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Pollution Litigation Review - June 2001
Pollution Litigation Review - June 2001
Charlie Kingdollar, Stamford
USA/ Canada
On June 22, 2001, it was reported that two separate class action suits have been filed against the American Dental Association and the California Dental Association for allegedly covering up information regarding the toxic affects of mercury in dental amalgam. The suit alleges that the associations threatened to revoke the licences of dentists who opposed their positions regarding the safety of such fillings. Morrison Mahoney & Miller Insurance Law 6/22/01
On June 19, 2001, it was reported that 104 investors of Lloyd's of London have filed suit against Lloyd's brokers alleging that they deliberately concealed the extent of asbestos losses facing Lloyds. The investors have filed suit in New York against Marsh & McLennan Cos. Inc. and Marsh's wholly owned agents Marsh Inc., Guy Carpenter & Co. Inc., Bowring & Co. Ltd. and Sedgwick Group PLC. According to the investors, Marsh has been the sole broker for Johns Manville since 1943. Mealeys.com 6/19/01
On June 18, 2001, jury selection began in a statewide class action lawsuit against tobacco manufacturers which seeks to force the manufacturers to pay for medical testing for the 500,000 or more Louisiana smokers. The article also states that Louisiana, which received $4 billion as its portion of the state lawsuits settlement against the tobacco defendants, has recently authorized the sale of up to $2.4 billion of the settlement as some state officials fear that tobacco industry defendants may eventually not be able to pay the full settlement. Dow Jones International News Service 6/18/01
On June 6, 2001, it was reported that the Rhode Island Senate passed Senate Bill 871 which, among other things, would, if signed into law, prohibit insurers from excluding coverage for losses or damages caused by lead poisoning effective July 1, 2003. The Bill also requires that all insurers issuing commercial lines and personal lines policies covering rental housing built prior to 1978 that complies with the state's standards for lead hazard control, mitigation or abatement provide an affirmative grant of coverage for lead poisoning claims in an amount at least equal to the policy's BI/PD limits. Mealey's Litigation Reporter Lead 6/6/01 & Morrison Mahoney & Miller Insurance Law 6/22/01
On June 18, 2001, an Indiana auto parts manufacturer, Guide Corp., reached a settlement with state and federal regulators by agreeing to pay $13.9 million for discharging 1.6 million gallons of wastewater contaminated with industrial chemicals into the White River in 1999. The spill killed an estimated 5 million fish. The agreement includes $6 million in natural resource damages, $2.025 million in cleanup costs and $5.9 million in fines. Knight Ridder Tribune News & Dow Jones 6/18/01
On June 15, 2001, it was reported that an Illinois appellate court held that a liability insurer failed to give statutory notice of a change in coverage when it added a lead paint exclusion at policy renewal and, therefore, is estopped from asserting the exclusion as a defense to coverage in a lead poisoning claim (Guillen v. Potomac Ins. Co. of Ill.). Morrison Mahoney & Miller Insurance Law 6/15/01
On June 15, 2001, the State of California's Scientific Review Panel gave preliminary approval to a list of the five toxic air pollutants that potentially cause the most harm to children up through adolescence. The five are: Diesel exhaust, lead, acrolein, dioxins and polycyclic aromatic hydrocarbons. These air pollutants are largely a result of combustion. As a result of this designation, state regulators may act to tighten regulations addressing emissions of these substances. L.A. Times
On June 14, 2001, it was reported that a Utah cattle rancher who was previously awarded $8 million for property and punitive damages when it sued air bag manufacturer Thiokol Corp. alleging that his cattle died as a result of grazing in pastures contaminated by hazardous wastes emanating from the company's plant, has served notice that he intends to sue to force Thiokol to remediate contaminated groundwater. The notification of the intent to sue lists 29 chemicals allegedly discharged by the facility into the water supply. Dow Jones International News Service 6/14/01
