SILICA. By David N. Lutz and Theodore Dorenkamp III. In This Issue Sophisticated User/Intermediary Defense...1. Case Law and Tort Reforms...

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1 SILICA LAW JOURNAL NEWSLETTERS L E G A L N E W S R E P O R T Volume 1, Number 2 September 2005 Silica Litigation Case Law and Tort Reforms A State-By-State Overview By Marc S. Gaffrey and Wendy R. Kagan After seeing the effects of asbestos litigation on the courts and the economy such as bankruptcy filings and the economic fallout that ensues few want to see a repeat with silica litigation. On the federal level, a comprehensive bill has been introduced to address the current and future handling of asbestos, silica and mixed dust claims. The original proposal sought to create a $140 billion national trust fund for asbestos claims. A subsequent draft, which came out of committee May 26, added silica and mixed dust claims to the agenda. But while federal measures work their way through the system to either become law or not, states are implementing their own guidelines to control silica litigation. Some changes are being made through state court decisions, others through legislation. Some are already in place, while others are still in the works. An overview of some states silica litigation-related decisions and tort reforms should prove useful to the litigator who wants to know what trends are developing that may affect his or her practice. continued on page 2 For Defendants: Developing the Sophisticated User/Intermediary Defense By David N. Lutz and Theodore Dorenkamp III In defending silicosis claim lawsuits, defendants must try to demonstrate the knowledge and sophistication of the plaintiff. This can be challenging, however, when the plaintiff disclaims knowledge or claims reliance on specific information from his or her employer or suppliers. The sophisticated user defense generally focuses on the knowledge and sophistication of the employer as a corporate entity regarding the industry as a whole and the product or product s inherent hazards specifically. There are good reasons to focus on several levels within the company. Co-workers of the plaintiff are likely to be less knowledgeable and sophisticated than people higher in the corporation, but securing admissions that people similarly situated to the plaintiff were aware of hazards will help undermine the credibility of a plaintiff who is feigning ignorance. Developing the knowledge and sophistication of the corporate employer, however, usually requires deposing people in management. Discovery should focus on the employer s knowledge of the silica-silicosis connection. Defendants should particularly concentrate, however, on areas in which the employer has far superior knowledge where silica is used in the workplace and under what conditions. Since silica can be used safely with appropriate processes and controls, the focus should be on the nature of the workplace, an area as to which the employer has superior knowledge and the suppliers may have no knowledge whatsoever. THEMES FOR POTENTIAL DISCOVERY There are several topics for potential discovery that should be considered, as well as many possible witnesses to depose. Some of the issues to look at are: Corporate Safety: Develop corporate safety policies, particularly with respect to handling hazardous materials and, ideally, with respect to silica (or, at least, other potential inhalants). The person tasked with developing and ensuring compliance with corporate safety requirements should have a good understanding of the purpose continued on page 8 In This Issue Sophisticated User/Intermediary Defense Case Law and Tort Reforms Doctors and Lawyers Tactics Minnesota California News Briefs

2 Overview continued from page 1 Marc S. Gaffrey is a partner at Hoagland, Longo, Moran, Dunst & Doukas, LLP, in New Brunswick, NJ. Wendy R. Kagan is an attorney in the firm. OHIO This state was the leader of tort reform for silica litigation, becoming the first state to place limitations on a plaintiff s right to sue for exposure to silica through passage of its Amended Substitute House Bill Number 342, which went into effect Sept. 1, Under this Bill, a plaintiff who wants to file a claim based on a nonmalignant condition must first make a prima facie showing that he/she has a physical impairment, that the physical impairment is a result of a medical condition, and that the person s exposure to silica is a substantial contributing factor to the medical condition. See Section (B). This showing must include a detailed exposure, medical, and smoking history and a medical examination as well as a pulmonary function test. In addition, under Section (B)(3)(a), the plaintiff must first establish that he/she has a permanent respiratory impairment rating of at least class 2 as defined by and evaluated pursuant to the AMA guides to the evaluation of permanent impairment. Settlement of a silicosis claim or mixed dust disease claim does not preclude a plaintiff from later filing a claim for a silicarelated cancer injury. See Section (C). Also, with claims for nonmalignant conditions, no award may be made to compensate for fear of or risk of developing cancer. See Section (B). To establish a prima facie case, the doctor issuing the opinion must be a board certified internist, pulmonary specialist, oncologist, pathologist, or occupational medicine specialist. Section (H)(3)(I)(1). The doctor must have treated or be currently treating the claimant, and that doctor (and his/her organization) cannot spend more than 25% of his/her professional efforts in providing consulting or expert services in tort actions. See Sections (H)(3)(I)(2) and Section (H) (3)(I)(4). For smokers who develop lung cancer, the Bill goes on under Section (C) to require that before such plaintiffs can maintain an action alleging exposure to silica, they must provide a diagnosis by a competent medical authority that the exposed person has primary lung cancer and that exposure to silica is a substantial contributing factor to that cancer. They must also provide radiological or pathological evidence along with evidence of substantial exposure to silica. There is a 10-year latency period required for lung cancer claims, but this presumption may be rebutted by the