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Kaylin S. Grey is an associate in MG+M’s Miami office. She is a seasoned litigator whose practice focuses on complex commercial litigation, products liability and toxic tort defense. 

Florida courts have historically relied on the standards set forth in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923) (“Frye”) to determine the admissibility of expert opinions and testimony.  Though the Florida Supreme Court adopted Frye in the mid-1980s, Florida courts had applied this standard long before then. See Bundy v. State, 471 So. 2d 9 (Fla. 1985); Bundy v. State, 455 So. 2d 330 (Fla. 1984). However, in April 2013, the Florida Legislature stirred things up when it passed a bill that amended Florida Statute § 90.702 to replace the longstanding Frye standard with the standard used in Federal Courts, as announced in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) (“Daubert”). Since the amended statute came into effect, some members of the Florida bar have challenged its validity and advocated that the Florida Legislature overstepped its bounds and infringed on the Florida Supreme Court’s rule-making authority. These challenges resulted in a five-year long debate as to the appropriate standard in Florida to determine whether expert testimony is admissible: Frye or Daubert?

Under the Frye standard, expert opinion and testimony is admissible if it is based on new or novel scientific principles and methodologies that are generally accepted in the scientific community. Whereas under Daubert, general acceptance is not a prerequisite for admissibility. Rather, a trial judge acts as the gatekeeper and determines the admissibility for “any and all scientific testimony or evidence” that is relevant and reliable. While there has been a clear divide within Florida’s legal community between those who are pro-Frye versus pro-Daubert, the five-year-long debate over which standard should be the law and is the law in Florida is finally over.

Continue Reading Frye Makes a Strong Comeback in Florida

The Florida Asbestos and Silica Fairness and Compensation Act (the “Act”) has governed asbestos litigation in Florida nearly seamlessly for more than a decade until a series of recent challenges threw a wrench into the system by calling into question its constitutionality.

The purpose of the Act, which came into effect in June 2005, is to preserve funds of viable defendants in asbestos litigation to ensure compensation for those who develop or may develop asbestos-related cancers or an actual physical impairment caused by asbestos, and enhance the ability of the judicial system to supervise and control asbestos litigation. See § 774.202. While Defendants will argue the Act has served its purpose, Plaintiffs contend quite the contrary. In three separate motions filed in the Robert G. Clark, et. al. v. Borg Warner Corporation, et. al., Case No. 14-027985, Miami-Dade County, Florida case, Plaintiffs attempt to undo the legislative reform of asbestos litigation in Florida by challenging the constitutionality of the following provisions of the Act: (1) the pleading requirements for establishing an alleged non-malignant asbestos-related physical impairment; (2) the limitations on the liability of sellers and retailers; and (3) the abolition of punitive damages.

In the first of the three motions, Plaintiffs address the provisions of the Act, which govern the pleading requirements applicable to plaintiffs pursuing claims for non-malignant asbestos-related diseases. See Fla. Stat. §§ 774.204(1) and 774.205(2). These provisions require a plaintiff to demonstrate a “physical impairment” by requiring them to file prima facie evidence supporting his/her alleged asbestos-related injury along with their complaint. In Clark, while Plaintiffs provided medical documentation, which they maintain establishes Mr. Clark’s alleged diagnosis of asbestosis, they concede not only that the documentation provided does not meet the requirements of the Act, but also that they will never be able to meet those requirements. As such, they argue that these provisions of the Act should be declared unconstitutional on the following grounds: (1) they are procedural in nature, and therefore violate the separation of powers provision of the Florida Constitution; (2) they restrict access to the Courts; and (3) they violate Plaintiffs’ right to equal protection.

Plaintiffs’ first argument in support of this motion is based on the premise that the Act is procedural in nature, and therefore violates the separation of powers provision of the Florida Constitution, which grants the Florida Supreme Court exclusive authority to enact procedural laws. Plaintiffs look to the Florida Supreme Court’s ruling in Massey v. David, 979 So.2d 931, 936 (Fla. 2008) (citing Allen v. Butterworth, 756 So.2d 52, 59 (Fla. 2000)), which states “[g]enerally, the Legislature is empowered to enact substantive law” and the Florida Supreme Court “has the authority to enact procedural law.” In Massey, the Court described the difference between procedural and substantive law as follows:

 

Substantive law has been defined as that part of the law which creates, defines, and regulates rights, or that part of the law which courts are established to administer…On the other hand, practice and procedure encompass the course, form, manner, means, methods, mode, order, process or steps by which a party enforces substantive rights…

 

Massey, 979 So.2d at 936-37. Relying on the Courts explanation in Massey, Plaintiffs argue that the Act is clearly not substantive in nature because it does not “create, define or regulate” any rights that did not already exist at common law. Instead, Plaintiffs contend that the Act is procedural because it (1) creates priorities among injured plaintiffs by giving priority to plaintiffs that can demonstrate actual physical impairment; (2) regulates the manner in which an injured plaintiff can enforce substantive rights that existed at common law; and (3) conflicts with the Florida Rules of Civil Procedure by requiring harsher pleading requirements.

