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Relatively “Exclusive”
A national overview of employer
liability for toxic torts
Michael D. Martinez
MATUSHEK NILLES LLC
Factors Giving Rise to “The Compensation Bargain”
• Workers: Loss of Income and Uncertain Recovery
• Before WC, injured wo...
Workers Compensation: Adoption in the U.S.
• First adopted in 1911 and spread rapidly
• By 1921, only 6 states had yet to ...
NIOSH: Occupational Diseases
• NIOSH-recognized ODs include:
• 1) Occupational lung diseases, incl. pneumoconiosis,
lung c...
ODs Caused by Toxic Exposures
• Mesothelioma (asbestos exposure)
• Lung cancer (asbestos, arsenic, beryllium, cadmium, chr...
Early Gap in Statutory Framework for ODs
• WC acts developed to address traumatic injuries
• Most states did not address O...
ODs: Unique Problems Posed by Toxic Exposures
• Uncertain Etiology & Causation
• Epidemiology of the causation is difficul...
Occupational Diseases: Latency
• ODs often become manifest only years after exposure
• Asbestosis (20 to 30-year latency)
...
ODs: Adequacy of Compensation
• Time-barred claims = No Compensation
• More modest recovery than in civil court
• Statutor...
Toxic Tort Plaintiffs’ Bar: Economic Incentive to
Circumvent Exclusive Remedy
• Statutorily limited attorneys’ fees in WC
...
Efforts to Circumvent E.R. in Toxic Tort Cases
• Intentional Tort Exception
• Dual Capacity/Dual Persona
• Injury Outside ...
Intentional Acts Exception to Exclusive Remedy
• WC covers only “accidental” injuries
• “Intent” standard varies by State
...
Intentional Acts Exception:
Knowledge & Appreciation of Risk = Insufficient
• Acevedo v. Consolidated Edison Co. of N.Y., ...
Intentional Acts Exception:
Knowledge & Appreciation of Risk = Insufficient
• Rodgers v. GCA Servs. Group, 2013 Tenn. App....
Outlier Cases Satisfying Deliberate Intent Standard
• Birklid v. Boeing, 127 Wn. 2d 853 (1995)
• Boeing knew in advance it...
Fraudulent Concealment = Intentional Injury
• Intentional injury established where employer concealed actual
knowledge of ...
Outlier States: Gross Negligence = Exception to E.R.
• Texas
• Tex. Lab. Code § 408.001 (2005).
• Exception to E.R. for de...
Dual Capacity/Persona: Exception to E.R.
• “Dual Persona” Doctrine
• An employer may become a third person, vulnerable to ...
Dual Persona in Toxic Tort: Environmental Exposure
• Boyer v. Weyerhauser Co., 39 F. Supp. 3d 1036 (W.D. Wi. 2014)
• Compl...
Dual Persona in Toxic Tort: Inherited Liability
• Calewarts v. CR Meyer & Sons Co., 344 Wis. 2d 124 (2012)
• After merger ...
Outside Scope of WC Act: Off-Site Exposures
• Plaintiffs have sought to circumvent E.R. by alleging toxic exposures
attrib...
Outside Scope of WC Act: Secondary Exposure
• E.R. successfully circumvented where secondary exposure did not arise from
c...
Outside Scope of WC: Not Compensable in WC
• When an OD claim is not compensable in WC, plaintiffs often seek a
remedy in ...
Not Compensable in WC: Time-Barred Claims
• Ganske v. Spahn & Rose Lumber Co., 580 N.W.2d 812, 814-15 (Iowa 1998)
• Findin...
Not Compensable in WC: Civil Action Allowed
• Gidley v. W.R. Grace & Co., 717 P.2d 21 (Mont. 1986)
• Employee who discover...
Not Compensable in WC: Civil Action Allowed
• Tooey v. AK Steel Corp., 81 A.3d 851 (Pa. 2013)
• Because claimant’s mesothe...
Consequences of Tooey decision
• Tooey decision has led to expensive litigation for employers that
was not anticipated and...
