You asked for background information about asbestos litigation in Connecticut including the number and outcome of these cases and how many companies declared bankruptcy because of asbestos litigation.

SUMMARY

Initially, most of the asbestos litigation in Connecticut, as well as in other states occurred in federal court. But this changed and in recent years most asbestos cases are filed in state court.

Unfortunately, there are no public sources that provide a comprehensive picture of asbestos ligation including the number of asbestos cases or the amount paid in judgments or settlements either for Connecticut or nationally. It also appears that no private entity gathers or maintains these records. This is further complicated by the fact that the typical asbestos law suit involves a number of claimants and many dozen defendants.

According to Deborah Fuller, the Judicial Branch's' legislative liaison does not automatically or routinely collect data about the number and outcome of asbestos-related products liability cases. While the department's computer system automatically keeps statistics about some categories of civil cases, it has not created a separate code for asbestos cases. Thus, no computer records of pending or disposed of asbestos cases are available.

The department has consolidated asbestos cases in a special docket in the Fairfield Judicial District at Bridgeport since 1989. Currently Judge Hiller is presiding over the docket. Special calendars are heard in New Haven before Judge Trial Referee Skolnick. The department created this special docket to assist the court and the parties to administer these cases.

According to Deborah Fuller, Judicial Branch personnel conducted a manual search of the special docket's records. This search indicated that as of September 30, 2009, (1) 304 cases were pending and (2) 632 had been disposed of during the preceding 18 months. The overwhelming majority of the disposed of cases were either dismissed (422) or withdrawn (196). Of the remainder, 10 were removed to Federal Court, one was a judgment by stipulation before trial, two were reported as judgments for the plaintiff, and one was simply reported as a judgment.

Unfortunately, the data provided does not indicate how many defendants settled with plaintiffs and thus had their case dropped or withdrawn or whether the court dismissed them because the plaintiff was not able to show a sufficient connection between the defendant and the asbestos the plaintiff was exposed to.

In Connecticut, as elsewhere, asbestos cases seldom go to a jury. Most are settled before trial. In the first asbestos jury verdict case in over 20 years, in March 2009, a Connecticut jury awarded a $2.6 million verdict to the family of a mechanic who died of mesothelioma. The court subsequently reduced the verdict by a little over $268,000 because of medical insurance benefits the deceased had already received.

According to a recent report in Mealey's Asbestos Bankruptcy Report, there have been at least 85 bankruptcies filed because of asbestos litigation as of May 20, 2009. In addition, there were several related bankruptcies filed by subsidiaries of these companies. This figure includes only companies that filed primarily because of asbestos litigation. It does not include companies that filed primarily for other reasons but which had minor asbestos litigation exposure.

We compared the companies that declared bankruptcy because of asbestos litigation with the electronic business records available at the office of the Secretary of the State. Based on that comparison, there were five corporations organized under Connecticut law that are on this list: API, Inc.; Dana Corporation; Insul; Raymark Corp.; and Special Metals Corp.

We identified one corporation on the list that appears to be a Connecticut based corporation, which chose to organize under the laws of Delaware-Combustion Engineering Inc. It lists its Connecticut business address as 501 Merritt 7, Norwalk Connecticut, 06856, and it lists the home addresses of its corporate officers as in Connecticut. The Secretary of the State's records indicate that the corporation's status as “active” but lists the last year it submitted reports to the Secretary of the State as 2003, the same year it filed for bankruptcy. It may have been acquired by ABB Ltd. of Zurich Switzerland. According to a press release from ABB, dated January 17, 2003 - ABB and its U.S. subsidiary Combustion Engineering (CE) announced they had agreed a pre -packaged bankruptcy plan for CE with representatives of asbestos plaintiffs to resolve CE's asbestos liability.

Sixteen of the corporations that filed for bankruptcy had registered with the Connecticut Secretary of the State to do business in Connecticut at some time. Each of the 16 companies was organized under the laws of some other state. According to the Secretary of the State's electronic records, two of these companies withdrew from Connecticut or stopped filing reports around the time they filed for bankruptcy; eight withdrew from Connecticut well before they filed for bankruptcy; and six continued to be registered to do business in Connecticut after they filed for bankruptcy under their original name or under a new name.

