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Summary Judgment Order Illuminates Issues in MA Asbestos Litigation

Posted in Asbestos Litigation, Massachusetts Courts, Premises Liability, Professional Liability

Overview

On March 30, 2018, Judge Rya Zobel of the United States District Court (District of Massachusetts) issued a memorandum of decision on two Defendants’ (NSTAR Electric, formerly Boston Edison, and General Electric) Motions for Summary Judgment in an asbestos personal injury and wrongful death matter, June Stearns and Clifford Stearns as Co-Executors of the Estate of Wayne Oliver v. Metropolitan Life Insurance Co., et al., that addresses multiple issues, including statute of repose, strict liability and liability of a premises owner.

Background

Plaintiff’s decedent, Wayne Oliver, worked on the construction of two power plants, Pilgrim Nuclear Power Station (Massachusetts) and Calvert Cliffs Nuclear Power Plant (Maryland), between 1971 and 1978 and his estate alleges that Mr. Oliver was exposed to asbestos-containing products present at those sites. Defendant NSTAR Electric (formerly Boston Edison)(“Boston Edison”) owned the Pilgrim premises.  Defendant General Electric (“GE”) allegedly designed, manufactured, and sold generators used at Pilgrim and at Calvert Cliffs.  Oliver worked as a pipe inspector for Bechtel, the architect-engineer on projects at both Pilgrim and Calvert Cliffs.

 

As the owner of Pilgrim, Boston Edison conducted safety audits while the construction proceeded, but primary responsibility for the site construction rested with GE and Bechtel: GE for the steam supply system, nuclear fuel system, and the generators themselves; and Bechtel for everything else. In that capacity, Bechtel hired and supervised all subcontractors on the project, including an insulation installer, New England Insulation (“NEI”). Although NEI reported to Bechtel, it installed the asbestos-containing insulation around the generators pursuant to directions from both Bechtel and GE, and pursuant to GE’s specifications that specifically required asbestos-containing insulation.  The Court also recognized that at both Pilgrim and at Calvert Cliffs, GE had rejected suggestions or proposals for an asbestos-free insulation alternative.

 

Oliver allegedly sustained exposure to asbestos at both sites while inspecting pipe near dusty thermal insulation as other subcontractors installed it around the generators. He was subsequently diagnosed with mesothelioma in 2015 and died in 2016.  In denying summary judgment to GE and granting summary judgment to Boston Edison, the Court found that:  (1) while the construction work performed by GE met the definition of an improvement to real property for purposes of the statute of repose, public policy considerations necessitated an exception to the application of the statute in cases involving alleged asbestos-related disease; (2) the installation of asbestos insulation was not an abnormally dangerous activity; (3) Boston Edison did not exercise sufficient control over the work at issue to be held negligent; and (4) a premises owner, such as Boston Edison, has no duty to warn where the subcontractor has knowledge of the hazard which is equal to or greater than that of the premises owner.

 

Application of Statute of Repose

GE argued protection from Plaintiffs’ claims under Massachusetts’s six-year statute of repose, which bars claims concerning “improvements to real property.” Under Massachusetts law, this involves a “permanent addition” versus “ordinary repair.” Whether this statute applied to asbestos claims against manufacturers posed an issue of first impression for the Court. GE argued that its generators were permanent improvements to the plant. Plaintiff disagreed, and further argued that public policy prevented the application of the statute to asbestos claims given their long latency.

 

Ultimately, the Court agreed with GE that the generators were permanent improvements, but found that public policy cut against the application of the statute of repose to GE’s benefit. Though the public policy behind statutes of repose is based on the policy judgment that a potential defendant should have no reasonable expectation of responsibility for injuries that occur after the passage of a number of years, the Court held that such a policy rationale does not apply to asbestos cases because: (1) the potential dangers associated with asbestos exposure were well known by 1971; and (2) the typical latency period from asbestos exposure to disease is much longer than the six-year window for filing personal injury claims under the statute of repose.  Accordingly, the Court found that an asbestos defendant should not have a reasonable expectation that an injury, if one should occur, would likely manifest itself within the six year statute of repose.

 

The Court further relied on what it called a “somewhat relaxed” burden of proof in asbestos cases, thereby minimizing the argument that evidence relied upon by the parties would become stale over the passage of time, another policy reason behind the application of statutes of repose. The Court also noted that GE’s responsibility was not typical of a manufacturer that releases its products to an end user without much retained control. In this case, GE directed the material selection and at least some of the work allegedly giving rise to the exposure.  In addition, GE continued to exercise some level of control for an extended period of time through on-site maintenance and inspections following completion of the project. On these grounds, the Court refused to bar Plaintiffs’ claims against GE on statute of repose grounds.

