No Duty to Prevent Take Home Exposure in Arizona

The Arizona Court of Appeals has held in a case of first impression that an employer has no duty of care to protect family members from asbestos taken home on an employee’s work clothes. Quiroz v. ALCOA Inc., et al., No. 1 CA–CV 15–0083 (9/20/2016).

Background Facts

laundryDr. Ernest V. Quiroz was allegedly exposed during his childhood to asbestos brought home on his father’s work clothes from the Reynolds Metals extrusion plant in Phoenix. Dr. Quiroz left the family home at age 14 to attend seminary high
school in Los Angeles. He gave up plans for the priesthood after meeting the girl he would marry, and instead attended college in Los Angeles and medical school in Michigan before entering practice in Grand Rapids in the 1980s. Dr. Quiroz was diagnosed with mesothelioma in 2013, and died the following year at age 62. Dr. Quiroz testified in his deposition that he never entered the Reynolds Metals extrusion plant, and acknowledged that his only asbestos exposure related to Reynolds Metals would have been from his father’s work clothes. The trial court granted Reynolds Metals’ summary judgment motion based on the lack of duty under Arizona law to an employee’s family members. Plaintiffs timely appealed.

The Court’s Analysis

Dr. Quiroz was a very sympathetic claimant – potential priest, respected doctor, lay leader of his church, devoted husband and father with five children and six grandchildren – and absolutely no occupational or para-occupational exposure. His family and counsel, Waters Kraus & Paul, sought to use this case to extend liability for take-home exposure beyond the limited number of states that have recognized the claim. Acknowledging that there was no “special relationship” between Reynolds Metals and Dr. Quiroz, plaintiffs argued that premises owners such as Reynolds Metals had a duty to protect persons from hazards which foreseeably left their premises based on three main grounds: (1) Restatement (Third) of Torts §7 (imposing a general duty of reasonable care on all persons), (2) Restatement (Third) of Torts §54 (imposing a duty of care on possessors of land “for artificial conditions or conduct on the land that poses a risk of physical harm to persons or property not on the land”), and (3) “public policy.”

The Court of Appeals rejected each of plaintiffs’ arguments and affirmed the trial court’s grant of summary judgment. Consistent with the common law around the country, the existence of a duty of care is a pre-requisite for a negligence claim in Arizona. However, the Arizona Supreme Court has steadfastly rejected any consideration of foreseeability in determining the existence of a duty of care. The Quiroz court noted that Arizona had previously declined to adopt any general duty of care such as that in Restatement (Third) of Torts §§7 and 54, and it declined to do so here as well, explaining that doing so would:

substantially change Arizona’s longstanding conceptual approach to negligence law by effectively eliminating duty as one of the required elements of a negligence action. . . . The Third Restatement approach significantly lessens the role of the court as a legal arbiter of whether society should recognize the existence of a duty in particular categories of cases; for this reason, adopting the Third Restatement would increase the expense of litigation.

The court further declined plaintiffs’ invitation to either follow Restatement (Second) of Torts § 371 (imposing on a possessor of land liability for physical harm to others outside of the land caused by an activity thereon which he realizes or should realize will involve an unreasonable risk of physical harm) or to recognize a duty on the part of Reynolds Metals as a landowner to Dr. Quiroz, because those theories do – but Arizona does not – consider foreseeability in determining whether a duty of care exists.

Quiroz also rejected plaintiffs’ argument that public policy supported imposing a duty of care, in part because plaintiffs offered no statutory or common law basis for the public policy beyond the Restatement sections discussed (and rejected) above. The court also rebuffed Plaintiff’s argument that “any property owner could reasonably expect that a lack of due care in handling toxins on its premises, resulting in off-premises injury, could lead to liability,” which the court saw this as putting the cart before the horse: “A finding of a duty of care must come before considering whether Reynolds exercised due care.” The court further questioned where the dividing line would be if claims by person off-premises were permitted – would they be limited to family members with regular exposure, or could claims be brought by persons with more tangential alleged exposure, and would such an expansion result in unlimited or insurer-like liability? As Quiroz explained, other states around the country which, like Arizona, do not employ foreseeability in their duty analysis have all rejected claims based on take-home exposure for these and other reasons. Because there was no basis under Arizona law for any duty of care on the part of Reynolds Metals to Dr. Quiroz, no negligence claim could be stated and summary judgment was correctly granted.

