November 12, 2009

The Pennsylvania Supreme Court recently issued its long-anticipated opinion in Abrams v. Pneumo Abex Corporation, wherein it addressed the question of whether an individual who previously recovers damages for increased risk and fear of developing cancer due to asbestos exposure under the “one disease rule,” may later recover damages – from a party he did not previously sue – for cancer that developed and was diagnosed after the “separate disease rule” was adopted by the Pennsylvania Court of Appeals in 2002. The Court answered this question in the affirmative, providing clarification to asbestos litigants on an issue which is frequently raised in lower courts throughout Pennsylvania.

Abrams involved consolidated actions for personal injuries sustained by two individuals who were occupationally exposed to asbestos, and who were both diagnosed with non-malignant asbestos-related disease in the mid-1980s. In that same time period, the Abrams plaintiffs filed complaints against various defendants, seeking damages for increased risk and/or fear of cancer. In 1993, the Abrams plaintiffs settled their 1980s lawsuits.

However, in 2002, the Abrams plaintiffs were diagnosed with lung cancer and, in 2003, each filed a separate lawsuit (“the 2003 lawsuits”) against various companies, including John Crane, Inc. (“Crane”), a company which was not named in the 1980s lawsuits. In their 2003 lawsuits, the Abrams plaintiffs alleged that their lung cancer was caused by their occupational exposure to asbestos-containing products manufactured by various defendants, including Crane.

Crane filed a motion for summary judgment on the basis that the plaintiffs’ claims were barred by the two-year statute of limitations applicable to asbestos injuries, which began to run upon their initial diagnosis with asbestos-related disease in the mid-1980s. The trial court agreed, and entered summary judgment for Crane. The Pennsylvania Superior Court affirmed the trial court’s ruling, noting that the plaintiffs’ claims in the 1980s lawsuits were premised upon the assertion that they would contract cancer in the future as a result of their occupational exposure to asbestos, and thus pertained to the same malignant asbestos-related disease for which they sought coverage in the 2003 lawsuits. Plaintiffs appealed the Superior Court’s ruling with respect to Crane.

At the time the Abrams plaintiffs were diagnosed with non-malignant asbestos-related disease in the 1980s, Pennsylvania law required them to file a single cause of action for all present and future harm caused by their exposure to asbestos within two years of the initial diagnosis of any asbestos-related condition. This rule is known as the “one disease” rule. However, in 1992, Pennsylvania adopted a “separate disease rule,” also known as the “two disease rule.” Under the separate disease rule, a plaintiff who discovers a non-malignant asbestos-related lung pathology does not trigger the statute of limitations with respect to an action for a later, separately diagnosed, disease of lung cancer.

Applying the separate disease rule to the Abrams plaintiffs, the Supreme Court determined that the plaintiffs’ prior recovery from certain other defendants for increased risk and fear of cancer (arising from diagnosis of non-malignant asbestos-related disease) did not preclude their recovery of compensation for a separate disease (here, lung cancer) from Crane, following Pennsylvania’s adoption of the separate disease rule. According to the Supreme Court, the plaintiffs’ claims for lung cancer were separate and distinct from any claims for risk or fear of cancer that may have existed in the 1980s, upon their diagnosis of non-malignant asbestos-related disease. Accordingly, the statute of limitations on their lung cancer claims did not begin to run until they were diagnosed with lung cancer in 2002, and plaintiffs’ claims against Crane were timely filed, requiring reversal of the trial court’s ruling granting summary judgment to Crane.

While this aspect of the Abrams decision provides some clarification in the area of asbestos litigation, other portions of the Court’s opinion may create some confusion, such as the Court’s comments regarding a defendant’s right to repose. In this regard, the Court rejected an argument made by Crane that allowing the Abrams plaintiffs to proceed with their causes of action for lung cancer would violate Crane’s right to repose. In so ruling, the Abrams Court defined a statute of repose as “a statute barring any suit that is brought after a specified time since the defendant acted (such as designing or manufacturing a product), even if this period ends before the plaintiff has suffered a resulting injury.” With respect to Crane’s assertion that it had a right to repose from the plaintiffs’ lung cancer claims, the Abrams Court noted that “no statutory right to repose exists with respect to asbestos cases.”

According to the Abrams court, if the Pennsylvania legislature had wanted to subject asbestos cases to a statute of repose, it could have expressly indicated so in its enactment of 42 Pa. C.S.A. §5524(8) (a now-repealed statutory provision providing a two year statute of limitations applicable solely to asbestos-related conditions). As an example of an instance wherein the Pennsylvania Legislature did enact a statute of repose, the Abrams Court cited the statute of repose contained in Pennsylvania’s Worker’s Compensation Act at Section 301(c)(2), which provides that a claim expires within 300 weeks of the claimant’s last exposure, regardless of whether occupational disease manifests or death occurs within that time period.

While the Abrams Court seemingly intended its repose-related comments to mean that no statute currently exists which provides for the wholesale abolishment or elimination an asbestos plaintiff’s cause of action against a designer or manufacturer of asbestos products after the expiration of a specified period of time, the language used by the Court is loosely crafted, thereby creating an opportunity for argument by asbestos plaintiffs that the AbramsCourt’s dicta should have broader application to all rights of repose. This is unfortunate, as there are statutes of repose which currently exist, and which clearly apply to certain entities frequently named as defendants in asbestos litigation. For example, 42 Pa. C.S.A. §5536 is a statute of repose which operates as a complete bar to causes of action arising from construction or improvements to real property if such actions are not brought within twelve years after the construction or improvement is complete. In current asbestos litigation, §5536 is often raised as a defense by entities involved in the initial design or construction of buildings into which asbestos was allegedly incorporated. Given the wording of the AbramsCourt’s dicta on this issue, we are likely to see the Abrams opinion cited in opposition to any assertion of a right to repose, no matter how viable such right may be under currently existing statutes of repose.

The dissent to the Abrams majority opinion focused on the expiration of plaintiffs’ claims against Crane based on the legal framework in effect at the time the Abrams plaintiffs initiated their 1980s lawsuits, which provided a two-year statute of limitations applicable to all claims arising from asbestos exposure. According to the dissent, “statutes of limitations are designed to effectuate the preservation of evidence, the right of potential defendants to repose, administrative efficiency and convenience.” In the dissent’s view, when the Abramsplaintiffs’ claims against Crane vested in the 1980s upon their diagnosis with non-malignant asbestos-related disease, the “one disease rule” was the law in existence. At that time, Crane became vested with certain defenses against the Abrams plaintiffs, including the defense of expiration of the applicable limitations period. According to the dissent, Crane’s entitlement to that defense has essentially been eliminated by the majority’s opinion.

The dissent also noted that, given that the state of the law in the 1980s was based on the “one disease rule,” the compensation afforded to the Abrams plaintiffs as part of the settlement of their 1980s lawsuits included compensation for the increased risk that they might develop cancer at some point in the future. Indeed, as noted by the dissent, the availability of compensation for increased risk of cancer grew out of the “one disease rule” because, pursuant to the “one disease rule,” later recovery would be unavailable for the actual development of cancer because the limitations period would most likely have expired. Thus, from the dissent’s perspective, the Abrams plaintiffs were fully compensated for all cancers caused by their asbestos exposure in settlement of their 1980s lawsuits, and the majority opinion merely permits the Abrams plaintiffs to obtain full compensation for their asbestos-related injuries a second time.