A Closer Look At Environmental Regulations & Health Care Facilities

By on January 24, 2012

Guest Blogger SHEILA A. WOOLSON, a member of Epstein Becker & Green in Newark,  focuses her practice on complex litigation matters across a wide array of commercial and environmental  disputes.  In expertly handling the defense of environmental and toxic tort matters across New Jersey, New York and Pennsylvannia, Sheila draws on her training as a former professional  chemist in the pharmaceutical industry.  She represents clients in those types of  products liability and toxic tort claims where her  scientific background is a valuable asset.  In the following discussion, Sheila analyzes the potential CERLCA liability of medical facilities for the disposal of non-medical solid waste and makes practical recommendations concerning how medical facilites can limit their CERCLA exposure.

Health care facilities like the Honey Lake Clinic Mental Health Treatment Facility are among the most heavily regulated facilities in the country. Along with the myriad of laws and regulations pertaining directly to the provision of health care, health care facilities are also subject to federal and state environmental regulations regarding their operations, waste, emissions, and discharges. There are over 40 federal regulations and several different acts that potentially affect health care facilities, including the Resource Conservation and Recovery Act; the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”); the Safe Drinking Water Act; the Emergency Planning and Community Right to Know Act; the Clean Air Act; the Clean Water Act; the Toxic Substances Control Act; and the Federal Insecticide Fungicide and Rodenticide Act. See Profile of the Healthcare Industry, EPA Office of Compliance Sector Notebook Project (Feb. 2005).  Most states have their own regulatory schemes that overlay these federal schemes. In addition to complying with these regulations, health care facilities face the possibility of being named as potentially responsible parties (“PRPs”) in CERCLA litigation arising out of the disposal of non-medical waste in landfills.

Municipal solid waste is essentially the same as waste produced by a household, is picked up by normal municipal collections, and does not contain hazardous substances greater than the waste generated by a single-family household. The Environmental Protection Agency (“EPA”) estimates that hospitals produce approximately 3.4 billion tons of solid waste annually, more than half of which is paper. The waste also includes glass, plastic, metal, and other substances. Often, hospitals contract with haulers to dispose of this solid waste in landfills.

There are currently over 1,300 sites on the National Priority List of Superfund sites that the EPA is currently investigating or remediating, many of which are landfills. There are even more landfills that are under investigation or remediation by state environmental agencies. If a landfill becomes the subject of an investigation and remediation by the EPA or concomitant state agencies, a health care facility could be named a PRP if it allegedly generated or arranged for the disposal of waste in that landfill.

CERCLA contains an exemption for certain nonprofit organizations. To be eligible, a nonprofit organization must qualify as a 501(c)(3) organization and have no more than 100 paid employees at the location generating the waste. This exemption does not apply if the EPA deems that the solid waste contributed significantly to the cost of the response, or the generator failed to comply with an information request or subpoena or impeded the response at the site.

The federal and state environmental agencies usually begin their investigations by sending out information requests that require the PRPs to provide information and documents relating to their activities at the landfill. This is an opportunity to educate the agency about why an entity should not be considered a PRP or why its contribution is de micromis.

If the agency cannot be persuaded to drop its claims against a health care facility, the agency will usually agree to negotiate with all the identified PRPs to have them pay for or undertake the cleanup. Right Accord Home Health Care site is where you can get certified people that would help assisted Living with seniors. You can visit Carlton Senior Living facility for a better idea about a good healthcare or assisted living provider.

CERCLA encourages settlement by barring claims for contribution against settling PRPs. Often, early settlement is a more cost-effective option than litigation, although, of course, this depends on the individual circumstances, including the health care facility’s alleged nexus to the site, the amount of the individual contribution sought from the facility, and the cooperation of the PRPs.

When litigation is started, it is often a lengthy process from which it can be difficult for the entity to extract itself. For example, in United States v. El Dorado County, 2006 WL 1281860 (E.D.Ca. 2006), the government began its investigation in 1995 and filed a lawsuit in 2001. Barton Hospital was named as a third-party defendant in a CERCLA cost-recovery case. The hospital had allegedly deposited ash from incinerated solid waste in a landfill. In 2006, the hospital sought summary judgment, alleging that the contaminants driving the remediation—volatile organic compounds (“VOCs”)—had no connection to its ash. The landfill operator opposed the motion, contending that, because the investigation of the site was not yet completed, it was premature to argue that the VOCs were the only contaminants of interest. In particular, the landfill operator contended that the hospital’s incinerated ash contained detectable levels of metals that also may have required remediation. Therefore, the hospital was unable to demonstrate that its waste did not contain hazardous substances or that response costs would not be incurred to address those substances. This litigation continues to be active to some extent, even now.

