John D. Winer, San Francisco
i. Explosion in toxic cases.
Over the last 20 years, one of the fastest growing areas of law are cases involving "toxic torts."
ii. What is a toxic tort?
"Tort" is defined in the law as "any wrong for which the law undertakes to give the injured party some appropriate remedy against the wrongdoer." Thus toxic tort cases generally involve situations in which people who have been injured by toxic substances seek redress through the court system.
iii. Toxic conditions can be chemical, physical, mechanical or biological.
The toxic conditions that give rise to legal cases can be chemical, physical, mechanical or biological in nature.
iv. Toxic cases frequently involve chemical agents that are toxic to humans.
Most toxic cases involve a chemical agent that causes human beings a significant injury when they are somehow exposed to the toxin.
v. Typical toxic exposures that lead to legal cases.
Toxic tort cases can arise from any number of the ways that people can be exposed to toxic substances including:
- direct contact between the toxin and the person.
- toxins released into groundwater.
- toxins released into drinking water.
- toxins released into the air.
- toxins in food sold and served to human beings.
- toxins released by refineries and power plants particularly during out-of-control fires.
- toxins in clothing such as latex gloves.
- toxins in vitamins and drugs that are ingested.
vi. Key to success in a toxic tort case.
The key to a successful toxic tort case will be whether or not a plaintiff or group of plaintiffs can establish:
- that some person, company or entity is at fault under the law for the toxic exposure of the plaintiff.
- that the toxic exposure caused actual damage to the plaintiff. (Plaintiffs in California can no longer recover for fear of developing a disease or illness due to toxic exposure unless they can prove they are likely to get the disease.)
B. Who Can Sue for Toxic Exposure Cases.
Any person injured as a result of a toxic exposure, no matter how long or how short the exposure, how direct or indirect the exposure, can sue if they are able to establish that some person, company or entity is at fault under California law for the exposure and the plaintiff can establish actual damage from the exposure.
Frequently, because toxic tort cases are so difficult to prove, a large group of plaintiffs ban together to bring the case. The strength in numbers usually increases the chances of success.
Any person, whether an adult or a minor, is entitled to bring a toxic tort claim.
The spouse of the injured plaintiff can also bring a lawsuit for loss of consortium damages; that is, damages for the loss of society, comfort and care of the injured plaintiff. See the section on Damages in this article.
C. Types of Toxic Tort Cases.
i. Growing number of cases every year as science catches up with callous corporations.
The types of toxic tort cases grow every year as corporations act more and more callously in the handling of toxic substances and medical science learns more and more about the various risks of harm and actual harm caused by exposure to particular types of toxic substances.
ii. Areas in which there have been toxic tort litigation.
The list below identifies various areas in which there has been toxic litigation in recent years; however, it is by no means exclusive, and ten years from now, the list may be 50 times longer. However, it will provide the reader some idea as to the variety of potential toxic tort cases.
- asbestosis. (This is by far the most prominent type of toxic tort case. Plaintiffs have enjoyed tremendous success in recent years in asbestosis litigation due to the laws relaxing the statute of limitations for when claims can be brought; the long time understanding of the asbestos industry of the dangerous nature of their product; exposure to asbestos causes concrete findings such as thickening of the lungs and the presence of asbestosis fibers in the body and there are two diseases, asbestosis and mesothelioma, which are found only among people with asbestosis exposure.)
- refinery explosions.
- toxic waste dumping.
- toxic spills.
- manufacturing operations involving toxins.
- airplane contaminants from refinery power plants including hydrogen sulfide, sulphur dioxide, trichloroethane, propane, methane and benzine derivatives.
- the release of acid in gases causing burning eyes and respiratory problems.
- chromium VI contamination of the air, water and soil (chromium VI is a human carcinogen which is particularly potent when inhaled and it is known to cause lung and other respiratory cancers. It is also toxic through dermal exposure (i.e., skin) and ingestion.)
- electromagnetic radiation cases including video display terminal litigation.
- vitamin and dietary supplement cases such as the L-Tryptophan cases.
- groundwater contamination cases.
- drain cleaner exposure cases.
- PCB (polychlorinated biphenyl) exposure cases.
- pesticide exposure cases.
