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D.C. Court of Appeals Overturns Frye and Adopts Federal Rule of Evidence Rule 702

Posted in Complex Torts, Products Liability, Toxic Tort
district court

Washington, D.C. District Court of Appeals

The District of Columbia Court of Appeals recently adopted the standards found in Federal Rule of Evidence 702 (“Rule 702”), regarding the admissibility of testimony by expert witnesses, thereby replacing the Frye (“Frye”) test.  See Motorola Inc., et al. v. Michael Patrick Murray, et al., 2016 WL 6134870 (October 20, 2016)(“Motorola”). Washington D.C. is now the most recent jurisdiction to adopt Rule 702, a trend that has continued since Rule 702 was amended in 2000 to reflect United States Supreme Court decisions pertaining to expert witness testimony, such as Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993); Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999); and General Electric v. Joiner, 522 U.S. 136 (1997).

Rule 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

  1. the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
  2. the testimony is based on sufficient facts or data;
  3. the testimony is the product of reliable principles and methods; and
  4. the expert has reliably applied the principles and methods to the facts of the case.

In Motorola Plaintiffs in thirteen cases sued numerous cell phone manufacturers, service providers, and trade associations, alleging that long-term exposure to cell-phone radiation caused their brain tumors. The trial Judge Frederick H. Weisberg, held four weeks of evidentiary hearings on the admissibility of the expert testimony offered by the plaintiffs. He concluded that, based on the record before him, some, but not all, of Plaintiffs’ proffered expert testimony on general causation was admissible under the Frye evidentiary standard, but “most, if not all, of Plaintiffs’ experts would probably be excluded under the Rule 702/Daubert standard.” Judge Weisberg then certified the following question of law to the Circuit Court: “whether the District of Columbia should adopt Federal Rule of Evidence 702 (or a revised Frye standard) for the admissibility of expert evidence.”

In certifying the question, Judge Weisberg noted,

[A]t the risk of over-simplification[,] if a reliable, but not yet generally accepted, methodology produces ‘good science,’ Daubert will let it in, and if an accepted methodology produces ‘bad science,’ Daubert will keep it out; conversely, under Frye, as applied in this jurisdiction, even if a new methodology produces ‘good science,’ it will usually be excluded, but if an accepted methodology produces ‘bad science,’ it is likely to be admitted.

The District of Columbia Court of Appeals, en banc., heard the question, Plaintiffs’ appeal, and adopted the Rule 702 standards unanimously, with Judge Easterly providing a concurring opinion.

Associate Judge Fisher, writing for the Court, stated, “the ability to focus on the reliability of principles and methods, and their application, is a decided advantage that will lead to better decision-making by juries and trial judges alike.” Associate Judge Fisher highlighted the language in State v. Coon, deeming the Frye test, “as both unduly restrictive and unduly permissive” because the crux of the test is general acceptance as opposed to reliability. 974 2d. 386, 394 (Alaska 1999). The standards deriving from Rule 702, however, require trial court judges to act as “gatekeepers” in the determination of whether or not expert testimony is relevant and reliable. Associate Judge Fisher cited to the Daubert decision to emphasize, “the objective of the gatekeeping requirement is to make certain that an expert…employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.”  Despite this, the Court explicitly stated that differing scientific opinions can be equally reliable. In so doing, the Court established that minority opinions within expert communities will not be per se unreliable.

The Court considered revising the Frye test, as some jurisdictions have done. It rejected doing so given their belief that Rule 702/Daubert analysis better ensures evidentiary reliability based upon scientific validity. It also found substantial benefits to be gained from adopting a test that is widely used.

The Court directed future litigants and judges to review closely the Advisory Committee Notes to Rule 702, and the cases cited therein when making Rule 702/Daubert challenges. See Fed. R. Evid. 702 advisory committee’s note (2000 Amendment); Kannankeril v. Terminix Int’l, Inc., 128 F.3d 802 (3d Cir. 1997)(regarding newly founded expert theorems); Sheehan v. Daily Racing Form, Inc., 104 F.3d 940 (7th Cir. 1997)(demanding consistency between the expert’s professional and testimonial opinion); Claar v. Burlington N.R.R., 29 F.3d 499 (9th Cir. 1994)(regarding expert’s consideration of “obvious alternative explanations”). It will apply Rule 702 to all civil and criminal cases in which the trial begins after the date of this opinion. The Court also indicated that it will consider at a later time whether the standard applies to cases that have already been tried but are not yet final on direct appeal.

The District of Columbia now joins twenty-seven states in adopting the factors of the Daubert standard and rejecting the Frye test. See Andrew Flake, Eric Harlan & James King, 50 State Survey of Applicability of Daubert, available here (last visited Oct. 28, 2016).

The full decision can be read here.

About the Author

Jonathan F. Tabasky is a partner with the firm. He has primary responsibility for the management, handling and defense of litigation brought against many different types of professionals. His clients include architects, attorneys, engineers, real estate brokers, real estate appraisers and independent insurance adjusters, among others. Since joining the firm, Jon has also been extensively involved in the defense of product liability and toxic tort claims. In this capacity, Jon represents a broad range of companies, including those that manufacture prescription drugs, protective clothing, fittings, heating devices, wire and cable, trucks, aircraft and turbines. As a result, Jon regularly works with renowned epidemiologists, pathologists, industrial hygienists, pulmonologists, radiologists, economists and others. Jon also defends product and premises liability cases brought against major retailers.

