On April 16, 2018, a Rhode Island court addressed for the first time whether an entity owes a duty of care to protect non-employees from exposure to the asbestos-tainted work clothes of the entity’s employee.  In a decision denying the defendant Crane Co.’s motion for summary judgment in the matter of Carolyn Nichols, as Executrix of the Estate of Iva Pearl Jones, et al. v. Allis Chalmers Product Liability Trust, et al., C.A. No. PC-2008-1134, Judge Sarah Taft-Carter held that while the existence of such a duty is determined on a case-by-case basis, the plaintiffs had presented sufficient evidence to establish that Crane Co. had a duty to protect against such “secondary” or “take-home” exposure.  The decision is significant in that the Court demonstrated a willingness to impose such a broad duty upon an employer if certain factors are met through the plaintiff’s evidence.

In the Jones matter, the plaintiffs alleged that the decedent, Iva Pearl Jones (“Ms. Jones”) was exposed to asbestos from the clothing of her brother-in-law, Stanley Nichols (“Mr. Nichols”) while Mr. Nichols was employed by Crane Co. from 1979 to 1980 and resided in the same home as Ms. Jones and other family members.  The testimony also established that Ms. Jones “always” did the laundry, including Mr. Nichols’ work clothes.  Ms. Jones was diagnosed with mesothelioma in 2005 and passed away in 2007.  The plaintiffs alleged that Crane Co. failed to take adequate precautions to prevent asbestos fibers from leaving the work site and failed to warn employees of a foreseeable risk of take-home exposures to their cohabitants. Following discovery, Crane Co. moved for summary judgment on all counts asserting that it had no duty of care to Ms. Jones, its employee’s sister-in-law, and that the plaintiffs had failed to establish that the alleged exposure to asbestos from Mr. Nichols’ clothing caused Ms. Jones’ disease.

The Court, noting that an employer’s duty to protect against “take-home” exposures is an issue of first impression in Rhode Island, recognized the division of existing authority in other jurisdictions that have addressed the issue in NY, MD, GA, TN, NJ, IL, and ND. The Court held that it need not find a “special relationship” between Crane Co. and Ms. Jones to impose a duty because the plaintiffs allegations were based upon Crane Co.’s own alleged misfeasance in utilizing asbestos-containing products and not on an alleged failure of Crane Co. to protect against the actions of a third-party tortfeasor.  Instead, the Court held that under Rhode Island law, the existence of a duty of care is determined on a case-by-case basis considering the following factors: (1) the foreseeability of the harm; (2) the degree of certainty of injury; (3) the closeness of connection between the defendant’s conduct and the plaintiff’s injury; (4) the policy of preventing future harm; (5) the burden to the defendant and consequences to the community in imposing a legal duty; and (6) the relationship between the parties.

After considering the above-factors, the Court
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In a recent case, the Ohio Supreme Court addressed the question of whether the “cumulative-exposure theory” satisfies the “substantial factor” test for a plaintiff to succeed on a claim for asbestos-related injuries. The standard in Ohio requires a plaintiff to demonstrate that exposure to the product of a certain defendant was a substantial factor in causing the plaintiff’s asbestos-related injuries.

The decedent, Kathleen Schwartz, was diagnosed with and died from mesothelioma. The alleged main source of her exposure to asbestos occurred as a result of laundering the clothing of her father, who worked as an electrician.  In addition, plaintiff claimed that Ms. Schwartz was exposed to asbestos as a result of her proximity to her father when he changed the brakes on the family vehicle.

Plaintiff, decedent’s husband, brought suit against a number of defendants and claimed that the products of each of those defendants were a substantial factor in causing his wife’s mesothelioma. At trial, plaintiff presented evidence, in the form of expert testimony, that there is no known threshold of asbestos exposure at which mesothelioma will not occur, and thus each exposure to asbestos that the decedent experienced from laundering her father’s clothes and being in proximity to brake products contributed to her total dose of asbestos and were substantial contributing factors to the causation of her mesothelioma.

The trial court entered judgement against the defendant in the amount of $1,011,639.92, based on this cumulative exposure theory of causation. The Eighth District Court of Appeals affirmed the decision, finding that the cumulative exposure theory was based on “reliable scientific evidence.”