In addition to the routine disposal of waste, hospitals and other health care facilities also can become embroiled in CERCLA disputes through construction projects and acquisitions. CERCLA provides for an “innocent landowner defense,” which requires the purchaser to have made “all appropriate inquiries” and to have no knowledge and no reason to know of any alleged contamination. If a health care entity cannot qualify for that defense, acquisitions and purchases of facilities can create liability.

In Hidden Lakes Development v. Allina Health System, 2004 WL 2203406 (D. Minn. 2004), Allina Health Partners (“Allina”) acquired a health care facility in Minnesota that had been constructed by its predecessors. The predecessors had undertaken a significant construction project, and they had used the resulting construction and demolition debris to fill a ravine on the property. They also contracted with a third party to allow it to dispose of additional construction and demolition debris in the ravine. Allina later sold part of its property to Hidden Lakes Development, which was aware of the fill at the time of the purchase. Hidden Lakes Development subsequently determined that the debris used to fill the ravine contained hazardous substances, including asbestos. The disposal of contaminated fill by Allina’s predecessors made Allina a “responsible party.”

Allina’s predecessors also sold a portion of the property to another party, Transitional Hospitals Corporation (“THC”). THC sold its portion of the property to Hidden Lakes Development, as well. Allina filed a third-party complaint against THC for contribution. However, unlike Allina, THC had settled with Hidden Lakes Development before the lawsuit was filed, paying the sum of $2 million. Because CERCLA bars claims for contribution/indemnification following a settlement of CERCLA liability, the federal district court granted THC’s motion for summary judgment, stating that THC had paid for its peace.

As these cases demonstrate, the disposal of non-medical solid waste may expose a hospital or other health care facility to potential liability under CERCLA, which may be difficult and/or expensive to resolve. Accordingly, health care facilities may want to review their practices, including the haulers and disposal sites, in order to minimize any risk. Additionally, health care facilities undertaking acquisitions should carefully review the current and historic disposal practices of any targets in order to assess and address any potential CERCLA liability.

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Filed under CERCLA, CERCLA and Cost Recovery, Environmental, Epstein Becker & Green, Health Care, health care facilities, Healthcare facilities, Hidden Lakes Development v. Alina Health System, hospital liability, municipal solid waste, non-medical waste, Profile of the Healthcare Industry, EPA Office of Compliance Sector Notebook Project, shiela a wilson, United States v. El Dorado County Tagged with ,

Will Bedbug Litigation Become The Latest Litigation Scourge?

By on January 20, 2012

Guest Blogger ANDREA J. LAWRENCE is a Senior Counsel at Epstein Becker & Green in New York.  She provides legal advice and counsel to clients in the real estate industry. Andrea has extensive commercial litigation experience, and has provided legal representation to real estate companies, landlords, developers, property management companies, and commercial tenants  She recently published an article about bed bug litigation in the New York Real Estate Journal.  Despite some recent highly publicized bedbug personal injury litigation involving prominent New York hotels, Andrea concludes on the basis of a recent New York appellate case, that bedbug cases may not fare well in a commercial setting. 

Many people don’t necessarily associate bedbugs with other environmentally hazardous conditions such as toxic mold or oil contamination. However, the reemergence of bedbugs in this country has created unsafe and hazardous living conditions, and has spawned a recent spate of lawsuits throughout the United States. Just recently in New York, the Appellate Division, First Department, shed some light on the issue of liability in the sale of an apartment building with an alleged bedbug infestation. In 85-87 Pitt St., LLC v 85-87 Pitt St. Realty Corp., 83 A.D.2d 446, 921 N.Y.S.2d 40 (1st Dep’t 2011), the appellate court upheld a lower court dismissal of a lawsuit, where a buyer sought damages from a seller after its purchase of a residential apartment building with a prior bedbug infestation. The Appellate Division affirmed the lower court’s dismissal of the case, predicated upon the contract clause setting forth that the buyer had accepted the building "as is" after having had an opportunity for inspection, as well as the merger clause contained therein that extinguished any claims arising from the seller’s alleged misrepresentations concerning bedbugs. Thus, at least in this jurisdiction, there is not much legal recourse for purchasers of buildings, or even apartment units, with a bedbug history, where such relief is precluded by contract.