On June 13, 2001, it was reported that mold-related litigation and claims in Texas were pointing to an alarming trend. According to the article, a claims executive responsible for South Texas for the State Farm Group has reported that the company has received 1,700 mold claims in the first five month s of 2001, 900 of these from the Houston area. According to an economist for the Insurance Information Institute, "this issue could cost insurers hundreds of million of dollars this year." According to a spokesperson for the Alliance of American Insurers, "the mold problem could quickly grow to unmanageable proportions" as they have seen serious toxic mold issues developing in other states such as California, Illinois and Arizona. California was described as "a tremendous hotbed of activity." Bestwire 6/13/01
On June 13, 2001, it was reported that 73 families have filed a class action toxic mold suit in Houston against residential builder, Life Form Homes Inc, and the manufacturer of the synthetic stucco product, Finestone, alleging that the stucco is defective as it traps moisture behind walls leading ti mold infestation. The suit was filed in the 221st District Court in Montgomery County. Bestwire 6/13/01
On June 13, 2001, it was reported that a Minnesota jury awarded a mesothelioma victim and his wife $8.05 million in damages. The former Koch refinery worker filed suit against A.P.I. Inc, one of the manufacturers of the asbestos product he worked with from 1968 to 1979. The jury awarded the plaintiff and his wife $4 million each and an additional $50,000 for past medial expenses. The jury decided not to award punitive damages. The jury found A.P.I. 60% liable, another asbestos product manufacturer Hickory Insulation, 20% liable and his employer, Koch, 20% liable. BNA Toxics Law Daily 6/13/01
On June 12, 2001, Appleton Papers and its previous owner, NCR, reached an interim settlement with federal and state regulators and tribal governments requiring the company to pay at least $40 million in cleanup costs and natural resource damages for PCB contamination in the Fox River. The $40 million interim settlement does not limit the ultimate liability facing the company for the long term cleanup and restoration costs but was deemed an "initial payment." Milwaukee Journal Sentinel 6/12/01
On June 12, 2001. it was reported that even short term exposure to air particulates can increase the risk of heart attack. The new study was performed by researchers at the Beth Israel Deaconess Medical Center and concluded that exposure to air particulates below current federal standards can result in an increased risk of heart attack. The article cites emissions from power plants, refineries and other industries as well as auto exhaust as the primary source of air particulate pollution. The Atlanta Journal Constitution 6/12/01
On June 8, 2001, it was reported that there have only been seven billion dollar verdicts awarded to individual plaintiffs and families and all of these have taken place since 1992, four of the seven verdicts were awarded since 1/1/99. The two most recent involved pollution and toxic tort (tobacco) cases and resulted in jury awards of $1.056 billion and $3.005 billion, respectively, to single plaintiffs. The article also noted that the largest verdict ever, $145 billion, awarded in a tobacco class action suit, also was handed down last year. Lawyers Weekly USA 6/8/01
In June 2001, it was reported that a class actions toxic mold suit was filed against the School City of Gary, Indiana and the Board of School Trustees of the School of Gary, Indiana on behalf of students, parents of the students, faculty and other employees of the Pittman Square School. The suit alleges that the defendants failed to completely dry material in the school within a reasonable time frame, failed to properly maintain the property, failed to replace moldy ceiling tiles in a timely manner, ignored visible mold in the school and disregarded numerous anecdotal reports of illnesses by the plaintiffs. The plaintiffs are alleging that exposure to toxic mold cause bodily injuries, pain and suffering and emotional distress. Mealey's Litigation Report Mold 6/01
