Legal Updates

U.S. Supreme Court Rejects California State Court's "Sliding Scale" Jurisdiction Over Claims By Out-of-State Plaintiffs Against Out-of-State Defendants Where the Occurrence Took Place In Another State

In a decison that should reduce forum shopping by out-of-state plaintiffs, the U.S. Supreme Court has firmly rejected a California State Court's attempt to use a "sliding scale" analysis to find specific jurisdiction over the claims of out-of-state litigants against out-of-state defendants, finding that in order for a court to exercise specific jurisdiction over a claim, there must be an "affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State." See Bristol-Myers Squibb Co. v. Superior Court of California, No. 16-466, decided June 19, 2017. This should prevent out-of-state asbestos plaintiffs from convincing local courts to create attenuated connections to create jurisdiction when the underlying tort didn't occur in the forum state, in violation of a defendant's right to due process. You can read the full decision here: icon Bristol-Myers_Squibb_case.pdf (151 KB)

Indiana Appellate Court clarifies premises liability in Indiana asbestos cases, expanding scope of liability for negligence of independent contractors

For the second time this year, an Indiana appellate court has expanded the scope of asbestos liability in the Hoosier state. Hot on the heels of the Indiana Supreme Court's invalidation of the state's Product Liability Act statute of repose in asbestos cases in Myers v. Crouse-Hinds Division of Cooper Industries, Inc., 53 N.E.3d 1160 (Ind. 2016), the Indiana Court of Appeals has issued another opinion arising out of the Larry Myers case, this time bearing on premises liability and the scope of the general rule of non-liability for the negligence of independent contractors.

In a 3-0 opinion issued September 28, 2016, the Indiana Court of Appeals reversed summary judgment for two premises defendants in Myers v. Bremen Casting, Inc., No. 49A04-1503-MI-113 (Ind. Ct. App. Sept. 28, 2016). In doing so, the court significantly narrowed the scope of the general rule of non-liability for the negligence of independent contractors first applied to asbestos claims in Roberts v. PSI Energy, Inc., 829 N.E.2d 943 (Ind. 2005).  This new decision essentially limits the defense to situations where the plaintiff's own work caused his asbestos exposure.

The plaintiff in Roberts was an ACandS insulator who sued PSI Energy, Inc. under theories of vicarious liability and premises liability for injuries caused by asbestos exposure on PSI's premises. He argued PSI was liable for the negligence of its independent contractors under the non-delegable duty doctrine, which provides five exceptions to the general rule against non-liability for the negligence of independent contractors, including: (1) where the contract requires the performance of intrinsically dangerous work; and (2) where the act to be performed will probably cause injury to others unless due precaution is taken.

The Roberts court had rejected the plaintiff's argument, finding the non-delegable duty doctrine did not apply because asbestos was not "intrinsically dangerous" (since there was evidence proper precautions could have minimized Mr. Roberts's risk of exposure), and rejecting the plaintiff's "due precaution" argument because Mr. Roberts, as an insulator, was injured by the very condition he was employed to address. Thus, the facts did not establish PSI created a risk greater than the routine and predictable hazards generally associated with Mr. Roberts's occupation.

The defendants in Myers argued the facts were analogous to Roberts.  Nonetheless, the Myers court distinguished Roberts based on the nature of the two plaintiffs' respective work. Because Mr. Roberts's job was to install and maintain asbestos insulation, he was injured by the very condition he was employed to address; the risk of him being exposed to asbestos was always the same, regardless of the location of his work. Therefore, PSI could not be held liable for failing to take different precautions than those generally taken by asbestos insulators.

In contrast, Mr. Myers's employer was hired to perform electrical work, not asbestos work. The evidence showed Mr. Myers typically worked with electrical components and equipment, as opposed to asbestos insulation. Moreover, there was insufficient evidence to indicate Mr. Myers's risk of being exposed to asbestos was common among electricians or across workplaces, and there was no evidence he was injured by the very condition he was employed to address. Thus, the court rejected the defendants' argument that the asbestos work being conducted on the premises did not create a peculiar risk of harm to those not hired to perform asbestos work, such as Mr. Myers, and held the due precaution exception to the general rule of non-liability was available to Mr. Myers.

