Document r9JMpv1qEadBJm3zjzon0NK0

*u /^hU.AA, LEGAL AFFAIRS > ' A legal tl la California on May 27, Richard J. alongside it (Ln May evidence came to the deed that the land was filled with Hogard won a $1.2 million jury verdict light suggesting that the federal govern chemical wastes and assigning "all risk against Johns-Manvilie Corp. aad Ray- ment it3eif may have dumped poisonous and liability incdent to the [canal's] use" bestos-Manhattan lac. And he may get chemicals in and around the canal in the to the board. Not until the mid-1970s did more in punitive damages. Hogard re mid-1940s.) The asbestos cases also trace it become clear, that the wastes had tired in 1975 from Long Beach Naval back as far as the 1940s, when shipyard leached into adjacent homes. Shipyard after contracting asbestosis. workers now developing cancer and as Hooker denies ail liability. Says Hook What is more, 1.000 similar cases are bestosis began to work openly with the er President Donald L. Baeder "It's pending in the Los Angeles area. toxic insulating material. Users of des quite simple. We have not owned or had Another 1.000 claimants--including were not the current plaintiffs but their any control of Love Canal for 27 years. It some in a class action on behalf of 2.4 mothers, who took the drug beginning in was a very responsible- dosure that million veterans --seek what could 1947 to prevent miscarriages. And it. has would have passed modern standards.. What happened was that the site was breached by the dry, state. 3nd county. Two roads were cut through. We have ample records that we tried to. discour age them from using that site as a schooL" Murky legality. Whether Hooker can pin the ultimata liability on the school-board and dty is problematic. "Shifting re sponsibility is a murky legal area," says Victor E. Schwartz, chairman of the U. S. Commerce Dept task force, on product liability. "If there's a hazard and a company fails to warn, then it is liable; it can't contract out of iis liability to third parties," he says. What is- an adequate warning under the circum stances, and whether Hooker had an . obligarion-to monitor the- leaching,, re main-to be tested. " The .thorny problem of transferring A Love Canal homo; Hooker Chemical say3 it has had no control of the area in 27 years. liability from industry to government crops up in the Agent Orange and asbes amount to 540 billion in damages from now been IS years since veterans first tos cases also. Some herbidde manufac Dow Chemical Co. and four other manu came into contact with Agent Orange. turers argue that they sold the govern facturers. More than a decade ago those Statutes of limitation, designed to ment what it wanted and that liability companies made an essential ingredient force lawsuits to be started within one to for its use should be charged to the Pen in Agent Orange, a defoliant used by the six years after an injury occurs, do not tagon. But the government is immune1 U. S. military in Vietnam. The veterans apply in most states to- cases involving from suits by soldiers for war-related, contend that the substance caused can- latent diseases. .And from the mid-1960s injury or illness. ' ' car, liver abnormalities, nervous disor on, most 3tata courts washed away an Johns-Manvilie and others have also ders, and birth defects in offspring. old legal doctrine that prevented suit3 tried to shift' the.blame for asbestosis Last March the California Supreme against manufacturers if the plaintiffs onto the government, which bought the. Court said that women suffering from did not buy the defective products direct~ company's-product for.rise by govern-'-. adenocarcinoma, a virulent form of vagi - ly from them. Consequently, increased, . meat workers, mainly in- shipyards. .So nal cancer, can sue all manufacturers of litigation i3 stretching legal principles to far,- these efforts have been singularly. des (diethyistilbestroi), even though the the breaking point. ' -- - Vi ".'-iL : unsuccessful. Last December a federal. '. drug was taken by their mothers up to Tho U. S. wu Hookor. The.federal,govern court refused to-order the-Norfoli Naval- 30 years ago, and no one knows which ment has brought four suits against Shipyard to reimburse in for a settle-" particular company sold it to them. Hooker for 5124 million. Compensatory ment of $69,000. The Navy had reacted Legal fallout These and other situations, and punitive damages totaling $12' bil lazily to news in 1964 that asbestos was such as the increasingly convoluted skein lion to 515 billion are being sought by carcinogenic to insulation workers, but of events at Love Canal, are industrial 1,200 residents in Niagara Falls. Several its negligence, the court ruled, was "sec time bombs. Their causes lie deep in the bills have been introduced in Congress to ondary to the negligence involved in set past and are the outcome of actions chat create a "super-fund" to dean up aban ting loose dangerous products upon a at the outset no one anticipated would doned dumps such as Love Canal, thus vulnerable work force." A provision in lead to such injur/. And the legal fallout passing the cost on to the American tax the model product liability law that is beginning to get thick. payer. But precisely where liability will Schwartz drafted last year would ab Hooker Chemicals & Plastics Corp. or ought to be placed, nobody knows. solve manufacturers like Monsanto Co. began dumping toxic wastes in Love In 1953, under pressure of condemna and JM that respond to a mandatory pro Canal in the early 1940s and stopped by tion, Hooker deeded the property to the vision in a government contract, but 1953, well before homes were built Niagara Falls School Board, nocing in Schwartz's draft although introduced in ISO BUSINESS WEEK: June -.6, 1980 LEGAL AFFAIRS PCB-ARCH-EXT0375856 L ` - ; : T the House, has virtually no DES caused their cancer, but it is possible chance of enactment. that their burden of proving the state of The lack of clear precedent and the manufacturer's knowledge will be a complex statute of limitations eased. Three states--Pennsylvania, Col in New York