plaintiff, who has the burden of proof. The newly enacted Revised Codes also cover wrongful death claims. These claims must first establish that the death and physical impairment of the exposed person resulted from a medical condition that was substantially caused by that person s exposure to silica. A medical diagnosis as required, as above, and the 10-year latency period and requirement of radiological or pathological evidence of silicosis are applicable. Should a plaintiff try to avoid these requirements by instead alleging mixed dust exposure and injury, there is Section to comply with. Such plaintiffs must first establish a prima facie case and meet the same requirements as if they claimed silica exposure alone. Whether the claimant is alleging silica exposure or mixed dust exposure, the prima facie evidence must be filed with the court within 30 days of plaintiff s filing of a complaint or any other initial pleading. Thereafter, defendants have 120 days to file a motion to challenge the evidence. Section provides limited liability protection to premises owners. Claims can be filed against a premises owner only if the exposure occurred on the premises. Plaintiffs are required to prove that the breathing level of silica or other mixed dust exceeded limits adopted by the state. continued on page 5 SILICA L E G A L N E W S R E P O R T PUBLISHER Sofia Pables EDITOR-IN-CHIEF Janice G. Inman MANAGING EDITOR Julie Gromer MARKETING PROMOTIONS COORDINATOR Rob Formica MARKETING ANALYSIS COORDINATOR Traci Footes GRAPHIC DESIGNER Crystal R. Hanna BOARD OF EDITORS ROBERTA D. ANDERSON...Kirkpatrick & Lockhart, LLP Pittsburgh DOUGLAS BEARD Vorys, Sater, Seymour and Pease LLP Columbus, OH LANCE BRADLEY McPherson, Monk, Hughes, Bradley, Wimberley and Steele Port Arthur, TX LAWRENCE G. CETRULO..Cetrulo and Capone Boston FRANCIS A. CITERA......Greenberg Traurig, LLP Chicago MARC S. GAFFREY Hoagland, Longo, Moran, Dunst & Doukas, LLP New Brunswick, NJ JASON A. GIBSON Smith Gibson, A Professional Corporation Houston CATHY R. GORDON......Swartz Campbell, LLC Pittsburgh JAMES M. HUGHES, Ph.D...Motley Rice LLC Mt. Pleasant, SC JEFFREY S. KING Kirkpatrick & Lockhart, LLP Boston DAVID LUTZ Bowman and Brooke LLP Minneapolis CATHERINE MOHAN.....McCarter English Hartford, CT MOLLY J. MROWKA......Burnham Brown Oakland, CA GREG NOBLE Wilentz, Goldman & Spitzer, PA Woodbridge, NJ MARK S. RAFFMAN Goodwin Procter LLP Washington, DC C. STEPHEN SETLIFF......Troutman Sanders LLP Richmond, VA ELIZABETH SHERWIN....Dickstein Shapiro Morin & Oshinsky LLP Washington, DC THOMAS J. TOBIN Gordon & Rees, LLP San Diego DIANE WHITNEY Pullman & Comley, LLC Hartford, CT TREVOR J. WILL Foley & Lardner LLP Milwaukee Silica Legal News Reporter (ISSN ) is published by Law Journal Newsletters, a division of ALM ALM Properties, Inc. All rights reserved. No reproduction of any portion of this issue is allowed without written permission from the publisher. Telephone: (800) Editorial jgromer@alm.com Circulation subspa@alm.com Silica Legal News Reporter Periodicals Postage Pending at Philadelphia, PA POSTMASTER: Send address changes to: ALM 1617 JFK Blvd., Suite 1750, Philadelphia, PA Annual Subscription: $599 Published Monthly by: Law Journal Newsletters 1617 JFK Boulevard, Suite 1750, Philadelphia, Pa Silica Legal News Reporter September 2005

3 Judge s Order Shows Contempt for Doctors and Lawyers Tactics By Janice G. Inman As anticipated, Judge Janis Graham Jack s written Order 29 in the In re Silica Products Liability Litigation multidistrict litigation ( MDL ) was far from complimentary to the plaintiff bar. The order, dated June 30, addresses subject matter jurisdiction, admissibility of evidence and sanctions for some lawyers Judge Jack basically deemed charlatans. The order followed the defendants presentation of evidence during a 3-day hearing in February in the U.S. District Court for the Southern District of Texas, Corpus Christi Division, which showed that many of the claims under investigation were brought on the basis of faulty or nearly nonexistent medical diagnoses. THE NUMBERS DID NOT ADD UP The MDL involved 111 cases originally filed in Mississippi state court and later removed to federal court by the defendants. The number of plaintiffs represented in those 111 cases, however, is huge, with numbers ranging from one to 4280 per case. Most of those plaintiffs are from Mississippi, Alabama or Texas, but others are residents of Arkansas, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Michigan, Missouri, North Carolina, Ohio, Tennessee and West Virginia. The defendant corporations in the cases ranged from six to 134, some of which are incorporated or have their principle place of business in Mississippi. The court noted that named defendants in many claims were suspiciously related more to the law firms that handled the claims than to the plaintiffs injuries. For instance, the law firm of O Quinn, Laminack & Pirtle filed 18 of the MDL cases on behalf of its clients, with each case covering between nine and 410 clients. In 16 of those cases, the same 73 defendants were named. Another law firm, Campbell, Cherry, Harrison, Davis & Dove, which serves as plaintiffs counsel in two of the cases one representing 247 plaintiffs and the other 4280 plaintiffs accused the same 134 defendants of wrongdoing in both cases. Judge Jack s order noted with sarcasm that Mississippi the state in which her court sits and which ranks only 44th nationally in numbers of silica-related deaths has seen a rise from 40 silicosis claims filed in 2000 to 10,642 claims in 2002, 7228 in 2003 and 2609 in Despite this, federal and state authorities have announced no state of emergency, and the media have not risen up calling for an end to the working conditions that lead to the development of silicosis. In short, stated Judge Jack, this appears to be a phantom epidemic, unnoticed by everyone other than those enmeshed in the legal system: the defendants, who have already spent millions of dollars defending these suits; the plaintiffs, who have been told that they are suffering from an incurable, irreversible and potentially fatal disease; and the courts, who must determine whether they are being faced with the effects of an industrial disaster of unprecedented proportion or