In a 6-3 ruling on March 19, 2019, the United States Supreme Court held that, under maritime law, a product manufacturer has a duty to warn when its “bare metal” product requires incorporation of a part the manufacturer knows or has reason to know is likely to be dangerous, such as asbestos-containing components.

In Air & Liquid Systems Corp., et al. v. DeVries, No. 17-1104, 586 U.S. ___ (2019), the Supreme Court examined the scope of a manufacturer’s duty to warn of the dangers of asbestos when its own bare metal products are later combined with asbestos-containing parts that the manufacturer did not make or sell. Plaintiffs Kenneth McAfee and John DeVries (“Plaintiffs”) filed suit in state court against a number of product manufacturers alleging that they developed cancer as a result of exposure to asbestos-containing equipment, including pumps, blowers, and turbines manufactured by the defendants, while serving on U.S. Navy vessels.[1] Plaintiffs asserted, inter alia, that defendants were negligent in failing to adequately warn of the dangers associated with the use of their equipment, even though the defendant-manufacturers of the equipment at issue did not always incorporate asbestos into their products and instead delivered much of the equipment to the Navy without asbestos, in a condition known as “bare metal.” Defendants removed to federal district court under maritime jurisdiction and subsequently moved for summary judgment based on the “bare-metal defense.” The District Court granted the motions for summary judgment, and Plaintiffs appealed. The United States Court of Appeals for the Third Circuit vacated and remanded, holding that “a manufacturer of a bare-metal product may be held liable for a plaintiff’s injuries suffered from later-added asbestos-containing materials” if the manufacturer could foresee that its product would be used with later-added asbestos-containing parts. In re Asbestos. Prods. Litig., 873 F.3d 232, 240 (3d Cir. 2017). The United States Supreme Court granted certiorari to resolve inconsistency among the Courts of Appeals regarding the validity and application of the bare-metal defense under maritime law. Continue Reading “Bare-Metal” Defense Treading Water Under Maritime Law

Synopsis: The six year statute of repose barring negligent construction and design claims applies even in cases involving damages arising from diseases with extended latency periods such as mesothelioma. A recent decision from the Massachusetts Supreme Judicial Court (“SJC”) affirms the legislative intent and comprehensive reach of the statute of repose, G.L. c. 260, § 2B (“§ 2B”). The decision highlights the importance and need for certain defendants entrenched in personal injury asbestos litigation within Massachusetts to evaluate their potential standing under the statute.

Overview: In Stearns v. Metropolitan Life Ins. Co, SJC-12544 (March 1, 2018), the SJC was tasked with answering a certified question for the United States District Court for the District of Massachusetts. The federal district court initially denied a defendant’s motion for summary judgment based on the statute of repose in a sweeping opinion that sought to address a matter of first impression under state law. Following a motion for reconsideration and a request for certification pursuant to 28 U.S.C. § 1292(b), the federal district court appropriately yielded to the Commonwealth’s highest court and certified the question of whether § 2B “can be applied to bar personal injury claims arising from diseases with extended latency periods, such as those associated with asbestos exposure, where defendants had knowing control of the instrumentality of injury at the time of exposure.” Stearns v. Metropolitan Life Ins. Co., No. 15-13490 RWZ, 2018 WL 2227991 (D. Mass. May 12, 2018).

In response, the SJC issued a well-reasoned opinion drawing from past precedent and legislative intent of § 2B in concluding that the plain and unambiguous statutory language means what it says. Although the SJC recognized “the regrettable effect of barring all or nearly all tort claims arising from negligence in the use or handling of asbestos in construction-related suits,” the SJC nonetheless upheld the viability of § 2B in finding that the statute “completely eliminates all tort claims arising out of any deficiency or neglect in the design, planning, construction, or general administration of an improvement to real property after the established time period has run, even if the cause of action arises from a disease with an extended latency period and even if a defendant had knowing control of the instrumentality of injury at the time of exposure.” Continue Reading Massachusetts Statute of Repose Means What it Says–Unequivocal Statutory Language Bars Asbestos Tort Claims

On September 11, 2018, the Environmental Protection Agency proposed modifications to the 2016 New Source Performance Standards, a series of regulations enacted by President Barack Obama that require the oil and gas industry to take strict precautions to reduce and avoid methane leaks due to drilling. While proponents argue that the new standards would save energy companies hundreds of millions of dollars, a vocal opposition slammed the proposed changes in the law as a public health risk and a danger to a much-needed environmental protection.

When the New Source Performance Standards were enacted by the Obama administration, the fundamental goal of the regulatory provision was to end harmful methane leaking. According to the Environmental Defense Fund, methane – which is the main component of natural gas – is 84 times more potent than carbon dioxide. It absorbs the sun’s heat and is more effective at preventing the escape of infrared radiation, potentially making it more harmful for the climate. To combat this, the New Source Performance Standards sought to require energy companies to capture methane that would otherwise escape into the atmosphere during drilling for oil on American and tribal lands. Under current regulations, energy companies are expected to inspect their drilling operations as often as every six months. If methane leaks are found, repairs must take place within 30 days. The New Source Performance Standards were projected to eliminate 175,000 tons of methane emissions, 150,000 tons of volatile organic compounds, and 1,860 tons of hazardous pollutants. Proponents of the New Source Performance Standards applauded the added protections for the environment, hopeful that the regulations would effectively reduce pollution. Opponents of the New Source Performance Standards felt it placed an undue burden on the oil and gas industry given the Environmental Protection Agency’s own estimates that energy companies would pay $530 million between 2019 and 2025.

