General Chemical Corp. v. De La Lastra

HECHT, Justice,

concurring and dissenting.

[Filed Feb. 24, 1993]

I agree with the Court that General Chemical cannot complain on appeal that federal maritime law precludes recovery of damages for nonpecuniary loss — damages for mental anguish and loss of society, and punitive damages — when that complaint was not made in the trial court. Hence, I join in Part II of the Court’s opinion. I write separately on this issue only because I believe that General Chemical’s reliance upon Texaco Ref. & Mktg., Inc. v. Van Tran, 808 S.W.2d 61 (Tex.1991), deserves an additional response. I do not agree, however, that there is any probative evidence to support an award of punitive damages. Thus, while I believe the Court is correct in Part III of its opinion that Tex. CrvPRAC. & Rem.Code § 41.007 limits the amount of punitive damages which could be awarded in this case, I would hold that there is no basis for any award at all, not the $30 million found by the jury nor the $8 million approved by the Court. I also believe the Court is remiss in refusing to address General Chemical’s arguments that the award of punitive damages in this case violates constitutional due process guaranties. I discuss first the evidence to support punitive damages, then the constitutional arguments, and finally our decision in Van Tran.

I

There is no question that if Gustavo and Jose Eduardo De La Lastra had followed the warnings and instructions printed on the sack of sodium metabisulfite they were using, their tragic deaths would have been avoided. Sodium metabisulfite, commonly referred to as “shrimp dip” by those associated with the shrimp fishing industry, is a chemical used to preserve shrimp after they are caught. It is called “dip” because, as properly used, the chemical, a dry powder, is mixed with water and shrimp are dipped in the solution and then removed, drained and stored. Like many chemicals, *926sodium metabisulfite is not dangerous if it is used properly, but there are dangers associated with its misuse. Specifically, it reacts with water to produce sulfur dioxide gas, which if inhaled can cause asphyxiation. Since this gas is heavier than air and thus will accumulate in any confined space, the chemical should be used only in an area that is well ventilated.

General Chemical sells sodium metabisul-fite in 50-pound bags. On each bag is a warning label which covers about two-thirds of one side. The text on the left side of the label is in English, and the text on the right side is in Spanish. Each side is about the size of a letter-sized sheet of paper (8-V2" X 11")- The English text is printed in all capital letters, while the Spanish text is in both lower and upper case. Portions of the text are in black print and portions are in red print. All of the print is larger than that in the text of ordinary reading materials, such as newspapers and magazines. There is no contention in this case that the label is inconspicuous, or that the print is too small, or that the warnings are hard to understand.

The label begins in large capital letters: WARNING! (in Spanish, PELIGRO). It states that the chemical should not be ingested, inhaled or touched. It gives instructions for the proper use and handling of the chemical as well as for remedies if the chemical is mishandled. A propos of this case, the warning label states in part:

WARNING!
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REACTS WITH ACIDS AND WATER, RELEASING TOXIC SULFUR DIOXIDE GAS....
USE WITH PROPER VENTILATION....
CONTACT WITH WATER SHOULD BE UNDER WELLr-VENTILATED CONDITIONS....
SPECIAL INSTRUCTIONS
CONTROL OF “BLACK SPOT” ON SHRIMP
Use as IV4% solution. Stir 3V4 pounds (about 2½ pints) of Sodium Metabisulfite in 30 gallons of fresh clean seawater until dissolved. Use plastic, rubber or plastic lined container of adequate size and a wood or plastic stirrer. Dehead shrimp and place in plastic sieve. Dip in solution and agitate 1 minute. Drain well and pack in ice as usual.
WARNING!
Do Not Use In Dry Form.
Prepare and use dip solution on deck— NOT IN HOLD. Toxic sulfur dioxide gas may be liberated.

There is no evidence that a more extensive warning label was used by any other manufacturer of the chemical. A copy of the entire label is attached as an appendix to this opinion.

The De La Lastras did precisely what the instructions warned against. They used the chemical in dry form instead of mixing it with water as the label instructed, and they sprinkled the chemical on their shrimp in the unventilated hold of their boat instead of using it on deck. When they did, toxic sulfur dioxide gas was released — exactly as the label warned it would be — and asphyxiated them. No one disputes that if the De La Lastras had followed the warnings and instructions on the label, they would not have died; but there is nothing to indicate that the De La Lastras ever even read the label.

