U.S. Supreme Court Changes Jurisdictional Landscape in Holding that Consent-by-Registration Laws Suffice to Allow General Personal Jurisdiction over Corporate Defendants

U.S. Supreme Court Rejects Challenge to Pennsylvania’s Corporate Consent-by-Registration Statute, Allowing Suits Against Foreign Companies Whether Arising from Acts in Pennsylvania or Elsewhere

The U.S. Supreme Court on June 27 in Mallory v. Norfolk Southern Railway Co., Case No. 21-1168 (2023) affirmed a statute that grants state courts general personal jurisdiction over out-of-state companies registered to do business in the state, even when an alleged injury occurred elsewhere, by virtue of registration alone.  The Court rejected an out-of-state railway company’s Fourteenth Amendment Due Process challenge to Pennsylvania’s consent-by-registration statute.  For a company registered as a foreign corporation in Pennsylvania, this is now the equivalent of being headquartered there, and that company may be hauled into court in Pennsylvania for any suit, whether the suit arises from acts in Pennsylvania or anywhere else in the country. 

Expected Impact on Corporate Clients

We expect there to be an immediate impact on corporate clients with presences in consent-by-registration states, with filings based solely on the fact that the corporation is registered to do business in the state.  Presently, Pennsylvania and Georgia have consent-by-registration laws for out-of-state corporations that have been upheld.  We will be watching to see whether other state legislatures amend their corporate registration statutes to impose consent to jurisdiction by way of registration. 

1917 Precedent Upheld as Basis for Opinion

The Court in Mallory held that its century-old decision in Pennsylvania Fire Insurance v. Gold Issue Mining, 243 U.S. 93 (1917) – which allowed a Pennsylvania insurer to be sued in Missouri by an out-of-state plaintiff on an out-of-state contract – remains controlling precedent.  The Court reasoned that Pennsylvania’s law, like the Missouri law upheld in Pennsylvania Fire, explicitly provides that registration to conduct business as an out-of-state corporation allows state courts to exercise general personal jurisdiction over an out-of-state corporation as if it were a domestic corporation. 

Factual Background and Statutory Scheme

Virginia resident Robert Mallory sued his former employer, Norfolk Southern, after being diagnosed with cancer that he attributed to his work as a freight-car mechanic in Ohio and Virginia.  Norfolk Southern, incorporated and headquartered in Virginia, claimed that a Pennsylvania court’s exercise of personal jurisdiction over it would violate the Due Process Clause of the Fourteenth Amendment.  Mr. Mallory pointed to Norfolk Southern’s corporate registration and presence in Pennsylvania, including that the company manages over 2,000 miles of track, operates 11 rail yards, and runs 3 locomotive repair shops in the Commonwealth. 

Pennsylvania law provides that a foreign corporation may not conduct business in the Commonwealth until it registers with the Pennsylvania Department of Business.  15 Pa. Cons. Stat. §411(a).  Pennsylvania’s long-arm statute allows Pennsylvania courts to exercise general personal jurisdiction over foreign corporations that are registered in Pennsylvania on “any cause” in the Commonwealth’s courts.  42 Pa. Cons. Stat. §5301(b).

Jurisdiction Held to be Appropriate Based on Corporate Registration

The Pennsylvania Supreme Court held that this statutory scheme violates the Due Process Clause because it grants general personal jurisdiction over foreign corporations without an affiliation that is so continuous and systematic as to render the foreign corporation essentially at home in Pennsylvania, and because compliance with Pennsylvania’s mandatory registration requirement does not constitute voluntary consent.

In vacating the Pennsylvania Supreme Court’s judgment and remanding the case, the Court held that Pennsylvania Fire remains the law and that jurisdiction was appropriate over Norfolk Southern.  The Court leaned heavily on its 1917 precedent for the proposition that statutes requiring corporate “consent” to jurisdiction do not violate the Due Process Clause of the Fourteenth Amendment.  The Court reasoned that a Certificate of Authority to do business within the Commonwealth confers benefits and burdens shared by domestic corporations, including amenability to suit in state court on any claim regardless of how much business a company actually conducts in Pennsylvania. 