In response to complaints about the costly effect of the New Source Performance Standards, the Trump administration seeks to modify or remove some of the regulations currently in place. For instance, the proposed changes would extend the timeline for energy companies to inspect their drilling operations from every six months to every year. Another amendment would extend the 30-day rule that required almost immediate repair of methane leaks to 60 days, allowing companies more time to remedy these leaks while still holding them accountable for repairs. The proposed revisions would also seek to diminish the federal government’s role in such regulation by allowing energy companies to follow state rules regarding methane standards rather than federal rules. It is anticipated that these revisions to the current regulations will save energy companies $484 million dollars by the end of 2025, should they be approved.

The proposed changes to the New Source Performance Standards have caused an uproar among Democratic leaders across the nation. The leading Democrat on the Senate Appropriations Subcommittee on the Interior, Environment, and Related Agencies, Senator Tom Udall of New Mexico, called the proposal “wasteful and outrageous.” California and a number of other states share the outrage. Mary Nichols, California Air Resources Board and Chair, states that repealing the rule is “an attack on public health and continues the administration’s dereliction of duty to protect air quality, taxpayer dollars and the environment.” Meanwhile, the Environmental Protection Agency refers to the proposed amendment as something that will “reduce EPA and state requirements, streamline implementation, and significantly decrease unnecessary burdens on domestic energy producers.”

What Is Next?

A 12-hour public hearing was held on the proposed rule titled, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Reconsideration,” on November 14, 2018 in Denver, Colorado. The public was welcome to provide comments, feedback and concerns through December 17, 2018.

While the proposed revisions to the New Source Performance Standards still need to be enacted and codified, these revisions are one of many steps the Trump administration has taken to reduce environmental regulations. If these modifications are passed into law, environmental attorneys would be required not only to take note of the changes in federal regulations, but they would also be wise to revisit state regulations that in the past were trumped by federal law.

MG+M Boston Attorneys Eric Skelly and Christos Koutrobis successfully obtained dismissals for two clients in James T. Casey, Jr. v. Apax Partners et al., 1:18-cv-11211-DJC, a case that was pending at the U.S. District Court for the District of Massachusetts. On behalf of MG+M’s foreign client, a motion to dismiss for improper service and lack of personal jurisdiction was granted by Judge Casper. MG+M navigated a voluntary dismissal for its other client through the discovery process by demonstrating, based on the evidence, that the client was not liable for the product at issue.

Plaintiff alleged in his lawsuit that he was ordered to wear an electronic monitoring bracelet as part of his pre-trial probation. In his complaint, he stated that the bracelet wrongfully indicated that he was outside of the approved geographic area, which resulted in two days of imprisonment. As such, he brought forth claims against the defendants under the Massachusetts’ consumer protection laws as well as claims for design defect and negligence.

In its decision on defendant’s motion to dismiss, the Court highlighted Plaintiff’s allegation that the defendant, a foreign entity, was liable because its unidentified affiliate assumed the rights and liabilities of the former manufacturer of the electronic monitoring bracelet. The Court noted that even if the Plaintiff established that this affiliate conducted activities in Massachusetts that would subject it to the Court’s jurisdiction, Plaintiff still would need to prove that the affiliate’s conduct could be imputed to the foreign entity by “piercing the corporate veil.” Under Massachusetts law, corporations are presumed to be separate entities. To ignore corporate separateness a party must demonstrate: 1) “active and direct participation by the representatives of one corporation, apparently exercising some form of pervasive control, in the activities of another and there is some fraudulent or injurious consequence of the intercorporate relationship;” or 2) “a confused intermingling of activity of two or more corporations engaged in a common enterprise with substantial disregard of the separate nature of the corporate entities, or serious ambiguity about the manner and capacity in which the various corporations and their respective representatives are acting.” My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 619 (1968). Plaintiff attempted to satisfy these requirements through evidence that suggested the foreign entity merely advised its unidentified affiliate during the acquisition of the electronic monitoring business. The Court, however, held that this evidence fell short of the threshold to disregard corporate separateness and “pierce the corporate veil.” Accordingly, the Court held that it did not have personal jurisdiction over the foreign entity.

This decision reinforces the long-standing principle of corporate separateness and should be beneficial to foreign defendants challenging personal jurisdiction in the future.

In December 2017, the EPA approved revisions to the Louisiana State Implementation Plan (“SIP”) addressing regional haze. Neither environmental groups—Sierra Club and National Parks Conservation Association—nor affected utility companies—Entergy and Cleco—are satisfied with the EPA’s rule, and they are now petitioning the Fifth Circuit as intervenors on behalf of the EPA. Both sides filed briefs on October 30, 2018.

By way of background, Congress added regional haze provisions to the Clean Air Act (“CAA”) in 1977. The Act requires pollution sources that emit any air pollutant that may reasonably be anticipated to cause or contribute to visibility impairment to operate with the best available retrofit technology (“BART”).

In evaluating BART, the CAA requires states to balance cost with 1) the energy and non-air quality environmental impacts of compliance; 2) existing pollution control technology in use at the source; 3) the source’s remaining useful life; and 4) the visibility improvements that may reasonably be anticipated to result from the use of such technology.

The EPA issued BART Guidelines in 2005. The Guidelines help states determine whether BART applies to a particular source of pollution. In June 2008, Louisiana submitted its first Regional Haze SIP. The EPA did not approve the plan because it relied on the Clean Air Interstate Rule, which was judicially invalidated before the EPA ruled on the plan. The EPA also found deficiencies in BART determinations for four non-electrical generating units.

Louisiana submitted a revised SIP in July 2017, which the EPA approved in December 2017. The revised SIP was based on analysis conducted by the EPA and Entergy. The Fifth Circuit litigation primarily addresses the BART for Entergy’s Nelson power plant and Cleco’s Brame Energy Center, which both emit large amounts of sulfur dioxide. Continue Reading Utilities and Environmental Groups Spar over EPA’s Approval of Louisiana’s Plan to Address Regional Haze