July 14, 2015; Even though the First Appellate Department unanimously affirmed in part NYS Supreme Court Sherry Klein Heitler’s Order entered on April 15, 2014 (“April Order”) that lifted the 18-year deferral on punitive damages in New York City Asbestos Litigation (“NYCAL”) actions, the First Appellate Department’s Decision also reversed and remanded a significant portion of the April Order. Therefore, the First Appellate Department’s Decision is a small victory for the NYCAL defense bar. The First Appellate Department held that a portion of the April Order that modifies punitive damages in the Case Management Order (“CMO”) violated NYCAL defendants’ due process rights. The First Appellate Department reversed the provision of the modified CMO, which granted the trial court the authority to decide if plaintiff may proceed with a punitive damage claim without affording the defendants an “opportunity to conduct discovery and establish a defense with respect to this damages claim.” 

The First Appellate Department further remanded the matter to the newly appointed NYCA Coordinating Justice Peter H. Moulton to modify the CMO accordingly. Therefore, Justice Moulton will be able to reconsider whether the removal of the deferral was appropriate, as well as other aspects of the April Order. The First Appellate Department also stayed the implementation of the portion of the modified order that allowed plaintiffs to assert punitive damages until procedural protocols on the issue of punitive damages are implemented. A copy of the order can be found here.