Intervening Jurisdictional Decisions

The Supreme Court found that the Pennsylvania Supreme Court improperly concluded that intervening decisions implicitly had overruled Pennsylvania Fire.  Specifically, Norfolk Southern had argued that International Shoe, 326 U.S. 310 (1945), and others undermined Pennsylvania Fire.  The Court disagreed, stating:

All International Shoe did was stake out an additional road to jurisdiction over out-of-state corporations . . . . Pennsylvania Fire held that an out-of-state corporation that has consented to in-state suits in order to do business in the forum is susceptible to suit there.  International Shoe held that an out-of-state corporation that has not consented to in-state suits may also be susceptible to claims in the forum state based on “the quality and nature if its activity” in the forum.

The Court also rejected Norfolk Southern’s argument that requiring companies to face suits in Pennsylvania would violate the “fair play and substantial justice” principle in International Shoe, pointing to Norfolk Southern’s tracks crisscrossing Pennsylvania, the freight tonnage it moved, and its many facilities in the Commonwealth.  The plurality specifically held that Pennsylvania Fire (holding that an out-of-state corporation that has consented to in-state suits to do business in a forum is susceptible to suit there) and International Shoe (holding that an out-of-state corporation that has not consented to in-state suits may be susceptible to claims in the forum State based on the quality and nature of its activity in the forum) “sit comfortably side by side.” 

Auto-Jurisdiction Based on Corporate Registration

Until Mallory, general personal jurisdiction over a corporation could be found in two very distinct places:  (1) the state of a company’s headquarters, and (2) the state of a company’s incorporation.  Mallory now also will allow a corporation to be hauled into court in any state in which it has consented to jurisdiction.  It is very clear now that state statutes explicitly requiring a company to submit to state court jurisdiction are viable and constitutional, thus creating auto-jurisdiction for any and all lawsuits where such statutes exist, regardless of where the actual basis for a suit arises or the residency of the plaintiff.

Immediate and Potential Practical Impacts of Decision

What do we make of states that simply require a company to have a registered agent of service?  Is that enough to create automatic general personal jurisdiction?  The Court did not answer that question directly, but based on its heavy reliance on Pennsylvania Fire, it appears the Court may venture there in the future.  The practical and immediate impact of this opinion is all but certain – plaintiffs will view it as a license to forum-shop in favorable jurisdictions with little actual connection to a venue, likely resulting in a near-term increase in forum shopping and challenges to general personal jurisdiction.

Of additional concern is the Court’s repeated citation to facts regarding Norfolk Southern’s continuous and expansive business presence in Pennsylvania as justification for the fairness of making it open to suit in the Commonwealth.  Is this a glimpse at the majority’s future plans to extend general personal jurisdiction over all corporations in any state in which those companies choose to do business?  The Court made the point several times that Norfolk Southern has taken full advantage of the business opportunities that Pennsylvania has to offer as if it were a domestic corporation and thus must also suffer the burdens of a domestic corporation.  In the modern world of extensive e-commerce, one must wonder whether a future court may hold simply that by selling products online a company has consented to jurisdiction in any place where someone may access the internet.

The future of corporate personal jurisdiction is now unclear.  This will undoubtedly lead to rampant forum shopping by plaintiffs, with plaintiffs bringing suits in states with jurisdictional consent statutes where the state’s laws are favorable to plaintiffs.  Product liability and toxic tort defendants will be at significant risk of being sued in courts with plaintiff-friendly rules on issues like apportionment of liability, expert witness qualifications, and causation burdens of proof, regardless of that forum’s actual relationship to the underlying facts of a case.  This decision will increase the unpredictability of doing business across state borders.  Companies may start to think long and hard about registering an agent for service in a state with a jurisdictional consent statute or even do business there at all, with impacts on the economic health of the state.

Moreover, Mallory may leave the door open for state courts to determine that registration is a significant – perhaps even dispositive – part of any “purposeful availment” determination for specific personal jurisdiction, even if not general jurisdiction as in this case.

Prior Related Posts

For our prior posts on this case, please see Personal Jurisdiction: Open Season on Forum Shopping? and Supreme Court of Pennsylvania to Address Whether Registration of Out-of-State Businesses Creates General Jurisdiction | Environmental and Toxic Tort Defense Insight (ettdefenseinsight.com).

