TOXIC MOLD: FROM THE BOOK OF LEVITICUS, TO DRIPPING SPRINGS TEXAS AND BEYOND

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1 TOXIC MOLD: FROM THE BOOK OF LEVITICUS, TO DRIPPING SPRINGS TEXAS AND BEYOND PRESENTATION FOR LEX MUNDI NORTH AMERICAN REGIONAL CONFERENCE MAY 16, 2004 BOSTON, MA

2 PRESENTED BY: M. Keith Moskowitz Sonnenschein Nath & Rosenthal LLP 8000 Sears Tower 233 South Wacker Drive Chicago, Illinois Phone:

3 PART ONE: CREATING A PUBLIC HEALTH PHENOMENA FROM THE BOOK OF LEVITICUS TO DRIPPING SPRINGS, TEXAS

4 MOLD IN BIBLICAL TIMES Leviticus 14:45 A house desecrated by mildew, mold, or fungus would be a defiled place to live in, so drastic measures had to be taken. Leviticus 13:47-50 If any clothing is contaminated with mildew any woolen or linen clothing, any woven or knitted material of linen or wool, any leather or anything made of leather if the contamination in the clothing or leather, or woven or knitted material, or any leather article, is greenish or reddish, it is a spreading mildew and must be shown to the priest. The priest is to examine the mildew and isolate the affected article for seven days

5 MOLD MEETS DRIPPING SPRINGS, TEXAS "It was our Shangri-La," the New York heiress says of her 72-acre estate in Dripping Springs, just west of Austin. "It was nirvana. Then we come to have Stachybotrys." " USA Weekend, December 5, 1999.

6 Melinda Ballard in front of her 12,000-square-foot replica of Tara, the Gone With the Wind mansion, in Dripping Springs. The house is now completely uninhabitable, destroyed by mold.

7 THE ROUNTINE INSURANCE CLAIM GOES AWRY Farmers gets a claim for water damage Did Farmers respond fast enough to address Ballard s claim? Farmers and Ballard fight over repair estimates. And then comes the mold.

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9 TOXIC TARA I will tell you that this house, at one time, was a beautiful place and courtesy of Farmers insurance it is a hell-hole," hole," Ballard said. News 8 Austin Farmers ultimately offered $2 million in repair costs, but Ballard wanted at least $6 million --

10 THE MOLD QUEEN STRIKES BACK! Travis County jury finds Farmers violates Texas unfair and deceptive trade practices act. Ballard awarded $32 million But court threw out injury claims

11 PART TWO A PRIMER ON MOLD

12 CHARACTERISTICS OF MOLD AND MOLD GROWTH MOLD GENERALLY Mold is a microorganism that is naturally occurring and beneficial in the balance of nature Issue is not presence of mold in the indoor environment, but whether mix of molds is out of balance

13 MOLD GENERALLY CHARACTERISTICS: Most appear greenish black Musty or mildew odor Many species Species indistinguishable without laboratory testing

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18 MOLD GROWTH REQUIREMENTS Water Food Temperature Time

19 MOLD GROWTH FOOD SOURCES Organic materials Cellulose based building materials Paper, wood, cardboard Ceiling tiles, drywall, wallpaper Carpet, carpet pads, fabric, upholstery Dust

20 MOLD GROWTH TEMPERATURE Molds flourish at common indoor temperatures Optimal temperature generally between 60 and 85 degrees Fahrenheit Generally, mold will not grow in temperatures below 55 degrees or above 115 degrees Fahrenheit

21 MOLD GROWTH TIME Mold can grow fairly rapidly on materials that remain wet for prolonged periods of time Microscopic levels within 12 hours Visible mold growth within 72 hours to 1 week

22 MOLD GROWTH HIDDEN MOLD GROWTH Mold can grow in enclosed areas such as within wall cavities or underneath floor boards

23 MOLD GROWTH REPRODUCTION AND MOLD SPORES Molds disperse spores to reproduce Slight disturbance & air currents

24 WHY MOLD MAY BE A CONCERN IN STRUCTURES Health Risks Unusable Structures Property Damage

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26 Allergic Reactions HEALTH RISKS Asthmatic Reactions Hypersensitivity Pneumonitis Respiratory Infection in rare cases Skin Irritation Illness with flu-like like symptoms Toxicosis

27 HEALTH RISKS - TOXICOSIS Reaction to toxins produced by some molds Hypothesized to cause or contribute to neurological damage (memory loss) and infant pulmonary hemorrhaging (bleeding lungs in infants) Not proven by medical science

