Three chemical manufacturers were ordered to pay the city of Modesto $178 million for contaminating its water with suspected carcinogens, a jury decided. Jurors in San Francisco Superior Court found the companies acted with malice because they failed to tell dry cleaners how to use perchloroethylene or trichloroethylene without harming the environment. The jury levied more than $175 million in punitive damages late Tuesday and $3.2 million in actual damages for groundwater contamination.
Vulcan Materials Co. was ordered to pay $100 million in punitive damages, Dow Chemical Co. was ordered to pay $75 million and RR Street & Co. Inc. was hit with a $75,000 verdict. Pennsylvania-based PPG Industries and Occidental Chemical Corporation, of Texas, do not face punitive damages, but were ordered to contribute to the $3.2 million awarded in actual damages.
"We're gratified at the jury's verdict," said attorney Duane C. Miller, who represented the city in the case. "We believe it's the first time the manufacturers of PCE have been held accountable for damages caused by that product."
Representatives of the companies reached Wednesday said they planned to appeal the verdict, which they called baseless. "We think the punitive damages are completely without merit," said David Donaldson, of Alabama-based Vulcan Materials. "We're going to be pursuing all the different means for post-trial and appellate relief to make that point."
Under State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), punitive damages that exceed actual damages by a ratio of more than 9 to 1 may be unconstitutional. Here, the ratio of $175,075,000 in punitives to $3.2 million in actual damages is closer to 55 to 1. I predict that the punitive awards here will not stand.
UPDATE: The Recorder now weighs in: Calif. Jury Awards $175M in Punitives in City Water Contamination Case