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PA Supreme Court Rules Allocation Scheme of Fair Share Act Doesn’t Apply to Strict Liability Asbestos Cases

by George “Jerry” S. Bobnak, Esq. and Michael H. Malin, Esq.

On February 19, 2020, the Pennsylvania Supreme Court issued its long-awaited opinion on the appeal of the Superior Court’s ruling in Roverano v. John Crane, Inc., 177 A.3d 892, Prod.Liab.Rep. (CCH) P 20,243, 2017 PA Super 415 (2017). The Supreme Court settled two very important issues of first impression in asbestos litigation and strict product liability litigation:

  • The Supreme Court ruled that the Fair Share Act, 42 Pa.C.S. § 7102, does not change Pennsylvania’s common law rule requiring per capita apportionment in strict product liability actions – reversing the Superior Court; and,
  • The Fair Share Act requires bankrupt entities that are defendants or that have settled with Plaintiff to be on the verdict sheet in asbestos matters as long as sufficient proofs are provided – upholding the Superior Court.

The Supreme Court’s ruling on these two issues will have significant impacts on future asbestos litigation and those impacts are generally detrimental for small share asbestos defendants.

The Trial Court
Plaintiff William Roverano claimed exposure to multiple asbestos products from 1971 to 1981 while working at PECO. He also smoked for approximately thirty years, until 1997. In 2013 he was diagnosed with lung cancer.

Mr. Roverano and his wife brought a strict product liability suit against multiple defendants, including John Crane, Inc. (“Crane”) and Brand Insulations, Inc. (“Brand”). Crane filed a joinder complaint against Johns-Manville/Manville Personal Injury Trust (“Manville”). Before trial, several defendants filed motions in limine seeking application of the Fair Share Act, 42 Pa.C.S. § 7102, and asserting that the Fair Share Act required the jury to allocate liability to each defendant depending upon the percentage of the total harm each asbestos product caused. The trial court denied the motions. Defendant Hajoca Corporation filed a motion in limine seeking to have the 14 asbestos bankruptcy trusts, with which the Roveranos filed claims, included on the verdict sheet for the sole purpose of an assessment by the jury of their responsibility for Mr. Roverano’s claimed injuries. Several other defendants filed similar motions seeking the inclusion of bankrupt entities on the verdict sheet.

The trial court denied all of defendant’s motions in limine and no bankrupt entities were permitted on the verdict sheet. The jury returned a verdict in Plaintiffs’ favor, and awarded a total of $5,189,265 to Mr. Roverano and $1,250,000 to Mrs. Roverano against Crane, Brand, and six of the other defendants who had settled prior to the verdict. The trial court molded the verdict by apportioning the judgments equally, per capita, among the eight defendants found liable. Thus, the judgments against Crane and Brand were for $648,858 each on Mr. Roverano’s claim, and a $156,250 on Mrs. Roverano’s claim.

The Superior Court
On appeal, the Superior Court affirmed in part, vacated the judgment, and remanded for a new trial on damages to apportion the jury verdict among Crane, Brand, the six settling defendants and the bankrupt settling defendants. The Superior Court found that the Fair Share Act expressly applies to strict liability claims, and thus, replaces per capita apportionment with percentage allocation as would be done in any negligence action.

The Superior Court concluded that the trial court erred in denying various defendant’s motions to have the jury apportion each defendant’s share of liability. The Superior Court reasoned that the Act reflected the legislature’s intent to allocate liability among strictly liable joint tortfeasors in the same manner as negligent joint tortfeasors, i.e., on a percentage basis, despite the fact that the Fair Share act does not specifically set forth the method of calculating any allocation under the Act. In the new trial on damages, the Superior Court also concluded that the jury should consider evidence of any settlements from bankrupt entities. Thus, the Superior Court remanded for a new trial on damages for the jury to apportion the verdict among Crane, Brand, the other defendants and the bankrupt entities that settled with the plaintiffs.

The Supreme Court
The Supreme Court granted allocator and reversed the Superior Court on the allocation issue and affirmed the Superior Court on the issue of inclusion of settling bankrupt entities on the verdict sheet.

