National Clothesline

A San Francisco Superior Court judge drastically reduced punitive damages against two firms in the Modesto, CA, contamination case last month.

Judge John E. Munter reduced damages against Vulcan Materials Co., to $7.25 million from $100 million. Dow Chemical Co. was ordered to pay $5.5 million, down from $75 million. The verdict for R.R. Street & Co. Inc. remained at $75,000. Judge Munter also rejected a request from the defendants for a new trial.

“We are very pleased,” Jim Colopy, a lawyer representing Vulcan, told The Birmingham News. “We believe there was no evidence of any malicious conduct by Vulcan, which in fact did provide warnings to end users and instructions on how to properly use the chemical.”

The city of Modesto filed the lawsuit in 1998 against 17 defendants, which included Occidental Chemical Corp., PPG Industries Inc. and several local drycleaners in addition to the defendants named above. The suit sought over $100 million to clean up soil and groundwater contamination at more than 30 locations around the city.

Before Munter’s ruling, attorneys Duane Miller and Michael Axline, who represent city of Modesto, say they were prepared to file a second lawsuit — this one involving 35 polluted areas around the city — should the judge drastically reduce the jury’s damages awards.

During the trial, which began in February, attorneys for the city argued that the companies told drycleaners that they could safely dispose their perc waste in the city sewer system.

The city’s lawsuit also contended that the cleaning chemicals are “defective products” even when used correctly and that some manufacturers withheld information about hazards of the chemicals.

In June, a jury granted $3.17 million in compensatory damages and, a few days later, returned a verdict that assessed punitive damages totalling $175 million against Dow, Vulcan and Streets. The city previously reached settlements with other companies named in the suit.

In awarding punitive damages, the jury said that the three companies acted with malice because they failed to tell drycleaners how to use and dispose of chemicals without harming the environment.

During the trial, attorneys for the city argued that the companies told drycleaners that they could safely dispose their perc waste in the city sewer system. The city’s lawsuit also contended that the cleaning chemicals are “defective products” even when used correctly and that some manufacturers withheld information about hazards of the chemicals.

Responding to the jury’s damage award in June, a statement on the Vulcan Materials web site said the company “believes the verdicts are contrary to the evidence presented at trial and the punitive damages are totally without merit, excessive, and in clear contravention of constitutional limits regarding such damages.”

Charles J. Kalil, corporate vice president, general counsel and corporate secretary for Dow, said the jury’s verdict was “without basis” and that “this absurd result will be remedied by the courts.”

Ross Beard, president and CEO of Street’s, said at the time that his “company will pursue all avenues of appeal available to it and vigorously defend the remaining claims in the lawsuit, which the company believes is not only of vital importance to Street, but also to the drycleaning industry as a whole.”

In a hearing in July before Judge Munter, the three companies argued that the verdicts were not supported by the evidence presented during the trial. They challenged the amount of the punitive damages, calling them “excessive” and “without merit.”

Dow attorney Gennaro Filice, told the judge that no evidence was presented during the trial that conclusively linked the company to the pollution.

John Thomas, representing R.R. Street, said testimony during the trial never established when the pollution occurred. He noted that filters made by R.R. Street, designed to catch contaminants such as perc, had not been linked to the contamination.

Miller and Axline, attorneys for the city, said that the award of punitive damages is not to compensate the city but to “punish and deter the defendants’ conduct.”

In an e-mail comment on the case, the National Cleaners Association said the lesson for cleaners is to “always follow the written instructions.”

“Pay less attention to what anyone says about how to handle the chemical and more attention to what the MSDS sheets, labels and other material that has been committed in writing, because that is the information that will be used if the legal question, ‘What did they know, and when did they know it?’ ever comes up in connection with the solvent or materials you are using!”