Defense Litigation Insider

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Whole Foods Faces Tremendous Risk In Connection With The Death of an 8 Year-Old From E. Coli 0157:H7 Infection

Posted in All Practice Areas, Foodborne Illness, Massachusetts Courts

The parents of Joshua Kaye, an 8 year-old boy from Braintree, Massachusetts who died on July 7, 2014, after contracting an E. coli 0157:H7 infection that turned into hemolytic uremic syndrome, have filed suit against Whole Foods, the retail store from which they allege to have purchased the contaminated meat, and Rain Crow Ranch, a Missouri company that allegedly produced and sold the meat to Whole Foods. Joshua Kaye was one of three Massachusetts residents known to contract E. coli between June 13 and June 25, 2014, prompting an investigation by the U.S. Department of Agriculture Food Safety and Inspection Service (“FSIS”), in conjunction with the Center for Disease and Control Prevention (“CDC”) and the Massachusetts Department of Public Health. FSIS, which began its investigation on June 25, 2014, purportedly initially linked the E. coli contamination to Whole Foods stores in Newton and South Weymouth, Massachusetts, through epidemiological evidence. FSIS reports that laboratory testing performed on August 13, 2014, presumably Pulsed-field Gel Electrophoresis (“PFGE”), provided a link between the three Massachusetts cases and the Whole Foods markets. On August 15, 2014, Whole Foods initiated the voluntary recall of 368 pounds of ground beef products from its two stores.

Joshua Kaye’s father, Andrew Kaye, told New England Cable News (“NECN”) that DNA samples had linked their son to the E. coli outbreak. Furthermore, Plaintiffs’ Complaint asserts that a stool sample taken from Joshua Kaye resulted in an E. coli 0157:H7 positive culture that “identically matched the Whole Foods Market E. coli 0157:H7 outbreak strain.” Both Whole Foods and Rain Crow Ranch have denied any clear link between the Massachusetts E. coli illnesses and their respective businesses.

Plaintiffs have asserted claims against Whole Foods for: (1) Breach of Implied Warranty of Merchantability; (2) Breach of Warranty in Violation of M.G.L. ch. 93A; (3) Breach of M.G.L. ch. 93A; (4) Negligence; (5) Gross Negligence and Reckless Conduct; (6) Negligent Infliction of Emotional Distress; (7) Conscious Pain and Suffering; (8) Wrongful Death; and (9) Punitive Damages.

What Does It Mean for Whole Foods? As a non-manufacturing product seller, Whole Foods appears to have pass-through liability for the sale of contaminated beef. On that basis, we expect Whole Foods to tender the defense and indemnification of their claim to Rain Crow Ranch. Whole Foods’ success in getting their tender accepted, however, will depend upon the terms of their contract with Rain Crow Ranch for the purchase of ground beef, as well as their role, if any, in the production process in advance of sale. For instance, if Whole Foods’ handling or processing of the subject beef caused or contributed to the alleged E. coli contamination, its independent negligence would preclude a common law indemnification claim and potentially impede a claim for contractual indemnity.

Further, Whole Foods’ tender will be complicated, by Plaintiffs’ assertion of Massachusetts General Laws Chapter 93A claims (“93A”). 93A provides a cause of action for unfair or deceptive practices in the conduct of any trade or commerce. Entities found to have breached 93A can be subject to double or treble damages. Plaintiffs have asserted two separate 93A claims against Whole Foods: (1) for the sale of contaminated meat in contradiction to its marketing of the product as safe; and (2) for failing to make a reasonable offer of settlement in response to Plaintiffs’ 93A demand letter. The latter 93A claim presumably falls outside the bounds of any indemnification provision contained within a purchase agreement entered into by the defendants relative to the subject beef, because it arises from acts independent of the sale of Rain Crow Ranch’s product.

Calif. Supreme Court Takes On ‘Take-Home’ Asbestos

Posted in Asbestos Litigation, California Courts, Premises Liability

Specifically, the court granted preferential review of the issue:

 

“If an employer’s business involves either the use or the manufacture of asbestos-containing products, does the employer owe a duty of care to members of an employee’s household who could be affected by asbestos brought home on the employee’s clothing?”

