History of Asbestos, Asbestos Litigation, and Regulation

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1 History of Asbestos, Asbestos Litigation, and Regulation Lawrence G. Cetrulo Cetrulo LLP 2 Seaport Lane Boston, MA (617) (617) [fax]

2 Lawrence G. Cetrulo is a founding partner of Cetrulo LLP, Chair of the firm s Products Liability and Toxic Tort Practice Groups, and author of the multi volume treatise, Toxic Torts Litigation Guide published by Thompson/West. Mr. Cetrulo represents clients as both national coordinating counsel and trial counsel in the defense of claims arising from toxic exposures, and serves as Defendants Liaison Counsel in Massachusetts and Rhode Island asbestos litigation. In addition to toxic tort, Mr. Cetrulo has more than 35 years of experience in environmental litigation, auto design defect litigation, products liability, general liability, insurance coverage and business litigation. Mr. Cetrulo s trial experience includes over 150 trials and dozens of arguments before state and federal appellate courts.

3 History of Asbestos, Asbestos Litigation, and Regulation Table of Contents I. Introduction II. Evolution of Asbestos Litigation: Timeline of Significant Historical Events History of Asbestos, Asbestos Litigation, and Regulation Cetrulo 147

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5 History of Asbestos, Asbestos Litigation, and Regulation I. Introduction Spanning more than four decades, asbestos litigation is the longest-running mass tort litigation in United States history. Commentators ascribe asbestos litigation s longevity largely to the widespread use of asbestos in United States industries for the majority of the 20th century and the long latency periods of asbestos-related diseases. As this litigation continues to evolve, the best thing a young litigator can do is study the past in order to inform strategy for the future: learn about where this litigation has been to understand why it has and continues to develop in such a unique manner. Below is a brief, non-exhaustive timeline of selected key events in the history and development of asbestos litigation, intended for use by asbestos litigators as a quick-reference tool. II. Evolution of Asbestos Litigation: Timeline of Significant Historical Events Date Event Significance 1930 Merewether, ERA and CW Price, Report on effects of asbestos dust on the lungs and dust suppression in the asbestos industry. Part I and II. London: His Majesty s Stationery Office, First lawsuits filed against Johns-Manville (on behalf of JM employees) for asbestos-related diseases Dreesen, Wc, JM Dallavalle, TI Edwards, JW Miller, and RR Sayers. A study of asbestosis in the asbestos textile industry. Division of Industrial Hygiene, National Institute of Health, Public Health Bulletin No August First large-scale epidemiological study regarding asbestos hazards that reported chronic exposure to high concentrations of asbestos could lead to asbestosis. This was the first industry-wide survey of health hazards to asbestos workers. The study looked at 363 asbestos textile workers who were exposed to pure asbestos dust and found that there was a relationship between exposure and asbestos-related disease (asbestosis). The study recommended dust control methods to prevent development of disease. The first lawsuits against Johns-Manville in federal court in Newark, NJ. Between , 11 lawsuits were filed against Johns-Manville on behalf of employees that alleged they were being denied a safe working environment at the company s, New Jersey plant. In 1933, as documented in Johns-Manville meeting minutes, the 11 claims were settled for approximately $30,000. The study, done for the US Public Health Service under the direction of the US Surgeon General, looked at textile workers in North Carolina exposed to raw asbestos and subsequent development of asbestosis. The study suggested asbestos exposure levels under 5 million particles per cubic foot (5 mppcf) was safe and further concluded that new cases of asbestosis would not appear if dust levels were kept below 5 mppcf. History of Asbestos, Asbestos Litigation, and Regulation Cetrulo 149