 

Although the decision purports to rely on a case-by-case factual approach to the application of the statute of repose, as evidenced by the Court’s statement that “although designers, engineers, and contractors like GE appear facially covered by the statute of repose, their protection is ultimately determined by reference to underlying acts.” the Court implicitly states that the statute of repose can never properly apply to asbestos claims, because such application would bestow upon asbestos defendants “absolute immunity” due to the typical latency period for asbestos-related diseases.

 

Strict Liability of Premises Owner

Plaintiff argued for the imposition of strict liability on Boston Edison based on the premise that the act of insulating equipment with asbestos-containing insulation amounted to an abnormally dangerous activity. Massachusetts imposes a balancing test on the application of strict liability in which the court evaluates: (a) whether an activity risks harm; (b) the magnitude of the harm; (c) whether the risk can be mitigated with reasonable care; (d) whether the activity is a common one; (e) whether the activity is appropriate where it is taking place; and (f) the activity’s value to the community. Here, the Court disagreed with Plaintiff’s argument and found that, despite the risk of significant harm posed by asbestos-containing insulation, the fact that asbestos insulation was commonly used during the time frame at issue, and the possibility of taking reasonable precautions to mitigate that harm weighed against the imposition of strict liability. Accordingly, the Court granted summary judgment in favor of Boston Edison on Plaintiffs’ strict liability claim. This decision suggests that, going forward, the Court will not be receptive to the blanket categorization that asbestos products are abnormally dangerous.

 

Negligence of Premises Owner

In addition, Plaintiffs argued that, to the extent Plaintiff’s employer, Bechtel, was negligent by exposing him to asbestos, Boston Edison bears vicarious responsibility. In Massachusetts, an employer of an independent contractor on their premises is not liable for harm caused by that independent contractor’s negligence, unless the employer retains control over performance of the work. Plaintiffs argued that Boston Edison’s authority to monitor the construction, coupled with the ability to shut down the project, rose to a sufficient level of control. The Court disagreed, and considered the right of inspection and the right to impose work stoppage insufficient levels of control to justify imposition of vicarious liability, and granted summary judgment. This decision supports the arguments of premises owners charged with responsibility for their independent contractors, and reaffirms the importance of clearly delineated responsibilities.

 

Plaintiffs further argue that, as premises owner, Boston Edison negligently failed to give Oliver’s employer a warning regarding the dangers of on-premises asbestos. Massachusetts landowners owe a duty of reasonable care to employees of independent contractors. However, courts distinguish pre-existing hazards with those created by the work the independent contractor undertakes to perform. With the latter, the independent contractor stands on equal footing with regard to the risk. The Court considered the insulation a case of the latter—where Boston Edison’s knowledge of the risks of asbestos was no greater than Bechtel’s, Boston Edison had no duty to warn, and therefore no liability, and granted summary judgment. This decision cuts against plaintiffs’ attempts to make premises owners the effective “insurers” for on-premises work, the nature of which subcontractors may be more or equally aware.

Trouble Brews in NYCAL after Summary Judgment Rejection

Posted in Asbestos Litigation, Litigation Trends, New York Courts, Products Liability

A March 22, 2018, denial of a defendant’s summary judgment motion in the New York City Asbestos Litigation (NYCAL) signals a drastic lowering of the product identification standards in that venue (and a possible strategic adjustment necessary in future defendants litigating there).

 

In Trumbull v. Adience, Inc., a former brewer sued Stavo Industries (“Stavo”) as a manufacturer of asbestos-containing products to which the plaintiff was allegedly exposed.  Stavo made, among other products, filters used in breweries. The plaintiff listed Stavo in his interrogatory responses, but not during his deposition testimony.  At his deposition, the plaintiff recalled exposure to filters generally, but only named one specific manufacturer—Cellulo.  However, the plaintiff also referred back, on the record, to his interrogatory responses for the list of filter brands that he supposedly encountered.

 

From Stavo’s perspective, the plaintiff’s general interrogatory mention of Stavo and reference back to those interrogatories during the deposition failed the requirement for product identification. Stavo moved for summary judgment.  Justice Manuel Mendez denied Stavo’s motion, and ruled that a reference back to the interrogatory responses during his deposition did “sufficiently identify” Stavo filters as an exposure source.  The Court found that Stavo’s liability could be inferred from the plaintiff’s testimony that he worked near filters being removed and replaced, considered with Stavo marketing materials from the time at issue claiming widespread usage of Stavo products in the brewing industry.  For the Court, this provided enough evidence to survive summary judgment.