Alexander Zodikoff is a law clerk with Manion Gaynor & Manning LLP, and in his final year of law school at Suffolk University. Alexander received his B.A. from Virginia Tech.

Johnson & Johnson Found Liable in Latest Talc Product Trial

Posted in Asbestos Litigation, Complex Torts, Talc Litigation

Talc!For the third time this year, a St. Louis, Missouri jury found Johnson & Johnson liable in a case where plaintiff alleged that her ovarian cancer was caused by her use of talcum powder products. At trial, Deborah Giannecchini, a 62 year-old California woman, claimed that her decades-long use of Johnson & Johnson talcum powder caused her to develop ovarian cancer in 2013. After a month-long trial, the jury awarded her more than $70 million in damages, approximately $65 million of which were comprised of punitive damages.

At trial, Giannecchini’s lawyers argued that Johnson & Johnson:  (1) was aware for more than 30 years that use of talc-based products increases the risk of ovarian cancer; and (2) did not warn the public of the potential health hazards associated with the product.

In the two prior St. Louis cases which reached a verdict against Johnson & Johnson, juries found in favor of plaintiffs and awarded $72 million and $55 million, respectively, in damages. While Johnson & Johnson has seen limited success before juries, the company hopes that each of the three St. Louis verdicts will be overturned on appeal. Specifically, Johnson & Johnson’s appellate arguments will focus on the lack scientific proof to support the recent jury awards. Indeed, Johnson & Johnson successfully used this approach in New Jersey, where a state court dismissed two talc-based actions after ruling that plaintiffs’ scientific experts were unable to provide sufficient evidence that the use of talcum powder causes ovarian cancer.

Johnson & Johnson is currently defending more than 1,500 cases nationwide.  In each of these cases plaintiffs allege that the company failed to warn consumers of the potential health risks associated with the use of talc products.

Why a Wisconsin Judge Rejected an Asbestos Case as “Disingenuous”

Posted in Asbestos Litigation, Toxic Tort
KastenmeierUSCT_Madison_WI_exterior_941675052106904545_1435163225376

Robert W. Kastenmeier United States Courthouse Madison, WI

A district court judge for the Western District of Wisconsin has issued a defense-verdict following a three-day bench trial, during which Plaintiff argued that his father’s work with Kaylo pipe insulation caused his death from mesothelioma. In his opinion in Gary Suoja, Individually and as Special Administrator of the Estate of Oswald Suoja v. Owens-Illinois, Inc., Magistrate Judge Stephen Crocker found that Plaintiff failed to meet his burden of showing that exposure to Kaylo was a substantial cause of Mr. Suoja’s mesothelioma. Though ultimately decided on the basis of pretrial motions that precluded the testimony offered by Plaintiff’s causation expert, Judge Crocker discussed Plaintiff’s failure to incorporate evidence of alternative exposures, stating that ignoring such evidence when arguing cumulative exposure was “disingenuous” on the part of the Plaintiff.

The current matter was filed on behalf of the Estate of Gary Suoja against numerous companies, only one of which—Owens-Illinois—remained at trial. Mr. Suoja worked as a union asbestos worker for 40 years, beginning in 1944. Throughout the course of the lawsuit, the Estate argued that Mr. Suoja’s lengthy career as an asbestos worker caused him to work with and around numerous asbestos-containing products; however, evidence of these exposures was noticeably absent from trial.

In order to establish the causation element of his negligence and strict liability claims, Plaintiff offered only the testimony of Dr. Frank. Dr. Frank’s position was that Mr. Suoja’s cumulative exposure to asbestos from working with Kaylo, manufactured by Owens-Illinois, caused his mesothelioma. When presenting his cumulative exposure theory, Dr. Frank took the position that any asbestos exposure, “no matter how slight, no matter how minimal” is a part of an individual’s cumulative exposure and thus a cause of resulting disease. Dr. Frank offered this opinion only in relation to Mr. Suoja’s limited work with Kaylo insulation; he did not offer any opinion about the amount of asbestos from Kaylo to which Mr. Suoja was exposed, nor did he compare the amount of Mr. Suoja’s Kaylo exposure to Mr. Suoja’s cumulative exposure to asbestos from the numerous other products he worked with over the course of his 40-year career.

Plaintiff took the position that Mr. Suoja’s admissions of other exposures were largely irrelevant, arguing that most were simply assertions of exposure without any information regarding the dosage level at which Mr. Suoja was exposed. Plaintiff further argued that if Owens-Illinois wanted to attack Dr. Frank’s causation opinion on the ground that he failed to account for other exposures, then it was defendant’s burden to establish that these alternative exposures were substantial in nature.

Judge Crocker addressed Plaintiff’s argument, calling it “unpersuasive” and stating that “[i]t is disingenuous for plaintiff to have obtained recovery from numerous bankruptcy trusts and asbestos manufacturers based upon sworn admissions of asbestos exposure and then to brush aside those admissions as irrelevant to causation in this lawsuit.” Plaintiff’s lawsuit against Owens-Illinois was ultimately dismissed for failure to establish both exposure and causation.

About the Author

Katherine Vogelhuber is an associate in the firm’s products liability and complex tort practice, where she concentrates on products liability defense and litigation management for a number of the firm’s national clients. Kate is admitted to practice in the Commonwealth of Massachusetts and the State of Illinois. In 2007, Kate received her Bachelor of Arts from Skidmore College in Saratoga Springs, New York. She received her J.D. from DePaul University College of Law in Chicago, Illinois in 2012.