In June 2001, it was reported that an Oregon homeowner has filed suit against developer and contractors alleging that construction defects caused toxic mold growth resulting in bodily injuries including respiratory distress, allergic reactions, skin rashes, edema, joint pain, fatigue, nosebleeds, headaches, flu-like symptoms, vertigo and other on-going medical conditions (Kent v. Lynn Development Corp.). The suit, which seeks over $3 million for bodily injuries, maintains that the mold growth included Stachybotrys, Penicillium, Aspergillus, Cladosporium, Amerospores and Ulocladium. The suit also seeks $700,000 in property damage and $20,000 in additional living expenses incurred through February 1, 2001 and increasing at $4,000 per moth. The defendants include Lynn Development Corp., McLaughlin Plastering Inc., David G. Martin, Earl Miller, Michael Martin and Jack McLaughlin. The plaintiff alleges that the contractors failed to apply an appropriate moisture barrier behind the exterior insulation and finish system (EIFS), and failed to install appropriate sealants, backing material and flashings windows, doors, light fixtures outlets and other penetration points through the EIFS. Mealey's Litigation Report Mold 6/01
In June 2001, it was reported that a California apartment resident has a filed a toxic mold suit against her landlord (Schowengerdt v. Greenwood Place). The suit , which also cites unnamed property managers and contractors as defendants, alleges that she has suffered permanent injuries as a result of mold exposure. In a separate California action, a condo owner has filed suit against the Homeowners Association, realtors, the developer and various contractors alleging that construction defects resulted in mold contamination which caused bodily injuries including respiratory ailments, fatigue, memory loss, tremors and other ailments (Lusted v. Hidden Canyon Homeowners Assoc.). Other defendants include Troop Real Estate, Dyno-Rood, Lloyd's Plumbing, Servpro, Prudential Real Estate and Griffin Homes.
On June 8, 2001, it was reported that the Cambria Community Services District, in California, has filed a lawsuit against Chevron Corp., Chevron U.S.A. and Chevron Products Co., seeking to recover the costs of remediating MTBE and other gasoline components from groundwater and surface water. Mealeys.com 6/8/01
On June 7, 2001, four New Jersey families filed a toxic tort suit against ExxonMobil Corp. and Shotmeyers Brothers Fuel Corp. alleging that a gasoline leak from a leaking underground storage tank at a service station contaminated their drinking water with benzene, toluene and MTBE. Tests at three of the plaintiffs' wells have found benzene and toluene in levels higher than those deemed safe. The suit alleges that exposure to the chemicals exposed them to health risks, caused property diminution and forced them to use alternative water supplies. The Record 6/8/01
On June 7, 2001, Wal-Mart agreed to pay a $1 million fine to settle federal allegations that the company and its contractors violated the Clean Water Act during the construction of new stores by allowing hazardous pollutants to flow into drinking water sources and waterways. The fine will be paid jointly by Wal-Mart and the contractors. The Record 6/8/01
On June 6, 2001, a California jury ordered Philip Morris to pay a longtime smoker diagnosed with lung cancer $3.005 Billion. The jury awarded $5.5 million in compensatory damages and $3 billion in punitive damages to the plaintiff who smoked two packs a day for 40 years. Philip Morris will appeal the award. The New York Times 6/7/01
On June 6, 2001, a panel of 11 top atmospheric scientists from the National Academy of Sciences delivered a report to the White House which concluded that global warming is a real problem, one that is getting worse and reaffirmed what was deemed as the "mainstream scientific view" that the warming is largely being caused by human activities releasing greenhouse gas pollutants. The New York Times 6/7/01
On June 5, 2001, the general contractor and the designer of a house reached a confidential settlement in a toxic mold suit with a Eugene, Oregon family. The settlement was reached just days after the trial began. Another contractor named as a defendant had settled just before the trial began. The suit, which was seeking $3.5 million, alleged that exposure to toxic mold caused bodily injuries to them and their 13 year old son. Injuries included swollen and painful joints, chronic fatigue, headaches and respiratory ailments. The house was finally burned down by the fire department to eradicate the mold. The settlement will be paid by the defendants' insurers. Knight Ridder Tribune Business News 6/7/01
