NEW YORK –– The court overseeing New York City’s coordinated asbestos docket has denied defense efforts to stay the litigation in the wake of a prior decision reinstating punitive damages.

In its Aug. 28 order, Judge Peter H. Moulton of the New York Supreme Court for New York County further outlined a plan for a renegotiation of the docket’s Case Management Order, acknowledging that the current CMO is in need of a “complete re-examination.”

The defendants moved to stay the litigation in a March motion, arguing that the current CMO, implemented nearly 30 years ago, no longer protects the rights and remedies afforded to the defendants.

“The time has come to right this imbalance,” the defendants maintained.

“Twenty-seven years later … a combination of factors –– dramatic changes to the litigation over nearly three decades, recent interpretation of the CMO, implementation of the CMO’s coordinating procedures, and certain systemic favoritism –– have together resulted in a far more significant departure from the rights and remedies afforded to Defendants under the CPLR than the original defendants bargained for or reasonably could have anticipated,” they said.

The plaintiffs opposed the motion, saying that while minor revisions to the CMO were appropriate, overall, it is not systematically unfair to the defendants. The plaintiffs further pointed out that the practice and procedures the defendants challenge have been affirmed at the appellate level.

Judge Moulton agreed, saying that while it would deny the stay, it would participate with the parties in a reevaluation of the CMO.

“The court will attempt to gain consensus of plaintiffs and defendants in any change to the Case Management Order,” the judge wrote. “While the court’s goal will be to craft a new Case Management Order that is wholly consented to by both sides, there may be too great a division between the two sides of certain issues to reach that goal. It may also be that a consent document will be impossible to attain given the diversity of opinion within the defendants’ or the plaintiffs’ respective camps. In any event, the reevaluation of the Case Management Order with the plaintiff and defense bars will inform the court’s understanding of the parties’ varied positions, and will assist the court, if necessary, in drafting a Case Management Order in the absence of complete unanimity among the parties.”

In its order denying the motion to stay, Judge Moulton noted that the defendants’ main motivation for seeking a stay in the docket is the recent modification to the CMO allowing punitive damages. While it affirmed that decision, however, the First Department did say that the defendants were entitled to more notice and discovery of a plaintiff’s claim for punitive damages.

The First Department then stayed any claim for punitive damages pending further modification of the CMO, asking the trial court and the parties to establish a protocol by which plaintiffs may apply for permission to seek punitive damages.

Judge Moulton also clarified that the First Department’s decision did not “explicitly” grant the plaintiffs the right to punitive damages.

“Rather,” the trial judge explained, “the decision focuses on the power of the Coordinating Justice to reintroduce punitive damages.”

And, Judge Moulton said, while modification of the CMO to address these issues is warranted, the defendants have not proven that there is a need for the stay of all NYCAL litigation.

“In balancing the parties’ interests, the court finds that that current state of NYCAL is not so rampantly unfair as to warrant suspending the trials, or the preparation for trials, of hundreds of cases where the plaintiffs have a mortal illness,” the order stated.

“However,” Judge Moulton continued, “the court agrees that defendants have raised important issues that warrant a complete re-examination of the CMO. A top to bottom re-examination is necessary for at least two reasons. First, the CMO has many interdependent provisions, and changes to one portion may affect other aspects of the litigation. Second, the court intends to assist the parties in reaching a negotiated agreement. In such a negotiation it is useful at the outset to leave all aspects of the CMO ‘on the table,’ so that the parties have the greatest leeway to reach agreement.”

Judge Moulton then –– noting their “collective institutional knowledge of NYCAL” –– appointed plaintiffs’ counsel Charles Ferguson and Jordan Fox and defense counsel Judith Yavitz and Robert Malaby as the four people that shall serve on the CMO negotiating committee.

Those representatives were also asked to choose two more representatives from each side.

“The role of the parties’ CMO representatives is to canvas their respective sides and negotiate on their behalf,” the judge stated, asking the parties to submit a document outlining points of agreement and disagreement by Oct. 9.

The court will then oversee negotiations from Oct. 26 to Nov. 13 in attempts to reach an agreement.