 

As background, recent California appellate rulings distinguished the liability of manufacturers and landowners in secondary-exposure cases—manufacturers have a duty to warn third-parties of exposure to asbestos carried off-site by an employee; landowners sued in premises liability actions, however, have no equivalent duty to warn identical third-parties. The distinction is outlined by two cases the California Supreme Court is reviewing: Kesner v. Superior Court (May 15, 2014, No. A136378) and Haver v. BNSF Railway Co. (June 3, 3014, No. BC435551).

 

In Kesner, the California First District, Division Three, overruled the trial court’s nonsuit for defendant-manufacturer Pneumo Abex, LLC. Plaintiff Kesner alleged he contracted mesothelioma through exposure to asbestos brought home from his uncle’s longtime employment with defendant-manufacturer Pneumo Abex, LLC. The court found Pneumo Abex, LLC as a manufacturer had a duty to warn Plaintiff of potential exposure to asbestos brought home on his uncle’s clothing.

 

By contrast, in Haver the California Second Appellate District upheld a sustained demurrer in favor of defendant BNSF. In Haver, Plaintiff brought a premises liability action against BNSF Railroad for the wrongful death of Lynn Haver. Lynn Haver suffered severe throat cancer and mesothelioma which eventually proved fatal. Her survivors sued BNSF in premise liability claiming BNSF employed Lynn’s husband who brought home asbestos fibers from BNSF’s premises.

 

In analyzing the BNSF’s duty to Plaintiff Haver, the court distinguished the earlier Kesner decision as a negligent manufacturer case. Following the reasoning in Campbell v. Ford Motor Co. (2012) 206 Cal.App.4th 15, the court held BNSF, as a landowner, had no duty to warn third-party Lynn Haver of potential exposure to asbestos off its premises. The Haver court specifically noted the reasoning in Campbell appears correct and parallels the U.S. majority view on premises liability to third-parties for off-site exposure.

 

Courts throughout the United States have struggled to define what duty, if any, employers—whether manufacturers, premises owners, contractors, suppliers, or others—owe to third parties for potential asbestos exposure away from the worksite. The California Supreme Court’s opinion will clarify this matter for the California courts—and could influence the decisions of all courts struggling with this issue.

 

Please stay tuned to www.defenselitigationinsider.com  for updates as this case progresses.

 

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Delaware Supreme Court Tosses $2.8 Million Verdict in Galliher Asbestos Trial

Posted in Asbestos Litigation, Delaware Courts, Products Liability

Overview:

In an opinion written by Justice Henry DuPont Ridgely, a unanimous panel of the Delaware Supreme Court recently threw out a $2.8 million verdict in the case of Michael Galliher v. R.T. Vanderbilt.  Defense Litigation Insider previously covered the verdict and Trial Court’s post trial opinion.  Here, R.T. Vanderbilt (“Vanderbilt”) appealed the verdict claiming the Trial Court failed to include a necessary jury instruction and certain testimony from plaintiff’s witnesses prejudiced the trial.  Plaintiff cross appealed and claimed he should receive post-verdict interest on the award, but the Supreme Court did not reach that issue.  Instead, the Court ordered a new trial based on the fact that Dr. Barry Castleman provided inadmissible testimony and the Trial Court did not provide a jury instruction on the duty of care owed by Mr. Galliher’s employer.

Dr. Castleman’s Testimony:

During cross examination, Dr. Castleman made several statements that were non-responsive to questions of defense counsel, including some information that had been specifically excluded by the Trial Court.  Dr. Castleman testified that: (1) Johns-Manville employees had called Vanderbilt “liars;” (2) Vanderbilt spent millions of dollars on studies to undermine government regulatory action with respect to its talc; and (3) it was “buying senators and lobbying the government.”  The Court determined Dr. Castleman’s unsolicited testimony during cross examination was inadmissible and its prejudicial effect required a new trial.

Jury Instructions:

The Court also overturned the verdict because the Trial Court did not include an instruction to the jury on the duty of care owed by Mr. Galliher’s employer.  Vanderbilt sought apportionment of fault to the employer and requested a duty of care instruction.  While the Trial Court indicated it would include such an instruction in the final set of jury instructions, it omitted the instruction from the set given to the jury.  The Court found that was an error and such an instruction must be added for the re-trial, which has since been scheduled for March 9, 2015.