something else entirely. Although Judge Jack mentioned as possible explanations for the glut of new lawsuits the facts that Mississippi tort reform measures might have prompted a rush to the courthouse and that asbestos cases are drying up, leaving attorneys with a need for new income streams, she focused her discussion on the medical explanation for the cases. Prior to handling the issue of jurisdiction, the court decided to conduct Daubert hearings of the plaintiffs diagnosing experts and the screening companies that hired them. These hearings were scheduled prior to deciding the issue of subject-matter jurisdiction because they were potentially relevant to the issue of the court s subject-matter jurisdiction, and they were warranted by defendants motion for sanctions, a matter a court without subject-matter jurisdiction may consider. See Willy v. Coastal Corp., 503 U.S. 131 (1992). THE MEDICAL DIAGNOSES The doctors who diagnosed the approximately 9000 plaintiffs only 12 doctors in all were for the most part primarily connected with the law firms involved, not with the plaintiffs, the court found. The plaintiffs generally lived at some distance from the diagnosing doctors and had no doctor/patient relationship with those physicians other than for the purpose of obtaining a diagnosis of silicosis. The defense deposed Dr. George H. Martindale of Mobile, AL, and his story served as just one example of the general mismanagement of the cases the court found. Dr. Martindale had signed diagnosis reports for 3617 of the plaintiffs in these consolidated cases, but he admitted to having never seen any of the patients involved. Instead, he performed B-readings. A B-reading is a physician s report of findings from review of a patient s chest radiograph (ie, an X-ray ). This report is entered on a standardized form using a classification system devised by the International Labour Office ( ILO ). The National Institute for Occupational Safety and Health ( NIOSH ) issues Breader certifications for physicians in the United States. There are approximately certified B-readers currently practicing in the United States. (The B-reading system was set up as a means to diagnose coal-mine workers with lung damage for the purpose of moving them to less contaminated work locations, if necessary it was not intended for use in formulating a case for litigation.) Dr. Martindale was a certified B- reader, but he admitted to not knowing the criteria for making a diagnosis of silicosis and disavowed the language on the forms he signed that said he had diagnosed silicosis in the plaintiffs whose X-rays he read. He asserted that he relied on the plaintiffs own doctors to make such diagnoses and that he was only reading the radiographs. All of Dr. Martindale s reports and B-reads were works hired by N&M Inc., the screening company that orchestrated the majority of silicosis diagnoses for plaintiffs in this MDL. continued on page 4 September 2005 Silica Legal News Reporter 3

4 Contempt continued from page 3 He was paid $35 for each screening he conducted. Other doctors, who conducted parking lot mass screenings set up by N&M Inc. testified that they also did not consider themselves to have diagnosed patients with silicosis, despite the fact that they signed documents saying they had made such diagnoses. They said that documents were presented to them by N&M representatives some time following the in-person screenings, and that they then signed them or authorized others to sign for them. The mass screenings generally occurred after a law firm provided screening companies with a list of people (for instance, existing asbestos plaintiffs or workers at industrial sites). Then, either the law firm or the screening company sent out a mass mailing asking the recipient to call the screening company s toll-free phone number. The staff answering the phone would ask if the caller had been exposed to silica, and, if so, the caller would be encouraged to attend a mass screening. These screenings were conducted from mobile units often parked in parking lots of retail establishments, such as K-Mart or Sizzler. The X-rays taken were not ordered by a doctor or other medical professional and were not overseen by such professionals. Two of the law firms singled out as examples in Judge Jack s order used the services of N&M, but paid for screenings only if the patient was diagnosed with silicosis and signed up as a plaintiff with that firm. Thus, there was a strong incentive for N&M to make a diagnosis of silicosis in as many cases as possible. The court, in discussing the admissibility of the evidence, noted that none of the challenged experts took an occupational or exposure history, relying instead on histories taken by lawyers and clerks without medical training or supervision. Without the benefit of such histories, the doctors could not have known the duration Janice G. Inman, Esq. is editor-inchief of this newsletter. or intensity of silica exposure or about possible alternative causes for any physical damage observed. The doctors also did not rely on other established criteria for diagnosing silicosis. Based on this and the evidence of financial incentive to diagnose silicosis, the court found the diagnoses unreliable under Daubert and deemed them inadmissible, despite the fact that because the court ultimately found it had no jurisdiction to hear most of the cases at issue, it was not in a position to make a ruling as to the admissibility of evidence. The mass screenings generally occurred after a law firm provided screening companies with a list of people (for instance, existing asbestos plaintiffs or workers at industrial sites). In every case involving a screening company, the court stated, the diagnoses were essentially manufactured on an assembly line. The steps in the diagnosing process were divided among a number of different people, not all of whom were qualified and none of whom assumed overall responsibility and oversight for the entire process. This, Judge Jack found, was an ingenious method of grossly inflating the number of positive diagnoses. (The court made clear that it was not finding that the plaintiffs diagnosed in this manner do not have silicosis only that the method of diagnosis was insufficient to support a cause of action.) The