Consequences of Tooey decision: Coverage Gap?
• CGL policies exclude coverage for bodily injury to an employee arising out...
Consequences of Tooey decision: Coverage Gap?
• Employers risk only being able to access a single policy year that is subj...
Recent Legislation Bearing on E.R. in Toxic Torts
• The Supreme Courts of Pennsylvania (Tooey) and Illinois
(Folta) came t...
Illinois Legislation: 820 ILCS 305/1.2 & 310/1.1
• Amends WCA to provide that the E.R. provision does not apply to injurie...
Questions? Please contact me:
Michael D. Martinez
mdmartinez@matushek.com
(312) 750-1215
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Relatively Exclusive: A national overview of employer liability for toxic torts Slide 1 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 2 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 3 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 4 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 5 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 6 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 7 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 8 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 9 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 10 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 11 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 12 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 13 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 14 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 15 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 16 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 17 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 18 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 19 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 20 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 21 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 22 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 23 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 24 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 25 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 26 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 27 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 28 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 29 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 30 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 31 Relatively Exclusive: A national overview of employer liability for toxic torts Slide 32
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Presentation given at The National Forum for Environmental & Toxic Tort Issues (FETTI) 2019 Annual Conference at the Union League Club in Chicago, Illinois on September 26, 2019.

Presentation focuses on the viability of, and challenges to, the exclusive remedy defense in toxic tort and asbestos actions nationwide, including recent legislation enacted by the Pennsylvania and Illinois legislatures to reverse the decisions of each state's supreme court with respect to the viability of the exclusive remedy as a defense to civil actions for asbestos-related injuries.

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Relatively Exclusive: A national overview of employer liability for toxic torts

  1. 1. Relatively “Exclusive” A national overview of employer liability for toxic torts Michael D. Martinez MATUSHEK NILLES LLC
  2. 2. Factors Giving Rise to “The Compensation Bargain” • Workers: Loss of Income and Uncertain Recovery • Before WC, injured workers had to prove employer negligence • in a long, costly and uncertain process • Prof. Arthur Larson estimated that only about 17% of workplace accidents were due to employer fault • Negligence law favored employers • “Unholy Trinity” of defenses: contributory negligence, fellow servant rule & assumption of risk • Employers: Unpredictable Costs and Unlimited Liability • Workplace liability insurance premiums were beginning to rise as a result of accidental workplace injuries • State legislatures were adopting employer liability laws • Courts were limiting employer defenses in liability suits • Lack of predictable costs as to awards to workers • Employers becoming insolvent as a result of high damages awards
  3. 3. Workers Compensation: Adoption in the U.S. • First adopted in 1911 and spread rapidly • By 1921, only 6 states had yet to enact WC legislation • Mississippi was the last in 1948 • All states’ WC statutes share a few common principles • Grand Bargain/Quid Pro Quo • Broad coverage of employees for accidental, work-related injuries • Exclusive Remedy • Civil immunity provides predictability of cost for employers • Mandatory Insurance • The employer is required to buy insurance to provide coverage to the employees. The cost of the insurance premium is supposed to be passed on to the consumer of the employer’s product rather than burden taxpayer supported programs. • Details vary by state • Availability of benefits • Covered injuries • Time-limitations • Level of benefits
  4. 4. NIOSH: Occupational Diseases • NIOSH-recognized ODs include: • 1) Occupational lung diseases, incl. pneumoconiosis, lung cancer, and occupational asthma; • 2) Occupational cancers other than lung cancer, including leukemia and cancers of the bladder, liver and nose; • 3) Cardiovascular diseases, incl. hypertension, myocardial infarction, and coronary artery disease; • 4) Reproductive disorders; • 5) Neurotoxic disorders; • 6) Hearing loss; • 7) Dermatologic conditions; and • 8) Psychologic disorders.