Next, Plaintiffs contend that the provisions of the Act governing the pleading requirements violate Florida’s constitution by restricting access to the Courts for those plaintiffs, like Mr. Clark, who are injured but not considered as having a “physical impairment” as defined by the Act. Plaintiffs again look to the Florida Supreme Court for guidance citing the two-part test set out in Kluger v. White, 281 So.2d 1, 4 (Fla. 1973), which precludes the Legislature from restricting access to the courts “without providing a reasonable alternative to protect the rights of the people of the State to redress for injuries, unless the Legislature can show (1) an overpowering public necessity for the abolishment of such right, and (2) no alternative method of meeting such public necessity can be shown.” Plaintiffs argue the Legislature failed to meet either prong.

Lastly, in support of their first motion, Plaintiffs argue that the Act violates the Equal Protection Clause of the Florida Constitution. First, Plaintiffs contend that the Act denies recovery to plaintiffs based on arbitrary criteria distinguishing those it deems have a physical impairment and those that do not. Second, Plaintiffs assert that the Act fails to meet the requirements of the Florida Supreme Court’s rational basis set out in McCall v. United States, 134 So. 3d 894, 901 (Fla. 2014). The McCall test requires a determination of (1) whether the challenged statute serves a legitimate governmental purpose, and (2) whether it was reasonable for the legislature to believe that the challenged classification would promote that purpose. The intent of the Act was to preserve funds of viable defendants in asbestos litigation to ensure that plaintiffs who develop asbestos-related cancers can be compensated and continue to contribute to the state economy.  Plaintiffs argue that there is a lack of data to support the stated purpose of the Act and the limitation of the number of cases filed by plaintiffs who were injured, but not “impaired” as required by the Act’s pleading requirements does not bear a rational basis to that purpose.

In their second motion, Plaintiffs challenge the Act’s prohibition of strict liability claims against sellers and retailers of asbestos-containing products. They contend that this provision, Fla. Stat. §774.208, violates the Equal Protection Clause of the Florida Constitution by creating the following arbitrary distinctions: (1) discriminating among plaintiffs injured by defective products by making an unnecessary distinction between those who are injured by asbestos and those injured by all other defective products; and (2) wrongfully distinguishing between product sellers based solely on the product they sell; i.e., by distinguishing between sellers of asbestos-containing products and sellers of all other defective products. Plaintiffs again assert that this provision of the Act fails the rational basis review under Florida’s McCall test, as set forth above, given the lack of legislative findings to support the purpose of the statute. And, even if the Court were to decide that the Legislature had a legitimate governmental purpose for this provision, preventing all plaintiffs from asserting strict liability claims against sellers and retailers is not rationally related to achieving the stated goals of preserving assets to compensate future plaintiffs or protect Florida’s economy. Notably, Plaintiffs failed to aver in their motion that they are unable to assert claims for strict liability against any of the defendants named in their complaint. So whether they even have standing to bring this motion in the Clark case is yet to be determined.

In their third and arguably most significant motion, Plaintiffs seek punitive damages against one of the defendants in Clark and challenge the constitutionality of the Act’s provision that abolishes punitive damages, Fla. Stat. §774.207. In the motion, Plaintiffs first provide the bases for why punitive damages are warranted against the defendant in question. Next, Plaintiffs present their constitutional challenge of the Act’s prohibition of punitive damages arguing that it violates the Equal Protection Clause of the Florida Constitution. Plaintiffs contend this provision creates an arbitrary distinction –this time, by immunizing manufacturers of asbestos–containing products against punitive damages, even when they have engaged in grossly negligent or intentional misconduct, while manufacturers of all other products remain subject to punitive damages in Florida. Plaintiffs also contend that the Act’s bar on punitive damages fails the rational basis test under McCall, because the legislative record supposedly does not support the stated purpose of imposing a punitive damages bar against defendants in asbestos. According to Plaintiffs, regardless of whether this provision serves a legitimate governmental purpose, the Act does not preserve assets for sick plaintiffs by precluding punitive damages in a small number of Florida lawsuits.

These motions are still in a very preliminary posture and discovery relevant to the constitutional challenges is currently being conducted. Nevertheless, they will be closely watched, as the outcome could have far-reaching effects on asbestos litigation in Florida.

