Asbestos Jurisdictional Highlights In The United States: Laws In Flux, Courts In Crisis

Expert Article by Edward R. Hugo and Thomas J. Moses

INTRODUCTION

While the old saying would have us believe that “the more things change, the more they stay the same,” the exact opposite is true with regard to asbestos litigation. This article provides a synopsis of recent legal and procedural developments in several “hot button” jurisdictions across the country, and their resulting impact on legal practice and advocacy.

HIGHLIGHTS FROM ASBESTOS “BATTLEGROUND” JURISDICTIONS

The continuing economic downturn, and a steady decline in filings in general (and asbestos in particular), has led to budgetary problems which have negatively impacted the trial court system statewide. Courts have been forced to limit hours, lay off personnel (including court reporters and clerks), and to review long-standing practices and procedures in an effort to increase judicial efficiency and keep courtroom doors open. In so doing, courts in the Bay Area and Los Angeles—both of which still have significant numbers of asbestos cases on their dockets—have adopted different approaches to managing asbestos litigation.

In prior years, the San Francisco Superior Court allowed the informal pre-trial “grouping” of similar asbestos cases for discovery and sometimes trial. After numerous challenges to this system were made by the defense bar, led by Primerus member firm Brydon Hugo & Parker, the Court dissolved all existing groups, and indicated that no future cases would be consolidated.[i]

Taking another step towards reform, the San Francisco court recently decided to phase out most of the General Orders applicable to asbestos litigation by the end of 2013. Although still considered “complex” litigation warranting its own court division and presiding judge, the revised General Orders serve notice that asbestos matters will not be given any sort of preferential treatment. Further, the revised orders reaffirm the Court’s determination to require discovery to be conducted separately in each case, and not as part of some collective group. No time limits have been put on the defense examination of a plaintiff in non-preference cases, but a twenty-hour limit has been imposed in cases in which trial preference has been (or will be) sought.

In Summer 2012, blaming the San Francisco courts’ continuing fiscal problems, Asbestos Presiding Judge Teri Jackson has taken the unprecedented step of requiring all parties who requested a jury trial to submit jury fees in advance for the entire estimated length of the trial before assigning the matter to a courtroom. Attorneys for both plaintiffs and defendants have asserted the impropriety of Judge Jackson’s order; whether appellate review (if and when sought) will support Judge Jackson’s sua sponte fee collection efforts remains to be seen.

Alameda County, just across the Bay, is also suffering from court budgetary issues, but to a much less significant extent than other courts. Like San Francisco, the Alameda court has rescinded most of its previous asbestos general orders, but retained orders requiring plaintiffs to file preliminary fact sheets and respond to standard asbestos interrogatories in personal injury and wrongful death cases.

Like its sister courts to the north, the Los Angeles Superior Court has been hard-hit by the state’s budget crisis; 56 courtrooms were closed, and approximately 600 court personnel were laid off. Unlike those courts, however, the Los Angeles court (along with the superior courts in Orange and San Diego counties) has seen a significant increase in its asbestos docket in the past few years. To handle this uptick, and following the San Francisco example, the Los Angeles court sought and obtained an order from the Judicial Council of California to coordinate all asbestos cases pending in Los Angeles, Orange, and San Diego counties under the management of one Superior Court judge. Unlike the informal “groupings” previously utilized in San Francisco, however, each case is still treated for discovery and trial purposes on an individual basis.

Two recent published decisions—one from the California Supreme Court, the other from the Second District Court of Appeals—addressed critical issues of duty and damages in the context of asbestos litigation.

In Campbell v. Ford Motor Company (2012) 206 Cal.App.4th 15, the plaintiff sued Ford Motor Company, alleging that her mesothelioma was caused by her para-occupational exposure to asbestos dust brought home by her father and brother from a Ford Motor plant where they worked as insulators. Ford appealed an adverse verdict, arguing that a property owner was not responsible for injuries caused by the acts or omissions of an independent contractor.