While Roberts remains good law in Indiana, the Myers court has significantly limited its reach by narrowing the scope of the general rule of non-liability for the negligence of independent contractors in asbestos cases to situations where the plaintiff's only asbestos exposures on the premises were caused by a condition he/she was employed to address, and situations where the plaintiff's potential for such exposure was always the same, regardless of the location of his/her work, such that the premises owner cannot be held liable for failing to take different precautions other than those generally taken by those in the plaintiff's trade.

This decision will have a significant impact on premises defendants in both Indiana and Illinois asbestos litigation, as Illinois premises defendants who have invariably sought application of Indiana substantive law when appropriate under the facts, will now have to balance Indiana's expansion of asbestos premises liability with its more defendant-friendly fault apportionment scheme.

For further information on the effect of this decision, contact Ed Matushek or Mike Martinez.

 

Illinois Supreme Court Restores Twelve-Person Juries in Civil Cases

The Illinois Supreme Court held on September 22, 2016 in Kakos v. Butler, 2016 IL 120377, that the right to trial by jury includes the right to demand a 12-member jury. The change to Illinois' jury system to reduce the size of juries in civil cases was proposed by the plaintiffs' bar and had passed the Illinois legislature without much real debate in the waning days of former Gov. Patrick J. Quinn's time in office, and became effective June 1, 2015. The Court held PA 98-1132 which reduced civil juries to only six members, and the statute it amended, 735 ILCS 5/2-1105(b), was facially unconstitutional. Because the provision regarding jury size could not be severed from the Act, the Court held the entire Act invalid. The 5-0 decision was authored by Justice Garman, with Justices Thomas and Kilbride taking no part. The full decision is here: Kakos_v_Butler.pdf (58 KB). The plaintiffs' bar had touted the bill as a way to raise juror compensation for the first time in decades, but the defense bar criticized it as merely making it easier to reach a plaintiff's verdict through a consensus of six instead of a unanimous panel of twelve. Associate Judge William Edward Gomolinski had ruled that language in Section 1, Article 13 of the 1970 state constitution: "The right to trial by jury as heretofore enjoyed shall remain inviolate," means that the right to a jury as it existed in 1970, with 12 jurors, cannot be changed without a constitutional amendment, and the Illinois Supreme Court has now agreed.  See Illinois Supreme Court Decisions.

Attempt by plaintiff to circumvent the Supreme Court's Folta decision rejected by Morgan County Court.

In a victory for the asbestos defense bar, Randy Smith and Mike Martinez of Matushek Nilles LLC secured summary judgment for Brand Insulations, Inc. in the case of Rex Hill (Morgan County, Illinois, Case No. 13 L 21). Randy and Mike convinced Judge Christopher R. Reif to reject a novel attempt by the plaintiff to circumvent and nullify the effect of Folta v. Ferro Engineering by pursuing claims of secondary exposure between coworkers.

In this case of first impression, the plaintiff, Rex Hill, worked as a union insulator employed by Brand Insulations for several years in the late 1960s and early 1970s. Plaintiff conceded there was no viable claim for direct exposure against his employer Brand because of the Supreme Court's Folta decision, but sought to pursue an alternative claim against Brand for secondary exposure through contact with the plaintiff's father, who also worked as an insulator for Brand.

The alleged secondary exposure occurred during the time period that both Mr. Hill and his father were working together for Brand. Nonetheless, plaintiff argued his secondary exposure claim was not barred by the exclusive remedy provision because the secondary exposures occurred away from the jobsite, such as while sharing a vehicle together over the course of several months and during frequent visits to his father's home on weekends. Plaintiff also presented the expert testimony of Dr. Arthur Frank, who opined that Mr. Hill would have been secondarily exposed to Brand's asbestos through the process of "re-entrainment" any time he visited his father's home after they last worked together for Brand.

