Toxic Tort Litigation

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By Michael J. deBarros

In asbestos-related injury claims, some states, including Louisiana, base an insurer’s liability for defense and indemnity on the amount of time an insurer is “on the risk.”  For instance, if a claimant was exposed to asbestos for a ten year period and the insurer issued policies covering five of those ten years, the insurer is “on the risk” for five of the ten years and should bear responsibility for 50% of the defense and indemnity absent additional grounds for denying coverage.

The allocation issue becomes more complex when the period of exposure to asbestos begins before, and ends after, 1986 or 1987.  In that situation, the following additional questions arise:

  1. When did insurance covering asbestos claims become “unavailable”;
  2. Must the insurers “on the risk” when insurance for asbestos claims was “available” bear responsibility for the years of exposure in which the insurance was “unavailable”; and
  3. Is the allocation affected if the insured continues to manufacture or sell asbestos-containing products after insurance for asbestos claims became “unavailable”?

All of the foregoing issues have been decided in New Jersey, and they are ripe for consideration in Louisiana given that the Louisiana Supreme Court relied on Owens–Illinois, Inc. v. United Ins. Co., 650 A. 2d 974 (N.J. 1994), when it held, in Arceneaux v. Amstar Corp., 2015-0588 (La. 9/7/16), 200 So. 3d 277, that insurers may prorate defense expenses in Louisiana asbestos-injury suits.

In Owens–Illinois, the Supreme Court of New Jersey held that insurers can prorate defense and indemnity in asbestos-injury suits based on their time “on the risk” and their policy limits.  The Owens–Illinois Court also held that an insured is not responsible for the years in which insurance covering the risk at issue was not reasonably available for purchase.

In Continental Ins. Co. v. Honeywell Intern., Inc., 2018 WL 3130638 (N.J. June 27, 2018), the Supreme Court of New Jersey recently reaffirmed the Owens–Illinois “unavailability” rule and once again rejected the insurers’ attempt to apportion liability to their insured for exposures occurring during the period of insurance unavailability.  The insurers in Honeywell argued that Honeywell should bear responsibility for asbestos exposures after April 1, 1987 (the date excess insurance for asbestos claims became unavailable) because Honeywell continued to manufacture asbestos-containing products until 2003.  The Court rejected the insurers’ argument and apportioned liability for the years in which insurance was unavailable to the insurers who were “on the risk” when the insurance was available.

Considering the Louisiana Supreme Court’s reliance on  Owens–Illinois in Arceneaux, a Louisiana court may be persuaded to adopt New Jersey’s “unavailability” rule and require all insurers “on the risk” when insurance for asbestos claims was “available” to bear responsibility for the years of exposure in which insurance was “unavailable.”  If your company needs help navigating these issues, Kean Miller’s Insurance Coverage and Recovery team can help.  We have recovered millions for policyholders in environmental and toxic tort actions, legacy lawsuits, products liability lawsuits, professional liability claims, governmental investigations, intellectual property claims, directors’ and officers’ disputes, property losses, and business interruption losses.

By Alex Rossi

The 5th U.S. Circuit Court of Appeals “adopt[ed] a bright-line rule [on January 11, 2018]: Section 1446(b)(3)’s removal clock begins ticking upon receipt of the deposition transcript” as opposed to running from the date of the deposition testimony. The decision in Morgan v. Huntington Ingalls, Inc., et al, No. 17-30523, __ F.3d __ (5th Cir. 1/11/18) was one of first impression for the court.

Plaintiff, Curtis Morgan filed the original lawsuit alleging he contracted mesothelioma as a result of asbestos exposure at various industrial facilities in Louisiana. Morgan specifically alleged that he was exposed to asbestos through his employment at Avondale Shipyard in New Orleans as a sheet metal tacker in the 1960s. Seventy-eight (78) defendants were originally named in the lawsuit.

Morgan was deposed over eight days from March 9 to April 13, 2017. On the second day of testimony, Morgan testified that he worked on unspecified vessels at Avondale Shipyard. On March 20, Morgan agreed with medical records presented by counsel for Avondale Shipyard that one of the vessels on which he worked was the USS Huntsville, a vessel Avondale refurbished on behalf of officers of the U.S. government.

Based on the testimony regarding Morgan’s work on the USS Huntsville for the U.S. Government, Avondale removed the case to the U.S. District Court for the Eastern District of Louisiana on April 28, 2017 under the federal officer removal statute and claimed that removal was timely filed 30 days after receipt of Morgan’s deposition transcript. Morgan opposed the removal as untimely, claiming that the removal clock began from Morgan’s testimony regarding the USS Huntsville, which took place 38 days prior to removal. Morgan further argued that the district court lacked subject matter jurisdiction under 28 U.S.C. § 1442.

