By Leah S. Poniatowski, J.D.
Pennsylvania’s high court also holds that the statute allows liability to be apportioned to certain bankruptcy trusts.
In two matters of first impression arising under construction of Pennsylvania’s Fair Share Act, which recently replaced the state’s Comparative Negligence Act, the state high court held that the statute requires per capita apportionment of liability in a strict liability asbestos injury case, and that bankruptcy trusts that are joined as third-party defendants or have entered into a release with the injured party may be included on the verdict sheet upon submission of “appropriate requests and proofs," reversing the appellate court in part and affirming in part (Roverano v. John Crane, Inc., February 19, 2020, Mundy, S.).
An individual was diagnosed with lung cancer in both lungs in 2013. He had worked as a helper and carpenter at PECO Energy Company; and during that time, he was exposed to asbestos for approximately a decade until the early 1980s. Additionally, he smoked cigarettes for around 30 years, quitting in 1997. The employee and his wife filed liability lawsuits against 30 parties, including John Crane, Inc. and Brand Insulations, Inc., on the basis that their asbestos products caused his lung cancer. Almost two years later, Crane filed a joinder complaint against the Johns-Manville/Manville Personal Injury Trust.
Trial court. At trial, the jury found in favor of the employee and his wife, and against eight of the entities they had sued. The jury awarded the employee over $5 million, and his wife over $1 million for loss of consortium. The trial court apportioned the judgment equally among the eight companies, two of which appealed, asserting that the trial court made numerous errors.
Fair Share Act. The state appellate court concluded that the trial court erred in holding that Pennsylvania’s Fair Share Act did not apply to the case, and that the jury could not apportion liability as provided under the Act [see Product Liability Law Daily’s January 3, 2018 analysis]. The statute’s language and legislative intent did not exclude asbestos litigation from the Act’s requirements. The appellate court held that, as required by the Fair Share Act, liability in a strict liability case, such as this one involving products containing asbestos, should not be allocated on a per capita basis, but rather proportionately, based on each tortfeasor’s liability. The appellate court also agreed with the companies’ contention that the jury on remand must be permitted to consider evidence of any settlements by the employee and his wife with bankrupt entities in connection with apportionment of liability. The Fair Share Act requires that settlements with bankrupt entities be included in calculating liability.
The employee filed the present appeal to the Supreme Court of Pennsylvania, asking the state high court to consider two issues: (1) whether the appellate court had misinterpreted the Fair Share Act when it held that the jury should apportion liability on a percentage basis instead of a per capita basis in the context of a strict liability asbestos case; and (2) whether the appellate court had misinterpreted the Fair Share Act in holding that the Act requires the jury to consider evidence of any settlements by the plaintiffs with bankrupt entities in connection with the apportionment of liability among joint tortfeasors.
Per capita apportionment. Under the Fair Share Act, in the circumstance of multiple defendants, "each defendant shall be liable for that proportion of the total dollar amount awarded as damages in the ratio of the amount of that defendant’s liability to the amount of liability attributed to all defendants and other persons to whom liability is apportioned ." However, the Act does not have an explicit provision guiding how damages should be apportioned. The employee argued that because there was no clear statutory provision, the traditional method of apportioning liability on a per capita basis should apply, especially as precedent has prohibited apportionment by fault in strict liability cases.
The state high court agreed, holding that the appellate court’s interpretation of the Act was flawed because the theory of strict liability does not encompass fault, vis-a-vis the theory of negligence. Further, there was nothing in the language of the Act to preempt common law supporting per capita apportionment. The high court clarified that the inclusion of strict liability in the statute’s liability allocation section did not reflect the intent to have the "ratio" of liability apportionment be determined the same way for both negligence and strict liability theories.
Additionally, the appellate court’s holding would lead to a result "impossible of execution," which is contrary to the Statutory Construction Act. The high court explained that in the case of asbestos injury, it is impossible to determine the individual contributions to the injured party’s total dose of asbestos. Therefore, under the Fair Share Act’s plain language, liability is to be apportioned equally among the strictly liable joint tortfeasors. As such, the Pennsylvania Supreme Court reversed the state superior court’s ruling.
Bankruptcy trust liability. As to how liability should be apportioned when nonparties are involved, the Fair Share Act provides:
[f]or purposes of apportioning liability only, the question of liability of any defendant or other person who has entered into a release with the plaintiff with respect to the action and who is not a party shall be transmitted to the trier of fact upon appropriate requests and proofs by any party….
The employee argued that: the statute did not expressly address bankruptcy or related derivatives, they signed pro tanto releases instead of pro rata releases, and public policy supported the position to exclude bankruptcy trusts from verdict sheets. In contrast, the companies supported their position favoring inclusion by looking to the plain language of the statute, highlighting that it encompasses "any other person who has entered into a release…," and the only exception included in the statute was for employers based on workers compensation immunity.
The state high court concluded that bankruptcy trusts either joined as third-party defendants or enter into releases with injured parties should be included on the verdict sheet after a submission of “appropriate requests and proofs." The statute contemplates apportioning liability to two entities: (1) defendants; or (2) any non-party "who has entered into a release with the plaintiff with respect to the action," the high court explained. In the present case, both categories applied—Crane filed a joinder complaint against a bankruptcy trust; and the employee acknowledged having received payments from certain bankruptcy trusts and having entered into releases as a condition of receiving those payments. Thus, the trial court erred when it did not include the trusts on the verdict sheet. The lower court also committed error when it refused to apply the Fair Share Act to motions in limine to include the settled bankruptcy trusts on the verdict sheet. Consequently, the matter was remanded to the trial court for a new trial vis-a-vis apportionment.
Concurrences and dissent. Justice Wecht penned a concurrence, agreeing with the majority that in strict liability cases the established per capita allocation method was not disturbed by the passage of the Fair Share Act and that settling bankruptcy trusts should be included in order to allow the jury to fairly apportion liability among those responsible parties.
Chief Justice Saylor also provided a separate opinion, concurring and dissenting with the majority. He agreed that bankrupt entities should be included on verdict sheets. However, he disagreed with the majority’s ruling on apportionment under the established per capita method, arguing that the Fair Share Act intended to implement comparative responsibility and that it is not impossible to determine in asbestos strict liability cases.
The case is Nos. J-10A-2019 and J-10B-2019.
Attorneys: Michael A. Rowe (Nass Cancelliere Brenner) for William C. Roverano. William Rudolph Adams (Dickie, McCamey & Chilcote, PC) for John Crane, Inc. Robert L. Byer (Duane Morris LLP) for Brand Insulations, Inc.
Companies: John Crane, Inc.; Brand Insulations, Inc.
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