Although the alleged inhalation of Brand's asbestos occurred away from the jobsite, Judge Reif agreed that the alleged secondary exposure "arose out of" and occurred "in the course of" Mr. Hill's employment with Brand because the alleged injury-causing agent originated in Mr. Hill's employment with Brand, and his alleged injury was the result of a risk connected with, or incidental to his employment there. Brand also argued that anything short of outright rejection of plaintiff's secondary exposure theory would nullify the intent of the Illinois Supreme Court in Folta that rejected an asbestos exception to the exclusive remedy provision. In addition to finding in favor of Brand on this matter of first impression, Judge Reif also agreed that, under the facts shown, Brand owed Mr. Hill no common law duty of care with respect to his secondary exposure claim.

For further information, contact Randy Smith or Mike Martinez.

Special Electric Granted Summary Judgment on Proper Corporate Dissolution

Dane County, Wisconsin Judge James R. Troupis recently ruled in favor of the motions drafted by Mike Martinez on behalf of Special Electric Company, Inc. and John Erato, its former President, and entered summary judgment in favor of these defendants. The court agreed with Mr. Martinez that Erato's resignation as president did not breach any duty owed to the plaintiffs, and that the statute of limitations barred any claim against Erato for a breach of fiduciary duty. Mr. Martinez also persuaded the court that because Special Electric was dissolved by the State of Wisconsin on May 8, 2014, the court did not have the authority to reinstate the company. To do so would ignore the authority granted by the legislature to the Department of Financial Institutions as well as the Business Corporations Act. Alternatively, because Mr. Erato properly resigned, the court found that no one remained at Special Electric to be ordered to reinstate the company. For further information, contact Mike Martinez at MDMartinez@matushek.com .

In a 3-2 decision issued March 2, 2016, the Indiana Supreme Court declared the Indiana Product Liability Act statute of repose unconstitutional as applied to asbestos claims, in effect overruling the court's decision in AlliedSignal v. Ott, 785 N.E.2d 1068 (Ind. 2003).

The Court applied the ten-year statute of repose applicable to all product liability plaintiffs, and restored as controlling precedent Covalt v. Carey Canada, Inc., 543 N.E.2d 382 (Ind. 1989), finding the Act unconstitutional as applied to asbestos plaintiffs.

In a dissenting opinion, Justice Mark Massa agreed with the position asserted by Mike Martinez of our office, and bemoaned the reversal of precedent and its effect on the perception of the Court. Justice Massa expressed particular outrage that this case "began with an unusual act of defiance in the trial court, when the judge (shortly before retiring) refused to apply our clear and unmistakable precedent and grant summary judgment to the defendants." Noting that the court's decision in Ott "could not be any clearer, the trial court was required to apply it accordingly, and refused," Justice Massa lamented, "After today, what is to keep another trial judge from deciding he prefers this dissent?"

A copy of the decision is available here: http://publicaccess.courts.in.gov/Appellate/Document?id=d4612121-f515-4dc6-90ef-ddcdd291e919.

As we expected, the petitions for rehearing before the Indiana Supreme Court were denied on April 28, 2016. There was a split vote, 3-2, with the same justices dissenting as in the original opinion. The view of dissenting Justice Massa is of note: 
"[W]e've already seen a preview of coming attractions. If distinguishing between ‘asbestos plaintiffs injured by defendants who both mined and sold raw asbestos and asbestos plaintiffs who were injured by defendants outside that category' is constitutionally impermissible, many other classifications the legislature has deemed appropriate can and will be challenged. The costs of massaging classifications for a desired result will undoubtedly soon multiply."

Defendants Avoid $30 Million Suit in California Asbestos Trial

          By Kunal M. Ganti

In Swasey v. Asbestos Companies, et al (RG15758585, Cal. Super. Ct., Alameda County, Sept. 21, 2015), five defendants, Hennessy Industries, Inc. (brake lathe manufacturer), Maremont Corp. (brake lining manufacturer), I.B. Benedict Co. (brake supplier), Metalclad Insulation Co. (steam pipe insulation) and Nissan Motor Co. Ltd., obtained a defense jury verdict in the Alameda County, California court. The plaintiff claimed that during his 50-year career he developed mesothelioma from exposure to asbestos fibers in automobile brakes and dust created from brake-grinding machines and construction materials. The evidence showed this was likely chrysotile asbestos.

