Document Lgk52JMY6OXjQjkdap5zQaMV5

IN THE tKITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BARRY R. HASSEY and CATHERINE HASSEY v. UNIRDYAL, INC. CIVIL ACTION s NO. 80-43 UNIROYAL'S BRIEF IN SUPPORT OF ITS MOTION FOR SUGARY JUDQgNT URL 125S1 Pursuit to this Court's Order of Septenber 30, 1980, Uni-royal now files this brief in support of its notion for sanitary judgment. For the convenience of the Court, Uniroyal has included herein certain portions of memoranda already filed in this action so that the Court may consider the merits of Uniroyal's argument with only minimal cross reference to other documents. I. FACTUAL & PROCEDURAL SUMMARY Plaintiff, Harry Hassey, worked at the Masland Duraleather plant ("Masland") frcm Septenber, 1951 to August, 1978. Hassey was originally an errployee of the Masland Duraleather Ccnpany, but defendant Uniroyal acquired 100% ownership of that corporation in January, 1962. Masland continued as a wholly-owned subsidiary of Uniroyal until Decenber, 1972, when Uniroyal liquidated the ccnpany altogether, continuing to use "Masland Duraleather" merely as a fictitious name. This state of affairs continued until August, 1978, when the Masland plant was closed down. URL 12592 Hassey has sued Uniroyal, alleging that his exposure to certain chemicals during his enploynent at Masland caused the cancer from which he ultimately died. Before bringing this suit, he filed another claim, also against Uniroyal, seeking conpensation under the Pennsylvania Work men's Ompensaticn Act. This state eia*in is still pending. Because an enployee vfro is eligible for cccpensaticn aider the Workmen's Condensa tion Act is barred fron suing his employer at carnen law. Uniroyal, on February 27, 1980, filed a motion for sunnary judgment in which it preferred evidence showing that it was Hassey's "statutory enplcyer" under the Act. Hassey pronptly petitioned the Court for an opportunity to take discovery regarding the asserted enplcyer-enployee relationship, and the Court allowed such discovery by Order of April 1, 1980. The parties, and indeed the Court, are new in agreement that Uniroyal is Hassey1 s statutory enployer and that any claim plaintiff has under the Workmen's Condensation Act is properly brought against Uniroyal. The present disagreement is the result of a legal argument pressed by Plaintiff, an argument herein referred to as "bifurcation." Hassey reasons that even though Uniroyal is his statutory employer for purposes of recovery uider the WbrJonen's Ccnpensaticn Act, any iirnunity given a statutory errplqyer by that Act is limited to the time period for vhich the enployer can prove his statutory employer status, under this theory, Hassey's occupational illness may be "bifurcated," with a bar raised against suit premised cn exposure during the enploynent period and no bar for a suit premised on exposure during the pre-enployment -2- URL 12593 period. This theory was largely accepted by the Ccurt in its Order and Memorandum of Jme 30, 1980. In Uniroyal's view, however, Hassey's illness is a single injury that may not be bifurcated. Mow that the parties agree that Unircyal is the proper, and indeed the oily possible, defendant under the Workmen's Caipensaticn Act, Uniroyal believes that its motion for sunnary judgment should be granted, under Unircyal's analysis, the statutory employer's immunity frcxa suit is op-extensive with its liability for any Workmen's Compensation recovery. In that the latter is not subject to bifurcation, neither should be the former. Because unircyal rejects bifurcation, it does not believe that the date on which it became Hassey's statutory employer is relevant. Thus, Unircyal largely confined its evidence in the original motion for sumary judgment to the post-liquidaticn period of 1972-1978, for in that period Unircyal's status as Hassey's statutory enployer is clear, and, in the traditional view at least, such status disposes of this case in its entirety. If, however, this Court adopts plaintiff's novel bifurcation theory, then Unircyal submits that it can show that the correct bifurcation vrould be to consider September, 1951 to January, 1962 as the pre-enpicyment period and January, 1962 to August, 1978 as the employment period. Plaintiff has urged