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DTCI: A protracted push and pull

May 4, 2016

 

costa-cristina-mug-dtci.jpg By Cristina A. Costa

In its 1989 decision Covalt v. Carey Canada, Inc., 543 N.E.2d 382 (Ind. 1989), the Indiana Supreme Court held that the 10-year statute of repose found in the Indiana Product Liability Act did not apply to actions based on negligence or strict liability where the injury at issue was caused by an illness or disease that may have been contracted as a result of protracted exposure to an inherently dangerous foreign substance, such as asbestos. In 2003, the Supreme Court overruled Covalt in its decision AlliedSignal, Inc. v. Ott, 785 N.E.2d 1068 (Ind. 2003), analyzing the new two-part statutory scheme enacted by the General Assembly (codified at I.C. § 34-20-3-1 and § 34-20-3-2), which provided different statutes of repose for product-based actions and certain types of asbestos litigation. In Ott, the Supreme Court expressly held that the two-part statute of repose provided in the Act was constitutional under the Indiana Right to Remedy Clause and the Privileges and Immunities Clause. This past March, the high court changed course, holding in Myers v. Crouse-Hinds Div. of Cooper Indus., Inc., 49S00-1501-MI-35, 2016 WL 825111 (Ind. Mar. 2, 2016), that the statute of repose governing certain asbestos litigation (codified at § 34-20-3-2) violated the Indiana Constitution’s Equal Privileges and Immunities Clause.

So, what gives? In less than three decades, it seems the Supreme Court has swung between several extremes affecting asbestos litigation without any material change in the science backing asbestos-related diseases, and certainly without any change in the constitution governing the validity of its statutes. While the headlines following these decisions may lead a reader to believe the high court’s opinions stand in stark opposition to one another, a closer reading uncovers the whittling and refining at play in each. This article will explore the substance of the court’s decisions in Covalt, Ott, and Myers, which all sought to address the same broad question: Whether a plaintiff may bring suit within two years after discovering an asbestos-related illness, despite discovering the disease more than 10 years after last being exposed to asbestos.

Covalt v. Carey Canada, Inc., a break from the 10-year statute of repose

The court first tackled this question in its 1989 decision Covalt v. Carey Canada, Inc., 543 N.E.2d 382 (Ind. 1989), overruled by AlliedSignal, Inc. v. Ott, 785 N.E.2d 1068 (Ind. 2003). In Covalt, the plaintiff worked with asbestos products between 1963 and 1971. In 1986, 15 years after his last exposure to asbestos, the plaintiff sued the defendant, a supplier of raw asbestos, after being diagnosed with lung cancer. The plaintiff alleged that the defendant supplied the plaintiff’s employer with raw asbestos without properly warning either the plaintiff or his employer of the dangers associated with asbestos. The defendant filed for summary judgment under the statute of repose contained in the Indiana Product Liability Act, which at the time of the filing of the lawsuit provided:

[A]ny product liability action in which the theory of liability is negligence or strict liability in tort must be commenced within two (2) years after the cause of action accrues or within ten (10) years after the delivery of the product to the initial user or consumer.

Covalt, 543 N.E.2d at 383. The court denied the defendant’s motion for summary judgment, holding that the statute of repose contained in the Act was inapplicable to the plaintiff’s claims. The court based its decision on two lines of reasoning. First, it confronted the issue of the compounding nature of asbestos exposure, noting that asbestos-related diseases, such as lung cancer, are the product of an ongoing and continuous injury that is only exacerbated by the passage of time. Second, the court addressed a more nebulous fairness-based argument, reasoning that it was unfair to apply a statute of repose founded on the date of a product entering a marketplace when that date made no difference to plaintiffs injured by raw asbestos. On this issue, the court stressed that asbestos is an inherently dangerous and toxic product at all times, adding:

An inherently dangerous substance like the raw, chrysotile, fibrous asbestos that [the plaintiff] was exposed to in this case is just as hazardous when it is first introduced into the market as it is ten (10) or even fifty (50) years later. Accordingly, since one can be injured from prolonged exposure to newly milled and manufactured asbestos just as readily as asbestos which has been on the market for ten (10) years or more, no purpose is served in legally distinguishing the two.

