Cooley v. Lincoln Electric Co. (776 F. Supp. 2d 511, 2011)

MEMORANDUM & ORDER

KATHLEEN McDONALD O’MALLEY, District Judge.

This products liability action was brought by Curt and Nancy Cooley against four manufacturers of welding rods: (1) Lincoln Electric Company; (2) Hobart Brothers Company; (3) The ESAB Group, Inc.; and (4) BOC Group, Inc. fik/a Aireo, Inc.

The case was assigned to the undersigned as related to the Multidistrict Litigation (“MDL”) known as In re Welding Fumes Products Liability Litigation, case no. 03-CV-17000, MDL no. 1535. The case proceeded to trial and the jury returned a verdict finding defendants liable to Curt Cooley. The jury awarded $1.25 million in compensatory damages, but allocated 37% of fault to Cooley. The jury also awarded $5 million in punitive damages, allocated against the defendants as follows: ESAB, $1.75 million; Hobart, $1.75 million; Lincoln, $750,000; and BOC, $750,000.

The parties then filed several post judgment motions. For the reasons explained below, the Court rules on these motions as follows.

• Defendants’ renewed motion for judgment as a matter of law on plaintiffs’ punitive damages claim or, in the alternative, for reduction of the punitive damages awards (docket no. 258) is DENIED.

• Plaintiffs motion for attorneys’ fees and expenses (docket no. 255) is DENIED, and defendants’ motion for leave to file surreply (docket no. 269) is DENIED AS MOOT.

• Defendant BOC’s renewed motion for judgment as a matter of law (docket no. 256) is DENIED.

• Defendants’ renewed motion for judgment as a matter of law on plaintiffs’ aiding and abetting claims (docket no. 257) is DENIED.

• Plaintiffs motion to tax costs (docket no. 253) is GRANTED, in part, and the Court awards $60,964.79 in costs to Cooley.

I. BACKGROUND

A. BRIEF FACTUAL BACKGROUND

The pertinent evidence presented at trial is summarized in the punitive damages section below; what follows is a brief introduction of the factual basis for Cooley’s claims.

Cooley was born in Iowa in 1951, and currently lives there. He learned how to arc weld from his father when he was 16 years old. After he graduated from high school in 1969, Cooley took a one year course on auto body repair at a vocational school and received his first formal welding instruction. Throughout the 1970s, Cooley worked in various auto body shops. The body shops routinely used arc welding to repair cars, and welding was part of Cooley’s job. In 1979, Cooley decided to make a career change and entered the ironworking trade, where he continued to weld as part of his job. He was a union ironworker until the late 1980s, when the work dried up and he went back to the auto body business for a few years. He returned to ironworking in 1990, and spent the rest of his working life in that trade— i.e., until 2004. At times during his career, Cooley was a foreman or supervisor, but he still welded while holding those positions.

In addition to welding as part of his job, Cooley welded outside of work. He occasionally bought wrecked cars and repaired them in his garage, and over the years, did artwork with metal that required welding.

The last time Cooley welded was January 10, 2003.

Although defendants dispute the diagnosis, Cooley has been diagnosed with manganese poisoning. This disease causes a movement disorder in the same family of disorders as Parkinson’s Disease, but it is “defined by its cause: overexposure to manganese.” Manganese is a heavy metal contained in welding consumables, i.e., welding rods and wires. The process of joining steel by welding generally involves melting a welding consumable to fuse together two pieces of metal. Welding consumables give off fumes that contain manganese. In this case, Cooley alleges he has neurological injuries caused by inhaling welding fumes that contain manganese. He describes his injuries as follows:

I have balance problems. I have tremors. I have slower movements than I used to have. I’m impotent. I’m on depression — I’m depressed. I ache all over. I’m constantly fatigued. I can’t sleep at all, very little at night. And I have problems with my memory.

The essence of Cooley’s lawsuit is that defendants, manufacturers of welding consumables, knew inhaling welding fumes presented the risk of irreversible neurological injury, but failed to adequately warn Cooley of that risk.

B. PROCEDURAL HISTORY

After this case became part of the Welding Fumes MDL, the parties consented to this Court presiding over the trial. As described above, the jury returned a verdict for Cooley, ultimately awarding $787,500 in compensatory damages and $5 million in punitive damages. The post-judgment motions now pending before the Court challenge these jury verdicts.

The standard of review for each of the substantive motions is discussed below. Because the Court’s ruling on certain of the motions could impact its consideration of others, the Court addresses the pending motions in this order: (1) defendants’ punitive damages motion; (2) Cooley’s motion for attorneys’ fees and expenses; (3) BOC’s motion for judgment as a matter of law; and (4) defendants’ aiding and abetting motion. Last, the Court addresses Cooley’s motion to tax costs.

II. DEFENDANTS’ PUNITIVE DAMAGES MOTION

A. PROCEDURAL HISTORY

In his complaint, Cooley asserted entitlement to punitive damages. Prior to trial, defendants moved for summary judgment on Cooley’s punitive damages claim. The Court addressed and denied defendants’ motion at a pretrial hearing. During the trial, defendants made an oral motion pursuant to Rule 50(a) of the Federal Rules of Civil Procedure for judgment as a matter of law with respect to the punitive damages claim. The Court denied that motion. Defendants renewed their Rule 50(a) motion at the close of the evidence. Again, the Court denied defendants’ motion and submitted the punitive damages claim to the jury. After the jury returned its verdict, defendants again renewed their motion for judgment as a matter of law with respect to punitive damages, this time pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. It is this motion that is now pending.

B. THE STANDARD FOR RULE 50 MOTIONS FOR JUDGMENT AS A MATTER OF LAW

Federal Rule of Civil Procedure 50(a)(1) states that, “[i]f a party has been fully heard on an issue during a jury trial and the cornet finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue,” then the court may “grant a motion for judgment as a matter of law against the party on a claim or defense that, under controlling law, can be maintained or defeated only with a favorable finding on that issue.” A party may move for judgment as a matter of law at any time before the case is submitted to the jury. If the Court denies the Rule 50(a) motion made during trial, as did the undersigned in this case, “the court is considered to have submitted the action to the jury subject to the court’s later deciding the legal questions raised by the motion.” The movant may then “renew its request for judgment as a matter of law by filing a motion no later than 10 days after the entry of judgment.” Defendants timely filed their motion for judgment as a matter of law with respect to punitive damages pursuant to Rule 50(b). After a verdict is returned, the Court may rule on a renewed Rule 50(b) motion by: (a) allowing the judgment to stand, (b) ordering a new trial, or (c) directing entry of judgment as a matter of law.