PFAS Expanding the Targets for California’s Proposition 65 Liability

Proposition 65 Background

The California law commonly referred to as “Proposition 65” prohibits businesses from knowingly and intentionally exposing any individual in the State to a listed chemical without first giving a clear and reasonable warning.  Violations of Proposition 65 can lead to penalties of up to $2500 per violation per day, and can carry the possibility of paying a plaintiff attorneys’ fees.  Proposition 65 provides private parties the right to enforce this law on behalf of the People of the State (if the State chooses not to), which has spawned a cottage industry of enforcement plaintiff attorneys capitalizing upon this plaintiff-friendly law.

PFAS Chemicals Added to the List

Under Proposition 65, the State maintains two lists of chemicals: one for carcinogens and another for reproductive toxicants.  The List now exceeds over 900 such chemicals and the State updates the List annually with new additions. 

PFAS (per- and polyfluoroalkyl substances) are a class of thousands of chemicals, and they are found in many different consumer, commercial, and industrial products.  PFAS appear set to take center stage on the Proposition 65 landscape, both from a litigation and regulatory perspective.  In 2017, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) were identified by the State as reproductive toxins and added to the List.  On December 31, 2021, the State added perfluorononanoic acid (PFNA) to the List.  Following a one-year grace period, enforcement for PFNA can now begin on January 1, 2023.  The State is also considering several other PFAS: PFHxS and PFDA.  As research concerning the impacts of many PFAS is intensively proceeding, we would expect the State may identify further PFAS to add to the List in the near future.

Products of Concern

PFAS have many beneficial properties, which has led to its use in many different industries and for varied products.  PFAS can impart oil, water, stain and soil repellent barriers, chemical and temperature resistance, and surfactant properties to products, some of which are considered essential to health, safety, or modern life.  The following are examples of some common products:

  • Water resistant clothing and footwear
  • Upholstery and carpeting
  • Cosmetics and dental products
  • Electronics
  • Paints and other coatings
  • Firefighting foam, and equipment and protective clothing
  • Medical products
  • Paper and cardboard, including food packaging

Recent Notices

Gordon Rees Scully Mansukhani regularly monitors the Proposition 65 Notices of Violation to keep on top of any trends, so that we may promptly inform our clients who may be impacted.  Significantly, we have noticed an important trend over the last 2 months: a dramatic increase in the number of Notices targeting products with PFAS.  Recent Notices have targeted outerwear clothing and rain jackets, baby bibs, bath pillows, duffel bags, umbrellas, shower liners, crib mattress pads, tablecloths, paper straws, and numerous cosmetics.

Tips for Companies to Help Protect Against Proposition 65 Liability

To minimize the potential for Proposition 65 liability, companies should consider the following:

Working with Suppliers to obtain maximum protection: companies obtaining products from upstream suppliers should obtain the best information possible from those suppliers regarding the presence of PFAS in the product, and confirm Proposition 65 compliance in its contract.

Product Testing: Depending upon the circumstances, product testing can be considered.  Attorney involvement should also be considered if testing, as attorney-client privileges may be important.  Also, companies obtaining product from upstream suppliers should request any testing results conducted by the suppliers.

Proper Warnings: Proposition 65 provides a “safe harbor” for those products containing a compliant warning.  The law allows for both long-form and short-form warnings.  The long-form warnings require identification of at least one listed chemical, whereas the short-form warnings generically identify carcinogens and/or reproductive toxicants.  When considering warnings, in the quest to avoid Proposition 65 liability, some companies will provide a Proposition 65 warning regardless of any specific information actually requiring the warning.  We recommend extreme caution attempting to achieve Proposition 65 compliance by providing long-form warnings identifying PFAS without information confirming the presence of PFAS.  The regulatory landscape for PFAS is evolving rapidly, and some states, including California, and have banned the use of PFAS in certain products; thus, a long-form Proposition 65 warning concerning PFAS (without any specific supporting data) raises the potential for triggering liability under other laws.

GRSM regularly counsels clients seeking to comply with Proposition 65 and is available to assist any company seeking advice to maximize its liability protection.