 

After this decision, the bar for product identification in the NYCAL appears dangerously low.  This standard encourages plaintiffs to make blanket references to their vague interrogatory responses in depositions where actual recollection is impossible. It also forces prudent defendants to cross-examine during depositions with or without a specific mention of the defendant’s product occurring. If the NYCAL proceeds with this standard, the number of identifications stands to increase.

Developments in Sexual Orientation Discrimination Claims under Title VII

Posted in Employment Litigation, Litigation Trends, Rhode Island Courts

Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating on the bases of race, color, national origin, religion, and sex. Federal circuits are currently split on whether discrimination based on sexual orientation falls within the scope of discrimination based on sex (and therefore within the scope of Title VII’s prohibition). On February 26, 2018, the en banc Second Circuit Court of Appeals found in Zarda v. Altitude Express that Title VII’s prohibition of discrimination based on sex does in fact cover discrimination based on sexual orientation, overturning its own precedent holding from almost twenty years prior. This result signals increased viability for challenges advocating a broader interpretation of Title VII to remedy sexual orientation discrimination, as well as a potential pushback by the Jeff Sessions-helmed Justice Department as these challenges arise.

 

Zarda involved a skydiving instructor (Zarda) who alleged that his employer (Altitude Express) fired him in response to a customer telling them of his sexual orientation. The U.S. District Court for the Eastern District of New York granted summary judgment in favor of Altitude Express on Zarda’s claim, finding that Title VII failed to cover sexual orientation discrimination, and that Zarda failed to establish the type of gender-stereotyping claim covered by the act. The District Court considered itself bound by the Second Circuit’s 17-year-old decision in Simonton v. Runyon, and held that, absent an en banc review by the Second Circuit reversing Simonton, Second Circuit precedent required dismissal. Zarda appealed the summary judgment to the Second Circuit, which granted an en banc review. Writing the majority opinion, Judge Robert Katzmann wrote in the majority opinion that sexual orientation discrimination necessarily involves sex discrimination, as it means discrimination against someone based on their own sex in relation to the sex of those to whom they are sexually attracted. Katzmann noted that although Congress had not sought to address sexual orientation discrimination in Title VII, laws like Title VII “often go beyond the principal evil to cover reasonably comparable evils,” which in this case included sexual orientation discrimination. The Second Circuit thus reversed Simonson, vacated the summary judgment, and remanded the Title VII claim to the District Court.

 

By allowing such a claim to proceed under Title VII, the Second Circuit joined the Seventh Circuit, which found last April that Title VII covers sexual orientation discrimination in its decision in Hively v. Ivy Tech Community College of Indiana. Hively concerned an adjunct professor who alleged that her employer passed her up for full employment because she was openly gay. Hively argued that she faced discriminated for failing to conform to female stereotypes, and because she publicly identified as a lesbian. The Seventh Circuit reversed and remanded the summary judgment in favor of her employer. It found that “discrimination on the basis of sexual orientation is a form of sex discrimination” and that “a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.” According to the Seventh Circuit, Title VII encompassed both her gender non-conformity and sexual orientation discrimination allegations.

 

The Eleventh Circuit held otherwise in Evans v. Georgia Regional Hospital, decided on March 10, 2017. The case involved a male-identifying security hospital security guard (Evans) allegedly dismissed from employment for failing to present as a woman. Like the plaintiff in Hively, Evans argued that she suffered discrimination due to her gender non-conformity, which she argued fell within the scope of Title VII’s prohibition of sex discrimination. The Eleventh Circuit agreed that Title VII protected against this type of discrimination, but found that she failed to make a prima facie showing of it. The Eleventh Circuit distinguished discrimination based on gender non-conformity from discrimination based on sexual orientation, and found that Title VII did not address the latter.

 

In Franchina v. City of Providence, decided on January 25, 2018, the First Circuit heard the city’s appeal of a verdict and judgment against it for a female firefighter’s Title VII claim that her employer provided her with a hostile workplace, where she suffered discrimination as both a woman and a lesbian. She proceeded under a “sex-plus” theory, or a gender discrimination claim alleging that an employer classifies employees based on their sex “plus” another characteristic (in this case, sexual orientation). The First Circuit held in denying the city’s challenge that the plaintiff’s claim of sexual orientation discrimination, although not technically redressable under Title VII, did not cause her meritorious sex discrimination claim to fail. In a jurisdiction following Zarda’s reasoning, this “sex-plus” heuristic becomes less meaningful or necessary for the plaintiffs to resort to, where sexual orientation itself becomes a protectable distinction. The difference between two jurisdiction’s analyses in cases like Franchina underscores the stakes in the national push for Circuit reconsideration of narrow judicial applications of Title VII.

