Can a defendant in a tort case be held liable for injuries caused by a product it manufactured – even if such a product was never directly sold to the plaintiff?
The answer is not as simple as a straight-forward "yes" or "no." When it comes to asbestos lawsuits, courts have generally said yes. The legal issues are still extremely complicated, however.
One of the reasons that asbestos litigation is such a tangled web is the fact that asbestos illnesses have such a long latency period; someone exposed to asbestos fibers in the early 1960s may only now be starting to experience symptoms. In the meantime, companies that manufactured or sold asbestos or products containing asbestos go out of business, or merge with or are bought out by other companies or large conglomerates. Of course, if Small Company A is bought out by Large Conglomerate B and Small Company A has asbestos liability or lawsuits pending against it, Large Conglomerate B acquires that liability as well (former Halliburton CEO Dick Cheney found out about this the hard way back in 1999 and 2000).
Another reason has to do with a conspiracy among asbestos producers that was proven back in 1977. Correspondence between the CEOs of Raybestos, W.R. Grace, Johns Manville and others dating back to the 1930s was discovered that year in the course of an early asbestos suit. Known as the "Sumner Simpson Papers," these documents clearly showed that the health hazards of asbestos were proven by medical science and well known – and that industry players engaged in a deliberate conspiracy to withhold this information from the general public.
In this case, the "general public" also included other companies that manufactured products containing asbestos, such as brake linings, HVAC systems, boilers and other types of machinery and building materials. But exactly how far did that conspiracy go? Do the smaller manufacturing companies that purchased and used asbestos obtained from primary sources also bear liability – and if so, to what extent? Furthermore, can they be held liable for "secondary exposure"?
In recent months, juries in Bloomington, Illinois have awarded $120 million in damages to asbestos plaintiffs. The question being raised surrounds the fact that said plaintiff had never received or been directly exposed to products from these companies. The judges in these cases upheld the awards because of "circumstantial" evidence of conspiracy: interlocking boards of directors (not uncommon), mutual participation in past medical studies, written documents, etc.
In the meantime, Illinois appellate courts have been overturning these verdicts. At the same time, these same courts have tried to keep the door open to a retrial. In a recent appeal in which the Illinois Supreme Court overturned a $2.5 million verdict against Honeywell and Pneumo Abex, the judge stated that plaintiff lawyers must prove that these companies actually entered into an agreement– not simply have engaged in "parallel conduct." Basically, "parallel conduct" means that two or more companies were engaging in the same behaviors, independently from each other, which according to the judge in this case, does not constitute proof of a conspiracy.
What would constitute proof? Paper or electronic documents (such as emails) or recordings or phone conversations.
Interestingly, the original defendant in this case was neither Honeywell nor Pneumo Abex, but the Union Rubber & Asbestos Company (UNARCO), which was among the first companies to file for Chapter 11 in 1982 because of asbestos liability. A bankruptcy trust was established in 2001 for UNARCO, which has since had nearly 440,000 claims filed against it.
What's the connection between these entities? We'll explore that in the next post.
Bowker, Michael. Deadly Deception. (New York: Touchstone, 2003)
Fisher, Daniel. "Illinois Appeals Courts Stem Tide of Asbestos-Conspiracy Cases." Forbes, 18 July 2011.
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