Owens-Illinois, Inc. v. Zenobia

In Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 427, 601 A.2d 633 (1992), the plaintiffs each had been exposed to asbestos in the course of their employment in the late 1940s through early 1960s and each had developed pleural and parenchymal asbestosis. The plaintiffs sued numerous manufacturers and suppliers of asbestos-containing products, including Owens-Illinois, Inc. ("O-I"). The cases were tried purely on the theory of strict liability. The jury awarded each plaintiff more than one million dollars in compensatory damages and awarded punitive damages against certain of the defendants, including awards in favor of each plaintiff in the amount of $235,000 against O-I. After this Court affirmed the punitive damages awards against O-I, the Court of Appeals granted certiorari and reversed. As relevant here, the Court addressed the proper standard for the grant of punitive damages under Maryland law. Specifically, it considered "what basic standard of wrongful conduct should be used for the allowance of punitive damages in negligence actions generally, and in products liability actions based on either negligence or on strict liability." Id. at 451. The Court explained that the jurors had been instructed, and this Court had reasoned, that an award of punitive damages can be premised on a finding that the defendant acted with "implied malice," that is, he engaged in grossly negligent conduct or conduct evincing "a wanton and reckless disregard for the rights of others." Id. at 451-52. In contrast, "actual malice" is "characterized by evil motive, intent to injure, fraud, or actual knowledge of the defective nature of the products coupled with a deliberate disregard of the consequences." Id. The Court of Appeals discussed the difference between changing the common law and overruling a previous opinion on the ground that it was wrongly decided. The Court changed the standard of proof for punitive damages from preponderance of the evidence to clear and convincing, and noted that it was not overruling any prior cases, but rather, that this decision constituted a change in the common law. Id. at 469. Consequently, the Court did not apply its decision to all pending cases but instead, while noting that the decision did not relate to the elements of a cause of action, but rather to the requirements at trial, the Court applied it to all trials occurring after the issuance of the opinion. Id. at 470. The Court also overruled prior cases applying an implied malice standard and adopted an actual malice standard. Id. at 472. This ruling was not a change in common law but rather was a recognition that the prior cases had been wrongly decided. Id. at 471. The Court applied the holding to pending cases. Id. at 472.