On June 6, 2001, it was reported that according to certain claims experts the impact of mold claims on the property casualty insurance industry "could rise into the billions." The article discusses a recent case in which a Texas jury awarded a family $32.2 million ($6.2 million in property damage, $5 million for mental anguish, $12 million in punitive damages and $8.9 million in legal fees). The court had refused to allow the plaintiff's expert witnesses to testify on the potential for adverse health effects due to mold exposure thus killing the bodily injury portion of the plaintiffs' claim alleging serious injury to the husband/father. The plaintiffs may appeal this decision. The plaintiffs also plan to file a separate bodily injury suit on behalf of their 5 year old son who was not part of the original suit. The Wall Street Journal 6/6/01
On June 6, 2001, it was reported that a Franklin, Wisconsin couple has asked the city to raze their 1920s era farmhouse after toxic mold allegedly contaminated the house and injured family members or set remediation standards that will guarantee to solve these problems. The couple alleges that a July 2, 2000 storm dislodged their siding and saturated their walls. Repairs did not begin until October after their insurer finished its claims investigation. The couple alleges that this lag time allowed the mold to spread throughout the house. In late July their children were diagnosed with bronchitis and the family moved out of the house in August after one of their children started to cough up traces of blood. Their insurance company paid $107,000 to remediate the mold, this reportedly involved gutting the house, however, the mold returned. The couple has been living in a hotel since August 2000. Milwaukee Journal Sentinel 6/6/01
On June 6, 2001, it was reported that 54 Florida families have filed suit against Chevron Corp. after low levels of MTBE was discovered in their well water. The source of the contamination is allegedly a former Chevron gas station. Chevron recently agreed to pay $200,000 to hook the 54 properties up to the municipal water supply. Also named as a defendant is the Pasco Dept. of Health for failing to warn the residents about the contamination. St. Petersburg Times 6/6/01
On June 5, 2001, it was reported that US Gypsum paid $100 million for asbestos personal injury claims in 1999, $162 million in 2000 and expects to pay $275 million this year. The company is reported to be considering filing for bankruptcy protection. The New York Times 6/5/01
On June 4, 2001, a Texas jury ordered a homeowners' insurer to pay a family $32.2 million in damages after the insurer refused to fully remediate water damage resulting in mold contamination throughout their house (Ballard v. Fire Insurance Exchange). The breakdown of the award was: $6.2 million in actual damages; $5 million for mental anguish; 412 million in punitive damages and $8.9 million in legal fees. The plaintiff reported a bathroom plumbing leak in 1988. Subsequent investigations also discovered stachybotrys caused by a second leak behind their refrigerator. The insurer allegedly refused to pay for removal of the floor and instead only wanted to pay to remove the most severely damaged boards. Mold contamination allegedly spread throughout the dwelling. The plaintiffs also had alleged bodily injuries with at least one of the plaintiffs diagnosed with toxic encephalopathy caused by mold exposure. The court refused to allow some of the plaintiffs' expert witnesses to testify during the bodily injury phase of the trial. Governo and Kavanagh LLP 6/4/01
On June 4, 2001, it was reported that attorney firms are seeing dramatic increases in plaintiffs' inquiries regarding toxic mold litigation. One California firm, Knopler & Robertson, now represent 1,000 mold plaintiffs and has had to turn away hundreds of other cases. The article reports that toxic tort web sites are being flooded with inquiries from people who think they may have been injured by exposure to mold. Many plaintiffs' attorneys say that potential plaintiffs are contacting their firms in unprecedented numbers. The National Law Journal 6/4/01
On June 4, 2001, a New York jury found tobacco manufacturers guilty of deceptive trade practices and ordered them to pay Empire Blue Cross and Blue Shield, New York's largest insurer, $17.8 million. Empire was seeking $800 million. The jury found that the insurer had failed to prove fraud and conspiracy allegations. Associated Press 6/4/01