In reversing the Court of Appeals, the Ohio Supreme Court held that cumulative exposure theory is inconsistent with a substantial factor test for causation. In its decision, the Ohio Supreme Court noted that R.C. 2307.96 requires a showing that “the conduct of that particular defendant was a substantial factor in causing the injury or loss.” This substantial factor standard requires the trier of fact to consider the manner, proximity, and frequency of exposure. As such, the Ohio Supreme Court held that the cumulative exposure theory is incompatible with the plain language of R.C. 2307.96.  Moreover, the Court held that there must be at least some quantification or means of assessing the amount of exposure to determine if the exposure was in fact sufficient to contribute to the cause of the disease.

SLIP OPINION NO. 2018-OHIO-474 SCHWARTZ, EXR., APPELLEE, ET AL. v. HONEYWELL INTERNATIONAL, INC., APPELLANT.[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Schwartz v. Honeywell Internatl., Inc., Slip Opinion No. 2018-Ohio-474.]
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On December 22, 2017 President Trump signed into law the Tax Cuts and Jobs Act (officially Public Law no. 115-97, named “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”). Recognized generally for changes to the individual income tax brackets, the corporate tax cuts, and the estate tax modification, a separate section, 13307, likely will have a significant impact on sexual harassment settlements.

Senator Bob Menendez (D- NJ) proposed the Weinstein tax exclusion (above) in direct response to the #MeToo movement after the sexual harassment revelations about Harvey Weinstein. The provision was added to the Tax Cuts and Jobs Act to restrict tax deductibility of sexual harassment settlements associated with nondisclosure agreements. Such agreements were reported in connection with Harvey Weinstein, Fox News, and other high profile cases.

Section 13307 modified the IRS Tax Code section 162 to eliminate the ability of businesses and defendants (and possibly plaintiffs) to deduct the costs associated with settlements of sexual harassment claims that are subject to nondisclosure agreements, including legal fees related to the settlements. Because most settlements related to sexual harassment have included confidentiality or nondisclosure language, the impact of this legislation will be significant for all parties involved, and will be reflected in advice from legal counsel. The provision applies to any payments made on or after December 22, 2017 and is not retroactive, except to the extent it affects payments left to be paid after December 22, 2017 on any prior settlement agreement.

The statutory language does not provide definitions for the terms “sexual harassment” or “sexual abuse.” The statutory language also does not clarify the meaning of “related to” for the purposes of settlement or legal fees. This ambiguity leaves several important open questions:

• An employment dispute that does not involve claims of sexual harassment but results in a nondisclosure agreement that includes broad releases may be problematic. If the scope of the releases includes sexual harassment claims, can that settlement be deducted by the business?

• What if a plaintiff has multiple claims, including but not limited to retaliation, gender discrimination, and a sexual harassment claim; what portions of a settlement payment will be deductible? Could effective contract drafting allocate most of the settlement consideration to the non-sexual harassment claims and thereby affect deductibility?

• In settling multiple claims, should counsel draft two separate agreements, one dealing only with the sexual harassment claim and the other agreement with all remaining claims, and allocating the larger portion of the settlement consideration to the nonsexual harassment claim, which is deductible?

• Does the statute exclude all legal fees associated with the claim from deduction, or just the portion of fees associated with the negotiation of the settlement and the drafting and execution of a settlement agreement?

Until more clarity is provided by administrative rules, legislative changes, or court opinions, lawyers will have an important role advising clients how to modify previous boilerplate nondisclosure settlement
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A federal district court in the Eastern District of Louisiana recently held that it continued to have federal jurisdiction under the federal officer removal statute, even after the plaintiffs amended their petition to delete claims that gave rise to federal subject matter jurisdiction. The court reasoned that the original removal satisfied the proper requirements to invoke federal subject matter jurisdiction and exercised its discretion to retain the case.

This case, Pitre v. Huntington Ingalls, et al,[i]  arose out of lung cancer allegedly caused by asbestos exposure while the decedent was employed at Avondale Shipyard in Avondale, Louisiana. The initial petition named numerous defendants and included, among other causes of action, failure to warn and other negligence claims against Avondale, as well as strict products liability and failure to warn claims against Foster Wheeler. The plaintiffs filed a first amended petition adding an additional defendant, Occidental Chemical, and asserting strict liability claims against the new defendant and against Avondale.