In finding the removal untimely, the district court determined that the removal clock for “other paper” under § 1446 began running on the date of the oral deposition testimony, and not the later date of receipt of the deposition transcript. The district court did not address whether the substantive requirements of § 1442 had been met for federal officer jurisdiction.

Citing the plain meaning and purpose of § 1446(b), as well as policy considerations, the 5th Circuit found that oral testimony at a deposition does not constitute an “other paper.” Instead, the court found the removal clock begins upon receipt of the deposition transcript as the “other paper” providing the basis for the removal. In adopting this bright light rule, the 5th Circuit balanced the competing goals of removal: encouraging prompt and proper removal and preventing, hasty, improper removals. The court declined to follow the “notice” standard adopted by the 10th Circuit, finding it counterintuitive to start the clock for removal before the objective evidence is received by the defendant.

The 5th Circuit remanded the case to the district court to address whether the substantive requirements of federal officer removal have been met.

 

 

By Lana D. Crump and Amanda Collura-Day

In Louisiana, the collateral source rule mandates that a tort plaintiff be awarded the full value of his medical expenses against the tortfeasor, including any amounts written off by the provider, when that plaintiff paid some “consideration” (money) for the benefit of the written-off amount.  In other words, even though a person may have health insurance and, therefore, received the benefit of discounted medical charges, the collateral source payment is not credited to the tortfeasor, and the tortfeasor has to pay the full amount charged for the services.

However, in Rabun v. St. Francis Med. Ctr., Inc., 50,849 (La. App. 2 Cir. 8/10/16), 206 So.3d 323, a hospital was attempting to recover on its medical lien against the patient for the full amount of medical services charged (without accounting for the patient’s health insurance discount). The Second Circuit capped the patient’s medical expenses incurred at the negotiated rates between the hospital and the patient’s health insurer.  The Second Circuit found that the contracted rate is deemed the amount “incurred” by the patient.  Rabun did not deal directly with a tort plaintiff against a tortfeasor, and was limited to the hospital’s lien on the patient’s tort recovery. La. R.S. 9:4752.  Regardless, the court left lawyers with language to make a strong argument that a tortfeasor can only be held liable to an insured plaintiff for the contracted rate – the amount actually incurred.

Hoffman v. Travelers Indem. Co. of America, 13-1575 (La. 5/7/14), 144 So.3d 993 is another example.  There, an automobile insured sought to recover the entire amount charged for medical services following an accident, pursuant to the medical pay provision of her auto policy that allowed her to claim all reasonable expenses for necessary medical services incurred.  The provider was paid less than list rates pursuant to an agreement between the provider and the insured’s health insurer.  The Louisiana Supreme Court held that, as a matter of first impression, the insured did not incur the full list cost of the medical services.  The court found that because the plaintiff’s health insurer had contractually pre-negotiated rates with the provider, the plaintiff was only legally obligated to pay the discounted amount.  Since she had no liability for any amount over that discounted amount she did not “incur” the full list rates and, therefore, she could only claim the discounted amount from her auto insurer.

Rabun and Hoffman show that Louisiana courts are taking a close look at quantifying medical expenses, and there is an argument to be made that a tort plaintiff’s recovery for medical expenses (past and future) is limited to the insurance negotiated rates for insured plaintiffs because that is the actual amount incurred by the plaintiff.  Louisiana courts are catching up to the reality of managed care costs in this country as it relates to recovery of medical expenses.

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By Greg Anding

For years, plaintiffs in asbestos litigation have been filing suit in the plaintiff-friendly jurisdictions of St. Louis, Missouri and Madison County, Illinois.  Some estimate that more than half of all mesothelioma claims filed in the United States are filed in Illinois and Missouri.  Many of those claims arise out of alleged exposures completely outside of those two states: some sources cite as many as 72%.  Under guidance from the United States Supreme Court’s ruling in Daimler AG v. Bauman, 134 S. Ct. 746 (2014), Missouri appears to be bringing that trend to an end, which will likely mean an increase in filings in states such as Louisiana where the alleged exposures actually occurred.  A similar issue is currently pending in Illinois, and a similar ruling would likely mean more filings in Louisiana as well.