Subject-matter jurisdiction in this case is based upon diversity of citizenship. The parties agree that, in the Sixth Circuit, “state law governs the standard for granting motions for directed verdicts” and judgments notwithstanding the verdict, in diversity cases. Hence, Iowa law provides the applicable standard for a motion for judgment as a matter of law filed under Rule 50.

Iowa courts apply the “substantial evidence” standard for judgment as a matter of law. That is, judgment as a matter of law is not appropriate if there is substantial evidence to support each element of the plaintiffs claim. “Evidence is substantial if a jury could reasonably infer a fact from the evidence.” In evaluating a motion for judgment as a matter of law, the Court must construe the evidence “in the light most favorable to the nonmoving party.” “This is so regardless of whether the evidence was contradicted.” Thus, the Court will afford Cooley “every legitimate inference that can be reasonably drawn from the evidence.” Indeed, “Iowa courts generally defer to a jury’s award of punitive damages.” Although a different fact-finder might reach a different conclusion, the Court must uphold the jury’s verdict if reasonable minds could disagree as to whether substantial evidence supported Cooley’s punitive damages claim.

C. IOWA LAW REGARDING PUNITIVE DAMAGES

The Court’s review of the jury’s punitive damages award involves two separate inquiries: (1) whether the record contains substantial evidence showing defendants’ conduct was sufficiently egregious to support an award of punitive damages pursuant to Iowa law; and (2) if so, whether the size of the punitive damages award is constitutionally appropriate.

1. The Iowa Punitive Damages Statute

In Iowa, statutory law provides that punitive damages may be awarded only where the plaintiff shows, “by a preponderance of clear, convincing, and satisfactory evidence, the conduct of defendant from which the claim arose constituted willful and wanton disregard for the rights or safety of another.” Willful or wanton conduct occurs when

an actor has intentionally done an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences.

In other words, Iowa law permits punitive damages when the plaintiff presents clear and convincing evidence that defendant acted with actual or legal malice. Cooley did not argue that defendants acted with actual malice; rather, Cooley argued only that defendants acted with legal malice, which “may be shown by wrongful conduct committed with a willful or reckless disregard for the rights of another.”

2. Comparison with the Mississippi Standard for Punitive Damages Applied in Jowers

The legal standard for imposition of punitive damages varies from state to state. The parties disagree regarding whether Iowa’s legal malice standard is higher than the Mississippi standard the Court applied in another MDL case, Jowers v. BOC Group, Inc. The parties debate this question vigorously because the issue is relevant within the broader context of this multidistrict litigation. Most of the evidence of defendants’ conduct will be the same in every MDL case, and defendants do not claim the evidence presented by Cooley on this issue was meaningfully different from the evidence presented in Jowers. The availability of punitive damages arising from defendants’ conduct in a given case within the MDL depends, therefore, upon each state’s approach to punitive damages. Thus, if the Court finds the evidence sufficient to sustain a punitive damages award under one state’s law, that conclusion normally would compel a similar finding under the law of any other state with the same or less strict legal standards for an award of punitive damages.

All but two states allow punitive damages, but the degree of culpability to justify an award varies from state to state. For instance, one commentator divides states into four “general categories”— those requiring (1) malice; (2) conduct that does not rise to the level of malice but exceeds gross negligence; (3) gross negligence; or (4) satisfaction of certain statutory elements. These categories provide only rough guidance, however; in practice, one state’s definition of “malice” or “gross negligence” is not necessarily the same as another’s. The same conduct could conceivably be labeled “gross negligence” in state A and “malice” in state B. Because the Court found that the defendant’s conduct could support a jury award of punitive damages under Mississippi law in Jowers, the Court compares the law cited in Jowers to relevant Iowa law.

The Mississippi statute the Court applied in Jowers states:

Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that defendant against whom punitive damages are sought acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud.

The applicable Iowa punitive damages statute requires the jury to decide:

Whether by a preponderance of clear, convincing, and satisfactory evidence, the conduct of defendant from which the claim arose constituted willful and wanton disregard for the rights or safety of another.

Parsing these statutes, the first similarity is the burden of proof: clear and convincing evidence is required in both Iowa and Mississippi. The necessary degree of culpability, however, appears to differ. The Mississippi statute describes a range of culpable conduct, including three alternatives: (1) “actual malice;” or (2) “gross negligence which evidences a willful, wanton, or reckless disregard for the safety of others;” or (3) “actual fraud.” In contrast, there are no alternatives in the Iowa statute: it requires conduct constituting “willful and wanton disregard for the rights or safety of another.”

Whether these statutory distinctions translate into meaningfully different legal standards must be resolved by reference to case law applying the respective phrases. Both statutes refer to conduct in “disregard for the safety of others.” In Iowa, the disregard must be “willful and wanton” to support a punitive damages award. In Mississippi, the disregard can be “willful, wanton, or reckless.” Based solely on the language of the statutes, it would appear the minimum mens rea is less in Mississippi than in Iowa — reckless disregard in Mississippi versus willful and wanton disregard in Iowa. But Iowa case law eviscerates this apparent distinction. The Iowa Supreme Court has consistently conflated “willful and wanton” disregard and “legal malice,” and defined “legal malice” as “wrongful conduct committed with a willful or reckless disregard for the rights of another.” In other words under Iowa law, as under Mississippi law, a degree of recklessness is sufficient to support an award of punitive damages. In sum, careful examination of the language of the Iowa and Mississippi punitive damages statutes, as defined and refined by the respective state Supreme Courts, reveals the standards are very similar.

