Two courts rule for plaintiffs on second-hand asbestos claims

Despite the prediction a number of years ago that asbestos claims were going to stabilize and begin to taper off, the number of claims actually has been rising in recent years, a recent study revealed.

According to the study, titled “Asbestos Liability,” by the Rand Institute for Civil Justice, “more than 700,000 [of those exposed to asbestos] have brought claims, and just as many, and possibly even more, claimants may come forward with claims in the future.”

The greatest increase involves claimants with non-malignant injuries, although there has been an increase in the number of mesothelioma claims as well. As more and more asbestos manufacturers are driven into bankruptcy and settlement funds start to dwindle, plaintiffs' attorneys have been looking to broaden the scope of potentially responsible parties in an attempt to shift liability to non-bankrupt defendants.

One such approach involves targeting landowners who conducted operations involving the use of asbestos-containing products on their property. Such claims have been asserted on behalf of “second-hand exposure” plaintiffs who were not directly exposed to asbestos in the workplace.

Under a premises-liability theory, plaintiffs' attorneys have argued that family members who have come into contact with asbestos as a result of their relationship with someone who has been directly exposed should be entitled to recover from the owner of the property where the exposure took place. That argument recently has been accepted by a New Jersey state appellate court, in Olivio v. Exxon Mobil Corp in a May 5 ruling. And a similar argument was successful just six months earlier in a New York state appellate court (In re New York City Asbestos Litigation).

It has long been established that the manufacturer of a hazardous product owes a duty of care not only to users or consumers of the product, but also to third parties who are injured by the product. Whether a landowner who permits the use of a hazardous product on its premises, but who is not a manufacturer or supplier of the product, can be held liable to an off-premises plaintiff who indirectly comes into contact with the product, has been less than clear.

The cases essentially turn on whether it was foreseeable that the particular plaintiff could become injured as a result of the onsite activities, and if so, whether it would be fair and just to impose liability on the landowner for the injuries. In both the New Jersey and New York cases, the plaintiff was a person who came into contact with asbestos while laundering her husband's work clothes. Each plaintiff developed mesothelioma, a virulent form of cancer for which the only known cause is exposure to asbestos.

The defendant in the New Jersey case, Exxon Mobil Corporation, argued that it owed no duty to the wife of its employee, who had passed away, because she did not come into contact with asbestos while on its premises. The lower court agreed with Exxon Mobil and granted summary judgment in its favor, concluding that “imposing an additional duty on a landowner for asbestos-related injuries that occurred off the premises would not be fair or just.”

That ruling was reversed on appeal. The appellate court began its analysis by noting that landowners “can owe a duty to a plaintiff injured off the landowner's premises” and that the “ultimate question is whether it is fair and just to impose a duty of care on a landowner.”

In addressing the foreseeability requirement, the court noted that as early as 1916 it was generally known “that to avoid contaminating employees' homes, employees laboring around industrial chemicals should be provided with changing rooms and washing facilities, and encouraged not to wear clothing home.”

Consequently, the court concluded that Exxon Mobil had knowledge of a potential risk to its employees' family members. Despite that knowledge, Exxon Mobil did not provide showers, uniforms or changing rooms for use by its employees.

Exxon Mobil also failed to warn its employees of the dangers of asbestos or provide any safety instructions regarding the use of asbestos, the court said.

In determining whether it would be fair and just to hold Exxon Mobil liable, the court concluded that “Exxon Mobil was in the best position to prevent the harm.” According to the court, Exxon Mobil could have warned its employees of the risk to themselves and their families and/or provided changing facilities so that its employees did not carry the asbestos home.

The court was careful to limit its holding, however, to immediate family members who come into contact with a hazardous substance.

Although noting that its analysis was sound under principles of New Jersey law, the court found instructive the decision by the New York appellate court. That court also concluded that an employer-landowner could be held liable to the spouse of its employee who developed mesothelioma as a result of washing her husband's work clothes.

The defendant in the New York case was the Port Authority of New York and New Jersey. Unlike Exxon Mobil, the Port Authority did provide laundry services. However, the husband chose not to use them and, instead, wore his work clothes home.

The Port Authority originally moved for summary judgment on the basis that it could not be held liable to its employee's wife because her exposure to asbestos was not connected to her own employment. The trial court agreed with the Port Authority and granted judgment in its favor.

That ruling, however, was reversed on appeal. The appellate court held that the trial court was too narrow in its focus by limiting its analysis to claims arising out of the employee-employer relationship. The appellate court concluded that as a landowner, the Port Authority could be held liable to people who are injured off-premises as a result of operations conducted on its premises.

In determining whether liability exists, the court held that the relevant inquiry is whether the defendants knew or had reason to know “that their use or sale of a product posed a reasonable risk of harm to the injured plaintiffs.”

Similar to the New Jersey court, the New York court limited its holding to “members of each employee's household who were exposed at home to asbestos dust from an employee's workplace clothes, by washing the clothes or otherwise.” The court noted that extending liability to others “such as car pool participants, bus drivers, elevator operators, etc., would stretch the concept of duty beyond any reasonable parameters.”

These two recent decisions broaden the scope of potentially responsible parties in asbestos litigation pending in New Jersey and New York. Although manufacturers and suppliers have been held liable to third parties that have been injured, the liability of employers-landowners traditionally has been limited to those who actually used the asbestos.

While claims against employers-landowners have been asserted by family members for some time, it is only in the past few months that appellate courts are starting to address directly and recognize such claims. As a result of these two decisions, employers-landowners in New Jersey and New York will have to reevaluate their potential liability.

Although the potential class of individuals who may assert such a claim is limited, given the long latency period between exposure to asbestos and the development of any symptoms, these claims will be around for some time. In addition, as awareness of these decisions grow, family members who might not have considered filing a claim previously, especially those that are not suffering from any symptoms associated with asbestos exposure, may now consider doing so.

According to the recent study by the Rand Institute for Civil Justice, almost all the growth in the asbestos caseload (in the late 1990s and early 2000s) can be attributed to the growth in the number of claims for non-malignant injuries, “which include claims from people with little or no current functional impairment.”

Of course, it remains to be seen whether other courts will permit similar claims. Just this past January, the Georgia Supreme Court, in CSX Transportation, Inc. v. Williams, rejected the approach taken by the New Jersey and New York courts. That court concluded that “an employer does not owe a duty of care to a third party, non-employee, who comes into contact with its employee's asbestos-tainted work clothing at locations away from the workplace.”

William D. Wilson is partner in charge of the New Jersey office of the law firm of Mound Cotton Wollan & Greengrass in Newark, where he defends insurance companies in commercial coverage disputes. He can be reached at wwilson@moundcotton.com.

Two recent decisions broaden the scope of potentially responsible parties in asbestos litigation pending in New Jersey and New York, but the Georgia Supreme Court rejected the approach taken by the New Jersey and New York courts.

Possible caption: Exposure Doesn't Come Out In The Wash: Extending off-premises liability to car pool participants would stretch the concept too far, but an employer can be liable when a wife develops mesothelioma from her husband's laundry, a New York court said.

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