 

Trial Tip Take Aways:

  1. All parties should carefully review the final jury instructions and be prepared to address any omissions or errors with the Court prior to or, if necessary, immediately after the instructions are given to the jury, so any errors can be corrected immediately.
  2. All parties should be sure to tell witnesses of evidentiary rulings that impact their testimony and instruct them to limit their testimony accordingly.
  3. Video testimony played by plaintiff at trial included a line of testimony that the Trial Court had ruled was inadmissible.  Although the Court did not thoroughly analyze this issue in this ruling, it created an appealable issue and all parties should be sure to review final cuts of videos before they are played to the jury to avoid potential appellate issues.
  4. Defense counsel should be armed with this opinion in future trials where Dr. Castleman will testify and be prepared to immediately address his testimony with the Court if his answers start to stray from the questions asked.  This opinion may encourage Trial Courts to instruct him to limit his testimony to the questions posed.

 

* Disclosure: Bill Larson served as the Trial Judge’s law clerk during the Galliher trial, but had no involvement in the post-trial motions. 

Significant Asbestos “Take-Home Exposure” Opinion

Posted in Asbestos Litigation, Premises Liability, Products Liability, Toxic Tort

-Persuasive precedent likely as PA judge holds employer/premises owner does not owe duty to warn 

On August 28, 2014, the Honorable Judge Eduardo C. Robreno, in the Multi-District Litigation for asbestos in the United States District Court for the Eastern District of Pennsylvania, issued a significant opinion in which he held that an employer and/or premises owner does not owe a duty “to an employee’s spouse to warn or take measures to protect against take-home exposure to asbestos under Pennsylvania law” Gillen v. The Boeing Co., 2014 WL 4211354, *2 (E.D. Pa. Aug. 27, 2014) (Robreno, J.).

 

In Gillen, Mrs. Gillen alleged that she developed mesothelioma as a result of, among other things, take-home exposure to asbestos transmitted to her husband’s clothes while he was employed at Boeing, then transported to the family home, and inhaled by her when laundering his clothes.  Boeing moved to dismiss claims based on the take-home theory, and argued that Boeing did not owe a duty to a take-home plaintiff.

In granting Boeing’s motion, the Court recognized that there was not any controlling law, either from the Pennsylvania Superior Court or the Pennsylvania Supreme Court, which squarely addressed whether an employer/premises owner owed any duty to a third party under Pennsylvania law, and analyzed cases from multiple jurisdictions which reached divergent conclusions.  Judge Robreno determined that the Pennsylvania Supreme Court would conclude that an employer/premises owner does not owe a duty to warn a third-party of potential asbestos exposure for any exposure which did not occur on the employer’s premises.

The Gillen decision should be most persuasive in cases where Pennsylvania law is applied. It may also, however, serve as persuasive precedent in other jurisdictions, due to Judge Robreno’s extensive history as the presiding judge of the MDL asbestos docket and the detailed analysis he employed in resoundingly concluding that the employer/premises owner does not owe a duty to a third party for take-home exposure.

Manion Gaynor & Manning (MG&M) represented Boeing in this case as national coordinating counsel.  Segal McCambridge Singer & Mahoney served as Boeing’s Pennsylvania local counsel.

Please contact us if you would like to discuss the opinion and/or if you would like copies of the associated briefing.

What’s in a name? That which we call a rose by any other name would smell as sweet;

Posted in Pharmaceutical and Medical Devices, Products Liability, Toxic Tort

Plaintiffs, when faced with a legal bar to traditional negligence claims, frequently try to cloak them in new theories of liability. This tactic is reminiscent of dialogue in William Shakespeare’s play Romeo and Juliet, in which Juliet argues that the names of things do not matter, only what things “are” is truly important.