6 1942 Transactions of the Fifth Annual Meeting of the National Conference of Governmental Hygienists (NCGIH) Joint Meeting with the Subcommittee on Industrial Health and Medicine, Health and Medical Committee, Federal Security Agency. Washington DC, April American Conference of Governmental Industrial Hygienists (ACGIH) first publication of TLVs for various substances, including asbestos. The maximum allowable concentrations for asbestos exposure furnished by information provided by various states industrial hygiene departments ranged from 5 to 15 mppfc. ACGIH first published threshold limit value ( TLV ) of 5 mppfc for asbestos. Asbestos was not listed as a toxic substance in the ACGIH published list of substances in U.S. Department of Labor, Walsh-Healey Public Contracts Act 1955 Richard Doll, Mortality from Lung Cancer in Asbestos Workers, Medical Research Counsel, London First federal legislation regarding the safe handling of asbestos adopts the ACGIH TLV of 5mppfc. The Act applies to contractors with contracts in excess of $10,000 for the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government. First epidemiological study to demonstrate an association between asbestos textile workers and lung cancer. Doll concluded that those working with asbestos for 20 or more years were 10 times more likely to develop lung cancer than the average population First Modern Asbestos Lawsuit Prior to 1957, any asbestos claims filed were litigated in workers compensation courts, without a jury, without public recognition. In 1957, a career insulator, brought what is considered the first modern day asbestos case against Johns-Manville in New Jersey federal court. The parties reached a confidential settlement agreement prior to the trial but the case resulted in Johns-Manville providing signed answers to interrogatories that would be utilized in subsequent litigation. See W. Russell Mem. Re: Frederick LeGrande v. J-M Products, Nov. 3, 1982, produced in LeGrande v. Johns-Manville Prods. Corp., No (D.N.J. filed 1957) Wagner, JC, CA Sleggs, and P Marchand, Diffuse pleural mesothelioma and asbestos exposure in the north western Cape Province. British Journal of Industrial Medicine 17: First study to describe a connection between exposure to crocidolite asbestos and the development of pleural mesothelioma. 150 Asbestos Medicine November 2013

7 1964 Selikoff, I., Churg, J., and Hammond, E. Asbestos Exposure and Neoplasia. Journal of the American Medical Association 188(1):22-26 (1964) 1969 Borel v. Fiberboard Paper Products Corporation 1970 Selikoff, IJ. Partnership for prevention The insulation industry hygiene research program. Industrial Medicine, 39(4): OSHA Title 29 Labor, Chapter XII Bureau of Labor Standards, Part 1518 Safety and Health Regulation for Construction, Standard for exposure to asbestos dust. 36 FR OSHA Title 29 Labor, Chapter XVII, Part 1910 Occupational safety and health standards, standard for exposure to asbestos dust. 37 FR First large-scale epidemiological study of insulation workers concluding that insulators asbestos exposure results in increase in incidence of lung caner approximately 6-7 times greater than that of general population. The study consisted of a cohort of 632 asbestos insulation workers in the New York area, during their working years of The study found significant increases in deaths from lung cancer, mesothelioma, gastrointestinal cancer, and asbestosis. In each year group death rate among insulators from lung and pleura cancer exceeded that for all US white males and suggests that smoking cannot account for the high death rate. First case to recognize a manufacturer s duty to warn of asbestos dangers. Borel was diagnosed with asbestosis after working in shipyards and oil refineries and brought suit against 11 asbestos manufacturers across the U.S. Study points out that the delay in knowledge is due to the latency period of the development of disease. In addition, the study states that the application of knowledge of hazards in one industry is not necessarily applicable to other industries. Concentrations above 5 fibers per milliliter but, not to exceed 10 fibers per milliliter, may be permitted up to a total of 15 minutes in an hour for up to 5 hours in an 8-hour day. (Change in the measuring of airborne asbestos concentrations, adopting the metric system. 5 mppfc is the equivalent of 30 f/cc.) OSHA promulgated a new asbestos standard that established an 8-hour time-weighted average (TWA) of 5 f/cc and a ceiling limit of 10 f/cc. The primary goal of these standards was to protect employees against asbestosis. In addition, OSHA now required that [c]aution labels shall be affixed to all raw materials, mixtures, scrap, waste, debris, and other products containing asbestos fibers, or to their containers, except that no label is required where asbestos fibers have been modified by a bonding agent, coating, binder, or other material so that during any reasonably foreseeable use, handling, storage, disposal, processing, or transportation, no airborne concentrations of asbestos fibers in excess of the exposure limits prescribed in paragraph (b) of this section will be released. History of Asbestos, Asbestos Litigation, and Regulation Cetrulo 151