Analysis of other Iowa cases with facts similar to this one, more than examination of the language of the statute, best illustrates the type of conduct the Iowa Supreme Court considers to rise to the level of a “reckless disregard for the rights of another.” As the Iowa Supreme Court has stated, “the real issue here is conduct.”

3. Case Law Analysis of the Iowa Punitive Damages Standard

The parties understandably focus their attention on just a few Iowa Supreme Court cases. The defendants rely primarily on Mercer v. Pittway Corp., while Cooley emphasizes the Court’s analysis in Fell v. Kewanee Farm Equip. Co. A third case, Hillrichs v. Avco Corp., links the two.

The plaintiffs in Mercer were members of a young family that purchased a model 83R ionization smoke detector, manufactured by defendant “BRK.” The plaintiffs installed the 83R smoke detector in their home, but the detector did not alert to a smoldering house fire. The fire killed one child and severely injured another. The plaintiffs claimed the product was defective as manufactured, and also asserted BRK failed to warn that an ionization smoke detector might not detect a smoldering fire. The plaintiffs presented evidence BRK knew its 83R detector was not as effective as photoelectric smoke detectors at detecting smoldering fires, but failed to warn consumers of this fact.

In response, BRK argued that: (1) the 83R detector satisfied the applicable industry standards for performance and construction of smoke detectors; (2) BRK developed and consistently implemented an industry-approved simulation testing protocol to address customer complaints relating to failure of the 83R to alert to smoke; (3) BRK’s warning stated that the detector “may not go off or give early warning in as many as 35% of all fires” and “[s]moke detectors may not sense every kind of fire every time;” and (4) a more specific warning regarding the relative strengths and weaknesses of different kinds of smoke detectors would only confuse consumers.

The Iowa Supreme Court rejected the plaintiffs’ punitive damages claim, stating as follows:

We conclude ... that plaintiffs generated a jury question on their theories of strict liability and negligence [including failure to warn] as to the effectiveness of ionization smoke detectors, and how the Mercers’ smoke detector did, or should have, responded to the fire in their home. However, we reject plaintiffs’ contention that BRK’s knowledge of the 83R’s failure to alarm in certain types of fires, coupled with BRK’s failure to test ionization detectors in real world fires and its failure to place a specific warning on the box concerning the 83R’s delayed response to certain types of fires, creates a jury question on punitive damages.

In so holding, the Iowa Supreme Court noted that BRK’s compliance with industry standards showed “reasonable disagreement over the relative risks and utilities of the conduct and device at issue”:

BRK’s adoption of the UL 217 [industry] standard ... shows a reasonable disagreement over the relative risks and utilities of BRK’s conduct in the manufacture and production of the model 83R ionization detector. See Hillrichs v. Avco Corp., 514 N.W.2d 94, 100 (Iowa 1994) (stating “that an award of punitive damages is inappropriate when room exists for reasonable disagreement over the relative risks and utilities of the conduct and the device at issue”). BRK’s experts also testified that the sensitivity level of ionization and photoelectric components in a combination smoke detector are not as sensitive as a stand-alone device to avoid nuisance alarms. Thus, although a jury could reasonably conclude that BRK was at fault, we do not believe that a rational fact finder could find by clear, convincing, and satisfactory proof a willful and wanton disregard by BRK for the rights of another. Consequently, the district court erred in submitting plaintiffs’ claim of punitive damages to the jury and in overruling BRK’s post-trial motion in this regard. We reverse on this issue.

Notably, while the Iowa Supreme Court did consider defendants’ warning when assessing the propriety of punitive damages, the “industry standards” aspect of the decision pertains to the “manufacture and production” of the smoke detector, not the warning. The relationship between “industry standards” regarding manufacture and production and the adequacy of the warning is, therefore, unclear in the context of the entire Mercer opinion.

While defendants highlight Mercer in their briefs, Cooley relies on Fell v. Kewanee Farm Equip. Co. Cooley cites Fell for the principle that punitive damages may be based on evidence that a manufacturer knew consumers were being injured by its product, but the manufacturer chose not to act on that knowledge for economic reasons. In Fell, the Iowa Supreme Court set forth the “willful and wanton” standard for punitive damages from Prosser and Keeton: “The actor has intentionally done an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences.” The Fell court then tailored this definition to the products liability arena as follows:

“A legal basis for punitive damages is established in product liability cases where the manufacturer is shown to have knowledge that its product is inherently dangerous to persons or property and that continued use is likely to cause injury or death, but [the manufacturer] nevertheless continues to market the product without making feasible modifications to eliminate the danger or make adequate disclosure and warning of such danger. Especially is this so when the evidence is susceptible to the inference that the manufacturer not only refused to warn for the user’s protection, but intentionally took steps to cover up the known danger in order to protect continued marketing of the product for its own economic advantage.”

Fell underscores the importance, under Iowa law, of whether the manufacturer’s reason for disregarding the safety of its customers was in order to preserve or obtain an economic advantage.

The Court in Hillrichs included in its analysis both of the primary considerations identified in Mercer and Fell. In Hillrichs, the Iowa Supreme Court was addressing a design defect claim. The plaintiff in Hillrichs was a farmer who severely injured his hand while trying to clean out the husking bed of a running cornpicker. The defendant-manufacturer knew farmers frequently try to clean the husking bed while the cornpicker is on. Nonetheless, it “decided not to install emergency stop devices on the ... husker apparatus, ... bas[ing] their decision on the so called ‘dependency hypothesis’ — that is, the theory that the product as designed would discourage farmers from making contact with the roller bed and that plaintiffs proposed device would invite farmers to unreasonably depend on it, despite the dangerousness of the husking roller bed.”

The jury in Hillrichs found for the plaintiff and awarded punitive damages, but the trial court set aside the award. The Iowa Supreme Court upheld the trial court’s ruling, reasoning that a reasonable disagreement existed with respect to the manufacturer’s husking bed design. In light of the “dependency hypothesis,” the Iowa Supreme Court held that “an award of punitive damages is inappropriate when room exists for reasonable disagreement over the relative risks and utilities of the conduct and device at issue.” In its analysis, however, the Court cited Fell and specifically noted that the evidence did not “support an inference that the manufacturer took the position it did for its own economic advantage.”

