Segal McCambridge Legal Blog

In a 28 page decision, New York Supreme Court Justice Richard Lowe said Travelers Insurance is entitled to receive about $262.3 million plus interest from a group of reinsurers.

For the past several years, United States Fidelity & Guaranty Company (USF&G), now part of Travelers, had been looking to recoup from reinsurers about half of a $987 settlement with an asbestos policyholder.

According to court documents, the largest share of the award—about $202.5 million—will be paid by American Reinsurance Company, now Munich Re America.

About $59.8 million will be picked up by the Excess Casualty Reinsurance Association, ACE Property & Casualty Co., Century Indemnity Co., OneBeacon American Insurance Co. and Excess Treaty Management Corp., according to the decision.

Justice Lowe found that the reinsurance treaties were enforceable. With interest, the award could top $420 million. Reportedly, Travelers' attorneys have said the company had already reached settlements with other reinsurers.

USF&G settled with Western Asbestos in 2002 after about 10 years of litigation, but the facts of the case go back to 1948 when USF&G began providing a number of liability insurance policies to the asbestos company, according to court documents. Western Asbestos sought coverage when it started to get sued by individuals injured by asbestos.

At least one of the reinsurers, Princeton, N.J.-based Munich Re America Inc., has said it plans to appeal the ruling.

The Bloomberg story is here

On August 20th, the New Jersey Appellate Division affirmed a $7.5 million verdict against ExxonMobil (“Exxon”) in a take-home and occupational asbestos exposure case involving the spouse of an employee who was also employed by Exxon.

In a unique exposure setting, Plaintiff Bonnie Anderson (who was diagnosed with peritoneal mesothelioma) was allegedly exposed to asbestos from laundering the asbestos-contaminated clothing of her husband who worked at the Exxon Bayway Refinery in New Jersey from 1969 to 2003. Ms. Anderson also claimed first-hand exposure to asbestos during her employment with Exxon between 1974 and 1986.

Of note, Exxon moved for summary judgment, arguing that plaintiffs’ claims were barred by the exclusive remedy provisions of the Workers’ Compensation Act (WCA), N.J.S.A. 34:15-1 to -69.3. The trial court Judge denyied the motion without prejudice. After the close of discovery, Exxon moved for summary judgment again, renewing its argument that plaintiffs’ claims were barred by the WCA. Again, the judge denied the motion in a January 12, 2007 oral decision.

At the end of the “first” trial, the jury found that: plaintiffs had proven that Bonnie has “asbestos related Peritoneal Mesothelioma;” Exxon breached a duty owed to Plaintiffs; Exxon’s breach was a proximate cause of Bonnie’s disease; Bonnie was awarded $500,000 in compensatory damages. The jury did not award John damages for past and future loss of consortium. There was an immediate trial on punitive damages before the same jury. The jury awarded no punitive damages. At which point the Plaintiffs moved for a new trial on damages or, in the alternative, for additur, and the trial court granted a new trial on damages. The Appellate Division denied Exxon’s motion for leave to appeal. Exxon moved for a new trial on all issues. The trial court denied that motion. Finally, the Appellate Division denied Exxon’s motion for leave to appeal as to the all issues trial denial.

In the second trial on damages, the jury heard from plaintiffs, Taub, and Mary Hesdorffer, a nurse practitioner involved in Bonnie’s care. Exxon presented Dr. Allen Robert Gibbs, an expert in pathology and in the clinical course and survival of women with mesothelioma. Neither Hesdorffer nor Gibbs had testified at the previous trial (in the first trial, Plaintiffs had called Dr. Jacqueline Moline, M.D and Barry Castleman, Ph.D.. Exxon had called Dr. Gerald Kerby, Dr. Gerhard Raabe and William Dyson).

The second “damages only” jury awarded Bonnie Anderson $7 million and John Anderson $500,000. The judgment ordered prejudgment interest of $1,717,397.26 for Bonnie and $122,671.23 for John, and post-judgment interest.

Exxon appealed, arguing that the exclusive remedy provisions of the WCA barred plaintiffs’ recovery and that the judge erred in several evidentiary rulings and by granting plaintiffs’ motion for a new trial on damages while denying Exxon’s motion for a new trial on all issues.