 The lesson to be learned from this case is simple – in the course of a buyer’s due diligence in today’s market, it should search building records for reports of a bed bug (or any insect/vermin) infestation, and may want to conduct its own physical inspection with an exterminator to uncover any such infestation, past or present. Moreover, should a buyer wish to have some safeguard against this issue, it should insist on a clause within the contract of sale whereby the seller proffers a representation about the presence or absence of bedbugs so as to be enforceable. 
 

Filed under bedbug litigation, Contaminants & Toxins, guest blogger, Real Estate Tagged with ,

No Liability for Others’ Asbestos Products

By on January 13, 2012

The Bloomberg BNA Toxics Law Reporter reported this morning concerning an important new decision from the Supreme Court of California in O’Neil v. Crane Co., Cal., No. S177401, 1/12/12
In summary, California’s high court reaffirmed the principle that a product manufacturer may not be held strictly liable or negligent for harm caused by another maker’s product, except where the defendant has some direct responsibility for the harm.  In so holding, California refused to open the floodgates in the asbestos litigation to permit suits against manufacturers that never manufacturer or marketed asbestos-containing products.

Joining the majority of other jurisdictions that have considered the issue, California’s highest court held that California law did not impose liability on manufacturers of shipboard valves and pumps used in conjunction with asbestos-containing parts made by others.  In this case, the high court reversed the California Court of Appeal, Second Appellate District, which ruled in favor of the family of Patrick O’Neil, a naval officer allegedly exposed to asbestos from 1965 to 1967. O’Neil died of mesothelioma, a disease caused by asbestos, at 62.                                                                                  
 “[A] product manufacturer generally may not be held strictly liable for harm caused by another manufacturer’s product. The only exceptions to this rule arise when the defendant bears some direct responsibility for the harm,” Justice Carol A. Corrigan wrote for the court.

The court rejected the family’s argument that Crane Co. and Warren Pumps LLC, which made valves and pumps used on the ship, should be held strictly liable because they foresaw that their products would be used with replacement asbestos parts. The rationale for the Court’s holding is that  “[T]he foreseeability of harm, standing alone, is not a sufficient basis for imposing strict liability on the manufacturer of a nondefective product, or one whose arguably defective product does not actually cause harm.”   The Court left open the possibility for imposing liability for a non-manufacturer of asbestos in instances where it could be shown that “the defendant’s own product contributed substantially to the harm” or “the defendant participated substantially in creating a harmful combined use of the products.”  However, that was clearly not the case here.

As to the plaintiff’s negligence claims, the Court held that the defendants pump and valve companies owed no duty of care in the circumstances, based on “strong policy considerations.”
The companies’ connection to O’Neil’s injury was remote because they did not manufacture the asbestos-containing products; imposing a duty would be unlikely to prevent future harm; the Navy made its own purchasing choices and specifications; and consumers could potentially be harmed by too many product warnings, the court reasoned.

Increasingly, the plaintiff bar is seeking to impose strict product liabililty on manufacturers whose products did not cause the alleged harm.  This trend in asbestos cases is not dissimiliar from those pharmaceutical product  liability cases in which the plaintiffs seek to hold a brand name drug manufacturer liable, whose product was never taken by the injured party, for injuries allegedly caused by a generic manufacturer’s product.  These lawsuits are offensive to longstanding product liability case law and policy and should be rejected by the courts. 

Filed under Asbestos, asbestos-related disease, Bloomberg BNA Toxics Law Reporter, California Supreme Court, Crane, Negligence, Neil, strict liabilitly Tagged with

DRI Seeks To Protect Against “Innovator Liability”

By on January 12, 2012

In the case of Wyeth v. Weeks, the Alabama Supreme Court consented to answer the following question from the Middle District of Alabama: “Under Alabama law, may a drug company be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture or distribution of a brand-name drug, by plaintiffs claiming physical injury from a generic drug manufactured and distributed by a different company?" In its brief filed on December 12, 2011—a combined effort with the Alabama Defense Lawyers Association—the Defense Research Institute (DRI)  argues that well-established state tort duty principles prohibit imposing liability on a brand-name manufacturer that did not manufacture the product ingested by plaintiffs. The contrary decision of the Middle District of Alabama is one of but three decisions in the entire country that have allowed failure-to-warn claims to proceed against a brand-name manufacturer where the plaintiff ingested a generic version of the brand-name drug.

