$______ RECOVERY - UNSAFE WORKPLACE - TWO MAINTENANCE MECHANICS DIE IN REFINERY FIRE - FAILURE TO PROPERLY TRAIN AND SUPERVISE - HOLDING COMPANY FOUND LIABLE DUE TO INTERVENTION IN MANAGEMENT OF REFINERY.

• Pages: 10-11

10 SUMMARIES WITH TRIAL ANALYSIS

Volume 25, Issue 10, October 2010

duction and frequently entails an employer who continues to so ex-

pose a worker to this danger despite a prior incident. In this case,

the plaintiff argued that while each individual safety failures might

not have risen to the level necessary to invoke liability, the culmi-

nation of the multiple failures did, in fact, render the risk of death

or serious injury substantially certain to occur.

In this regard, the plaintiff stressed that the employer’s actions in-

cluded advising the workers that the suits gave 20 seconds of pro-

tection when there was no testing or data supporting this claim,

that it assigned this job to the plaintiff despite the fact that he was

never tested as is required after his training sessions with the su-

pervisor, that the employer did not include the shut off valve when

it ordered the piping system and that the employer failed to place

a sufficient number of bath tubs in the area to enable a worker to

minimize the burns in the event of an incident occurring. Addition-

ally, although the plaintiff could not point to a similar incident in-

volving this employer, the plaintiff argued that the employer was

on notice of the hazards because of such an incident occurring at

the premises of another chemical company in Tennessee in 2000

that was well known in the industry.

Regarding damages, although the plaintiff’s scarring is very notice-

able, the disfigurement is significantly less than would be thought

to have resulted from such injuries. The plaintiff was present

throughout the trial and the plaintiff stressed that the jury was ob-

serving the result after six years and some 46 surgical interven-

tions. Additionally, the plaintiff would have made effective use of

demonstrative evidence in the form of a video depiction of one of

the 20 laser procedures that was performed under general anes-

thesia and dramatic hospital photographs of the skin graft

procedures.

$12,000,000 RECOVERY – UNSAFE WORKPLACE – TWO MAINTENANCE MECHANICS

DIE IN REFINERY FIRE – FAILURE TO PROPERLY TRAIN AND SUPERVISE – HOLDING

COMPANY FOUND LIABLE DUE TO INTERVENTION IN MANAGEMENT OF REFINERY.

Cook County, Illinois

The two male decedents, 50-year-old Forsythe

and 37-year-old Szabla, were employed as

maintenance mechanics for Clark Refining which

operated an oil refinery in Blue Island, Illinois. On

March 13, 1995 both men were killed when a fire

erupted at the refinery while they were on their

lunch break. The fire was caused by Clark

Refining operators who were performing

maintenance work that day. The operators were

not maintenance workers and were replacing a

four inch valve on a machine without ensuring

that the flammable materials in the pipe had been

depressurized. The plaintiff alleged that the

defendant parent company’s overall business

strategy was to limit costs and increase revenue.

As such, training, maintenance, supervision and

safety budgets at the refinery were severely

limited. Due to these budget restraints, Clark

Refining was using operators, who were not

trained or qualified to work on refinery

equipment, to perform maintenance on the

equipment.

The plaintiff alleged that the parent corporation exer-

cised control over the day to day operations of the

decedent’s employer to such an extent that it was lia-

ble for the fire that caused the death of the two men.

The defendant denied the allegations. It maintained

that it was merely a holding company and had no

control over the day to day operations and did not

owe a duty of care to any of the employees of Clark

Refining.

The defendant filed a motion for summary judgment

that was granted by the trial court. The plaintiffs ap-

pealed and the Illinois Appellate Court reversed the

trial court. The Appellate Court held that there was a

“direct participation” exception that was defined for

the first time and held to apply to the defendant in

this matter. The Appellate Court held that a holding

company that directly intervenes in the management

of its subsidiaries can be held liable for the injuries

suffered by the subsidiary’s employees.

The defendant appealed to the Illinois Supreme

Court. The court agreed with the Appellate Division.

As a result of the ruling by the Supreme Court, the

matter was submitted to mediation and a settlement

was reached. The settlement in the total amount of

$12,000,000 was split evenly between the two

decedents’ estates.

REFERENCE

Marguerite Forsythe as Administrator of the Estate of

Michael F. Forsythe, deceased and Elizabeth M.

Szabla, Special Administrator of the Estate of Gary

Szabla, deceased vs. Clark USA, Inc. Case no.

2007L009909; Donald O’Connell (Ret. - mediator).

Attorneys for plaintiff Forsythe: Martin Healy, Jr. and

David P. Huber of Healy Law Firm in Chicago, IL.

Attorney for plaintiff Szabla: Edward G. Willer of

Corboy & Demetrio in Chicago, IL. Attorneys for

defendant: John Berghoff, Mark Ter Molen and

Karen Prena of Mayer Brown in Chicago, IL and

Russell R. Eggert of Reed Smith LLP in Chicago, IL.

Attorney for defendant: James F. Bennett of Dowd

Bennett LLP in St. Louis, MO.

COMMENTARY

This was the first case in the State of Illinois to recognize that a

parent company can be held responsible for the torts of its subsid-

iary where it was a direct participant in the commission of the tort.

This decision came from the Illinois Supreme Court case of

Forsythe, et al. v. Clark USA, Inc. 224 Ill.2d 274 (2007). The Court

determined that where there is evidence sufficient to prove that a

parent company mandated an overall business strategy and carried

that strategy out by its own specific direction or authorization, sur-

passing the control exercised as a normal incident of ownership in

disregard for the interests of the subsidiary, as it did in this matter,

the parent company or defendant in this matter could be held

liable.

The key elements as enunciated by the Supreme Court were the

parent company’s specific direction or authorization of the manner

in which the activity is undertaken and the forseeability of harm. In

this matter, the facts were clear that the CEO of the defendant,

Clark USA and Clark Refining, was the same officer who issued di-