Although the Arizona Supreme Court has repeatedly addressed the lack of any role of foreseeability in determining the existence of a duty under Arizona law, we anticipate that Plaintiffs will seek review of the Court of Appeals decision here.

Oregon Court of Appeals Decision Upends Asbestos Litigation for Equipment Manufacturers, and Perhaps Others

The Oregon Court of Appeals has held in a case of first impression that the “bare metal” defense is not applicable under Oregon law. McKenzie v. A.W. Chesterton Co., 277 Or App 728 (2016). Under this defense, which courts in many other states have applied, a manufacturer whose product does not contain asbestos (i.e., is “bare metal”) is not liable for harms caused by asbestos-containing replacement parts supplied by others. By bucking the national trend, it is likely that the ruling will increase the number of asbestos cases filed in Oregon. The decision is based on Oregon statute, which may limit its applicability to Oregon, but it is also based on the Restatement, which may make it influential elsewhere as well.

Background

5-19Paul McKenzie served on WWII-era aircraft carriers as a fireman and boilerman in the course of a 20-year naval career that ended in 1972. He changed packing, internal gaskets, and external insulation in and around pumps manufactured and sold to the U.S. Navy by defendant Warren Pumps when the carriers were built. Warren had shipped original asbestos-containing gaskets, packing, and insulation with some pumps as “a complete package,” but these had all been replaced by the time Mr. McKenzie served on these vessels. The trial court granted Warren’s summary judgment motion based on Plaintiff’s failure to offer evidence that Warren had manufactured or supplied to the Navy the replacement products to which Plaintiff claims her husband had been exposed.

The Court’s Analysis

The Oregon Court of Appeals reversed based on the Oregon strict liability statute, ORS 30.920, and in particular two provisions of that statute: (1) that strict liability applies if “[t]he product is expected to and does reach the user or consumer without substantial change in the condition in which it is sold or leased[;]” and (2) that the statute “shall be construed in accordance” with Comments a through m of the Restatement (Second) of Torts, sec. 402A (1965). Plaintiff argued that Warren reasonably knew that the replacement products would contain asbestos, because that is what the Navy required, and that therefore the pumps were not substantially changed between their delivery to the Navy and Mr. McKenzie’s service decades later. The court rejected Warren’s argument that the relevant “unreasonably dangerous products” for purposes of ORS 30.920 were the asbestos-containing replacement products of others to which Mr. McKenzie had actually been exposed, and held that a jury could conclude that Warren should have reasonably known that the pumps were expected to and did reach users like Mr. McKenzie without substantial change in the condition in which they were sold even though the replacement asbestos-containing gaskets, packing, and external insulation that Mr. McKenzie encountered were manufactured and supplied by others. The court relied in part on Restatement comment (d), which recognized the expected replacement of component parts through wear and tear.

McKenzie expressly declined to follow decisions from other states, including the supreme courts of neighboring Washington State (Simonetta v. Viad Corp., 165 Wash.2d 341, 197 P.3d 127 (2008), and Braaten v. Saberhagen Holdings, 165 Wash.2d 373, 198 P.3d 493 (2008)) and California (O’Neil v. Crane Co., 53 Cal.4th 335, 266 P.3d 987 (2012)), which applied the “bare metal” defense to exonerate equipment defendants from liability. McKenzie concluded that Oregon precedent was inconsistent with the “bare metal” defense, and that the opinions from other states “appear to derive the bare-metal defense either from a limitation on a manufacturer’s or seller’s duty to warn that is contrary to the comments in section 402A of the Restatement or else based upon the jurisdiction’s own common law, developed without regard to the comments to section 402A which may be consistent with their respective common law but were not with Oregon statutes.”

