WASHINGTON–Successor liability for damages has been rejected by a Texas appellate court in cases where a company acquires a business where an asbestos victim worked.

The appellate court panel, based in Houston, upheld in a 2-1 split decision the constitutionality of retroactive state legislation that barred victims of asbestos-related disease from winning damages–either compensatory or punitive–from the successor companies.

According to Mark Behrens, a lawyer with Shook, Hardy & Bacon L.L.P. in Washington, D.C., the decision in Robinson vs. Crown Cork provides “relief from unfair asbestos-related successor liability.”

He said the decision is important because a number of states have laws similar to Texas, including Florida, Mississippi, Ohio and Pennsylvania. South Carolina is preparing to pass a similar bill within the next several weeks, he said.

“The court's holding will help companies like Crown Cork & Seal that have been named in such cases,” even though their only role was to acquire companies for which the victims had earlier worked, according to Mr. Behrens.

“More broadly,” he said, “the persuasive opinion may serve as a guide for other courts that may be asked to decide similar challenges to retroactive laws, such as asbestos or silica medical criteria laws that apply to cases pending at the time of enactment.”

Mr. Behrens said the majority opinion avoided the question of whether the law affected a “vested right” by finding that the law was permissible under the legislature's “police power.”

The victim, John Robinson, joined the Navy in 1956 and served as a boiler tender on a number of vessels for 20 years. He maintained boilers, pipes, steam lines, and other machinery and equipment insulated with asbestos products, including insulation products of Mundet Cork Corp.

Crown Cork started acquiring the stock of Mundet in the 1960s. Within three months of acquiring a majority stake in Mundet, Crown Cork sold off the insulation division.

Years later, John Robinson was diagnosed with mesothelioma. He and his wife, Barbara, sued Crown Cork and others for damages caused by Mr. Robinson's exposure to asbestos.

The Robinsons were able at the trial court level to establish Crown Cork's liability for the damages allegedly caused by Mundet's products, and Crown Cork did not contest its liability for compensatory damages, but the lower court refused to allow them to seek punitive damages.

While this was going on, in June 2003, the Texas Legislature passed a bill limiting the liability of successor companies for asbestos claims. It was on the basis of this law that the majority of the appellate court panel said Crown Cork owed the Robinsons nothing.

Special Reports /

Texas Asbestos Law Spares Successor Firm

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