 

New Trend Emerging From Pending California Take-Home Exposure Decision?

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

ffonseca_articleCalifornia has become a hub for asbestos litigation.  Its plaintiff-friendly law and juries have attracted plaintiffs from both California and across the country.  A case currently pending in the Supreme Court of California concerning whether a duty is owed to a plaintiff who alleges “take-home” asbestos exposure could have a major impact on whether California becomes an even greater hotbed for asbestos litigation.  Should the Court impose a duty on an employer for “take home” exposures, this expansion of an employer’s duty is likely to lead to increased asbestos filings as plaintiffs seek out attractive jurisdictions based on substantive legal doctrine.

Recently, the Supreme Court of California heard oral arguments in coordinated “take-home” asbestos cases. In both cases, at issue is whether an employer owes a duty of care to members of an employee’s household who could be affected by asbestos brought home on the employee’s clothing.

In Kesner v. Superior Court, 226 Cal.App.4th 251 (2014), plaintiff, the nephew of a brake manufacturer’s employee, alleged that he developed mesothelioma as a result of exposure to asbestos from his uncle’s dirty and dusty clothing during frequent visits to his uncle’s home. In finding that the brake manufacturing company employer owed plaintiff a duty of care, the court found that “[a]s a general matter, harm to others from secondary exposure to asbestos dust is not unpredictable.” Kesner 226 Cal.App.4th at 259. Further, the harm “from a lack of precautions to control friable asbestos that may accumulate on employees’ work clothing is generally foreseeable.” Id.  As for employers, the court found that “extending the duty of care to [an employee’s household members or long term occupants of a residence] does not threaten employers with potential liability for an intangible injury that can be claimed by an unlimited number of persons.”  Id. at 261. Thus, the court not only imposed a duty on an employer for “take home” exposures, it extended a duty to any guest that frequents an employee’s home.  It is important to note, however, that despite the fact that plaintiff claimed that he was exposed to asbestos through his uncle’s clothing, plaintiff’s claim was premised on a theory of products, not premises, liability.

That distinction is important, as a month later a different appellate court ruled against extending a duty of care based on “take home” exposure in the context of a case alleging premises liability. In Haver v. BNSF Railway Co., 226 Cal.App.4th 1104 (2014), the heirs of an employee’s deceased wife claimed that she developed mesothelioma as a result of exposure to asbestos from the clothing her husband wore home while employed by the defendant company. Deciding not to follow the earlier Kesner decision, the Haver court distinguished the two cases by pointing out that Kesner was a products case while Haver involved allegations of premises liability. Importantly, though, the court noted that courts should be wary of the consequences of extending employers’ liability too far. Id. at 1110.

A decision by the California Supreme Court which extends a duty to the family and/or guests of an employee is likely to result in a huge uptick in asbestos claims filed in California, as plaintiffs look for favorable jurisdictions in which to bring their cases.  That is what has occurred in Illinois, where the Illinois Supreme Court upheld the appellate court’s reversal of an order granting an employer’s dismissal based on the lack of a duty to an employee’s spouse, and allowed plaintiff to re-plead foreseeability.  See Simpkins v. CSX Transp., Inc., 2012 Ill. 110662.  Conversely, multiple jurisdictions, such as Georgia, have shut the forum shopping door by holding that employers and premises owners owe no duty to a member of a household injured by take home exposure to asbestos. CSX Transp., Inc. v. Williams, (2005) 278 Ga. 888.  

Should the Supreme Court of California expand the scope of an employer’s duty to include “take home” exposure, venue selection flexibility and favorable new legal doctrine may very well cause a seismic shift in asbestos filing activity, leaving California at the epicenter.

 

About the Author

Freddy Fonseca is an associate with Manion Gaynor & Manning and an FAA licensed airframe and power plant technician. Clients have come to rely on Freddy for his eight-year career as an aircraft maintenance technician, knowledge of federal aviation regulations and airport operations, and enthusiasm for aviation, to defend toxic tort and products liability aviation cases.  Prior to attending law school, Freddy was an aircraft technician for a major airline performing engines changes, sheet metal repairs, brake changes, and avionics and systems troubleshooting.  Utilizing his aviation experience, he brings a unique practical perspective to his civil litigation law practice.

Court Rules Monsanto Roundup Cases to Stay in Delaware

Posted in Delaware Courts, Litigation Trends, Products Liability, Toxic Tort

de-courtJudge Vivian L. Medinilla of the Delaware Superior Court recently denied defendant Monsanto Company’s motion to dismiss on the basis of forum non conveniens (“FNC”) in Barrera v. Monsanto Company.  This ruling, along with a similar ruling issued by Judge Andrea L. Rocanelli one day prior in Gilchrist v. GlaxoSmithKline, LLC, reaffirms and provides new strength to Delaware’s long-standing precedent of offering great deference to a plaintiff’s choice of forum and requiring a defendant to establish “overwhelming hardship” in order to dismiss a case on FNC grounds.