The Court of Appeals similarly reversed Warren’s summary judgment on Plaintiff’s negligence claim. As with the strict liability claim, the court rejected Warren’s argument that it was the asbestos dust from replacement parts which had allegedly harmed decedent – not any asbestos from products it had originally supplied with the pumps – and that any failure to warn about asbestos-containing products originally supplied with its pump was therefore not the “but for” cause of Mr. McKenzie’s asbestos-related condition. McKenzie ruled that negligence in Oregon is based on foreseeability, and noted that Warren failed to establish that its failure to warn about asbestos in replacement parts did not play a part in Mr. McKenzie’s injury. Because the Navy required the use of asbestos-containing gaskets, packing, and external insulation in or on its pumps, a jury could find it to have been foreseeable that replacement component parts would contain asbestos, thereby triggering a duty to warn.

Likely Effects of This Opinion

There is clearly the potential under McKenzie for more equipment claims in Oregon that might otherwise be brought elsewhere. For example, craftsmen working in southern Washington State often also work on jobs in northern Oregon. McKenzie also makes summary judgment less likely (perhaps even unlikely) in cases with no product identification issues – for example, once a plaintiff shows evidence of asbestos exposure while working with a defendant’s product, it now seems to make no difference whether the asbestos was in the defendant’s product or a product manufactured or supplied by someone else.

That said, the scope of the decision may still be limited. A primary focus of the opinion was the foreseeability based on Navy regulations that replacement gaskets, packing, and external insulation would also contain asbestos. Such foreseeability may not be as clear in private industry, without such government regulations or MilSpecs. Further, Oregon currently has a cap on non-economic damages of $500,000 in wrongful death cases, which has historically limited the number of cases generally brought in Oregon to those with no alternative jurisdiction. The Legislature has considered increasing that limit to $1.5 million, which would make the cap less of a hindrance, but has taken no such action to date.

N.B: Although Gordon & Rees represents Warren Pumps as local counsel in certain jurisdictions, this post is the opinion of the author and is not intended to constitute or represent the opinions or positions of Warren Pumps with respect to this matter.

Since Mesothelioma Uncertain to Occur from Asbestos Exposure, Washington Court of Appeals Affirms Summary Judgment for Plaintiff’s Former Employer

Last year’s decision of the Washington Supreme Court in Walston v. Boeing, 181 Wn.2d 391, 334 P.3d 519 (2014smelting), affirmed the narrow scope of the state’s statutory exception from worker’s compensation pre-emption – a plaintiff must prove an employer’s deliberate intention to cause his injury to avoid pre-emption and file a civil lawsuit for tort damages in excess of worker’s compensation benefits. In Kalahar v. Alcoa, Appeal No. 72635-8-1 (August 24, 2015) (unpublished), the plaintiff tried an end-run around Walston which, if adopted, would have rendered pre-emption illusory and opened employers up to civil liability in myriad circumstances. Instead, the Court of Appeals saw through the attempt to circumvent Walston and reaffirmed that the deliberate injury exception to workers compensation immunity did not apply as a matter of law because – citing the plaintiff’s own medical experts – there was no evidence that the employer knew asbestos exposure was certain to cause compensable injury to the plaintiff.

Plaintiff John Kalahar worked at the defendant’s aluminum smelter plant in Wenatchee, Washington in the 1960s and early 1970s. Mr. Kalahar and his wife sued his former employer in 2014 after he was diagnosed with mesothelioma, a form of lung cancer generally associated with asbestos exposure. Under the Washington Industrial Insurance Act, employees injured in the course and scope of their employment are generally limited to the recovery of workers compensation benefits without proof of fault, while employers receive immunity from civil suits by workers. However, plaintiffs argued here for application of the statute’s narrow exception allowing an employee to sue an employer in tort for a work-related injury which results “from the deliberate intention of his or her employer to produce such injury.” RCW 51.24.020. The trial court granted the defendant employer’s motion for summary judgment based on its lack of actual knowledge that (1) the plaintiff was certain to develop mesothelioma and (2) the company willfully disregarded such knowledge.