The Appellate Division rejected all of Exxon’s contentions in affirming the judgment.

The decision in .pdf format is here

In overturning a $31 million dollar verdict against Ford Motor Co., ($16M in actual damages and $15M in punitive damages) the South Carolina Supreme Court adopted the "the risk-utility test with its requirement of showing a feasible alternative design."

The gist of the case involved a defective seat belt sleeve claim, and a "handling and stability" design defect claim related to the rollover issues allegedly found in the 1987 Ford Bronco II 4×2.

The South Carolina Supreme Court stated:

While the consumer expectations test fits well in manufacturing defect cases, we do agree with Ford that the test is ill-suited in design defect cases. We hold today that the exclusive test in a products liability design case is the risk-utility test with its requirement of showing a feasible alternative design. In doing so, we recognize our Legislature’s presence in the area of strict liability for products liability.

…

In sum, in a product liability design defect action, the plaintiff must present evidence of a reasonable alternative design.  The plaintiff will be required to point to a design flaw in the product and show how his alternative design would have prevented the product from being unreasonably dangerous.  This presentation of an alternative design must include consideration of the costs, safety and functionality associated with the alternative design

There is also a discussion of Plaintiff’s counsel’s improper remarks made during closing statement in the opinion. Specifically:

“The closing argument of Branham’s counsel was designed to inflame and prejudice the jury.
…
It is unmistakable that the closing argument relied heavily on inadmissible evidence. In addition, as will be discussed below, much of the prejudice resulting from the improper evidence was merged in closing argument with Branham’s pursuit of punitive damages in requesting that the jury punish Ford for harm to Branham and others. (emphasis in original) The closing argument invited the jury to base its verdict on passion rather than reason. The closing argument denied Ford a fair trial.”

A copy of the opinion is here and here.

Of note, the “Overlawyered” blog has a piece on this decision here and offers the following assessment:

“How bad of a judicial hellhole is Hampton County? Though Hale was a co-defendant, she cooperated with the plaintiffs throughout the trial in their case against Ford, even sitting at the plaintiffs' table; but because the judge classified Hale as a co-defendant, it meant that Hale got half of the peremptory challenges of the "defense."”

On August 5, 2010, the Michigan Court of Appeals ruled that under the adoption of the “Apex deposition rule” that two high-ranking Toyota executives do not have to give depositions in a personal injury lawsuit involving the death of a woman whose vehicle allegedly suddenly accelerated and struck a tree.

From the Alberto v. Toyota Motor Corporation, No. 296824 (Mich. Ct. App., 8/5/10) opinion:

This is a personal injury, products liability suit wherein plaintiff seeks to depose two high-ranking Toyota corporate officers in connection with the claim that a defect in a Toyota vehicle caused the accident that resulted in the death of plaintiff's decedent.
…
This appeal presents the question whether Michigan should formally adopt the apex deposition rule in the corporate context. As used by other state and federal courts, the apex deposition rule provides that before a plaintiff may take the deposition of a high-ranking or "apex" government official or corporate officer, the plaintiff must demonstrate that: (1) the government official or corporate officer possesses superior or unique information relevant to the issues being litigated, and (2) information cannot be obtained by a less intrusive method, such as by deposing lower-ranking employees. See, e.g., Baine v Gen Motors Corp, 141 FRD 332, 334-335 (MD Ala, 1991).
…
We hold that the apex deposition rule applies in Michigan cases involving public and private high-ranking corporate officers.
…
In adopting the apex rule, we recognize, as have other courts, that an apex corporate officer, like a high-ranking government official, often has no particularized or specialized knowledge of day-to-day operations or of particular factual scenarios that lead to litigation, and has far-reaching and comprehensive employment duties that require a significant time commitment. And, therefore, to allow depositions of high-ranking government officials or corporate officers without any restriction or preconditions, could result in the abuse of the discovery process and harassment of the parties. Accordingly, our adoption of the apex deposition rule should serve as a useful rule for trial courts to use in balancing the discovery rights of the parties.

A Cook County, Illinois jury has awarded a $30.4 million verdict to a chemical-flavoring plant worker disabled by exposure to diacetyl, an ingredient in butter flavoring used at a Jasper popcorn plant where several workers claimed similar injury.

