Featured Expert Contributor: Mass Torts—Asbestos
Robert H. Wright is a Partner with Horvitz & Levy LLP in Los Angeles, CA.
Although courts across the country have issued conflicting opinions about the “bare metal” defense, the Iowa Court of Appeals has affirmed a judgment under a state statute that encompasses and extends that defense, and the Iowa Supreme Court has granted review to decide the issue.
Under the “bare metal” defense at common law, a product manufacturer is not liable for injuries caused by asbestos-containing products made by others. As my prior posts have noted (here and here), courts have split on application of that defense. The United States Supreme Court rejected the defense to products liability claims in maritime cases. Air & Liquid Systems v. DeVries, 139 S. Ct. 986, 991 (2019). But the highest courts in some states have embraced the defense. E.g., Coffman v. Armstrong Int’l, Inc., 615 S.W.3d 888, 890 (Tenn. 2021); O’Neil v. Crane Co., 266 P.3d 987, 991 (Cal. 2012); Simonetta v. Viad Corp., 197 P.3d 127, 132-33 (Wash. 2008). Most recently, the Tennessee Supreme Court concluded earlier this year that the manufacturers of equipment could not “be held liable for injuries resulting from products they did not make, distribute, or sell.” Coffman, 615 S.W.3d at 900.
In 2017, Iowa enacted the Asbestos and Silica Claims Priorities Act. See Iowa Code § 686B. That statute creates something akin to the bare metal defense, but applies it to all defendants, not just product manufacturers. Iowa Code § 686B.7(5) states that a “defendant in an asbestos action or silica action shall not be liable for exposures from a product or component part made or sold by a third party.”
In Beverage v. Alcoa, Inc., No. 19-1852, 2021 WL 1016602 (Iowa Ct. App. Mar. 17, 2021), the Court of Appeals applied the defense. Charles Beverage worked inside an aluminum plant where he was allegedly exposed to asbestos. After Charles’s death, his estate and children filed asbestos-related claims against both the owner of the plant and an installer of insulation The Court of Appeals held that the statute barred plaintiffs’ claims. Id. at *1.
The Beverage plaintiffs argued that the statute applied only to manufacturers. The Court of Appeals disagreed, noting that the statute, by its terms, applies to any “defendant.” Id. at *2. The Court of Appeals held that the term “defendant” should be given its common, ordinary meaning in the context of civil litigation and that all of the parties the plaintiffs had sued were defendants. Id. at *2-3.
The Beverage plaintiffs argued that, “while not directly stated in the statute,” its “meaning and purpose” were “quite clearly the establishment of the ‘bare metal defense.’ ” Id. at *3. The Court of Appeals concluded the statute was not so limited. It recognized that the immunity afforded by the statute “may overlap or even encompass the protections available under a ‘bare metal’ defense,” but nonetheless found no reason to conclude that the provision “was a mere codification of that defense.” Id. at *4. As the Court of Appeals stated, if “ ‘the legislature intended’ to merely codify a common-law ‘bare metal’ defense, the legislature ‘could easily have so stated.’ ” Id.
The Court of Appeals held that the “plain purpose” of the Iowa statute was “to narrow asbestos litigation by protecting defendants against liability for exposure to products that were ‘made or sold by a third party.’ ” Id. at *4. That effect “will naturally tend to refocus asbestos litigation on more culpable targets, such as asbestos manufacturers.” Id. The Court of Appeals stated there was “nothing absurd about this.” Id. The Iowa Supreme Court has granted review in the case and will have the final word.
The Iowa statute seems to be the first of its kind. Although the statute shares the same name and some of the same provisions as a model act by the American Legislative Exchange Council, the provision at issue does not appear in the model act. Moreover, my research did not disclose a similar provision in any other state statute.
