Insurers Find Positives In Supreme Court Asbestos Ruling Washington

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

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

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

Mr. Schwartz, who represents a coalition of insurance companies called the Coalition for Asbestos Justice, cited reports that many asbestos claims are being submitted by people who are not impaired in a way that affects their ability to perform activities of daily living.

However, Mr. Schwartz criticized the portion of the decision holding that any individual defendant in a case brought under the Federal Employers Liability Act can be held 100 percent liable for any 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 the court to limit liability in a reasonable manner in order to address the liability crisis.

But several commentators, including Mr. Schwartz, the American Insurance Association, the Alliance of American Insurers and the National Association of Manufacturers, all cited language in the decision again urging Congress to enact legislation to resolve the asbestos litigation crisis.

“It is virtually unprecedented for the court to call upon Congress three times to fix a serious problem,” Mr. Schwartz said.

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

They charged that they were exposed to asbestos due to the companys negligence.

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

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

The jury ruled in favor of the plaintiffs, who were ultimately awarded a total of $4.9 million in damages. The $4.9 million figure represents the final amount after the original jury award was reduced for three of the claimants due to their comparative negligence from smoking.

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

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

Norfolk & Western challenged the award in two ways. The first challenge related to any portion of the award relating to fear of contracting cancer. The company questioned whether that is recoverable under FELA.

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

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

On the issue of fear of cancer, the majority opinion written by Justice Ruth Bader Ginsburg said that claims for pain and suffering, including mental anguish, associated with a physical injury are traditionally compensable.

Once found liable for any bodily harm, a defendant is also liable for emotional disturbance resulting from the harm, the court said.

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

In this case, the court said, the proof was notably thin, but Norfolk & Western decided not to target the proof during the trial.

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

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

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

Contrast this recovery, he said, with the prospects of an employee who does not yet have asbestosis but who will develop cancer.

The majority decision, Justice Kennedy said, endangers this employees chances of recovery since, by the time the worker is entitled to sue, the funds available for compensation will likely have disappeared.

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

“As a consequence of the majoritys decision, it is more likely that those with the worst injuries from exposure to asbestos will find they are without remedy because those will lesser, and even problematic, injuries will have exhausted the resources for payment,” Justice Kennedy said.

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

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Insurers Find Positives In Supreme Court Asbestos Ruling

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