a different division, with December, 1972, as the date when the employment 1 relationship was established. T It is not clear whether plaintiff alleges that Unircyal supplied Mas land with PVC prior to 1962. Unircyal has no record or information suggesting it did so, but it is conceded that if bifurcation is permitted, Unircyal cannot be considered Hassey's statutory employer before January, 1962. -3- The Court, in granting Uniroyal's notion for reconsideration, has expressed a willingness to address the bifurcation issue. If Unircyal pre vails an this question, its notion for surrary judgnent should be granted. If, however, the Court adheres to Hassey's position cn bifurcation, then Unircyal asks that the Court accept evidenoe cn the question of what dates are appropriate ones for that bifurcation. II. HASSEY'S CLAIM IS FOR A SINQJ3 INJURY, VKTCH, IF WORK-RELATED, IS GCMPENSARTfi UNDER THE PENNSYLVANIA WORKMEN'S COM PENSATION ACT, AND AS SUCN, THE CLAIM MAY NOT EE BIFURCATED _______________ The "bifurcation" issue presently before the Court is apparently novel. Uniroyal has been able to discorer no case in which the question was even raised, inch less answered. Uhirqyal respectfully submits that this apparent ^3 lack of authority is the result of an assorpticn cn the part of the bar that bifurcation is not permissable and a consequent failure to raise the question. Moreover, Uniroyal believes that such an assumption is soundly based and that a decision by this Court to allow bifurcation would radically alter the existing understanding of the Worionen's Compensation Act. In the present case the parties are largely agreed regarding the traditional application of the Workmen's Compensation Act. It is agreed that if Hassey's disease was occupational in origin, Uniroyal is the "statutory employer" under the Act. The Pennsylvania Act is very clear: . . . The enployer liable for compensation pro vided by section 305.1 or section 108, subsections (k), (1), (m), (o), (p) or (q), shall be the enployer in whose enplcymsnt the enploye was last exposed for a period of not less than one year to -4- SSStl ly n 2 77 P.S. 5411(a). the hazard of the occupational disease claimed. ... Thus Uniroyal, having shown that it was Hassey's enployer at the time of his last exposure, has shown that it is the "statutory employer" liable for all ccrpensaticn inder the Act, regardless of the length of time Hassey was exposed to PVC while enplcyed by others. Hassey recognizes this. He is suing Chiroyal alone for workman's Ccnpensation benefits arci has not suggested, nor could he suggest, that any previous enployer is responsible for any part of those benefits. Bifurcation has never been permitted in the allocation of liability under the Workman's Ccnpensation Act and is precluded by the distribution of risk mandated in the language quoted above. It is also agreed that the Workmen's Ccnpensation Act creates an exclusive remedy. In return for his right to seek ccnpensation mder the Act, the esplcyee surrenders his right to sue in tart. 77 P.S. 5481(a) provides: (a) The liability of an enployer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death as defined in section 301(c) (1) or (2) or occupational disease as defined in section 108. See Albrecht v. Pneuco Mach. Co., 448 F.Supp. 851 (1978)? Hefferin v. Stenpkowski, 247 Pa. Super. 366 (1977). 2~. A siiTu3ar approach is taken in Section 301(g) of the Pennsylvania Occupa tional Disease Act, 77 P.S. 51401(g). It should also be noted that the language set out above applies only if the employee's exposure is "in whole or in part" after June 30, 1973. Hassey's alleged exposure fulfills this requirement. -5- V URL 12596 tfcat is not agreed upon is the extent of this exclusivity. Plaintiff has taken the position that it is limited to the period during which the employer employee relationship existed. For any other period of exposure, Hassey con tends that he may sue ttiixeyal as a third party supplier of chemicals. The right to proceed against third parties is preserved in 77 P.S. 481 (b) Unircyal believes that there are four compelling reasons to reject this argument. First, the language of the statute neither mandates nor even suggests such a result. 