BACKGROUND

The following information was taken directly from a 2005 report (Asbestos Litigation by Deborah Hensler, Jennifer Gross, Matthias Schonlau, Allan Abramse, and J. Scott Ashwood (http://www.rand.org/pubs/monographs/2005/RAND_MG162.sum.pdf). This report provides excellent background information about asbestos injuries and litigation. We have enclosed a copy of a report on this topic our office wrote several years ago (2004 –R-0173).

The word asbestos refers to several types of fibrous minerals that exist in nature.  These fibers are strong, durable, resistant to heat and fire, thin, and flexible.  According to the Insurance Information Institute, about 33 million tons of asbestos were used in industrial sites, homes, schools, shipyards, and commercial buildings in the United States during the twentieth century.

Asbestos Related Illness

The injuries caused by asbestos exposure are (1) mesothelioma and other forms of cancer, (2) asbestosis, and (3) pleural abnormalities. Mesothelioma is a deadly cancer of the lining of the chest or abdomen for which asbestos is the only known cause. Lung cancer is the other frequently claimed malignant disease that can be caused by asbestos, although many other forms of cancer have been related to asbestos exposure, including leukemia and cancers of the bladder, breast, colon, pancreas, and prostate. Asbestosis, a chronic lung disease resulting from inhaling asbestos fibers, can be debilitating and even fatal. Pleural plaques, pleural thickening, and pleural effusion are abnormalities of the pleura, the membrane that lines the inside of the chest wall and covers the outside of the lung.

Data on Asbestos Litigation

There are no public sources that provide a comprehensive picture regarding asbestos ligation including the number of asbestos cases or the amount paid in judgments or settlements either for Connecticut or nationally.

According to the 2005 Rand report:

“The critical challenge to conducting research on asbestos litigation is that so little data are publicly available. There is no national registry of asbestos claimants. Some claims are not filed formally in court as lawsuits. Federal courts report the number of asbestos lawsuits filed, but in recent years most lawsuits have been filed in state courts, which do not routinely identify and report annual asbestos lawsuit filings.”

“The typical asbestos claimant brings a claim against many defendants. In recent years, defendants have typically named several dozen defendants, and each of those defendants generally settles claims separately and keeps its own records. Any one defendant knows about the claims against it and its settlements, but it usually does not know how much other defendants are paying on a claim. Claimants may receive money from settlements over a long period of time. They may settle with some defendants today and other defendants next year and still others later on down the line.”

“Further, because there are so many conflicting interests, and because so much money is involved, even the limited data possessed by those involved in the litigation are viewed as highly sensitive and confidential.”

Reasons for Recent Litigation

According to the 2005 Rand report, a number of factors have led to the latest increase in new asbestos-related litigation and claims.  First, there has been an increase in the number of defendants that plaintiffs are naming. Because many of the companies involved in the manufacturing of asbestos are no longer in business, plaintiffs are now suing companies that are less directly linked with asbestos – those that used it and those that became owners of companies that had once produced it.  

Also according to the 2005 report, as asbestos claims drive companies into bankruptcy, (1) remaining companies are forced to assume more liability, which results in more bankruptcy and (2) lawyers are filing more cases so as to be included on the companies' bankruptcy creditor lists.

Lastly, the report asserts that the factor with the largest impact on the amount of asbestos litigation has been the filing of cases by people who have been exposed to asbestos but who have not yet manifested illness. A Tillinghast-Towers Perrin study the report cites reportedly found that 94% of the claims filed in 2000 were by non-malignant claimants.  The report estimates that 65% of total asbestos compensation has gone to non-malignant individuals.

CONNECTICUT ASBESTOS CASES

According to Deborah Fuller, the Judicial Branch does not normally keep statistics regarding asbestos related products liability cases. The computer system that the branch uses to track civil litigation does not have any separate coding for asbestos cases. But the branch retains records of civil cases for 18 months and Fuller was able to have records manually reviewed to determine cases currently pending and cases disposed of during the preceding 18 months. Table 1 includes the data Fuller provided us as of September 30, 2009.