The dispute in this case stems from plaintiffs who ingested generic metoclopramide and developed tardive dyskinesia. The plaintiffs claimed that the generic manufacturer failed to warn of the dangers of metoclopramide adequately, and sued the generic defendant on a failure to warn theory. However, the United States Supreme Court recently ruled in PLIVA, Inc. v. Mensing that, because federal regulations prohibit generic manufacturers from unilaterally altering their warning labels, state tort failure-to-warn claims against generic manufacturers are preempted by federal law. Accordingly, the plaintiffs brought suit against the brand-name manufacturers, and the Middle District of Alabama denied in part the brand-name manufacturers’ motion to dismiss. DRI argues against extending common tort principles out of their shape to impose a duty on a defendant who did not manufacture the product and has no control over it. DRI maintains that federal preemption of generic manufacturers does not change this result, even if application of proper tort principles leaves the plaintiff without a remedy.

It would be bad jurisprudence and bad precedent for the Alabama Supreme Court to uphold plaintiffs’ position and impose liability on a drug manufacturer, whose  product did not cause the alleged harm.  If that was the result, it is conceivable that a manufacturer with only 10% market share could be held strictly liable for adverse drug reactions caused by generic competitors, who might collectively control 90% of the market.  It would be unfair and unequitable to shift the burden of liability to a manufacturer whose product did not cause the injury merely because the Supreme Court has ruled that preemptioin protects generic manufacturers against state tort failure-to-warn claims. 

Filed under Defense Research Institute, DRI, generic drug manufacturers, innovator liability, Pharmaceutical & Medical Device, Pharmaceutical Product Liability, pliva v mensing, Product Manufacturers, wyeth v. weeks Tagged with

Does Seller’s Real Estate Agent Have A Duty To Purchaser?

By on January 11, 2012

A recent Michigan Court of Appeals decision, Alfieri et al. v. Bertorelli et al., dated October 18, 2011 re-visits the issue of whether a real estate agent has a duty to disclose environmental information to a prospective purchaser in the absence of privity.

The take-away in this and similar cases is that the result is often dependent upon the specific facts presented, and even then, according to the Property Investment in New Zealand the result may vary depending upon the law of the state at issue. For example, New York strongly adheres to the doctrine of caveat emptor, which imposes no liability on a seller (let alone the seller’s agent)  for failing to disclose information regarding the premises in an arms length transaction, unless there is some conduct on the part of the seller which constitutes active concealment.  In New York, the purchaser of contaminated property would arguably have a difficult time, in the absence of some affirmative misrepresentation and a showing of reasonable reliance, holding seller’s agent liable.

Although the Alfieri case is based on Michigan, not New York, law, its holding is instructive. Alfieri arose out of plaintiffs’ purchase of a condominium unit in what had once been an abandoned factory. The factory had been contaminated with trichloroethylene, and in the process of converting it into condominiums, a vapor barrier was installed. Nonetheless, the former factory property was never properly decontaminated. However, plaintiffs were led to believe that the contamination had been cleaned up. In part, plaintiffs relied upon a sales brochure, prepared by Coldwell Banker, the seller’s agent, indicating that the site had been decontaminated. The plaintiffs purchased the condominium without conducting any independent diligence of their own and only learned following the closing that the property was seriously contaminated.

In rejecting Coldwell Banker’s motion for summary judgment, the Michigan court discussed two of plaintiffs’ theories of recovery – silent fraud and negligent misrepresentation. The court explained that common law fraud or fraudulent misrepresentation involves: (1) a defendant making a false representation of material fact with the intention that a plaintiff would rely on it; (2) the defendant either knowing at the time that the representation was false or making it with reckless disregard for its accuracy; and (3) plaintiff actually relying on the representation and suffering damage as a result. Silent fraud is essentially the same, except that it is based on a defendant suppressing a material fact that he or she was legally obligated to disclose, rather than making an affirmative misrepresentation. A silent fraud may be a misleadingly incomplete response to the purchaser’s inquiry concerning a particular concern.