The jury found that the warning label was inadequate because it did not expressly state that the toxic gas produced by misuse of the product could be fatal. The jury also found that this inadequacy in the label caused the De La Lastras’ deaths. General Chemical challenged these findings unsuccessfully in the court of appeals, but it has not raised those challenges in this Court. Consequently, the inadequacy of the warning label must be taken as an established fact.

The award of punitive damages in this case is based upon the jury’s finding that General Chemical was grossly negligent in failing to warn expressly that misuse of its product could be fatal. The trial court *927correctly defined gross negligence for the jury to mean:

more than momentary thoughtlessness, inadvertence, or error of judgment. It means such an entire want of care as to establish that the act or omission was the result of actual conscious indifference to the rights, safety, or welfare of the person affected.

This definition is taken verbatim from Tex. Civ.PRAC. & Rem.Code § 41.001(5). The jury also found, in answer to a separate question, that General Chemical’s failure “was with a flagrant disregard for the rights of others and with actual awareness on [its] part ... that such a failure [would], in reasonable probability, result in human death or great bodily harm.” The parties do not argue that this second finding provides a different basis for punitive damages, and it is not clear why the trial court thought it appropriate to submit two separate questions. In any event, it is necessary to consider only whether there is evidence to support a finding of gross negligence.

In Burk Royalty Co. v. Walls, 616 S.W.2d 911, 922 (Tex.1981), this Court stated:

The essence of gross negligence is not the neglect which must, of course, exist. What lifts ordinary negligence into gross negligence is the mental attitude of the defendant; that is what justifies the penal nature of the imposition of exemplary damages. The plaintiff must show that the defendant was consciously, i.e. knowingly, indifferent to his rights, welfare and safety. In other words, the plaintiff must show . that the defendant knew about the peril but his acts or omissions demonstrated that he didn’t care.

We also held that evidence that a defendant exercised some care cannot be considered in determining the legal sufficiency of the evidence to support a finding of gross negligence. Id. at 920-922. While this part of our holding in Burk Royalty has been the subject of substantial criticism, General Chemical does not challenge Burk Royalty in this case. Rather, General Chemical argues that even under the restricted review allowed by Burk Royalty, there is no probative evidence in this case of gross negligence. Thus, the continued validity of the Burk Royalty standard of review for the sufficiency of the evidence of gross negligence is not at issue here.

While plaintiffs are entitled to have the evidence and all reasonable inferences which can be drawn from it viewed in the light most favorable to the verdict, there must nevertheless be evidence in the record that General Chemical was knowingly indifferent to the rights, welfare and safety of those who used its product. Even by plaintiffs’ account, there is not a wealth of such evidence in this record. Although the trial of this case consumed six days, plaintiffs cite only three pieces of evidence in support of the jury’s finding of gross negligence. The Court discusses only two of them. None provides sufficient support for the finding.

The piece of evidence on which plaintiffs place principal reliance, is that General Chemical failed to change its warning despite its awareness of, in plaintiffs’ words, “nine prior deaths and/or injuries from the chemical.” Actually, plaintiffs offered evidence of three prior deaths and six prior injuries from the use of sodium metabisul-fite. Of the non-fatal injuries, none was shown to have involved shrimpers in similar circumstances. Even if the circumstances of any injury had been similar and had been known to General Chemical, such knowledge of non-fatal injuries would not suggest that its warning was inadequate in failing to warn that misuse of the product could be fatal. Of the three deaths, there is no evidence concerning the circumstances of one which appears to have occurred in 1981, seven years before the De La Lastras’ accident. The other two deaths did occur in circumstances similar to the De La Lastras’, and it is on this incident that plaintiffs rely for their contention that General Chemical knowingly failed to change its warning label.

*928The parties refer to these two deaths as the “Cape Rojo” incident. It occurred in 1973, 15 years before the accident in this case.1 The Coast Guard investigated the incident and afterward wrote General Chemical and other manufacturers of the same chemical, stating that “[pjromul-gation and dissemination of safety information regarding this product may be indicated.” The Coast Guard report stated: “It is recommended that since it was reported that Sodium Bisulfite Anhydrous is widely used by fisherman [sic] throughout the industry, that an expeditious means be devised to warn users of the chemical, aboard vessels, of the potential dangers involved in its use in a confined and unventilated space.” After receiving this report, General Chemical changed its warning twice, cautioning against the dangers involved in the Cape Rojo incident, viz., use of the product in an unventilated space or in the hold of a boat. The Coast Guard report does not state that users of the product should be warned that the chemical is deadly; in fact, if used properly in accordance with the instructions, the chemical was not deadly.2

There is no dispute that General Chemical modified its warning label following the Cape Rojo incident. Plaintiffs may of course argue that General Chemical’s modifications did not go far enough, and the finding that the warning label was inadequate indicates that the jury was persuaded by that argument. Gross negligence, however, requires more than an inadequate response to perceived dangers; it requires actual conscious indifference. Not only is there no evidence that General Chemical reacted with indifference to the Cape Rojo incident, the evidence establishes that it attempted to comply with the Coast Guard’s recommendations.

