Lachenmeier, Enloe & Rall - February, 2004 Publication

Problems With the Several Liability Statutes
An Asbestos Case Study
February 2005

     As most of you will recall, in 1995 the Oregon legislature passed Tort Reform legislation. Among other things, it purported to do away with “joint and several liability” and, with some restrictions to protect against insolvent defendants, replaced it with “several liability”. See ORS 18.430-18.490. Accordingly, a defendant is now normally only responsible for his own proportionate share of damages caused to a plaintiff. The new law was to apply to cases “arising” after the effect date of the Act. Had the legislature used the word “accruing”, which is a statute of limitations buzz word, or “filed” there would have been no doubt that asbestos claims which were first discovered or filed after the date of the new law would be governed by it.

     Using the word “arising” caused problems for asbestos disease claims since the date the disease “arose” is often not known with specificity. Did the disease “arise” on the date it was discovered, the date of the first abnormal cellular changes, or on one or more of the dates of exposure, 30 or more years ago? At least two Multnomah County trial court rulings in the last ten years appear to have held that for asbestos cancer or mesothelioma cases, the injury “arose” when the first cells got out of the control of the immune system , thereby inevitably leading to disease, and the best guess in those cases was that it occurred prior to 1995. Thus the court twice held that joint and several liability applied. What this meant for an individual defendant was that if they were liable for any damages they were liable for all of them, minus only offsets for settlements. As time went on, it seemed more and more likely that eventually the court would have to decide that for pending claims “several liability” would apply, as it became harder to rationalize that the newly discovered injuries predated 1995.

     Keeping in mind that a defendant that is “jointly and severally liable” for the damages of all does get the benefit, by way of an offset from damages, of other settlements and that a defendant that is liable only for his “several” share does not get an offset, let’s look at the problems that developed last year with one of my asbestos cases.

     A complaint was filed in early 2004, seeking a large monetary damage award against five defendants in Oregon for allegedly selling “defective” asbestos containing products 30 or more years ago, which allegedly caused a very nice Oregon man to develop a fatal lung disease, mesothelioma. The case was assigned an expedited trial date in November to give him a chance to get to trial while he was still alive. Thus the case was dangerous because of the sympathy factor regardless of the merits of the claim against my clients. However, we soon learned that a few days before the Oregon case was filed, the very same man had filed suit in California against more than 100 different defendants alleging the same disease was caused by exposure to their products!!!

     To start with, one would think you could not have the same claim pending in two different courts at the same time. After all, ORCP Rule 21 allows a defendant to move to dismiss a lawsuit, under 21(3), on the grounds “that there is another action pending between the same parties for the same cause…” But it was not the same parties. The plaintiff was the same, the injury was the same, but the defendants were different. My two clients were sued in Oregon, not in California, and in fact could only legitimately be sued in Oregon since neither did business in California. Accordingly, the knee-jerk reaction to dismiss under Rule 21 was only a mirage.

     As discussed in prior articles plaintiff must show that a particular defendant was a “substantial factor” in causing his disease. Given that plaintiffs claim that each and every fiber of asbestos contributes to plaintiff’s total dose and therefore his disease, it’s no wonder that there were more than 100 defendants. See also my prior article discussing the impact of the bankruptcies of virtually all of the major players in the asbestos arena, causing plaintiff’s counsel to seek out insured defendants where ever they can be found. It is available both on our website and at the website of the OCAA.

     As time went on, and the November trial grew closer, all three of the other Oregon defendants were either dismissed for lack of product ID or got out on summary judgment leaving just my two clients in Oregon. The issue became what law will the court apply and what’s better for my clients, the joint and several liability prior to 1995 for which one gets an offset for settlements, or the several liability which occurs in most post-1995 claims, for which there is no off-set for settlements because each defendant is only liable for that defendant’s fault, absent reapportionment issues for insolvent defendants.

     For quite a while it appeared that the California case was not going to be set until long after the Oregon case. As a result, it was not anticipated that there would be any settlements to help off-set a joint and several liability award. Thus, under joint and several liability, my defendants would either have to win outright or would likely suffer a grossly disproportionate award. Theoretically, there would be rights for contribution back against other responsible parties, but it would take another lawsuit and proof at trial against each defendant to get contribution, years later, if at all. The downside of a verdict in Oregon for the plaintiff was that a determination in Oregon of the value of the claim probably would determine the damages in California under the full faith and credit clause of the US Constitution, though there appeared to be no clear case law on any of this. Presumably an Oregon verdict would set lower damages than a California verdict.