Trend

An upsurge in this practice took place following the Supreme Court’s decision in Pliva Inc., v. Mensing, 131 S.Ct. 2567 (2011), which held that state-law claims based on a failure to warn of the risks of a generic medication are preempted by federal law. New theories presented by plaintiffs included: (1) that generic manufacturers should have warned healthcare providers of (Metoclopramide’s) risks through means other than the product’s package insert, such as by way of a “Dear Doctor” letter; (2) that state-law liability can be predicated on duties that arise solely from the FDCA; (3) that state-law liability can be premised on an alleged duty to ask the brand-name drug manufacturer to make a labeling change; and (4) that a generic drug manufacturer can be held liable for failing to stop selling a drug with allegedly inadequate warnings.[i]

Recent Defense Ruling

Wyeth-Ayerst Pharmaceuticals, Inc. (“Wyeth”) recently beat back such an effort in Tersigni v. Wyeth-Ayerst Pharm., Inc., 2014 U.S. Dist. LEXIS 86993 (D. Mass. June 25, 2014).  Plaintiff Michael J. Tersigni filed suit on March 11, 2011 against Defendant Wyeth alleging that his primary pulmonary hypertension was caused by his use of its diet drug “Fen-Phen.”[ii]

The Fen-Phen Craze

During the height of the 1990s the market was flooded with diet and weight loss drugs to combat America’s increasing problem with obesity. One such weight loss drug was known as “Fen-Phen,” which was a pharmaceutical cocktail that combined phentermine and fenfluramine. [iii] This combination was not approved by the Food and Drug Administration (FDA), yet was prescribed by doctors across the nation.[iv] Fen-Phen worked by increasing serotonin levels in the brain which had a twofold effect – the consumer would feel satiated, while also experiencing a loss in appetite.[v]

Despite contentious debate about the safety of this pharmaceutical combination, dexfenfluramine, a derivative of the Fen-Phen cocktail and the active ingredient in “Redux,” was approved by the FDA in 1996.[vi]  Sales of the product were very strong, with nearly 2 million individuals taking dexfenfluramine in the U.S. alone.[vii]  An article published in The New England Journal of Medicine in August 1997, however, revealed that Fen-Phen led to a host of illnesses including heart valve problems and pulmonary hypertension.[viii]

Wyeth was the distributor and manufacturer of Pondimin, a version of fenfluramine that had been on the market in the United States since the early 1970s, as well as Redux.[ix]  Wyeth withdrew both of these products from the market in September 1997 following a request by the FDA. This led to a torrent of litigation in which thousands sought financial compensation due to medical conditions allegedly caused by consuming these drugs, including the case brought by Mr. Tersigni.[x]

Plaintiff Strategy

Tersigni brought five claims against Wyeth alleging “Breach of Warranty – defective design (Count I), Breach of Warranty – failure to warn (Count II), Negligence or Products Liability (Count III), Fraudulent Misrepresentation (Count IV), and Fraudulent Concealment (Count V).”[xi]  Tersigni maintained that the action should not be limited to a “failure to warn” theory of negligence, but it should also be construed to allow a “failure to discontinue marketing” theory of liability.  Judge Sterns recognized defense counsel’s argument that such a theory was simply an attempt at a “backdoor” resuscitation of Plaintiff’s claims in violation of Massachusetts’ consistent adherence to the legal principles stated in comment k of Restatement (Second) of Torts § 402A (1965).[xii]

Takeaway

Defense counsel should be on the lookout for preempted claims cloaked in new theories of liability.  Defense Counsel in Tersigni did so, thereby limiting available theories of liability, and obtained a defense verdict on July 31, 2014.  The Court entered judgment on August 4, 2014.[xiii]

 

 


[i] PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 180 L. Ed. 2d 580 (2011).

[ii] Tersigni v. Wyeth-Ayerst Pharm., Inc., 2014 U.S. Dist. LEXIS 86993 (D. Mass. June 25, 2014).

[iv] Id.

[v] Tersigni v. Wyeth-Ayerst Pharm., Inc., CIV.A. 11-10466-RGS, 2013 WL 6531118 (D. Mass. Dec. 13, 2013).

[vii] Cohen, supra note 3.

[viii] Id.

[ix] Tersigni, 2013 WL 6531118.

[x] Tersigni, 2013 WL 6531118; Cohen, supra note 3.

[xi] Tersigni, 2013 WL 6531118.

[xii] Tersigni v. Wyeth-Ayerst Pharm., Inc., 2014 U.S. Dist. LEXIS 86993 (D. Mass. June 25, 2014); citing Vasallo v. Baxter Healthcare Corp., 428 Mass. 1, 22 (1988) and Payton v. Abbott Labs, 386 Mass. 540, 573 (1982). Comment k states, in relevant part, that,

[t]here are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs . . . . Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous. . . . The seller of such products, again with the qualification that they are properly prepared and marketed, and proper warning is given, where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk.