In support of its decision, the Supreme Court held that although the Fair Share Act explicitly applies to strict liability actions, the Act is silent on how apportionment is to be made among joint tortfeasors:

There is nothing in the [Fair Share] Act that suggests that the method of determining the ratio of liability for strict liability cases must be the same as specifically described for negligence cases alone in the prior version of Section 7102. It does not follow, as concluded by the Superior Court, that the inclusion of strict liability cases in Section 7102(a.1)(1) evidenced an intent to treat such cases the same as negligence case in all respects. It is clear that in both types of cases the Section directs that the ratio of damages must be determined among defendants and that, pursuant to Section 7102(a.1)(2) such proportions will not be subject to joint liability exposure. However, the Section 7102(a.1)(1) is silent about the basis for determining those proportions.

Roverano v. John Crane et al, No. 26 EAP 2018 and 27 EAP 2018 (Feb.19, 2020) page 23.

Thus, because of the Act’s silence, the Supreme Court found no reason to change to common law rule from cases such as Baker v. AC&S, 755 A.2d 664 (Pa. 2000) and Walton v. Avco Corp., 610 A.2d 454 (Pa. 1992), which dictate per capital allocation in strict liability actions.

In further support of its ruling, the Supreme Court also found that it is basically impossible to apportion liability in the context of strict liability when the plaintiff has suffered an indivisible injury such as lung cancer caused by asbestos, since asbestos exposure is cumulative and there is no way to apportion which defendant’s product was specifically responsible for a percentage of Mr. Roverano’s lung cancer. The Court referenced the fact that even the defense experts had to admit that if a variety of asbestos products combined to cause Mr. Roverano’s lung cancer, then the individual exposures cannot be separated.

The Supreme Court next explained its ruling that bankrupt entities that have settled and bankrupt entities joined as defendants must be on the verdict sheet by, again, pointing to the plain language of the Fair Share act, specifically §7102(a.2):

(a.2) Apportionment of responsibility among certain nonparties and effect.–For 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 Supreme Court found that the above section required the trial court to include Manville on the verdict sheet for the limited purpose of determining liability since Crane joined Manville as an additional defendant for the sole purpose of allocating liability.1 Since the above language also references inclusion of settling nonparties upon the verdict sheet for “purpose of apportioning liability only,” any bankrupt entities that settled with Mr. Roverano can be placed on the verdict without violating the bankruptcy automatic stay and debt discharge provision of 11 U.S.C. § 362 (providing the automatic stay until discharge) and 11 U.S.C. § 1141(d)(1)(A) (confirmation of a plan discharges pre-confirmation debt).

Practical Effects on Asbestos and Strict Product Liability
The Supreme Court’s Roverano ruling will have substantial impact on future asbestos ligation in at least three ways:

          1. Small share defendants may have to pay more to settle and at trial. A defendant who’s asbestos product is only implicated in minimal asbestos exposure to plaintiff may now be lumped with all other defendants equally, even if there is evidence that plaintiff was exposed to the other defendants’ products to a greater degree. Evidence of even a small number of exposures to asbestos will now be treated as having the same value as more significant exposures, since all exposures will be subject to per capita apportionment.

          2. Plaintiffs are less likely to settle filed claims with bankruptcy trust until after a case settles or concludes with a trial. Since there is no statute of limitations for filing claims with most bankruptcy trusts, plaintiffs are less likely to settle filed claims while litigation is pending, since that will ensure inclusion of those bankrupt entities on the verdict sheet and result in dilution of any verdict for each bankrupt entity on the verdict sheet by reducing the per capita share recovered from the viable defendants.

          3. Defendants should join bankruptcy trusts as additional defendants where permitted. To the extent permitted by the Trust Distribution Procedures for the given trust, potentially responsible bankruptcy trusts should be jointed as additional defendants to ensure inclusion on the verdict sheet.

Unless the legislature chooses to clarify the application of the Fair Share Act, the Supreme Court’s ruling will echo through asbestos litigation (and most likely other mass tort litigation) for years. If you have questions about this decision and its potential impact(s) upon you and/or your insured please feel free to contact us.

1The Manville Personal Injury Settlement Trust’s Trust Distribution Procedures are unusual as they permit it to be joined as a defendant for inclusion on a verdict sheet only, no other purpose.