Thus, as in Mercer, the Iowa Supreme Court in Hillrichs considered a critical factor to be the existence of “reasonable disagreement over the relative risks and utilities of the conduct and device at issue.” Like Fell, however, the Hill- ricks Court only reversed the punitive damages award after considering whether the defendant chose profitability over customer safety. In other words, Hillrichs links Mercer and Fell; either factor may support a punitive damages award. Consequently, in analyzing defendants’ punitive damages motion, there are two particularly relevant considerations: (1) when “room exists for reasonable disagreement over the relative risks and utilities of the conduct ... at issue,” punitive damages are more likely to be inappropriate, and (2) when the manufacturer disregards the safety of its customer in order to preserve or obtain an economic advantage, punitive damages are more likely to be appropriate.

These two specific considerations are not mutually exclusive; they are part of the substantial evidence determination whether, construed in the light most favorable and with all reasonable inferences given to Cooley, there is substantial evidence defendants acted with legal malice.

D. ANALYSIS OF THE JURY’S PUNITIVE DAMAGES AWARD

Defendants’ punitive damages motion presents two issues: (1) whether an award of punitive damages is justified under Iowa law; and (2) if so, whether the amount of the award is constitutional.

1. Propriety of a Punitive Damages Award

Defendants present three separate arguments why no reasonable jury could find they recklessly disregarded Cooley’s and other welders’ rights or safety. First, defendants argue “punitive damages are unavailable under Iowa law because the evidence at trial revealed the existence of a debate in the scientific community surrounding plaintiffs’ core allegation — i. e., that manganese in welding fumes causes neurological problems.” Second, defendants argue, “even if the scientific community broadly agreed that manganese in mild steel welding fumes can cause neurological injury, punitive damages would still be inappropriate because plaintiffs failed to prove that defendants knew it was ‘highly probable’ that harm would follow from use of their products.” Third, defendants argue a jury “could not reasonably award plaintiff punitive damages [because] defendants warned throughout Cooley’s career that welding fumes are potentially hazardous.”

Cooley responds correctly that the Court already addressed and rejected these three arguments in Jowers. More specifically, Cooley responds: (1) in fact, there is no legitimate scientific debate with respect to whether welding fumes cause neurological injury; (2) harm to at least some individuals was highly probable, given that millions of welding rods were sold to hundreds of thousands of welders, and the severity of that harm is extreme; and (3) the fact that defendants’ gave some generalized warning does not “immunize” them from a punitive damages award, because their warning was deliberately inadequate regarding a specific, known hazard.

Because the Iowa standard for punitive damages is not identical to the Mississippi standard, the Court will not simply adopt by reference its analysis as articulated in Jowers. Cooley is correct, however, that the vast majority of the relevant facts is the same in both cases and that the practical differences between the two states’ laws are not substantial. On the first point, both Cooley and Jowers presented essentially the same documentary evidence, in the form of trial exhibits, relating to defendants’ and the welding consumables industry’s knowledge of the dangers associated with manganese in welding fumes — that is, a catalogue of research reports, industry publications, internal memoranda, and similar business records. These documents were introduced through the witnesses who testified at Cooley’s trial, just as they were submitted through witnesses who testified in the Jowers case.

Finally, as in Jowers, this is a Rule 50(b) motion, and the substantial evidence standard governs the Court’s inquiry. The issue is whether, construing the evidence in Cooley’s favor and affording him all reasonable inferences, there is substantial evidence to support the jury’s conclusion, even if that evidence is contradicted in the record. Accordingly, like the Court’s Rule 50 opinion on the propriety of punitive damages in Jowers, the Court’s discussion will proceed in two stages: (1) review of the facts relating to defendants’ three arguments; (2) analysis of defendants’ arguments under Iowa law.

a. Review of the Evidence

i. Debate in the Scientific Community

Defendants’ first factual argument is that Cooley’s medical expert, Dr. Nausieda, testified there is a debate in the scientific community regarding whether manganese in mild steel welding fumes causes neurological injury. Defendants point specifically to testimony from Dr. Nausieda:

Q. Isn’t it a fact, Dr. Nausieda, that even today the medical community continues to argue and debate this issue about whether welding fumes from the kind of welding that Mr. Cooley did causes Parkinsonism?

A. Again, I mean, I can’t speak for the whole neurological community. There are certainly pro and con articles appearing, but it seems to me more people are making this diagnosis, because I get calls asking me about the issues involved in this case far more frequently now.

Q. There’s still a debate. That’s my question, sir.

A. We wouldn’t be in this courtroom if there wasn’t a debate.

Defendants argue this testimony is distinguishable from the medical testimony on this issue' in Jowers, and they contend the distinction is important in light of the Iowa standard for punitive damages. They argue the medical testimony in Jowers indicated a debate exists as to how often exposure to mild steel welding fumes causes neurological injury, while the testimony quoted above acknowledges a debate over whether welding fumes can cause neurological injury at all. Indeed, the testimony elicited by defendants in Cooley responds directly to this Court’s discussion of the evidence in Jowers} In reply, Cooley argues: (1) the record as a whole contains substantial evidence that the connection between welding fumes and manganese poisoning is proven; and (2) defendants are taking Dr. Nausieda’s testimony out of context.

The Court has reviewed the evidence presented at trial on this issue, construing the evidence and all reasonable inferences to be drawn therefrom in favor of Cooley. Not surprisingly, defendants’ experts generally testified it has not been scientifically established that manganese in welding fumes can cause neurological damage to welders, while Cooley’s experts testified it has certainly been established. For exam-pie, at trial, defendants’ expert neurologist, Dr. Watts, testified he did not believe it has been proven that excessive overexposure to manganese in welding fumes can cause neurological damage to welders. He testified on direct-examination that the literature supports a diagnosis of manganese poisoning in manganese miners, manganese smelters, manganese ore crushers, and other individuals exposed to manganese, but not in welders. In contrast, Cooley’s expert, Dr. Nausieda, testified at trial that manganese poisoning in welders has been reported in the medical literature, including in case reports regarding specific individuals. As explained above, Dr. Nausieda testified the scientific literature is “pretty clear” that manganese in welding fume can cause neurological damage in welders. Finally, like the plaintiff in Jowers, Cooley presented as trial exhibits defendants’ own internal memoranda acknowledging, e.g., that “[t]he irreversible neurological damage produced by chronic overexposure to manganese fume is tragic.”