Table 1: Asbestos Cases Currently in the Civil System by

Disposition Status as of 9/30/09

Asbestos Jury Verdicts in Connecticut

It appears that only one jury verdict has occurred in Connecticut during the past 22 years involving an asbestos-related products liability case. In March 2009, a Connecticut jury awarded $2.6 million in damages to the family of a mechanic who died of mesothelioma (Fortier, et al., vs. Aerco International, Inc., et al, in Superior Court J.D. of Fairfield at Bridgeport, Connecticut, No. BA 06-5005849S (March 10, 2009)). Fortier, a 59-year old Florida resident, died from mesothelioma in 2008. The defendant was the Allis Chalmers Product Liability Trust of Madison, Wisconsin. Fortier was a fireman on the USS Forrestal aircraft carrier, regularly working with Allis-Chalmers pumps that contained asbestos gaskets and packing.

The Allis-Chalmers Manufacturing Co. of Wisconsin was an American manufacturer with diverse interests. The company eventually divested its manufacturing businesses and today is known as Allis-Chalmers Energy, and is based in Texas. The trust was established as part of a bankruptcy reorganization to deal with asbestos claims. The defendant supplied pumps with asbestos in their gaskets for the Groton-based aircraft carrier on which the plaintiff worked.

The $2.6 million dollar verdict included $1,775,000 in non-economic damages and $820,000 in economic damages. The jury determined that (1) the pumps were defectively designed and a substantial factor in causing the plaintiff's death and (2) the company negligently failed to warn of the inherent dangers of working with the pumps.

The defendant filed a post-verdict motion to reduce the economic damages by the amount of collateral source payments made toward the decedent's hospital and medical bills. The defendants also filed a motion to dismiss the verdict and called for the disclosure of how much the plaintiff and his estate received in settlements from 50 other defendants that avoided a trial. The defendant claimed that the judge should have that information in weighing the verdict. Apparently, the jury had no knowledge of any prior settlement payments.

The defendant sought a collateral source reduction of $268,425.08 consisting of $214,236.93 in payments made by health insurers and $54,188.15 in “insurance adjustments.” The Appellate Court had previously determined that medical bills reduced or forgiven under a contract between the medical care provider and a health care insurer would be considered a collateral source, (Hassett v. City of New Haven, 91 Conn. App. 245, 880 A. 2d 975 (2005)).

The trial court agreed with the defendant that the credits reflected on the medical bills in question referred to insurance adjustments. There was no evidence presented to show that any of the credits resulted from voluntary or gratuitous forgiveness of the bills by any health care providers. The court found that the defendant had established by a preponderance of the evidence that these adjustments must be considered collateral sources.

The trial court concluded that the defendant was entitled to a collateral source reduction in the amount of $268,425.08. The court had already addressed on the record, and denied, other post-trial motions filed by the defendants. The court entered judgment in favor of plaintiff, Gail M. Fortier as administrator of the estate of David Fortier as follows: economic damages-$551,574.92; past non-economic damages-$750,000.00; future non-economic damages-$500,000.00; total damages-$1,801,574.92.

It also entered judgment in favor of the plaintiff Gail Fortier on her loss of consortium claim in the amount of $525,000. (David Fortier et. al. v. A.O. Smith Corp. et. al. David Fortier et. al. v. AMPCO-Pittsburg Corp. et. al 2009 Conn. Super. LEXIS 1453, (May 21, 2009)).

CONNECTICUT LAW –STATUTE OF LIMITATIONS RELATING TO ASBESTOS CASES

No product liability lawsuit may be filed longer than three years from the date when the injury, death, or property damage is first sustained or discovered or in the exercise of reasonable care should have been discovered. In addition, with certain exceptions, no lawsuit may be filed against any party more than 10 years from the date that the party last parted with possession or control of the product (CGS § 52-577a(a)).

