct is permissible there [citations], and in that sense California may also ‘regulate’ conduct which is ‘lawful’ in other states.” (Yu, supra, 69 Cal.App.4th at p. 1391, fn. 2.) We do not decide whether California law or Washington law would have applied had Foster Wheeler raised a choice-of-law argument.
DISPOSITION
The judgment is affirmed. Plaintiffs are awarded costs on appeal.
We concur: CROSKEY, Acting P. J., ALDRICH, J.