77 P.S. 481 (a) relieves the errployer of any and all liability to his employees other than that provided by the Act. While 481 (b) preserves the enployee's right to sue a third party supplier, it ncwhete sug gests that he nay do so if that supplier is also the statutory employer, who is liable for the injury complained of under the Act. Indeed, 481 (b) goes so far as to extend the employer's immunity to include claims for contribu tion or indemnity made by a third party. Neither 481 (a) nor 481 (b) give any indication that an employer's innunity frcrni suit is measured by anything other than his liability for carpensation. This observation leads naturally enough to the second reason for rejecting bifurcation: bifurcation is unfair and subjects an enployer to double liability. If the WorJonen's Compensation Act may be said to offer the employer intimity fron oomitcn law actions in return for his acceptance of responsibility far providing compensation, it follows that the tvo parts of tte Act are co-extensive. In an occupational disease case, a statutory enployer is liable for all of a plaintiff's exposure, even if a large part of it took place while plaintiff was employed elsewhere. TO allocate lia bility in this manner, and then to fashion another and inconsistent rule for --6-- URL 12597 the iamunity that goes hand in hand with that liability is not cnly unfair, but close to irrational. Support far this view is found in Moffett v. Harbison-W^ivor Refractories, Inc., 339 Pa. 112, 14 A.2d m (1940). lhere the Pennsylvania Supreme Cburt concluded that an enployee surrenders his axnni law right of action against his enployer even as to injuries allegedly inflicted before the Act was effective because the enplqyee was covered when the disability occurred. The Court reasoned that if the date of injury under the Occupational Disease Act was such that plaintiff could claim ccnpensation under that Act, he was barred from seeking uxyjensatlon in a ccnuui law action even though some of the injury might have been inflicted before plaintiff was covered: Plaintiff argues that even if the above construction is accepted, he would have sur rendered his right to sue in trespass cnly for injury occurring after the effective date of the act, January 1, 1938, but not for so ouch of the injury, if any, as was negligently inflicted before that. Fran his averment that he was enployed for many years "prior to March 8, 1938," he would infer that at least part of his injury resulted before he surrendered his uuuiim law remedy. It is unnecessary to consider whether in any circumstances, his statement of claim could be supported on that theory; the statute is definitely against that position? section 3, quoted above, pro vides that "The date when the disability occurs from occupational disease shall be deemed to be the date of injury or accident." Plaintiff's disability occurred on March 8, 1938, when he quit vrcrk. The Act of 193? was then in effect. 339 Pa. at 118, 14 A.2d at 114. This case, althou^i not directly an point, is a clear rejection of a plaintiff's effort to bifurcate his illness in order to proceed in two fora simultaneously. -7- URL 12598 Moffett, moreover, supports the third argument against bifurcation; an illness is a single injury, not a series of injuries. Pennsylvania Courts have been consistent in treating occupational diseases as "injuries" that take place at a particular point in time, rather than as slowly developing illnesses resulting frcm long-term exposure. The Supreme Court has explained Pennsylvania's policy in this regard: Occupational diseases are, from a legal standpoint, peculiar in this -- that they arise, not ten an accident or event happening at a precise moment, but frcm a day by day exposure to mhealthful condition over an extended period; the exact time of their origin is necessarily obscure and their insidious pro gress is not revealed until, frequently after a long interval, the disability which they create manifests itself. In the case, of accidents ccm- pensable wder the Workmen's Ccnpensation Act 177 P.S. $1 et seq. ], the accident and the damage resulting therefrom, the cause and the effect, are usually determinable immediately and they are practically simultaneous. But, because in disability arising frcm