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Legal Updates for Asbestos and Mass Tort Litigation

New Jersey Appellate Division Strikes Down $117M Verdict in Talc/Asbestos Case Because Trial Court Did Not Properly Assess Plaintiffs’ Expert Opinions

Legal Updates for Asbestos & Mass Tort Litigation – April 30, 2021

April 30, 2021

by Paul C. Johnson

In April 2018, a Middlesex County jury returned a verdict against Johnson & Johnson Consumer, Inc. and Imerys Talc America, Inc., finding that the plaintiff, Stephen Lanzo, was exposed to asbestos from Johnson’s baby powder and Shower to Shower powder and that this exposure caused his mesothelioma. The jury awarded $30 million in compensatory damages to Stephen Lanzo, $7 million to Kendra Lanzo for loss of consortium, and subsequently entered punitive damages awards of $55 million against Johnson & Johnson and $25 million against Imerys, for a total verdict of $117 million.

Both defendants appealed, arguing that the trial judge erred by admitting unreliable expert testimony. Johnson & Johnson also appealed the trial court’s denial of their motion to sever the plaintiffs’ claims against them from the claims against Imerys based on an adverse inference jury charge against Imerys. The Appellate Division agreed with the defendants, reversing the trial court judgment and remanding the matter to the Law Division for a new trial. On the adverse inference issue, the Appellate Division held that the new trials should be conducted separately in order to avoid any potential prejudice to Johnson & Johnson caused by the adverse inference charge against Imerys.

Expert – Gatekeeper Role

Both defendants challenged the expert opinions expressed by two of the plaintiffs’ expert witnesses, Dr. Jacqueline Moline and Dr. James Webber, that non-asbestiform cleavage fragments from certain minerals could cause mesothelioma. The trial judge denied the defendants’ request for a Rule 104 hearing. The defendants contended that by permitting these experts to testify, the trial judge misapplied the well-established gatekeeping procedures required to be handled by the trial court and as required by In re Accutane Litigation (Accutane), 234 N.J. 340, 388 (2018). The Appellate Division noted that the Supreme Court decision in Accutane essentially reconciled New Jersey Rules of Evidence with the longstanding Federal evidence standard expressed in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).

An expert’s opinion on causation may be admitted when it is “based on sound, adequately founded scientific methodology involving data and information of the type reasonably relied on by experts in the scientific field.” Accutane, at 349-350. The trial court is required to assess the soundness of the preferred methodology and the underlying data used to formulate the opinion in evaluating the qualifications of the expert and the conclusions. When a proponent fails to demonstrate “the soundness of a methodology, both in terms of its approach to reasoning and to its use of data, from the perspective of others within the relevant scientific community, the gatekeeper should exclude the proposed expert testimony on the basis that it is unreliable.” Lanzo v. Johnson & Johnson, (slip op. p. 34-35).

Here, both Drs. Moline and Webber testified that non-asbestiform cleavage fragments can cause mesothelioma. The trial judge only noted that “the issue of cleavage fragments was an area that’s highly contested between plaintiff’s experts and defense experts,” but the judge did not evaluate the issues in context. Lanzo, (slip op. p. 41). The trial judge also denied the defendants’ motion for a Rule 104 hearing on the experts’ opinions on this issue.

The Appellate Division found that the trial court did not assess the methodology or the underlying data used by these experts, noting that Dr. Webber had not conducted any studies and was not aware of any studies showing that non-asbestiform cleavage fragments could cause mesothelioma. Dr. Moline had previously testified that non-asbestiform cleavage fragments could not cause mesothelioma. At trial in this case, she testified that she had changed her opinion on this issue over time. However, she did not express any scientific basis for the change in her opinion.

The Appellate Division determined that the trial judge did not perform the required gatekeeping function by failing to evaluate the methodology or the data and information that formed the basis for the expert conclusions put forth by Drs. Webber and Moline. The Appellate Division also determined that those errors were clearly capable of producing an unjust result, which required a new trial.

Adverse Inference

In their discovery responses, Imerys certified that it did not have and was not aware of any historical talc samples or testing documents. At trial, however, Imerys’ representative confirmed that Imerys had, at one time, been in possession of historical talc samples and testing documents, but they had discarded the talc samples and documents.

The trial court determined that discarding these items was not intentional, however, recognized that spoliation does not require intent. The court noted that the purpose of an adverse inference charge is to level the playing field where evidence has been hidden or destroyed. To accomplish this levelling, the trial court included a jury charge that stated, “You may infer that the missing evidence may have been helpful to the plaintiffs’ case to the detriment of defendant Imerys.” The trial court also specifically charged that Johnson & Johnson was not involved in the spoliation conduct and that the adverse inference should not be drawn as to any other defendant in the case.

The Appellate Division noted that New Jersey court rules permit separate trials in order to prevent prejudice. R. 4:29-2 & R. 4:38-2(a). Severance may be appropriate “where a significant portion of the evidence to be adduced at trial is admissible only as to one defendant thereby causing prejudice to other defendants.” State v. Mance, 300 N.J. Super. 37, 53 (App. Div. 1997).

