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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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Thought Leadership

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

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Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Thought Leadership

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