Defendants did elicit, during cross-examination of Dr. Nausieda, the statement quoted above that “there is still a debate.” Dr. Nausieda also said that “the neurological community did not recognize mild steel welding fumes as a cause of Parkinsonism” in the 1970s, 1980s, or 1990s. But defense expert Dr. Watts testified that “manganese in welding fume gets into welders’ lungs, then gets into their blood, then [crosses] the blood-brain barrier, and gets into their brain.” Dr. Watts further testified that: (1) no one knows at what level of exposure to manganese in welding fumes overexposure occurs; (2) no one has ever done a large-scale epidemiological study of welders to determine what level of exposure might be safe; (3) there is no difference between manganese that enters the body as a result of mining, smelting, or other sources, and manganese in welding fumes; and (4) neurological damage from overexposure to manganese can be cumulative, occurring over an entire career. In addition, defendants’ expert, Dr. Lang, has stated it is “proven” that it is possible to get manganese poisoning from welding fumes. At his deposition, Dr. Lang testified:

Q. You believe that welders can get manganese-induced Parkinsonism from welding fumes?

A. Yes.

Q. That has been proven to your satisfaction in the literature?

A. Yes. I think there are enough patients with features that are sufficiently convincing that I believe that, yes.

And Dr. Nausieda testified he agreed with Dr. Lang’s opinion on this issue, and he believes the medical literature is “pretty clear” welders can get manganese poisoning from welding fumes. Furthermore, Hobart Vice President Dr. Sundaram Nagarajan testified at his deposition that “[m]anganese in welding fumes under excessive overexposure causes [neurological] damage.” In sum, there exists substantial, albeit not unrebutted, evidence upon which a jury could conclude there is not a reasonable debate in the scientific community regarding whether manganese in mild steel welding fumes can cause neurological injury; the real debate is how often.

Furthermore, in the Jowers opinion on punitive damages, this Court summarized the evidence relating to scientific studies of welding fume toxicity, and many of the same exhibits were introduced in this case. First, the Court noted the welding consumables industry did not even consider a medico-scientific study of the health effects of welding fumes on welders until approximately 1979, when the American Welding Society (“AWS”) Safety & Health Committee considered (but opted not to pursue) a study that would address, among many other things, a “possible connection with manganese exposure in [an] epidemiological study.” More recently, both the plaintiffs and defendants in this MDL litigation have funded medical and epidemiological studies addressing all aspects of the question of whether welding fume causes movement disorders. The Court ultimately concluded the sum of this evidence is sufficiently reliable to support the conclusion that “exposure to low-manganese welding fumes can cause, contribute to, or accelerate a movement disorder, including parkinsonian syndrome that some doctors will diagnose as [Parkinson’s Disease].” While defendants did submit studies that found no proof that welding fume causes neurological injury, the jury was entitled to discount these litigation-related studies as biased.

ii. Defendants’ Knowledge of, and Warnings about, Welding Fume Toxicity

Defendants’ second factual argument is that they did not know of a “high probability” that exposure to welding fumes would cause neurological injury. Defendants argue their warnings have always been adequate based on the extent of their knowledge and understanding of the risk.

Applying the substantial evidence standard, the Court has reviewed the evidence adduced at trial relating to defendants’ knowledge and understanding of welding fume toxicity, as well as the development of the warnings that were available to Cooley on defendants’ products. This evidence is virtually identical to the evidence adduced in Jowers on these issues. Accordingly, what follows is an evidence review that is similar to, but shorter than, the same summary in the Jowers opinion.

Defendants Historical Knowledge Welding Fumes Are Toxic

Defendants admit they and- the entire welding consumables industry knew by 1940 that welding fumes were toxic. For example, in the late-1930s, the Metropolitan Life Insurance Company published a book summarizing a German doctor’s reports regarding the effects of exposure to manganese in welding fumes. The MetLife Booklet stated:

Manganese is an important poison from the point of view of its effects rather than from frequency of exposure to it. Manganese has a selective action on some of the nerve centers of the brain. It causes a disease similar to paralysis agitans [n/k/a, Parkinson’s Disease], which in chronic cases is seldom fatal, but which, owing to the fact that no satisfactory treatment is known, is always disabling. Prevention, therefore, is the measure to be stressed when the possibility of manganese dioxide fumes or dust is present.

Two cases of poisoning in a mild form, by manganese oxide fumes given off from the electrodes in arc welding of tanks and boilers, have been reported from Germany. The electrode used contained 0.2 percent manganese. It is stated that protective filter respirators or air helmets are necessary in tank and boiler work, although in open rooms it is improbable that these precautions will be needed.

Documents of welding industry trade groups such as the American Welding Society (“AWS”) and National Electrical Manufacturers Association (“NEMA”), as well as defendants’ internal memoranda, show that the MetLife Booklet and its conclusions regarding the toxicity of manganese in welding fumes were widely discussed when they appeared. Subsequently, defendants continued to discuss the toxicity of manganese in welding fumes, and the hazards it presented to welders, both individually and at industry-wide meetings and in correspondence.

Defendants’ Warning & Anti-Warning Practices

There are documents showing that, despite having obtained knowledge that welding fume could be toxic to the human brain, defendants initially decided, both individually and jointly, not to supply any warning with their welding rods, in order to protect sales. Later, defendants discussed at AWS and other meetings the cost/benefit of giving a warning, and subsequently adopted an industry-wide approach to warnings that did not include disclosing the risks of permanent neurological injury. A brief history of defendants’ warnings follows.

A 1949 BOC memorandum described the early history of warnings as follows: “the arc welding industry at one time desired to take every precaution to guard against injury, and [NEMA] decided to incorporate a warning clause on all electrode box labels. It turned out, however, that some of the manufacturers did not do this and as a result immediately capitalized on the advantage of being able to sell an electrode which did not have to be marked ‘poison.’ As a result, one by one all of the various manufacturers took this information off the label and all were very glad to get it off.”

