Emerging trends in asbestos premises liability claims: understanding current theories of liability and proposed legislation to protect your client.

• Author: Meyer, Kenneth R.

YOUR client has never manufactured asbestos-containing products and remains untouched by the devastating waves of asbestos litigation that have reduced financially stable companies to empty shells. Do not allow yourself or your client to become complacent. The turbulent waters of asbestos litigation have seeped into virtually every type of economic activity in our country. (1) Defense attorneys are striving to protect their clients from the perils attendant to the most enduring mass tort litigation recorded in the annals of American jurisprudence--a marathon that has yet to reach full stride. (2)

On September 25, 2002, the Rand Institute for Civil Justice released an Interim Report ("Rand Report") estimating that only twenty to fifty percent of the total potential asbestos-related personal injury claims were filed and that defendants and insurers faced approximately $145 to $210 billion in future asbestos litigation costs. (3) Last year, Stephen Carroll, the senior economist who authored the Rand Report, estimated that defendants had already paid $70 billion on 730,000 claims, making asbestos litigation the most expensive mass tort in American history. (4) In 2003, plaintiffs filed approximately 110,000 asbestos claims the most ever filed in one year. (5) As a growing number of traditional asbestos defendants are forced to seek bankruptcy protection from their massive litigation expenses, counsel for plaintiffs are increasingly adding nontraditional defendants to the fray. The Rand Report identified a predictable, yet alarming trend--a rapid growth in the volume of claims by workers allegedly exposed to asbestos in industries that had not been targeted in the past. (6) Indeed, the number of claims filed annually against this new class of defendants has grown so swiftly that by 2002, it was already equivalent to the number of claims filed annually against traditional defendants.

Plaintiffs' attorneys have been filing cases for years against premises owners in the ship construction and petrochemical industries where the heavy use of asbestos-containing products, especially insulation, was integral to those industries' operations. But now, owners and operators of virtually any industrial facility constructed prior to the mid-1970s are potential targets. (7) Premises liability claimants are typically former employees of outside contractors who sue the owners of the facilities where they performed their work. (8) In Texas, the representatives of deceased employees of premises owners have also asserted premises claims.

The recently targeted premises defendant is typically an industrial company that has been in business since before the mid-1970s when manufacturers began to eliminate asbestos from their insulation products. Typically, defendants never manufactured or sold asbestos-containing products, but they used or had products such as pipecovering, gaskets, refractory materials, roofing, and floor tile in their facilities. (9) To date, these defendants have included, but have not been limited to, metal refineries, paper mills, pharmaceutical plants, candy factories, textile factories, and utilities.

Texas is currently at the forefront of asbestos premises liability litigation. Between 1988 and 2000, Texas led the nation in the number of newly-filed asbestos-related lawsuits. (10) The emergence of this type of litigation in Texas is likely attributable to the following factors: (1) Juries in several Texas counties have a history of rendering high verdicts in asbestos-related cases; (2) Texas law permits a plaintiff who sues a defendant on a claim for an asbestos-related nonmalignant disease (e.g., asbestosis) to file a second action against another defendant for a subsequently diagnosed asbestos-related malignant disease (e.g., mesothelioma); (11) (3) Texas law permits lawsuits against employers (e.g., premises owners) by the survivors of a deceased employee whose death was allegedly caused by the employer's gross negligence or intentional conduct; (12) and (4) Certain Texas plaintiffs' attorneys sponsor aggressive asbestosdisease screening programs--essentially mass recruitment campaigns that target former industrial and construction workers. (13)

Theories of Liability

The theories of liability articulated by plaintiffs to support asbestos premises lawsuits vary from state to state. They also differ depending upon whether the plaintiff was an employee of an outside contractor or an employee of the premises owner.

The employee of an outside contractor is generally deemed a business "invitee" for purposes of a premises liability analysis. Business invitees who file suit typically allege that their injuries occurred due to an unreasonably dangerous condition at the premises. The standard of care imposed upon the premises owner depends upon the genesis of the unreasonably dangerous condition.

In cases where the employees of outside contractors allege injuries caused by dangerous conditions that arose outside of their work activity, (14) premises owners are typically held to a standard of ordinary care based upon general negligence principles. That standard of care generally imposes a duty upon the premises owner to inspect the premises and warn the outside contractor of the dangerous conditions of which it is or should have been aware.

In cases where the employees of outside contractors allege injuries caused by their own work activity, (15) premises owners are generally not held liable for failing to provide a safe workplace. However, there are exceptions to this general rule. The most significant exception arises when plaintiffs allege that the premises owner exercised or retained some degree of control over the manner in which the contractor performed the work, had actual knowledge of the danger or condition that caused the injury, and failed to adequately warn. (16) Under these circumstances, a premises owner generally owes a duty to the contractor's employees to exercise such control with reasonable care. (l 7)

The employee of a premises owner is generally barred from filing a lawsuit against his or her employer by the exclusive remedy provisions of most states' workers' compensation statutes. However, statutes and case law in various states provide a narrow exception to the general rule permitting the survivors of deceased employees to file lawsuits against former employers for wrongful death caused by an employer's intentional conduct. (18)

Where Are Plaintiffs Filing Premises Claims?

Because the theories of liability available to premises plaintiffs vary by state, especially with regard to lawsuits contemplated by premises owners' employees, plaintiffs' attorneys' decisions regarding venue reflect those differences. Asbestos premises litigation has found a comfortable home in a number of states, including Texas, West Virginia, California, and Louisiana where premises cases are routinely litigated. Attorneys in other parts of the country are warning that premises owners may be vulnerable to asbestos premises claims in their respective jurisdictions. (19) Asbestos premises verdicts have been reported in various states including West Virginia, Texas, Indiana, and Illinois.

Cancer and Lung Disease Verdicts

In late, 2002, during Phase I (liability) of a mass consolidated state trial in Kanawha County, West Virginia (In re: Asbestos...