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Carrie Lin is a partner in MG+M's San Francisco office. Her civil litigation practice focuses on tobacco and asbestos matters as well as the prosecution of employment class action matters.

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On July 12, 2013 an Alameda jury returned a defense verdict in the living mesothelioma asbestos case Richard Luros v. Amcord, Inc., Alameda Superior Court Number RG11600370. (Luros complaint pdf download).

The California defense asbestos bar had been watching the case with interest since it was filed in October 2011, as the Plaintiff, Dr. Richard Luros, had for many years prior to his mesothelioma diagnosis served as a medical expert witness in asbestos litigation for plaintiffs represented by the Brayton Purcell LLP law firm. The Brayton Purcell firm represented Plaintiff Luros at trial.

After a month long trial culminating in approximately two days of jury deliberations, the twelve person jury returned a verdict in favor of the remaining trial defendant, Union Carbide. The jury found that Dr. Luros had not been exposed to asbestos from a product associated with the remaining trial defendant, despite Plaintiff’s sworn testimony to that effect. (Luros jury verdict form pdf download). In other words, the case was ultimately won on the issue of credibility –the jury did not believe Dr. Luros’s testimony with respect to how he was exposed to asbestos and by whom he was exposed.

The defense verdict was due, in large part, to the investigation and evidence collected in the nearly two years that elapsed between the filing of the Complaint and the actual trial date (an unusually long amount of time for the defendants to prepare for trial in living mesothelioma cases, which are generally accorded an expedited trial date in California of 120 days). Specifically, the defense verdict appears to have turned on the credibility of the witnesses, and in particular, on the testimony of a number of independent percipient witnesses, which contradicted plaintiff’s testimony.

Of particular concern for defendants, and indicative of the uphill battle asbestos defendants face at trial, despite the “overwhelming” affirmative evidence presented by defendants which tended to demonstrate that Dr. Luros fabricated his testimony, when polled post verdict, five of the jurors – almost half the jury – admitted that their initial vote was in favor of Plaintiff.

Plaintiff’s Evidence in Luros

Plaintiff Dr. Richard Luros filed his Complaint for personal injuries, namely, mesothelioma, on October 18, 2011, against approximately 34 defendants. The named defendants were, for the most part, manufacturers of asbestos-containing joint compound and drywall products, insulation and drywall contractors, and the owners of various hospital premises where Plaintiff alleged asbestos exposure.

At his pre-trial deposition, plaintiff claimed he was exposed to respirable asbestos dust during his residency and through his work as a medical doctor at various hospitals in California. Specifically, plaintiff Luros testified that he worked in the presence of others who applied and sanded joint compound, and other asbestos containing construction products, while he made his rounds as a medical doctor treating patients in various hospitals where new construction and renovation work was performed. He alleged asbestos exposure at virtually every hospital where he worked.

Defendants’ Rebuttal Evidence in Luros

During the pre-trial discovery process, defendants were able to identify and depose various co-workers of Dr. Luros at the hospitals where he alleged asbestos exposure. By the time of trial, defendants had videotaped the testimony of no less than eight percipient rebuttal witnesses, including several of plaintiff’s medical colleagues, nurse administrators, and maintenance/janitorial staff. These rebuttal witnesses disavowed any personal knowledge or recollection of the events described by plaintiff at his deposition – ie, un-segregated work by hospital personnel and/or outside construction contractors with dust generating construction materials in or near areas where medical doctor’s such as Luros, treated their patients. In fact the witnesses testified that such practices would have violated hospital protocol.

In addition to rebuttal evidence in the form of fact witness testimony, Defendants retained construction sequencing experts to demonstrate that plaintiff’s alleged exposure scenario was implausible.

The Take-Away

Tony Miller took Plaintiff Luros’s deposition on behalf of various defendants who were dismissed prior to trial. He states that, defendants were very aware [at the Plaintiff’s deposition] that Luros’s exposure testimony was fabricated, or at the least exaggerated,” and on that basis made a conscious group effort to lock the Plaintiff into concrete positions with respect to when and how he was allegedly exposed to asbestos at his deposition, with an eye towards developing affirmative rebuttal evidence from independent third party witnesses for trial.

Ultimately, the Luros verdict highlights the importance of pre-trial fact investigations to develop evidence which rebuts plaintiff’s product identification and exposure evidence.  Unlike many of the more technical aspects of a defense case, such as a medical or fiber defense, all jurors tend to understand and can effectively assess credibility.  As such, a factual investigation of a plaintiff’s allegations, including, but not limited to, interviews of percipient witnesses, is many times a defendant’s most effective defense in asbestos litigation.

Brent Karren concurs in the above assessments.

“Jury verdict research has shown time and again that asbestos trials are won and lost on the believability of the product identification evidence. This case appears to be a perfect example of how to win a defense verdict in an asbestos trial.”

The California Supreme Court recently resolved conflicting opinions from state appellate intermediary courts on the subject of whether, or under what circumstances, a plaintiff may sue a dissolved out of State corporation in California. In Greb v. Diamond International Company, 56 Cal. 4th 243 (2013) the Court held that dissolved foreign corporations are not subject to suit in California where a direct conflict exists between California Corporations Code Section 2010 (which permits Plaintiffs to sue dissolved corporations for an indefinite period of time), and the corporate survival laws of the dissolved company’s state of incorporation.  See, Greb v. Diamond International Company, 56 Cal. 4th 243 (2013). (pdf download )

Factual Background of Case

In December of 2008, Plaintiff Greb filed an asbestos-related personal injury complaint in San Francisco Superior Court. His Complaint named Diamond International Company, a Delaware Corporation that had filed for dissolution in July of 2005, but which still had funds remaining on its liability insurance policy.