RESTATEMENT (SECOND) OF TORTS § 402A cmt. k (1965).

 

[xiii] See Tersigni v. Wyeth-Ayerst Pharm., Inc., No. 11-10466-RGS ( D. Mass. July 31, 2014), ECF No. 255; Jury Verdict in Favor of Defendant, Tersigni v. Wyeth-Ayerst Pharm., Inc., No. 11-10466-RGS ( D. Mass. Aug. 4, 2014), ECF No. 257.

Will House Bill 4123 Turn Massachusetts Into a Filing Haven for Plaintiffs?

Posted in Asbestos Litigation, Environmental Litigation, Products Liability, Toxic Tort

 

House Bill 4123 makes two changes to Massachusetts Superior Court procedure, both of which favor plaintiffs.  The first, addressed by Section 1 of the bill, allows plaintiffs’ attorneys to request a specific monetary amount of damages at trial.  The second, addressed by Section 2 of the bill, allows attorneys to conduct voir dire.

 

The Language of the Bill

Section 1 of the bill states that “[i]n civil actions in the superior court, parties, through their counsel, may suggest a specific monetary amount for damages at trial.”

 

Section 2 of the bill requires the court, upon the request of any party or any party’s attorney, to permit “the party or the party’s attorney to conduct, under the direction of the court, an oral examination of the jury venire.”  This examination is not unlimited, however.  Instead, “[t]he court may impose reasonable limitations upon the questions allowed during such examination.”  The court may provide additional time to the parties at its discretion.

 

Examination by a party or a party’s counsel does not replace voir dire conducted by the court.  Instead, such examination is “[i]n addition to whatever jury voir dire of the jury venire [that] is conducted by the court.”  Also, the bill does “not limit the number of peremptory challenges a party is entitled to by statute or court rule.”

 

Massachusetts’s Jury Trial Statistics

 

In a 2005 study, the Department of Justice analyzed plaintiff success rates in the United States’ seventy-five most populous counties.  Four Massachusetts counties were included in this study: Essex, Middlesex, Suffolk, and Worcester.  The study revealed that plaintiffs prevailed approximately 53.2 percent of the time nationwide.  However, in the four Massachusetts counties, plaintiffs prevailed in only 79 of the 321 jury trials, for a success rate of approximately 24.6 percent.

 

Potential Impact of the Bill

 

The Massachusetts Academy of Trial Attorneys, an organization of Massachusetts plaintiffs’ attorneys, believes that the implementation of House Bill 4123 will make Massachusetts a more plaintiff-friendly jurisdiction.  After the governor signed the bill into law, the Academy’s president posted a letter to the group’s website calling the bill “a cultural shift in Massachusetts.”  The letter further stated that “the ability to state a dollar amount at trial is also a huge advance” for plaintiffs’ attorneys.

 

If the Academy is correct, House Bill 4123 could make Massachusetts a particularly problematic jurisdiction for toxic tort and products liability defendants.  According to the Department of Justice’s 2005 study of nationwide trial statistics, plaintiffs prevailed in jury trials less than half as frequently in Massachusetts as they do throughout the country.  If plaintiffs in Massachusetts jury trial begin winning more often because House Bill 4123 (1) gives their attorneys a better chance to influence the jury through attorney-conducted voir dire and (2) strengthens their attorneys’ presentation to the jury by authorizing them to request a specific amount of monetary damages, then Massachusetts could become an appealing jurisdiction for plaintiffs, and plaintiffs’ attorney might be emboldened to push cases to the jury that they previously would have settled.

Discovery Costs: How Companies Can Increase Efficiency and Save Money in the Process

Posted in All Practice Areas, Products Liability, Professional Liability, Toxic Tort

Despite efforts to increase efficiency and save money, most businesses set aside substantial budgets for litigation costs. With the ever-changing landscape of litigation, discovery is usually one of the most expensive line-items. In fact, Inside Counsel points out a Gartner forecast showing, “revenue in the enterprise e-discovery software market will grow from $1.8 billion in 2014 to $3.1 billion in 2018”.