In Barrera, the Court considered the claims of three Plaintiffs alleging their cancers were caused by Monsanto’s glyphosate pesticide known as Roundup.  The case’s only connection to Delaware was Monsanto’s status as a Delaware corporation (although Monsanto’s principle place of business is in Missouri).  None of the Plaintiffs lived in Delaware or alleged any exposure to Roundup in Delaware.  Rather, Plaintiffs alleged exposure to Roundup in Michigan, New York, Oregon, Texas, Virginia, and Washington.  Monsanto therefore asserted that Plaintiffs’ claims would be more properly adjudicated in the respective jurisdictions of their alleged exposures and moved to dismiss the Delaware action on FNC grounds.

In analyzing Monsanto’s motion, the Barrera Court considered the following six factors, known as the “Cryo-Maid” factors, which Delaware Courts have long relied upon in examining FNC motions:

  1. The relative ease of access to proof;
  2. The availability of compulsory process for witnesses;
  3. The possibility of viewing the premises;
  4. Whether or not Delaware law will be applied;
  5. The pendency or nonpendency of similar actions in another jurisdiction; and
  6. All other practical problems that would make the trial of the case easy, expeditious, and inexpensive. Barrera, at 12-13.

In considering all of the factors as a whole, the Court concluded an overwhelming hardship did not exist.  Although the relevant proof, witnesses, and premises (factors 1-3) mostly lie outside of Delaware, the Court found  obtaining such evidence was not a hardship on Monsanto given the technology available in today’s global age.  The Court also noted that it routinely applies other states’ laws (factor 4) and that no other action was currently pending in another jurisdiction (factor 5).  The Court found that the “other practical problems” sixth factor weighed in Monsanto’s favor, but nevertheless concluded that this single hardship was insufficient to justify dismissal, stating:

It may be true that there are more appropriate or convenient forums to litigate Plaintiffs’ claims.  Yet to prevail on this FNC motion to dismiss, Defendant is nonetheless required to demonstrate with particularity that this is “one of those rare cases where the drastic relief of dismissal is warranted” because Defendant will suffer overwhelming hardship if forced to litigate here.  Defendant has not demonstrated that this is one of those rare cases.  Barrera, at 22.

The Barrera ruling takes on added significance given that Delaware’s FNC jurisprudence had come under some question of late after a pair of decisions,  Martinez v. E.I. DuPont de Nemours & Co., Inc. in the Delaware Supreme Court and Hupan v. Alliance One International, Inc. in the Delaware Superior Court, surprisingly resulted in a dismissal of claims under FNC grounds.  However, as Judge Medinilla noted in her Barrera opinion, both of those cases are distinguishable from Barrera in that each involved injuries that occurred outside the United States and required the application of foreign countries’ laws that were not written in English.  At bottom, FNC still does not appear to be a successful defense in toxic tort cases involving alleged exposures confined to the United States.

About the Authors

William B. Larson, Jr. is an associate in the firm’s Delaware office. His civil litigation practice focuses on toxic tort and products liability litigation as well as corporate and commercial litigation in Delaware courts.  Outside Delaware, in asbestos litigation, Bill serves on two of MG&M’s national coordinating counsel teams.  He currently serves as assistant regional coordinating counsel for one company and coordinating counsel in several jurisdictions for another company.

Ryan W. Browning is an associate in the firm’s Delaware office. His civil litigation practice focuses on toxic tort and products liability litigation as well as corporate and commercial litigation in Delaware courts. Prior to joining MG&M, Ryan was an associate with one of Delaware’s leading law firms, where he represented large corporate defendants in all stages of complex commercial and corporate litigation.

 

Rhode Island Court Upholds Daimler to Dismiss Claims Against Foreign Corporation for Lack of Personal Jurisdiction

Posted in Asbestos Litigation, Complex Torts, Litigation Trends, Rhode Island Courts

Lady JusticeOn October 13, 2016, Presiding Justice Alice B. Gibney of the Rhode Island Superior Court ruled on Defendant Dana Companies, LLC’s Motion to Dismiss for Lack of Personal Jurisdiction pending in the case of Harold Wayne Murray and Janice M. Murray v. 3M Company, et al., granting the defendant’s motion to dismiss upon finding that the court lacked sufficient minimum contacts to exercise personal jurisdiction – either general or specific – over the defendant. With this ruling, Rhode Island joins a growing list of jurisdictions that have applied the United States Supreme Court’s standard passed down in Daimler AG v. Bauman, 134 S. Ct. 746 (2014).

The Murray case was filed in Providence Superior Court, and involves a Tennessee resident alleging he developed mesothelioma as a result of exposure to asbestos through his work with and around numerous defendants’ products over the course of his lifetime, predominantly at locations in Tennessee and Virginia. The complaint filed in Murray named hundreds of defendants who allegedly manufactured, sold, or supplied asbestos or asbestos-containing products to which Mr. Murray was allegedly exposed, including Dana Companies, LLC (“Dana”). Dana subsequently moved to dismiss the plaintiff’s claims on the grounds that a Rhode Island court’s exercise of jurisdiction, either specific or general, would violate its due process rights pursuant to the United State Constitution as well as the Supreme Court’s ruling in Daimler AG v. Bauman and its progeny.

Specifically, Dana asserted that as the plaintiff’s claims arose from alleged conduct that occurred entirely outside of Rhode Island with consequences transpiring outside of the State, the court’s exercise of specific personal jurisdiction was clearly improper. During his deposition taken near his home in Johnson City, Tennessee, Mr. Murray confirmed that he’d never lived in, worked in, received treatment in, or visited the State of Rhode Island. Absent a nexus between the plaintiff, the forum, and the litigation to permit the court’s exercise of specific personal jurisdiction, the court’s review of Dana’s motion to dismiss turned on the question of whether there was a basis to exert general jurisdiction over the defendant.