On June 3, 2001, it was reported that additional contamination has been discovered emanating from the Li Tungsten Superfund site in Glen Cove Long Island. Radium and thorium contamination has been found in the sediment of Glen Cove Creek. Some of the tests for radioactivity found levels far above acceptable levels. Dredging operations in the creek have been halted and previously dredged material (enough to fill 1,000 dump trucks) has been piled up and awaits remediation. More extensive testing of the creek bottom will also be necessary. Li Tungsten was a defense contractor during and after World War II and went bankrupt in the mid-1980s. The cleanup, before the newly discovered contamination, was already tens of millions of dollars and years away from competition. The New York Times 6/3/01
On June 3, 2001, it was reported that the Indiana Department of Environmental Management (IDEM) is sampling residential yards near the Evansville Plating Works for lead contamination. A spokesperson for the IDEM is quoted as saying that "rarely do you come across something [contamination] so widespread. Free blood lead testing for area children will be available from the state health department 's laboratory. High levels of lead contamination has already been found in some of the surrounding properties. The state has yet to determine the potentially responsible party for the contamination. The Evansville Plating Works was abandoned in 1990 and there were four iron foundries also in the area that could be responsible. Evansville Courier & Press 6/3/01
On June 1, 2001, it was reported that the Missouri legislature passed a lead screening Bill which will require that Missouri children ages 6 months to six years who are living in areas of the state deemed to be high risk areas for lead poisoning be tested for lead poisoning. A companion Bill, also passed, provides $1.3 million in funds for the blood-lead screening. Lycos Environment News Service 6/1/01
Rest of World
On June 20, 2001, it was reported that a toxic cloud covered parts of Melbourne, Australia after a fire broke out at a meat processing plant. The toxic cloud formed as the polystyrene cladding in the facility's walls burned. The fire forced the evacuation of thousands of nearby residents. Dow Jones International News Service 6/20/01
On June 14, 2001, it was reported that a tanker capsized in the sea between Malaysia and Singapore spilling phenol, an industrial solvent, and diesel fuel into the sea. The exact size of the spill was uncertain. The ship was carrying 600 tons of the solvent. L.A. Times 6/15/01
On June 13, 2001, landslides in Ecuador ruptured the county's main oil pipeline spilling 462,000 gallons of oil. Over 40,000 gallons of the spilled oil was burning. Oil Spill Intelligence Report 6/14/01
On June 5, 2001, it was reported that the government of Ecuador is seeking to recover $10 million in containment and cleanup costs resulting from a 240,000 gallon oil tanker spill off the Galapagos Islands in January. The Ecuadoran government has stated it will file a suit in U.S. federal court, under the international treatment on civil liability for oil pollution, if Air and Sea Insurance Corp. does not pay their claim within 30 days. The attorney firm representing the Ecuadoran government has stated that while the cleanup costs was approaching $10 million, the natural resource damages was still being calculated and would be much higher. Reuters 6/5/01
On May 30, 2001, a pipeline belonging to Brazilian oil company Petrobas leaked 57,200 gallons of oil onto lawns of an affluent neighborhood in Sao Paulo. The company originally reported the spill involve 12,200 gallons. The spillage was the third pollution incident reported by Petrobas during the month of May. Associated Press 6/1/01
On June 1, 2001, it was reported that for the first time in Brazil's history a nongovernmental organization has filed suit against a company seeking natural resource damages. The Brazilian environmental organization the Sea Shepherd Conservation Society is taking the fishing company Pescado Amaral to court seeking $100,000 in damages to the marine environment caused by the company's illegal drag trawling. While this particular suit seems not to involve "an occurrence" it may not be an issue for insurers, however, the fact that nongovernmental organizations have now filed suit against a firm for natural resource damages and a Brazilian court has agreed to hear the case is significant. It doesn't take much imagination to foresee Brazilian polluters being sued by environmental groups for natural resource damages. Lycos Environment News Service 6/1/01 |
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