In 1966, shortly after the tobacco industry first issued warnings about cigarettes, the AWS Committee on Filler Metal, which had members employed by each defendant in this case, addressed the question of whether they should put a warning label on welding rods. Eventually the AWS agreed that all welding rod manufacturers would adopt a mandatory warning label in 1967. The warning label, however, did not make any mention of the hazard of permanent brain damage! It read:

Caution. Welding may produce fumes and gases hazardous to health. Avoid breathing these fumes and gases. Use adequate ventilation. See USAS Z49.1, ‘Safety in Welding & Cutting’ published by the American Welding Society.

In 1979, largely in response to two lawsuits, the AWS adopted a new, mandatory, industry-wide warning label, which stated, in pertinent part:

FUMES AND GASES can be dangerous to your health.

• Keep your head out of fumes.

• Use enough ventilation or exhaust at the arc or both.

• Keep fumes and gases from your breathing zone and general area.

See American National Standard Z49.1, “Safety in Welding and Cutting,” published by the American Welding Society.

As before, this warning contained no language specifically addressing: (1) the danger of permanent neurological harm from manganese in welding fumes; or (2) under what circumstances “ventilation” or “exhaust at the arc” was or was not “enough” to protect against harm.

In sum, none of the various versions of the cited Z49.1 publication ever mentioned the risk of neurological injury from manganese in welding fumes. At the same time, defendants continued to acknowledge internally that welding fumes could cause permanent neurological injury, and that they were not including any specific warning to this effect with their products. For example, as recently as 2002, defendant ESAB’s internal documents indicate that its warnings did not adequately inform welders of “the irreversible nature of the symptoms.”

Cooley, moreover, presented evidence from which a jury could reasonably conclude (and apparently did conclude) that the industry decided to explicitly downplay the health hazards associated with welding fumes. As discussed further below, Cooley’s expert referred to this type of misleading communication, meant to mitigate the force and effect of a warning, as an “anti-warning.” For example, in 1955, despite knowledge of the information contained in the MetLife Booklet, defendant Lincoln issued a publication directed at welders, stating that “[mjuch research has been done which has proven that the fumes and smoke obtained when welding steel and the ferrous alloys are not harmjul.” Similarly, the AWS published an article to introduce the 1967 warning label in hopes of reassuring consumers that welding was safe. The article stated, among other things: “Over the years, the number of welders who have shown any effects from these fumes has been extremely small, and their disability temporary, usually less than 24 [hours];” and “[t]he appearance of the precautionary label should not be interpreted as an indication of any change in the potential health hazard from welding fumes.” This article was reprinted and distributed to thousands of customers, according to an AWS-coordinated plan. This and other industry publications indicated the hazard of exposure to welding fumes was not permanent brain damage, but a 24-hour flu-ish feeling known as “metal fume fever.” In addition, shortly after the 1967 industry-wide warning was adopted, Lincoln made a policy decision to place the new warning on cartons of welding rods, but not on the product inside the carton, knowing this reduced the chance that a welder would actually see the new warning (because large employers routinely remove rods from the cartons before giving the rods to welder-employees). A jury could reasonably construe all of these actions as purposeful efforts by defendants to minimize the impact of their own warnings.

Naturally, defendants contended at trial (and contend now) that there are innocent explanations for the statements in these documents. The Court’s role, however, is not to weigh the competing evidence. These materials constitute evidence that, while defendants (and the welding rod industry generally) were acknowledging privately that welding fumes could cause permanent neurological injury, defendants were not being candid about this hazard with the general public, for fear of how candor might affect sales, and the jury had the right to rely upon that evidence.

Government and Other Industry Standards

In addition to the AWS mandatory warning, there are other relevant industry and government standards. The American Conference of Governmental Industrial Hygienists (“ACGIH”) has established measures to define safe exposure to various toxins, including manganese. “Threshold Limit Values” (“TLVs”) are one such measure. The TLV for manganese promulgated by the ACGIH has dropped over time. When first published in 1948, the TLV was an 8-hour time-weighted average of 6.0 mg/m3; it was dropped in 1960 to 5.0 mg/m3; dropped again in 1979 to 1.0 mg/m3; and then dropped again in 1995 to 0.2 mg/m3. Since 1995, ACGIH has twice proposed even further reductions; in 2009, the proposed TLV for manganese was 0.02 mg/m3 . In fact, industrial hygienist David Kahane testified that “at least some of the support for the proposed change [to the TLV for manganese] is based on welders and welding fume exposure.” These actual and proposed reductions in the manganese TLV reflect a consensus among industrial hygienists that the more that is known regarding the toxicity of manganese, the lower the exposure limits must be set to ensure “no adverse health effects,” and particularly to protect against brain damage.

Of course, the lower the TLV of a given substance, the more difficult (and expensive) it becomes to ensure that workers’ exposures do not exceed it. Thus, the welding rod industry opposed the change from 1.0 to 0.2 mg/m3 TLV. In 1994, members of the American Welding Society met to discuss the then-proposed reduction of the manganese exposure TLV from 1.0 to 0.2 mg/m3. The AWS meeting minutes state that defendant Lincoln “estimated that if the TLV is lowered to 0.2 milligrams per cubic meter, then the overall welding fume limit ... would be exceeded in most workplace atmospheres.” Despite the fact that the ACGIH did, in fact, reduce the manganese TLV to 0.2 mg/m3 in 1995, none of defendants changed their warning language. After the reduction of the TLV, the AWS Committee on Fumes and Gases explicitly recognized, once again, that the new limit will “be exceeded in most workplace atmospheres” — that is, most welders would be overexposed.

Congress regulates the welding industry via the Occupational Safety and Health Act of 1970 (“OSHA”). Under OSHA, the United States Secretary of Labor sets “mandatory occupational safety and health standards applicable to businesses affecting interstate commerce.” In 1974, the Secretary promulgated regulations requiring “suppliers of welding materials [to] determine the hazard, if any, associated with the use of their materials in welding, cutting, etc.” and provide the following “minimum” warning on “[a]ll filler metals and fusible granular materials”:

CAUTION

Welding may produce fumes and gases hazardous to health. Avoid breathing these fumes and gases. Use adequate ventilation. See ANSI Z49.1-1967 Safety in Welding and Cutting Published by the American Welding Society.

