Illinois Federal Court Holds Asbestos Product Manufacturer Owes no “Take Home” Duty of Care

The Northern District of Illinois recently ruled that under Illinois law, an asbestos product manufacturer owed no duty of care to household members in a “take home” or “secondary exposure” asbestos case. Neumann v. Borg-Warner Morse Tec LLC, No. 15-10507, N.D. Ill., 2016 U.S. Dist. LEXIS 31280.

Plaintiff Doris Jane Neumann alleges that she contracted malignant mesothelioma through exposure to asbestos-containing products as a result of laundering the clothes of her son, who used asbestos-containing friction paper during his work as a mechanic. Originally filed in state court, the case was removed to federal court on diversity grounds. Subsequently, defendant MW Custom Papers moved for dismissal under Federal Rule of Civil Procedure 12(b)(6), alleging that it could not be found liable for negligence because it did not owe Doris Jane Neumann a duty of care under Illinois law.

In ruling on the motion, the federal district court noted with frustration that there was a split of opinion among Illinois appellate courts on the issue. The Illinois Supreme Court had the opportunity to decide the issue in Simpkins v. CSX Transp., Inc., 2012 Ill. LEXIS 330, 965 N.E.2d 1092 (2012), but declined to issue a definitive ruling. Thus, the Illinois Supreme Court never actually answered the question as to whether a “take home” duty of care existed in Illinois asbestos cases. As a result, the holding in Neumann takes on a heightened significance.

Neumann analyzed the following four factors set forth in Simpkins: (1) the reasonable foreseeability of the injury; (2) the likelihood of the injury; (3) the magnitude of the burden of guarding against the injury; and (4) the consequences of placing that burden upon the defendant. At the outset, the court determined that the foreseeability factor was sufficiently met under the liberal notice pleading standard used in federal court. Moreover, MW Custom Papers did not challenge the “likelihood of injury” factor. Importantly, the court emphasized that plaintiff completely failed to address the third and fourth policy-driven factors in her briefs and exclusively focused her arguments on the foreseeability factor, which “is not the only factor to be considered.” Although the court found “no precedents or other authorities that convince us how the Illinois Supreme Court would rule on this novel duty question,” it found two Illinois appellate decisions that addressed this issue, but came to opposite results. Lastly, the court looked toward outside jurisdictions for direction, where it once again found divided opinions throughout the country. “While the majority of courts have declined to extend a duty in this situation, that fact alone is not persuasive, particularly because duty and negligence principles vary among states.”

Neumann gleaned some guidance from the Seventh Circuit, which instructed that “[w]hen we are faced with two opposing and equally plausible interpretations of state law, we generally choose the narrower interpretation which restricts liability, rather than the more expansive interpretation which creates substantially more liability.” Applying this reasoning, the court adopted the more narrow view, finding that MW Custom Papers did not owe a duty to Neumann in light of the magnitude of the burden of protecting her and the potential ramifications of imposing that heavy a burden on MW Custom Papers.

Barred: Illinois Supreme Court Holds That Plaintiffs May Not File Common Law Claims Against Employers, Even After Statutory Periods Have Expired

11-18On November 4, 2015, the Supreme Court of Illinois issued an opinion in Folta v. Ferro Engineering, 2015 IL 118070, which provided much needed clarification to the application of the “exclusive remedy” provisions of the Illinois Workers’ Compensation Act and Occupational Diseases Act in the context of long-latency asbestos-related diseases. Before Folta, several courts have ruled that employees were allowed to file civil lawsuits against their employer, if the 25-year statute of repose for workers’ compensation claims had expired. Folta went the opposite way, reinforcing the longstanding rule that an employee’s exclusive remedy for damages sustained in the course of employment is through the Illinois Workers’ Compensation Commission, regardless of whether any statutory time periods for workers’ compensation claims have expired.

Decedent James Folta worked for Ferro Engineering from 1966-1970 as a direct employee. Forty-one years later, in May 2011, Folta was diagnosed with mesothelioma. He thereafter filed a civil lawsuit in Cook County, Illinois against various defendants, including his former employer, Ferro Engineering, to recover damages. Defendant Ferro Engineering filed a motion to dismiss, alleging that Folta’s claims were barred by the exclusivity provision of the Illinois Workers’ Compensation Act (820 ILCS 305/5) and the Occupational Diseases Act (820 ILCS 310/5). In response, Folta argued that his symptoms did not manifest until 40 years after his last exposure to asbestos from Ferro Engineering and, accordingly, he was unable to file a workers’ compensation claim due to expiration of the 25-year statute of repose included in the Acts. Folta further argued that since the statute of repose had expired, his claims were “non-compensable,” which is one of four exceptions to the exclusivity mandate contained in the Acts.