 

After these cases, a pronounced Circuit split exists on the scope of Title VII’s coverage. On December 11, 2017, the Supreme Court refused certiorari for the plaintiff’s appeal in Evans, but more appeals to the Court’s jurisdiction on this issue appear imminent. The Second Circuit’s reversal appears to increase the impetus for the Supreme Court to address this question. In the meantime, state legislatures draft their own provisions aimed at remedying the type of discrimination typified by these suits.

Rhode Island Supreme Court Redefines Requirements for Modifying an Arbitration Award that Exceeds Insurance Policy Limits

Posted in Insurance Litigation, Litigation Trends, Rhode Island Courts

In a recent decision, the Rhode Island Supreme Court ruled that when an arbitration award exceeds the insurance policy limits, the Superior Court cannot consider the policy limits, or the insurance policy itself, in a motion to modify the award, unless the insurance company asserted a policy limit defense at the arbitration and provided a copy of the policy to the arbitrator.

 

In Lemerise v. Commerce Ins. Co., the Rhode Island Supreme Court held that trial courts may not supplement the review of a motion to modify an arbitration award pursuant to R.I. General Laws Section 10-3-14 with testimony, other evidence, and even arguments, if those items were not raised during the arbitration.  137 A.3d 692 (R.I. 2016).  This new precedent provides instructions to the trial court when reviewing motions to modify arbitration awards.  Courts are now forbidden to review evidence and arguments that were not presented or raised during the arbitration proceedings, and have been instructed to confirm arbitration awards unless the narrow exceptions outlined in Section 10-3-14 apply.

 

The underlying matter in Lemerise involved a dispute between the plaintiff, Joseph Lemerise, and the defendant, the Commerce Insurance Company.  In August 2011, Mr. Lemerise was struck by an uninsured motorist while crossing a street in Newport, Rhode Island.  Lemerise, 137 A.3d at 697.  Following the accident, Mr. Lemerise filed a claim for coverage under his automobile insurance policy through Commerce.  Id.  The parties unsuccessfully attempted to negotiate appropriate compensation for Mr. Lemerise’s injuries and a suit was subsequently filed in the Newport County Superior Court.  Id.  After filing the suit, the parties agreed to participate in arbitration pursuant to the terms of Mr. Lemerise’s uninsured motorist policy.  Id. at 705.  The arbitrator sought to determine the extent of Mr. Lemerise’s injuries and award sufficient compensation.  Id. at 698.  The arbitrator assessed Mr. Lemerise’s injuries at $150,000 and added prejudgment interest of $47,550, which brought the total award to $197,550.  Id. This total was well above the policy limit of $100,000.  Id.

 

At the conclusion of the arbitration, Mr. Lemerise moved in the superior court to confirm the arbitration award, and Commerce filed a motion seeking modification.  Id. at 698.  While reviewing the motions, the superior court supplemented its review of the issues at hand with a copy of Mr. Lemerise’s insurance policy, as well as testimony from the arbitrator.  Id.  The superior court justice granted Commerce’s motion to modify the award to conform with the insurance policy limit of $100,000.  Id. at 699.  The justice stated that he would not “allow [Mr. Lemerise] to take advantage of some technicality to get more than he bargained for in this case.”  Id.  Mr. Lemerise appealed to the Rhode Island Supreme Court, seeking a reversal of the superior court’s holding and a confirmation of the initial arbitration award.  Id.

 

The sole issue presented before the Supreme Court was whether the trial justice erred in granting the motion to modify the award, when, after supplementing the record with the admission of the insurance policy and the testimony of the arbitrator, he reduced the award to conform to the policy limit of $100,000.  Id. at 700.  Upon review of the lower court’s holding, the Rhode Island Supreme Court expressed concern that litigants might sidestep the binding effect of arbitration awards by moving for modification of the awards.  Id. at 699.  The Court stated that “[p]ublic policy favors the finality of arbitration awards, and such awards enjoy a presumption of finality.” Id.  The Supreme Court further stated that courts reviewing a motion to confirm an arbitration award must limit the scope of their review to the arbitration record.  Id. at 700.