The Second District reversed, finding that the true issue presented by the case was a broader one—whether “pass through” exposure claims could ever result in a duty of care on premise owners. (Campbell, supra, 206 Cal.App.4th at 29.) While the Campbell Court agreed that a property owner had a duty to maintain premises under its control in a reasonably safe condition, it noted that this duty was only owed to persons “who it is reasonably foreseeable may be injured as the result of [the premise owner’s] conduct.” (Campbell, supra, 206 Cal.App.4th at 31.) The Court held:

[W]e conclude that a property owner has no duty to protect family members of workers on its premises from secondary exposure to asbestos used during the course of the property owner’s business. While the overall policy of preventing future harm is ordinarily served, in tort law, by imposing the costs of negligent conduct upon those responsible, the policy question is “whether that consideration is outweighed, for a category of negligent conduct, by laws or mores indicating approval of the conduct or by the undesirable consequences of allowing potential liability.”

California law has long recognized that an injured party who received medical treatment for tortiously-caused injuries suffers a compensable economic loss, and is entitled to an award of damages for any reasonable charges for that treatment. When the costs of that medical treatment were paid in whole or in part by a third party, such as a medical insurer, the “collateral source rule” held that any compensation received by an injured party “from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor.” (Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 6.)

The California Supreme Court, in its recent opinion in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, resolved a long-standing split of authority over the proper measure of damages for past medical expenses incurred by or on behalf of an injured plaintiff (or the decedent in a wrongful death action). The Court held that an award for past medical expenses must be limited to the amounts actually paid by or on a plaintiff or decedent’s behalf, as opposed to the amounts that may have been billed by their medical care providers. (Howell, supra, 52 Cal.4th at 548-549.)

In recent years, the Philadelphia Court of Common Pleas had come under intense scrutiny, largely as a result of a perception that its procedures for mass tort cases favored plaintiffs and were unbalanced. However, after a change in judicial leadership at the Court, a new General Court Regulation (Regulation No. 2012-01.3) was issued on February 15, 2012, which has completely revised the rules governing asbestos and other mass torts cases. The order significantly limited the consolidation of cases for trial (absent agreement of the parties), and pro hac vice appearances by out-of-state attorneys.

The Court’s order also eliminated the practice requiring the “involuntary reverse bifurcation” of asbestos trials. Under that former practice, during the “first phase” of an asbestos trial, the jury would be asked to decide only the issue of general causation (i.e., whether the plaintiff’s injury resulted from exposure to asbestos), and then, if asbestos causation was established, the extent of the plaintiff’s compensatory damages. Questions regarding product identification and a particular defendant’s liability were reserved for a second phase, which would take place only if the parties (after judicial encouragement) did not settle. The Court’s order, importantly, not only reaffirmed the Court’s practice of deferring punitive damage claims in asbestos cases, it also extended it to apply to all mass tort cases.

The change in atmosphere in the Philadelphia courts has been noticed by defense lawyers and juries. A recent example involved Primerus member John Brydon (of the Brydon Hugo & Parker firm), who—after obtaining a defense verdict in an automobile friction case—successfully resisted the plaintiffs’ efforts to set it aside.[ii]

In New York, New York, a new special master (Claire Gutekunst) was recently appointed to replace former special master Laraine Pacheco (originally appointed in 1999), who had faced charges that she had overbilled asbestos lawyers by $400,000 over a span of several years. Ms. Gutekunst, a lawyer with the Proskauer Rose firm in New York Cityf or over three decades, has never litigated any asbestos cases, but brings significant experience in dispute resolution to the New York bench. In addition, a financial management company has been retained to handle billings and collections, relieving the special master of those obligations.