The trial court granted Ferro Engineering’s motion to dismiss, finding that the action was indeed barred by the exclusivity provision of the Acts. Specifically, the trial court found that expiration of the applicable statute of repose period did not render the cause of action “non-compensable” under the Acts and that his exclusive remedy was still with the Illinois Workers’ Compensation Commission. Folta appealed the lower court’s decision and the appellate court reversed and remanded. The appellate court found that Folta’s injury was not compensable under the Act, because his disease did not manifest until after the statute of repose expired and he had no opportunity to seek compensation under the Acts. Therefore, the court reasoned, that the workers’ compensation exclusivity provision did not bar his suit against his former employer.

The Illinois Supreme Court reversed, ruling that the exclusivity provisions of the Illinois Workers’ Compensation Act and the Illinois Occupational Diseases Act bar an employee’s cause of action against an employer to recover damages for a disease resulting from asbestos exposure which arose out of and in the course of employment even though no compensation is available under those Acts due to statutory time limits on the employer’s liability.

Both the Workers’ Compensation Act and the Occupational Diseases Act provide that compensation provided therein for workplace injuries represent the full and complete remedy to an employee and no other remedy under common law or statutory law is available. 820 ILCS 310/5(a) and 820 ILCS 310/11. As with every rule, however, there are exceptions. Illinois courts have carved out four scenarios in which the exclusivity provisions of the Acts do not apply: (1) the injury was not accidental; (2) the injury did not arise from the employee’s employment; (3) the injury was not received during the course of employment; and (4) the injury is not compensable under the Acts. For the purposes of this analysis, the only relevant exception is the “noncompensability” exception, which is further outlined below.

The Folta decision reviewed a plethora of cases that specifically addressed the compensability of certain injuries under the Acts. In particular, the decision honed in on three cases wherein the plaintiffs sought to recover for injuries such as severe emotional shock and emotional distress that were incurred during employment. Pathfinder Co. v. Industrial Comm’n, 62 Ill.2d 556 (1976); Collier v. Wagner Castings Co., 81 Ill. 2d 229, 237 (1980); Meerbrey v. Marshall Field & Co., 139 Ill.2d 455 (1990). Folta ruled that these three cases stood for the proposition that whether an injury is compensable is related to whether the type of injury categorically fits within the purview of the Act. Contrarily, they do not stand for the proposition that whether an injury is compensable is defined by an ability to actually recover benefits for a particular injury sustained by an employee. Asbestos-related injuries, such as asbestosis or mesothelioma, fall within the purview of the Acts and are specifically addressed by each Act, and are, therefore, compensable.

Folta then ruled that such claims remain compensable despite the expiration of a limitations period on the employer’s liability. The court relied heavily upon Moushon v. National Garages, Inc., 9 Ill. 2d 407 (1956) and Duley v. Caterpillar Tractor Co., 44 Ill. 2d. 15 (1969) in analyzing the efficacy of the exclusivity provisions of the Acts in cases where little or no compensation was received. In Moushon, a workplace accident caused the employee to become permanently impotent. The employer provided medical, surgical, and hospital services for the underlying injury; however, the plaintiff thereafter filed a civil action seeking damages for his impotence that resulted from the workplace accident. Despite the fact that no compensation was available specifically for the injury of impotence, the court held that his claims were barred by the exclusivity provision of the Acts. Mouson, 9 Ill. 2d at 418. Likewise, in Duley, the spouse of a deceased employee who was fatally injured in a workplace accident brought a civil lawsuit against the employer for wrongful death. Although the spouse received nominal reimbursement for funeral expenses, the court found that plaintiff’s wrongful death claims were barred by the exclusivity provisions of the Acts because he was not a dependent of his deceased wife. Duley, 44 Ill. 2d. at 18.

The Illinois Supreme Court agreed that Folta’s injuries are indeed barred by the 25-year statute of repose contained in each of the Acts. This did not, however, mean that exclusivity disappeared over time. “To construe the scope of the exclusive remedy provision to allow for a common-law action under these circumstances would mean that the statute of repose would cease to serve its intended function, to extinguish the employer’s liability for a work-related injury at some definite time.”

The Folta decision is significant for Illinois based employer-defendants in cases involving diseases with long latency periods, such as mesothelioma. It is also significant to insurers. The Illinois Supreme Court has made it clear: the Workers’ Compensation Act and Occupational Diseases Act are the full relief afforded to employees for injuries sustained in the course of employment, to the exclusion of any civil litigation, regardless of an expired statutory time period or whether an employee actually recovers compensation.