court included its findings on the reliability of the diagnoses in its order in hopes that the state courts that ultimately must shepherd these cases to their conclusion will not have to rehear Daubert-type challenges to these doctors and their diagnoses. THE QUESTION OF JURISDICTION The Fifth Circuit, in which the court in this case sits, has recognized that improper joinder may be established in one of two ways: 1) through actual fraud in the pleading of jurisdictional facts, or 2) through inability of the plaintiff to establish a cause of action against the nondiverse party in state court. Defendants, however, relied on a third type of improper joinder known as fraudulent misjoinder, which exists where a diverse defendant is joined with a nondiverse defendant as to whom there is no joint, several or alternative liability and where the claim against the diverse defendant has no real connection to the claim against the nondiverse defendant. Triggs v. John Crump Toyota Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (citing Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot Inc., 204 F.3d 1069 (11th Cir. 2000)). Although the Fifth Circuit has not explicitly adopted the rule in Tapscott, the court analyzed the present case under the assumption that it would do so if faced with a similar case. Defendants argued that in deciding jurisdiction, the court should sever each plaintiff s claim and look at the citizenship of that plaintiff and the defendants that allegedly caused his or her injuries. Doing this, they claimed, would expose fraudulent misjoinder by the majority of plaintiffs of Mississippi defendants in an effort to defeat federal diversity jurisdiction. Tapscott involved an interpretation of Federal Rule of Civil Procedure 20(a) to determine whether the joinder of certain claims in a class action was proper. Rule 20(a) governs the permissive joinder of parties. Joinder among plaintiffs is only proper if they allege a claim arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action. Fed. R. Civ. P. 20(a). Such was not the case here because the plaintiffs had such differing work histories, with too many separate sets of circumstances and in continued on page 6 4 Silica Legal News Reporter September 2005

5 Overview continued from page 2 Furthermore, an invitee who performs work that involves silica or other mixed dust has the burden of proof to establish that the premises owner had superior knowledge of the dangers of silica or other mixed dust to that of the invitee s employer, if the invitee s employer held itself out as being qualified to perform the work. The statute covers claims of tortious acts as well as guidelines for piercing the corporate veil. See Sections and In addition to the tort reform, the courts are creating special dockets to deal with silica related lawsuits. MISSISSIPPI Mississippi has seen an excessive amount of silica-related lawsuits filed in its courts. In an attempt to alleviate the strain caused by this and other tort injury litigation, Mississippi has recently passed tort reform laws. Starting Jan. 1, 2003, Mississippi began capping punitive damage awards. In addition, in prior years, Mississippi courts had allowed plaintiffs from other states to join in a Mississippi case if they had similar claims. In 2002, that situation changed when the state passed laws requiring plaintiffs to have a direct connection with Mississippi before they can bring or join an action there. TEXAS Case law paved the way for silica litigation to take off in Texas. The state has seen two important verdicts for plaintiffs in silica litigation. In Tompkins v. U.S. Silica Company, 92 S.W.3d 605 (Tex.App. 2002), the jury imposed liability on a defendant based on the theory of failure to warn, and in Humble Sand & Gravel, Inc. v. Gomez, 46 S.W.3d 170 (Tex. 2004), the sophisticated user defense was severely questioned in situations where employees of so-called sophisticated users, who are not necessarily told of dangers by their employers, are involved. Since these cases were decided, the Texas legislature has passed tort reform measures aimed at asbestos and silica litigation. Now, there are medical criteria that must be met before suits can be entertained, which include a qualifying medical report and pulmonary function tests showing a physical impairment. MINNESOTA In the case of Gray v. Badger Mining Corp., 676 N.W.2d 268 (Minn. 2004), the Minnesota Supreme Court, opened the door to the handling of litigating silica claims in Minnesota. There, the court dealt with the summary judgment motion brought by a supplier of silica in a product liability claim in which the plaintiff claimed negligence, strict liability for failure to warn, and breach of warranties of merchantability and fitness for the intended purpose. The questions arose as to whether the plaintiff s employer was a sophisticated purchaser and whether the supplier was a bulk supplier. Specifically, the plaintiff in Gray alleged that the supplier knew the hazards involved in using sand for foundry purposes and that the supplier knew that the disposable respirators his employer used were ineffective to protect users against the inhalation of silica dust. In Minnesota, generally, a supplier has a duty to warn end users of a dangerous product if it is reasonably foreseeable that an injury could occur in its use. Balder v. Hale, 399 N.W.2d 77, 81 (Minn. 1987). The duty to warn includes the duty to give adequate instructions for the safe use of the product. Frey v. Montgomery Ward & Co., 258 N.W.2d 782 (Minn. 1977). Adequate warning has been defined as the act of attracting attention to the fact that the product could cause harm, explaining how it can cause harm and providing instruction on how to safely use the product. Did the supplier in Gray comply with federal regulations, state regulations and/or industrywide standards? What are the effects of failure to comply with these regulations? Does proof of failure to comply with such standards make out a prima facie case of negligence? Unfortunately, the court did not come to any conclusions on these issues in Gray. The court did, however, enumerate the supplier s potential defenses, including the learned intermediary, sophisticated user, sophisticated intermediary, bulk supplier and raw