Lachenmeier, Enloe & Rall - August, 2002 Publication

The Changing Face of Asbestos Litigation:
What to Do When Your Insured Gets Invited to the Party
August, 2002

Asbestos litigation, known for a variety of reasons as “the Mother of All Products Cases,” is not going away anytime soon. Despite the bankruptcy of virtually every major manufacturer and distributor (roughly 40 since 1980 and almost half of them in the last 3 years) more suits are being filed against more defendants than ever before. Companies that were never sued before are suddenly finding themselves sued regularly as plaintiffs’ counsel try to make up for the lack of “target” defendants. In very abbreviated form, I will attempt to tell you a little about asbestos, a little about what is happening, and why, and what you are in for if your insured gets sued.

For those of you without any asbestos background, see if you can determine which of the following statements is not true:

There are 4 major minerals, all known as “asbestos”, but each is chemically different from the others and behaves differently in the lungs;
Every person who lives in a metropolitan area has breathed millions of fibers of asbestos from ambient air;
The lung’s defense mechanisms are extremely efficient at eliminating inhaled foreign particles;
At one time there were more than 7,000 different products being sold which contained asbestos;
Asbestos can cause asbestosis, lung cancer and mesothelioma, a cancer of the lining of the lungs;
There is a dose response curve for most asbestos disease, meaning the higher the level of exposure to asbestos, the more likely disease will occur;
Most people exposed to asbestos do not come down with an asbestos-related disease;
Plaintiffs claim that all products release fibers under some conditions and that all fibers that are breathed contribute to a plaintiffs’ asbestos disease;
Defendants try to prove that any exposure to their products is de minimus and not a “substantial factor” in causing disease;
There is no such thing as being a minor defendant anymore;
“If the asbestos is not friable (airborne and subject to inhalation), you aren’t liable”; and
The Chicago Cubs will win the Pennant this year.

     Because the onset of all asbestos diseases have long latency periods after exposure to asbestos, from 10 to 50 years, asbestos cases in Oregon and elsewhere have no statutes of ultimate repose. ORS 30.907 merely requires a claim to be brought within 2 years of when you know or should have known of the disease and the cause thereof. Imagine having to ask plaintiffs and plaintiffs’ witnesses what they remember about a particular job site 50 years ago! Then imagine trying to find records to disprove a statement made about what occurred 50 years ago when you know that witness must be mistaken. Since plaintiffs’ counsel claim that all exposures over a long working life can contribute to a plaintiffs’ disease, you can see why years worth of CGL policies may come into play, often providing multiple years worth of policies and multiple carriers with coverage for the same “occurrence.”

     Historically, the vast majority of cases were filed against major manufacturers or distributors only and were handled in the federal court system. The federal courts then started transferring all asbestos cases to Pennsylvania where they languished, so by the 1990s plaintiffs’ counsel started including at least one Oregon defendant in state court cases, which prevented diversity jurisdiction and removal to the federal court. The first and only state court case for which there is an appellate opinion is Marlene Purcell v. Asbestos Corp. LTD, et al 153 OR APP 415 (1998). In that case I represented the only Oregon defendant at trial, and prevailed on a motion for directed verdict. My client was not, however, a target defendant.

     All that has changed in the last 3 years, because virtually all of the “target” defendants have declared bankruptcy. The fallout has been felt in two ways. First, there has been, and continues to be, a massive effort to find new defendants with insurance coverage. There is no longer any such thing as a “peripheral defendant” and at least one of the law firms handling plaintiff cases in Multnomah County, appears to purposely isolate individual small defendants to try to squeeze out settlements 10 to 100 times higher than they would have accepted from the same defendant 5 years ago. Wherein it used to be that a person who changed brakes for a living might have sued Raybestos because of asbestos exposure, now people who have changed only a few brakes at home sue mom and pop auto stores. Any company that ever handled an asbestos products, even on a rare basis, is a potential defendant. Products as diverse as sheet rock mud to hair dryers, are being blamed for not only traditional asbestos disease, but also colon cancer, prostate cancer, and non-Hodgkin’s lymphoma!

     The second, somewhat unexpected effect, is that there has been a rash of filings on behalf of people who were exposed to asbestos but arguably do not yet have an asbestos disease, but are fearful they might get one. It is as if they are afraid all defendants will be bankrupt if they wait to find out if they are really injured. Many of these plaintiffs are responding to mass screenings, some sponsored by unions, and others directly by attorneys as far away as Texas. Locally, one mass mailing to “Seniors” was responsible for droves of people getting free x-rays and promises of free pulmonary function tests and regular monitoring, if needed, in exchange for signing up as a client of the Texas law firm. That firm is affiliated with one of the Oregon plaintiffs’ firms.

What to Do if Your Insured gets Sued?

     First of all, pick a defense firm with experience in handling asbestos cases. The plethora of unique medical and legal issues involved in asbestos litigation requires it. Understand that you will be tested, and that unless you are prepared to go to trial, you will likely pay more than you want to settle the case. Be aware that one Multnomah County case involving a cancer of the lining of the lungs lasted 11 full weeks. The good news is that all 5 of the defendants, including my client, got defense verdicts. The stakes in these cases are very high because at least elsewhere, like Texas, Mississippi, and California, multi-million dollar verdicts have been occasionally returned for people who are not even impaired. Make no mistake though, if you do pay $5,000 or $10,000 or more to settle a case, you may have to pay at least that much on every case, unless, or until, you are willing to go to trial, or run out of money.

     Be prepared to pay for experts. In a cancer case, that likely means a pathologist, a pulmonologist, and possibly an oncologist. For certain it means an industrial hygienist, an epidemiologist, and in the appropriate case, a materials specialist. Defendants do work together, often sharing experts, but you could be left alone at trial. In cancer cases jury consultants are, in my opinion, worth their weight in gold.

     Be aware that rulings in Multnomah County have held that the changes in the tort reform law, i.e., several liability, are not applicable, because the court has ruled that the “injuries” occurred prior to the change in the law, even if they did not manifest themselves until later. Be aware that your defense attorney may be hard pressed to pursue that issue. To do so might considerably lessen the exposure, but simultaneously could greatly reduce or eliminate the insured’s available coverages, if a court were to rule that discovery of the disease controlled when the injury occurred, rather than prior exposures.

     The vast majority of people with asbestos disease were exposed to high concentrations of airborne fibers from pipe insulation or similar, easily friable products. Thus, exposure to small amounts of fibers from your insured’s encapsulated products is not likely to be a “substantial” factor in causing plaintiffs’ disease. Proving that is the defense attorney’s task.

     The good news is that aggressive defense pays off. Early depositions, before other defendants settle or are dismissed, keep plaintiffs honest about exposures. Often plaintiffs cannot prove sufficient product identification. Summary judgments are then routinely granted. Keep that in mind and formulate a customized long-term plan for defending your insured. These cases can be defended successfully and over the long run you can do so economically. Welcome to the party!