Will the Exception Swallow the Rule? The Northern District of Illinois’ Take on the Bare Metal Defense

The bare metal defense has become a “go-to” defense for defendants involved in national asbestos litigation.  Predominantly asserted by manufacturers of industrial equipment, the defense provides that those defendants that manufactured products composed only of metal have no duty to warn of asbestos-containing components later installed by others post-sale.  It also rejects liability for “affixed” external materials – typically thermal insulation and flange gaskets manufactured by others – placed on the metal products by someone other than the defendant.

While the defense has been the subject of numerous cases, its application has not been uniform.  However, the decisions fall into three main categories:

(1) a defense-friendly category, holding that manufacturers have no duty to warn of asbestos-containing replacement parts supplied by a third party;

(2) a plaintiff-friendly category, holding that manufacturers have a duty to warn whenever it is foreseeable that asbestos-containing material may be used with their products; and

(3)  a “middle ground,” holding that manufacturers generally have no such duty, but do have a duty to warn when the use of asbestos-containing materials (a) was specified by a defendant, (b) was essential to the proper functioning of the defendant’s products, or (c)         was for “some reason so inevitable that, by supplying the product, the defendant was responsible for introducing asbestos into the environment at issue.”

Recently, the Northern District of Illinois expressly adopted the middle ground. In Quirin v. Lorillard Tobacco Co., 2014 U.S. Dist. LEXIS 18744 (N.D. Ill. Feb. 14, 2014), the court ultimately denied Crane Co.’s summary judgment motion under an exception to the middle-ground approach, namely that the plaintiff was able to proffer evidence that Crane Co. specified the asbestos-containing replacement components or that the asbestos-containing components were necessary for the metal products to function.

Quirin arose out of the plaintiff’s alleged exposure to asbestos-containing Crane Co. valves during the plaintiff’s service in the U.S. Navy.  Although the valves themselves were composed of “bare metal,” they included an internal bonnet gasket and stem packing at the time of shipment that may have contained asbestos. In addition, Crane Co. sold asbestos-containing replacement gaskets, gasket material and packing.  Crane Co. moved for summary judgment, arguing that its valves were bare metal and, accordingly, Crane Co. had no duty to warn of asbestos-containing components manufactured by others and ultimately applied by the Navy, the end user of the product.

Quirin looked to other jurisdictions for guidance, expressly citing the California Supreme Court’s ruling in O’Neil v. Crane Co., 53 Cal. 4th 335 (2012), noting that “manufacturers are not required to investigate and warn of the potential risks of any other products that might be used with a Crane Co. product.  The duty attaches only when the manufacturer incorporated the asbestos-containing material into its product, meaning that asbestos would inevitably be introduced into the stream of commerce along with the product.”  The Quirin court, however, found that the O’Neil court “qualified its conclusion” and “left room for an exception to the rule” because the plaintiffs in O’Neil did not prove the equipment at issue needed asbestos to function.

Quirin relied on evidence that Crane Co. valves were used for high heat applications, that at least some of its valves needed asbestos-containing components to function properly, and that Crane Co. provided specifications for such use.  Taken together, the court concluded that a jury could find that Crane Co. had a legal duty to warn about the hazards of asbestos exposure from working with its valves.

On one hand, the fact that the Quirin court cited the O’Neil case with approval is encouraging for equipment defendants in Illinois.  However, the adoption of the middle-ground approach by the Northern District of Illinois is troubling. Practically speaking, there is minimal difference between the middle-ground approach and the plaintiff-oriented foreseeability approach, since the plaintiffs will merely proffer expert testimony to prove the “bare metal” product at issue was used for hot applications and “needed asbestos” to function properly.  As presently interpreted by the Northern District, then, defendants need to be particularly aware of the bare metal defense’s limitations; it does not provide a complete bar for bare metal defendants, even those that never manufactured asbestos-containing products or provided asbestos-containing components with their products.

Fortunately, however, development of the bare metal defense is still in its infancy in Illinois.  Indeed, there has yet to be a definitive ruling rendered by an Illinois appellate court on the issue.  In fact, just before the ruling in Quirin, the Asbestos MDL remanded an asbestos lawsuit to the Southern District of Illinois to determine whether the state even recognized the bare metal defense.  For now, equipment defendants in federal court in Illinois are well advised to argue the policy and rationale of O’Neil and push at the state and federal level for a bright-line rule of nonliability for other parties’ products.