Defendant Diamond International Company, a dissolved Delaware corporation, filed a demurrer to the Complaint on the ground that, under Delaware’s corporate survival law, the action was not permitted because it was initiated more than three years after the corporation was dissolved.  Plaintiffs opposed the demurrer, arguing that California Corporations Code 2010 took precedence over Delaware law, and citing prior appellate court decisions and choice-of-law analysis. (pdf download of North American Asbestos decision)

The trial sustained the demurrer without leave to amend. The Court of Appeal affirmed.

The Supreme Court’s Decision

On final appeal, published February 21, 2013, the California Supreme Court affirmed and held that California Corporations Code Section 2010 only applied to dissolved California Corporations, not to foreign corporations. Notably, the Supreme Court considered and expressly rejected Plaintiffs’ alternative argument that, because Defendant was qualified to and did in fact conduct a large portion of its business prior to dissolution in the State of California, that it was a quasi-California corporation subject to California corporate survival law. In rejecting  Plaintiffs argument the Court stated: “We discern in the statutes no evidence that the Legislature intended…to accomplish the dramatic result ascribed to it by Plaintiffs – essentially, imposing on all…foreign corporations that are qualified to undertake repeated and successive business in California, the burden of complying with all provisions of…[California’s corporation code]…subject to what would often be a difficult choice of law analysis with regard to each California statutory provision that conflicts with a provision governing the corporation in its state of formation. As defendant suggests, such a scheme would require foreign corporations to “follow a litany of requirements regarding various corporate activities that their home state already regulates, creating innumerable, treacherous conflicts of law that the corporation would find impossible to navigate.”

Although not expressly referenced in the opinion, the California Supreme Court issued its ruling in the Greb within weeks of a seemingly related Delaware Court of Chancery decision holding that, even when funds remain on a dissolved Delaware corporation’s insurance policy, a plaintiff may not recover against the policy or initiate suit against the dissolved corporation outside of the time frame contemplated by Delaware’s corporate survival laws.

Conclusion

In recent years the California Supreme Court has published several decisions that are extremely favorable to the asbestos defense practitioner. In 2011 the Supreme Court  limited a plaintiff’s medical expenses to those actually paid by his or her insurance company to a medical provider. (pdf download of Howell v. Hamilton Meats decision) In 2012, the Court held that an equipment manufacturer cannot be held liable for a plaintiff’s exposure to asbestos-containing replacement component parts used with the equipment, where it neither manufactured nor supplied the asbestos containing replacement part involved in the exposure. (pdf download of O’Neil v. Crane Co. decision)

As seen above, the Greb case is the third California Supreme Court decision issued in the past two years limiting either the amount of damages recoverable to an asbestos plaintiff in a civil suit, or the pool of available defendants from which a recovery can be made. Recent decisions from California’s intermediary appellate courts give defense practitioners reason to hope that this trend will continue. (pdf download of Campbell v. Superior Court)

Given the current favorable appellate climate, California defense practitioners should be on the lookout for issues to press on demurrer, summary judgment, or in limine at trial in cases where Plaintiff’s claims against the client are tenuous on issues of jurisdiction and duty.

Co-authored by Brian Gross 

Navy ShipAfter years of inconsistent rulings in the trial and appellate courts, the California Supreme Court recently decided the issue of whether plaintiffs in asbestos litigation may pursue claims against equipment manufacturers for injuries caused by asbestos-containing replacement component parts they neither manufactured nor supplied. For the reasons below, the Court expressly rejected this theory of liability and affirmed judgment in favor of equipment manufacturers Crane Co. and Warren Pumps (O’Neil v. Crane Co., California Supreme Court Case No. S177401).

Procedural History of Case

This opinion originated from a wrongful death personal injury asbestos case first filed in Los Angeles Superior Court. Plaintiffs alleged that the Decedent was exposed to asbestos-containing gaskets, packing, and insulation materials found in or on the Defendants’ pump and valve products when Decedent served aboard ship in the United States Navy. Although the evidence demonstrated that Defendants’ products incorporated asbestos-containing component parts, it was undisputed that the Defendants did not manufacture or supply the asbestos-containing gaskets and packing actually found in or on the equipment at the time of Decedent’s exposure.

At trial, the Superior Court granted Defendants’ non-suit motions.  In doing so, the Superior Court ruled thatCalifornia’s strict liability and negligence law did not support imposition of liability for harm caused by another manufacturer’s product. The Second District Court of Appeal reversed the trial court’s decision.

California Supreme Court Ruling

On final appeal, the California Supreme Court reversed the Court of Appeal decision and affirmed the trial court judgment in favor of Defendants.  In so doing, the Court re-affirmed the general rules that a manufacturer cannot be held strictly liable for defects in another entity’s product, and that a manufacturer has no duty to warn of risks arising from another manufacturer’s products.

Impact of O’Neil Decision on California Asbestos Litigation Going Forward

The O’Neil decision will likely have a significant impact on asbestos litigation going forward. Although the decision does not entirely eliminate liability for all pump, valve, or other equipment manufacturers, it certainly limits the factual scenarios under which they may be held liable. Accordingly, California asbestos litigation counsel may anticipate the following:

  • An increased litigation focus on the remaining pool of asbestos replacement part manufacturers, such as gasket, packing and insulation manufacturer defendants
  • An increase in litigation against the direct suppliers of gasket, packing, and insulation materials (largely due to fact that many of the insulation, gasket, and packing defendants are now bankrupt)
  • Finally, because the O’Neil opinion leaves open the possibility that an equipment manufacturer may be held liable upon a showing that it “substantially participated” in creating a harmful combined use of its product with asbestos-containing replacement parts, equipment manufacturers should anticipate that certain Plaintiffs firms will pursue and develop this theory of liability against them through the pre-trial discovery process.