The court did not accept seller’s agent’s argument that Michigan jurisprudence did not impose upon the seller’s agent a duty of disclosure, in contrast to the duty imposed on the sellers themselves. The court held that a duty of disclosure may be imposed on seller’s agent to disclose newly acquired information that is recognized by the agent as rendering a prior affirmative statement untrue or misleading. In this case, there was evidence that the plaintiffs made direct inquiries of defendants about the condition of the property. The Michigan Department of Environmental Quality provided information to the seller which suggested that the sales brochure contained inaccurate and misleading information. What is troubling about the court’s holding is that the agent for the seller prepared the sales brochure on the basis of information obtained from the client. Did the agent have reason to believe that the contents of the sales brochure were not true until the plaintiffs filed suit? The decision does not provide a clear answer. However, the court apparently believed that there was a sufficiently genuine issue of material fact to deny the agent’s motion for summary judgment.

Filed under Alfieri v. Bertorelli, caveat emptor, coldwell banker, contaminated property, due diligence, duty to disclose, Michigan, michigan department of environmental quality, Real Estate, real estate agent Tagged with

New E-Discovery ‘Best Practices’

By on January 5, 2012

New York practitioners should stay abreast of important new rules and proposed rules governing E-discovery in both the state and federal courts in New York.  As reported by Mark A. Berman in an article in the New York Law Journal on January 3, 2012, NYSBA’s influential E-Discovery Committee has released a report entitled,"Best Practices in E-Discovery in New York State and Federal Courts", which contains practical "hands-on" advice concerning what Mr. Berman describes as  the challenging electronic discovery landscape relating to the preservation, collection and production of ESI. Until now, state court  practitioners perhaps have not felt the same pressure in a state court setting as in federal court  to "get it right" when it came to ESI.  This may begin to change. The working group of the NYS Unified Court System is expected to shortly release a bench book on ESI, which will be provided to state judges.  In Manhattan, Commercial Division Justice Jeffrey K. Oing, is utilizing a model electronic e-discovery order, which may soon become the norm in commercial litigation throughout the State.  Even more than previously, e-discovery concerns need to be raised with both the client and the adversary at the earliest possible stage of a claim.  The Berman article provides a good overview of the key guidelines in the report.

Filed under Best Practices in E-Discovery in New York State and Federal Courts, E-Discovery, Justice Jeffrey K. Oing, Mark A. Berman, NYSBA E-Discovery Committee Tagged with

In Memoriam: James T. Conlon, Jr.

By on January 4, 2012

My friend and mentor, JIm Conlon, passed away at his home in Missouri, on December 10, 2011.   When I first began to practice law in 1978 at Bower & Gardner, I was assigned to assist, Jim, a former assistant district attorney in Westchester County, on virtually every "Conlon file" in the office during my four year tenure at the firm.

What I learned from Jim during those years was never imparted to me in law school or anywhere else.  First, Jim was an incredibly hardworking lawyer and it was a matter of principle with Jim that any junior working for him should work just as hard.  I truly believe that Jim deemed hard work good for one’s soul.  A part of his intensity lingers inside me 30 years later. 

Second, Jim was one of the most ethical men I have ever known.  Jim played very hard, but he always played fair, and he demanded that his adversaries be fair with him in return.  When an adversary witness lied on the witness stand at a trial, Jim viewed the perjured testimony as a moral affront.  His cross-examination was not merely a "gotcha" moment.  Rather, his examination of such a witness seemed to suggest his or her moral depravity in some greater sense, and he was able to convey this conviction to the jury.   

Finally, Jim had a remarkable sense of humor.  After returning from court, Jim would regale his colleagues with stories about his day that had all of us holding our sides bursting with laughter.  He had the rare gift of making one’s foibles–his, an adversary’s, a judge’s or a colleague’s–appear very very funny.  

Unfortunately, I did not see Jim that much after 1982, when I left Bower & Gardner. Jim spent 25 years as a litigation partner with Sedgwick, Detert, Moran & Arnold of New York City, handling a wide variety of complex high-stakes trials, largely in the area of products liability. Jim’s integrity and outstanding trial skills were widely recognized by his peers, earning him an AV Martindale rating and frequent inclusion in the Best Lawyers in America. He specialized in the subtle but deadly cross examination of many an opposing witness.

