Document 747r8DqNYg41Xm2V7pEEGQNo

Lawsuits relating to "latent" diseases-- those appearing several years after initial exposure to toxic substances--will dom inate tort law in the 1980s. lawyers say. "We are just in the legal infancy of answering the questions" of who should pay for the growing number of medical problems of persons exposed to the chemical by-products of industrialized society, said Professor Sheila Bimbaum of the New York University School of Law. "It is impossible to predict the fu ture." Some lawyers and insurance industry representatives predict that latent dis ease suits may shake the foundations of U.S. tort law, threaten the financial health of insurance companies and some industries, and contribute to the nation's economic problems. "The goose that lays the golden egg may he killed be cause there is just not enough money to go around," warned William Bailey, chairman of the Task Force on Cumula tive Trauma and Latent Injury. The task force was formed recently by the Ameri can Insurance Association in New York City. "The (tort] system could well grind to a halt by 1984: we had better start thinking about alternatives." said Bailey, senior vice president of Com mercial Union Assurance Companies in Boston. Lawyers cite a combination of factors bringing the problem to a head. Medical science only in recent years has iden tified links between toxic substances and diseases that give plaintiff lawyers the grounds to bring suits, said Del Haral son. a Tucson plaintiff lawyer who has Say Latent Disease Suits WiU Bebrought suits relating to radiation in juries. Others share Bailey's view that plaintifT lawyers also have succeeded in Key Battleground in '80s pushing for judicial acceptance of strict liability theories in latent disease suits. Also, courts often have adopted a "deep pockets" policy of basing liability not on who caused injuries but on who is best able to pay for them, Bailey added. Another factor, lawyers said, is the sheer size of the problem. For example. been filed through 1980. Those damages could exceed SI00 billion. Those suits may be "just the tip of the iceberg com pared with the people who may make claims in the 1980s and '90s,'* Bailey added. In In re "Agent Orange" Product New York, recently certified all Viet nam War veterans, their families and survivors as potential plaintiffs in the class action suit against manufacturers of the herbicide used as a defoliant in the war. The number of plaintiffs could reach 50.000. Victor Yannacone of Bailey said, about 25.000 suits seeking Liability Litigation (MDL 381). the U.S. Patchogue. New York, the lead plaintiff damages for exposure to asbestos had District Court for the Eastern District of attorney estimated. More than 1.000 February. 198t Volume 67 139 ucc 008457 *% I :*rV> --.jI % f Two C-I23s of the 12th Air Commando Squadron fly low over a South Vietnam jungle in 1966 spraying defoliation liquid. The spray, sometimes called Agent Orange or dioxin, was used as a tactical weapon to defoliate Viet Cong base areas, crops and communications routes. A class-action suit has been filed on ' behalf of the thousands of Vietnam veterans who claim injury caused by exposure to the spray. (InsetI 1970 photo offorest sprayed In 1965. suits have been filed concerning DES. a drag that many women took in the 1950s. DES allegedly causes cancer in their daughters. More suits are being filed against the federal government for in juries allegedly caused by atomic testing in the 1950s. Diseases allegedly related to exposure to toxic materials in industrial waste dumps, reflected in the experience ofres idents of the Love Canal area-in Niagara Falls. New York, may be the basis of the next major round of suits, lawyers predict. Pointing to growing evidence that toxic wastes dumped throughout the nation may be injurious to nearby resi dents, lawyers suggest that the flood of latent disease suits is just starting. "Cer tain toxicants in widespread use since World War II are potential ticking toxic time bombs," said Yannacone. Lawyers also agree that the tort sys tem is being forced to develop new ways to deal with illnesses that are not diag nosed until years after exposure to the substances that allegedly caused them. Latent disease cases differ from tradi tional torts in which "people always know the party that injured them and when the injury occurred." said Paul Rheingold of New York City, who has lectured widely on product liability mat ters. The legal problems are further complicated, said professor Thomas Lambert of Suffolk Law School in Bos ton. by Federal Tort Claims Act prohibi tions against suing the federal govern ment and workmen's compensation law prohibitions against suing employers. These factors cause plaintiffs to focus on product manufacturers, which often re sults in problems in identifying defen dants. "The tort system is going to ex pand in ways that were not indicated a few years ago," said Dennis Connolly, senior counsel for the American Insur ance Association. A landmark example of this expansion is the California Supreme Court's recent ruling in Sindel! v. Abbott et al (607 P. 2d 924). The court applied the new theory of "market share liability," under which several firms producing the same prod uct are liable in proportion to their share of a product market when the manufac turer whose product caused injury cannot be identified. (See "DES Ruling Shakes Products Liability Field." LawScope, July 1980, p. 827.) The U.S. Supreme Court has denied certiorari in Sindell. and similarly, an at tempt by the California General Assem- Chris James, JJ. of Wichita Falls, Texas, with his wife Terry, is con vinced that his life has been permanently scarred by the effects ofa defoliant with which he was sprayed in South Vietnam in 1968. His wife has had two miscar riages, and three children were horn prematurely. Only two survived, and they have birth deflcts. bly to overturn it also failed. Sheila Birnbaum of New York University pre dicts that it will take several years to re solve the issues raised by Sindell as simi lar suits wind through other courts. The Sindell theory already has been raised in suits in New Jersey and Texas. Bailey said. In Abel v. Eli Lilly and Company (289 N.W. 2d 20), the Michigan Court of Appeals last year ruled, in a DES case, that firms marketing the same product are jointly liable. Charles Nichols of De troit, a plaintiff co-counsel, suggested that Abel shows that such suits can be based successfully on existing law. Although Sindell generally favors plaintiffs, defendant asbestos