WASHINGTON - Asbestos defendants facing verdicts in Pennsylvania can now make sure jurors know when plaintiffs have also blamed other companies - and ask that they dole out fault proportionally.
And last year, KCIC Consulting, which provides tools for mass tort litigation management, released a tool being used to preserve evidence after asbestos defendants file for bankruptcy that could benefit those defendants.
After more than a year in development, KCIC released its Bankruptcy Evidence Verification (BEV) Tool in January 2017, as part of its Ligado Platform to centralize claims information and documents within the framework of the tort system.
“We’ve created this tool to really help solvent defendants prove alternative exposure to asbestos based on the insolvent companies,” KCIC Vice-President Michelle Potter stated.
Many companies that manufactured products containing asbestos went bankrupt due to the high costs of asbestos-related liabilities, and then set up 524(g) bankruptcy trusts funded by both defendants and their insurers. There are dozens of trusts that pay out claimants outside of the civil courts system.
But claimants also simultaneously target solvent companies with civil lawsuits. It can be difficult to determine whether a plaintiff is trying to recover for the same exposure twice.
“Claimants to (the bankruptcy trusts) can submit a claim to the trust and get a payment. The claim usually says, ‘I worked at this place...’ and there’s typically a low bar of exposure or evidence that claimants have to submit to be able to get approved for the bankruptcy trust to pay their claim,” Potter stated.
Many solvent defendants feel that plaintiff counsel pursue payments first from them, before proceeding to go after a second round of payments from the bankruptcy trusts.
“The defendants are pushing for more transparency around that issue,” Potter said.
Whereas defendants at one time were forced to navigate about 60 separate bankruptcy trust websites to examine their approved claims criteria, KCIC’s BEV tool centralizes the data found on those same websites into one location.
Defendants and their counsel are also able to use the tool to discover evidence through a number of factors, such as work history, products, industry, or occupation, which may locate other potential exposure sources and assist in structuring questions for depositions.
“We’ve tried to streamline the process of looking for each bankruptcy trust that a claimant could potentially collect money from, or products that are potentially at fault for that claimant’s disease,” Potter said. “We help with data management and processes around gathering data that make that as efficient as possible.”
According to KCIC, more than 8,000 U.S. companies are named annually on complaints alleging exposure to asbestos-containing products, with an average of 68 business entities named on each complaint, not including bankrupt companies.
KCIC referenced the Garlock litigation as one that exposed the trend of evidence disappearing from the record after asbestos product liability defendants filed for bankruptcy, and adds that in using BEV, even bankrupt companies are held to the prescribed standards of evidentiary law.
“We designed BEV to serve as a weapon in the post-Garlock era, with the means to keep all bankrupt companies in evidence and accountable for their fair share of liability. Rather than defense counsel tediously researching thousands of job sites and products, BEV pulls together an extensive collection of bankruptcy trust data into one access point,” KCIC President Jonathan Terrell said.
Fair Share Act Deemed Applicable In Roverano v. Crane
The Fair Share Act, signed into Pennsylvania law by then-Governor Tom Corbett in June 2011, amended the Commonwealth’s Comparative Negligence Statute and stipulated that if an individual defendant was found less than 60 percent liable in a given case, then dollar-amount damages for said defendant would be set at a level proportional to their percentage of liability in that case.
The Fair Share Act served to substantially curtail, if not remove, the concept of joint and several liability from such cases tried in the state – though for several years, appellate court guidance on the applicability of the law to asbestos litigation was absent.
Enter Roverano v. John Crane, Inc.
Plaintiff William Roverano worked for the Philadelphia Electric Company (PECO) from 1971 to 2001 and claimed his exposure to more than 15 types of asbestos products from several different manufacturers during the time period of 1971-1981 led to his development and diagnosis of lung cancer in 2013.
In contrast, the defendants argued Roverano’s history of smoking led to his lung cancer, rather than any exposure to asbestos products.
The trial court, the Philadelphia County Court of Common Pleas, denied the defendants’ motion to apply the Fair Share Act to the case, explaining the legislation could not apply since “asbestos exposure is not quantifiable.”
A jury later found in favor of Roverano and his wife, awarding them in excess of $6.4 million, with the cost evenly split among eight defendants named in the lawsuit — all of which were solvent at the time.
On appeal, the defendants raised the issue of the Fair Share Act not expressly prohibiting its own application to asbestos cases, an argument which found favor in a December 2017 decision from the Superior Court of Pennsylvania and was cited as grounds for a new trial on remand.
“We hold that the trial court failed to apply the Fair Share Act in the manner intended by the Legislature and that we therefore need to remand this case for a new trial on the question of apportionment of liability,” the Superior Court’s decision read.
How The BEV Tool Can Benefit Asbestos Defendants In Pennsylvania
According to KCIC, the solvency or insolvency of a defendant named in asbestos litigation shouldn’t prevent them from absorbing their share of a jury award.
“This decision highlights the importance of keeping bankrupt companies in evidence. Solvent defendants shouldn’t have to bear a higher liability because other entities filed for bankruptcy. Allowing the Fair Share Act to apply to asbestos cases can serve to lower the solvent defendant’s overall share of the liability by ensuring that the solvency status of other defendants does not absolve those companies from their fair share of liability,” KCIC stated in a recent blog.
In the Roverano v. Crane case, KCIC used the BEV tool and a cross-reference among Roverano’s asbestos exposure history to locate potentially liable bankruptcy trusts. Though all 30 defendants named in the lawsuit were solvent at the time of its filing, BEV showed more than 25 bankrupt companies approved jobsites and/or products that coincided with Roverano’s exposure history.
“If those bankrupt entities had been included on the verdict sheet under the Fair Share Act, it is likely that the jury would have allocated a share of the verdict to at least some of these bankrupt companies, thus lowering the liability for the solvent defendants, potentially significantly,” according to KCIC.
Meanwhile, the Roveranos have appealed the Superior Court’s December decision, claiming the impossibility of accurately determining liability percentage from each defendant’s products, and that the appellate court erred in its particular interpretation of the Fair Share Act and its inclusion of bankrupt companies.
Per KCIC’s annual report for 2017, Pennsylvania ranks a stark second nationwide in asbestos lawsuits filed by plaintiffs allegedly suffering from mesothelioma.
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at firstname.lastname@example.org