 

Although discovery costs are necessary, the way a business operates can have a significant impact on its bottom line.  The following list provides six steps companies should consider implementing to make the discovery process more efficient and save money.

 

1. Determine Which Parties Are Most Important to the Case

 

In discovery your attorney needs to determine where essential documents can be located and who has knowledge most relevant to the case.  This can result in attorneys having to interview several people within a company to determine: (a) who is the best candidate to represent the entity as the Person Most Knowledgeable; (b) where crucial information can be found; and (c) who has access to that information.  Doing some of the initial legwork yourself can save your business many hours of attorney fees and will allow your legal counsel to hit the ground running.

 

2. Be Aware of Deadlines

 

When attorneys receive discovery requests from opposing counsel, they are on the clock.  In California for example, attorneys have 30 days to respond to most forms of written discovery.  This entails analyzing the discovery requests, determining which objections should be made, drafting responses, and providing the client time to review and approve the responses.    To prevent delays, tell your attorneys at the outset of the case how much time you will need to review discovery responses.  You can also request to be notified when discovery requests are received to plan ahead and set aside time in your schedule to review the responses.

 

3. Provide Reliable Modes of 24/7 Communication

 

Poor communication results in increased costs in all industries, and litigation is no exception.  Unanswered emails, missed telephone calls, and other communication misfires can quickly rack up fees.  This is especially true when a discovery deadline is approaching and counsel needs to reach you to acquire information for discovery responses or verification forms.  Inform your counsel of the best ways to reach you.  If you do not typically respond to work emails or phone calls after a certain hour, let your attorney know.  Consider creating an email chain with all parties involved in the case copied to ensure information is communicated simultaneously rather than multiple times.

 

4. Determine Your Theme

 

Litigation can be an art, but usually benefits from an organized, structured presentation of the legal issues raised in a case.  A company theme, or Good Company Story, is often used to provide a common thread during a jury trial to help counteract opposing counsel’s efforts to vilify a company.  By creating a theme at the outset of a case, companies can often maintain a more focused discovery process, thereby minimizing discovery into unnecessary tangent issues.

 

5. Create a Comprehensive Filing System

 

Larger corporations amass abundant volumes of records over the years, often storing them away with minimal organization.  When documents are constantly rotated and reexamined for litigation, a comprehensive filing system may be most cost effective as it eliminates countless hours of searching for documents down the road.  A comprehensive document-control index will only be useful, however, if policies and procedures are developed to ensure that digital and hard-copy documents are promptly and systematically returned to their respective places after viewing. There is nothing more frustrating than spending time and resources on a comprehensive index only to find its true benefit has been compromised by disorganized handlers.

 

6. Embrace Diversity in your Legal Team

 

Some companies opt to have their entire caseload handled exclusively by partners, while others prefer when junior associates do the brunt of the work with minor supervision by partners.  However, a diverse team of attorneys with various levels of experience can holistically tackle legal issues in a shorter amount of time. Partners provide a significant amount of wisdom and experience. Mid-level or senior associates oftentimes have comparative expertise at a lower price-point, and junior associates provide a fresh perspective on mature legal issues.

 

These tips may not work for all businesses, but keeping an open mind and working with your counsel to streamline business operations, before discovery, can result in significant bottom-line savings.

 

Regardless of your business size or sector, now is the time to begin planning for discovery.

 

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Latest Fallout in Garlock Highlights Importance of Thorough Discovery of Bankruptcy Claims

Posted in Asbestos Litigation, Litigation Trends, Toxic Tort

Note: For more MG&M analysis on Garlock, please see previous post by William Larson and Brian Gross.

 

The ramifications of the Garlock asbestos bankruptcy are just beginning to be felt across the country.  As new developments continue to play out, it is important to note that in each of the 15 cases in which Garlock was allowed to conduct additional discovery, the bankruptcy court found evidence that alternative exposures to asbestos were withheld.  This groundbreaking case has shed light on extremely valuable areas of discovery previously not pursued in a thorough enough manner.

 

The case has set in motion a new trend triggering discovery requests for all sources of exposure outlined in prior bankruptcy trust claims. Today, many different entities are seeking additional information regarding any potential withholding of alternative exposure evidence.