Beginning in 1962, Swasey was an officer and a mechanic in the U.S. Navy. During his service, he worked on steam pipes and insulation which contained high levels of crocidolite/amosite asbestos. After serving in the Navy, plaintiff worked as a mechanic from 1965 until his retirement in 2006.
Swasey filed his suit against 30 different companies in the automotive industry. During the trial, John Henshaw, an industrial hygienist and former OSHA director, testified as an expert defense witness. The defense expert explained to the jury that the concentration of asbestos that Swasey was exposed to during his service in the Navy far exceeded any asbestos exposure during his 41-year career as a mechanic and was therefore the likely cause of plaintiff's mesothelioma.

Due in part to the defense expert testimony, the jury returned a verdict for the defendants. The jury found that although Swasey was exposed to asbestos from the defendants' products, the true cause of his condition was his exposure in the Navy. The jury also found that none of the products failed to perform in a way that an ordinary consumer would expect, that the product design benefits outweighed the risks, and the defendants did not fail to warn about the dangers and were not negligent.
The Swasey case illustrates how important it is to select well qualified experts that are able to break down complex issues for the lay person to understand. Fighting bad science with credible testimony from properly selected expert witnesses can strengthen a causation defense that will carry the day at trial. The Swasey case also shows that juries are willing to listen to all the evidence in a case and return a logical verdict if a defendant stands its ground.  
         

Illinois Appellate Court Issues First Decision on Spoliation of Evidence in an Asbestos Case. 

The Fourth District Illinois Appellate Court released its decision affirming our defense verdict in icon Holloway_v_Sprinkmann_4-13-1118.pdf . This opinion is noteworthy and favorable to the asbestos defense bar for the following reasons:
(1) It is the first published decision
in Illinois dealing with spoliation of evidence claims in the asbestos context.  The appellate court agreed with our position that the defendant's destruction of sales records was immaterial in this case given the testimony of witnesses presented by plaintiff that the defendant had sold asbestos products to the job site at issue. 
(2) The court casts serious doubt on the merit of plaintiffs’ expert Dr. Arthur Frank's "each and every fiber" theory, and takes a common-sense approach in affording little weight to plaintiff's testimony that she "worked all over the plant."  Dr. Frank conceded on one hand that a certain "threshold" of exposure had to be crossed to prove causation, but also stated that if someone was exposed to an undisturbed asbestos product that caused the person to breathe no more fibers than someone would breathe in a pure state of nature (such as hiking in the mountains), "that product nevertheless must be regarded as one of the causes of the person's asbestosis.
The court stated the jury could have regarded that position as unreasonable, while at the same time being confused by the paradox that a threshold of exposure had to be crossed.  Since the plaintiff's causation argument relied upon speculation, the court refused to find that the jury's verdict was against the manifest weight of the evidence.
(3)  The appellate court ruled that plaintiff waived the issue of reference to plaintiff’s other exposures to asbestos when plaintiff failed to request a mistrial. While the court side-stepped our argument that the plaintiff “opened the door” to allowing us to refer to other asbestos exposures despite the trial court’s adverse ruling on motions in limine, its recitation of the facts characterizes Sprinkmann's "opening the door" argument as being based on plaintiff's counsel's remarks in opening statement that "no exposure to asbestos could be exonerated" while at the same time stating that Holloway worked in a plant that was full of asbestos, therefore the evidence could not be viewed in proper context without admitting evidence of her other exposures.  While the Fourth District did not specifically opine on this issue, the factual summary it embraced may be a sign that courts may be willing to consider introducing evidence of other exposures in similar circumstances where the plaintiff is presenting "each and every fiber" testimony.

Fourth District Appellate Court Finds No Duty to Warn For Products of Others and Conspiracy in Mesothelioma Case.