an occupa tional m both cause and effect are pro tracted and a long interval is apt to elapse between the exposure and the disability, it becanes necessary to fix a time at which the injury which is the subject of ccnpensation shall be deemed to arise and the right to condensation accrue. Accordingly, the Occu pational Disease Ccnpensation Act of 1937 provides, section 3, that 'The date when the disability occurs frcm occupational disease shall be deemed to be die date of injury or accident.' Thus it makes the occurence of the disability the event which constitutes the ocnpensable injury, although the dis ability is necessarily preceded by an exposure and an occupational disease of which it is the culmination. McIntyre v. Lavino & Oo., 344 Pa. 163, 165-66, 25 A.2d 163, 164-65 (1942); Accord DeMascola v. Lancaster, 200 Pa. Super. Ct. 265, 369-70 (1963). -8- URL 12599 Thus, if an employee works in three different asbestos plants, for example, any one of the three, or all three, may have contributed to his developing asbestosis. The policy of Pennsylvania is to treat his illness as a single indivisible injury and to place *11 the liability for this exposure cn a single employer, even if he enployed the plaintiff for a shorter 3 period than other employers. In Gaydosh v. Richircnd ?^*tor Co., 164 Pa. Siper. Ct. 154, 63 A.2d 502 (1949), a case involving the liability of insurance carriers, Travelers Insurance Co. was held liable even though it insured the plaintiff's employer for only the last month of plaintiff's exposure. Two other insurance companies, who had insured for two and eighteen years of plaintiff's exposure respectively, were not liable because liability is fixed an the basis of plaintiff's last exposure by 5301(g) of the Occupational Disease Act. Accord Pekorofsky v. Glen Alden Coal Co., 171 Pa. Super. Ct. 105, A.2d B90 (1952); Walsh v. State Workman's Ins. Fund, 28 Northumb. L.J. 67 (C.P. 1957). Given this clear policy of the Ccnnonwealth, Hassey's disease must be treated as a single injury taking place at a specific point in time. As Moffett, McIntyre and Detescola make clear, Pennsylvania has unqualifiedly rejected efforts to divide and segregate periods of e^osure. Instead, it has constructed a system far determining which employer will bear the burden for the entire illness. Plaintiff now urges this Court to repudiate this policy and, for the first time, divide an individual's exposure and resulting disease. Mo Pennsylvania Court has ever done so for any reason. Pennsylvania treats occupational diseases as single indivisible wholes. T. The last enplcypr hwr* liability as between employers. In certain cases, tte Ccrncnwealth may pay some of the Occupational Disease liability. -9- Fourth, and finally, the Court should consider the practical effects of bifurcation. Pennsylvania's adherence to the single injury approach to occupational disease is in truth the only practical solution to causes of action involving work-related illnesses, which often nature over a substantial period of time, Wiis is so because as a practical setter bifurcation is not bifurcation at all; it is the abrogation of the isrunity given in 77 P.S. 481 (a) If plaintiff can establish the causative relationship between his exposure to certain chemicals and his cancer, we submit that it would be difficult, if not impossible, for him or anyone to attribute the disease to one period of exposure and not another. As the Pennsylvania Supreme Court noted in McIntyre, supra, oocupntiraal diseases generally arise from prolonged exposure over a long period of time. Thus, in the great majority of cases in which a marker had more than cne employer in his career, bifurcation will simply deprive the employer respoisible for Workmen's Ccnpensaticn the statutory benefit of his imramity. In sun. Uniroyal respectfully urges this Court to reject bifurcation. In so doing, Unircyal does not suggest that the Court need or should offer employers any protection for injuries recei^d outside of the employment con text. If, to use the Court's hypothetical case, a plaintiff is hit by a taxi cab and later becomes an ecrployee of the cab ccnpany, the injury sustained is simply not covered by the Workmen's Compensation Act. Were that Hassey's