The Iowa statute may not remain unique. The Georgia Legislature is considering a bill with similar language, which would provide that a “product liability defendant in an asbestos action shall not be liable for exposures from a product or component part made or sold by a third party.” 2021 Georgia House Bill No. 638, § 3. Now that the Court of Appeals has given effect to the Iowa statute, it could become a model for legislation in Georgia and beyond.
The post Iowa Supreme Court to Consider Breadth of Unique “Bare Metal Defense” Law appeared first on Washington Legal Foundation.
GSA, USDA Partnership Transformed the Digital Experience for USDA Customers and Avoided $50M+ in Burdensome Costs
The post Legal Group Tells Justices Federal Law Overtakes ABC Test appeared first on Washington Legal Foundation.
Jurgita Ashley is a securities and corporate governance partner with Thompson Hine LLP, co-chair of the firm’s Public Companies group, and co-chair of the firm’s ESG Collaborative. David Wilson is an internal investigations, government enforcement, and securities and shareholder litigation partner with Thompson Hine LLP and partner in charge of the firm’s Washington, D.C. office.*
Calls for increased environmental, social and corporate governance (ESG) disclosures are growing exponentially. When providing them, companies should put in place systems to ensure that the disclosures are accurate and complete and implement litigation and enforcement safeguards.
Adding to demands from investors, employees and ESG rating organizations; legislative action in Europe and the United States; climate-based activity at state level; and the Biden administration’s focus on ESG issues is the U.S. Securities and Exchange Commission’s (SEC) new emphasis on climate and ESG disclosures. On March 4, 2021, the SEC announced the formation of a Climate and ESG Task Force in the Division of Enforcement. Soon thereafter, on March 15, 2021, the SEC announced a blueprint for reinvigorating climate and ESG-related disclosures in light of investor demand. Then SEC Chair Gary Gensler and other Commissioners released statements regarding ESG expertise on boards of directors and what form the climate and human capital disclosures may take in SEC filings. While the SEC has yet to initiate any definitive rule changes, proposed ESG rulemaking is currently on its agenda for October 2021, and its recent actions demonstrate a clear direction toward heightened sustainability reporting.
The SEC’s Climate and ESG Task Force is expected to initially focus on “identify[ing] any material gaps or misstatements in issuers’ disclosure of climate risks under existing rules,” “analyz[ing] disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies,” and pursuing whistleblower tips on ESG-related issues. In addition, according to Law360, in July 2021, SEC Acting Director of Enforcement Melissa Hodgman noted that more ESG disclosure-related enforcement actions might be coming, potentially in cases “where there was a misstatement or something that wasn’t disclosed to investors that they needed to know to make [an] investment decision.”
Where disclosures are made in this burgeoning area as companies respond to the growing demands for ESG disclosures and navigate the challenges of what to disclose and how to disclose it, litigation is sure to follow. Litigation and regulatory activity related to ESG issues has already begun to take shape and is likely to evolve in the coming months and years. Potential areas for litigation include companies’ operations and governance arrangements, reporting, and officer and director claims for breach of fiduciary duties. Companies also have been subjected to “greenwashing” claims that dispute disclosures or claims that products or processes are environmentally friendly. Some recent lawsuits have challenged climate change disclosures and whether boards have adequately monitored their companies’ food safety practices, and others have alleged breaches by directors of their duty to ensure their companies’ commitments to diversity and anti-discrimination.
Particularly when including ESG disclosures in SEC filings, companies should recognize increased liability risks and ensure that the disclosures are accurate, appropriately cautioned, consistent with the company’s statements in sustainability reports and other forums, and carefully incorporated into the company’s disclosure controls and procedures. Some companies may see claims alleging that omitting certain ESG disclosures now rises to the level of a “material omission” or that general statements about ESG achievements include “material misstatements,” particularly during offerings or other transactional activities or when there are significant fluctuations in stock prices.
Now is the time to implement disclosure controls and prepare for what is on the horizon.