Applying the Washington Supreme Court’s recent decision in Walston, the Court of Appeals upheld summary judgment for the former employer. In Walston, the Supreme Court held an employer’s knowledge that asbestos exposure to its employees may cause an asbestos-related disease does not establish a “deliberate” injury because asbestos exposure is not certain to cause mesothelioma and thus the employer cannot have actual knowledge that compensable injury was certain to occur. Walston rejected as insufficient the testimony offered by plaintiff’s expert Dr. Arnold Brody that asbestos exposure would cause changes at the cellular level, because the claimed compensable injury was mesothelioma, not cellular changes. The Supreme Court also relied on testimony by plaintiff’s expert Dr. Andrew Churg admitting that asbestos exposure is not certain to cause mesothelioma or any other disease. The Kalahars used the same experts (Dr. Brody and Dr. Churg) as the plaintiffs had in Walston and could not demonstrate the certainty that Mr. Kalahar would actually develop mesothelioma more than forty years after he left the defendant’s employment.

The Court of Appeals in Kalahar rejected the plaintiffs’ attempt to distinguish Walston. The Kalahars attempted to argue that – unlike in the Walston case – Mr. Kalahar had shown immediate symptoms from asbestos exposure demonstrated by coughing, sneezing, and skin irritation. But the Court of Appeals held that Walston reached its holding because asbestos exposure is not certain to cause disease regardless of whether contemporaneous physical symptoms existed:

The Kalahars attempt to distinguish Walston based on their evidence of Kalahar’s contemporaneous physical symptoms claiming that none existed in Walston. But, the Walston court ultimately reached its conclusion by reasoning that asbestos exposure is not certain to cause mesothelioma or any other disease – not because Walston failed to provide evidence of physical injury – contemporaneous or delayed. 181 Wn.2d at 397. (“[Asbestos exposure] does cause a risk of disease, but as we have previously held, that is insufficient to meet the [applicable] standard.”). Like the expert in Walston, the Kalahars’ expert admitted that asbestos exposure, at any level, is never certain to cause mesothelioma or any other disease. We are bound by the Supreme Court’s decision in Walston. Therefore, we conclude that the Kalahars have not raised a genuine issue of material fact as to whether Alcoa had actual knowledge that the injury—mesothelioma – was certain to occur.

The Court of Appeals further rejected the plaintiff’s argument that Walston effectively “removes occupational diseases from the intentional injury exception” by noting that prior Supreme Court precedent have required that an employer knew with certainty that the injury would occur and that “the legislature has not taken issue” with those cases.

Seattle Partners Mark Tuvim and Kevin Craig handled the appeal, with Tuvim arguing the case before the Court of Appeals. The Kalahars have thirty days to file an expected petition for review to the Washington Supreme Court.

Washington Court Clarifies When Product Sellers’ General Immunity from Product Liability Applies

The Washington Court of Appeals recently published a product liability opinion that clarifies how a court should decide whether a product-seller defendant is subject to Washington’s common law or the Washington Product Liability Act (WPLA).  Which law applies is significant for product sellers because they are subject to strict liability under Washington’s common law, but are generally immune from liability under the WPLA absent limited exceptions.  In Fagg v. Bartells Asbestos Settlement Trust (Dec. 8, 2014), the court held that in cases involving a plaintiff’s exposure to injury-causing products both before and after the WPLA’s effective date of July 26, 1981, a defendant-specific exposure analysis is proper to determine which law applies to a particular defendant.  The court concluded that unless substantially all of the plaintiff’s exposure to a particular defendant’s product occurred before July 26, 1981, the WPLA, and its general immunization for product-seller defendants, applies.

