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A Texas appellate court has ordered a new trial in a wrongful death action that originally brought a $42.5 million punitive damages verdict. The 1998 jury award was reduced in 1999 by the trial judge to $200,000, in line with the state’s caps on punitives. But on June 27, the Texas 4th District Court of Appeals found that the trial court, by excluding evidence on compensatory damages, denied the plaintiff the right to prove damages that could sustain a higher punitive award. EXPLOSION AT WORK The lawsuit grew out of the death of Charles Hall, 52, after a workplace accident. Hall was starting a compressor in a Diamond Shamrock plant near Amarillo, Texas, in April 1996, when liquid diesel fuel got into the gas-compression system. This caused the gas in the compressor to explode and burn, said plaintiff’s counsel J. Christopher Dean of Amarillo’s Garner, Stein & Dean. Hall suffered third-degree burns over more than 50 percent of his body; he died eight days later. His widow, Donna, sued Diamond Shamrock Refining Co. and its successor company, Ultramar Diamond Shamrock Inc., charging gross negligence. She contended that Diamond Shamrock had voluntarily and knowingly put liquids into the system and failed to use bleeder valves to drain off the liquid before restarting the compressor, Dean said. Diamond Shamrock contended that a flap valve on the compressor had failed, which caused the leak of fuel into the system. The plaintiff countered that this failure was not the sole cause of the accident, that Diamond Shamrock knew the valve was faulty and that Diamond Shamrock should have drained off the liquid. Hall v. Diamond Shamrock Refining Co. L.P., No. 06CI 11503 (Bexar Co., Texas, Dist. Ct.). In November 1998, a San Antonio jury ordered Diamond Shamrock to pay Donna Hall $42.5 million in punitives. The verdict contained no compensatory damages because, under the Texas labor code, the spouse of an injured worker can sue only for punitive damages and then only if the employee dies as a result of the underlying incident. During the trial, the plaintiff attempted to introduce evidence of economic and noneconomic damages. NO ECONOMIC EVIDENCE Diamond Shamrock objected that such evidence was irrelevant because the plaintiff could not collect compensatory damages. Judge John Specia granted Diamond Shamrock’s motion and prohibited any reference to or any evidence concerning economic or noneconomic loss. This meant, however, that there were no underlying compensatory damages. The Texas cap on punitives allows the greater of $200,000 or two times economic damages. In post-trial motions, Diamond Shamrock argued that because there were no compensatories, the verdict had to be capped at $200,000. Specia agreed. Hall appealed, contending the disallowal of evidence on compensatories was in error and that “Diamond Shamrock invited the error,” Dean said. “They seduced the judge.” The appellate court reversed the reduction and remanded the case for retrial. It found that the jury needed to hear evidence on compensatories in order to make a punitive award because punitives are based on the jury’s findings of economic and noneconomic damages. “Because the evidence of compensatory damages was relevant to Hall’s cause of action, the trial court committed error which resulted in an improper judgment,” Justice Alma L. Lopez wrote for the majority. This error, she added, caused “a substantial discrepancy between the amount Hall was actually awarded and the amount she could have been awarded.” The court also rejected Diamond Shamrock’s claim that the jury was presented with insufficient evidence to sustain a finding of gross negligence against the company. No trial date has been set. Diamond Shamrock will file a motion for rehearing, Dean said. Defense counsel Daryl G. Dursum of the Houston office of New Orleans’ Adams & Reese declined to comment.

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