The construction industry faces a wide variety of safetyconsiderations, and asbestos risks have beset the industry withdecades of health-related liability issues, resulting in rippleeffects for insurers.

Back in 1972, Congress passed the OccupationalSafety and Health Act into law, creating the FederalOccupational Safe and Health Administration (OSHA), which remainsat the forefront of employee safety and has had a significantimpact on modern U.S. asbestos litigation. Beyond the immediateconsequences of a regulatory violation, OSHA standards impacttoday’s asbestos litigation in three important ways:

• OSHA violations are often cited by plaintiff’s counsel arguingfor the imposition of a higher degree of culpability;
• OSHA’s applicability can allow certain knowledge to be legallyimputed to a defendant (irrespective of what the defendant actuallyknew);
• Because OSHA’s regulations control the actions of employers andtheir employees’ workplace, the adherence or non-adherence to OSHAstandards may give rise to arguments for apportioning greaterliability to defendants in physical control of the plaintiff’sworkspace.

Historical background: Asbestos exposureregulation

OSHA’s regulatory regime has had significant impact on modernU.S. asbestos litigation, but asbestos regulation goes back evenfurther.

The United States’ first work-related asbestos exposure standards appeared in thelate 1930s, shortly after the institution of similar controls inthe United Kingdom. These arose on a state-by-state basis and werenot applicable nationwide. In most instances, individual statesadopted an exposure level of 5,000,000 particles per cubic foot(ppcf) of total dust (not only asbestos fibers) of air based on atime-weighted average over an eight-hour work day. This levelderived from a 1938 United States Public Health Service survey ofseveral asbestos textile mills in North and South Carolina, whichfound that almost none of the mill workers employed for a period of10 years or more and exposed (on average) to less than5,000,000ppcf had asbestosis. For workers exposed above this level,substantial numbers of asbestosis were found.

In 1946, the American Conference of Governmental IndustrialHygienists (ACGIH), a private trade organization for industrialhygienists who worked in government jobs and on a yearly basispublished exposure limits for various toxicants, adopted the5,000,000ppcf level as a threshold limit value for asbestosexposure. The 5,000,000ppcf threshold limit remained essentiallyuniform (there are several references in contemporary medicalliterature characterizing it as “safe”) until the mid-1960s, whenmore sophisticated epidemiologic studies began being published,chief among them Irving Selikoff’s 1964 study of several thousandinsulators in New York and New Jersey. It was accepted that theseworkers: a) had regular asbestos exposure less than 5,000,000ppcfand b) were exposed far less regularly than workers in textileplants or asbestos manufacturing facilities. Nevertheless,Selikoff’s study showed clearly elevated levels of several diseasesin these workers, including asbestosis.

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OSHA gets involved

OSHA issued its first standard for asbestos exposures in theworkplace in May 1971. This required all states to ensure thatcertain worker safety measures were taken (i.e., wet down methods,segregation of work areas where asbestos was being used, shower andchange facilities for workers, clearly marked disposal areas forasbestos-containing waste) if worker exposures to asbestos exceededa measure known as the Permissible Exposure Limit (PEL). Theinitial PEL was defined at 12 fibers per cubic centimeter ofair(f/cc) based on a time-weighted average over an eight-hour workday. This level was lowered to 5f/cc shortly afterwards. In 1976,it was again lowered to 2 f/cc. In 1986, the level was furtherlowered to .2f/cc. By the mid-1980s, the use of asbestos-containingproducts in the United States was drastically reduced in responseto these regulations and other factors including:

• more widespread public appreciation of asbestos-relatedhazards;
• federal government bans on the sale and/or use of severalasbestos-containing products (spray-on fireproofing(1973), moldedpipe-covering(1975), and joint compound(1978)); and
• the onset of nationwide asbestos personal injury litigation(exemplified by the bankruptcies of Johns-Manville,Raybestos-Manhattan, and other companies during themid-1980′s).

The current OSHA standard for workplace exposures to asbestos is.1f/cc and has been in effect since 1994.