situation, his ccnpensaticn claim would be dismissed, but his carmen law claim could proceed. Similarly, if the new taxi-cab ccrrpany employee aggravates his injury while on the job, he has in fact sustained two injuries, not one, and the law may rationally treat these injuries separately. Here, in contrast. -10- URL 12600 URL 12601 Hassey has sustained a single injury. Uniroyal is responsible under the Act for all of that injury if it was in fact caused by employment conditions. It oust follow that it is iimune from ccmuun law suit for all of that injury. As noted above/ a contrary conclusion is (1) unsupported by the Act itself; (2) unfair because it permits double recovery; (3) directly contrary to Pennsylvania's policy of treating an occupational disease as a single injury; and (4) unworkable as a practical matter. Uniroyal respectfully urges the Court not to accept plaintiff's argument that an occupational, rtisease is divisible, an argument that has never been sanctioned by any Pennsylvania Court. HI. IF BIFURCATION IS PERMUTED, HASSEY'S EMPLOYMENT WITH UNIRCYAL SHOOED BE SEWED TO COVER THE PERIOD BETOEEN JANUARY, 1962 AND AU5UST, 1973 When it filed its motion far sunmary judgment, Unixoyal believed that if it proved that it was Hassey's "statutory employer" for purposes of recovery under the Workmen's Condensation Act, the exclusivity of that remedy would require that the Court dismiss Hassey's suit. Since that tine, plaintiff's bifurcation argument has raised the possibility that seme measure of partial surmary judgment would be appropriate. If the Court accepts bifurcation, cne question that is sure to arise is the correct determination of the employment period. On this question the parties have expressed a reasonable difference of opinion. Hassey worked at Masland from Septeirber, 1951 to August, 1978. His tenure there may be divided into three periods. From-Septenber, 1951 to January, 1962, Mas land was a separate corporation with no connection to Uniroyal. From January, 1962 to December, 1972, Masland was a corporation, but was wholly owned by Unircyal. Tron December, 1972 to August, 1978, Masland was merely a -11- URL 1280 fictitious name used by Unircyal after the liquidation of the corporation originally using that nans. Ite parties agree that Uniroyal clearly was not Hassey's statutory employer during the first period and that it just as clearly was his statutory enployer during the third period. At issue is the second period, during whidi Uniroyal owned Masland, but Masland continued to exist as a corporate entity. In detexmining whether Unircyal was Hassey's enployer during this second period, the Qourt nust decide whether a master-servant relationship existed between the two. See 77 P.S. S21, 22. The touchstone for this relationship is the right to exert "control" over an esployee. Mohan v. Continental Distilling Oorp., 422 Pa. 538, 591, 222 A.2d 876# 879 (1966). If the subsidiary corporaLien, ratter than the parent, is the "master" in the seise of control over the enplcyee, then the subsidiary, not the parent, is the statutory enployer. The Court in Mohan concluded that that was the case an the facts presented in that appeal. Unircyal believes that it can show the Court that the facts here differ front those in Mohan and that here the parent corporation is the "master" under the WorJanen's Ccnpensaticn Act. The basis of Uniroyal's belief in this regard is set cut in the affidavit acconpanying this brief. Pram 1962 on, Unircyal, not Masland, negotiated with Hassey's representative (the United Rubber, Cork, Linoleum & Plastic workers of America), regarding the terns and conditions of Hassey's enployment. The contract between plaintiff's Union and Unircyal .set the hasTf? ground rules fear the Masland enployees' relationship with their enployer. A labor contract is traditionally negotiated between a union, representing the enployees, and the enployer -- not between the union and a third party. If -12- URL 12603 Masland was in fact Hassey's employer during the 1962 to 1972 period. Masland, not Uniroyal, should have been negotiating the terms and conditions of his enployment- Mareover, from 1962 to 1972,Uniroyal, not Masland, was directly responsible for industrial hygiene and toxic