‘Bad facts make bad laws’: Attorneys compare Mo. and Ill. asbestos work comp laws

ST. LOUIS - While comparing asbestos litigation trends in neighboring states, two attorneys from both sides of the asbestos argument predict a wave of insurance cases as asbestos defendants fight for coverage from decades-old insurance packages.

As part of the HarrisMartin Midwest Asbestos Litigation Conference in St. Louis on Sept. 18, Patrick Stufflebeam of HeplerBroom and Andrew O’Brien of the O’Brien Law Firm compared trends in Illinois and Missouri asbestos litigation, specifically Workers’ Compensation laws.

Workers’ compensation

Stufflebeam and O’Brien outlined the differences between neighboring states’ workers’ compensation system, saying Illinois is “wait and see” and Missouri is “show me the enhanced benefits.”

Stufflebeam said Illinois workers’ compensation claims typically come from local employers and employees but has seen the “net cast a little bit wider” recently as Illinois fields calls from foreign states.

Illinois uses two laws to govern these types of claims: the Workers’ Compensation Act and the Illinois Occupational Diseases Act.

Stufflebeam said the two acts are essentially mirrors of each other, because they each contain identical provisions addressing asbestos, calling it both an injury and a disease.

However, the two acts differ on their statutes of limitations. Injured employees filing a claim under the workers’ compensation law must file it within 25 years of the exposure and those filing a claim under the occupational diseases law must file it within three years of the diagnosis.

In some cases, Stufflebeam said plaintiffs are filing cases beyond both limitations, which is where exclusive remedy comes in to play.

He explained that when claims are filed after the statute of limitations time has run, the remedy is the very fact that it is too late for a case.

However, there are some exceptions, such as whether the employer’s actions were intentional.

O’Brien, on the other hand, discussed workers’ compensation laws in Missouri, saying the facts show that the defendants have the upper hand there.

“Bad facts tend to make bad law,” he said, “and good facts tend to make good law.”

He explained that previously, workers’ compensation claims only paid for burial expenses in wrongful death cases if there was no widow or children.

“On paper, you have quite a valuable claim,” O’Brien said of the early claims.

Then, in 2005, Missouri redefined what was considered a compensable injury in these claims. And eventually, occupational diseases were added to the state’s workers’ compensation law.

While a claimant could still file suit despite the workers’ compensation laws, Stufflebeam said some defendants are self-insured or have an insurance provider that refuses to defend the company, meaning defendants may be “pushing back” against the lawsuit in an effort to work through the insurance issue.

“It’s a large snowball effect,” Stufflebeam said.

As a result, he predicted that there will be a mass filing of insurance cases as defendants fight for coverage and insurers fight against it.

O’Brien explained that the insurance industry realized that it sold coverage packages that didn’t require any paid claims for years. Now, insurers have to pay claims on policies from decades ago.

Insurance companies have reworked coverage language and are charging additional premiums to cover liability for the next several years, O’Brien said.

“They are scamming all these companies to pay for what they’ve already paid for,” O’Brien said.

Personal Jurisdiction

The two also discussed personal jurisdiction, which is a popular subject in Madison County, where roughly 90 percent of the newly filed cases come from out-of-state claimants.

Stufflebeam addressed what it takes to make a jurisdiction “at home,” noting that there is no test or standard handed down by the U.S. Supreme Court to make the determination more black and white.

Instead, parties must argue that an affiliation exists, but can’t simply rely on the fact that a defendant does business in a particular state.

“Affiliations must be so continuous and systematic as to render it essentially at home in the forum state,” the presentation stated.

Common connections to a particular state include an affiliate’s office, employees, licenses or real estate purchases.

However, Stufflebeam said it could take more convincing to prove jurisdiction, because “purchases in and of itself are not sufficient to render a case at home.”

As an example of how gray it can be when arguing for a specific jurisdiction, O’Brien mentioned a case he was able to keep in Missouri by relying on a local registered agent.

O’Brien said he got the court to agree that the defendant intended to do business in Missouri and chose to make itself physically present in Missouri by having a local registered agent.

Settlements

When addressing settlements, Stufflebeam said there are "three D’s"for asbestos defense attorneys: defend, delay and don’t pay.

However, when payment is inevitable, he said settling seems to be the "go-to" resolution for asbestos cases.

In both states, the defendants must confirm that a settlement was reached and then must pay the award within 30 days of the agreement.

When dealing with written confirmation of a settlement agreement, Stufflebeam strongly encouraged both defense and plaintiffs’ attorneys to consider what constitutes written confirmation. He added that virtually anything could potentially be interpreted as written confirmation.

For example, an email chain discussing settlement options could be taken as written confirmation of an agreement by one of the parties. To avoid such confusions, parties should be careful about their communication and clearer about their intentions.

Additionally, O’Brien said Missouri is currently concerned about how to balance defendants’ rights to information and confidential settlements.

The general public policy in Missouri is to encourage settlements, but some defendants are seeking settlement information to help unmask any potential additional exposures.

O’Brien said some judges are uncomfortable disclosing the information because it fails to encourage settlements.

Missouri punitive damages

Stufflebeam and Patrick ended by discussing a recent development in Missouri after the state’s Supreme Court unanimously struck down its cap on punitive damages.

The case they were referring to is Lewellen v Franklin decided Sept. 9, in which a jury awarded $25,000 in compensatory damages and $1 million in punitive damages on both counts of a common law fraud claim.

After the verdict was entered, the circuit court reduced the punitive damages award pursuant to the state’s cap, but the state Supreme Court held that the mandatory reduction of Lewellen’s punitive damages award violated her right to a jury trial.

“Because the right to a jury trial in 1820 included the right to have a jury determine the amount of punitive damages in an action for fraud, section 510.265’s cap on punitive damages awards is unconstitutional because the statute imposes a legislative limit on the jury’s assessment of punitive damages when such limits did not exist in 1820,” the Supreme Court held.

“The court is trying to do things, undoing what the legislature is doing,” Stufflebeam said of the decision.

While the Lewellen case was not an asbestos claim, Stufflebeam and O’Brien said the decision is important because it removes a punitive damages cap for personal injury asbestos cases as well.

Howver, Stufflebeam said defendants are prepared to argue in favor of caps on wrongful death asbestos cases.

“We’ll argue that one,” he said. “We’ll try to come up with something creative.”