The defendants are represented by E. Leo Milonas and David G. Keykoy of Pillsbury Winthrop Shaw Pittman LLP in New York; Timothy M. McCann and Christopher P. Browne of The Law Offices of David M. Santoro in New York; Genevieve MacSteel of McGuireWoods LLP in New York; Alfred Sargente of Hawkins Parnell & Young in New York; Jonathan Kromberg of Darger Errante Yavitz & Blau LLP in New York; Diane Pompei of Lynch Daskal Emery LLP in New York; John J. Fanning of Cullen & Dykman in New York; Donald R. Pugliese of McDermott Will & Emery in New York; Michael A. Tanenbaum of Sedgwick LLP in Newark, N.J.; Suzanne M. Halbardier of Barry, McTiernan & Moore in New York; John C. McGuire of McElroy Deutsch, Mulvaney & Carpenter LLP in New York; Diane H. Miller of Littleton Joyce Ughetta Park & Kelly LLP in Purchase, N.Y.; Thomas M. Canevari of Freehill Hogan & Mahar in New York; Erik C. DiMarco of Wilson Elser Moskowitz Edelman & Dicker LLP in New York; Joseph Koczko and Ruthe Nepf of Thompson Hine in New York; Kerryann M. Cook of McGivney & Kluger in New York; Lisa M. Pascarella of Pascarella Divita in Holmdel, N.J.; Lee Henig-Elona of Gordon & Rees in Florham Park, N.J.; Christopher W. Healy, Adam Masin, Spencer D. Wein and Joseph Koczko of Reed Smith in New York; Anthony J. Marino of Garrity, Graham, Murphy, Garofalo & Flinn in East Hanover, N.J., and New York; James M. Skelly of Marks, O’Neill, O’Brien, Doherty & Kelly in New York; Ellen Zweig of Delaney McBride in New York; David Katzensten of Eckert Seamans Cherin & MEllott of Newark, N.J; Marissa C. Nardi of Winston & Strawn in New York; Jason W. Rubin of Goldberg Miller & Rubin, P.C.; in Philadelphia; Timothy J. McHugh of Lavin, O’Neil, Cedrone & Disipio in New York; Lisa Massimi of Caruso Smith Picini in Fairfield, N.J. Robert B. Marcus of Law Offices of Robert B. Marcus, P.C., in White Plains, N.Y.; Colleen M. Cronin of Marshall, Dennehey, Warner, Coleman & Goggin in Melville, N.Y.; William F. Mueller of Clemente Mueller in Cedar Knolls, N.J.; Robert C. Malaby and Maryellen Connor of Malaby & Bradley in New York; Gary T. Healy of McMahon, Martine & Gallagher in Brooklyn, N.Y.; Jason Sultzer and Joseph Lipari of The Sultzer Law Group, P.C., in New York; Stephen A. Manuele of Feldman Kieffer in Buffalo, N.Y.; Shehzad Hasan, Sandra E. Cavazos and Stephen A. Fennell of Steptoe & Johnson in New York; Jason Harness of Kasowitz, Benson, Torres & Friedman LLP in New York; Richard P. O’Leary of Troutman Sanders in New York; Nancy L. Pennie of Aaronson Rappaport Feinstein & Deutsch in New York; Steven A. Weiner, Joshua S. Lichtenstein and Casey Chamra of O’Toole Fernandez Weiner Van Lieu in Verona, N.J.; Bradley R. Lawrence of Kent & McBride in New York; Lauren Smith, John Falcone and Richard C. Milazzo of Mendes & Mount in New York; Nicole A. Spence of Renzulli Law Firm in White Plains, N.Y.; Kenneth J. Kelly of Epstein Becker & Green in New York; Jason Riemer of Hoagland, Longo, Moran, Dunst & Doukas in New Brunswick, N.J.; Thomas J. Maimone of Maimone & Associates in Port Washington, N.Y; and Philip J. O’Rourke of Lewis, Brisbois, Bisgaard & Smith in New York.

In re: New York City Asbestos Litigation, NYCAL No. 40000/1988 (N.Y. Sup. Ct., New York Cty.).

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