material/component part defenses. The first four are derived from the Restatement (Third) of Torts: Products Liability Section 5 (1998). The learned intermediary defense comes into play when the supplier of a dangerous product supplies it to a distributor who knows of the dangers. Although it is theoretically limited to pharmaceutical products, it has been applied, without mentioning the defense by name, to other areas. This defense has been rejected in cases involving employeremployee relationships in particular, sand suppliers. With the sophisticated user defense, the supplier does not have any duty to warn the end user if the supplier has reason to believe that the end user will realize the dangerous condition. In Gray, there was no evidence that the end user knew the dangers of the product. A sophisticated intermediary defense may be raised to relieve a supplier of its duty to warn the end user when the end user s employer is either fully aware of the dangers of the product and his/her knowledge is on a par with that of the supplier or the employer is provided with adequate warnings and safety instructions that make the employer knowledgeable. This defense is used where the supplier can show that it used reasonable care in relying upon the intermediary (ie, the employer) to provide the warnings to the end user (ie, employee). The bulk supplier defense finds its origins in Section 388 of the Restatement (Second). Here, the supplier of a dangerous product that is sold in bulk can be relieved of its duty to warn the end users by adequately warning its purchaser of the bulk goods of the dangerous conditions of the product. Although this defense has been upheld in cases involving component parts wherein the final product causes the injury, it has been explicitly denied in cases in which sand caused the injury. Under the raw materials/component product supplier defense, the supplier of an inherently safe raw material that is then used as a component in a final product is not liable for a failure to warn when its raw product is used as a component in a continued on page 6 September 2005 Silica Legal News Reporter 5

6 Overview continued from page 5 product that later causes injury. This defense can be found in the Restatement (Third) of Torts: Products Liability Section 5 (1998). The defense does not relieve the supplier of the duty of adequately warning the intermediate purchaser in cases where the supplier has superior knowledge of the dangers. CALIFORNIA In California, there is an open question as to whether a product needs to contain one of the numerated chemicals listed in Proposition 65 in order for there to be an exposure that violates Proposition 65. How this issue is resolved will lay the framework for future silica litigation. NEW JERSEY An application was made to the Supreme Court pursuant to the Mass Tort Guidelines and Rule 4:38A (Centralized Management of Mass Torts) to designate litigation that alleges a silica-related disease as a mass tort to be centralized in Middlesex County. After reviewing the application and all the comments received in response to the notice, the application was denied in July It is anticipated, however, that Contempt continued from page 4 too many locations. Thus, when considering the issue of diversity of citizenship, the court determined to view each plaintiff s claim in isolation, as if all plaintiffs claims were severed from one another. Despite this, the defendants lost their bid to keep the majority of the cases in federal court because they did not carry their burden of showing that removal was proper. Specifically, they provided no evidence in support of their position that federal subject-matter jurisdiction existed over these cases by failing to show that complete diversity existed in any of the MDL cases. In addition, defendants failed to pierce the pleadings and show that any defendant was fraudulently joined, that all properly joined defendants had timely consented to the removal or plaintiff attorneys will reapply for mass tort designation after their promised mass filings, which are to occur after the new year. WISCONSIN It is well-established law in Wisconsin, under the sophisticated purchaser doctrine, that there is no duty to warn of dangers that are obvious to everyone. This defense has been upheld in connection with injury allegedly caused by unadulterated sand. FLORIDA In 2005, Gov. Jeb Bush signed a comprehensive asbestos and silica tort reform law the Asbestos and Silica Compensation Fairness Act requiring plaintiffs to show actual physical impairments, thereby eliminating causes of action for fear or risk. In addition, the medical experts who testify concerning those physical impairments must be licensed in the United States, be board certified and must have treated the plaintiff. There is also a minimum respiratory impairment threshold of Class 2 (ILO graded 1/1) or higher. GEORGIA Georgia is currently considering tort reforms relating to asbestos and silica claims. Under the proposed bill, a silica claim will require prima that no properly joined defendant was a citizen of the state where the action was originally filed. In short, the court found, Defendants failed to take any of the steps necessary to meet their burden of showing that federal jurisdiction exists over these cases. Because the plaintiffs nearly all alleged some harm from a defendant from their own states, complete diversity could not be found and federal subject matter jurisdiction was lacking. Defendants had apparently relied on the generally suspicious nature of the plaintiffs claims to come to the conclusion that plaintiffs allegations of harm from nondiverse defendants would be discounted by the court, and the normal burden the removing party faces would be transferred to the plaintiffs ie, that plaintiffs would be required to affirmatively prove the absence of federal jurisdiction. The court wasn t convinced: Regardless of how understandable facie evidence of a physical impairment to which silica was a substantial contributing factor. TENNESSEE Tennessee is looking to amend its law, in particular Title 29, Chapter 34, which would require exposure to silica be a substantial contributing factor to a plaintiff s physical impairment. To support a case for injuries, the