*The views expressed in this article are attributable to the authors and do not necessarily reflect the views of Thompson Hine LLP or its clients. This publication is provided for educational and informational purposes only and is not intended and should not be construed as legal advice.
Jim Wedeking is Counsel to Sidley Austin LLP in the firm’s Washington, DC office.
The EPA has listed, per- and polyfluoroalkyl substances, known as “PFAS,” on a draft version of its fifth Chemical Candidate List (“CCL 5”). 86 Fed. Reg. 37,948 (July 19, 2021). PFAS, a grouping of over 4,000 synthetic organofluourine chemicals, were used in hundreds of products since the 1940s due to their ability to repel water and oil, reduce friction, and their temperature resistance. Id. at 37,962. At their zenith, PFAS chemicals could be found in firefighting foams, clothing, cosmetics, furniture, and food packaging among other products. Dubbed “forever chemicals,” PFAS chemicals resist natural breakdown and can accumulate over time. PFAS chemicals migrated from landfills, manufacturing plants, firefighting foam uses, or other sources to drinking water. See generally, EPA, Basic Information on PFAS. Lawsuits against PFAS manufacturers allege that that long-term exposure to PFAS chemicals may lead to health problems. As a result, these once obscure industrial miracle additives have led to a litany of state attorney general and personal injury suits.
Although U.S. companies voluntarily phased out PFAS production in the late 2000s, their multitudinous uses over approximately 60 years means that they are commonly found in the environment. Environmental groups and members of Congress have criticized EPA’s delay in regulating PFAS chemicals, especially the chemicals perfluorooctane sulfonic acid (“PFOS”) and perfluorooctanoic acid (“PFOA”). Formal regulation under several environmental statutes has inched along, partly due to the complex statutory processes for studying and listing substances for regulation. On July 19th, EPA took another small step towards regulating PFAS by including it in the draft of CCL 5.
How the Chemical Candidate Lists Work
The Safe Drinking Water Act (“SDWA”) authorizes EPA to establish binding limitations for contaminants in public drinking water systems called maximum contaminant levels and non-binding maximum contaminant level goals. 42 U.S.C. § 300g-1(a). But the SDWA does not specify what substances are regulated; that is EPA’s job.
Listing decisions begin, in part, with the Unregulated Contaminant Monitoring Rule. SDWA requires EPA to issue a list of no more than 30 unregulated contaminants to be monitored by public drinking water systems serving more than 10,000 people and, under certain circumstances, smaller public drinking water systems serving between 3,300 and 10,000 people. 42 U.S.C. §§ 300j-4(a)(2), (j)(1)(A). Even smaller public water systems—those serving less than 3,300 persons—are sampled on a nationally representative basis. Id. § 300j-4(j)(1)(B). The results are then considered in generating the Chemical Contaminant List. Id. § 300g-1(b)(1)(B). Of the 30 contaminants monitored under the fourth Unregulated Contaminant Monitoring Rule (called UMCR 4), 17 were included in CCL 4 and 13 in the draft CCL 5. The most recent proposed Unregulated Contaminant Monitoring Rule, published on March 11, 2021, 86 Fed. Reg. 13,846, would include 29 PFAS substances to be monitored from 2023 through 2025.
The SDWA requires EPA to publish a Chemical Contaminant List every five years. 42 U.S.C. § 300g-1(b)(1)(B)(i)(I). The CCL includes unregulated chemical or microbial contaminants that are typically known to be present in public drinking water systems regulated under the SDWA, such as through the Unregulated Contaminant Monitoring Rule. Potential candidates include hazardous substances listed under Section 101(14) of the Comprehensive Environmental Compensation Response and Liability Act (commonly known as “CERCLA”) and registered pesticides that are not regulated under the SDWA. Id. § 300g-1(b)(1)(B)(i)(II).