28 HEALTH RISKS EXPOSURE AVENUES Inhalation of mold or mold spores Ingestion of mold or mold spores Skin contact

29 HEALTH RISKS Adverse health reactions can vary depending on the amount of the exposure and the susceptibility of the affected person Science has not developed threshold levels for exposure

30 AT RISK GROUPS HEALTH RISKS Elderly Infants Those whose natural ability to fight illness has been suppressed Asthmatics Those with allergies Possibly healthy individuals where exposure levels are significant

31 TECHNICAL GUIDANCE Sources of Published Guidance: Environmental Protection Agency, Mold Remediation In Schools and Commercial Buildings (2001) Environmental Protection Agency, A Brief Guide to Mold, Moisture and Your Home (2003) American Conference of Governmental Industrial Hygienists, Bioaerosols: Assessment and Control (1999) New York City Department of Health, Guidelines on Assessment and Remediation of fungi in Indoor Environments (1993 & 1999)

32 WATER ASSESSMENT Discrete Water Condition Burst pipe or flood Chronic Water Condition Roof or appliance leak General Moisture or Humidity Condition Improperly sized HVAC system

33 WATER ASSESSMENT IDENTIFY THE NUMBER AND LOCATION OF WATER SOURCES Important to understand whether liability exists for mold condition(s) MAP VERTICAL AND HORIZOTAL WATER MIGRATION For each source For all identified areas where water conditions exist

34 Remediation The Fire Cure To rid themselves of the toxic mold that savaged their lives, Steve and Karen Porath burned down their home

35 MOLD REMEDIATION Mold Remediation Generally Requires: Controlling source of water Cleaning mold from non-porous and where possible semi-porous and porous material Removing mold contaminated materials from structure in plastic bags Replacing those materials that cannot be rehabilitated

36 THE ROLE OF AIR SAMPLING Generally, no need for air sampling where mold is visually identified No clear guidance in the scientific community When should samples be taken? What can you conclude from sampling results? Impact on media response

37 PART THREE PREPARING FOR AND SUCCESSFULLY DEFENDING A MOLD CASE

38 PRE-SUIT STRATEGIES Litigation Prevention Timely and proper water mitigation is mold prevention Claims should be handled under water and mold guidelines Complaints should be properly addressed

39 PRE-SUIT STRATEGIES Identification of Likely Suits Claimant making aggressive health complaints Claimant has abandoned the home Claimant s experts advancing far-reaching reaching remediation proposals Claimant working with experts who are well-known plaintiff-oriented advocates on mold issues

40 PRE-SUIT STRATEGIES Identification of Likely Suits Claimants present medical reports asserting novel health claims (such as toxicosis) Claimants represented by public adjusters or attorneys active in mold litigation Claim arises in a hot-bed of mold litigation

41 Defining the claim LITIGATION STRATEGIES Product liability claim Construction defect claim Bad faith claims handling Premises liability Fraudulent Conveyance

42 LITIGATION STRATEGIES Developing the underlying facts Water first, mold second History of the structure with respect to water/moisture conditions Number of water sources Chronic versus discrete water conditions Mapping of the vertical and horizontal extent of water conditions

43 LITIGATION STRATEGIES Developing the underlying facts Mold assessment Extent of mold contamination Location of mold contamination Water/humidity source which caused mold contamination Hidden mold conditions Estimation as to when contamination first occurred When did mold become noticeable to occupant

44 LITIGATION STRATEGIES Developing the underlying facts Mold assessment Was any pre-remediation remediation sampling performed? By who? Why were samples taken? What was the sampling plan? What laboratory analyzed the sampling results? Identify the sampling data

45 LITIGATION STRATEGIES Developing the underlying facts Plaintiff s alleged exposure history Is the plaintiff a member of an at risk group How long did plaintiff reside in the mold contaminated structure? Alternative exposure locations (such as work, school etc) When does plaintiff allege first exposure?

46 LITIGATION STRATEGIES Developing the underlying facts Plaintiff s alleged exposure history Does plaintiff identify a specific location in the residence where exposure occurred Duration of alleged exposure Who did plaintiff first report health complaints to? Reported work problems Identify potential alternative exposures within structure which might have caused alleged injuries Obtain plaintiff s complete medical history

47 LITIGATION STRATEGIES Identifying and retaining appropriate experts Technical experts Industrial hygienists Microbiologists Engineers Moisture engineer Construction experts Architect, general contractor

48 LITIGATION STRATEGIES Identifying and retaining appropriate experts Medical experts Immunologist Epidemiologist Allergist Toxicologist Neuropsychologist