 

For example, Sindhu Sundar, writing for Law 360, reports that the bankruptcy court recently granted Ford Motor Company’s request to file a motion in federal district court seeking sealed evidence relative to other potentially withheld bankruptcy claims.

 

Meanwhile, the plaintiffs’ bar has pushed back on Garlock, arguing in a recent motion that Garlock knew of alternative exposures while hiding the evidence.  As a result, the Plaintiffs’ committee in the bankruptcy case has asked that the proceedings relating to the Garlock bankruptcy estimation be reopened, claiming that “Garlock has committed a fraud upon the court”—a charge Garlock attorneys argue is baseless.

 

In Los Angeles, California, Judge Emilie Elias, who has been appointed as the Coordination Trial Judge for all asbestos lawsuits pending in Los Angeles, Orange, and San Diego Counties, has set a hearing on disclosure requirements for bankruptcy trust submissions.  The plaintiffs’ bar has vigorously opposed many of the disclosure requirements, arguing they may file claims simply as “placeholders” to avoid the statute of limitations and such claims should not be discoverable under the attorney work product privilege.

 

Regardless of future rulings on the case, the proceedings highlight the need to conduct thorough investigation and discovery regarding all sources of exposure.

 

As Heather Isringhausen Gvillo noted in Legal Newsline “the ruling should do everything from assisting defense attorneys seeking access to asbestos trust claim submissions as well as fueling both jurisdictional and national efforts to require bankruptcy trust transparency through case management orders or even federal laws.”

 

The lesson learned in Garlock is that companies and insurers involved in asbestos litigation, as well as their attorneys, must insist upon the release of all discoverable bankruptcy trust claims information.  This will sometimes require vigilance and persistence since some plaintiffs’ firms are reluctant or unwilling to provide complete disclosure regarding these sources of exposure.

 

As always, diligent attention to discovery procedures is essential.

 

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Maryland Court Continues Trend, Holding There Is No Duty To Warn For Household Exposure

Posted in Asbestos Litigation, Litigation Trends, Maryland Courts, Toxic Tort

The Maryland Court of Appeals unanimously ruled that Georgia-Pacific Corp. was not liable for illness involving a woman who was exposed to asbestos while doing her father’s laundry in the 1960s.

The Insurance Journal reported on the recent decision:

  • The Court of Appeals ruled that Georgia-Pacific Corp. was not obligated to warn relatives of the dangers of asbestos in the 1960s.
  • The hazard was not sufficiently known until federal regulations were issued in 1972 by the U.S. Occupational Safety and Health Administration.
  • The court’s ruling overturns a $5 million verdict.
  • Jocelyn Farrar had been exposed while doing laundry in the late 1960s and fell ill decades later.

In the decision, available on the website of the Maryland high court (pdf download), the Court explained that it rejected liability because:

  • There was no duty to warn persons such as Ms. Farrar, who was a “bystander of a bystander,” a person who never used the product and never directly came into contact with it.
  • The duty extends to those whom the supplier should expect to use the product or to third persons whom the supplier should expect to be endangered by its use.
  • Even if the danger was foreseeable, prior to 1972 OSHA regulations, it would have been difficult for the company to have provided a warning that could have avoided the danger.

The Maryland decision continues the recent trend in rejecting a duty in cases involving secondary exposure.  In 2012, California followed Ohio and joined the growing list of states which reject the defendant’s duty to an employee’s family member in “take home asbestos” cases. In an article featured in the DRI‘s Newsletter and published on May 9, 2014, co-authors Carter E. Strang and Karen E. Ross also noted the jurisdictions which have rejected secondary exposure claims.  Since their publication, California and Maryland have joined approximately nine other states in rejecting a duty in secondary exposure cases.  Another California court recently came to the same conclusion as the earlier California case in an unreported decision.

However, as Strang and Ross noted in their January 16, 2014 DRI article (pdf download), it is unclear how these cases will play out at the trial level, as a verdict of over $27 million was recently entered in California in a case involving take-home asbestos exposure.