The court’s general jurisdiction analysis began by citing the Supreme Court’s decision in Goodyear Dunlop Tires Operations, S.A. v. Brown for the proposition that a court may reasonably exercise general jurisdiction over a foreign corporation where the corporation’s affiliations with the state are so continuous and systematic as to render them essentially “at home” in the forum state. 564 U.S. 915, 919 (2011); Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. and Placement, 326 U.S. 310, 317 (1945)).Upholding Daimler’s elaboration of this “at home” standard, the court reasoned that “with very limited exceptions, a defendant can customarily be subject to general jurisdiction in the state of its incorporation and the state of its principal place of business.” Going further, the court specified that evidence of a corporation’s continuous and systematic contact with a jurisdiction was relevant only to the determination of specific jurisdiction, and was not the proper ground for a finding of general jurisdiction.

Turning to the facts at bar, the court observed that both Dana and its predecessor were incorporated in Virginia with principal places of business in Ohio, with no offices, employees, or property in Rhode Island, and not registered or authorized to do business in Rhode Island. Dana reported no product sales to Rhode Island, though Dana’s predecessor reported historical sales to two Rhode Island businesses. However, such sales by Dana’s predecessor were reported to account for less than one-tenth of one percent of the company’s total annual net sales from 1997 to 2006. The court reasoned that under Daimler, “such contacts with the State of Rhode Island are insufficient to substantiate a finding of general jurisdiction over Dana.” The court went on to conclude that as Dana was not virtually ‘at home’ in the forum state for the purposes of general jurisdiction, the court lacked both general and specific personal jurisdiction over the defendant.

Beyond its significance for the extension of Daimler, the Murray ruling is instructive as to the proper exercise of the personal jurisdiction defense so as to avoid forfeiture.  In an attempt to avoid the constitutional constraints of personal jurisdiction, the plaintiff’s opposition argued that Dana forfeited its personal jurisdiction defense by attending four days of the plaintiff’s deposition prior to filing its motion, then attending eleven days of deposition following the filing of its motion.  To inform its analysis of the question of forfeiture, the court focused on the “crucial” question of whether the party advancing the Rule 12 motion met the Rule’s underlying objective of eliminating unnecessary delay at the pleading stage. Citing Dana’s timely filing of its motion to dismiss for lack of personal jurisdiction thirty days after receipt of service of the plaintiff’s complaint, and its “limited and reasonable participation in discovery,” the court concluded that Dana did not forfeit its right to assert a motion to dismiss for lack of personal jurisdiction.

The Murray decision is merely the latest in a line of cases expounding upon the landmark Daimler decision, with much remaining to be determined about the limits of a forum’s exercise of personal jurisdiction over a foreign corporation. The full decision can be read here.

About The Authors

Carolyn Riggs is an Associate in the firm’s Products Liability & Complex Tort practice where she focuses on insurance defense and toxic tort litigation. In her career, Carolyn has represented corporate clients in all phases of civil litigation in both state and federal court. She has defended clients against a variety of claims, including negligence, breach of warranty, failure to warn, wrongful death, breach of fiduciary duty, and consumer protection violations.

Brian Gross is a Partner in the firm and has extensive experience in a broad spectrum of litigation, including complex product and food liability matters, toxic tort and environmental litigation, pharmaceutical and medical device litigation, business and commercial disputes, and corporate and shareholder litigation.

LA Supreme Court Ruling a Sweet One for Insurer

Posted in Complex Torts, Employment Litigation

American_Sugar_Refining_Arabi_1913_PostcardRecently, the Louisiana Supreme Court in Arceneaux et al. v. Amstar Corp. et. al, 2015-0588 (La. 9/7/16, 1) decided that, in long latency disease cases, an insurer’s payments of defense costs may be prorated when the insurer’s occurrence-based policy was effective only during part of the plaintiffs’ exposure years.

Plaintiffs in Arceneaux alleged hearing loss from occupational noise exposures at American Sugar Refining, Inc.’s (“American Sugar”) facility in Arabi, Louisiana. Id. at 1-2. The approximately one hundred plaintiffs’ exposures occurred between 1941 – 2006. Id. at 2. Continental Casualty Company (“Continental”) issued eight general liability policies to American Sugar, effective from March 1, 1963 – March 1, 1978. Id. Each policy contained bodily injury exclusions for injuries that American Sugar employees experienced in the course and scope of their employment. Id. Importantly, in the last policy, the exclusion was deleted by special endorsement. Id. That endorsement was effective on December 31, 1975, and provided bodily injury coverage through March 1, 1978, for a total of twenty-six months. Id.

American Sugar brought a third-party demand against Continental alleging that Continental’s duty to defend required a complete defense in accordance with the policy, even if some of the plaintiffs’ claims fell outside of the coverage period. Id. Continental asserted that defense costs should be prorated amongst the insurers, and periods of non-coverage should be borne by the insured. Id. Particularly, Continental maintained that a complete defense was improper because its policies only covered twenty-six months of the alleged sixty-year exposure period.  Id.