The Appellate Division found that, once the jury was permitted to draw an adverse inference that Imerys’ talc was contaminated with asbestos, it would likely be impossible for the jury to make a different finding as to Johnson & Johnson. The Appellate Division held that the trial court erred in failing to sever the claims against Imerys from the claims against Johnson & Johnson and remanded the matter to the trial court for separate trials against each defendant.

 

 

Legal Updates for Asbestos & Mass Tort Litigation – April 30, 2021, has been prepared for our readers by Marshall Dennehey Warner Coleman & Goggin. It is solely intended to provide information on recent legal developments, and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We welcome the opportunity to provide such legal assistance as you require on this and other subjects. If you receive the alerts in error, please send a note to tdrau@mdwcg.com. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved.

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Marshall Dennehey is proud to highlight the firm’s 106 attorneys who have been recognized in the 2027 editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America. Less than 6% of all practicing lawyers in the U.S. were selected by their peers for this recognition. Additionally, four of the firm’s attorneys received the Best Lawyers® 2027 “Lawyer of the Year” awards in their respective practice areas and demographic regions. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For more information, please visit https://www.bestlawyers.com/. OUR 2027 LAWYERS OF THE YEAR Harrisburg, PA Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers Compensation Law - Employers Roseland, NJ Justin F. 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First DCA Reverses Excessive Jury Award Unsupported by the Evidence

In December 2019, the plaintiffs filed a claim with Universal for damages caused by a water and sewage back up through the plumbing system and existing through multiple fixtures including the washing machine drain, kitchen sink, dishwasher, bathtub and toilet. Universal investigated the claim, issued payment for resulting water damage totaling $7,000.00 in actual cash value ($12,000.00 in replacement cost value). The plaintiffs sought additional benefits for work needed to access the below-slab cast iron plumbing system due to the failure of the system from rust, deterioration, corrosion and breaks in the line. Universal denied any additional benefits for access. In 2021, the plaintiffs filed suit. During litigation, Universal sent a plumber to inspect the home and the plumber concluded the pipes were clogged but could be cleaned. The plaintiffs’ plumber testified that the plumbing system needed to be replaced due to holes and openings in the pipes. The plaintiffs introduced two estimates prepared by Triad Restoration services totaling $79,680.22 in replacement cost value and $50,219.97 in actual cash value and an executed contract with another company for repairs with the amounts of repair redacted. Since the insurance policy did not provide coverage for repair or replacement of the plumbing system, the jury only had to decide whether the plumbing system needed to be replaced, and if it did, Universal would owe for the access costs; the jury verdict form required the jury to determine both the replacement cost value and actual cash value amounts. The jury asked if it had to rely on the Triad estimates for their amounts. The trial court advised the amount awarded had to be based on the evidence presented at trial and the law given by the trial court. The jury awarded $335,000.00 in replacement cost value or $305,000.00 in actual cash value. Universal motioned for a new trial arguing the amount awarded was unsupported by the evidence and then moved for remittitur. The trial court denied both motions and this appeal followed. The court found that while a jury’s verdict should only be disturbed with caution and discretion, the trial court must give the properly challenged award close scrutiny and determine whether it bears a reasonable relation to the damaged provided, is supported by the evidence, and could have been reached in a logical manner by reasonable means §768.74(3), (5)(d)-(e), Fla. Stat. The court found the trial court did consider the statutory requirements at the hearing on Universal’s remittitur motion and was concerned about a reasonable relation to the amount of damages proved and injury suffered and whether the award was supported by the evidence, but ultimately denied the motion, reasoning that the jury had been properly instructed to fairly and adequately compensate the plaintiffs. The court noted the only evidence providing the basis for the jury verdict was Triad’s estimates and those valued the plaintiffs' claimed loss at $79,680.22 in replacement cost value and $50,219.97 in actual cash value; no valuation evidence reasonably supported the jury verdict. The plaintiffs argued that the jury was entitled to consider more than the estimates, but the court conveyed the evidence provided did not give the jury a way to reach the amounts they awarded. The court was also not swayed by the plaintiffs’ argument regarding inflation and later price increases, but the court noted that no evidence via the contract, nor testimony regarding increase in labor, material, fuel or construction costs were entered into the record.  The court concluded the jury may draw reasonable inferences from the evidence, but it may not supply a damages number by speculation. The court did not find any of the plaintiffs’ remaining argument persuasive either. The court reversed the denial of Universal’s remittitur motion and motion for new trial as to damaged and remanded the case. The court ended its opinion with advising the trial court must determine whether replacement cost value or actual cash value is the property measure of damages under the policy and order remittitur in an amount consistent with that determination and the evidence.