Once listed on a Chemical Candidate List, the candidates are evaluated based on their potential health effects and their occurrence in public water systems. 42 U.S.C. § 300g-1(b)(1)(B)(ii)(II). EPA must identify those chemicals or microbial contaminants of the greatest public health concern from exposure through drinking water. Id. § 300g-1(b)(1)(C). This includes an evaluation of sensitive populations that face greater risks from exposure, such as infants and children, pregnant women, and those with suppressed immune systems. Id. Based on this review, EPA must select at least five contaminants from the list and make a determination, positive or negative, as to whether it will begin the process of regulation. Id. § 300g-1(b)(1)(B)(ii)(I). A positive determination means that EPA must begin the process of creating maximum contaminant levels and maximum contaminant level goals for the contaminant. Id. § 300g-1(b)(1)(E).
What Inclusion on the Draft CCL 5 Means for PFAS
PFAS is only one group of chemicals on a draft list that includes two other chemical groups, 12 microbial contaminants, and 66 individual chemicals. 86 Fed. Reg. at 37,948. EPA’s proposal seeks comments on the draft CCL 5 listings, meaning that the inclusion of PFAS for further evaluation is not yet final. Once finalized, and assuming that PFAS stays on the CCL 5 list (which is likely), the chances of any particular contaminant being selected for regulation is relatively low. The CCL is only a screening tool intended to prioritize EPA’s research. Id. at 37,950. The inclusion of a contaminant on the CCL does not mean that it will be regulated, only that it will be studied. Id. Once EPA studies the listed contaminants, it must make a positive or negative determination for only five of them. The chances of PFAS receiving a positive determination is not very high based on the history of the CCL program. And even if EPA issued a positive determination, it would be several years before any PFAS regulations are final.
The first CCL, designated CCL 1 in 1998, included 50 chemical and 10 microbial contaminants or groups based on recommendations by the National Drinking Water Advisory Council. 63 Fed. Reg. at 10,274 (Mar. 2, 1998). After five years of study, EPA only had sufficient data to make a regulatory determination for nine of the 60 candidates. 68 Fed. Reg. at 42,897 (July 18, 2003). It issued a negative determination for all nine, although EPA issued non-binding guidance documents or health advisories for four of the candidates. The remaining 51 contaminants were carried over to CCL 2, released in 2005. 70 Fed. Reg. at 9,071 (Feb. 24, 2005). After three years of additional study, EPA issued another seven negative determinations with five non-binding health advisories. 73 Fed. Reg. 44,251 (July 30, 2008).
CCL 3, released in 2009, listed 104 chemical contaminants or contaminant groups and 12 microbial contaminants. 74 Fed. Reg. 51,850 (Oct. 8, 2009). EPA issued a single determination in 2011, finding that it would regulate perchlorate—the first since the CCL process began. 76 Fed. Reg. 7,762 (Feb. 11, 2011). However, the rulemaking process for regulating perchlorate inched along, culminating in a proposed rulemaking, 84 Fed. Reg. 30,524 (June 26, 2019), that was ultimately withdrawn. 85 Fed. Reg. 43,990 (July 21, 2020). As for the CCL 3, EPA had only made one out of the statutorily required five determinations. In 2016, seven years after EPA issued CCL 3, it made four negative determinations to complete the cycle. 81 Fed. Reg. 13 (Jan. 4, 2016). The remaining 99 contaminants from CCL 3, with some exceptions and new additions, carried over to CCL 4, released later in 2016. 81 Fed. Reg. 81,099 (Nov. 17, 2016). Five years later, EPA issued positive determinations for PFOA and PFOS and negative determinations for six other candidates. 86 Fed. Reg. 12,272 (Mar. 3, 2021). EPA will now embark on formulating a proposed rulemaking for public comment.
The history of the CCL illustrates how slowly EPA can move and how rarely it will determine to regulate any particular drinking water contaminant. Should EPA decide to keep PFAS on the draft CCL 5 list, the issuance of final drinking water standards, if any, are still several years away.
