Early twentieth century America, a time of great industrial expansion, was also a time of horribly unsafe working conditions. At the time, the laws on the books were unfair to injured workers and made it extremely hard for them to get compensation for their injuries (which is ultimately what led to the workers compensation system in this country.)
One of the most horrendous examples was New York City’s Triangle Shirtwaist Factory fire, in which 146 young immigrant women were killed, either burned alive or they jumped to their deaths, trapped inside due to locked doors. Today we commemorate the 100 year anniversary of that fire.
The factory owners, Max Blanck and Isaac Harris, were tried and acquitted of manslaughter. But what is less well-known is that they were also sued in civil courts. If there were ever a situation where punitive damages were in order, it was this case. But that was not to be. Here is a fascinating account of those civil trials:
Twenty-three civil suits were filed against Harris and Blanck by the victims’ families claiming, in total, some $500,000. Without a guilty verdict in the criminal case, the civil litigation became more difficult. Again, Harris and Blanck hired Max Steuer to defend them. Steuer raised a host of common law employers’ defenses, such as claiming that the workers assumed all the risks and dangers of their employment and that whatever injuries they suffered were caused by the negligence and carelessness of their fellow workers.
As pointed out by Crystal Eastman (a young labor activist) in an article related to her 1907 study of workplace injury and death, the courts at that time had concluded that there were implied terms in an employment contract under which the worker assumed the ordinary dangers of the work, extraordinary dangers of which the worker was aware, and dangers resulting from the actions of fellow workers. Thus, employee litigants had to prove “direct, individual, mechanical causal connection between the employer and the injured worker.”
In the case of Margaret Schwartz, her heirs would have had to prove that it was the locked door and not the panic of her co-workers that caused her death. The only case that went to trial was brought by Anna Gulla, a survivor who claimed compensation for “nervous disease” she suffered as a result of the fire. The trial lasted two days; the jury did not agree on a verdict and the case was dismissed. The families, most of them poverty-stricken, were overwhelmed by the necessities of earning a living and could not afford the cost of litigation.
Shortly after the Gulla verdict, all settled with the Asch Building owners for $75 for each life lost. But Harris and Blanck had insured the factory against loss, and the amount paid by the insurance company to Blanck and Harris amounted to about $400 per victim. None of that money was paid to the survivors or the heirs of those who had perished in the fire. In 1913, Blanck was once again arrested for locking the door in his factory during working hours. He was fined $20.
Meanwhile yesterday, the Bureau of Justice Statistics released its most recent analysis of the use of punitive damages in the country today. Here are some interesting statistics: the percentage of plaintiff winners awarded punitive damages in product liability cases? 1 percent. In medical malpractice cases? 1 percent. Premise liability? No percent. The median punitive award? $64,000.
With paltry numbers like this, I’m not sure where that leaves us as a country, except to say that in 2011, there probably still are plenty of corporate wrongdoers getting away with murder.