The verdict awarded to Gerardo Solis, 45, and against BASF Corp., a supplier of diacetyl and the world's largest chemical company, is the highest rendered to date in popcorn and butter-flavoring worker lawsuits in the U.S., according to Ken McClain, the attorney for Solis.

Solis worked at a Flavorchem Corp. plant in the Chicago area between the years 1998 and 2006 when he was diagnosed with a rare lung disease called bronchiolitis obliterans. McClain said Solis is totally disabled with 25 percent of normal lung capacity and is projected to require a lung transplant within the next 10 years.

The largest verdict previously awarded to an individual in the cases was $20 million granted by a Jasper County jury to Eric Peoples of Carthage and his wife in 2004. Two $15 million verdicts and a $2.7 million award were rendered to other workers at the former Jasper Popcorn Co. plant. Those cases involved Bush Boake Allen Inc. and International Flavors & Fragrances Inc., suppliers of butter flavoring to the plant and not BASF.

The story is here

Law.com is reporting that Baron & Budd and Cozen O’Connor Score Assignments in BP Oil Spill Litigation

From the story:

“Burton LeBlanc of Baron & Budd announced Friday that Louisiana attorney general James “Buddy” Caldwell has hired him and his firm to advise the state on damages it’s owed from the spill. LeBlanc, a former president of the Louisiana Trial Lawyers Association who is based in Baton Rouge, said Baron & Budd has a “tremendous familiarity with the ecology of the Louisiana coast.” (The Dallas-based firm apparently gained that tremendous familiarity when it acquired LeBlanc’s former firm, LeBlanc & Waddell, in 2008.)

Jindal has not always followed Republican orthodoxy when it comes to trial lawyers. According to Fisher, Jindal supported an effort to reverse a Louisiana law limited state contingency fee deals with outside lawyers. But that doesn't explain the state's hiring of Baron & Budd, which still gives heavily to Democrats. According to the AP, Jindal brushed aside questions about Baron & Budd’s hiring.

“I don’t care–to me it’s not about partisan politics,” Jindal said. “I don’t care if it’s a Democratic firm, Republican firm. The trustee agencies [and] the AG’s office looked across the country. They have found experts, they have found advocates that are the nation’s best. Certainly it is a positive thing that they’ve been able to identify some firms that have Louisiana roots, that have Louisiana connections, that know this coast, that know these wetlands. At the end of the day, this is all about being aggressive about defending our coast.”

LeBlanc said that Baron & Budd is already working to assess the damage Louisiana endured as a result of the spill. He said that after the assessment, he will present the state’s damages case to BP, specifying claims under federal and state laws. If the parties are unable to come to a resolution, he said, the state could pursue litigation.

In other oil spill litigation news, the BP victims compensation fund has hired Stephen Cozen of Cozen O’Connor. According to the Philadelphia Inquirer, which broke the story, Cozen will draft new rules on how the $20 billion BP has pledged to the fund will be doled out. Kenneth Feinberg of Feinberg Rozen, who is overseeing the Gulf spill compensation process, told the Inquirer, “There is no one else in the nation who has Steve’s grasp of these issues or his experience.”"

A total of 1,097 foodborne disease outbreaks were reported in 2007 to the Centers for Disease Control and Prevention, according to a CDC analysis. State investigators reported 21,244 illnesses and 18 deaths as a result of these outbreaks. The report also provides the most recent data on how many illnesses were linked to specific types of foods.

“Knowing more about what types of foods and foodborne agents have caused outbreaks can help guide public health and the food industry in developing measures to effectively control and prevent infections and help people stay healthy,” said Chris Braden, acting director of the CDC’s Division of Foodborne, Waterborne and Environmental Diseases.

Despite health officials’ efforts, the cause of an outbreak—either the food or the foodborne agent responsible—often cannot be determined or confirmed. This most commonly is the case when the outbreak is small.  In more than half of the outbreaks, a foodborne agent was not identified. Norovirus was the most frequently confirmed foodborne agent (39 percent), followed by Salmonella (27 percent).

Foodborne disease outbreaks due to norovirus occur most often when infected food handlers do not wash their hands well after using the toilet; outbreaks due to salmonella occur most often when foods are contaminated with animal feces. Contaminated foods are often of animal origin, such as beef, poultry, milk, or eggs. But any food, including vegetables, may become contaminated. Thorough cooking kills Salmonella.