  5. 5. ODs Caused by Toxic Exposures • Mesothelioma (asbestos exposure) • Lung cancer (asbestos, arsenic, beryllium, cadmium, chromium, diesel exhaust, ethylene oxide, nickel, radon and silica) • Pneumoconiosis (“dusty lung”) • Asbestosis (asbestos exposure), Silicosis (silica exposure) • Talcosis (talc exposure), Coal worker’s pneumoconiosis (coal dust) • Asthma & COPD (exposure to dust, fumes, oil mist) • Pancreatic cancer (chlorinated hydrocarbons, pesticides, PAHs, nickel) • Prostate cancer (agrochemicals, cadmium, PAHs, diesel exhaust) • Non-Hodgkin’s lymphoma (agrochemicals; ethylene oxide) • Leukemia (rubber workers exposed to benzene; ionizing radiation exposure; ethylene oxide) • Bladder cancer (exposure to aromatic amines in chemical, dye and rubber workers; painters; diesel exhaust) • Nasopharyngeal cancer (formaldehyde exposure) • Skin cancer (exposure to coal tar, arsenic, fracking fluid, ionizing radiation) • Ischemic heart disease (exposure to carbon monoxide, lead, paint removers, rayon fibers) • Malignant neoplasm of the scrotum (mineral oils)
  6. 6. Early Gap in Statutory Framework for ODs • WC acts developed to address traumatic injuries • Most states did not address ODs in their WC laws • Prof. Larson surmised this was due to fact diseases caused by the “normal” conditions of the industry, as distinguished from the negligence of the employer, had consistently been held incapable of supporting a common law action. • Larson, Occupational Diseases Under Workmen’s Compensation Laws, Univ. of Richmond L. Rev. (1974) • Coverage hinged on statutory interpretation of “injury” or “accident”; results varied by state • 1933 trade commission study • Of 44 states with WC laws, only 10 covered ODs and only 5 would allow a claim for silicosis. • Report to the Legislature on Occupational Disease, Massachusetts Workers’ Compensation Advisory Council (1990). • Scheduled lists of occupational diseases (ODs) • Limits compensation to specific diseases • Legislation often trailing behind the science • Mostly abandoned for general coverage, broadly defining “injury” or “disease”
  7. 7. ODs: Unique Problems Posed by Toxic Exposures • Uncertain Etiology & Causation • Epidemiology of the causation is difficult to establish with certainty • May be virtually indistinguishable from diseases with non-occupational causes • NIOSH has said there are only 10 diseases that are uniquely occupational in origin. Most others have “multiple etiologies” and are seen both within and without the workplace. • Latency Period • ODs often become manifest only years after exposure to a harmful stimulus. • Long latency ODs may be time-barred; state-specific limitations • Adequacy of Compensation • Perception that WC benefits are inadequate compensation • Plaintiffs’ Bar • Economic incentive to circumvent Exclusive Remedy protections
  8. 8. Occupational Diseases: Latency • ODs often become manifest only years after exposure • Asbestosis (20 to 30-year latency) • Mesothelioma, (20 to 50-year latency) • Occupational Respiratory Cancers (5 to 20 years) • Asbestos (>19 years), Chromium (>5 years), Soot (> 9 years) • Silicosis (10 to 20-year latency) • Pancreatic cancer (15 to 20-year latency) • Liver cancer (12-year latency) • Esophageal cancer (20-year latency) • Nasopharyngeal cancer (15-year latency) • Bladder cancer (4-year latency) • Skin cancer (20 to 50-year latency) • Non-Hodgkin’s lymphoma (2 to 15+ year latency) • Leukemia from benzene and radiation exposure (5 to15 year latency) • Source: Minimum Latency & Types or Categories of Cancer, World Trade Center 9.11 Monitoring and Treatment Health Program, Nov. 7, 2014 • Long latency OD claims may be time-barred • State-specific limitations
  9. 9. ODs: Adequacy of Compensation • Time-barred claims = No Compensation • More modest recovery than in civil court • Statutorily limited benefits • No pain and suffering • No loss of consortium • No punitive damages • Tort liens on third party recovery • WC award may reduce civil recovery and vice versa • WC award may reduce collateral benefits (e.g. SSDI) • WC claims often limited to one employer • “Last injurious exposure” rule breeds litigation • Can place entire liability on last employer with only token exposure