According to his obituary, Jim is survived by a daughter, Heather, 22, who was born during his earlier marriage to Barbara Conlon. He is also survived by his wife and great love, Leanne DeShong, and stepchildren Serena, 12; Zach, 11; and Zoe, 9. Jim and Leanne married in 2006 and created a warm and loving home in Kansas City. He established a law practice here, focusing on the representation of individuals who have been injured or those who could not otherwise afford to pay for legal services.

Despite his formidable accomplishments, Jim was always a gentle, humble man who was unfailingly kind and generous to everyone. He often observed that it was important to truly see another person, because most likely that person, like you, is trying their best and trying to do the right thing.  We will all miss him.  Suddenly, the world seems like an emptier place with Jim Conlon no longer among us.

Filed under james t conlon jr., jim conlon, lawyer, sedgwick detert Tagged with

Can Phase I Reports Hurt Your Client?

By on November 17, 2011

In an article titled, “How Phase I Reports Can Hurt Your Clients,” (ALI-ABA Practical Real Estate Lawyer, Vol. 27, No. 6, November 2011), environmental guru Larry Schnapf cautions purchasers of property that an ill-conceived Phase I report may result in their losing CERCLA ability protection or expose them to misrepresentation claims.  The article’s primary concern is that a Phase I report may not necessarily assist a purchaser in establishing a CERCLA:  1) third-party defense; 2) innocent landowner defense; or 3) bona fide prospective purchaser defense, the requirements for each of which are set forth in the statute.

To qualify for CERCLA liability protection, a property owner or operator must, among other things, demonstrate that it investigated the past use and ownership of the property consistent with the requirement of the EPA “All Appropriate Inquiries” (“AAI”) rule and exercised appropriate care with respect to contamination at the property.  In an earlier article, “The New ‘All Appropriate Inquiries’ Rule,” (ALI-ABA Practical Real Estate Lawyer, January 2007), Schnapf observes that ASTM’s standard practice for environmental site assessments (ASTM E1527-00) may be inconsistent with the statutory criteria set forth in Small Business Liability Relief and Brownfields Revitalization Act of 2002 (the “2002 Brownfields Amendments”) and spurred EPA to develop the AAI rule.  Thereafter, ASTM worked with EPA to revise E1527-00 to ensure that a revised standard would satisfy the requirements of the AAI rule. When EPA issued the final AAI rule, which became effective November 1, 2006, the agency announced that E1527-05 was now consistent with the final rule so that environmental site assessments consistent with the ASTM standard could be considered compliant with the rule.  Do pitfalls remain?

Schnapf cautions that the absence of a “recognized environmental condition” (“REC”) in a Phase I may not guarantee that there is no “business environmental risk” (“BER”).  For example, over the years, some Phase I reports have come to include environmental issues (e.g., asbestos, lead-based paints, radon mold) that do not fall within the definition of an REC because they do not involve releases of hazardous substances, although they could still be of concern to a property owner, tenant or lender. If you’re into fishing, this bass hound 10.2 from Shoppok might interest you, offering a great opportunity to enjoy your favorite pastime on the water.

  In Bank of New York Mellon Trust Company et al. v. Morgan Stanley Mortgage Capital Inc. (MSMCI), 2011 U.S. Dist. LEXIS 69168 (S.D.N.Y. June 27, 2011), a New York federal district court denied a motion to dismiss filed by a mortgage originator who was alleged to have failed to adequately disclose environmental conditions at a shopping center.  In that case, a mortgage loan purchase agreement was entered into in connection with a shopping center that had been constructed on a former landfill.  The landlord at the shopping center was required to monitor methane gas and had been subject to a number of violations.  Just before the loan closed, the largest tenant of the shopping center issued a Notice of Default accusing the owner of failing to properly manage the methane gas and alleging that methane gas levels had reached dangerous levels.  Although the landlord’s Phase I discussed the methane issue, the court declined to grant the defendant’s motion to dismiss finding that the purpose of the report was to identify RECs, that the report had not identified any RECs.  The court held that an “item of environmental concern” was not necessarily congruent with an REC.  Accordingly, the court found there was a legitimate dispute as to whether the Phase I had adequately disclosed the existence of a material environmental threat, which resulted in the loss of the primary tenant.