On September 18, 2013, the Fourth District Appellate Court of Illinois upheld the trial court's granting of defendants' motions for judgment notwithstanding the verdict on plaintiff's conspiracy claims in Gillenwater v. Honeywell et al, 2013 IL App (4th) 120929.  Plaintiff Charles Gillenwater filed suit for his mesothelioma from asbestos exposure in McLean County, Illinois against defendants, Honeywell International, Inc., Owens-Illinois, Inc., and Pneumo Abex, LLC  for civil conspiracy with one another to conceal the respiratory dangers of asbestos. Gillenwater alternatively alleged that Owens-Illinois entered into the same conspiracy with a nonparty, Owens-Corning Fiberglas Corporation, the manufacturer of Kaylo asbestos-containing insulation to which he was exposed during his career as a pipefitter.  After trial, the jury returned a verdict in Gillenwater's favor and against the three defendants, awarding plaintiff compensatory damages of $9.6 million and also awarding him punitive damages in the amounts of $20 million against Honeywell, $40 million against Owens-Illinois, and $20 million against Abex.  The trial court granted the defendants' post trial motions, and vacated the jury award.

In addressing the conspiracy claims against Owens-Illinois (involving non-party OCF), the court also discussed the issue of legal duty, and stated that a manufacturer owes no duty to warn of a product similar to its own but manufactured by someone else. The court noted that: "[i]t would be unfair to impose liability on a manufacturer for a defect in a product unless the manufacturer had the opportunity to avoid liability by stopping the assembly line that produced that particular product."  See text of the full opinion here: icon Gillenwater.pdf (235 KB).  

Illinois Appellate Court finds "Educational Malpractice" is not a recognized cause of action.   

The Illinois Appellate Court issued its opinion March 1, 2012 on the issue of whether or not volunteered flight instruction of a pilot constituted "educational malpractice" and therefore should not be a viable cause of action in Illinois.  Waugh v. Morgan Stanley, et al., 2012 IL App (1st) 102653. The appellate court affirmed the trial court's sweeping decision that granted summary judgment on every negligence claim that used the term "instruct" or "train."  Justice Pucinski wrote a dissent, agreeing with our position that claims of ordinary negligence were improperly miscategorized as "educational malpractice," and stated a question of fact remained that warrants reversal. WaughOpinion.pdf (2020 KB)

Ohio Supreme Court Upholds Illinois Corporate Dissolution Defense

On April 3, 2012, the Supreme Court of Ohio reversed the appellate court decision that had ruled that Judges Hanna and Spellacy were correct in denying our motion to dismiss Sager Corporation, a dissolved Illinois corporation, in which we had argued that a dissolved foreign corporation was no longer amenable to asbestos suits in Ohio.  The Supreme Court of Ohio agreed with our position that the law of the state of incorporation controls and must be afforded full faith and credit, and concluded that asbestos claims filed against an Illinois corporation more than five years after dissolution are barred.  We had previously eliminated all pending claims against Sager in Illinois, Indiana and Pennsylvania, based on the Illinois corporate dissolution  defense, and this ruling keeps our record intact as we proceed across the country in the effort to eliminate all claims against this insured.  Read the decision: Sager_Opinion.pdf (68 KB)

Judge Maddux Finds Purchaser Has No Corporate Successor Liability for the Asbestos Liabilities of Dissolved Industrial Insulation Contractor.

Judge Maddux granted our motion to dismiss hundreds of claims against Sprinkmann Insulation based on the lack of corporate successor liability for the torts of Sprinkmann Sons, whose assets had been purchased by our client. The Court flatly rejected the opinions of the plaintiffs' expert that Sprinkmann Insulation, Inc. is a continuation or alter ego of Sprinkmann Sons Corp. of Illinois. This was an interesting attempt by the plaintiffs' attorneys to reach the remaining insurance assets of the seller, a former asbestos insulation contractor, despite our earlier success in terminating litigation based on a corporate dissolution argument. If Judge Maddux had agreed with the plaintiffs, the effect of such a ruling would have been that the insurers of Sprinkmann Sons have unlimited asbestos liability and would be required to exhaust all policy limits, even though there was no bankruptcy of the insured.

Supreme Court rejects lawsuits over generic drug warning labels.  

The U.S. Supreme Court ruled on June 23, 2011 that generic drug companies cannot be sued under state law over allegations that they failed to provide adequate label warnings about potential side effects. By a 5-4 vote, the justices ruled in favor of Israel's Teva Pharmaceutical Industries Ltd., Mylan Inc.'s UDL Laboratories and Iceland-based Actavis Inc. by overturning U.S. appeals court rulings that allowed such lawsuits.
The companies argued that federal law barred such lawsuits because the drug had been approved by the U.S. Food and Drug Administration. Federal law requires generic drugs to have the same labels as their brand name equivalents.  Justice Clarence Thomas in the court's majority opinion agreed. He said federal drug regulations applicable to generic drug manufacturers directly conflicted with and thus pre-empted state lawsuits. 