There’s No Place Like Home: United States Supreme Court Reaffirms Daimler, Sends Out-of-State Plaintiffs Packing In Two Highly Anticipated Cases

The United States Supreme Court has issued two highly-anticipated personal jurisdiction decisions limiting suits against defendants who are not “at home” in a state, or alternatively, did not commit a wrongful act in that state.

Specific Jurisdiction

“General jurisdiction” exists over a defendant only where it is “at home,” generally where it is incorporated or has its principal place of business.  “Specific jurisdiction” exists only when the claims in a lawsuit arises out of a defendant’s connection to the jurisdiction, such as selling products. The Supreme Court reaffirmed these limits on jurisdiction in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, No. 16-466 (June 19, 2017).

Some 678 plaintiffs (592 of whom were out-of-state residents) filed suit in California state court against Bristol-Myers Squibb Company (“BMS”), asserting various state-law claims based on injuries allegedly caused by a BMS drug called Plavix. BMS moved to quash the non-residents’ suits for lack of jurisdiction. BMS was headquartered and incorporated outside California, so there was no general jurisdiction. Despite the fact that the nonresidents had not taken the drug in California, the California Supreme Court held that California courts had “specific jurisdiction to entertain the nonresidents’ claims.”  The United States Supreme Court reversed.

The California Supreme Court had applied a “sliding scale approach to specific jurisdiction,” finding that BMS’s “extensive contacts with California” permitted a “less direct connection between BMS’s forum activities and plaintiffs’ claims than might otherwise be required.” Because the claims of both the resident plaintiffs and non-resident plaintiffs were similar and “based on the same allegedly defective product and the . . . misleading marketing and promotion of that product,” the “less direct connection” requirement as met. Thus, the court reasoned, it had personal jurisdiction over all the claims of all the plaintiffs, even in the absence of any California conduct as to the out-of-state plaintiffs.

The Supreme Court rejected this in no uncertain terms:

“Under the California approach, the strength of the requisite connection between the forum and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims. Our cases provide no support for this approach, which resembles a loose and spurious form of general jurisdiction. For specific jurisdiction, a defendant’s general connections with the forum are not enough….What is needed—and what is missing here—is a connection between the forum and the specific claims at issue.”

This is true even if the defendant would suffer minimal or no inconvenience, even if the defendant has extensive contacts with the state, even if the forum had a strong interest in the application of its laws, and even if the forum state were the most convenient location for the litigation. Bristol-Myers should serve to help defendants limit the jurisdictions in which suit may properly be brought, and reduce forum-shopping in mass tort and perhaps other cases.

General Jurisdiction

On the issue of general jurisdiction, BNSF Railway Co. v. Tyrrell, No. 16-405 (May 30, 2017), the Supreme Court made clear that its 2014 ruling in Daimler AG v. Bauman precludes the exercise of general jurisdiction over a non-resident defendant unless that defendant has contacts which are so “continuous and systematic” so as to render that defendant essentially at home in the forum state. Thus, the Court rejected multiple theories on which plaintiff attempted to justify jurisdiction over BNSF in Montana.

First, it ruled that the Federal Employers’ Liability Act (“FELA”), a federal law that allows railroad workers to sue their employers for injuries that occur on the job, does not itself create a special rule authorizing jurisdiction over railroads just because they happen to do business in a particular place. Second, and most notably, the Court held that a Montana law that allows courts in the state to exercise jurisdiction over “persons found” was in violation of the Constitution. That is, even if BNSF conceded that it is “found” in Montana, the Court held that exercising jurisdiction over BNSF must still be consistent with the Due Process clause. Under its earlier decision, the Court explained, BNSF Railway can only be sued in Montana if it is “at home” there – something which normally means that the company is either incorporated in the state or has its principal place of business there.

With neither of those criteria met, the railroad was not so “heavily engaged in activity” in Montana as to present the kind of “exceptional” case in which jurisdiction could exist even outside the company’s state of incorporation and principal place of business. Thus, although BNSF could be sued in Montana for claims that are related to its business in Montana, it could not be sued there for claims that aren’t related to anything it did within the state.


