December 2014

Ben Franklin famously warned that “you may delay, but time will not, and lost time is never found again.” These words of wisdom appear to be lost on the Illinois state legislature, which recently abolished the ten-year statute of repose for personal injury claims related to asbestos exposure under 735 ILCS 5/13-214. Far from an esoteric legal issue, the amendment has become the front line in the latest battle of the national divide on the issue of tort reform. Some have warned that the Madison County Illinois asbestos docket, already one of the busiest and most plaintiff friendly in the country, will see a wave of new litigation from plaintiffs who missed the deadline to bring suit. The change to the statute however, may not be the seismic shift that some have forecast.

 

The statute in question, commonly known as the “construction statute,” previously held that “no action based upon tort…may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission.” The amendment adds a subsection which reads that the limitation does not apply to “an action that is based on personal injury…resulting from the discharge into the environment of asbestos.”

 

This legislative action hasn’t abolished the statute of limitations in all asbestos-related claims. It has only abolished the ten-year statute of repose for claims that fall under the limited ambit of the construction statute. In other words, defendants who are commonly named in asbestos suits won’t likely see a sizeable increase in claims unless they are also involved in the construction industry.

 

For those who previously fell under the protection of the statute, however, the change could be as dramatic as advertised. Given the long latency period for many asbestos-related diseases, contractors, engineers and architects were often immune from suit, as some persons exposed to asbestos on a given job site may not discover their condition until well after the 10 year statute of repose had expired. With the amendment, these Defendants may find themselves named in lawsuits as often as manufacturers of asbestos-containing products.  Fortunately for them, many cases filed in Madison County arise out of exposures from other states, and in those cases, the statute will not likely apply.

 

Consistent with the abolition of the statute of repose, the state also recently passed a law reducing civil juries from twelve to six members. This is a shift which generally favors Plaintiffs as smaller groups are more likely to be influenced by emotion or a strong personality in the jury room.

 

Embedded is a link to the American Tort Reform Foundation Judicial Hellholes® Listing.  We’ll be watching to see where Illinois falls on the next list.

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.

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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