  10. 10. Toxic Tort Plaintiffs’ Bar: Economic Incentive to Circumvent Exclusive Remedy • Statutorily limited attorneys’ fees in WC • Typically 20% in WC vs. 40% in civil court • Unavailability of large jury verdicts reduces settlement value • WC benefits often pale in comparison to civil jury verdicts for same injuries • Dwindling pool of viable defendants in the tort system • Bankruptcies, dissolutions, and difficulties with producing actionable evidence against third party manufacturers, contractors and suppliers • “One of the trends in the last few years has been that in trying to identify solvent potential defendants, plaintiffs’ lawyers are challenging the exclusive remedy provision of state (Workers’ Compensation) laws to try to bring employers into the asbestos litigation.” • Mark Behrens, Shook Hardy & Bacon, quoted in Malfitano, N., Asbestos attorneys: Supreme Court decision hasn’t brought flood of suits against employers, Pennsylvania Record, Sept. 20, 2016
  11. 11. Efforts to Circumvent E.R. in Toxic Tort Cases • Intentional Tort Exception • Dual Capacity/Dual Persona • Injury Outside Scope of WC • Does not arise from employment • Claims not compensable in WC • Constitutional Challenges • Legislative Amendments
  12. 12. Intentional Acts Exception to Exclusive Remedy • WC covers only “accidental” injuries • “Intent” standard varies by State • Narrow: “Deliberately Intended” to Injure • Must intend the act and desire the result • Broad: Injury “Substantially Certain” to Occur • Must intend the act and the result must, objectively, • be “virtually certain” to occur • Main difference is subjective vs. objective intent • Gross negligence/reckless indifference typically insufficient
  13. 13. Intentional Acts Exception: Knowledge & Appreciation of Risk = Insufficient • Acevedo v. Consolidated Edison Co. of N.Y., 189 A.D. 2d 497 (1993) • Employee cleaned up an explosion of steam pipe in 1990; not warned of hazard. • The conduct must be engaged in with the desire to bring about the consequence of the act; mere knowledge and appreciation of a risk is not the same as the intent to cause injury • Agee v. Ford Motor Co., 208 Mich. App. 363 (1995) • Expert testimony that injury was certain to occur to approx. 1/3 of the employees at Ford plant due to asbestos exposure found insufficient because plaintiff failed to establish injury was certain to occur • “The alleged facts demonstrate a reckless disregard for health, safety and welfare of the employees, but the standard set forth is not a gross negligence standard; it requires ‘actual knowledge’ of certain injury and willful disregard of that knowledge.” • Zimko v. American Cyanamid, 905 So. 2d 465 (La. Ct. App. 2005) • Mere knowledge and appreciation of the risk does not constitute intent, nor does reckless or wanton conduct or gross negligence. • Walston v. Boeing, 181 Wn. 2d 391 (2014) • Because employer could not know with certainty that any employee would be injured by asbestos exposure in the workplace, as not everyone exposed to asbestos developed an asbestos related disease, employer was immune from employee’s suit for workplace injury
  14. 14. Intentional Acts Exception: Knowledge & Appreciation of Risk = Insufficient • Rodgers v. GCA Servs. Group, 2013 Tenn. App. LEXIS 99 (Tenn. Ct. App. 2013) • Employer requiring decedent to work near toxic mold found insufficient to show employer actually intended to injure her. • DeMoss v. Coeur D’Alene, 118 Idaho 176 (1990) • While protective clothing provided to the workers may have been inadequate to protect them from asbestos, that did not rise to the level of unprovoked physical aggression required to defeat the E.R. provision of the WCA • Landry v. Uniroyal Chem. Co., 653 So. 2d 1199 (La. 1995) • Exposing