PFAS Drinking Water Regulations More Likely to Come from Elsewhere
Although EPA may eventually regulate PFAS under the SDWA, others will likely beat EPA to the punch. The SDWA does not preempt state drinking water standards. In fact, states are free to issue drinking water regulations more stringent than federal regulations. 42 U.S.C. § 300g-2(a)(1). Several have already set their own PFAS standards. New Jersey was the first state to do so, imposing a maximum contaminant level of 13 parts per trillion (“ppt”) for perfluorononanoic acid (“PFNA”), 14 ppt for PFOA, and 13 ppt for PFOS. Since then, Massachusetts, Michigan, New York, New Hampshire, and Vermont imposed enforceable drinking water limitations for one or more PFAS substances. Other states may also pass their own PFAS drinking water standards before EPA completes its CCR 5 review and any regulations it may undertake thereafter.
Congress may also resort to legislative action before EPA issues PFAS drinking water regulations. It already revamped SDWA in 1996 after a perceived lack of administrative action. In the intervening 25 years, EPA has made a total of three positive determinations, none of which have resulted in any actual drinking water regulations to date. H.R. 3684, a transportation spending bill called the INVEST in America Act, includes provisions that would not only award states grant money to treat PFAS contamination (Sec. 13109), but would amend the SDWA to mandate that EPA set maximum contaminant levels for PFOS and PFOA within two years and other PFAS chemicals within 18 months thereafter (Sec. 13202). This is just one of several bills in the 117th Congress that would regulate PFAS in drinking water.
The inclusion of PFAS on the draft version of CCL 5 is the first step on a long road. Should EPA eventually prescribe drinking water standards for PFAS, whether through the existing SDWA process or one amended by Congress, it would likely serve only to fill gaps where states have not already issued their own PFAS regulations. Should EPA issue its PFAS drinking water limitations, several years from now, the list of states with their own standards will likely have grown.
The post EPA Listing of PFAS Is the First Step on a Long Road to Drinking Water Regulations appeared first on Washington Legal Foundation.
—John Masslon, WLF Senior Litigation Counsel
Click here for WLF’s brief.
WASHINGTON, DC— Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to hear a case in which the Ninth Circuit placed state law over federal law. In an amicus brief, WLF argues that Supreme Court review is necessary to clarify how federal preemption advances federalism principles and to vindicate Congress’s goals in passing the Federal Aviation Administration Authorization Act (FAAAA).
The case arises from a declaratory judgment action filed by owner-operator truck drivers and a trucking association. California uses the ABC test to classify workers as independent contractors or employees. Because truck drivers are key to motor carriers’ businesses, the ABC test classifies all truck drivers as employees. The plaintiffs argued that the FAAAA preempts applying the ABC test to motor carriers. The Ninth Circuit rejected this argument and held that California could apply the ABC test to motor carriers.
In its brief supporting the petitioners, WLF argues that Supreme Court review is needed to clarify how federal preemption of state laws like the ABC test advances core federalism principles. Because the States ceded power over interstate commerce to the federal government, no vertical federalism concerns arise. Preemption also advances horizontal federalism principles by stopping California from imposing its views on other States.
WLF’s brief also explains how holding that the FAAAA preempts California from applying the ABC test to motor carriers advances one of Congress’s aims in passing the preemption provision—promoting free enterprise. WLF therefore urges the Supreme Court to hear this case and remind the Ninth Circuit that federal law trumps state law.
Celebrating its 44th year, WLF is America’s premier public-interest law firm and policy center advocating for free-market principles, limited government, individual liberty, and the rule of law.
The post WLF Urges Supreme Court Not To Regulate Trucking Nationwide appeared first on Washington Legal Foundation.
The post Law Group Argues That Court Misapplied ‘Thole’ Ruling in ERISA Case appeared first on Washington Legal Foundation.
The post If FDA Won’t Rethink Rules on Off‐Label Drug Use, Courts Should appeared first on Washington Legal Foundation.