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4/5/2018 By Michelle Potter and Carrington Austin

Senior Consultant Kathrin Hashemi also contributed to this post.

Toward the end of December 2017, asbestos defendants entangled in litigation in Pennsylvania received some promising news. In the case Roverano v. John Crane, Inc., the Pennsylvania Superior Court confirmed that the state’s Fair Share Act pertains to asbestos cases. Furthermore, it stated that any defendant found liable for the plaintiff’s injury can be apportioned a share of the liability for the plaintiff’s claim. This is true regardless of the solvency status of the defendants.

About the Fair Share Act

The Fair Share Act (42 Pa.C.S. § 7102(a.1) – (a.2)) was enacted in Pennsylvania in 2011, but until this decision, the standard practice for allocating liability in asbestos cases was on a per-capita basis among liable defendants named on the complaint. Applying the Act to asbestos cases could prove to be quite significant, if implemented. The Act suggests that the following would apply:

  • In cases with multiple defendants, each defendant would only be liable for its share of the total liability.
  • Defendants would be subject to several liability, except for certain types of cases or in cases where a defendant has been held liable for at least 60% of the total liability. In such instances, a defendant would be held for joint and several liability.
  • The judge and jury would be given evidence of liability for all defendants that have settled with the plaintiff, including bankrupt entities, in order to divide the verdict based on the plaintiff’s exposure.

To date, the Fair Share Act has been applied inconsistently, or not at all, to asbestos cases. The argument against applying the Fair Share Act is that quantifying a plaintiff’s asbestos exposure by defendant can be very complex. If a claimant used asbestos products independently of one another and for established amounts of time, determining each defendant’s share of the liability would be relatively straightforward. However, that is rarely the case for exposure history to asbestos products. Products were commonly used in conjunction with one another for varying amounts of time, making it much more difficult to quantify each defendant’s contribution to the claimant’s alleged exposure.

About Roverano v. John Crane, Inc.

The case subject in Roverano v. John Crane, Inc. involved William Roverano, who was exposed to asbestos products while working for a utility provider from the early 1970s to the early 1980s. During that time, he came in contact with over 15 asbestos product types from several different manufacturers. As a result, the court denied the defendants’ motion to apply the Fair Share Act to the case, stating that since asbestos exposure is not quantifiable, the Fair Share Act cannot apply.

After deliberating, the jury found in favor of Mr. Roverano and his wife. They were awarded over $6 million, evenly split among eight defendants — all of which were solvent companies named on the complaint.

Following the verdict, the defendants appealed the court’s initial decision to exclude the Fair Share Act from the case. John Crane and another appellant argued that the precedent of excluding asbestos cases from the Fair Share Act’s requirements was baseless, as the plain language of the Act did not say anything expressly about asbestos litigation. The Superior Court agreed.

This swift move to alter precedence is of critical importance to asbestos defendants seeking truer liability judgments in the courtroom. In addition, including the share of the other defendants, regardless of solvency, also provides a more accurate picture of each defendant’s liability. As we know, companies are not typically named on complaints once they file for bankruptcy — or in some cases even before they file for bankruptcy, as noted in the KCIC blog post about Kaiser Gypsum. However, this decision highlights the importance of keeping bankrupt companies in evidence. Solvent defendants shouldn’t have to bear a higher liability because other entities filed for bankruptcy. Allowing the Fair Share Act to apply to asbestos cases can serve to lower the solvent defendant’s overall share of the liability by ensuring that the solvency status of other defendants does not absolve those companies from their fair share of liability.

KCIC’s Analysis Using BEV

While having the ability to include bankrupt companies on the verdict sheet is beneficial for the defendants in trial, obtaining evidence of claimant exposure to a bankrupt entity can be very cumbersome and time consuming. Given that the plaintiff will likely not be offering evidence of exposure to the bankrupt company on the complaint or in the interrogatories, the last, best chance to get that exposure into evidence is through an admission from the plaintiff at the deposition phase that he or she was exposed to or remembers seeing the bankrupt company’s product. Another option may be to retain an expert at trial to testify to the likelihood of exposure to a bankrupt company’s products based on the plaintiff’s work history and approved jobsite lists from the trusts.

KCIC’s Bankruptcy Evidence Verification (BEV) tool can help defendants and their counsel efficiently obtain that potential link between a plaintiff’s work history and the bankruptcy trust’s approved jobsite and product lists. By matching a plaintiff's work history gathered from the complaint, interrogatory responses, or other discovery documents with a bankruptcy trust's approved jobsite, occupation, industry, and product lists, defense counsel can use BEV to produce a report within seconds that lists alternative exposures to the products of bankrupt companies.

For example, the KCIC team used BEV to identify potentially liable bankruptcy trusts based on Mr. Roverano’s exposure history. All 30 defendants named on the complaint were solvent at the time of filing, and no exposure to bankrupt entities was mentioned in the complaint or deposition. However, BEV revealed that over 25 bankrupt companies had approved jobsites and/or products that overlapped the plaintiff’s exposure history. If those bankrupt entities had been included on the verdict sheet under the Fair Share Act, it is likely that the jury would have allocated a share of the verdict to at least some of these bankrupt companies, thus lowering the liability for the solvent defendants, potentially significantly.

The Pennsylvania Superior Court’s decision serves as a foundation for a more just and transparent asbestos litigation environment — one in which all tortfeasors responsible for the claimant’s exposure are held accountable, including bankrupt companies. Our hope is that through our BEV tool, KCIC can help defendants use the Pennsylvania law to its fullest and ensure that exposures to bankrupt companies are considered with the same weight as solvent companies.

BEV revealed that over 25 bankrupt companies had approved jobsites and/or products that overlapped the plaintiff’s exposure history. If those bankrupt entities had been included on the verdict sheet under the Fair Share Act, it is likely that the jury would have allocated a share of the verdict to at least some of these bankrupt companies, thus lowering the liability for the solvent defendants, potentially significantly.

Current Status of the Case

In January 2018, the Roveranos petitioned for appeal. They maintain that the liability must be apportioned on a per-capita basis because of the strict liability of this case. They cite the explanation that in asbestos cases, it would be nearly impossible for a jury to determine a specific percentage of liability associated with each defendant’s product. Further, they argue that the Superior Court used flawed logic in its interpretation of the Fair Share Act and ruling to include bankrupt entities.

KCIC will be keeping a close watch as the appeals process unfolds.

 

Michelle Potter

About Michelle Potter

Having spent much of her career serving clients who are asbestos defendants, Michelle Potter is an authority on the current state of the asbestos litigation industry. At KCIC, her day-to-day role is to manage client relationships and lead projects to develop and implement claims processing procedures and systems, as well as to perform complex analyses of different types of claims and insurance.

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