First, Workers Comp is the bargain which has been struck (for good or bad) to ensure that people injured at work are compensated without having to sue to be compensated (even when the employer would not be liable under ordinary tort standards). The flip side of that is that (in general) you forfeit your right to sue your employer except in unusual circumstances. It provides a measure of stability and predictability for both parties.
This case was alleged to be one of those unusual circumstances - in which more than compensatory damages were being sought.
The widow in this case will still receive full compensation for the loss of her husband's income for the remainder of his working life. Lots of details go into that compensation, and you can argue about whether the amount is fairly calculated - but the point is that this widow is being compensated for his death. I received medical coverage and around $8000 in a partial permanent disability payment around 1985 for a permanent back injury - which still, 4 decades later, leaves me at a 1/10 pain level all the time, and worse for periods of a month or more at other times, and any treatment for that pain is excluded from coverage by insurance or Medicare. Is $8000 enough compensation for all that pain?
This decision changes nothing about compensation to the widow. It ONLY pertains to damages intended to punish the employer. The suit was under a law which is intended not to compensate victims (Worker's Comp does that), but to punish employers who are reckless as to worker safety - and at least from the summary at the Supreme Court case, it appears this was just an extremely unfortunate accident.
The law in place at the time required employers to provide safety equipment or otherwise mitigate the exposure for workers when there are, “air contaminants” which are “hazardous concentrations of . . . toxic gases . . . when suspended in the atmosphere." The husband, in this case, was not provided with safety equipment (nor was the gas mitigated in any other way - since it does not appear anyone expected the nitrogen level to be so high).
Air is 78% nitrogen. So nitrogen is not, in and of itself, toxic. We breathe it all the time.
The lower court interpreted "toxic gases" as gases which are toxic at the concentration present in the area. That interpretation renders the "hazardous concentrations" meaningless if the gas itself does not need to be inherently toxic. In other words they read the definition of contaminant as hazardous concentration of a toxic concentration of nitrogen when suspended in the atmosphere. A toxic concentration of nitrogen is inherently toxic, so the preface of a hazardous concentration adds no meaning. It is a standard canon of legal construction to read a definition in a way which does not render parts of the definition superfluous.
On the flip side - the lower court's reasoning is also legally sound. There are virtually no gasses which are inherently toxic which are not found in some concentration, however small, in the earth's atmosphere. So the circumstance described literally (without the qualification added by the lower court) would not be found. Gasses found in the atmosphere are toxic solely based their concentration. The ability to crowd out oxygen at higher concentrations (as happened here) is what makes them toxic - so it is nonsensical to require inherent toxicity of the gas (absent a reference to the concentration).
Ultimately, that's why we have Supreme Courts - to make the call as to which of two interpretations of the law is what was intended. If the legislature doesn't agree with that interpretation, it is up to them to change the law to make their intent clear.
It appears the legislature made it clear 3 months after this accident, by removing the word "toxic" as a qualifier of gas - so had the accident occurred 3 months later, punitive damages would have been allowed - and TimkenSteel would have been on notice that it needed to monitor for concentration of gasses (whether inherently toxic or not) and provide safety equipment/mitigate the danger or face punitive damages..
That doesn't alter the tragic circumstances here - but the burden (or benefit) of decisions in individuals cases always fall on/benefit the individuals who are testing the interpretation. And, again, this question ONLY pertains to whether the employer should not only compensate the widow - but also be punished. The employer is still, via the Worker's Comp system, compensating the widow.
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