     The analysis of the several liability language of ORS 18.470 was not much more helpful. Under 18.470(2), the statute reads as follows:

“The trier of fact shall compare the fault of the claimant with the fault of any party against whom recovery is sought, the fault of third-party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled…. Except for persons who have settled with the claimant, there shall be no comparison of fault with any person: (a) Who is immune from liability to the claimant; (b) Who is not subject to the jurisdiction of the court; or (c) Who is not subject to action because the claim is barred by the statute of limitations or statute of ultimate repose.

(3) A defendant who files a third-party complaint against a person alleged to be at fault in the matter or who alleges that a person who has settled with the claimant is at fault in the matter, has the burden of proof in establishing: (a) The fault of the third-party defendant or the fault of the person who settled with the claimant; and (b) The fault of the third-party defendant or the person who settled with the claimant was a contributing cause to the injury or death under the law applicable in the matter.”

     Under the factual scenario set forth above, there was one huge problem. I was not going to be able to include on the verdict form the California defendants, unless they had either: (1) settled with the claimant or (2) were subject to the jurisdiction of the Oregon court. As trial approached none had settled and none of the California defendants were subject to the Oregon court’s jurisdiction, at least in this case.

     Detouring for a moment, many of the primary asbestos manufacturing defendants are now bankrupt and have trusts with which you can make a claim, but you can only get a small portion of the value of your claim against those trusts. Presumably under this statute these companies are “immune” from liability so that you can’t assert their liability on a verdict form.
Under a joint and several analysis you would get offsets, but the small payments were not going to be very helpful.

     The case was also a procedural morass because the jury would be asked to do two things. First of all, they must determine whether or not the plaintiff’s exposure, if any, to my client’s products were a “substantial factor” in causing the plaintiff’s disease and, if so, then they would be required to apportion that fault with the other permitted entities on the verdict form.

     The first part requires a defendant to show generally the total exposure the plaintiff had, including from bankrupt defendant’s products and California defendant’s products, but without having to attribute all the exposures to a particular defendant. Exposure to, for instance, pipe insulation or lagging in ships was highly likely to have contained asbestos, and you can show that exposure to the jury even though you don’t know whose asbestos it was. Thus you show all exposures to attempt to prove your client was not a “substantial factor” in causing the plaintiff’s disease. The total exposure is then compared to the exposure from your client’s products to see if it was “substantial.”

     However, if your client’s exposure was a “substantial factor” in causing plaintiff’s disease, then according to 18.470, defendant has to prove the particular exposure of each defendant to the plaintiff in order to get them on the verdict form, and the burden of proof is on the defendant to do so. Here no non-settling California defendants would be on the verdict form, even though plaintiff himself was asserting their fault in California.

     Thus on the facts set forth above, either way, my clients would not be treated fairly and would either have to win outright or else be exposed to a verdict that did not reflect any of the 100 defendant’s sued in California, a result probably not foreseen or intended by those that were responsible of tort reform in 1995.

     The rest of the story, to borrow a phrase from Paul Harvey, is that one of my clients got out on summary judgment prior to trial. My other client, the last man standing, was a local retailer which allegedly sold one set of brake shoes to the plaintiff! Amazingly the manufacturer of those shoes ( actually the manufacturer’s successor ) was sued in that California case, for that very same exposure. Once it was clear that the California case was going to go to trial almost at the same time as the Oregon case, and that the result, through settlement or verdict, would necessarily resolve all of plaintiff’s claims for that same exposure, our local court pushed our trial date back three months. The California case then settled, and the Oregon case was over at the trial level. The summary judgment is on appeal, but even if that client should be unable to prevail on appeal, since many of the California defendants have now settled for what would appear to be a lot of money, I will be much better off in trial than I would have been in November. If it is remanded for trial, either my client will be able to get credit against any possible judgment for those settlements (if joint and several applies) or all settling defendants will now qualify for a spot on the verdict form (if several liability applies). Sometimes timing is everything.

If you have any questions about this subject, please feel free to contact the author at rudy@lerlaw.com or 503-768-9600.