diagnosis would have to be based on a medical examination and pulmonary function test and would have to include a permanent respiratory rating of at least Class 2. CONCLUSION This area of law is still developing and attorneys practicing in silica litigation will have to continue to follow their local courts rulings as these issues continue to develop and become implemented into law. Beyond this, however, it is important to know what is going on nationwide. Being aware of developing trends in the law could prove helpful to the litigator who is formulating strategies and arguments for his or her own client s case. Our quick overview of some of these trends should serve as a starting point to further study. the defendants suspicions might be, defendants have pointed to no legal authority indicating that the usual burden of proof in removals can be shifted as a sanction for other improper litigation tactics/assertions. Thus, the court ordered remand of the bulk of the cases to state court. SANCTIONS IMPOSED, BUT ONLY AGAINST ONE LAW FIRM Justice Jack declined to impose sanctions against most of the plaintiffs, as requested by defendants, because of a lack of jurisdiction over their cases. The court did find, however, that it possessed subject matter jurisdiction over one case, Alexander v. Air Liquide America Corp., S.D. Tex. Cause No Thus, with respect to the Alexander case and the Texas-based law firm representing continued on page 12 6 Silica Legal News Reporter September 2005

7 The Sophisticated User Defense in Minnesota: Weighing Knowledge By Jessica Grossarth and Meenah Kim Claims involving a failure to warn are often centered around what a reasonable manufacturer or supplier should have foreseen was necessary to avoid creating an unreasonable risk of harm. If a supplier is deemed to have a duty to warn, the duty can be fulfilled by calling the hazards of the product directly to the attention of the eventual user; for example, through product labeling. Greene v. A.P. Products, Ltd., 691 N.W.2d 38 (Mich.App., 2004). However, when, as is often the case, a product passes through the hands of multiple intermediaries between the supplier and the eventual user, the situation becomes murkier, and it becomes unclear who should shoulder the burden of the duty to warn. This is where the sophisticated user defense comes in. Under the sophisticated user defense, a supplier has no duty to warn the ultimate user if it has reason to believe that the user will realize its dangerous condition. Gray v. Badger Mining Corp., 676 N.W.2d 268 (Minn. 2004). Different jurisdictions apply the concept in different ways and knowledge of your courts take on the issue is important. Still, a closer look at how one jurisdiction handled the issue can serve as a jumping-off point for further discussion of the state of the law in other jurisdictions. GRAY V. BADGER MINING CORP. In Minnesota, in order to assert a valid sophisticated user defense, a supplier must demonstrate that the user had, at minimum, knowledge equivalent to that of the supplier of the dangers involved in the use of Jessica Grossarth is an attorney with Pullman & Comley LLC in Bridgeport, CT, and works on environmental matters. Meenah Kim was a summer associate at the firm. The justices noted that there was no evidence that Smith Foundry was familiar with industry or government publications on the dangers of silicosis... the product. Two recent decisions Gray v. Badger Mining Corp. and Conwed Corp. v. Union Carbide Corp, 2004 WL (D. Minn. 2004) have helped in the clarification of what a supplier must show in order to assert a valid sophisticated user defense in the state. In Gray, Lawrence Gray, an employee of the Smith Foundry for more than 45 years, was exposed to silica sand supplied by Badger Mining Corp. He later developed silicosis. Gray filed suit against Badger and other companies in Minnesota state court, claiming that the defendants had been negligent and were strictly liable for failing to warn him of the dangers of breathing silica dust. Badger countered that it had no duty to warn Gray of such dangers because Smith Foundry was a sophisticated buyer of silica sand and was in the best position to warn and protect its employees. Badger moved twice for summary judgment on the issue of duty to warn, but the trial court denied the motions. Badger appealed, asking the Minnesota Court of Appeals to decide whether the company had a legal duty to warn Gray about the potential hazards of inhaling silica. Viewing the case as one of first impression, the appellate panel reversed the denial of summary judgment, finding that Badger did not have a duty to warn Gray because Smith was a sophisticated purchaser of silica sand and possessed the generalized foundry-industry knowledge relating to the danger of inhaling silica sand and resulting silicosis. Gray appealed to the Minnesota Supreme Court, which reversed the decision of the appeals court and reinstated the trial court s judgment. The high court stated that it did not need to determine the precise applicability or scope of the sophisticated user defense because there was evidence that Smith Foundry s knowledge was inferior to that of Badger Mining. The justices noted that there was no evidence that Smith Foundry was familiar with industry or government publications on the dangers of silicosis specifically, that there was no evidence that Smith Foundry knew that disposable respirators were ineffective in preventing silicosis in a foundry environment. The Supreme Court found that because there was evidence that Badger Mining had greater knowledge of the dangers of the use of silica in the foundry process and had specific knowledge of the ineffectiveness of disposable respirators, the question of whether or not Smith Foundry s knowledge was sufficient to relieve Badger Mining of its duty to warn was not a matter of law. Thus, at a minimum, the court held that there were genuine issues of material fact that precluded summary judgment on the question of whether Smith was a sophisticated user. CONWED CORP. V. UNION CARBIDE While there are no Minnesota state court decisions handed down after Gray that apply or interpret Gray, there is at least one federal decision in the Eighth Circuit that further defines the level of knowledge a supplier must show to succeed on a summary judgment motion with regard to the sophisticated user defense: Conwed Corp. v. Union Carbide Corp., 2004 WL (D. Minn. 2004) (applying Minnesota law in a workers compensation subrogation action). In Conwed, for purposes of a judgment as a matter of law, in its application of the Gray holding, the court instructed the jury that Conwed was not a sophisticated user continued on page 12 September 2005 Silica Legal News Reporter 7