Thought Leadership

United State District Court for the Middle District of Florida finds Evidence of Replacement Cost Value is Admissible and Recoverable Even When Repairs Have Not Been Made

The plaintiff filed a claim for damage as a result of Hurricane Ian. It claimed damages were over $24 million, but the carrier accepted partial coverage and paid $8,307.49 for secondary components. The carrier found hurricane damage to the building, but it was below the insurance policy’s $3.6 million deductible. The plaintiff sued for breach of the insurance policy. The carrier argued in a motion for summary judgment that plaintiff could not recover replacement cost value (RCV) because the property repairs had not been effectuated. The policy provided for RCV, but only after the repairs were completed. The carrier argued that because the repairs were not completed, the plaintiff was not entitled to RCV damages. The plaintiff argued the carrier could not withhold the actual cost value (ACV) due, which was the main allegation of the lawsuit, then fault it for not making the repairs to unlock the RCV. The United States District Court for the Middle District of Florida rejected the carrier’s argument, finding that when an insurer allegedly breached the policy by withholding coverage, it could not hide behind a repair-contingent provision to block the insured from RCV damages at trial. The court found the issue to be whether the contractual language designed to preclude certain coverage until after repairs are completed barred an insured from seeking those damages at trial when repairs were not complete. The court noted the Eleventh Circuit had not resolved this issue and neither side pointed to a definitive answer from the Florida Supreme Court. The court reasoned that it must look to the Sixth District Court of Appeal (6th DCA), which is the court which would have heard this case if it was in state court. The court noted the 6th DCA recently addressed this issue in Universal Prop. & Cas. Ins. Co. v. Rodriguez, 427 So. 3d 676 (Fla. 6th DCA 2026). The Rodriguez Court found that a breach of contract action is designed to adjudicate not only whether the contract was breached, but also evaluate the damages incurred had the breach not occurred, which the Rodriguez court found to be recovery of the RCV. This court also noted basic Florida contract principles compelled the same result, as a material breach frees the nonbreaching party to suspend its own performance and can demand the full benefit of its bargain, including RCV damages. Finally, the court found the distinction between a full denial and partial denial did not compel a different result. It found the policy required the carrier to acknowledge coverage and pay ACV for all covered damages, and the failure to do that is a material breach, entitling the insured to all of the damages available under the contract, which included the RCV.

Thought Leadership

Appeals Court Reverses Trial Court Order Awarding Attorney’s Fees Due to Lack of Evidence to Support Fee Awarded

The Fourth District Court of Appeal reversed the trial court’s order awarding appellate fees to People’s Trust Insurance Company based upon a lack of evidence to support the attorney’s fee award in RM & Assocs. Consulting, Inc. v. People's Trust Ins. Co., 2026 Fla. App. LEXIS 4654 (Fla. 4th DCA 2026). People’s Trust was the insurer of a residential property that had sustained water damage. RM & Associates Consulting was hired by the homeowner to perform mitigation services at the property. The homeowner assigned post-loss benefits to RM and RM subsequently filed suit against People’s Trust alleging that it had not been paid the money it was owed for the mitigation services. People’s Trust defended the lawsuit on the ground that the policy required the insured to notify the insurer before authorizing repairs so People's Trust could elect to use its preferred contractor. Because the owner did not comply with that provision, People's Trust asserted its liability was limited to the amount that its preferred contractor would have charged for the work, which People's Trust contended was $2,000. People's Trust paid that amount to RM before RM filed suit. People’s Trust filed a motion for summary judgment which was granted. RM appealed the summary judgment ruling and the ruling was upheld by the Fourth District Court of Appeal. The appellate court also granted People’s Trust’s entitlement to appellate attorney’s fees, subject to the trial court’s determination of the amount of fees, based upon an offer of judgment made by People's Trust. On remand, the trial court held an evidentiary hearing to determine the amount of attorney’s fees People’s Trust was entitled to. At the hearing, People’s Trust presented testimony from it’s fee expert, supervising trial counsel and appellate counsel. People’s Trust sought recovery of $24,866.17 for work performed by appellate counsel. The request primarily consisted of work performed in preparation of the answer brief. The fee expert testified that more than ninety hours spent preparing the answer brief was reasonable given the complexity and significance of the underlying issue. The appellate court found that the fee expert’s testimony fell short of meeting the necessary standard of demonstrating that the hours expended were necessary. The appellate court found that the billing records did not serve to cure the deficient testimony, as the billing records did not contain adequate details regarding the specific tasks performed. Rather the records contained entries such as “answer brief” which the appellate court found to be insufficient. The appellate court noted that neither the fee expert or counsel addressed how the prior research and briefing in the parallel litigation informed the work in the instant matter. The appellate court noted this was significant in that a court's attorney's fees award must exclude excessive, redundant, or otherwise unnecessary hours, citing Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). Based upon the record failing to support the finding of the trial court, the 4th DCA remanded the case to the trial court for a reconsideration and redetermination of reasonable appellate attorney’s fees supported by competent substantial evidence. The 4th DCA reiterated that the fee expert’s focus on the quality of the work and the importance of the work to People’s Trust did not make up for the perceived deficiencies in the position that spending over ninety hours on a single answer brief was reasonable. Whether moving for attorney’s fees or challenging the amount of fees being sought by an opposing party, practitioners should be mindful of the evidence being used to support the claims being made. Parties should pay close attention to whether the hours being sought may be impacted by prior litigation either party may have engaged in. A party must be prepared to address how prior litigation efforts did or did not impact the amount of hours being claimed in current litigation. Lastly, billing records must be sufficiently detailed so as to support any potential future fee claim.