Insurers Find Positives In Supreme Court AsbestosRuling Washington

Insurance and business groups are finding cause to praise themost recent Supreme Court decision on asbestos, despite its findingthat plaintiffs can file claims for the mental anguish associatedwith asbestos exposure.

The court was clear that its decision applies only to peoplewith asbestosis disease, and not to persons with pleural thickeningclassified as “asymptomatic,” said Victor E. Schwartz, a tort lawexpert in the Washington office of Shook, Hardy & Bacon.

“The fact that the court confined its ruling to people who arereally sick is very important,” Mr. Schwartz said, commenting onthe case of Norfolk & Western v. Ayers.

Mr. Schwartz, who represents a coalition of insurance companiescalled the Coalition for Asbestos Justice, cited reports that manyasbestos claims are being submitted by people who are not impairedin a way that affects their ability to perform activities of dailyliving.

However, Mr. Schwartz criticized the portion of the decisionholding that any individual defendant in a case brought under theFederal Employers Liability Act can be held 100 percent liable forany harm, even if that defendant is only minimally responsible.

“The ruling is disappointing,” Mr. Schwartz said.

The Coalition, he noted, filed a brief in the case urging thecourt to limit liability in a reasonable manner in order to addressthe liability crisis.

But several commentators, including Mr. Schwartz, the AmericanInsurance Association, the Alliance of American Insurers and theNational Association of Manufacturers, all cited language in thedecision again urging Congress to enact legislation to resolve theasbestos litigation crisis.

“It is virtually unprecedented for the court to call uponCongress three times to fix a serious problem,” Mr. Schwartzsaid.

In the Ayers case, six former employees of Norfolk& Western Railway Co. who are now suffering from asbestosisfiled a lawsuit against the company under FELA, which makesrailroads liable under federal law for work-related injuries causedin whole or in part by the railroads negligence.

They charged that they were exposed to asbestos due to thecompanys negligence.

Of the six claimants, five were smokers and two persisted insmoking even after being diagnosed with asbestosis.

Those diagnosed with asbestosis have a one in 10 chance ofcontracting mysothelioma, an always fatal form of lung cancer.

The jury ruled in favor of the plaintiffs, who were ultimatelyawarded a total of $4.9 million in damages. The $4.9 million figurerepresents the final amount after the original jury award wasreduced for three of the claimants due to their comparativenegligence from smoking.

It was unclear how much of the $4.9 million award was due to theclaimants fears of contracting cancer.

In addition, Norfolk & Western was held 100 percent liablefor the award, even though it argued that its negligence, if any,was minimal.

Norfolk & Western challenged the award in two ways. Thefirst challenge related to any portion of the award relating tofear of contracting cancer. The company questioned whether that isrecoverable under FELA.

The second challenge focused on the company assuming fullliability for the award, called joint and several liability.Norfolk & Western question whether FELA limits the companysdamages to its proportionate share.

Regarding the first challenge, the Supreme Court ruled 5-4 thatthe company is liable for damages related to the fear ofcontracting cancer. As to the second challenge, the court ruledunanimously that the company is fully liable.

On the issue of fear of cancer, the majority opinion written byJustice Ruth Bader Ginsburg said that claims for pain andsuffering, including mental anguish, associated with a physicalinjury are traditionally compensable.

Once found liable for any bodily harm, a defendant is alsoliable for emotional disturbance resulting from the harm, the courtsaid.

The court noted, however, that it rendered this decision with animportant reservation. The plaintiff, the court said, must provethat the fear is genuine and serious.

In this case, the court said, the proof was notably thin, butNorfolk & Western decided not to target the proof during thetrial.

Despite this reservation, Justice Anthony M. Kennedy, in astrong dissent, criticized the majority for allowing recovery forfear of cancer. He noted that all the plaintiffs in the case arebetween 60 and 75 years old, and all except one have a long historyof tobacco use.

As for emotional injury, he said, only one said that hiscondition caused him to become “depressed,” while the others saidthey have some “concern” about their health.

And yet, Justice Kennedy said, the plaintiffs were awardedbetween $523,605 and $1,204,093 in damages.

Contrast this recovery, he said, with the prospects of anemployee who does not yet have asbestosis but who will developcancer.

The majority decision, Justice Kennedy said, endangers thisemployees chances of recovery since, by the time the worker isentitled to sue, the funds available for compensation will likelyhave disappeared.

They will be depleted, he said, by verdicts awarding damages forunrealized fears.

“As a consequence of the majoritys decision, it is more likelythat those with the worst injuries from exposure to asbestos willfind they are without remedy because those will lesser, and evenproblematic, injuries will have exhausted the resources forpayment,” Justice Kennedy said.

Reproduced from National Underwriter Edition, March 17, 2003.Copyright 2003 by The National Underwriter Company in the serialpublication. All rights reserved. Copyright in this article as anindependent work may be held by the author.