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Mealey's Litigation Report--Asbestos: An Immature Tort

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MEALEY’S1
LITIGATION REPORT
Asbestos
Asbestos: An Immature Tort (The Contrarian View)
by
Thomas W. Tardy III
and
Taylor H....
Commentary
Asbestos: An Immature Tort (The Contrarian View)
By
Thomas W. Tardy III
and
Taylor H. Wilkins
[Editor’s Note: T...
outcomes today in many jurisdictions are a coin toss,
including in ‘‘Judicial Hellholes’’ once considered extre-
mely host...
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Mealey's Litigation Report--Asbestos: An Immature Tort

  1. 1. MEALEY’S1 LITIGATION REPORT Asbestos Asbestos: An Immature Tort (The Contrarian View) by Thomas W. Tardy III and Taylor H. Wilkins Maron Marvel Bradley Anderson & Tardy Jackson, Mississippi A commentary article reprinted from the September 13, 2017 issue of Mealey’s Litigation Report: Asbestos
  2. 2. Commentary Asbestos: An Immature Tort (The Contrarian View) By Thomas W. Tardy III and Taylor H. Wilkins [Editor’s Note: Thomas W. Tardy III is a director in the Jackson, Miss., office of Maron Marvel Bradley Anderson & Tardy. Taylor H. Wilkins is an associate in the firm’s Jackson office. Any commentary or opinions do not reflect the opinions of Maron Marvel Bradley Anderson & Tardy or LexisNexis1 Mealey Publicationsä. Copyright # 2017 by Thomas W. Tardy III and Taylor H. Wilkins. Responses are welcome.] A mass tort is mature, according to Duke Law School Professor Francis McGovern, ‘‘where there has been full and complete discovery, multiple jury verdicts, and a persistent vitality in the plaintiffs’ contentions.’’ Van- derbilt Law Professor Richard Nagareda added in his book Mass Torts in a World of Settlement that the ‘‘tran- sition to the mature litigation stage comes only when the threat to prevail is such that defendants face a sub- stantial probability of loss in the event of trial.’’ As the asbestos litigation in the United States approaches its golden anniversary one would assume that this mass tort is ‘‘mature,’’ and probably has been that way for many years. Data shows that assumption is wrong with respect to today’s asbestos litigation envir- onment. Whatever maturity existed earlier in the litiga- tion vanished when the major asbestos producers exited the tort system through bankruptcy and were replaced by newer and formerly peripheral defendants as the target of plaintiffs’ claims. Attorneys now at Maron Marvel Bradley Anderson & Tardy LLC have spent years compiling information related to asbestos litigation. Drawing on national sources and information from local counsel throughout the country, our data captures virtually every asbestos verdict from 2008 to the present, including informa- tion related to the claimant’s disease, primary occupa- tion, jurisdiction, total verdict, and more. Our data shows quite clearly that, at least for a new generation of defendants, the ever-evolving asbes- tos litigation is, in fact, very ‘‘immature’’ at this time. A reason is the increasingly remote nature of both plain- tiffs and defendants in the litigation today. The new defendants have strong defenses available to them in many cases, such as alternative (bankrupt entity) expo- sures, and Daubert challenges to exclude plaintiff experts who opine as to causation without regard to dose. Also, many courts have rejected novel legal the- ories which have emerged in recent years, such as the claim that premises owners owed a duty to persons exposed off-site through ‘‘take home’’ exposures to asbestos through occupationally exposed workers and their clothes, or that manufacturers of products such as pumps and valves should be liable for harms caused by exposures to externally applied asbestos-containing thermal insulation or asbestos-containing replacement parts sold by third parties. The likelihood of a defense verdict in any given case is significant and rising. In fact, on average, asbestos defendants now prevail at trial almost as often as plain- tiffs. Many people are likely to find that surprising, but it is true according to our data. Asbestos case trial 1 MEALEY’S 1 LITIGATION REPORT: Asbestos Vol. 32, #15 September 13, 2017
  3. 3. outcomes today in many jurisdictions are a coin toss, including in ‘‘Judicial Hellholes’’ once considered extre- mely hostile to defendants. Further, while large verdicts often draw media attention, many such awards are reduced post-verdict or overturned. Well-intentioned courts want to move cases along, and sick people deserve compensation when someone is at fault. But courts should not be pressuring defendants to give up their right to a jury trial simply to meet these goals. The verdict data shows that when an asbestos defendant decides to take a case to trial, its decision is often vindicated. Defendants deserve their day in court just as much as plaintiffs. Asbestos Defendants Are Winning a Higher Percentage of Cases at Trial During the 1990s, in the country as a whole, asbestos plaintiffs prevailed in a staggering sixty-eight percent of cases tried to verdict. Most cases focused on the potential liability of prominent manufacturers and sellers of more potent and dusty asbestos-containing products. In the early 2000s, however, virtually all those thermal insulation and other primary historical asbestos defen- dants filed bankruptcy and exited the tort system. Commentators have explained that ‘‘following the bankruptcies of those frontline defendants during the Bankruptcy Wave, plaintiff attorneys shifted their liti- gation strategy away from the traditional thermal insu- lation defendants and towards peripheral and new defendants associated with the manufacturing and dis- tribution of alternative asbestos-containing products such as gaskets, pumps, automotive friction products, and residential construction products.’’ A larger percen- tage of cases involved defendants with more attenuated connections to asbestos and less scientific theories of liability. In this new environment, defendants’ win percentage climbed from about thirty-two percent in the 1990s to roughly thirty-nine percent by 2008. At the end of 2016, defendants were winning more than forty-five percent of the time. Juries have clearly become less willing to rule in favor of asbestos plaintiffs. Jurisdictional win rates also offer good insight into cur- rent verdict trends. In the 1990s, asbestos plaintiffs in California and New York had among the highest win percentages at trial in the nation, prevailing in seventy- two and eighty-five percent of cases, respectively. But even those states have mirrored the current trend in asbestos verdict rates in the post-Bankruptcy Wave era. In California, in particular, win rates for defendants at trial jumped from twenty-eight percent in the 1990s to roughly forty percent in 2008. By 2016, an aston- ishing sixty percent of asbestos verdicts in California were for defendants. New York went from having around fifteen percent of cases decided in favor of defendants during the 1990s to almost forty-three per- cent of the time at the end of 2016. In addition to lower success rates for asbestos plaintiffs overall, win percentages for various asbestos-related dis- eases have also been changing. During the past eight years, defendants won around forty percent of mesothe- lioma cases, forty-seven percent of lung cancer cases, and forty-two percent of non-malignancy cases nation- wide. This statistic signals that as the link between exposure and illness becomes less certain, the likelihood of a defense verdict increases. Remittiturs and Other Post-Verdict Adjustments Significantly Reduced Verdict Averages Even when defendants lose at trial, the verdicts are often reduced and sometimes overturned. The average jury award for asbestos plaintiffs nationally during 2008-2016 was approximately $9.3 million. The aver- age verdict nationally after reductions were taken into consideration was a considerably lower $6.3 million. Importantly, this figure does not account for additional reductions for set-offs that are used in certain jurisdic- tions. Accounting for set-offs would lower verdict averages even further. With reductions averaging almost one-third of the total verdict amount before set-offs, defendants can expect continued scrutiny of verdict amounts. National pre-reduction and post-reduction verdict totals for 2011 and 2013 alone provide a striking pic- ture of the manner in which trial and appellate judges can rein in excessive verdicts. In 2011, the national average jury verdict (before reductions), was around $14.2 million. After reductions, the average fell by over sixty percent—down to a post-reduction average of less than $5.7 million. Similarly, in 2013, the average pre-reduction verdict was approximately $11.6 million— after reductions, that figure dropped by over thirty-three percent to $7.7 million. 2 Vol. 32, #15 September 13, 2017 MEALEY’S 1 LITIGATION REPORT: Asbestos
  4. 4. Two individual examples from those years demonstrate the significant effect remittiturs and other post-verdict treatment can have on both jurisdictional and national averages. A Mississippi jury returned a $322 million non-malignancy verdict in 2011. Hailed as the largest single-plaintiff asbestos verdict in the history of asbestos litigation, it was vacated almost immediately in 2012. Consistent reductions in a single jurisdiction are also likely to affect future verdicts and damage awards, which is almost certainly the case in New York. In 2013, New York judges were responsible for more than $163 million of post-verdict reductions—more than ninety-five percent of the amount of all reductions nationally for that year. New York is also responsible for a staggering majority of the national asbestos verdict reductions during 2014, 2015, and 2016—the com- bined total of which approaches $50 million. Judges are unquestionably considering proper requests for verdict reductions by non-prevailing defendants. Conclusion The data paints a perhaps surprising picture of asbestos litigation. Many incorrectly assume the asbestos litiga- tion to be ‘‘mature,’’ but nothing could be further from the truth in the post-Bankruptcy Wave era. Over the last decade, asbestos defendants have been winning a higher percentage of verdicts, now approaching almost one-half. Further, when a defendant does not prevail, the verdict is often reduced or overturned. For these reasons, a defendant’s decision to go to trial rather than settle for the amount of the plaintiff’s demand is often vindicated. Consequently, rather than focus blame for the failure of a case to settle on a perceived ‘‘recalcitrant defendant,’’ judges should focus more ire on the ‘‘recal- citrant plaintiff.’’ I 3 MEALEY’S 1 LITIGATION REPORT: Asbestos Vol. 32, #15 September 13, 2017
  5. 5. MEALEY’S LITIGATION REPORT: ASBESTOS edited by Bryan Redding The Report is produced twice monthly by 1600 John F. Kennedy Blvd., Suite 1655, Philadelphia, PA 19103, USA Telephone: (215)564-1788 1-800-MEALEYS (1-800-632-5397) Email: mealeyinfo@lexisnexis.com Web site: http://www.lexisnexis.com/mealeys ISSN 0742-4647

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