Exception to the 10 Year Limit Rule-Useful Safe Life

The 10 year limitation does not apply to any product liability claim brought by a claimant who is not entitled to workers compensation and who can prove that the harm occurred during the product's useful safe life. In determining whether a product's useful safe life has expired, the trier of fact may consider among other factors:

Extension of 10 Year Limit by Warranty, Misrepresentation, or Deception

The 10 year limitation may be extended pursuant to the terms of any express written warranty that the product can be used for a period longer than 10 years, and does not prevent any action against a product seller who intentionally misrepresents a product or fraudulently conceals information about it, provided the misrepresentation or fraudulent concealment was the proximate cause of the harm (CGS § 52-577(a) (d)).

Special Rule for Asbestos Claims

The 10 year limitation does not apply to any product liability claim, whenever brought, involving injury, death, or property damage caused by contact with or exposure to asbestos. Instead the law requires that the lawsuit be filed (1) for personal injury or death be filed within 60 years from the date that the claimant last had contact with or exposure to asbestos, and (2) for property damage within 30 years from the date of last contact with or exposure to asbestos(CGS § 52-577(a)(e)).

Limit on Defendant's Ability to Implead a Third Party

In product liability lawsuit, a product seller may implead any third party who is or may be liable for all or part of the injured person's claim, if the third party defendant is served with the third party complaint within one year from the date a copy of the complaint is filed with the court(CGS § 52-577a(b)). (Impleading a party is a procedural device before trial in which a defendant brings another party into a lawsuit because the defendant alleges the other party is totally or partially liable.)

RECENTLY DECIDED CONNECTICUT ASBESTOS CASES

Virtually all of the recent asbestos related court decisions have involved motions by defendants to dismiss the complaint.We examined 48 asbestos-related products liability cases that were decided during the past 10 years or so on the special asbestos docket on the Judicial District of Fairfield at Bridgeport. Each case involved a motion by a defendant for summary judgment, which asks the court to dismiss the case because the plaintiff has not alleged facts sufficient to result in a verdict against the defendant even if the plaintiff were able to prove them. A defendant is entitled to the judgment if the pleadings, affidavits, and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law (Ct. Practice Book § 17-49).In deciding a motion for summary judgment the trial court must view the evidence in the light most favorable to the nonmoving party (Provencher v. Enfield, 284 Conn. 772, 790-91 (2007)).

What Must be Alleged and Proved in a Products Liability Asbestos Case

In a products liability action, the plaintiff must plead and prove that the product was defective and that the defect was the proximate cause of the plaintiff's injuries (Haesche v. Kissner, 229 Conn. 213, 220, (1994)). In a products liability asbestos-related claim a plaintiff must:

1. identify an asbestos-containing product for which a defendant is responsible,

2. prove that he or she has suffered damages, and

3. prove that the defendant's asbestos-containing product was a substantial factor in causing his damages.

In a motion for summary judgment, the plaintiff must show that a particular defendant's product was used at the job site and that the plaintiff was in proximity to that product at the time it was being used. The plaintiff must also produce evidence sufficient to support an inference that he inhaled asbestos dust from the defendant's product. The jury cannot reach this inference unless there is evidence that the defendant's product was used at the plaintiff's work site during the plaintiff's tenure or that the plaintiff was otherwise exposed.

Analysis of the 48 Cases Examined

Of these 48 cases, the court granted summary judgment in 22 cases and denied it in 26. Following in Table 3 is a brief description of these cases. The table also includes a few other cases that although asbestos-related, focus on disputes concerning the obligations of insurance companies to defend their policy holders and to pay damages. Unlike the products liability cases that all were handled by the Bridgeport docket, the others were heard in other locations.

Table 3: Recent Asbestos-Related Superior Court Cases

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COMPANIES THAT HAVE FILED FOR BANKRUPTCY

According to a recent report in Mealey's Asbestos Bankruptcy Report there have been at least 85 bankruptcies filed because of asbestos litigation (Where are They Now, Part Five: An Update on Developments in Asbestos-Related Bankruptcy Cases by attorneys Mark D. Plevin, Leslie A. Davis, and Noah S. Bloomberg of the Washington D.C. firm of Crowell and Moring). The authors subsequently updated this data to May 20, 2009 (see Crowell and Moring website).