In Fagg, the plaintiff alleged injurious-exposure to various asbestos-containing products manufactured and sold by separate defendants from the 1950s to the 1990s.  The plaintiff also claimed he was exposed to asbestos while enlisted in the Navy in the 1960s, and from living and vacationing near the Libby, Montana superfund site from the early 1980s to 2007.  The Court of Appeals considered how to determine whether WPLA applies to a plaintiff alleging prolonged exposure to injury-causing products – should a court aggregate a plaintiff’s exposure to all injury-causing products regardless of source, or should the court evaluate a plaintiff’s exposure on a defendant-specific basis.  Prior to the Fagg opinion, Washington law was undecided on this issue.

The Fagg court held that a defendant-specific exposure analysis is the proper measure to determine if the WPLA applies to a plaintiff’s claim.  To determine if the WPLA applies to a plaintiff’s claims against a particular defendant, a court must look at the plaintiff’s allegations of injurious-exposure to only that defendant’s product.

Underlying the Fagg court’s holding was the Washington Supreme Court decisions in Simonetta v. Viad Corp., Braaten v. Saberhagen Holdings, and Macias v. Saberhagen Holdings, Inc., which concluded that injuries from products outside a defendant’s “chain of distribution” are not actionable.  Accordingly, the Fagg court held that in determining what law applies to a plaintiff’s claim against a particular defendant – common law or the WPLA – a court must examine the plaintiff’s alleged injurious-exposure to only that defendant’s product.

In reaching its holding, the Fagg court affirmed the calculus used to decide if the WPLA applies to claims against a particular defendant:  “the WPLA applies unless ‘substantially all’ of the exposure occurred before” the WPLA’s effective date, July 26, 1981.  Thus, to bring a common law claim, an asbestos-plaintiff must show that substantially all of his injury-causing exposure to that defendant’s product occurred before 1981.

The Fagg court’s holding is significant for product sellers because of the different liability standards under the common law and the WPLA for product sellers.  If the Fagg court had concluded that an aggregate-exposure analysis should be used to determine whether the WPLA applied, this could impose the common law (and thus strict liability) on a product seller if substantially all of a plaintiff’s aggregate asbestos exposure occurred before 1981, even though the plaintiff’s exposure to the particular seller’s product occurred only after 1981.  This would thwart the Legislature’s intent when it enacted the WPLA to insulate product sellers from liability.  Instead, the Fagg court’s holding ensures that a product seller is held to the proper liability standard – common law or WPLA – based upon when a plaintiff was allegedly exposed to the specific seller’s product.

The Fagg court also discussed the meaning of “substantially all.”  The court noted with approval cases and Washington law that define substantially all as “‘nearly all,’” all except “‘a negligible minority’ or when a ‘practically negligible’ amount remains,” and “‘essentially all.’”  The Fagg court also cited positively cases which have quantified “substantially all” to mean “85 percent or more.”  Although the court declined to adopt a definition of “substantially all,” practitioners, and particularly product-seller defendants, should be able to use the Fagg court’s language and cited cases to better argue that the protections afforded by the WPLA apply to a given case.

Washington State Rejects Challenge to Workers’ Comp Pre-Emption of Asbestos Lawsuits Brought By Employees

Washington State’s Industrial Insurance Act (IIA), Title 51 RCW, like the workers’ compensation system in other states, creates a no-fault system under which employees are efficiently compensated for workplace injuries and employers are generally immune from civil suits arising from such injuries.  The statute contains a narrow exception that allows an employee to sue an employer for a work-related injury that “results . . . from the deliberate intention of his or her employer to produce such injury.”  RCW 51.24.020.  Last month, in Walston v. Boeing Co., the Washington Supreme Court ruled that this exception does not apply to employees’ claims of asbestos exposure at work, and that such claims are barred by workers’ comp exclusivity.