The Court’s two defense-friendly decisions on jurisdiction should bode well for defendants challenging jurisdiction, even in cases outside these specific factual contexts. General jurisdiction can only exist where a defendant is actually “at home,” and creative efforts – such as California’s “sliding scale” – will not pass constitutional muster to establish specific jurisdiction without a clear connection, such as a wrongful act, actually occurring in the forum state.

Rhode Island Superior Court Finds Limited Discovery Insufficient to Waive Personal Jurisdiction, Reaffirms Importance of Minimum Contacts

Since tgavel scale 01he U.S. Supreme Court’s decision  in Daimler AG v. Bauman (2014) 134 S.Ct. 746, personal jurisdiction has quickly become a critical issue for asbestos defendants nationally. Perhaps because asbestos cases involve dozens of parties from multiple states, and are often commenced in jurisdictions far from where the exposures occurred, personal jurisdiction has quickly become a “first line” defense.  When and how this defense may be employed, however, is evolving, with Rhode Island being one of the most recent jurisdictions to address these issues in Harold Wayne Murray and Janice M. Murray v. 3M Company, et al., C.A. No. PC-16-0151 (R.I. Super October 13, 2016, Alice B. Gibney, J.).

In the wake of  Bazor v. Abex Corporation et al., C.A. No. PC-10-3965 (R.I. Super. May 2, 2016),  the Superior Court of Rhode Island answered the “when and how” questions by issuing an instructive ruling on what a defendant must do to preserve its right to contest jurisdiction.  The court held that a defense counsel’s “active conduct constitute[d] forfeiture of the defense of lack of personal jurisdiction.”  Although the defendant in Bazor forfeited its jurisdictional defense, the court nonetheless analyzed its underlying personal jurisdiction argument, holding that the moving defendant did not have sufficient minimum contacts to exercise specific or general jurisdiction over the defendant or its predecessor.  The court’s analysis therefore addressed two issues: 1) What must a defendant do to preserve a personal jurisdiction defense; and 2) What are the sufficient minimum contacts Rhode Island must have in order do exercise jurisdiction?

First, in regard to preservation of a personal jurisdiction defense, the court clarified its ruling in Bazor.  In Murray, the plaintiff served his complaint on defendant on January 29, 2016.  Defendant acted promptly and filed a motion to dismiss on February 29, 2016.  Though defendant’s counsel participated in four days of depositions prior to filing its motion, the court nonetheless found that defendant’s counsel’s participation in an exigent deposition was insufficient to constitute “forfeiture” of a motion to dismiss based on lack of personal jurisdiction.

Looking to federal jurisprudence for guidance, the court noted that it must examine (1) “any delay in the defendant’s assertion [of the 12(b)(6) defense] and the nature of said delay,” as well as (2) “the nature and extent of a defendant’s conduct prior to raising the motion to dismiss.”  The court further held that the first factor could be met by as little as four months’ delay; but reasoned that the second factor weighed more heavily than the mere passage of time.  The court held that the analysis under the second factor “requires proof that defendant’s conduct was inconsistent with defendant’s assertion that the court lacked personal jurisdiction over them.”  (internal citation and quotation omitted).  The level of participation, therefore, appears to be the deciding factor in cases like Bazor and Murray.  Notably, the court found that “Defendant’s participation in discovery was limited and reasonable,” and defendant’s post-filing participation in an additional eleven (11) deposition days did not amount to forfeiture of the lack of personal jurisdiction defense.  Notwithstanding the above, the court did not establish a “bright line” rule to precisely outline the necessary amount of participation required to forfeit a jurisdictional defense.  At most, the court established “[d]elays as short as four (4) months can constitute forfeiture,” however, one-month delays with limited participation in discovery will not.

Although Murray provides more guidance than Bazor, it is not entirely clear where this decision leaves litigants who want to participate in early discovery.  While the Murray decision assuages some fears that participating in any discovery will result in inadvertent forfeiture of a jurisdictional defense, there remains uncertainty of where on the timetable the line crosses from limited and reasonable discovery to potential forfeiture.  Ultimately, the lesson of Murray may be that the defense counsel should file its motion to dismiss timely; i.e. within one-month after being served.  Thereafter, it appears that defense counsel should limit its participation in discovery and timely pursue adjudication of the motion to dismiss.