materials at Masland -- the very area upon vhich Hassey's suit here is based. Although Masland continued to exist as a corporate entity, it was not a wholly separate operation, as was the case in Mohan. Accordingly, Uniroyal beliefs that it can dencnstrate that it, not Masland, was Hassey's employer from 1962 to 1972, as well as from 1972 to 1978, and it does not wish to be precluded front doing so merely because it failed to anticipate plaintiff's bifurcation theory when it filed its notion for sunmaxy judgment. That theory, as Unircyal has demonstrated above, is both novel and entirely out of keeping with the traditional mderstanding of the exclusivity of the WoarJansn's Ccrpensaticn remedy, upcn which Uniroyal's notion for sunmary judgment was based. Respectfully submitted. Dated; October 10, 1980 w- -- -- Alfred'W. Putnam, Jr. kJ DRINKER BXEGLE) & REftlH 1100 Philadelphia National Bank Building Broad and Chestnut Streets Philadelphia, PA 19107 (215) 988-2907 Attorney for Uniroyal, Inc. -13- STATE OF NEW YORK ) SS. : COUNTY OF NEW YORK ) AFFIDAVIT VIRGINIA K. SMITH, being duly sworn, says: 1. I an an Assistant Secretary of Uniroyal, Inc., a defendant in this action. I an authorised to make this affidavit on behalf of Uniroyal. 2. During the period 1962 to 1972, Uniroyal owned 100% of the stock of Masland Duraleather. As a wholly owned subsidiary, Masland Duraleather acted in furtherance of Uniroyal's business interests. 3. Daring the period 1962 to 1972, the earnings of Masland Duraleather were included in Uniroyal's consolidated financial statement. 4. During the period 1962 to 1972, the terms and conditions of the employment of Masland's employees were governed by an agreement entered into between Uniroyal and the United Rubber, Cork, Lineoleum and Plastic Workers of America. 5. During the period 1962 to 1972, employees at Masland Duraleather received Uniroyal health and medical benefits, and participated in Uniroyal retirement programs. 6. During the period 1962-1972, Uniroyal was responsible for industrial hygiene at Masland Duraleather, and for ensuring that proper precautions were taken for the handling of toxic materials at Masland Duraleather. Sworn to before me this 9th day of October, 1980. NOTARY PUBLIC PATHIt*A A. MeGUtRE Kotiry Public, Ctott of Now York No. >*715288 Qualified ir. County Cart. Filed in Neo; YctSt County^ Commissioo Expiree torci'. 20. 1932 ' VIRGINIA K. SMITH URL 12605 CEKTIrlQaE OF 5EFP/ICE I, AIFHED W. PUINAM, JR., hereby certify that a copy of Uniroyal's Brief in Sisport of Its Motion for Sunmary Judgment has been served vpon plaintiff by hand delivery to plaintiff's counsel, Andrew F. Mixmaugh, CTAHf, MXMNADGH & McGONICTE, Suite 805, Continental Building, 400 Market Street, Philadelphia, PA 19106 October 10, 1980 .Xlfzed W. Putnam, Jr. f'Jo; A STATE OF NEW YORK ) SS.: COUNTY OF NEW YORK ) AFFIDAVIT VIRGINIA K. SMITH, being duly sworn, says: 1. I am an Assistant Secretary of Uniroyal, Inc., a defendant in this action. I am authorized to make this affidavit on behalf of Uniroyal. 2. During the period 1962 to 1972, Uniroyal owned 100% of the stock of Masland Duraleather. As a wholly owned subsidiary, Masland Duraleather acted in furtherance of Uniroyal's business interests. 3. During the period 1962 to 1972, the earnings of Masland Duraleather were included in Uniroyal's consolidated financial statement. 4. During the period 1962 to 1972, the terms and conditions of the employment of Masland* s employees were governed by an agreement entered into between Uniroyal and the United Rubber, Cork, Lineoleum and Plastic Workers of America. 5. During the period 1962 to 1972, employees at Masland Duraleather received Uniroyal health and medical benefits, and participated in Uniroyal retirement programs. 6. During the period 1962-1972, Uniroyal was responsible for industrial hygiene at Masland Duraleather, IURL 2601 and for ensaring that proper precautions were taken for the handling of toxic materials at Masland Duraleather. Sworn to before me this 9th day of October, 1980. NOTARY PUBLIC PATRICIA A. McGUIRE Kali.-/ Public, Ctote of New York No. *710288 Qualified in Drcrw County Cert Filed in New York County Commission Expire* tercl; c0, 13S2 w, i' VIRGINIA K. SMITH _/ U(H 12608