Id. at 385. Given these rationales, the court held that the statute of repose was inapplicable “where an injury to a plaintiff is caused by a disease which may have been contracted as a result of protracted exposure to a foreign substance.” Id. at 384.

Enactment of the amendedProduct Liability Act

The decision in Covalt may read like a piece of judicial activism, but the court was led by the language of the General Assembly’s amended Indiana Product Liability Act, which became effective while Covalt was pending. The amended Act materially modified the timetable applicable to asbestos litigation, and the language of the amended Act mirrored that provided by Indiana’s present-day statute of repose. Section 1 of the Act contains the familiar 10-year statute of repose, reading:

[A] product liability action must be commenced:

(1) within two (2) years after the cause of action accrues; or

(2) within ten (10) years after the delivery of the product to the initial user or consumer.

However, if the cause of action accrues at least eight (8) years but less than ten (10) years after that initial delivery, the action may be commenced at any time within two (2) years after the cause of action accrues.

Ind. Code Ann. § 34-20-3-1 (West) (hereinafter “Section 1”). Section 2 of the Act provides a special statute of repose for certain asbestos claims, allowing product liability actions for personal injury, disability, disease, or death resulting from exposure to asbestos to be commenced within two years after the action accrues, without regard to the 10-year statute of repose provided in Section 1. However, Section 2 applies only to actions against:

(1) persons who mined and sold commercial asbestos; and

(2) funds that have, as a result of bankruptcy proceedings or to avoid bankruptcy proceedings, been created for the payment of asbestos related disease claims or asbestos related property damage claims.

Ind. Code Ann. § 34-20-3-2 (West) (hereinafter “Section 2”). Thus, the holding in Covalt, which involved a lawsuit brought against a seller of commercial asbestos, closely aligned with the newly adopted statute of repose applicable to asbestos litigation in Indiana.

AlliedSignal, Inc. v. Ott: considering constitutionality

Fourteen years after the Covalt opinion, the court analyzed Sections 1 and 2 in AlliedSignal, Inc. v. Ott, 785 N.E.2d 1068 (Ind. 2003), and expressly overruled Covalt. However, rather than an outright break with precedent, Ott can be read as refining Covalt under the amended statute of repose. Ott involved a decedent who was diagnosed with lung cancer after being exposed to asbestos-containing products at least 15 years before diagnosis. The defendants in Ott argued that the plaintiffs’ claims were barred by Section 1 because the defendants were not part of the class defined by Section 2. In response, the plaintiffs argued that if their claims were not governed by Section 2, then Section 2 violated the Equal Privileges and Immunities Clause of the Indiana Constitution (Article I, § 23) and Section 1, as applied to the plaintiffs, violated the Right to Remedy Clause (Article I, § 12). The Indiana Supreme Court held that Section 2 was inapplicable to the plaintiffs’ claims because it applied only to defendants who sell commercial asbestos (“leav[ing] those who sell asbestos-containing products within the ambit of Section 1,” id. at 1072), and that the entire statutory scheme created by Sections 1 and 2 was constitutional under both the Right to Remedy Clause and the Equal Privileges and Immunities Clause of the Indiana Constitution.

The court’s reasoning behind finding Section 2 constitutional under the Equal Privileges and Immunities Clause should be examined because the court’s latest decision addressing this question (Myers v. Crouse-Hinds Div. of Cooper Indus., Inc., 49S00-1501-MI-35, 2016 WL 825111 (Ind. Mar. 2, 2016)) found Section 2 unconstitutional under the same clause. The Equal Privileges and Immunities Clause reads:

The General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms, shall not equally belong to all citizens.

Ind. Const. Art. I, § 23. In Ott, the court distilled the plaintiffs’ argument under this clause as follows:

[A]sbestos victims in Indiana are bound by the statute of repose governing product liability actions when suing particular categories of defendants but are not so constrained when suing others. Thus, the statute creates a distinction between asbestos victims and other victims under the product liability act.