Following in Table 4 is a list of companies that declared bankruptcy because of asbestos claims arranged alphabetically by company name. Following that is Table 5, which arranges this information chronologically. In addition, there were several related bankruptcies filed by subsidiaries of these companies. This figure includes only companies that filed primarily because of asbestos litigation. It does not include companies that filed primarily for other reasons but which had minor asbestos litigation exposure.

Table 4: COMPANY NAME AND YEAR OF BANKRUPTCY FILING (ALPHABETICALLY BY COMPANY)

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*Three subsidiaries of Asarco – AR Sacaton LLC; Southern Peru Holdings, LLC; and Asarco Exploration Company – filed for Chapter 11 on December 12, 2006, citing asbestos exposure.

Table 5: COMPANY NAME AND YEAR OF BANKRUPTCY FILING (CHRONOLOGICALLY)

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*Three subsidiaries of Asarco – AR Sacaton LLC; Southern Peru Holdings, LLC; and Asarco Exploration Company – filed for Chapter 11 on December 12, 2006, citing asbestos exposure.

Connecticut Companies That Have Declared Bankruptcy

We compared the companies that declared bankruptcy because of asbestos litigation with the electronic business records available at the office of the Secretary of the State. Based on that comparison, it appears there were five corporations organized under Connecticut law that are on this list: API, Inc.; Dana Corporation; Insul Co.; Raymark Corp.; and Special Metals Corp.

Table 6 lists the company's organized under Connecticut law that according to Mealey's, declared bankruptcy because of asbestos litigation. The table also indicates the status of a corporation as reflected on the Secretary of the State's records, the date it filed its last report with the Secretary of the State, the Connecticut business address listed if any, and the year it filed for bankruptcy.

Table 6: Connecticut Domestic Corporations

*Although the Secretary of the State's records indicate the corporation's status as active, it does not appear that these corporations are operating.

Connecticut-Based Company Organized Under the Laws of Another State

We identified one corporation on the list that appears to be a Connecticut based corporation, which chose to organize under the laws of Delaware-Combustion Engineering Inc. It lists its Connecticut business address as 501 Merritt 7, Norwalk Connecticut, 06856, and lists the home addresses of its corporate officers as in Connecticut. The Secretary of the State's records indicate the corporation's status as “active” but lists the last year it submitted reports to the secretary of the state as 2003, the year it filed for bankruptcy. It may have been acquired by ABB Ltd. of Zurich Switzerland. According to a press release from ABB, dated, January 17, 2003, ABB and its U.S. subsidiary Combustion Engineering (CE) announced they had agreed a pre -packaged bankruptcy plan for CE with representatives of asbestos plaintiffs to resolve CE's asbestos liability. According to the release, a trust, set up under the plan, will handle claims filed after a Chapter 11 reorganization has been approved in court.

Reportedly, under the agreement, the value of Combustion Engineering on the due date would be made available for the payment of asbestos claims. At the end of September 2002, CE's value reportedly was around $812 million. In addition, ABB apparently agreed to provide an enhanced payment for the benefit of claimants in the form of ABB stock and cash. The cash payments were to be made in pre -agreed installments from 2004 to 2009.

Foreign Corporations Registered to do Business in Connecticut

Sixteen of the corporations that filed for bankruptcy had registered with the Connecticut Secretary of the State to do business in Connecticut at some time. Each of the 16 companies was organized under the laws of some other state. In Table 7 below we specify the name of each company, the state law it was organized under, its status, the last report it filed with the Secretary of the State, and the year it filed for bankruptcy. According to the Secretary of the State's electronic records, two of these companies withdrew from Connecticut or stopped filing reports around the time they filed for bankruptcy; eight withdrew from Connecticut well before they filed for bankruptcy; and six continued to be registered to do business in Connecticut after they filed for bankruptcy under their original name or under a new name.

Table 7: Foreign Corporations Registered in Connecticut

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