Advance Asbestos Trial Settings Eliminated in Madison County.

On March 29, 2012, Madison County Associate Judge Clarence Harrison entered an order terminating the court's 2013 advance setting of asbestos trial weeks.  "The Court finds no continuing need for the pre-assignment of trial settings."  The order is effective immediately. The standard jury trial week calendar will be used going forward, and cases will be set by motion on a case-by-case basis.   Read the order here:  iconRevisedSettingOrder_3-29-12.pdf (478 KB).  Although this ruling has been touted by the U.S. Chamber of Commerce as a positive sign, the old adage "be careful what you ask for," still applies. It is curious that much of the defense bar has overlooked the fact that the number of trial weeks now available in Madison County for asbestos cases has now increased from 28 to 30 by virtue of this order, and there has been nothing implemented to insure that the actual number of asbestos cases set for trial next year is decreased or even limited to those allowed under the prior order entered by Judge Crowder.

Revised Case Management Order Adopted For Madison County Asbestos Litigation.

On January 26, 2011, Judge Crowder entered a new Case Management Order governing asbestos litigation in Madison County, the first comprehensive change in seven years.
Plaintiffs' firms are now limited to 19 cases per trial slot. (Previously the limit was 24 cases.) For an analysis of the changes affecting the defense of these cases, or if you would like to receive a copy of the order, contact Ed Matushek.


Illinois Appellate Court Rejects Premises Liability Claim Brought by Asbestos Plaintiff Who Claimed "Take-Home" Exposure.

In affirming the entry of summary judgment we obtained on behalf of our client, the Illinois Appellate Court rejected an asbestos plaintiff's attempt to extend a duty in a premises liability case to a person who had no contact with the premises, but claimed injury from household exposure to asbestos fibers brought home on work clothes worn by a worker at our client's premises. Nelson v. Aurora Equipment Company, 909 N.E.2d 931 (2d Dist. 2009).

The appellate court upheld the entry of summary judgment we obtained in Kane County, Illinois on behalf of defendant Aurora Equipment, ruling that an insufficient relationship existed between the decedent and Aurora Equipment's premises to impose a duty on the premises owner to protect her from injury due to asbestos fibers allegedly released at the workplace of her spouse and son.

Plaintiffs Vernon Nelson and John Nelson, spouse and son respectively of the decedent, Eva Nelson, alleged Eva was exposed to asbestos fibers brought home on their clothes as part of their work at Aurora Equipment. Plaintiffs further alleged Aurora Equipment breached its duty to provide a reasonably safe place for persons lawfully on the premises and to those who could foreseeably be harmed by dangerous conditions on the premises. Eva Nelson was never on the premises. We filed a motion for summary judgment arguing no duty applied under Illinois law. The motion was granted, and plaintiffs appealed.

On appeal, plaintiffs argued that the court's duty inquiry should focus almost exclusively on whether the decedent's injury was foreseeable. We responded that the issue of foreseeability should not be considered in the absence of a relationship between the parties. The appellate court rejected plaintiffs' argument, holding that in Illinois "the touchstone of a duty analysis is to ask whether the plaintiff and defendant stood in such a relationship to one another that the law imposed upon the defendant an obligation of reasonable conduct for the benefit of the plaintiff." The court then found that Eva Nelson had no relationship with Aurora Equipment, having never been on the premises and having encountered no condition on the premises.

This result is in marked contrast to the opinion of the Fifth District Appellate Court in Simpkins v. CSX, which found a duty based upon "foreseeable injury," and ignored the decision we obtained in the Nelson case. A resolution by the Illinois Supreme Court is now ripe to clarify the issue of a premise owner's duty and secondary asbestos exposure.

If you would like a copy of these decisions, or need further information about these issues, please feel free to contact Ed Matushek.

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