As the National Association of Manufacturers noted, the Maryland Court of Appeals found:

“that there was skimpy knowledge at the time of the danger to household members from asbestos dust brought into the home, and that the company was unable to give warnings directly to such plaintiffs and the warnings would not have had any practical effect. “

Conclusion

Courts nationwide are increasingly rejecting the claims by plaintiffs and their attorneys that seek to impose duties far removed from the allegedly wrongful act.  Defense attorneys can and should seek to impose reasonable limits on the issue of duty to those instances in which harm is reasonably foreseeable to the alleged tortfeasor.  Raising appropriate defenses in cases involving “take home” claims “household” exposure, or secondary exposure is essential to the defense of toxic tort claims.

North Carolina Bankruptcy Court Limits Garlock’s Asbestos Liabilities and Ford Wants the Court Records Unsealed

Posted in Asbestos Litigation, Litigation Trends, Toxic Tort

Court Ruling

Background: Garlock Sealing Technologies, LLC (“Garlock” or “Debtors”) filed for Chapter 11 bankruptcy protection in June 2010.  Garlock had been an active asbestos defendant for its asbestos-containing precut gaskets, sheet gasket material, and packing materials.  In January, after extensive discovery and a trial held under seal, the Bankruptcy Court issued an opinion (pdf download) in which it estimated Garlock’s liability for present and future mesothelioma claims.  The Court adopted the Debtors’ estimate of $125 million despite the $1-$1.3 billion estimate of the representatives of current and future claimants (“Claimants”).

Estimation Analysis: In the past, bankruptcy courts have taken a variety of approaches to estimating liability for present and future claims, which has led to billions of dollars being set aside for claimants in asbestos bankruptcy trusts.  Here, Debtors requested that the Court follow a “legal liability” approach, in which the merits of claims are considered and an econometric analysis is conducted to determine the likelihood of recovery.  Meanwhile, Claimants requested that the Court follow a “settlement approach” based on extrapolating data from Garlock’s past settlements in the tort system.

Before making a determination, Judge George R. Hodges allowed Garlock to conduct additional discovery in 15 cases that it settled or took to trial.  Plaintiffs in these cases were represented by 5 major asbestos plaintiff firms.  In every case, Garlock found that evidence of alternative exposure was withheld.  The Court found on average pre-settlement disclosure of exposure to 2 bankrupt entities’ products, but after settlement those same plaintiffs made claims to an average of 19 bankruptcy trusts.  The Court found several occasions when lawyers misrepresented a plaintiff’s exposure history to judges and juries only to later file claims against trusts for products to which they had previously denied exposure.  Garlock has filed civil lawsuits against several plaintiff firms based on allegations of fraud.  For more details on the allegations and related litigation see the Court’s opinion and accounts from NPR, Forbes, and BusinessWeek.

While the Court recognized a comfort in relying on settlement history to estimate liability, it found in this case a “divorce” from that process was necessary and it adopted the Debtors’ approach and estimate.  The Court determined that the Claimants’ approach did not adequately account for cases in which exposure evidence was withheld and it did not take into consideration the cost of litigation as a driving factor in settlements.  The Court concluded that Garlock’s products were made of low potency chrysotile asbestos and generally Claimants had also been exposed to more potent amphibole asbestos from other manufacturers’ products.  Based on this alternative exposure and the fact that some claimants had never been exposed to asbestos from a Garlock product, the Court concluded Garlock should be responsible only for a small percentage of each claimant’s recovery and only if exposure actually occurred.

The Court adopted the analysis of Dr. Charles E. Bates of Bates White.  It found that $25 million was a reliable estimate of Garlock’s liability to its approximately 4000 current mesothelioma claimants, which is an average of $6,000 per claimant.  The Court also determined $100 million was sufficient to cover future claims based on Dr. Bates’ analysis.  News accounts expect Claimants to challenge these rulings.

Implications: Other entities want to know more about the evidence under seal.  Legal Newsline, which is owned by the U.S. Chamber Institute for Legal Reform, has moved for access to records of the alleged fraud described in the Court’s decision under the First Amendment.  The organization wants the Court to unseal the transcripts of its trial, so it can gather information regarding the plaintiffs’ alleged conduct in those asbestos cases.  Ford Motor Company joined the request last week and claimed that it may have been induced into inflated settlements in some of the cases in which Garlock conducted additional discovery.  If the Court releases the records, it will surely offer a glimpse into the practices of the asbestos plaintiffs’ bar.