The court also ruled on the underlying personal jurisdiction argument.  In doing so, the court addressed whether the defendant had sufficient minimum contacts with the forum enabling it to properly exercise specific or general jurisdiction. See Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014). When faced with the decision as to whether to assert specific jurisdiction over a party, the Rhode Island Supreme Court has employed a two part test:  1) does the cause of action arise out of the defendant’s contacts with Rhode Island; and if so, 2) whether any relationship among the defendant, forum, and the litigation exists.”

In employing this test in Murray, the superior court concluded it did not have a basis to assert specific jurisdiction over the defendant because “the cause of action does not arise out of Defendants’ contacts with Rhode Island.”  Moreover, plaintiff did not reside in Rhode Island and the cause of action was not based on an occurrence in Rhode Island.  Finally, there was no connection between the moving defendant’s Rhode Island based clients and the current cause of action.  Therefore, the court found that it could not assert specific jurisdiction over the defendant.

The court likewise determined that general jurisdiction did not exist.  In making this finding, the court noted that defendant was incorporated in Virginia, with is principal place of business in Ohio; its officers and executive employees were always located solely in Ohio; it has no offices or employees in Rhode Island; and it did not own or lease any property, sell products, nor has it ever registered to conduct business in Rhode Island.  Although the court found that defendant earned approximately one-tenth percent of its total annual net sales from Rhode Island, the totality of the evidence “cannot suggest that [defendant was] virtually at home in the forum state for the purposes of general jurisdiction.”  (internal citation and quotation omitted).

Ultimately, the Murray court’s holding is welcome news for defendants needing to engage in limited discovery to evaluate a motion to dismiss on personal jurisdiction grounds.  In addition, the court made clear that “minimum contacts” means what it says, and a defendant with de minimis sales in the state should not be deemed “at home” there.


After “Roundup” of Evidence, EPA finds Glyphosphate “Not Likely to be Carcinogenic to Humans”

croppyEarlier this month, the EPA issued a position paper regarding the risks of glyphosate.  Notably, in classifying glyphosate’s cancer risk to humans, the EPA states, “The strongest support is for ‘not likely to be carcinogenic to humans’ at doses relevant to human health risk assessment.”

Although the EPA report is not dispositive on the issue and will be followed by with a “final assessment” in early 2017, it is a positive development.  The FIFRA Scientific Advisory Panel of the EPA, much like the European Food Safety Authority, is not accepting the recent IARC position that glyphosate is “probably” carcinogenic to humans.  Consequently, causation in litigation involving glyphosate will remain a challenge for plaintiffs’ firms to establish.

Since the IARC position was issued in 2015, plaintiff’s firms have filed a number of lawsuits in California, Illinois, and New York against Monsanto.  In late July, one plaintiffs’ firm filed a motion requesting that the multidistrict panel be in the U.S. District Court for the Southern District of Illinois, where three lawsuits are pending. In total, 21 lawsuits have been filed in 14 district courts nationwide naming Monsanto only.  The parties expect a ruling this fall on whether the matters against Monsanto will be consolidated.

Criminal Prosecution and “Restitution” in Toxic Tort Cases?

As they are wont to do, the voters in the State of California in 2008 passed an initiative amending the state constitution. The admirable purpose was to ensure that victims of crimes, who suffered pecuniary loss as a result of a crime would have a right to monetary “restitution” from the criminal this will be implemented in all the types of correctional facilities. There is now a plethora of statutes and regulations governing who may seek restitution in California, in what amount and under what circumstances (see California Government Code section 13959 et seq).

Numerous other states have their own statutory schemes providing for similar rights, and working with specialized lawyers like David Mirsky could help bring resolution for cases happening in these states. Indeed, there are lawyers you can find on the internet who proclaim their expertise in obtaining restitution for victims.

You might ask what that has to do with toxic torts? But think of all the statutes and regulations that make toxic spills, releases or dumping a crime. As an example of how this constitutional amendment might impact a toxic case in California, consider our recent experience in Santa Clara County, CA.