Prior to assessing the merits of Continental’s argument, the Court distinguished an insurer’s duty to defend from its duty to indemnify. Id. at 5. The duty to defend “arises whenever the pleadings against the insured disclose even a possibility of liability” Id. (emphasis added). In contrast, an insurer’s duty to indemnify in long latency disease cases requires liability “to be prorated among insurance carriers that were on the risk during periods of exposure to injurious conditions” Id. at 5-6 (citing Norfolk S. Corp. v. California Union Ins. Co., 2002-0369, pp. 42-43 (La. App. 1. Cir. 9/12/03), 859 So.2d 167, 197-98, writ denied, 2003-2742 (La. 12/19/03), 861 So.2d 579). While Louisiana courts determined that proration is proper in regard to an insurer’s duty to indemnify, no such precedent existed as to its duty to defend. Id. at 6-7. Thus, prior to Arceneaux, insurers and insureds had no defined method to allocate defense costs in latent disease lawsuits.

At the outset of its analysis, the Court discussed two nationwide approaches to allocating defense costs in long latency disease cases: the pro rata allocation, and joint and several allocation. Id. at 7. “Under pro rata allocation, insurance carriers of triggered policies are responsible for a share of defense costs based at least in part on the period of time they are on the risk.” Id. If an insured has periods of non-coverage after defense costs are divided, then an insurer only pays its pro rata share. Id. Conversely, joint and several allocation allows the insured to choose one insurer “that is on the risk” and hold it liable “for the entire loss up to the policy limits.” Id. Defense costs are divided amongst insurance carriers, even for periods where no coverage was in place. Id. Under this scheme, the selected insurer bears the burden of seeking contribution from other insurers. Id. Consequently, the treatment of uninsured time periods is the most significant difference between these two methods. Id. (citing Owens–Illinois, Inc. v. United Ins. Co., 138 N.J. 437, 650 A.2d 974, 989 (1994)).

Ultimately, the Court implemented the pro rata approach to allocate defense costs because Continental’s policy language explicitly limited coverage to bodily injuries during eighty-six percent[1] of the policy period. Id. at 12 (emphasis added). Since neither party “could reasonably expect that the insurer was liable for losses that occurred outside the policy coverage period,” pro rata allocation was proper. Id. at 13 (citing Sec. Ins. Co. of Hartford v. Lumbermens Mut. Cas. Co., 826 A.2d 107, 121 (Conn. 2003)). Furthermore, “the pro rata allocation scheme is an equitable system that can be readily used in long latency disease claims in Louisiana” to clearly apportion defense costs, and promote risk spreading. Id. at 13-4. However, the Court importantly noted that “[t]he manner in which defense costs are to be allocated [in a long latency disease lawsuit] may need to be determined on a case by case basis, according to the precise language of the insurance contract at issue” Id. at 13 (emphasis added).

Despite the Court’s guidance, some questions remain unanswered. For instance, in latent injury claims, policies in place at the time of the first injurious exposure have often been discarded “under the mistaken notion that they were no longer in effect.” Mielenhausen, Thomas, Missing Policies Proof – Turning Burden Into Opportunity, ABA Section of Litigation Insurance Coverage Litigation Committee CLE Seminar, March 3-5, 2011. Several sources may be used by a defendant to prove the existence and terms of these insurance policies, including testimony from the “comptroller who purchased the insurance [and] the agent who sold the insurance,” along with insurance declaration pages, certificates of insurance, policy index cards, reinsurance records, and publications from insurance industry organizations. Id. Moreover, these sources may include the insurer’s precise policy language for bodily injury coverage in place during a particular policy period. Id. Thus, if testimony and/or documents evidence the appropriate policy language, it appears that an insurer could benefit from the Arceneaux ruling.[2]

Notably, dicta and the ultimate ruling in Arceneaux seem to conflict. While Arceneaux provides that “the pro rata allocation scheme is an equitable system that can be readily used in long latency disease claims in Louisiana,” the Court’s limited ruling was specific to the particular language of an insurance policy in a long latency disease lawsuit. Arceneaux at 13-4. Currently, it seems that Arceneaux will only be applied to cases with similar facts. However, Louisiana courts could extend the Arceneaux ruling to parol evidence of insurance policies that accurately depict policy language.

[1] As discussed supra, Continental issued eight policies to American Sugar from March 1, 1963 – March 1, 1978, totaling to fifteen years, or one hundred eighty months. Because Continental’s policies only provided coverage for bodily injury to American Sugar’s employees in the course and scope of their employment for twenty-six months, there were one hundred fifty-four months where such coverage was excluded. Thus, eighty-six percent of the entirety of policies issued to American Sugar contained exclusions for bodily injury to employees of American Sugar.

[2] Similar to other jurisdictions, Louisiana requires that only an original document may be used to prove its existence and contents contained therein. See La. CE Art. 1002. However, Louisiana allows a party to introduce parol evidence to establish the existence and contents of an insurance policy in a long latency disease lawsuit after that party has proved by a preponderance of the evidence “that the instrument is either lost or otherwise unavailable” (See Hoerner v. ANCO Insulations, Inc., 2000-2333 (La.App. 4 Cir. 1/23/02, 39), 812 So.2d 45, 73-4, writ denied, 2002-0935 (La. 6/21/02), 819 So.2d 1023, and writ denied, 2002-0965 (La. 6/21/02), 819 So.2d 1023, and writ denied, 2002-0967 (La. 6/21/02), 819 So.2d 1023, and writ denied, 2002-0972 (La. 6/21/02), 819 So.2d 1024).

