• Asbestos Litigation -- Is Your Company a New Target? Recent Developments in Asbestos Litigation Nationally and in the Carolinas
  • July 1, 2003 | Author: Anna L. Baird
  • Law Firm: Parker, Poe, Adams & Bernstein L.L.P. - Charlotte Office
  • Traditionally, asbestos claims focused primarily on manufacturers of asbestos-containing products. Businesses who used asbestos-containing products in their plants and other facilities faced the occasional workers' compensation claim by an employee who claimed to have been exposed to asbestos at work, and perhaps the occasional claim by an independent contractor who claimed to be exposed to asbestos while working on the company's premises. Premises owners were not traditionally principal targets of asbestos litigation, however.

    In recent times, bankruptcies of major asbestos manufacturers, such as Johns Manville, Owens Corning, Babcock and Wilcox, W. R. Grace, and others have prompted plaintiffs' lawyers to cast their nets wider to include new defendants. Those defendants include premises owners who used asbestos-containing insulation and other products in their facilities. This new development could impact a number of companies in North Carolina and South Carolina.

    1. Significant North Carolina Supreme Court decision may change the landscape of asbestos workers' compensation claims in North Carolina.

    The North Carolina Workers' Compensation Act provides that employees who are removed from their employment because of exposure to asbestos are entitled to recover 104 weeks of their average weekly wage as a benefit, if they suffer from an asbestos-related disease. This statute was designed to compensate employees who were forced to leave their employment as the result of exposure to asbestos. Over time, the North Carolina Industrial Commission began to interpret that provision liberally, awarding 104 weeks of average weekly wage to any claimant who demonstrated an asbestos-related disease, regardless of whether the claimant had been removed from his or her employment.

    The North Carolina Supreme Court decided in November 2001 that the statute should be enforced as written - namely, an employee should not recover 104 weeks of compensation unless the employee was removed from employment.1 The claimant in the case presented to the North Carolina Supreme Court, Wayne Austin, was a long time employee of Continental General Tire. Mr. Austin retired in 1987. He filed a claim with the North Carolina Industrial Commission in 1989 alleging that he suffered from asbestosis as the result of exposure at Continental General Tire. The Industrial Commission awarded 104 weeks of compensation to Mr. Austin, despite the defendant's objections. The North Carolina Court of Appeals agreed, although one of the Court of Appeals judges dissented. The dissenting judge decided that because Mr. Austin had retired voluntarily and had not been removed from employment because of exposure to asbestos, he was not entitled to recover 104 weeks of compensation. The North Carolina Supreme Court agreed with the dissenting judge's analysis.

    The impact of the Austin decision is that asbestos claimants who retired from their employment or are not in need of removal from hazardous employment are not automatically entitled to receive 104 weeks of benefits. Now, in order to recover benefits, a claimant will have to show that he was removed from his employment because of potential continued exposure to asbestos. Otherwise, the claimant will have to prove actual disability resulting from the asbestos-related disease in order to recover benefits.

    There is some indication that the plaintiff's bar is lobbying to have the North Carolina Workers' Compensation Act legislatively amended to effectively overturn the Austin decision. We do not have any details on the specific legislative changes the plaintiff's bar is seeking. No specific legislation has been introduced as of this writing. Businesses that face asbestos workers' compensation claims should be on the alert and let the General Assembly hear their views if legislation is indeed proposed.

    1 See Austin v. Continental General Tire, ___ N.C._____, 553 S.E.2d 680 (2001).