employees to asbestos without instructing them to wear protective gear, leave area or warn them deemed insufficient to establish intent • Allegations of failure to provide a safe workplace, disregard of OSHA safety provisions, failure to correct unsafe working conditions and failure to provide specifically requested safety equipment are not sufficient to invoke intentional act exception to E.R. • Carter v. Henry Carlson’s Constr. Co., 2019 U.S. Dist. LEXIS 54886 (W.D. Wis. Mar. 31, 2019) • Substantial certainty requires more than willful and wanton conduct and should not be equated with substantial likelihood
  15. 15. Outlier Cases Satisfying Deliberate Intent Standard • Birklid v. Boeing, 127 Wn. 2d 853 (1995) • Boeing knew in advance its workers would become ill from the phenol-formaldehyde fumes, yet put the new resin into production. After beginning to use the resin, Boeing then observed its workers becoming ill from the exposure. These facts went beyond gross negligence of the employer and involved willful disregard of actual knowledge of the employer of continuing injuries to employees. • Lusk v. Monaco Motor Homes, Inc., 775 P.2d 891 (Or. Ct. App. 1989) • Employer knew that paint was highly toxic and that plaintiff’s resulting exposure was substantial and continuing; it did not follow the warnings of the paint manufacturer and the urging of its insurer to furnish a supplied-air respirator; plaintiff and his supervisor had complained about the problem repeatedly; and the cost of proper available equipment (which defendant knew would soon be required by the state) was not prohibitive. A specific intent to produce injury is not the only permissible inference to be drawn from defendant’s apparent obstinancy, but it is one that a jury should be permitted to consider.
  16. 16. Fraudulent Concealment = Intentional Injury • Intentional injury established where employer concealed actual knowledge of harm to its employees and intentionally misled its employees • Lockwood v. W.R. Grace, 272 Mont. 202 (Mont. 1995) • Milison v. E.I. duPont de Nemours & Co., 101 N.J. 161 (N.J. 1985) • Handley v. Unarco Indus., Inc., 124 Ill. App. 3d 56 (Ill. App. Ct. 1984) • Johns-Manville Products Corp. v. Contra Costa Sup. Ct., 27 Cal. 3d 465 (1980) • Distinction is where employer has “certain knowledge” employee is being injured vs. employer exposing employee to risk of harm without certain knowledge employee is being or will be harmed. • Fraudulent concealment codified as an exception to the E.R. in some states • Ann. Cal. Labor Code § 3602(b)(2) • Ohio Rev. Code Ann. § 2745.01
  17. 17. Outlier States: Gross Negligence = Exception to E.R. • Texas • Tex. Lab. Code § 408.001 (2005). • Exception to E.R. for death caused by “gross negligence” • Standard has objective and subjective components • Goodyear Tire & Rubber Co. v. Rogers, 538 S.W.3d 637 (Tx. Ct. App. 2017) • Statistical evidence of the probability of serious injury is not required to establish the objective component (“extreme risk”) of gross negligence. • Goodyear “turned a blind eye” to the dangers of asbestos at its facility for at least 11 years; did not warn employees or conduct air sampling until 1983.
  18. 18. Dual Capacity/Persona: Exception to E.R. • “Dual Persona” Doctrine • An employer may become a third person, vulnerable to tort suit by an employee, if -- and only if -- he possesses a second persona so completely independent from and unrelated to his status as employer that by established standards the law recognizes it as a separate legal person. 2A A. Larson, supra, § 72.81, at 14-229. • If the “dual persona” is to apply, the injury must flow solely from the non-employer persona, not be just coincidental to it. • Examples include: • Employer hospital is negligent in treating employee’s work-related injury • Some instances of landowner liability • Product Liability for manufacturer employers • Only viable where employee’s exposure to employer’s products is wholly independent from their employment.