This language rings familiar — it is the same warning the entire welding consumables industry had adopted as their own mandatory warning in 1967. Although the industry has changed its warnings since 1974, OSHA has never updated this regulation. OSHA’s position is that this standard remains appropriate, even though the defendants use new language.

In 1985, the Secretary of Labor promulgated the Hazard Communication Standard (“HazCom Standard”), which, among other things, directed product manufacturers to “ensure that each container of hazardous chemicals leaving the workplace is labeled, tagged or marked with ... [the] [identity of the hazardous chemical(s); [and] [appropriate hazard warnings.” The Secretary further defined an “appropriate hazard warning” as one that “conveyed] the specific physical and health hazard(s), including target organ effects, of the chemical(s) in the container(s).” In the wake of the new federal HazCom Standard, however, no defendant added known “target organ” information to its warning labels, such as mentioning the possibility of brain damage.

In sum, the jury was presented with evidence that: (1) the defendants knew of, and even helped create, industry and government standards and regulations; and (2) the defendants did not adhere to these standards or regulations.

iii. Defendants’ Warnings to Cooley

Defendants’ third and final factual argument is that they did warn Cooley that breathing welding fumes is dangerous throughout his career and, therefore, they are immune from liability for punitive damages under the Iowa standard and the circumstances of this case.

Some of the historical development of the warnings is described in the above section. Put simply, from the time Cooley began welding in 1967 until 1991, defendants used a version of the following warning:

Caution. Welding may produce fumes and gases hazardous to health. Avoid breathing these fumes and gases. Use adequate ventilation.

For the remainder of Cooley’s career— 1991-2003 — defendants began to reference manganese in the safety information associated with their products, although not on the warning label itself. In 1991, for example, Hobart included in its Material Safety Data Sheet (“MSDS”) the statement “nervous system damage may result from overexposure” to manganese in its product. In 1996, Lincoln used the same approach, including language in its MSDS stating: “Manganese present in the fumes from this product may affect the central nervous system, resulting in poor coordination, difficulty speaking, and tremor of arms and legs. The condition is considered irreversible.” Hobart has included some sort of language about manganese and neurological damage in its MSDSs since 1987, and ESAB and Lincoln since 1993. ESAB is the only defendant to incorporate manganese-specific language on their actual warning label, which first occurred in 2002. As discussed below, Cooley presented evidence indicating defendants did not make an effort to inform consumers effectively that their existing product warnings had been amplified.

Cooley also presented evidence explaining characteristics of an effective warning, including the principle that a warning is inadequate unless it identifies clearly: (1) the hazards; (2) how to avoid the hazards; and (3) the consequences of failure to avoid. Cooley’s warnings expert, Dr. Cunitz, testified that defendants’ warnings did not meet these criteria. Indeed, there was substantial evidence from which a jury could reasonably conclude that defendants knew and understood these three elements of an effective warning, and purposefully chose not to employ them. At trial, Dr. Cunitz testified that defendants’ internal memoranda contained statements reflecting a clear understanding of the three basic rules of warnings. Moreover, industry documents discussing the content of the defendants’ warnings acknowledged their deficiency. For example, in 1979, the American Welding Society’s Task Group on Warning Labels noted that a warning must identify clearly the products’ hazards, “how to avoid” the hazards, and the “consequences” of a failure to avoid. Even as late as 2002, defendant ESAB acknowledged that its MSDS “fails to highlight the ‘irreversible’ nature of the symptoms; therefore, it is not a complete statement of the potential damage.”

Dr. Cunitz further testified regarding “anti-warnings.” He explained to the jury that an anti-warning:

is kind of the opposite of a warning. It’s a message that says: Well, there’s this issue, but don’t worry about it. It’s a concept of downplaying and minimizing the danger that’s present as opposed to presenting it in a realistic and actual manner. It’s a difference between worry about this and don’t worry about this.

Similarly, a leading textbook on warnings describes the concept of anti-warnings as follows:

The second strategy is to produce media that deliberately misrepresent dangerous products as safe in order to contradict or eviscerate true warnings. These can include, for example, training materials, advertisements, or promotional materials that project an image of safety for what is in actuality a dangerous product or material. We call these anti-warnings.

Dr. Cunitz testified regarding examples of defendants’ use of anti-warnings. For example, in 1979, representatives of each defendant attended a meeting of an AWSNEMA joint committee dedicated to developing a new warning label, based on the recognition that the 1967 AWS warning was “insufficient.” After that meeting, however, defendants disseminated publications and documents Mr. Cunitz characterized as anti-warnings. Dr. Cunitz told the jury that these publications and documents “are examples of antiwarnings. You have on the one hand the knowledge of a connection, being manganese exposure and serious health effects, and on the other hand you’ve got documents and materials suggesting this is not a problem and everything is perfectly fine, and there’s no safety issue. So you’ve got two messages that are different.”

Thus, a jury could reasonably conclude the evidence adduced at trial demonstrated that: (1) defendants knew that manganese in welding fumes could cause neurological injury; (2) welders were frequently “overexposed” to manganese in welding fume; (3) prior to 2002, none of defendants’ warning labels disclosed the hazard that exposure to manganese in welding fumes could cause neurological damage; (4) established principles of warnings known to defendants require the manufacturer of a hazardous product to identify the hazards, how to avoid them, and the consequences of failure to avoid; (5) defendants knew these principles and knew their warnings did not satisfy them; and (5) defendants used “anti-warnings” to mitigate the force of the warnings they did provide.