A client was in the business of selling, and sometimes delivering, chemicals for public swimming pools. One on occasion, the unfortunate happened: the wrong chemical was placed in the wrong tank and a cloud of potentially hazardous gas was released at the pool. Numerous swim instructors and patrons of the pool were exposed. Paramedics, ambulances, fire trucks, police vehicles, and even TV news helicopters were soon on the scene.

Though to our knowledge none of the exposed people suffered anything more than transitory discomfort, the District Attorney elected to pursue a criminal prosecution against the deliverer of the chemicals.

California’s Health and Safety Code section 42400.1(a) makes it a criminal misdemeanor to cause a “negligent emission of air contaminants” under certain circumstances:

Any person who negligently emits an air contaminant in violation of any provisions of this part or any rule, regulation, permit or order of the state board or of a district pertaining to emission regulations or limitations is guilty of a misdemeanor and is punishable by a fine of not more than twenty-five thousand dollars ($25,000), or imprisonment in a county jail for not more than nine months, or by both that fine and imprisonment.

The chemical delivery man was arrested, he and his corporate employer were prosecuted and pled nolo contendere to the criminal charges.

Pursuant to California Penal Code section 1191.2, the Probation Department and the District Attorney undertook to ensure that all the victims were provided information regarding their rights, including the right to seek monetary restitution. The Probation Department is directed to contact each victim for which it has a mailing address. Curiously, the Court of Appeal of California has held that this language is “directory” as opposed to “mandatory,” so that the Department has some latitude in deciding when to issue such notice (People v. Superior Court (1984) 154 Cal.App.3d 319.) Several victims did provide information supporting such claims for pecuniary losses and the court ordered restitution to be made.

This process did not include or even contemplate the filing of a civil complaint. There was no formal discovery and certainly no depositions. No records were subpoenaed, and no sworn testimony was heard. There was no trial, though there was a hearing before the court when it considered adopting the recommendations of the Probation Dept. for orders requiring restitution.

The number of questions and issues proceedings like these may raise in any subsequent civil case for damages is daunting. Certainly one has to think of res judicata or collateral estoppel. And does insurance coverage play a role in paying the restitution or any part of it? The answers to these questions will vary depending on the jurisdictions, statutes and insurance policies that are at play in any given case. We were frankly very surprised to learn that there was going to be a criminal prosecution in connection with our swimming pool chemical mishap case and an order for restitution entered. Defense counsel should be cognizant of the possibility for criminal prosecution affecting the disposition of cases involving purportedly hazardous chemical exposures.

California appellate court bucks national trend, allows plaintiff experts to opine that “every asbestos exposure is a substantial factor”

Courts from around the country have rejected efforts by plaintiff experts to testify that every asbestos exposure is a substantial factor in causing disease. On March 3, 2016, California’s second appellate district went the other way, and held in Davis v. Honeywell International, Inc. that the controversial “every exposure counts” theory is admissible under governing expert witness law.   Thus, although trial courts are supposed to play a “gatekeeper” role in keeping out unreliable expert evidence (Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747), Davis breaks the gate wide open in allowing a jury, not the trial court in its “gatekeeper” role, to decide whether to accept the theory.

Davis was aGATEPICTURE wrongful death case.  Sam Davis  worked as an auto mechanic and home remodeler from approximately 1963 to 1979.  He performed “one or two” brake jobs per day, and always used Bendix brake linings (for which defendant Honeywell was responsible). These linings contained 50 percent chrysotile asbestos by weight.  He was also allegedly exposed to asbestos as a result of his home remodel work.

Prior to trial, Honeywell filed a motion in limine to preclude plaintiff from presenting expert opinion testimony that every exposure to asbestos above background contributed to decedent’s disease. The motion was denied, and plaintiff’s pathologist (James A. Strauchen, M.D.) and pulmonologist (William Rom, M.D.) were permitted to testify and advance the theory. Ultimately, the jury found for plaintiffs, and Honeywell appealed.

Honeywell’s primary basis for appeal was that the “every exposure counts” testimony of Dr. Strauchen should have been excluded. Honeywell advanced four arguments:  (1) the testimony was speculative and illogical; (2) the regulatory standards Strauchen relied upon cannot establish causation; (3) no appropriate scientific literature supports the theory; and (4) the theory is contrary to California causation law espoused in Rutherford v. Owens Illinois (1997) 16 Cal.4th 953, which held that not every exposure to asbestos is a “substantial factor” in causing disease.