Ott, 785 N.E.2d at 1077. The court’s decision on this question is concisely laid out in a single paragraph, holding “[w]hile it is true that such a distinction is created, we find it unnecessary to determine whether the distinction is constitutionally permissible because the classification resulting from the distinction of which the plaintiffs complain, as we have seen, works in favor of asbestos plaintiffs.” Id. Strangely, the court thus disposed of the plaintiffs’ constitutional claim while apparently admitting its validity. As pointed out by Justice Dickson in his dissenting opinion, the majority seemed to miss the mark when it came to interpreting the inequalities at issue: the plaintiffs’ claim was not that asbestos victims are treated differently from other victims under the Act, rather their claim was that certain asbestos victims are treated differently from other asbestos victims, on the basis of the purity of the asbestos encountered and the identity of the defendant sued. See id. at 1083 (Dickson, J., dissenting). With this distinction in mind, Justice Dickson found Section 2, in fact, violated the Equal Privileges and Immunities Clause as “[t]here [were] no inherent characteristics that distinguish workers with asbestos-related diseases caused by exposure to raw asbestos from those with the same diseases brought about by exposure to manufactured products containing asbestos.” Id. (Dickson, J., dissenting). Because the unequal treatment of each class could not be said to be related to any inherent difference between the classes themselves, Justice Dickson concluded, “[t]he constitutional violation [was] apparent.” Id. (Dickson, J., dissenting).

Myers v. Crouse-Hinds Div. of Cooper Indus., Inc.: the current standing of the statute of repose

Perhaps not surprisingly, Justice Dickson wrote the majority opinion in Myers v. Crouse-Hinds Div. of Cooper Indus., Inc., 49S00-1501-MI-35, 2016 WL 825111 (Ind. Mar. 2, 2016), which reconsidered the constitutionality of the Indiana Product Liability Act statute of repose and held Section 2 of the Act unconstitutional under the Equal Privileges and Immunities Clause. Myers consolidated three appeals involving asbestos-related diseases that presented the same principal issue: whether the plaintiffs’ claims were barred under Ott. The court in Myers “decline[d] to alter Ott’s holdings with respect to statutory construction, finding it settled under [the] doctrines of stare decisis and legislative acquiescence.” Id. at *1. Instead, the court addressed the plaintiffs’ argument that the statute of repose, as construed in Ott, violated the Indiana Constitution’s Right to Remedy Clause and Equal Privileges and Immunities Clause. With regard to the equal privileges and immunities challenge, the court noted that the Myers plaintiffs brought claims “different” from the one brought by the plaintiff in Ott: “Instead of comparing asbestos victims to non-asbestos victims, they compare[d] two separate types of asbestos victims. They argue[d] that, given Ott’s statutory interpretation, Section 2 draws a constitutionally impermissible distinction between asbestos plaintiffs injured by defendants who both mined and sold raw asbestos and asbestos plaintiffs who were injured by defendants outside that category. Id. at *2. The majority went on to analyze the plaintiffs’ claim under the two-part standard articulated in Collins v. Day, 644 N.E.2d 72, 80 (Ind. 1994), ultimately concluding that the unequal treatment of asbestos victims under Section 2 violated the Equal Privileges and Immunities Clause by drawing an impermissible distinction between two classes of asbestos victims. The court thereby invalidated Section 2 and expressly restored Covalt as the court’s controlling precedent with regard to the applicable statute of repose for asbestos litigation.

The Myers decision, no doubt, will have a significant impact on asbestos litigation as it pertains to practitioners framing their client’s issues before a court. However, given that the controlling precedent was influenced by (although not determined under) the very statute found to be unconstitutional by Myers, it is left to be seen whether the decision will have a significant effect on the outcome of asbestos claims brought outside Indiana’s usual 10-year statute of repose deadline.•

Ms. Costa is an attorney joining the Indianapolis office of Taft Stettinius & Hollister LLP effective May 9, 2016, and is a member of the Product Liability Section of DTCI. The opinions expressed in this article are those of the author.

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