Plaintiffs’ assertion that General Chemical knew of other occurrences involving fatalities from the misuse of sodium meta-bisulfite but did not care enough to change its warning is based upon one incident 15 years before, after which General Chemical changed its warning twice. Assuming that General Chemical should have warned that misuse of its chemical could be fatal, I fail to see how that failure was gross negligence — “actual conscious indifference” of others’ safety — when it changed its warning twice after the earlier incident, used the most extensive warning of any other manufacturer of the product, and warned explicitly against the exact misuse which occurred in both the Cape Rojo and De La Lastra incidents. The fact that there were only three deaths involving the product over the 15 years before the accident in this case also suggests that General Chemical did not fail to respond appropriately.

The second piece of evidence on which plaintiffs rely to support the finding of gross negligence is that General Chemical’s representative testified in response to cross-examination by plaintiffs’ counsel at trial that the company did not intend to change its warning despite the De La Las-tras’ deaths. Given General Chemical’s position that its warning was adequate, its representative’s testimony is hardly surprising. The jury’s finding that the warning was inadequate does not transform the testimony of General Chemical’s representative into evidence of conscious indifference. Again, even if General Chemical did not do everything it should have done, and even if it intended not to do all it could *929have done, there is still no probative evidence that it was actually indifferent to its responsibility to warn of the dangers associated with its product. Moreover, the representative’s testimony at trial of his intention at that time is, logically, no evidence of General Chemical’s intention prior to the De La Lastras’ deaths several years before.

The last piece of evidence cited by plaintiffs is the testimony of their expert at trial that in his opinion General Chemical had been grossly negligent. The expert based his opinion exclusively on the Cape Rojo incident and other instances of injuries cited by plaintiffs. For reasons already discussed, none of those prior incidents are evidence that General Chemical was grossly negligent. Stripped of all support, the expert’s opinion is entitled to no weight and thus does not support a finding of gross negligence.

There is no probative evidence that General Chemical was grossly negligent, and therefore there is no basis for an award of punitive damages. Even applying the restrictive standard of Burk Royalty, plaintiffs must still show that General Chemical knew of the peril its warning could cause and yet did not care. General Chemical simply cannot be said to have been indifferent to the dangers which could result from misuse of its product when it gave clear, conspicuous, bilingual warnings, more thorough than any others in the industry, which would have prevented the De La Lastras’ deaths if only they had heeded those warnings. The world is full of products, from cars to cleansers, which if misused may cause death. One should certainly expect that misuse of toxic chemicals may be lethal. Manufacturers may be obliged to warn against misuse of their products. When they do, however, and when the warnings given would have prevented an accident if they had been followed, it is wrong to assign liability for the accident to the manufacturer. It is worse still, however, to punish it for not caring. General Chemical has been held liable for an accident its warning would have prevented. It has been assessed over $13 million for the actual damages suffered in the accident, including $2 million for the mental anguish the De La Lastras suffered during the thirty seconds before each lost consciousness. On top of this, the Court holds that General Chemical should be assessed a penalty of $8 million because it did not care that the De La Lastras might die from misusing its product. Absent any evidence to support it, the award of punitive damages in this case is an injustice.

II

General Chemical challenges the award of punitive damages in this case on three separate grounds: that there is no probative evidence of gross negligence to support an award of punitive damages, that punitive damages cannot exceed four times actual damages under Tex.Civ.Prac. & Rem. Code § 41.007, and that an award of punitive damages in this case violates the due process and due course of law guaranties of the United States Constitution and the Texas Constitution. The Court rejects the evidentiary argument, accepts the statutory argument, and ignores the constitutional argument. Because I accept the evidentia-ry argument, I need not consider the statutory argument, although I do not disagree with the Court’s analysis of the application of section 41.007 in this case. I also need not reach General Chemical’s constitutional arguments. The Court, however, cannot avoid them.