Picture Worth More Than a Thousand Words to Plaintiff in Rhode Island Case

Posted in Employment Litigation

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Arguably the two most significant challenges for any employer involve hiring and terminating employees. In both processes, employers are faced with substantive and administrative concerns.  On the substantive level, employers routinely ask themselves questions such as: Will the applicant be a good fit with office culture? Did the employee meet core competencies? Likewise—and perhaps more daunting—are the employer’s administrative tasks, which range from submitting completed I-9 Forms and setting up email accounts to providing COBRA notices and collecting company issued devices. To be sure, a great deal of employment litigation stems from the way in which employers tend to administrative affairs upon an employee’s separation.

In a case of first impression for Rhode Island, the state’s Superior Court recently addressed the legal ramifications associated with an employer’s continued maintenance of a website profile and photographs of a former employee. The plaintiff in Rompf v. Intern. Tennis Hall of Fame, Inc., was employed by the International Tennis Hall of Fame as its Head Tennis Professional. 2016 WL 4534211 (R.I. Super. Ct., Stone, J., 2016). In that role, Rompf oversaw the organization’s educational and instructional programs until the Hall of Fame dismissed her on November 6, 2014. Id. at *1. After Rompf’s termination, the Hall of Fame allegedly “continued to identify Rompf in her previous role and used photographs of her on its website until the middle of May 2015.” Id. Subsequently, Rompf sued her former employer. The plaintiff asserted, in part, that the Hall of Fame misappropriated her “name and likeness for its own purposes and benefit without her permission or approval” to achieve a commercial advantage while simultaneously violating her right to privacy pursuant to Rhode Island General Law § 9-1-28.1. Id.

The Hall of Fame returned Rompf’s serve by filing summary judgment. The organization argued that “Rompf had no expectation of privacy in her name and likeness because it was used in conjunction with her employment.” Id. at *2. That is, the Hall of Fame maintained that Rompf’s suit was meritless because one cannot have a privacy interest in activities that relate to one’s employment. Id. at *4. The court found, however, that the Hall of Fame failed to hit a winner in its summary judgment motion. It reasoned that Rompf would advance to the next set because: (1) Rompf’s Complaint established that she did not consent to the use of her name and image following termination; (2) there was a question of fact as to whether the Hall of Fame used her image in a false light by publishing the existence of a relationship that no longer existed; and (3) a jury would need to determine whether the Hall of Fame used Rompf’s image to “entice individuals to utilize the services she offered as the Head Tennis Professional.” Id.

Although Rompf’s legal match is far from over, the results of the court’s summary judgment ruling are profound for those supervisors and human resource professionals charged with navigating an employee’s separation. In addition to calculating final paychecks, conducting exit interviews, and cancelling benefits, employers would be wise to inspect their media footprint within a reasonable time of an employee’s departure. For example, employers who wait to update their websites until new hires are in place risk misappropriating the former employee’s image as well as offending his or her statutory right to privacy.

 

 

 

Causation and Bare Metal Defenses Prove Effective as Asbestos Liability Shield

Posted in Asbestos Litigation, Products Liability, Toxic Tort

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A recent ruling in an asbestos-related case provides an important lesson for defendants in framing their defenses.

In Malone v. Air & Liquid Systems, et.al. (Report and Recommendation, C.A. No. 14-406-GMS-SRF (D. Del. Aug. 29, 2015)), a mesothelioma case pending in the U.S. District Court for the District of Delaware which involves allegations of asbestos exposure to several products at Ingalls Shipyard in Pascagoula, Mississippi, the court recently found summary judgment was appropriate for three defendants based on lack of evidence to support causation and the “bare metal defense.”  The court, however, rejected the defendants’ other arguments based on the “learned intermediary doctrine” and the “government contractor defense.”

U.S. Magistrate Judge Sherry R. Fallon confirmed that the well-established “frequency, regularity, and proximity” causation standard adopted by Mississippi courts in asbestos actions is a uniform standard regardless of the alleged asbestos-related disease.  The court recommended granting summary judgment for three defendants – Cummins, Inc. (“Cummins”); CBS Corporation f/k/a Westinghouse Electrical Corporation (“CBS”); and Foster Wheeler Energy Corporation (“Foster Wheeler”).[1]  In the recommendation, the court noted that “Mississippi courts have not distinguished between different asbestos-related diseases when applying the frequency, regularity, and proximity test.”  The court found the Malones’ argument that the factors should be applied “less rigidly” in mesothelioma cases unavailing, and that plaintiffs did not meet their burden to prove causation with respect to these defendants’ products.

Cummins, CBS, and Foster Wheeler each moved for summary judgment asserting as an additional ground the “bare metal defense.”  The “bare metal defense” shields from liability companies that did not manufacture or distribute asbestos-containing components which were incorporated into the manufacturer’s product after its sale.  In recommending summary judgment for each defendant, the court substantially followed its prior ruling in Dalton v. 3M Co., 2013 WL 4886658 (D.Del.), where the court found that “it is reasonably likely that the Supreme Court of Mississippi would follow the majority of jurisdictions that have refused to find defendants liable for other manufacturers’ asbestos products.”  The court rejected plaintiffs’ argument that Dalton is inapplicable where the use of an asbestos-containing product in association with the defendant’s product was foreseeable, where the defendant did not require its use.