manufac turers in several California suits may re ceive the first major benefits of the rul ing, Bailey said. Citing evidence of a link between asbestos injuries and cigarette smoking in asbestos workers, he said that asbestos manufacturers recently filed cross-complaints against the na tion's major tobacco companies for a percentage of damages. Under Sindell, Bailey said, it must no longer be proved "whether a worker smoked Camels or Luckies. Apply Sindell to every poten tial [asbestos] claimant and the tobacco industry has one big, big problem." An October ruling by the Sixth Circuit in Cincinnati could have widespread im pact on the issue of who should cover 140 American Bar Association Journal ucc 008458 Bailey: "The goose that lays the golden egg may be tilled because there is just not enough money to go around." liability, lawyers said. In Insurance Co. of North America v. Forty'Eight Insula tions. Inc. (No. 7S-I322-26), the Court of Appeals affirmed a rating by the U.S. District Court in Detroit that applied an "exposure" theory of liability requiring several insurance companies covering the asbestos product manufacturer be tween 1923 and 1970 to share liability coverage for asbestos-induced diseases in proportion to the length of time that each insurer served the manufacturer. INA had argued for a "manifestation" theory under which only the insurance company at the time employees learned they had contracted asbestosis should provide liability coverage. The manifestation theory would put manufacturers, virtually uninsured against potentially massive claims filed in the past few years, out of business "and leave plaintiffs without recovety," said defense lawyer Frederick Baron of Dallas. Robert Bissell, an attorney for Celotex Corporation, a Tampa. Florida, asbestos products manufacturer, noted that most insurers already have with drawn from that area under the onslaught of suits. Insurers warn that their industry is threatened by Forty-Eight Insulations. Bailey said, "There is no way you can underwrite insurance based on an expo sure theory." He said. "The only seri ous proponents of the exposure theory are asbestos manufacturers and insurers who could lose more under the manifes tation theory." Other federal circuits are expected soon to rale on the issue in other suits, said insurance industry representatives Baron: The Forty-Eight Insulations case will benefit both plaintiffs and manufacturers. Rbeingold: Legislation may check court rulings favoring those trim sue. and lawyers. If the rulings conflict, the Supreme Court may have to step in, they said. The federal government's role is a key unsettled factor in latent disease suits. Leonard Rivkin of Carden City. New York, national trial counsel for the Dow Chemical Company in Agent Orange suits, said that while the government is generally protected against suits by the Federal Ton Claims Act. "More and more courts are trying to carve out ways for plaintiffs to cause the government to be a party" in latent disease suits. Rivkin and James Ries. director of asbestos pol icy for the Johns-Manvilte Corporation in Denver, the nation's largest asbestos products manufacturer, said that indus try also questions whether it should be liable for injuries related to products made and used under government direc tion, such as Agent Orange and some as bestos products. In In re "Agent Orange." the court provided some answer to that question. Rivkin said. It dismissed the government and allowed defendant manufacturers to claim, in proceedings expected to start in the fall, a "government contractor's de fense" that would free them from liabil ity if they show that they manufactured Agent Orange according to government specifications. The defense could have wide impact in other cases in which manufacturers argue that they met gov ernment standards in dealing with toxic substances. Rivkin said. Industry must meet such standards. Rivkin said, add- ing. "For gosh sakes, give us a defense if we complied." But Victor Yannacone said, "The last group claiming that [defense] was hung collectively. They were called the Nuremberg defendants." Tort lawyers generally agree that re cent rulings raise questions about how-- and whether--the tort system should be used to deal with latent disease suits. Some lawyers suggested that latent dis ease suits are pushing the ton system beyond its limits. The system "works well on a one-to-one or even a larger basis," said Dennis Connolly of the American Insurance Association, "but it works badly when there are two million against 300." Bailey warned. "You see a ton system being totally clogged in the courts" and a cost to industry and insur ers that is "potentially disastrous." Ries of Johns-Manvillc predicted that the eventual impact would be an increase in the cost of doing business that "would have an adverse effect on our econ omy." Others say corporate defendants and their insurers may be financially un able to fully compensate plaintiffs, a problem cited in the Agent Orange litiga tion. Suffolk Law School's Lambert, how ever. questioned whether industry is threatened by latent disease suits. "Who is trying to sell a drug company?" Lam bert asked. "How many have become insolvent? Where are all the victims of strict liability?" Yannacone said there are ways to fully February, 1981 Volume 67 141 ucc 008459 compensate the entire class of plaintiffs without draining the resources' of defen dants. For example, he said, plaintiffs in the Agent Orange litigation are seeking a decree requiring defendants to establish a trust fund out of current earnings as a reserve against claims. There is general agreement with Paul Rheingold's prediction that efforts wfll be made to offset, through legislation, recent court decisions favoring plaintiffs. Such efforts are already underway in Congress. A spokesman for Sen. Cary Han (D-Colondo) said that Han plans this year to reintroduce the Asbestos Health Hazards Compensation Act. which would establish a pool fbnded by industry and the federal government to compensate asbestosis victims. The bill would also prohibit damage suits by as bestosis victims. Although insurers and industry generally favor such legislation, there are barriers to passage, warned Bailey, who said that Han's Ml was per ceived in the last session "as too much of an effort to bail out Johns-Manville. The real scope of the social problem must be presented to avoid that type of political problem." --James Podgers A Love Canal area resident protests. Toxic waste dumping sites: the next lawsuit battleground? ucc 008460