For many years, the “deliberate intention” exception was effectively limited to physical assaults.  In Birklid v. Boeing Co., 127 Wn.2d 853, 904 P.2d 278 (1995),the Washington Supreme Court expanded the exception to cover the immediate and observable injuries from use of allegedly toxic substances in the workplace.  Birklid held that the “phrase ‘deliberate intention’ . . . means the employer [1] had actual knowledge that an injury was certain to occur and [2] willfully disregarded that knowledge.”  The exception is narrowly construed to preserve the “legislative policy mandating employer immunity.”  Nevertheless, because employer Boeing continued to use a new resin that caused immediate and observable injuries in its employees, the Supreme Court held that the affected employees could proceed in tort against Boeing.

Birklid expressly considered and rejected a test used in some other states under which injury was only “substantially certain” to occur – it concluded that certainty of injury was required in Washington State.  Birklid also rejected the “injury to somebody” approach – i.e., that the employer knew that someone (not necessarily the specific claimant) would be injured due to the employer’s intentional conduct.  Subsequent opinions have affirmed the certainty of injury necessary to avoid pre-emption.  See, e.g., Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 28-29, 109 P.3d 805 (2005) (school could not have “actual knowledge” that injuries to teachers assaulted by disabled student with history of violent behavior were certain as a matter of law, because the student’s behavior was unpredictable and school had taken steps to reduce the risk); Shellenbarger v. Longview Fibre Co., 125 Wn. App. 41, 103 P.3d 807 (2004) (mere exposure to asbestos does not create “certainty” that an employee will develop an asbestos-related disease).  Thus, risk of injury is not enough for an employee to avoid workers’ comp pre-emption and proceed in tort; rather, “the Birklid test can be met in only very limited circumstances where continued injury is not only substantially certain, but certain to occur.”  Vallandigham, 154 Wn.2d at 28, 32 (emphasis in original).

In Walston v. Boeing Co., employer Boeing allegedly compelled employees in 1985 to work underneath “moon-suited” remediation contractors removing asbestos-containing pipe insulation in the machine shop.  Boeing supervisors allegedly rejected the employees’ requests for protective equipment and forced them to return to work.  Gary Walston was diagnosed with mesothelioma 25 years later in 2010 and sued in tort, claiming intentional injury based on Boeing’s knowledge by 1985 that even if his mesothelioma was not certain to develop by his compelled exposure, underlying cellular lung damage was certain to occur simply by exposure to asbestos, and that it was substantially certain, if not certain, that someone would develop mesothelioma or some other asbestos-related disease as a result of asbestos exposure.

The Court of Appeal reversed the trial court’s denial of Boeing’s summary judgment motion, and the Supreme Court agreed by a 5-4 vote.  According to the majority, cellular lung injury would not constitute a compensable injury under the IIA.  Even the plaintiff’s experts conceded that Walston’s eventual development of mesothelioma (or any compensable asbestos-related condition) had not been certain to occur simply by his exposure to asbestos; under Birklid, the risk of mesothelioma is not “certainty of injury” to Walston himself, as necessary to avoid workers’ comp pre-emption.  Thus, even if Boeing had actual knowledge that exposure to asbestos would cause asymptomatic cellular-level injury, the controlling Birklid “intentional disregard” standard would not be met.

Walston’s affirmance of the Birklid “intentional disregard” standard – particularly in a case involving a sophisticated employer in the mid-1980s more than a decade after the implementation of OSHA and public awareness of the risks from asbestos exposure – should continue to protect employers from tort claims arising from their employees’ exposure not only to asbestos but other toxins and risks that produce injuries with long latency periods.  For example, employees of landscapers who develop skin cancer and truck drivers who develop emphysema from vehicle fumes should continue to be limited to recovery under the IIA rather than in court.

But this narrow standard remains under attack.  Donna Walston, the representative of Gary Walston’s estate, has filed a motion for reconsideration of the Supreme Court’s opinion looking to garner one more vote there, and at least one legislative leader (not coincidentally, a former asbestos plaintiffs’ lawyer and partner of the plaintiff’s counsel in Walston) plans to propose a change to the IIA that would create tort liability for employers from exposure to asbestos and other toxins that lead to latent conditions that are not immediately observable.  We will continue to keep you informed of developments in this area.