The validity of a long-standing NYCAL Case Management Order requiring asbestos plaintiffs to produce copies of any bankruptcy trust claim submissions has been challenged by the Weitz & Luxenberg firm. Shortly after her appointment, Special Master Pacheco issued a recommendation in December 2011 enforcing the trust disclosure provisions after defendants claimed the Weitz firm had not complied with its discovery obligations under the CMO, which was adopted by Administrative Judge Sherry Klein Heitler after a hearing on April 18, 2012. Although Weitz & Luxenberg has sought to reverse Judge Heitler’s order, it appears likely that their effort will be unsuccessful.

A rarely-used procedural device has allowed the Ninth Circuit to undertake an immediate review of an order denying a plaintiff’s motion to remand in a case with potentially wide-ranging significance. In Leite v. Crane Co.[iii], Crane Company—a supplier of asbestos-containing products to the United States Navy for use in the construction of ships—removed an asbestos personal injury action to the District Court of Hawaii pursuant to the “federal officer” removal statute (28 U.S.C. § 1442(a)(1)). Crane relied on the federal “government contractor” defense as articulated in numerous cases, including Getz v. Boeing Co., 654 F.3d 852 (9th Cir. 2011), for the proposition that in order to establish a “colorable” federal defense—and thus justify removal and the assertion of federal jurisdiction—it did not have to show that the Navy specifically prohibited asbestos warnings in its specifications and plans. The District Court—after an order denying remand had been handed down—allowed an interlocutory appeal of that order, requesting the Ninth Circuit address and resolve this long-standing and divisive legal issue.

In two separate opinions[iv], the New Castle County (Del.) Superior Court has held that a manufacturer defendant was not liable for asbestos-containing replacement parts added to its products after sale. In both cases, the asbestos plaintiffs alleged asbestos exposures attributable to equipment aboard Navy ships manufactured by the defendants many years after the original installation of the equipment; the defendants argued, in support of their motions for summary judgment, that any asbestos exposures the plaintiffs might have had would have come from asbestos contained in replacement parts they neither manufactured or supplied. The New Castle court granted summary judgment in both cases, ruling that there was no duty owed by the defendants for having failed to warn the plaintiffs of risks created by the use of products it neither manufactured nor placed into the stream of commerce.

Late last year, Judge Eduardo Robreno of the United States District Court for the Eastern District of Pennsylvania, the judge who oversees MDL No. 875—the federal Asbestos MDL—reported that the backlog of cases in that had been largely eliminated, and that he anticipated that all cases presently pending before the court would be adjudicated, settled, or remanded by the end of 2012.. As a result, Judge Robreno suggested to the Judicial Council on Multidistrict Litigation that they their practice of issuing orders transferring so-called “tag-along” cases (i.e., asbestos cases involving the same party or counsel as one already pending in the MDL) to the Eastern District of Pennsylvania be largely discontinued. An order adopting Judge Robreno’s recommendations was issued by the JPML on December 13, 2011. In its order, the JPML noted that the parties in any new federal asbestos actions which would proceed in the individual federal district courts ‘should be able “to avail themselves of the discovery already obtained in the MDL,’’ and that ‘‘the judges presiding over those actions will almost certainly find useful guidance in the many substantive and thoughtful rulings that have been issued during the lengthy course of the multidistrict proceedings.

CONCLUSION

Asbestos cases have been, and will continue to be, a significant litigation engine across the United States. While there have been changes in filing patterns, with some previously popular jurisdictions losing favor, and other jurisdictions growing in case filings, these changes are highly dependent upon the perceived attractiveness (or lack thereof) of a state’s or locality’s substantive legal doctrines or procedural rules, judicial case management practices, and attitudes of judges and juries toward asbestos plaintiffs and defendants.

Many of the current “popular” jurisdictions, as noted above, are in states of flux, because of recently-changed case handling procedures or new judicial leadership. Significant changes are underway in the federal Asbestos MDL as well. In sum, what might be “known” or “settled” today might not be tomorrow—which is the “nature of the beast” in asbestos litigation.

Tags: ACI Event, Arbestos, BHPLaw, Edward R. Hugo, Expert Article, Thomas J. Moses