8 1973 Borel v. Fiberboard Paper Products Corporation 1974 EPA Part 61 National Emission Standards for Hazardous Air Pollutants: Asbestos, Beryllium, and Mercury. 39 FR UNARCO and Johns Manville File for Bankruptcy 1986 OSHA. 29 CFR Parts 1910 and 1926, Occupational Exposure to Asbestos, Tremolite, Anthophyllite, and Actinolite; Final Rules. 51 FR The Fifth Circuit upheld Borel, finding for plaintiff. This decision extended the doctrine of strict product liability to asbestos-related disease caused by the use of insulation materials. Less than 10 years later, over 16,000 asbestos-related personal injury cases had been filed in the U.S. and had become the largest area of product liability litigation. The definition of manufacturing is added to clarify that the regulation applies to only those sources within the specified categories of affected manufacturing facilities that process commercial asbestos into a product. Operations which process (cut, shape, assemble, mix, or otherwise alter) a manufactured product that contains commercial asbestos at a separate location are not intended to be covered by the regulation, and are classified as fabricating rather than manufacturing operations. In July of 1982, the Union Asbestos and Rubber Company (UNARCO) filed for bankruptcy protection. UNARCO was the first asbestos products manufacturer to declare bankruptcy, although the bankruptcy filing of Johns Manville received greater attention due to the company s much larger size. In August of 1982, Johns-Manville filed for bankruptcy protection as a result of numerous asbestos lawsuits filed against it seeking compensation for asbestos-related injuries alleged as a result of work with Johns-Manville asbestoscontaining products as well as raw asbestos. The bankruptcy filing prevented people from suing or proceeding with pending litigation against Johns-Manville as a result of the bankruptcy code s automatic stay protection. At the time of its bankruptcy filing, Johns-Manville had approximately 16,000 claims pending against it as a result of asbestos allegations. Between , approximately 49 more companies sought bankruptcy status as a result of asbestos liability claims and, as of June, 2013, approximately 100 companies have filed for bankruptcy protection due to asbestos claims. See, e.g., Towers Watson, A Synthesis of Asbestos Disclosures from Form 10-Ks Updated, June OSHA reduced the 8 hour time-weighted standard for occupational exposure to asbestos in general industry and in construction workplaces to 0.2 f/ cc. 152 Asbestos Medicine November 2013

9 1986 Lohrman v. Pittsburgh Corning Corp., 782 F.2d 1156 (4th Cir. 1986) 1988 Center for Claims Resolution (CCR) formed on October 6, The Fourth Circuit Court of Appeals held that [t] o support a reasonable inference of substantial causation from circumstantial evidence, there must be evidence of exposure to a specific product on a regular basis over some extended period of time in proximity to where the plaintiff actually worked. Lohrman, 782 F.2d at Therefore, de minimis asbestos exposure that is not frequent, regular and proximate to the use of asbestos, is insufficient causation of disease as a matter of law. The CCR, comprised of numerous asbestos defendant members, was formed to handle asbestos-related personal injury claims filed against members of the CCR. The purpose was to handle asbestos personal injury claims in a rational and cost-effective manner. The CCR negotiated settlements with plaintiffs counsel. At this time, the claims were nonmalignancies and mostly cultivated through mass screenings EPA Attempts to Ban Asbestos In July of 1989, the Environmental Protection Agency (EPA) attempted to ban asbestos by issuing a rule under the Toxic Substances Control Act (enacted in 1976) which banned most uses of asbestos. The rule was known as the Asbestos Ban and Phaseout Rule and it prohibited manufacturing, importing, processing or distributing of most asbestoscontaining products. A group of corporations successfully challenged the rule and, in 1991, the Fifth Circuit Court of Appeals, in Corrosion Proof Fittings, et al. v. The Environmental Protection Agency, overturned the regulation upon finding that the EPA s administrative record supporting the ban failed to demonstrate that the regulation was the least burdensome alternative, as required under applicable law. 947 F.2d 1201 (5th Cir. 1991). Following the Fifth Circuit decision, specific asbestos-containing products were banned, but not all. Early 1990s Court Management of Asbestos Claims - Deferred Dockets In the 1990s, asbestos claim filings were increasing and courts worked to manage the litigation. Many courts adopted pleural registries or deferred or inactive dockets that enabled non-malignant claims to be deferred such that judicial resources could be focused on the plaintiffs with the most serious illnesses. With these dockets, unimpaired claimants can maintain a cause of action by filing claims before a malignant illness develops. Upon development of such an illness, the plaintiff can proceed with the claim. History of Asbestos, Asbestos Litigation, and Regulation Cetrulo 153