  19. 19. Dual Persona in Toxic Tort: Environmental Exposure • Boyer v. Weyerhauser Co., 39 F. Supp. 3d 1036 (W.D. Wi. 2014) • Complaint alleged that some exposures occurred in employee’s home or car, where fibers had migrated, or areas of the plant where no work-related activities occurred. • Community exposure theory allowed to proceed (although court expressed skepticism at the merits) • Pecher v. Owens-Illinois, Inc., 859 F.3d 396 (7th Cir. 2017) • Plaintiff attributed his mesothelioma not to his exposure while working at the Weyerhauser plant, but to non-occupational environmental exposure in the surrounding community, including while working a side job a few blocks from the plant and one month living in the same city as the plant • Kilty v. Weyerhauser Co., 2018 U.S. Dist. LEXIS 64002 (W.D. Wi. 2018) • E.R. would bar claims based on exposure to fibers carried home from the plant, but does not bar non-occupational community exposure claim.
  20. 20. Dual Persona in Toxic Tort: Inherited Liability • Calewarts v. CR Meyer & Sons Co., 344 Wis. 2d 124 (2012) • After merger with Nicolet Paper, Milprint (Colonial Heights) acquired a "dual persona" relative to Calewarts. Therefore, while immune from safe place liability as Calewarts’ employer from 1962-82, it is not immune from inherited liability for Nicolet Paper's conduct prior to the merger. • Finding “the legislature never intended the [WCA] to immunize the employer from liability for obligations arising from a source other than its role as an employer.“
  21. 21. Outside Scope of WC Act: Off-Site Exposures • Plaintiffs have sought to circumvent E.R. by alleging toxic exposures attributable to employer occurred outside of employment • Claims rejected where source of harm “arose from” employment • Acevedo v. Consolidated Edison of N.Y., 189 A.D. 2d 497 (N.Y. App. Div. 1993) • Rejecting employee’s tort claims premised on employee’s exposure to asbestos fibers remaining on clothing after they had returned home because any damage resulting from such harm arose out of plaintiff’s employment. • Melendrez v. Ameron International Corp., 240 Cal. App. 4th 632 (Cal. Ct. App. 2015) • E.R. provision applies even where employee was also exposed to employer’s product at his home; the contribution of employee’s home exposure did not create a divisible, separate injury outside WC law that is compensable in tort. • Swanson v. Simpson Timber Company, 78 Cal. Comp. Cases 1125 (Cal. Ct. App. Oct. 2, 2013) • Rejecting attempt to hold employer liable for employee’s secondary exposure to asbestos from contact with fellow employee, away from the job site.
  22. 22. Outside Scope of WC Act: Secondary Exposure • E.R. successfully circumvented where secondary exposure did not arise from claimant’s employment and therefore outside scope of WC • Anderson v. A.J. Friedman Supply Co., Inc., 416 N.J. Super. 46, 54 (App. Div. 2010) • Plaintiff alleged liability for asbestos exposure during her employment with Exxon from 1974 to 1986 and secondary exposure from laundering her husband’s asbestos- laden work clothes during his employment with Exxon from 1969 to 2003. • E.R. did not bar recovery for injury “caused from exposures while she was not employed by Exxon.” • Schneider Electric, USA, Inc. v. Williams, 2019 Ky. App. Unpub. LEXIS 578 (Ct. App. Aug. 9, 2019) • Claimant’s brief employment (1 summer) with Square D did not preclude her claims relating to household exposure attributable to her father’s employment at Square D.
  23. 23. Outside Scope of WC: Not Compensable in WC • When an OD claim is not compensable in WC, plaintiffs often seek a remedy in civil court • Typically where claim is time-barred by a SOR or otherwise not covered • Courts typically defer to the Legislature’s enactment of time-limitations on the filing of WC claims, even when there are harsh results • Folta v. Ferro Engineering, 2015 IL 118070 (Ill. 2015) • Rejecting Equal Protection argument and finding the E.R. controlled, even though an employee may not be able to recover under the WCA because of 25-year SOR • Hendrix v. Alcoa, 2016 Ark. 453 (Ark. 2016) • Rejecting argument that employee’s time-barred mesothelioma claim was not subject to the E.R. despite acknowledging fact long latency of mesothelioma • Majority did not address constitutionality, but dissent did. • Matthews v. DuPont, 2018 U.S. Dist. LEXIS 193735 (D.S.C. Nov. 13, 2018) • Rejecting similar argument that asbestos-related lung cancer claim was not compensable under the WCA because time-barred and therefore not subject to the E.R. provision. • “While this result may seem unfair, this Court is not tasked with legislating.”
