Lockheed Martin v. Sup. Ct.

Filed 7/11/06 Lockheed Martin v. Sup. Ct. CA4/2

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

ORIGINAL PROCEEDINGS in mandate. Ben T. Kayashima, Judge. (Retired judge of the San Bernardino Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Petition granted.

Gibson, Dunn & Crutcher, Robert S. Warren, Robert W. Loewen, Jeffrey D. Dintzer; Holme Roberts & Owen and Linnea Brown for Petitioner.

No appearance for Respondent.

Engstrom, Lipscomb & Lack, Walter J. Lack, Gary A. Praglin, Richard P. Kinnan, Ann A. Howitt; Girardi & Keese, Thomas V. Girardi, Howard B. Miller; Niddrie, Fish & Buchanan, Martin N. Buchanan; Masry & Vititoe and Edward L. Masry for Real Parties in Interest.

Petitioner and defendant Lockheed Martin Corporation (Lockheed) seeks a writ of mandate to set aside the trial court's denial of a motion for summary adjudication of the punitive damages claim. Although there is a triable issue of fact whether Lockheed's chief safety engineer was a managing agent for the purposes of assessing punitive damages under Civil Code section 3294,^[1] we conclude that plaintiffs have failed to show that they have evidence that any officer, director, or managing agent of Lockheed engaged in or ratified malicious conduct. Accordingly, we grant the petition.

FACTUAL AND PROCEDURAL BACKGROUND

This is yet another petition arising from a series of related actions that have been consolidated for pretrial purposes under the caption In re Redlands Tort Litigation. The plaintiffs claim to have suffered a variety of personal injuries, and also wrongful deaths due to exposure to toxic chemicals that entered the Redlands groundwater as a result of the manufacturing activities of the defendants. Plaintiffs allege that Lockheed contaminated the groundwater from 1954 to 1975 when it owned and operated a rocket propulsion facility in Redlands.^[2]

Lockheed moved for summary adjudication of plaintiffs' claims for punitive damages. From their interrogatory responses, plaintiffs are charging Lockheed with malicious conduct based on the allegation that its standard operating procedures were to transfer chemical waste to a bare-ground pit for dumping and burning, and also to dispose of other chemicals through building drains, which deposited the waste solvents onto the bare ground. All the while, according to plaintiffs, Lockheed was aware that discharge of hazardous waste on the ground would contaminate the city's water supply. However, Lockheed contended in its motion that it had a strict policy against improper disposal of chemicals and that if any improper disposal did occur, no officer, director, or managing agent was aware of it. It claimed that in fact the testimony of every person who even arguably qualified as an officer, director, or managing agent has established that they were not aware of improper disposal practices, and that there were rules against such practices.

Plaintiffs contended in opposition that: (1) the bare-ground disposal of toxic waste was approved by Lockheed's managing agent, Chief Safety Engineer Adolph Heeseman; (2) Lockheed's corporate policy approved bare-ground disposal of toxic waste by

designing and constructing process operation buildings with chemical waste drains that emptied on the bare ground at the facility in Redlands; and (3) Lockheed's waste disposal practices were sufficiently malicious so as to justify punitive damages.

The trial court denied summary adjudication. It concluded that Lockheed had failed to meet its burden of proof to show that Heeseman was not a managing agent. Even if it did, the trial court stated that plaintiffs presented sufficient evidence to raise a triable issue of fact whether Heeseman was a managing agent and had policymaking authority.

The trial court also rejected Lockheed's contention that there was no evidence that Heeseman approved the bare-ground disposal of chemicals. It noted, Heeseman testified that waste solvent and rocket fuel propellant were routinely dumped into the burn pit. The burn pit was unlined and was, in essence, bare ground. Thus, the court denied summary adjudication â€