On February 28, 2017, the Missouri Supreme Court, in State ex rel. Norfolk So. Ry. Co. v. Hon. Colleen Dolan, No. SC95514 (2/28/2017), applying the United States Supreme Court’s landmark ruling in Daimler, dismissed plaintiff’s suit for lack of personal jurisdiction.  Russel Parker, plaintiff, was an Indiana resident who was allegedly injured in Indiana while employed by Norfolk Southern Railway Company (“Norfolk”), a Virginia corporation with its principal place of business in Virginia.  The court found that although Norfolk owned and operated railroad tracks in Missouri, Mr. Parker’s suit did not arise out of or relate to Norfolk’s activities in Missouri, and therefore, Missouri had no specific jurisdiction.  More significant was the court’s finding of no general jurisdiction despite Norfolk’s “substantial and continuous business in Missouri” as demonstrated by its ownership of 400 miles of railroad tracks in Missouri, 590 employees in the state and generation of approximately $232 million in annual revenue from its Missouri operations.  Finding that Norfolk also conducted “substantial and continuous business in at least 21 other states,” and its Missouri business amounted to only 2 percent of its total business, the court held this was insufficient to establish general jurisdiction over Norfolk.  The court also noted that Norfolk did not consent to suit over activities unrelated to Missouri simply by complying with Missouri’s foreign corporation registration statute.

For more information, please contact any member of our Louisiana Asbestos Defense and Occupational Exposure team.

Norfolk Opinion.

 

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By Brittany Buckley Salup

Chief Judge Brian Jackson issued an “Omnibus Order Suspending All Deadlines” for cases pending or to be filed in the U.S. District Court for the Middle District of Louisiana.  The Order explains that the court has been inaccessible—a key term in the Federal Rules of Civil and Appellate Procedure—since August 12, 2016 due to historic flooding in the region.  Until further notice from the Middle District, all deadlines and delays in cases pending or to be filed in the Middle District are suspended.  This suspension expressly applies to prescriptive and peremptive periods.  In addition, all pending criminal cases in the Middle District are temporarily excluded from the time requirements of the Speedy Trial Act.

The Middle District’s Order follows similar Executive Orders from Governor Edwards, which suspended deadlines in Louisiana state courts due to flooding.  More information about the Governor’s Orders is available here.

A copy of the Middle District’s Order (M.D. La. General Order 2016-10) is available here.

 

 

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By Claire Juneau

On August 17, 2016, Governor Edwards amended Executive Order JBE 2016-57 which had suspended the running of prescription, peremption, and all legal delays from August 12, 2016 until September 9, 2016. The amendment to Executive Order JBE 2016-57 modifies the suspension of deadlines as follows:

  • Liberative prescription and peremptive periods continue to be suspended throughout Louisiana until Friday, September 9, 2016.
  • Deadlines in legal proceedings currently pending in state courts, administrative agencies, and boards in Acadia, Ascension, Assumption, Avoyelles, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson Davis, Lafayette, Livingston, Pointe Coupee, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Tammany, Tangipahoa, Vermilion, Washington, West Baton Rouge, and West Feliciana, Parishes, continue to be suspended until Friday September 9, 2016. This suspension includes all deadlines set forth in the Louisiana Civil Code, the Louisiana Code of Civil Procedure, Title 9 (Civil Code Ancillaries) Title 13 (Courts and Judicial Procedure), Chapter 11 of Title 18 (Election Campaign Financing); Chapter 10 of Title 23 (Worker’s Compensation); Chapter 5, Part XXI-A of Title 40 (Malpractice Liability for State Services); Chapter 5, Part XXIII, of Title 40 (Medical Malpractice), and Title 49, Chapter 13 (Administrative Procedure) of the Louisiana Revised Statutes. This is a modification from the original Exeuctive Order JBE 2016-57 which suspended deadlines statewide.
  • Except for the suspension of prescriptive and peremptive periods and the suspension of deadlines in the parishes listed above, the suspension provided for in original Executive Order JBE 2016-53 shall end Friday, August 19, 2016. If a party can show an inability to meet the deadlines caused the flooding, the court, administrative agency, or board shall suspend deadlines specific to that matter until September 9, 2016.

A copy of the amendment can be found here: JBE-16-57-Amended-Emergency-Suspension-of-Deadlines-in-Legal-Proceedings

A copy of the original executive order can be found here.

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By Tyler Moore Kostal

As previously reported, the Louisiana Supreme Court heard oral argument in Oleszkowicz v. Exxon Mobil Oil Corporation, et al. and Chauvin v. Exxon Mobil Corporation, et al., regarding the dispute as to whether claims for punitive damages are barred by res judicata. The court recently issued opinions in these cases.