 

In Lemerise, the Court determined that Commerce effectively waived certain defense arguments regarding awards in excess of the insurance policy limits by not raising those defenses in the arbitration proceedings.  Id. at 704.  Particularly, the Court concluded that Commerce waived a policy limit defense by failing to submit a copy of Mr. Lemerise’s insurance policy during the arbitration proceedings.  Id.  In addition, the Court determined that the arbitrator did not err by awarding prejudgment interest.  Id. 700-04. The Court vacated the superior court’s order and remanded the case to the superior court with instructions to confirm the arbitrator’s award of $197,550.  Id. at 704-05.

 

In conclusion, the Rhode Island Supreme Court made clear that a trial court considering a motion to modify an arbitration award pursuant to section 10-3-14 may not expand its review beyond the arbitration record.  Therefore, when an insurance policy limit may be a defense, it is imperative that such arguments, and any supporting evidence, are introduced at the arbitration hearing; otherwise there is no remedy for arbitration awards in excess of the policy.

Bristol-Meyers Squibb Standard Helps MG+M Attorneys Secure a Dismissal

Posted in Asbestos Litigation, California Courts, Litigation Trends

Recently, a team of attorneys from MG+M successfully obtained a dismissal of all claims against their client, based on the lack of personal jurisdiction.  The case was Howell v. Asbestos Corporation, pending in Los Angeles County Superior Court before the coordinating asbestos judge, the Honorable Steven J. Kleifield.  In his decision dismissing the claims, Judge Kleifield applied the stringent personal jurisdiction standards recently set forth in Bristol-Meyers Squibb Co. v. Superior Court of California 137 S. Ct. 1773 (2017).

 

In Bristol-Meyers, the United States Supreme court examined whether a state court could exercise personal jurisdiction over the claims of non-resident plaintiffs against a non-resident corporate defendant for injuries occurring out of the forum state.  Id. at 1778  Specifically, a group of plaintiffs sued Bristol-Myers Squibb (Bristol) in a California court for injuries sustained after ingesting a drug manufactured and supplied by Bristol.  Many of the plaintiffs were not from California. Bristol was incorporated in Delaware with its principal place of business in New York; however, it did have some connections with California, as it sold its drug within the state.

 

Ultimately, the Court ruled that California courts could not exercise specific personal jurisdiction over Bristol with respect to any plaintiffs who did not reside in California, because any conduct giving rise to the non-resident plaintiffs’ claims occurred outside of California. The Court noted that specific jurisdiction necessitates “an affiliation between the forum and underlying controversy, principally, [an] activity or an occurrence that takes place in the forum state.”  Id. at 1781.  Thus, because the complaint did not allege any acts or occurrences in California that specifically resulted in injury, the Court ruled that California could not exercise personal jurisdiction over the claims against Bristol.

 

In the Howell v. Asbestos Corporation case decided last week, the plaintiffs alleged that Mr. Howell developed malignant epithelial mesothelioma as a result of exposure to various asbestos-containing products. Although the plaintiff did reside in California for a short period of time, the vast majority of the plaintiff’s alleged exposure to asbestos occurred in the state of Texas. On behalf of one of the defendants, attorneys from MG+M argued that California courts lacked personal jurisdiction over our client pursuant to the standard set forth in Bristol-Meyers. Specifically, MG+M attorneys argued the plaintiff’s claims did not relate to any contacts that the defendant had with the state of California. For example, the defendant was not incorporated in California, did not have its principal place of business in California, and had less than 1 percent of employees residing in California, meaning there was no general jurisdiction. Additionally, the plaintiff’s alleged injury from the defendant’s product occurred outside of the state of California, meaning there was no specific jurisdiction. Ultimately, Judge Kleifield applied the Bristol-Meyers standard and held that because the plaintiffs’ claims did not bear a substantial connection to the non-resident defendant’s forum contacts, the exercise of personal jurisdiction was not appropriate.

 

 

The Future of Bristol-Meyers

 

Since the decision in Bristol-Meyers, corporate defendants are raising more personal jurisdiction challenges and achieving greater success. The Bristol-Meyers standard for personal jurisdiction has fundamentally changed the rules governing where corporate defendants can be sued, limiting plaintiffs’ lawyers’ ability to select favorable forums in which to file claims (i.e. forum shopping).  To establish specific jurisdiction, plaintiffs’ lawyers now must plead specific facts that show a connection between their client’s claims and the forum in which they seek adjudication.