In a footnote, the Court suggests that General Chemical concedes that an award of punitive damages equal to four times actual damages in this case does not offend due process. Ante at 925 n. 12. In the text of its opinion, however, the Court acknowledges that “General Chemical ... asserts that the current Texas system of awarding punitive damages, and the resulting excessive punitive damage award deprived them of the constitutional rights of due process_” Ante at 924. The text is correct; the footnote is not. Al*930though General Chemical argues that punitive damages cannot exceed four times actual damages under section 41.007, it does not concede that such an award comports with due process. The Court’s footnote adds a non sequitur: “Contrary to the dissent’s view, General Chemical has not raised a constitutional challenge to section 41.007.” While it is true that General Chemical has not attacked the constitutionality of section 41.007, that fact is not “contrary to the dissent’s view”. Nor is the fact significant. Section 41.007 caps punitive damages; it does not immunize any award up to the cap from constitutional scrutiny. General Chemical need not attack the statutory cap to argue that the system of awarding punitive damages is flawed. General Chemical can and does argue that an award of punitive damages cannot exceed those allowed by statute, and also that any award in these circumstances offends due process.

The Court itself recognizes in the text of its opinion that General Chemical argues that the system itself, both before and after judgment in the trial court, is invalid. The Court rejects this argument without explaining why. There are only two possible bases for the Court’s conclusion: either that a punitive damage award of four times actual damages never violates due process, or that such an award of punitive damages does not violate due process in this case. The Court disavows the former premise: “We need not address whether [a 4-1] ratio will in all cases withstand a constitutional challenge.” Ante at 925 n. 12. The second premise is thus the only remaining basis for the Court's decision.

It may be perfectly reasonable to conclude that an award of $8 million punitive damages in this case does not violate due process. It is not reasonable, however, or even acceptable, to reach this conclusion without saying why. The parties have argued the issue fully in their briefs, and we have received amicus curiae briefs on the issue. The issue is among those on which we granted General Chemical’s application for writ of error. 35 Tex.Sup.Ct.J. 508-509. The issue was addressed at oral argument. The issue is an important one in this state, in other states, and in the United States. The Court makes no attempt to justify its refusal to address the issue. It delivers the parties an edict rather than an opinion.

Ill

As I stated at the outset, I agree with the Court that General Chemical has not preserved a complaint that recovery of non-pecuniary damages is barred by the application of federal maritime law. General Chemical makes an additional argument, however, that the Court does not address. General Chemical contends that in circumstances indistinguishable from this case, the Court reversed an award of loss of society damages in Van Tran. General Chemical is correct. In Van Tran, Texaco objected to an award of mental anguish damages as being precluded by federal maritime law, but it did not raise a similar objection to the award of loss of society damages. While Van Tran was on appeal, the United States Supreme Court held in Miles v. Apex Marine Corp., 498 U.S. 19, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990), that loss of society damages cannot be recovered under federal maritime law. We reversed the award of mental anguish damages to which Texaco properly objected, but we also reversed the award of loss of society damages to which Texaco did not object.

Following Van Tran, General Chemical’s failure to object in the trial court to an award of nonpecuniary damages not allowed under maritime law should not preclude it from obtaining reversal on appeal. In my view, however, Van Tran was wrongly decided in this respect. A party, whether plaintiff or defendant, is entitled to the benefit of changes in the law while a case is on appeal as long as those changes are fully retroactive. However, the party should ordinarily be required to have raised the issue at trial in order to assert it on appeal. I would not extend the error in Van Tran to this case.

* * * * * *

*931For all these reasons, I concur in affirming the award of actual damages but dis-b sent from the award of punitive damages.

PHILLIPS, C.J., and ENOCH, JJ., join in .,. . , ,. this concurring and dissenting opmion.

APPENDIX

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*932[[Image here]]

. Although General Chemical was not in existence at the time, its predecessor corporation was, and the parties agreed at trial that notice of the Cape Rojo incident to General Chemical’s predecessor was notice to General Chemical. Thus, by referring to the manufacturer as General Chemical I include both that corporation and its predecessor.

. At trial, when plaintiffs' counsel asked the Coast Guard official who wrote the report whether he had been trying by his report to get General Chemical to warn that its product could be deadly, he replied, "basically”. Whatever the official may have been "basically" trying to do, the report itself neither stated or suggested that General Chemical should warn that its product was deadly. General Chemical was not simply being obtuse; none of the other manufacturers alerted to the Cape Rojo incident changed their warnings to include that their products could be deadly.