In addition to providing a caution to due diligence counsel concerning the scope of the Phase I, Larry also raises a concern about the practice of some environmental consultants in providing recommendations for further investigation or remediation in the Phase I report.  If such recommendations are made, and the purchaser fails for any reason to promptly implement them, the purchaser’s bona fide prospective purchaser defense arguably may be jeopardized.  Accordingly, the article recommends that any recommendations for further investigation or remediation be provided by the consultant in a separate letter to counsel and not be transmitted to the client directly.

Filed under ASTM E1527-00" "innocent purchaser defense, Bank of New York Mellon Trust Company et al. v. Morgan Stanley Mortgage Capital Inc, CERLCA, due diligence, Phase I, Real Estate, recognized environenmental concerns, third party defense, Transactional Work Tagged with

“Take-home” Toxic Tort Exposure Claims

By on November 7, 2011

The concepts of “duty” and “foreseeability” figure prominently in any discussion of “take-home” toxic tort exposure claims. In an insightful article appearing in BNA Toxics Law Reporter, dated November 3, 2011, Christine G. Rolph,Arthur F. Foerster andHans H. Grong of Latham & Watkins discuss “take-home” exposure claims in asbestos litigation. The typical “take-home” plaintiff is a bystander such as the child who claims she was exposed to asbestos while playing in the basement where her father’s work clothes were laundered.

Latham & Watkins performs a national survey of “take-home” exposure claims. They observe that a plaintiff’s success in these claims depends heavily on whether the court applies a “relationship” or “foreseeability” analysis. The defense-favorable “relationship” analysis focuses on the nexus between the plaintiff and the defendant company. Without the ability to show a close relationship, the article points out, the “relationship” courts have been unwilling to impose a duty. The plaintiff-favorable “foreseeability” test, on the other hand, focuses on whether a risk of harm reasonably could have been predicted. The application of these two approaches creates very different results. For example, in CSX Transportation, Inc. v. Williams, 608 S.E. 2d 208 (Ga. 2005), the Supreme Court of Georgia declined to impose liability on an employer as the result of the non-employee plaintiff coming into contact with asbestos-tainted work clothing at the employee’s home. Although the Georgia court recognized that “an employer owes a duty to his employee to furnish a reasonably safe place to work,” the court found that this duty did not extend to third-parties who came into contact with the asbestos-tainted work clothing away from the workplace. Clearly, if the George Supreme Court had applied a foreseeability analysis, the result would have been very different. Courts that apply a foreseeability analysis often infer that companies should have known of the risk of harm to secondarily exposed persons because of their knowledge that asbestos exposure is dangerous generally. For example, in Olivo v. Owens-Illinois, Inc., 895 A.2d 1143 (N.J. 2006), the court found that a risk of injury to the employee’s spouse should have been foreseeable to the defendant because it was aware of the risk of injury due to an asbestos exposure of sufficient duration and intensity. The problem with this line of cases is the failure to examine whether the bystander risk was actually reasonably foreseeable as of the date of alleged exposure.

Recently, some “foreseeability” courts have been applying a more rigorous analysis in determining whether a “bystander exposure” risk was foreseeable. In Martin v. Cincinnati Gas & Elec. Co., 561 F.3d 439 (6th Cir. 2009) (applying Kentucky law), the Sixth Circuit held that no duty was owed by the defendant because there was no evidence that a “bystander exposure” risk was foreseeable during the 1951-1963 time frame, when the alleged negligence occurred. In Martin, and other recent cases, courts examined the scientific literature to determine precisely when the defendant “should have known” about any alleged harm. The Sixth Circuit observed that although studies existed regarding exposure of workers and neighbors to asbestos emissions in factories and mines, the first studies on family members of asbestos-exposed workers were not published until 1965. Accordingly, the Sixth Circuit determined that the risk to plaintiff Martin was not foreseeable. In June 2011, an Illinois appellate court dismissed a “take-home” exposure case in Estate of Holmes v. Pneumo Abex, 2011 WL 2517420 (Ill. App. Ct. 4th Dist. June 22, 2011), where the court made clear that the plaintiff, to prevail, had to show that the defendants were “aware of concrete evidence of take-home exposure as opposed to the more prevalent literature involving direct exposure.” Thus, these cases signal a willingness by some courts to more closely examine historical knowledge and scientific information when applying the “foreseeability” test to take-home claims.
 