b. Analysis: Iowa Punitive Damages Law Applied to the Facts

Upon review of all the evidence in the record in this case, construed in the light most favorable to Cooley and affording him all reasonable inferences, the Court finds substantial evidence upon which a jury could conclude punitive damages are appropriate under applicable Iowa law. It is irrelevant whether the Court, had it been acting as the trier of fact, would have imposed punitive damages. The Court clearly informed the jury of the Iowa standard for punitive damages in the jury instructions. Indeed, the Court’s instructions focused on the explicit language of the Iowa punitive damages statute, rather than explanatory Iowa case law, which disclosed a somewhat more lenient standard for imposition of punitive damages. The only issue is whether, affording Cooley “every legitimate inference that can be reasonably drawn from the evidence,” reasonable minds could disagree as to whether substantial evidence supported Cooley’s punitive damages claim. Based on this standard, Cooley has shouldered his burden under Iowa law to present clear and convincing evidence that defendants’ conduct was in willful and wanton disregard of his safety. Each factual argument will now be addressed in turn.

i. “Reasonable Disagreement” in the Scientific Community

Defendants argue punitive damages are inappropriate in this case because Iowa law precludes a punitive damages award “when room exists for reasonable disagreement over the relative risks and utilities of the conduct and device at issue.” They argue this case is analogous to Mercer, the smoke detector design defect case, in which the Iowa Supreme Court reversed an award of punitive damages based, at least in part, upon “a reasonable disagreement over the relative risks and utilities” of the conduct and device at issue. Therefore, the first question is whether there actually is reasonable disagreement with respect to the threshold question of whether manganese in mild steel welding fumes can cause neurological damage.

Based on the evidence presented, the jury answered that question in the negative. Construed in the light most favorable to Cooley, the evidence shows paid experts debating whether this question is really debatable. The jury was entitled to conclude that the opinions of defendants’ paid experts in this debate were not reliable, and that other evidence (including defendants’ own documents) established that manganese in mild steel welding fumes unquestionably can cause neurological damage.

Ultimately, no evidence was presented in this trial that would undermine the validity of the Court’s conclusion on this same argument in Jowers — there is substantial evidence in the record to support the jury’s conclusion that there is no genuine debate as to whether manganese in welding fumes can cause manganese poisoning. In Jowers, the Court concluded as follows:

The weakness with [defendants’] argument is that, given the evidence adduced at trial, it does not appear to the Court — and apparently it did not appear to the jury — that there actually is “strong disagreement in the scientific community” that welding fumes can cause neurological injury. As discussed above, defendants’ own expert neurologists agree that manganese in welding fumes can accumulate in the brain and cause Manganese-Induced Parkinson-ism. This knowledge is not new: the first scientific report of MIP in welders dates to 1937, and treatises on industrial hygiene in the first half of the 20th century explain that welders can suffer brain damage from excessive manganese exposure. Further, defendants’ own internal documents — as opposed to the publications they wrote for welding journals — have for decades acknowledged the existence of welders who suffered neurological injury due to welding fume exposure.

It is more accurate to say there is strong disagreement in the scientific community regarding how often welders actually suffer the hazard of MIP, and to what degree they are injured. It is generally agreed that, like other toxin-related injuries, whether a welder will ever suffer MIP (and the degree of his impairment) depends on: (1) individual susceptibility, and (2) the “dose,” meaning how much manganese he is exposed to (both cumulative and episodic). The parties and their experts disagree vehemently, however, on how these factors combine to disclose the frequency with which welders actually suffer MIP, and the extent of their physical injuries.

This analysis remains accurate. The fact that Dr. Nausieda stated in this case that there is a “debate” is inconsequential. In context, Dr. Nausieda’s statement refers to the simple fact that, for the purposes of this litigation, the welding consumables industry has resisted conceding that welding fumes can cause neurological injury in normal circumstances. In addition, Dr. Nausieda explained that the neurological community was not aware of a connection between welding fumes and manganese poisoning in the 1970s, 1980s, and 1990s because treating physicians were not aware that welding fumes contained manganese, not because the connection between manganese and neurotoxicity was unknown. Taken as a whole, there is no ambiguity in Dr. Nausieda’s testimony — he opined that, during Cooley’s welding career, it was settled in the scientific community that exposure to manganese contained in welding fume can cause manganese poisoning. Dr. Watts’s expert testimony for defendants, moreover, revealed there is no disagreement in the scientific community with respect to the following: (1) overexposure to manganese causes neurological injury; (2) no one knows how much exposure to manganese is too much; (3) when a welder inhales welding fumes, manganese enters the blood stream and crosses the blood-brain barrier; (4) manganese miners, manganese smelters, and other individuals likely to inhale manganese can and do get manganese poisoning; and (5) many doctors did not diagnose movement disorders in welders as manganese poisoning because the connection between manganese and welding was not (and is not) widely known in the medical community.

Dr. Watts opined the medical community is still debating whether manganese in welding fumes can cause manganese poisoning because, to date, no one has proven a connection through a large-scale epidemiological study of welders. But Cooley presented evidence, including statements of defense experts such as Dr. Lang, that welding fumes can cause manganese poisoning. The record also contains examples of actual diagnoses of manganese poisoning in welders, indicating that welding fumes can cause manganese poisoning. In addition, Cooley presented evidence that many of the studies and articles questioning whether manganese in welding fumes can cause manganese poisoning were prepared by doctors and scientists who were paid by defendants and/or the welding consumables industry.

Defendants are correct that Iowa law— particularly Mercer — makes this a closer question than it was in Jowers. Under Mercer, a reasonable disagreement with respect to the nature and degree of the risk caused by a product and the adequacy of the associated warning is a critical consideration in determining whether a punitive damages award is appropriate. This standard is slightly higher than the one at issue in Jowers, where Mississippi law was less explicit about the effect of such a disagreement. But application of the standard set out in Mercer does not change the result, for three reasons.

First, as discussed above, construing the evidence, and all reasonable inferences, in the light most favorable to Cooley, there was substantial evidence that there is no reasonable debate regarding the risk of manganese in mild steel welding fumes causing neurological injury to welders. The risk is real and exists; the only question is how frequently welders suffer manganese poisoning and how seriously they are injured. Therefore, the Mercer consideration does not apply as a solid bar to punitive damages, because the jury could conclude Dr. Watts’ testimony did not support the conclusion that there was a sufficiently reasonable disagreement to trigger its application.