8 For Defendants continued from page 1 of those policies and requirements. This may be an internal safety director or an outside contractor. In a company with several locations, it may be someone in the corporate office. Use of Materials: Develop information about what materials were used, where, how and for what purpose. Establish that the employer knew the materials contained silica and that it therefore knew that there were potential hazards that had to be controlled. Ventilation and Other Engineering Controls: The employer should have ventilation or other engineering controls in place to remove airborne inhalants. Such controls have probably evolved and improved in quality over the years, and the defense should learn what was installed, when and why. Silica would be a prominent source of dust. The employer witness with knowledge about the ventilation equipment used may know the purpose for the equipment and may be one of the people with earliest knowledge of potential silica hazards. This equipment may include a dust hood or local exhaust, changes in process (such as changing from a floor molding system to a more modern pallet line in a foundry), enclosed cabs on cranes and other equipment and dust collectors in certain operations (such as the muller, shakeout, wheel abrader and grinding operations in a foundry). Where these systems were installed, this fact will likely reveal the employer s knowledge, as their installation was probably motivated in part by silica concerns. Administrative Controls: Explore whether the employer had administrative controls to limit the time David N. Lutz is a partner and Theodore Dorenkamp III is an associate in the Minneapolis office of Bowman and Brooke LLP. They specialize in the defense of mass tort cases, including silica and asbestos. Bowman and Brooke is a national law firm with six offices specializing in the defense of complex civil litigation, primarily product liability defense. employees spent in high exposure areas. Perhaps the employer had a job-share system or rotated employees in and out of areas with potentially high exposure to reduce the exposure of each specific employee in that area. HR witnesses, safety witnesses and foremen might be knowledgeable about these efforts. Respiratory Protection: It would be difficult to imagine a corporate user of silica that did not at some point institute a respiratory protection program or policy. Defendants should obtain that policy and develop information about when it was implemented, who it applied to, and why. Although plaintiffs might assume masks were to protect them from general nuisance dust, respiratory protection programs often differentiate between different employees and impose additional requirements for certain employees or trades that work with certain materials, including silica. For example, a foundry may have a cast iron portion and a separate aluminum foundry, with sand used in one and not the other. If the respiratory protection requirements are different, the likely explanation is the use of silica in one operation and not the other. Explore what requirements the program had for example, could employees wear facial hair? and what training was given about proper use of equipment. Look at the extent to which the policy was enforced, such as whether employees were ever disciplined for failing to comply with the policy. A human relations person and anyone with safety responsibility is likely to be knowledgeable about the respiratory protection program and the reason for it. Air Sampling: Explore the history of air sampling in the workplace to measure dust and other contaminants in the air, including silica. Develop evidence about when the air sampling began, who did it, the purpose for it, how often it was done, what the results were and how the results were disseminated to employees. The employer should know that the purpose of the air sampling was to determine whether the employer provided a workplace that complied with OSHA permissible exposure levels ( PELs ), including those for silica. The air sampling may have been limited to certain portions of the facility, perhaps where silica was used. If results identified excessive exposures, explore what corrective steps were taken. It is difficult for an employer to deny knowledge when the employer has analyzed whether its exposures exceeded acceptable levels, identified that they did and then implemented steps that were not fully successful. The employer may have conducted the testing itself, contracted it out or it might have been done by the employer s insurer or a government entity. Discovery should seek the details of such testing, including what was being tested for, who was tested (were workers with certain silica-exposed duties tested?), how the results were interpreted (implicating knowledge of the PEL), and the results. OSHA Compliance: The passage of OSHA in the early 1970s imposed a new set of obligations on employers and put them on notice of the likelihood of government inspections to determine compliance. Explore how the employer responded to the passage of OSHA was there an OSHA compliance team or mock inspections? The employer witness in charge of interface with OSHA or other similar government entities should be familiar with OSHA requirements, the purpose of OSHA inspections and the results of those inspections. An OSHA inspection may have involved air sampling. Explore how the employer prepared for inspections (if given advance notice), the results of OSHA inspections (especially citations), how the employer responded to such inspections and how results were communicated to the employees. Hazard Communication: Following enactment of hazardous communication and employee right-to-know laws in the early 1980s, employers should have begun receiving and collecting Material Safety Data Sheets ( MSDS ) and provided training to employees with respect to workplace hazards. Employers can certainly be imputed continued on page 9 8 Silica Legal News Reporter September 2005