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Adherence to OSHA regulations can still create unknown risksfor a contractor and in turn, the company’s insurer. (Photo:Shutterstock)

Non-compliance costs contractors andinsurers

Defendant companies previously found in violation of OSHA’sworkplace safety standards can expect to confront arguments fromplaintiffs’ counsel that such violations demonstrate a higherdegree of culpability beyond ordinary negligence. In the state ofNew York, for example, plaintiffs can seek a jury determinationthat the defendant company was not only negligent but also that thecompany “acted with reckless disregard for the safety of others.”[See New York Civil Practice Law and Rules §§1601, 1602(7)(2017).]

The result of being held to this higher standard is that thedefendant loses the ability to argue that its liability to theplaintiff was several and not joint. While a defendant company maypossess other legal bases to mitigate its liability under New Yorklaw, the loss of several liability under CPLR § 1601 can, in somecases, significantly impact their ultimate legal liability.

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OSHA regulations as a basis for imputedknowledge

Even where a defendant-company fully complied with OSHA’srequirements, OSHA regulations can still affect a defendant’slitigation risk because where the plaintiff’s exposure occurredafter OSHA enacted asbestos-related safety standards, plaintiff’scounsel often seek to impute that knowledge to defendants.

To establish a right of recovery in most U.S. jurisdictions, anasbestos personal injury claimant must show the defendant’s failureto warn was unreasonable under the circumstances, particularly ifthe defendant “knew or should have known” of the potential hazardsassociated with asbestos exposure based on the information publiclyavailable or reasonably ascertainable by the defendant during theplaintiff’s alleged exposure.

Where the plaintiff’s exposure took place after OSHA’simposition of workplace regulations in the early 1970s, theplaintiff can more easily establish this element of the case byarguing the defendant was presumptively knowledgeable (i.e., theyshould have known) of OSHA’s regulations and regulatory statementsregarding the potential asbestos-related health risks. [See e.g.,Williams v. CSX Transp., Inc., 176 N.C. App. 330, 342 (2006).]

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Asbestos claims can be based on exposures that occurred manyyears earlier. (Photo: Shutterstock)

Impact on division of liability amongdefendants

Another way OSHA impacts modern asbestos litigation is itpotentially affects the shifting of liability among defendants. Theapplicability of OSHA standards in this area is drawing greaterattention as asbestos plaintiffs are increasingly claimingsignificant (in some cases exclusive) exposure after 1972, whenOSHA’s requirements took effect.

These regulations primarily target employers since theyfrequently control workplace exposures, where they are on the sceneand exert authority over their employees. In most U.S.jurisdictions, workers are barred from suing their employersdirectly in tort based upon the no-fault workers’ compensationinsurance system, so in many cases the OSHA regulations will notcome into play for fault-shifting purposes.

However, such regulations can play an important role where atrial defendant (e.g., a manufacturer) seeks to shift fault ontoanother defendant (e.g., a contractor) who may have been installingor removing asbestos-containing products in a plaintiff’s vicinityat a worksite, or who was supervising and controlling activities ata worksite (and may potentially bear liability under state laborlaws).

Entities are obliged to follow these regulations in order toprotect their own workers (and any other workers in theirvicinity). However, a defendant can point to non-adherence to OSHAstandards to seek a greater jury apportionment against thoseentities.

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Understand the timeline and regulations

As we continue to see asbestos-related claims involvingplaintiffs who claim exposure during the 1970s and later, OSHAregulations are playing an increasingly important role in asbestoslitigation. Whether policyholders complied tends to be a key issue,as plaintiffs will cite failure to follow these regulations asevidence of negligence. Education is the first step for insurerswho wish to better understand this kind of liability and properlyadvise their clients in asbestos-related risk management.

Peter Dinunzio ([email protected]) is senior counsel atClyde & Co. and a member of the firm’s insurance disputespractice. He focuses his practice on complex insurance andreinsurance litigation and arbitration and has particularexperience in environmental pollution and asbestos exposures andclaims. Jeffrey Fegan ([email protected]) is senior counselat Clyde & Co. and has been a litigator and trial lawyer formore than 10 years. He has experience in various types ofhigh-exposure cases in state and federal courts and has significantfirst-chair jury trial experience. He has handled multiple types ofhigh-value cases from inception through jury trial, post-trialmotions and appeals.