In discovery, a former coworker of the decedent testified that the decedent worked on U.S. navy ships built by Avondale, Destroyer Escorts. Within 30 days of this testimony, defendants Avondale and Lamorak removed the case to federal court and asserted that they were entitled to removal under the federal officer removal statute, 28 U.S.C. 1442(a)(1), as the plaintiffs’ claims were related to acts performed under color of federal office. After a federal magistrate judge granted the plaintiff’s motion for leave to file an amended complaint deleting their strict liability claims against Avondale, the defendants appealed the ruling to the district court. In their response to the appeal, plaintiffs moved to remand the action to state court.

The defendants argued that the effort to amend the original petition by deleting strict liability claims was a bad faith attempt to defeat federal jurisdiction. The district court denied defendants’ appeal and concluded that there was no error in granting the plaintiffs leave to amend, as courts are freely permitted to give leave to amend when justice so requires. However, that still left open the issue of the plaintiffs’ motion to remand.

The court cited Fifth Circuit opinions, IMFC Prof. Servs. of Fla. v. Inc. v. Latin Am. Home Health, Inc.[ii] and Bartel v. Alcoa S.S. Co., Inc.,[iii] in support of the principle that jurisdiction “is based on notice of removal, not the amended complaint.” Therefore, “although an amended complaint deleting federal claims may permit a discretionary remand, it does not destroy federal jurisdiction over a validly removed case.” The appellants’ original removal to federal court was properly supported by a colorable defense of federal contractor immunity. The plaintiffs did not seriously contest that their original claims were removable, arguing only that their strict liability claims were brought in error. The court held that though “a good faith error may justify granting leave to amend,” in this matter “plaintiffs’ error does not create a jurisdictional defect in notice of removal.” Furthermore, the court held that Foster Wheeler, a boiler manufacturer defendant,
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For the first time since 1989[1], Connecticut’s Supreme Court addressed the plaintiff’s burden of proof in the asbestos context, in Wayne Bagley v. Adel Wiggins Group et al, SC 19835 (11/7/17).  In a win for defendants facing such claims, the court found that plaintiffs bringing claims pursuant to the Connecticut Product Liability Act (under both strict liability and negligence theories) require expert testimony to prove exposure at levels sufficient to cause their asbestos-related disease, and not merely general testimony that an asbestos-containing product generated an indefinite amount of dust in the plaintiff’s vicinity.

The decedent, Wayne Bagley (“Bagley”) worked at Sikorsky Aircraft Corporation (“Sikorsky”), and alleged exposure to an adhesive product used to bind interior components of helicopter blades. The material, an epoxy, came in the form of a sheet with strippable release paper, it contained 8.6 percent asbestos, and was manufactured by Wyeth Holdings’ predecessor. Employees removed any excess epoxy with chisels or by sanding. The Bagley estate called a former co-worker to testify that Bagley’s work area overlooked the blade shop, that Bagley’s daily responsibilities required him to enter the sanding room frequently, and that the sanding process created visible dust to which Bagley and he would have been exposed to.

At trial, the plaintiff presented causation expert testimony from Dr. Arnold Brody and Dr. Jerrold Abraham. Dr. Brody testified in detail regarding the process by which asbestos causes mesothelioma. However, he acknowledged on cross-examination that his testimony was based upon the assumption that a person has already been exposed to respirable asbestos fibers.

Dr. Abraham, a pulmonary pathologist testified that a proximate cause of the decedent’s mesothelioma was the exposure to asbestos fibers from the epoxy while the decedent passed through the sanding room of the blade shop. While discussing causation, Abraham was given a hypothetical scenario that reflected Bagley’s alleged exposure during his ten-month tenure as the manufacturing engineer. In response, Abraham testified that the scenario was a clear description of an exposure to asbestos fibers emitted from working with epoxy, and that the mere presence of dust indicated inadequate control of the product. On cross-examination, Abraham acknowledged that he never inspected the epoxy, that he did not speak with anyone at Sikorsky about the ventilation in the sanding room, and that he did not know of any studies concerning fiber release of the product when manipulated.

Once the plaintiff rested, Wyeth moved for a directed verdict, arguing that the estate failed to present any evidence of either a design defect or that asbestos dust from the epoxy caused the decedent’s death. Moreover, the defendant argued that expert testimony is required to prove the dangerousness of the epoxy, as it was a complex product for which an ordinary consumer could not form a safety expectation. The trial court denied the motion for directed verdict reasoning that the plaintiff presented sufficient evidence from which the jury could conclude that the epoxy was unreasonably dangerous and that the defendants were negligent in failing
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