9 For Defendants continued from page 8 with knowledge of the warnings and information contained in those MSDS, including those of co-defendants and nonparties. Develop evidence of where the MSDS were kept where they were they posted and whether employees have unlimited access. Who were they available to and how did the employer disseminate the information contained in the MSDS to the employees? Explore how the employer complied with hazardous communication and right to know obligations, including how often training was provided, who did it, what topics were discussed and what materials were given out. The foreman in a particular area or someone in corporate safety or human relations may be the best witness to talk about MSDS. Medical Monitoring: Many employers at some point developed a medical monitoring program, which perhaps screened potential employees and typically monitored them after they began employment. The medical monitoring may have included chest X-rays and/or pulmonary function testing. Find out who is covered by the medical monitoring program and the reasons for differences in monitoring between different employees. If the monitoring includes chest X- rays, it was probably intended to identify X-ray abnormalities that might arise in an employee because of respirable dust in his or her work, specifically silicosis. To the extent that the medical monitoring includes pulmonary function testing, the purpose was probably to identify pulmonary function deficits that might arise from breathing dust in the workplace. In foundries, abrasive blasting and certain other industries, silica may be the primary dust. The plaintiff and other laborers perhaps understood the purpose of the monitoring was to identify workers who were developing lung disease as a result of breathing silica dust in the air. If the employer has a medical director or nurse, that witness is likely to know the purpose of the medical monitoring program. If the monitoring is done by an outside doctor, that doctor should also know the purpose of the monitoring as well as the primary inhalable dust to which workers might be exposed. Workers Compensation Claims and Insurance: Employer witnesses with knowledge of insurance are likely also to be familiar with the risks that affect premiums and payouts. In certain industrial settings (such as in foundries), silicosis should be a prominent potential risk. It is likely that other workers have in the past alleged silicosis or other disease from industrial inhalants. Develop information about prior claims and what the plaintiffs knew about the nature and source of the claimed injuries. Trade Associations: If the employer is involved in trade organizations or safety organizations, they may provide a source of knowledge to the employer. For example, many foundries belong to the American Foundrymens Society ( AFS ), which has extensive resources available for members, including information about ventilation equipment, air monitoring services and workplace safety generally. Unions: Bring out information that the employees unions were knowledgeable about the potential hazards of silica overexposures and of potential exposures in this particular workplace. Perhaps the union negotiations with management included discussion of medical monitoring, air sampling, administrative and engineering controls or respiratory protection. Management might have conveyed to the unions the results of such efforts. Also, develop the extent to which the unions communicated results to the employees, who ideally were actively involved in the union, attended meetings and read union materials. Other Facilities: The employer may have other facilities, in which case discovery on these topics with respect to other facilities may generate further evidence of sophistication and knowledge. In addition, knowledge on such topics may be more extensive in the corporate office than in the individual facility where the plaintiff worked. Lack of Reliance on Sand Suppliers: Defendants should look into the relationship between the employer and supplier and secure admissions that the employer did not rely on or even seek advice from the sand supplier about how to safely use the material. Defendants should seek the admission that the warnings provided told the employer what it needed to know to protect its employees; and beyond that, that the employer was in the best position to identify and prevent potential hazards. Beyond the Duty to Warn The sophisticated user defense is often used in summary judgment to secure a ruling by the court that there is no duty to warn. If that defense is unsuccessful and the case proceeds to trial following a court finding of a duty to warn, the evidence amassed in support of the defense becomes the crux of the causation defense. Employers, with equal information about silica hazards generally and superior knowledge about the potential sources of silica hazards within their workplace, have complete control over the identification and remedy of potential hazards. Employers decide what capital improvements, engineering controls, administrative controls, medical monitoring and respiratory protection will be implemented. The same evidence supporting the lack of a duty to warn also supports the fundamental causation defense that there is nothing the defendants could have conveyed in their warnings (even had those warnings been drafted by plaintiff s experts) that would have changed the behavior of the knowledgeable and sophisticated employer. It is this information that the finder of fact must hear, and it is the defense s job to make sure that it does. The publisher of this newsletter is not engaged in rendering legal, accounting, financial, investment advisory or other professional services, and this publication is not meant to constitute legal, accounting, financial, investment advisory or other professional advice. If legal, financial, investment advisory or other professional assistance is required, the services of a competent professional person should be sought. September 2005 Silica Legal News Reporter 9