To recap, a jury awarded the plaintiff in the initial Oleszkowicz case compensatory damages for the increased risk of cancer but specifically denied punitive damages. The denial was based on the jury’s express finding that that the defendant had not engaged in wanton or reckless conduct. Soon after that suit, plaintiff actually developed cancer and filed suit again, claiming that his cancer was caused by the same exposure and conduct as the first suit. He sought compensatory damages and renewed his claim for punitive damages. Contrary to the verdict in the first suit, the jury awarded plaintiff $10 million in punitive damages. The defendant appealed, and the court of appeal reduced the punitive damages award but rejected defendant’s argument of res judicata. Instead, the court of appeal found that an exception to res judicata applied, as “the complexity of and convoluted circumstances” of the case constituted “exceptional circumstances.” However, the Louisiana Supreme Court concluded that res judicata bars any re-litigation of the punitive damages claim and that no “exceptional circumstances” exist to justify an exception to res judicata. The court found it undeniable that the plaintiff’s right to bring a future cancer claim in his initial case did not change the fact that he fully prosecuted his punitive damages claim, and the jury, in deciding whether to award such damages, found that the defendant had not engaged in wanton or reckless conduct. While the court noted that the facts are unusual, the case does not involve a complex procedural situation or an unanticipated quirk in the system to which an exception to the general rules of res judicata applies. Because it found that the plaintiff’s punitive damages claim must be dismissed, the court reversed the judgment of the court of appeal.

In Chauvin, the defendant settled the plaintiff’s fear/increased risk claim and received a release from all future claims, except for future cancers. Plaintiff later developed cancer and filed another lawsuit, including a claim for punitive damages. The defendant sought dismissal of all claims barred by plaintiff’s prior settlement. The trial court agreed and granted defendant’s exception of res judicata as to all claims, including punitive damages, other than damages for future cancer. Plaintiff appealed, and the court of appeal reversed the trial court’s judgment as it pertained to punitive damages, finding an exception to res judicata. The Louisiana Supreme Court held that punitive damages relate to conduct and are separate and distinct from compensatory damages related to a specific injury. Because the plaintiff released all punitive damages arising out of the defendant’s alleged misconduct resulting in his exposure to NORM, res judicata bars his subsequent claim for punitive damages and no exception to res judicata applies. The court reversed the decision of the court of appeal and reinstated the trial court’s judgment. The plaintiff sought rehearing from the Louisiana Supreme Court. The court denied rehearing on February 6, 2015.

In sum, the Louisiana Supreme Court held that a jury’s prior finding of no punitive damages, or a prior release of punitive damages, prevents the same plaintiff from later pursuing punitive damages against the same defendant in a subsequent case for the same exposure.

 

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By Tyler Moore Kostal

The Louisiana Supreme Court recently heard oral argument in two cases, Oleszkowicz v. Exxon Mobil Oil Corporation, et al. and Chauvin v. Exxon Mobil Corporation, et al., both involving a plaintiff’s damages for potential exposure to naturally occurring radioactive material (NORM). This is the second lawsuit for both plaintiffs against the same defendant, for the same exposure to NORM as in the first suit. Both plaintiffs initially sued (in other matters) for fear/increased risk of cancer and then later sued for developing cancer due to the same potential NORM exposure. The fact that the plaintiffs can bring separate lawsuits for the same exposure is not in dispute. What is in dispute is whether the plaintiffs are entitled to punitive damages for each claim.

In the initial Oleszkowicz case, a jury awarded plaintiff compensatory damages for the increased risk of cancer but specifically denied punitive damages. The denial was based on the jury’s express finding that that the defendant had not engaged in wanton or reckless conduct. Soon after that suit, plaintiff actually developed cancer and filed suit again, claiming that his cancer was caused by the same exposure and conduct as the first suit. He sought compensatory damages and renewed his claim for punitive damages. Contrary to the verdict in the first suit, the jury awarded plaintiff $10 million in punitive damages. The defendant appealed. The court of appeal reduced the punitive damages award but failed to eliminate it entirely, rejecting defendant’s argument of res judicata. Instead, the court of appeal found that “the complexity of and convoluted circumstances” of the case constituted “exceptional circumstances,” thereby relieving plaintiff of the preclusive effect of the final judgment in his first suit. The Louisiana Supreme Court granted defendant’s writ of review, limiting the argument to the issue of res judicata.