Asbestos(Cropped)Travelers Casualty and Surety Company (“Travelers”) dodged a bullet when a $36 million judgment entered against it was unanimously overturned by a recent Third Circuit ruling in General Refractories Co. v. First State Ins. Co., 2017 WL 1416364 (3d. Circ. 2017). Significantly, the Third Circuit held that Travelers had no obligation to indemnify its policyholder, General Refractories Company (“GRC”), for any losses associated with underlying asbestos-related lawsuits based on a policy exclusion for losses “arising out of asbestos.” The crux of the Court’s decision is hinged on the interpretation of the language that shaped the asbestos exclusion in Travelers’ insurance policy, which provided:

“It is agreed that this policy does not apply to EXCESS NET LOSS arising out of asbestos, including but not limited to bodily injury arising out of asbestosis or related diseases or to property damage.”

By way of background, GRC was a manufacturer and supplier of refractory products, some of which contained asbestos. The historical use of asbestos in some of GRC’s products resulted in over 30,000 lawsuits alleging injuries from exposure to asbestos starting in the late 1970s. While GRC’s primary liability insurers handled these claims, it also obtained excess insurance policies for additional coverage from a number of insurers, including Travelers. GRC began tendering the claims to its excess insurers in 2002, after its liabilities had far exceeded the limits of its primary insurance coverage, and the primary insurers could no longer defend and indemnify the company for these claims. All of GRC’s excess insurers, including Travelers, denied coverage based on their policies’ asbestos exclusions. As such, GRC initiated a lawsuit in the Eastern District of Pennsylvania, Gen. Refractories Co. v. First State Ins. Co., 234 F.R.D. 99, 100 (E.D. Pa. 2005), seeking to recover its losses from the underlying asbestos matters against its excess insurers, alleging that the asbestos exclusion did not preclude it from recovering under the policies. Through the course of the litigation, all of the excess insurers, with the exception of Travelers, resolved with GRC.

The District Court endeavored to interpret Travelers’ asbestos exclusion with a one-day bench trial, and considered argument and evidence from both parties. GRC held strong with its narrow interpretation of the asbestos exclusion, arguing that it only applied to raw mineral asbestos, not asbestos-containing products. In support of its position, GRC presented evidence of: (1) comparable insurance policies that clearly stated asbestos-containing products were excluded; (2) comparable insurance policies with definitions of “asbestos” that failed to include asbestos-containing products; (3) Travelers’ consecutive policies containing less ambiguous language; (4) the definition of asbestos-related claims from outside sources; and (5) expert testimony distinguishing between asbestos and asbestos-containing products. Travelers’ interpretation, however, was much broader, asserting that all asbestos-related claims were precluded under the asbestos exclusion.

The District Court agreed with GRC’s narrow interpretation of the word “asbestos” — concluding that it should be interpreted to mean raw mineral asbestos only. The Court explained that its interpretation was supported by GRC’s evidence of industry custom at the time, and that Travelers failed to show otherwise. Consequently, it considered the asbestos exclusion to be riddled with a latent ambiguity and deemed it “ambiguous” and “unenforceable.” Accordingly, a judgment was entered against Travelers for $36,273,705.00 to indemnify GRC for its losses in the underlying asbestos lawsuits.

On appeal, the Third Circuit unanimously reversed the District Court, when it held that Travelers’ asbestos exclusion was “unambiguous” and “enforceable” as a matter of law. To reach this monumental decision, the Court interpreted the language in the asbestos exclusion, and determined that any debate over the meaning of the word “asbestos” was completely nullified by the preceding phrase “arising out of” in the exclusion. In fact, U.S. Circuit Judge Thomas I. Vanaskie, in writing for the panel, notably stated “[t]he phrase ‘arising out of,’ when used in a Pennsylvania insurance exclusion, unambiguously requires ‘but for’ causation.” (emphasis added). And, then explained that “[b]ecause the losses relating to the underlying asbestos suits would not have occurred but for asbestos, raw or within finished products, [the Court] reverse[s] the judgment of the district court.” Simply put, the phrase “arising out of” in effect broadens the asbestos exclusion to include any injuries caused by asbestos and asbestos-containing products.

Lastly, even if GRC’s narrow interpretation was correct, the Court states that its decision would not be any different. Rather, the Court purposefully points out that GRC’s claims would still be excluded, because it could not overlook the blatant fact that the fiber released from asbestos-containing products is the same as that from raw mineral asbestos, and that the plaintiffs in the underlying asbestos lawsuits were exposed to GRC’s asbestos-containing products.

Ultimately, there is no question that this broad interpretation will have far-reaching effects on other similarly situated manufacturers and/or suppliers of asbestos-containing products, like GRC. The Court even acknowledged the widespread implications of it decision, which U.S. Circuit Judge Thomas I. Vanaskie predicted to have “immediate” significance “to the parties at hand and those insurers and insureds” with policies like Travelers. In fact, he even went so far as to call the Court’s decision “PRECEDENTIAL”- leaving asbestos defendants, particularly manufacturers and suppliers of asbestos-containing products, in a vulnerable situation.