mean that the Love orado, and Washington--have adopted a Canal litigation 'will linger for a rule of absolute liability; If a company long time. This is why the most markets an inherently dangerous prod likely outcome will be a negoti uct, it is assumed to know of any hazards' ated settlement, although associated with its use, even if these haz Richard J. Lippes, of Buffalo, at ards were unknown at. the time of sale. torney for the 1,200 residents, Failure to warn thus automatically es- . says that no talks are going on. tabb'shes liability, me California court But informed speculation i3 that Hinted in 1978 that it, too, might adopt if Hooker were to offer S200 mil such a rule.. And if the plaintiffs win, the lion. the suits could be ended. court's unique March ruling would re Potential liability in the asbes quire that damages be apportioned tos cases rivals the claims at among the industry by market share. Love Canal. Some 11 million Saarcn for a solution. This reshaping of workers have been exposed to as legal doctrines to fit cases has prompted bestos since World War II; add many to look beyond the-judicial system ' an aggressive and growing net - for a solution. Business "can- continue- to work of lawyers seeking poten try lawsuits, but does, that resolve the- - tial ''bystander" plaintiffs (hair problem ?"' asks Dennis J. Marknsson, dryer users, school children), and Johns-Manville associate counseL ".All of settlements, understandably, are these things, one way or another, add up becoming the norm. Some are to a. bigger question: How do we. handle large; in 1977, 445 workers set occupational or paraoccupationai disease tled with the government, PPG claims in this country?" " Industries Inc, Corning Glass Congress took one approach m 1976 Works, and various South Afri Handling asbesto*: A shipyard workman who got with the Toxic Substances Control Act, can suppliers, for $20 million. asfcestosis has won $1.2 million in damages. which gives the Environmental Protec Johns-Manville alone has about tion-Agency clear authority., to keep tabs. - 32100 open litigation flies involving 5,000 their customers' workers; The same legal on company testing of substances before claimants. It has disposed of 500 others, duty to warn appiie3 to makers of DES. marketing. Another approach is- to- set only 19 of which went to trial Most suits against the 200-odd manufac up compensation plans for specific dis- ' Duty !o warn. Since state and. federal turers, of which Eli Lilly & Co. had the-: eases. One bill would have set up a gov laws bar employees from suing their largest market share, have been defeated ' ernment-industry- fund of $30 .mUGon': arl - employers, most asbestos workers with on the unique contention that the plain year and would annually pay asfcestosis.- cancer or asbestosis have sued manufac tiffs cannot tell from which-companies victims $13,000. That, bill has died for-to.- turers for failure to warn of the danger their mothers bought DES. Under con now, but it and others are., csrtain.-to be.; in inhaling the deadly fibers. In most ventional legal theory, when the plaintiff, resurrected. . rttfh.. i : -A~- . states, a manufacturer that fails to warn cannot prove who produced the injury- In the: long- ran, however, no one sola- . of hazards that it knew or should have causing product, the case is a an end.' (don is likely to suffice. As .Dr-Sidney MI; I known about is liable to consumers for- But the California Supreme Court ruling, ' Wolfe, director-of the. Health Research ensuing injuries. means that plaintiffs will be given a . Group m Washington, - D- C-^'po3 it, In a key test in-1973, a federal appel chance to go to trial (as other plaintiffs society's solution to long-term -risk must' late court ruled that companies must have in lower courts in New York and . be-; "multifaceted:. government regnia.-- warn not only their customers but also Michigan). They will have to prove that.; . ti6n,_litigation, and insurance."')/ a ' '.j' The Catch-22 risks . : permit correlations between workplace , . might thus' wind' apt ag.'eyidejica;ajgaSnsth environment and the- workers' physical 1 them.* :=?--fi"vA A:Y5 - i-Wizf wpjr?-?> In health data banks i- . conditions.-: '-Hf. FiA' to Risks. But companies such as' Indiana' y al claim s ^ttdrafey. for- Standard.i'dgffjt^l For Standard Oil Co. of Indiana, keeping Standard, Monsanto, Du Pont, Allied: that data his campanyTs amassmg'coaLd: tabs on employee health is important Chemical, and others that have, built- be used to such,effect He sees the'-sy^y'.. business. From eight terminals at com monitoring systems may find themselves- ` tern as an aid. in1 rebutting claims "that ' pany offices around the country, medical victims of a legal Catch 22, 3ays Profed- "exposure of la. worker to an environmen data based on periodic examinations, in sor Alan F. Wastin, Columbia Universi tal. hazard - caused a specific ailment .;. cluding annual physicals for all high- ty professor of political science and a . Wolkonsky- agrees and denies that the risk workers, are fed to a computer at lawyer, who is currently studying the company developed the computer pro Chicago headquarters. Another comput legal rights of employees. Westin says no gram out of any concern for legal liabili er coilect3 data on 125 hazardous sub one knows when a company is required ty- "We're just interested in expanding- stances. to act on data it collects. A lawyer could scientific knowledge," he says. He pre With epidemiologists at Rush-Presby- subpoena the data to convict a company dicts that industrial monitoring systems terian-SL Luke's Medical Center in Chi of "willfully" allowing a hazard to con could disprove findings of the Occupa cago, Dr. Peter Wolkonsky, Standard's tinue. A monitoring system established tional Safety A Health Administration medical and environmental health ser to comply with the law's demands that or other agencies that a particular sub vice 'director, is building a data base to executives not stick their heads in sand stance is harmful. 154 BUSINESS WEEK: June 16, 1980 LEGAL AFFAIRS PCB-ARCH-EXT0375857