New England Biz Law Update
Despite two U.S. Supreme Court opinions urging Congress to do something about it and despite unprecedented efforts to fashion a legislative solution in the 108th Congress, the asbestos personal injury litigation grinds on.
The litigation has driven more than 70 companies into bankruptcy and has cost businesses more than $54 billion.
The latest comprehensive study of the problem (Rand Corporation, 2002) projects the filing of up to 2.4 million additional claims, the resolution of which will cost businesses an additional $210 billion dollars. Most astonishing, there are now more than 6,000 companies named as defendants in these cases.
Every general counsel whose company or predecessor manufactured or distributed products that may have contained asbestos, or whose industrial workplaces have or had substantial asbestos-containing materials in place, should be aware of the continuing expansion of this litigation. New defendants are added to these cases monthly.
We are in the third wave of the litigation. The earliest cases were against insulation manufacturers such as Johns Mansville and Raybestos Manhatten, some of whom were generally aware of dangers of high-level industrial exposures to friable asbestos. The second wave defendants were companies that consciously used asbestos but in generally smaller quantities and in a less friable form than the insulation manufacturers. They did not consider the asbestos in their products to present any hazard.
The third wave defendants are generally those who (i) sold or incorporated an asbestos-containing product manufactured by others into their own product; or (ii) owned or controlled a workplace found to have asbestos-containing products on it to which workers could have been exposed. The arguable lack of culpability, or knowledge of hazard in their product or workplace, will not give the third wave defendants a free pass out of the litigation.
Early Assessment
However, cases against the third wave defendants are defensible. There are steps you can take now so your company is better prepared to respond if it is added to this litigation.
General counsel are well advised to make an early assessment of their company’s potential exposure and take steps to position their company before the first summons arrives.
Learn about the company’s historical product lines and industrial premises. To determine potential exposure, counsel need to know the company’s product history, including products manufactured by predecessor companies.
Records of product formulations and purchasing records should be recovered and preserved. Company employees and retirees should be sought out and interviewed. The records of the asbestos content of component parts supplied by others can be researched, if necessary, through documents produced in the asbestos litigation.
Understand a product’s intended use and the employees or trades that could have been exposed to friable asbestos from its use. The more you know about the product at issue, the better able you will be to mount an effective defense to an asbestos personal injury lawsuit.
To defend against potential premises liability claims, gather and preserve your industrial plant’s building, maintenance and renovation records. Determine the identity of contractors, designers and suppliers as well as the company personnel responsible for maintaining the building. Unsurface any building assessments that were done for insurance or regulatory purposes. These may be valuable in themselves, or point ways to further investigation.
Insurance Records
You will need insurance policies and files reaching back as far as you can find them. Insurance companies began writing absolute asbestos exclusions to general liability policies in the 1980s. However, the exposures you will be defending are decades old.
This is significant because the years of exposure a plaintiff alleges may correspond to an old policy, written before an asbestos exclusion was in place. Also, the old policies were triggered by the exposure, not by when the claim was made. However, you will need the policy to prove the coverage. Your company’s agent or broker may be helpful in this search.
Documents And Witnesses
In addition to manufacturing, supplier and premises records, it’s not too early to search and recover the following categories of documents:
During your investigation, keep your eyes open for a long-term company employee or former employee who will make an effective presentation at trial. You know plaintiffs’ counsel will try to portray your company as a faceless, uncaring corporation. You will need an effective counter-presence, who understands the company’s products, history and culture.
Product Samples
Locating product samples that may have been manufactured with asbestos-containing elements may be trickier than it sounds. Your company stopped using asbestos components a long time ago. You may need to look outside your company – to customers for instance – to find installations where the originally manufactured item can be inspected.
Samples may need to be examined by a materials analyst to determine the quantity and type of asbestos materials involved. The type of asbestos incorporated into your company’s product will often be critical in developing a causation defense to a particular plaintiff’s asbestos injuries.
If you can locate a sample, you are faced with a choice about whether to test the product in a simulated work setting to determine if the product sheds fibers when in operation. Remember, asbestos is only dangerous when it releases respirable fibers in some quantity. Testing by an industrial hygienist is a tactical decision and requires a good amount of forethought about whether to test, as well as the design of the test. Working with a knowledgeable industrial hygienist may help you develop avenues of defense that were not immediately apparent.
If all of this sounds like a lot of work for a harried general counsel, consider the time spent to be an investment. The history of the litigation is that companies who are prepared to vigorously contest their legal responsibility for the asbestos claims end up having fewer claims to defend.
Robert D. Friedman is regional managing partner of the Boston based law firm Perkins Smith & Cohen LLP. He has been defending product liability cases, including asbestos cases, for more than 20 years in the Massachusetts state and federal trial courts.