  24. 24. Not Compensable in WC: Time-Barred Claims • Ganske v. Spahn & Rose Lumber Co., 580 N.W.2d 812, 814-15 (Iowa 1998) • Finding no right to a common law action against employer where employee’s mesothelioma claim time-barred by 3-year SOR • OD does not have to be compensable to fall within the coverage formula of the WCA • Employee’s constitutional argument waived on appeal • Tomlinson v. Owens-Corning Fiberglas Corp., 244 Kan. 506 (1989) • Claim for asbestosis time-barred by 5-year SOR, which did not amount to an unconstitutional denial of remedy • Time limitations to file claims does not restrict coverage of ODs • Wyoming Refining Co. v. Bottjen, 695 P.2d 647 (Wyo. 1985) • Asbestosis claim time-barred by 3-year SOR despite amendment eradicating SOR • Stone v. SAIF, 57 Or. App. 808 (1982) • 5-year SOR for WC found constitutional barring asbestosis claim despite long latency • Tyson v. Johns-Manville Sales Corp., 399 So. 2d 263, 269 (Ala. 1981) • Finding 1-year SOL for reasonable and binding for latent asbestos disease claims • Bunker v. National Gypsum Co., 441 N.E.2d 8 (Ind. 1982) • Asbestosis claim time-barred by 3-year SOR; constitutional challenge rejected; time-limits deemed constitutional legislation • Tisco Intermountain & State Ins. Fund v. Industrial Comm’n, 744 P.2d 1340 (Utah 1987) • 3-year SOL applied to bar recovery of WC benefits for mesothelioma claim
  25. 25. Not Compensable in WC: Civil Action Allowed • Gidley v. W.R. Grace & Co., 717 P.2d 21 (Mont. 1986) • Employee who discovered he suffered injury from asbestos exposure 4 years after he left his job was ineligible for WC due to 3-year SOR but entitled to sue in civil court). • 1989 amendment replaced SOR with 1-year “discovery” rule • Missouri • 2005 amendments requiring “strict construction” inadvertently excluded all occupational diseases from WC. • Resulted in: KCP&L Greater Mo. Operations Co. v. Cook, 353 S.W.3d 14, 18 (Mo. Ct. App. 2011) • Mesothelioma did not meet definition of “accident” under 2005 amendments; therefore not subject to WC and claim can be pursued in civil court. • 2013 amendments provided new category of “occupational disease due to toxic exposure,” increased meso benefits 300% and allowed employers to purchase separate coverage for meso liability.
  26. 26. Not Compensable in WC: Civil Action Allowed • Tooey v. AK Steel Corp., 81 A.3d 851 (Pa. 2013) • Because claimant’s mesothelioma manifested outside the 300-week SOR, the claim did not fall within the purview of the WCA and the ER did not apply to preclude common law claim against employer. • Statutory definition of OD limited to diseases manifesting within 300 weeks of last exposure; found to operate as a “de facto exclusion of coverage” for meso under WCA • Leaving the employee with no remedy would contravene WCA’s intended purpose of benefiting injured workers; WCA is remedial in nature, intended to benefit the worker, and must be liberally construed to effectuate its humanitarian objectives. • Therefore found the Legislature did not intend for the WCA to apply to OD claims which manifest more than 300 weeks after the last occupational exposure
  27. 27. Consequences of Tooey decision • Tooey decision has led to expensive litigation for employers that was not anticipated and threatens to put many small businesses out of business. • NFIB Statement to Pa. House and Labor Industry Committee, May 6, 2019. • Potentially unlimited liability • Difficult to project and plan for costs that may be associated with OD litigation • Difficult to defend these claims given passage of time and reliance on E.R. immunity • New defendants being dragged into asbestos litigation • 1 NFIB member had to settle 2 suits for $40,000 each despite having no asbestos history • In the first post-Tooey verdict in Pennsylvania, Busbey v. ESAB Group, a Philadelphia County jury brought back a verdict solely against a Pennsylvania employer for $1.7 million in 2015