10 1991 Creation of MDL 875 All asbestos-related personal injury cases pending in federal courts were consolidated in the Eastern District of Pennsylvania, under MDL 875. Over 20,000 cases were consolidated in the docket and tens of thousands of later-filed asbestos cases were subsequently transferred to MDL 875. MDL 875 was an effort to relieve individual district courts of the massive burden imposed by the asbestos mess OSHA reduces PEL to 0.1 f/cc (8hr time-weighted average) 1997 Amchem Products, Inc. v. Windsor, 21 U.S. 591 (1997) Late 1990s: significant number of asbestos filings in targeted plaintiff friendly jurisdictions. OSHA reduced the time-weighted average PEL to 0.1 f/cc for all asbestos work in all industries. This remains the current PEL today. In addition, the new OSHA standards included a new classification scheme for construction and shipyard work which included, among other requirements, a presumptive asbestos identification requirement for high hazard asbestos containing building materials and mandatory methods of asbestos control for brake and clutch repair. June 25, 1997, the US Supreme Court denied certification of a class of people claiming exposure to asbestos-containing products and held that while the existence of a settlement may be relevant to the class certification, a putative class created solely for settlement must be analyzed in the same manner as a class sought for litigation purposes. Claim filings increased in the late 1990s and continued to do so in the early 2000s. In addition, claim filings became targeted in regard to jurisdiction. Between 1998 and 2000, sixty-six percent of state court asbestos claim filings were located in Texas, Mississippi, New York, West Virginia, and Ohio. See Stephen J. Carroll et al., Asbestos Litigation Costs and Compensation: An Interim Report, Rand Institute for Civil Justice, Sept. 25, The filing location was likely due to the location of the business strategy of certain plaintiffs counsel to aggressively screen for asbestos-related diseases in order to seek out potential plaintiffs. 154 Asbestos Medicine November 2013

11 Early 2000s Bankruptcy Wave In the early 2000s, there was a wave of bankruptcy filings of many asbestos defendants. As a result, many peripheral defendants experienced an increase in asbestos claim filings. In addition, with the bankruptcy filings of many product defendants, claims against premises owners increased. In addition, in the 2000s second-hand exposure or take home cases developed that were filed by an employee s spouse or children alleging that disease resulted from asbestos fibers that the employee brought home from work. These cases also often involved higher potential damages than in traditional cases as a result of plaintiffs of a younger age Ohio Tort Reform Ohio enacted landmark asbestos reform legislation (H.B. 292 of the 125 th Ohio General Assembly). Ohio s legislation requires that a person demonstrate actual impairment under objective medical criteria established by the American Medical Association in order to proceed with an asbestos claim. In addition, Ohio s legislation established statutory premises liability, codified Ohio s doctrine regarding piercing the corporate veil and limits asbestos-related liability for successor corporations Judge Jack Decisions Regarding Screenings State Tort Reform (Georgia, Florida, Texas, Kansas, South Carolina) companies filed for bankruptcy Judge Jack exposed an assembly-line scam with respect to medical screenings in regard to silicosis suits. Beyond the silicosis suits, this ruling has provided great lessons for asbestos litigation, including cautions as to mass-screening, misdiagnoses and the impact (and over-burden) on courts across the country. Florida, Texas, Georgia, South Carolina and Kansas follow Ohio the first state to enact tort reform to dramatically change the landscape of asbestos litigation. Between 2005 and 2006, Texas, Georgia and Florida enacted medical criteria legislation to require physical impairment evidence in order for plaintiffs to proceed with asbestos claims. In 2006, Kansas and South Carolina enacted similar legislation. See Lawrence G. Cetrulo, 4 Toxic Torts Litigation Guide 33.9 (2012). History of Asbestos, Asbestos Litigation, and Regulation Cetrulo 155

12 2007 Borg-Warner Corp. v. Flores, 232 W.W.3d 765 (Tex. 2007), reh g denied (Oct. 12, 2007) 2007 Kananian v. Lorillard Tobacco Co., No. CV (Ohio Cuyahoga County Com. Pl.; Order Opinion dated Jan ) 2013 Approximately 100 companies have filed for bankruptcy protection. June 8, 2007, the Texas Supreme Court held that a plaintiff in an asbestosis case must present defendant-specific evidence relating to the approximate dose [of asbestos] to which the plaintiff was exposed. Thereafter, lower courts quickly relied on this holding to require certain exposure thresholds to be met in order to impose liability on defendants. The dose requirement goes beyond the frequency, regularity and proximity requirement of Lohrmann. An Ohio Judge granted a motion to revoke the pro hac vice status of a plaintiffs law firm for filing a false proof of claim with an asbestos bankruptcy trust and associated misrepresentations. 156 Asbestos Medicine November 2013

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