49 LITIGATION STRATEGIES Identifying and retaining appropriate experts Other experts Insurance bad faith Appraiser (mold stigma claims)

50 LITIGATION DEFENSES Causation defenses Frye General acceptance Daubert Judge acts as gatekeeper Evidence must pertain to scientific knowledge supported by appropriate validation i.e., good grounds

51 LITIGATION DEFENSES Mold specific medical causation issues Symptoms associated with mold can be attributable to a great number of other causes Unlike toxic torts there are no definite biological markers which could establish a mold exposure No accepted methodology to measure dose Neurological effects of mold unknown

52 LITIGATION DEFENSES Mold specific medical causation issues There are no valid epidemiological studies or peer reviewed research demonstrating a casual connection between mold exposure and significant illnesses Large gaps in knowledge necessary to conduct quantitative risk assessments for inhaled mycotoxins

53 LITIGATION DEFENSES PLAINTIFF S EVIDENCE Cleveland Baby Study (1994) New York Office Building (1996) Chicago Residence (1986) Animal Studies Case reports (differential diagnosis)

54 LITIGATION DEFENSES The general scientific community recognizes that the current peer-reviewed reviewed literature does not support causation between mold exposure and specific medical diseases of illnesses.

55 LITIGATION DEFENSES CDC notes gaps in scientific knowledge between mold exposure and human health and comments that it is not known. what quantity of mold is acceptable in indoor environments. See, Statement of Stephen C Redd, M.D. to U.S. House of Representatives Financial Services Subcommittee regarding the State of the Science on Molds and Human Health, pps

56 LITIGATION DEFENSES ACOEM reports that: Current scientific evidence does not support the proposition that human health has been adversely affected by inhaled mycotoxins in the home, school or office environment. American College of Occupational and Environmental Medicine Council on Scientific Affairs, Adverse Human Heath Effects Associated with Molds in the Indoor Environment JOEM 45:

57 LITIGATION DEFENSES Technical causation issues Sampling to establish personal exposure Sampling plan and protocols Snap-Shot Shot sampling inadequate Does not indicate dose (concentration over time) Sampling is highly variable Baseline samples Experience of sampler Experience of laboratory analyst Ominous data may be largely meaningless

58 LITIGATION STRATEGIES Ballard v. Fire Ins. Exchange (Daubert) Judge excluded plaintiff s proffered causation testimony that mold caused cognitive defects Rejects Johanning epidemiological survey -- no attempt to link exposure to cognitive defects Reporting bias Some survey participants patients of expert Fails to meet Hill criteria

59 LITIGATION DEFENSES Ballard v. Fire Ins. Exchange Rejects specific causation Deaths of mice in home No scientifically derived or designed methodology free from bias Sampling not conclusive proof of causation

60 LITIGATION DEFENSES Flores v. Allstate Texas Lloyds (Daubert) Court excludes treating physician s testimony that mold in home caused plaintiffs alleged injuries.

61 LITIGATION STRATEGIES Miner v. American Mortgage (Daubert) Employees of credit card company allege injuries resulting from long-term exposure to mold, mycotoxins and other toxins at work Court allowed expert testimony over defendants Daubert challenge

62 LITIGATION STRATEGIES Mondelli v. Kendel Homes Corp. (Frye) Alleged asthma from household mold exposure Nebraska Supreme Court admits evidence under Frye general acceptance test Court did not explain how evidence met the test

63 LITIGATION STRATEGIES New Haverford Partnership v. Stroot (Daubert) Differential diagnosis by Johanning of plaintiff alleging injuries from mold exposure Court rejects Daubert challenge But see, Turner v. Iowa Fire Equip (8th Cir.), and Moore v. Ashland Chemical (5th Cir.) (rejecting differential diagnosis to establish causation under Daubert).

64 LITIGATION DEFENSES Graham v. Lautrec, Ltd.. (Frye) [T]here is no well-established established evidence linking the presence of indoor mold and the health concerns elaborated in the scientific and lay press. This manuscript as well as the litany of other reports and studies supports Defendant s assertion that Plaintiffs expert s are not supported by principles or theories generally accepted by the scientific community.

65 LITIGATION STRATEGIES Roche v. Lincoln Property Co. (Daubert) Excludes expert testimony from medical doctor. Also rejects claim that unit was uninhabitable finding plaintiff s industrial hygienist s insufficient.

66 LITIGATION STRATEGIES Other defenses Statute of limitations Discovery rule

67 PART FOUR THE FUTURE OF MOLD

68 MOLD TRENDS First party insurance market restricted The merging of mold and construction defect Remediation of commercial structures New medical-science?

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