  28. 28. Consequences of Tooey decision: Coverage Gap? • CGL policies exclude coverage for bodily injury to an employee arising out of employment • Employer’s Liability (Part B) policies are now being invoked for employer- liability asbestos claims • Part B coverage exists to fill the gaps between WC coverage and an employer’s general liability policy… to protect the insured from tort liability for injuries to employees which do not come under the ER provisions of WC. • Erie Ins. Prop. & Cas. Co. v. Stage Show Pizza, JTS, Inc., 210 W. Va. 63, 68 (2001). • Part B coverage is fundamentally different and more limited than CGLs • High deductibles (or loss reimbursement provisions) and low aggregate limits. • Coverage often limited to claims filed within 3-5 years of the policy’s expiration date. • “Continuous trigger” applicable to CGL policies unlikely to apply; coverage limited to policies in effect on the last day of the worker’s exposure • Source: Asbestos Suits Against Employers Present New Risk for Employer’s Liability Insurers, Sept. 2014, available at www.gordonreese.com/publications/2014/asbestos-suits-against-employers-present-new-risk-for-employers-liability-insurers
  29. 29. Consequences of Tooey decision: Coverage Gap? • Employers risk only being able to access a single policy year that is subject to a high deductible and low aggregate limit (with no excess coverage available). • “The liability for ‘Tooey cases’ is passed to insurers, but only if the employer carried employer’s liability insurance in the year the employee was last exposed. Policy limits for employer’s liability claims were typically set at $100,000 per claim, which would cover only a fraction of a typical Tooey settlement, let alone a jury verdict. In many cases, employers are left to defend and pay for these cases on their own.” • K. Kachline, Comments for the House Labor and Industry Committee’s Hearing on HB1234, May 6, 2019.
  30. 30. Recent Legislation Bearing on E.R. in Toxic Torts • The Supreme Courts of Pennsylvania (Tooey) and Illinois (Folta) came to opposite conclusions in determining whether time-barred OD injury claims could be pursued in civil court • Both states’ legislatures haven taken actions in response to these decisions • Pennsylvania HB-1234 would return latent injury disease claims to WC • Illinois has enacted 820 ILCS 305/1.2 & 310/1.1, which seeks to provide a common law remedy for time-barred OD injury claims
  31. 31. Illinois Legislation: 820 ILCS 305/1.2 & 310/1.1 • Amends WCA to provide that the E.R. provision does not apply to injuries or death resulting from an OD to which recovery of compensation benefits under WC would be precluded due to the operation of any period of repose or repose provision. • Subject of Criticism • Political legislation • Increases costs for employers • Brings new defendants into the tort system • Insurance coverage gap • Illinois Chamber of Commerce President Todd Maisch wrote a letter to Gov. Pritzker stating employers may be uninsured as business liability policies exclude WC claims and WC policies exclude civil claims against the employer. • J. Breslin, Attorneys take aim at new work comp law, allowing workers to sue in court and press work comp claims, Cook County Record, Aug. 30, 2019 • Questionable Constitutionality • Vested Rights • Impermissibly Retroactive • Special Legislation
  32. 32. Questions? Please contact me: Michael D. Martinez mdmartinez@matushek.com (312) 750-1215

Presentation given at The National Forum for Environmental & Toxic Tort Issues (FETTI) 2019 Annual Conference at the Union League Club in Chicago, Illinois on September 26, 2019. Presentation focuses on the viability of, and challenges to, the exclusive remedy defense in toxic tort and asbestos actions nationwide, including recent legislation enacted by the Pennsylvania and Illinois legislatures to reverse the decisions of each state's supreme court with respect to the viability of the exclusive remedy as a defense to civil actions for asbestos-related injuries.

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