Davis rejected each of Honeywell’s arguments. “Having reviewed much of the commentary and scientific literature cited in support of and against the ‘every exposure’ theory, we conclude that the theory is the subject of legitimate scientific debate.   Because in ruling on the admissibility of expert testimony the trial court ‘does not resolve scientific controversies (Sargon), it is for the jury to resolve the conflict between the every exposure theory and any competing expert opinions.”  The court focused largely on the mere existence of evidence that supported the “every exposure counts” theory, and declined to weigh the evidence or any competing inferences.   “While Honeywell is generally correct that in many (or even most) instances epidemiological studies provide the best evidence of causation, its implied argument that it is improper for an expert to rely upon any other tools to determine causation, such as case reports, is not universally accepted.”  As to Honeywell’s argument that “every exposure” contravenes Rutherford, Davis  interpreted Rutherford as not requiring a “dose level estimation,” instead issuing a sweeping statement interpreting Rutherford as supporting the conclusion that even a very small “dose” could increase the risk of asbestos-related cancer.  Davis distinguished the many cases from other jurisdictions rejecting this argument, including Betz v. Pneumo Abex, LLC (2012) 615 Pa. 504, Bostic v. Georgia-Pacific Corp. (Tex. 2014) 439 S.W.3d 332 and Moeller v. Garlock Sealing Technologies, LLC (6th Cir. 2011) 660 F.3d 950. “[W]e simply disagree” that the “every exposure” theory could not be “reconciled with the fact that mesothelioma and other asbestos-related diseases are dose-dependent.”

The Davis court did state, however, that “[w]e caution that our discussion of the materials Dr. Strauchen relied upon should not be seen as approval of either side in that scientific dispute.  Rather, we rely upon the rule of Sargon that although trial courts ‘have a substantial ‘gatekeeping’ responsibility,’ in evaluating proposed expert opinion . . . the gate tended is not a partisan checkpoint . . . If the opinion is based on materials on which the expert may reasonably rely in forming the opinion, and flows in a reasoned chain of logic from those materials rather than from speculation or conjecture, the opinion may pass, even though the trial court or other experts disagree with its conclusion or the methods and materials used to reach it.  (emphasis added)

Further, although much of the discussion relates to the “any exposure” theory, Davis pointed out that the case did not hinge on that theory.  “In this case, Dr. Strauchen was presented with a hypothetical based on the facts surrounding Davis’ exposure to dust from his work on Bendix brake linings, and testified as to estimates of the amount of asbestos fibers contained in visible dust. Therefore, his conclusion that Davis’ exposure to Bendix brake linings was a substantial factor in contributing to the risk of mesothelioma was not based simply on “any exposure” to asbestos, but instead related to an estimate of actual exposure.”

The decision is not yet final. It is still subject to a petition for rehearing, which could result in a change in the opinion, and to either or both a request for depublication and a petition for review to the California Supreme Court, either of which if granted would make this decision uncitable in California courts, though not necessarily elsewhere.

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.

Vulnerable no more: disaster preparedness now safer under Oregon law

As part of a larger package of earthquake preparedness measures, a new Oregon statute should be of interest to anyone who stores toxic substances. Oregon Senate Bill 775 provides:

Evidence of measures taken or vulnerability assessments conducted before a natural disaster occurs that were intended to minimize the impact of or plan for the natural disaster is not admissible to prove negligence or culpable conduct in connection with damage, harm, injury or death resulting from the natural disaster.

quakeyWhile not limited to the chemical industry, the bill is of particular interest to that industry. In an interview with Oregon public radio, the Chair of the Oregon Seismic Safety Commission explained that the bill was intended to encourage companies that store fuel or toxic chemicals to conduct vulnerability assessments with the assurance that the studies would not be later used against them in court to prove their negligence.

According to Oregon public radio, geologists estimate that there is a 37 percent chance of a large earthquake (8.0 or greater) along the Cascadia Subduction Zone within the next 50 years. So, it may be time to consider an updated vulnerability assessment – with less worry that acting to promote safety could backfire later and be used to establish tort liability.