The report states that in the 235 outbreaks where one food commodity was identified, the largest number of illnesses listed poultry (691 illnesses), beef (667 illnesses), and leafy vegetables (590 illnesses) as the cause. The CDC tracks 17 food commodity categories. A full listing of the number of illnesses associated with each of the categories is available at: www.cdc.gov/outbreaknet/surveillance_data.html.

To prevent foodborne illnesses, CDC recommends that consumers and food handlers appropriately clean, separate, cook and chill foods. For more details, visit www.foodsafety.gov.

From the report:
Foodborne agents cause an estimated 76 million illnesses annually in the United States. Outbreak surveillance provides insights into the causes of foodborne illness, types of implicated foods, and settings of foodborne infections that can be used in food safety strategies to prevent and control foodborne disease. CDC collects data on foodborne disease outbreaks submitted from all states and territories. This report summarizes epidemiologic data for the 1,097 reported outbreaks occurring during 2007 (the most recent finalized data), which resulted in 21,244 cases of foodborne illness and 18 deaths. Among the 497 foodborne outbreaks with a laboratory-confirmed single etiologic agent reported, norovirus was the most common cause, followed by Salmonella. Among the 18 reported deaths, 11 were attributed to bacterial etiologies (five Salmonella, three Listeria monocytogenes, two Escherichia coli O157:H7, and one Clostridium botulinum), two to viral etiologies (norovirus), and one to a chemical (mushroom toxin). Four deaths occurred in outbreaks with unknown etiologies. Among the 235 outbreaks attributed to a single food commodity, poultry (17%), beef (16%), and leafy vegetables (14%) were most often the cause of illness.

The CDC press release is here

The CDC report is here

More litigation concerning the issues with mass X-ray screenings arising out of West Virginia.

“CSX Transportation says the dismissal of 1,400 asbestos cases in West Virginia has everything to do with its fraud case against a Pittsburgh law firm.

Peirce Raimond & Coulter had asked that CSX’s notice of the dismissals be stricken from the record of the fraud case, which alleges the Peirce firm teamed with a radiologist to fabricate asbestos claims and hid them among several others.

CSX’s lawsuit was ruled by a district court to have been filed after the statute of limitations, and the company appealed to the U.S. Court of Appeals for the Fourth Circuit.

“(The Peirce firm’s) basic submission is that it is impermissible… to apprise a federal court of appeals of a recent development in related state-court litigation,” CSX’s attorneys wrote Tuesday.

“In fact, it is commonplace.”"

The entire article can be found here

From Daniel Fisher at Forbes.com

“This just in: Baron & Budd says Louisiana Gov. Bobby Jindal has hired the Dallas law firm to "provide counsel" to the state on how to recover damages from the BP oil spill.

As noted here this morning, Baron & Budd are an unusual choice for Jindal, a conservative Republican whose supporters tend to abhor plaintiff lawyers. Especially the ones who make millions of dollars representing asbestos claimants and share a lot of that money with Democratic candidates.”

An earlier story from Daniel Fisher at Forbes.com is here

“Quintessential expert for hire,” Plaintiff’s expert, Dr. John Maddox excluded.

Orders from a middle Georgia judge throwing out an expert witness and the asbestos suit his testimony was going to support have defense attorneys celebrating and plaintiffs lawyers bearing down for an appellate battle.

At issue is a June 29 decision by Ocmulgee Judicial Circuit Superior Court Judge John Lee Parrott. He barred the testimony of John Maddox, a pathologist who claims that asbestos caused the lung disease that killed the plaintiff’s husband.

The problem, Parrott said, is the doctor’s opinion that any exposure to asbestos causes injury. That opinion, the judge said, “is not practically testable and has not been tested,” thereby violating one of the prongs of Georgia’s 2005 law governing the use of expert witnesses.

“[T]he courtroom is not the place for scientific guesswork, even of the inspired sort,” Parrott wrote, quoting a 1996 decision from the 7th U.S. Circuit Court of Appeals.

Lawyers who defend companies from asbestos cases hailed Parrott’s decision as great news and predicted it could influence other judges around the state.

The entire article can be found at Law.com