The Chauvin case involves essentially the same issue except that, rather than a jury verdict in the first instance, the parties entered into a settlement agreement. The defendant settled plaintiff’s fear/increased risk claim and received a release from all future claims, except for future cancers. Plaintiff later developed cancer and filed another lawsuit, including a claim for punitive damages. The defendant sought dismissal of all claims barred by plaintiff’s prior settlement. The trial court agreed and granted defendant’s exception of res judicata as to all claims, including punitive damages, other than damages for future cancer. Plaintiff appealed, and the court of appeal reversed the trial court’s judgment as it pertained to punitive damages, finding an exception to res judicata. The Louisiana Supreme Court granted defendant’s supervisory writ.

Oral argument was heard in both cases on Monday, October 13, 2014.

 

By Tyler Moore Kostal

Recently, the Louisiana Supreme Court granted a writ application to the Fourth Circuit Court of Appeal in Watkins v. Exxon Mobil Corporation, et. al.—an action involving plaintiff’s damages from decedent’s potential NORM (i.e., naturally occurring radioactive material) exposure. The central issue before the court is whether the one-year period to bring a survival action under Louisiana Civil Code Article 2315.1 is peremptive or prescriptive. Prior to the Fourth Circuit’s ruling in Watkins, the First, Second, Third, and Fifth Circuits weighed in on the issue and concluded that the one-year period is peremptive and thus not subject to suspension or interruption. Because the Fourth Circuit reached the opposite conclusion, holding that the one-year period in Art. 2315.1 is prescriptive, not peremptive, there is now a clear split on the issue in the circuit courts of appeal. Should the court find the one-year period to be prescriptive, the right to bring a survival action could be extended exponentially, contrary to the longstanding interpretation of the survival statute.

Oral argument is set for Monday, January 27, 2014.

By Scott D. Huffstetler

The Occupational Safety and Health Administration (OSHA) is seeking public comments regarding a proposal for a new online whistleblower complaint form. The form, which would allow whistleblowers to electronically submit whistleblower complaints directly to OSHA, is part of OSHA’s proposal to revise the information collection requirements for handling retaliation complaints filed with OSHA under various whistleblower protection statutes. The proposal may be accessed electronically here, and comments are due on or before March 18, 2013.

OSHA is responsible for investigating alleged violations of whistleblower provisions contained in a number of statutes. These statutes include:

  • Occupational Safety and Health Act, 29 U.S.C. 660
  • Asbestos Hazard Emergency Response Act, 15 U.S.C. 2651
  • International Safe Container Act, 46 U.S.C. 80507
  • Safe Drinking Water Act, 42 U.S.C. 300j-9(i)
  • Federal Water Pollution Control Act, 33 U.S.C. 1367
  • Toxic Substances Control Act, 15 U.S.C. 2622
  • Solid Waste Disposal Act, 42 U.S.C. 6971
  • Clean Air Act, 42 U.S.C. 7622
  • Energy Reorganization Act of 1974, 42 U.S.C. 5851
  • Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9610
  • Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
  • Corporate and Criminal Fraud Accountability Act of 2002 (Title VIII of the Sarbanes-Oxley Act of 2002)
  • Pipeline Safety and Improvement Act of 2002
  • National Transit Systems Security Act and the Federal Railroad Safety Act
  • Consumer Product Safety Improvement Act of 2008
  • Affordable Care Act, 29 U.S.C. 218C
  • Consumer Financial Protection Act, Section 1057 of the Dodd Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203
  • Seaman’s Protection Act, 46 U.S.C. 2114, as amended by Section 611 of the Coast Guard Authorization Act of 2010, Public Law 111-281
  • Section 402 of the FDA Food Safety and Modernization Act, Public Law 111-353
  • Section 31307 of the Moving Ahead for Progress in the 21st Century Act, 49 U.S.C. 30171

The electronic form expands the methods in which a whistleblower may submit a complaint to OSHA under one of these statutes – either by submitting the form electronically directly through the Internet; or by downloading, completing, and submitting the form to OSHA by fax, mail, or hand-delivery. The proposed form will enable workers to electronically submit whistleblower complaints directly to OSHA 24-hours a day. Last year, a record number of whistle-blower cases were filed and resolved by OSHA. This was after a series of initiatives were launched during the 2012 fiscal year to strengthen OSHA’s whistleblower protection programs. It is believed that the current proposals, if accepted and initiated in 2013, will result in an even greater number of OSHA whistleblower claims being filed.