While the court granted judgment as a matter of law to all three defendants based on defendants’ causation and “bare metal” arguments, the court rejected CBS’ argument that it was entitled to summary judgment based on the “learned intermediary doctrine” and CBS’s and Foster Wheeler’s argument that each was entitled to summary judgment based on the “government contractor defense.”  The court rejected CBS’s “learned intermediary” argument because, despite the fact that if offered evidence that the United States Navy was aware of the potential hazards associated with asbestos, it “offer[ed] no facts . . .  to support whether Westinghouse reasonably relied on the Navy to warn users like Mr. Malone . . .”  With regard to the government contractor defense, the court held that a factual issue concerning whether military specifications cited by plaintiffs were applicable to the Westinghouse turbines at issue, and thus whether the Navy required Westinghouse to create asbestos warning labels, precluded summary judgment on the government contractor defense.

Based on the court’s decision in Malone, defendants should take solace in the rejection, yet again, of a plaintiff’s argument for a less stringent causation standard in mesothelioma cases and the confirmation that yet another court adopts the majority approach to the “bare metal defense.”  The ruling also, however, illustrates that defendants should expect a tough go of it when arguing the “learned intermediary doctrine” and “government contractor defense” at the summary judgment stage in this jurisdiction.

The entire Malone decision can be found here.

[1]       The parties had fourteen days from the date of the Report and Recommendation to file written objections with the court.  Because no party filed written objections within that time frame, it is likely the court will accept the Report and Recommendation as its opinion on the matter.

Massachusetts Appeals Court Upholds Judgment in Birth Control Patch Case

Posted in Massachusetts Courts, Pharmaceutical and Medical Devices
Massachusetts Appeals Court

Massachusetts Appeals Court

On September 21, 2016, the Massachusetts Appeals Court upheld the grant of summary judgment to Johnson & Johnson (“J&J”), the manufacturer of the Ortho-Evra birth control patch at issue in the case of Niedner v. Ortho-McNeil Pharmaceutical, Inc., No. 15-P-1272, 2016 WL 5106479 (Mass. App. Ct. Sept. 21, 2016).  In so doing, the Appeals Court held that J&J had a duty to warn the decedent, but that it adequately did so.

Neidner involved the death of 17-year-old Adrianna Duffy, which resulted from blood clots allegedly caused by the Ortho-Evra birth control patch worn by Ms. Duffy.  Plaintiff claimed that she and Ms. Duffy had not been adequately warned about the increased risk of developing blood clots to those who use the patch.

In June, 2009, Ms. Duffy and her mother met with Ms. Duffy’s doctor to discuss birth control options. Ms. Duffy specifically asked her doctor about the Ortho-Evra patch, as she had previously taken an oral birth control pill but now wanted an easier birth control method. Id. at *1. Ms. Duffy’s doctor prescribed her the patch after this meeting and informed Ms. Duffy and her mother of the risks associated with using the patch, including that of blood clots. The prescription package filled by Ms. Duffy came with an insert from the manufacturer (J&J), as well as a leaflet from the pharmacy at which the prescription was filled, both setting forth the risks associated with the patch, including heart attack, stroke, and blood clots. After approximately three months of use, Ms. Duffy collapsed and died from a massive bilateral pulmonary embolus. Id. at *1.

Ms. Niedner filed suit in October, 2010, alleging, among other things, that her daughter’s death was caused by her use of the patch and that J&J was liable for breach of warranty under the theories of design defect, failure to warn, and manufacturing defect. Id. at *1.  J&J filed a motion for summary judgment, arguing that the patch’s risks, including the increased risk of blood clots, was sufficiently disclosed. Id. at *1. A Superior Court judge agreed, allowing the motion, and plaintiff appealed.

Typically, a manufacturer has a duty to warn product users of dangers associated with the reasonably foreseeable use of its product.  Manufacturers of prescription drugs and medical devices are, however, generally excepted from that rule based on the “learned intermediary” rule, which provides that the manufacturer fulfills its duty by providing physicians with an adequate warning about the risks associated with its product. In these instances, the physician acts as the “learned intermediary” between manufacturer and consumer to ensure the patient understands the potential risks and benefits. In MacDonald v. Ortho Pharmaceutical Corp., however, the Massachusetts Supreme Judicial Court created a narrow exception to this rule for the manufacturer of oral contraceptives, which it held has a duty to directly warn not only medical professionals, but also the consumer, about the risks associated with birth control medications. Id. at *2. The Neidner court held that this same exception to the “learned intermediary” rule applies to birth control patches, such as the Ortho-Evra patch, and as such, J&J had a duty to warn Ms. Duffy directly of the risks associated with the use of the patch. Id. at *2.

The Appeals Court also held, however, that J&J had satisfied that duty.  It noted that the box of patches purchased by Ms. Duffy contained a pamphlet which explained the risks associated with its use and contained instructions to consult a physician concerning information contained in the pamphlet. Both Ms. Duffy and her mother read the insert, though neither then consulted with Ms. Duffy’s doctor. Among other topics, the pamphlet thoroughly discussed in multiple locations the risk of developing blood clots while using the patch, particularly in the lungs like those Ms. Duffy developed. Id. at *3. The Appeals Court found as a matter of law that the pamphlet adequately warned of the increased risk of developing blood clots that could result in death, and described these warnings as “plain, numerous, and comprehensive.” Id. at *4.