Filed under Asbestos, christine g. rolph, csx transportation v. williams, estate of holmes v. pneumo abex, hans h. grong, latham & watkins, martin v. cincinnati gas & elec. co, scientific literature, state of the art, Take-Home Exposure, Toxic Tort Litigation Tagged with

Courts Reject “Single Fiber” Theory Of Asbestos Causation

By on November 2, 2011

A Sixth Circuit case, Moeller v. Garlock Sealing Technologies, LLC, 2011 U.S.App.Lexis 19987 (6th Cir. Sept. 28, 2011), is the most recent in a series of judicial decisions that have rejected the opinions of plaintiffs’ experts in asbestos cases who espouse the “any exposure” or “any fiber” or “single fiber” theory of causation.  Pursuant to this specious line of reasoning, asbestos disease is a cumulative dose response process. Each and every exposure to asbestos during a person’s lifetime, no matter how small or trivial – even a single fiber – substantially contributes to the disease, whether it be asbestosis, lung cancer or mesothelioma. Using this theory of causation, plaintiffs have initiated a wave of new lawsuits against defendants far removed from the production of asbestos containing products.  As defense practitioners are well aware, successfully challenging weak causation expert opinions is key to winning any toxic exposure case, whether it involves asbestos or some other substance.

In a “must read” column in the New York Law Journal, dated October 19, 2011 titled "Courts Shoot Down Asbestos Causation Theory", Michael Hoenig, whose law firm defends asbestos case litigation, describes how plaintiff experts are promoting the “any fiber” or “any exposure” theory in courtrooms across the country and how a series of notable judicial decisions have begun to reject these theories as the underlying scientific methodology is subjected to scrutiny. In a recent amicus curiae brief filed by eleven distinguished scientists in a Pennsylvania asbestos case, none of whom received funding from or testified as experts for any of the parties in the case, the scientists attacked the methodological errors of the “any exposure” expert for:  (1) failing to consider the dose level of exposure and minimum threshold of asbestos fiber levels; (2) failing to consider the physical chemical and toxicological differences between various types of asbestos; (3) failing to distinguish between general causation and specific causation (and not even establishing general causation for chrysotile asbestos); (4) for suggesting that “every exposure” and “cumulative risk” theories are generally accepted when they are not; and (5) ignoring the large body of toxicological studies demonstrating that chrysotile asbestos is not potent as a cancer-causing agent. 

The Pennsylvania Supreme Court observed in Gregg v. V-J Auto Parts Co., 943 A.2d, 216, 223 (Pa. Sup. Ct. 2007), that although it was “common for plaintiffs to submit expert affidavits attesting that any exposure to asbestos, no matter how minimal, is a substantial contributing factor in asbestos disease,” such opinions are not “not couched within accepted scientific methodology.”  The court called the “willingness on the part of some experts” to offer such opinions “one of the difficulties” courts face in the mass tort cases.

As the plaintiff bar continues to look further and further afield in its “endless search for a solvent bystander,” as one well-known plaintiff’s lawyer described the litigation, successful challenges under Daubert and Frye should only increase.  The author thanks Mr. Hoenig for his thoughtful treatment of this important topic.

From a risk management perspective, peripheral toxic tort defendants often decline to mount  Daubert challenges due to the cost and time involved and the uncertainty of the result, particularly when the plaintiff presents them with seemingly  reasonable settlement demands.  As a result, hundreds of peripheral defendants continue to be named in these cases and often pay their "penny in tribute" just to get out of the case.  Unfortunately, in many jurisdictions, judges responsible for large asbestos dockets are unwilling to give appropriate consideration to motions by "shade tree" defendants who might otherwise challenge plaintiffs’ experts’  theories of causation.  Cynically, these judges know that the cases will most likely settle out if this type of motion is given short shrift.  There is little incentive for a peripheral defendant to risk an adverse  judgment at trial merely to earn the right to bring an appeal, no matter how strong the grounds may be.  Hopefully, cases like Moeller will have a trickle down effect and motivate the trial judges responsible for the asbestos dockets to re-think their approach. 

Filed under Any Exposure, Asbestos, asbestos causation, asbestos dockets, Gregg v. V-J Auto Parts, Michael Hoenig, Moeller v. Garlock SealingTechnologies, risk management, single fiber theory of causation Tagged with

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