- BCME (bischloromethyl ether) cases.
- tobacco exposure cases.
- lead exposure cases (particularly children living in low income housing).
- Freon exposure cases.
- Toluene diisocyanate cases.
- asphalt exposure.
- dimethylformamide exposure (chemical byproduct of tannery process).
- epoxy paint.
- radiation from atomic test injuries.
- nickel cadmium exposure.
- pentachlorophenol exposure.
- calcium oxide.
- wood preservatives.
- aerial pesticide sprays.
D. Who Can Be Held Responsible in Toxic Exposure Cases.
i. Many potential defendants depending on the type of case.
There are any number of potential defendants who can be held liable in toxic exposure cases depending upon the type of toxin, type of exposure, type of case and the type of theories of liability alleged by the plaintiffs.
a. Lead poisoning case.
For instance, in a case involving lead related injuries, potential defendants may be:
- the owner or landlord of property where children or adults are unreasonably exposed to lead.
- housing authorities and local governments in cases of low income or subsidized housing.
- contractor, subcontractors, risk assessors and inspectors who built or improperly inspected the property.
- realtors who failed to disclose material defects such as a risk of lead poisoning.
- child care providers.
- property management companies.
- in some occasions, employers when an employee exposes their children to lead poisoning from dust which the employee naturally brings home from the workplace. (Note that the workers themselves cannot sue, usually due to worker's compensation preclusions, but that does not prevent family members from suing. Workers in lead industries and processes such as battery plants, foundries, smelters, metal shops, auto mechanics, plumbing, recycling, welding and soldering are also likely to bring dust home to their children, which can result in lead poisoning.)
b. Refinery fire or explosion cases.
In a case involving toxins released from a refinery either during the normal course of business or during an explosion, potential defendants include:
- the owner of the refinery.
- any independent contractors working in the refinery who contributed to the exposure or explosion.
- in some cases, the manufacturer of the refinery.
- the manufacturer, seller or supplier of any product that contributed to the explosion.
ii. Choice of who to sue in a case may depend on legal theory advanced.
Because the potential defendants that could be named in a case vary so widely from case to case, section E, which deals with the various legal theories of recovery, will provide additional information as to potential defendants in a case based upon the legal theories pursued.
E. Legal Theories for Recovery in Toxic Tort Cases.
i. Potential legal theories generally.
The type of legal theory pursued in a toxic tort case will differ a great deal depending upon the many potential factors involved in the toxic exposure and whether or not there were any specific legal statutes permitting a cause of action. However, the following legal theories can potentially be used in any case.
ii. Product liability.
a. Failure to warn.
Most toxic exposure cases against the manufacturer of a chemical or product that causes the toxic poisoning involve "failure to warn" cases.
Under California product liability law, a product is considered defective when marketed if the manufacturer or supplier failed to include, on the product or its packaging, adequate instructions on safe use or adequate warnings of dangerous characteristics that are not obvious. Thus, a faultlessly made product is defective if it is not accompanied by adequate warnings or instructions.
b. Product substantially dangerous due to failure to warn.
Liability based on inadequate warning of dangerous characteristics of a product arises when the absence of an adequate warning renders the item "substantially dangerous" to the user.
c. Strict liability.
If a plaintiff can establish that a product was defective due to a design, manufacturing or failure to warn defect, and that defective condition caused the plaintiff to be toxically poisoned, then the plaintiff should be able to maintain with some exceptions a strict liability action against the manufacturer, seller or supplier of the product. (Strict liability means the plaintiff will prevail even if they cannot prove negligence.)
iii. Premises liability.
The owner or possessor of property who creates a risk of toxic exposure to people on or off his or her property by maintaining the property in a dangerous condition may be held liable in a toxic tort case.
In order to hold the landowner or possessor liable, plaintiff must establish that the defendant knew or should have known of the dangerous condition created by the toxic exposure and failed to act reasonably to correct or warn of the condition.
If a plaintiff can establish that anyone involved in the manufacturing, selling, supplying, maintaining and use of a toxic substance owed a duty of due care to the plaintiff and failed to exercise that duty and act as a reasonable person would under the circumstances, then plaintiff can bring a case for negligence.
A negligence theory can be particularly effective in cases in which the defendant knew or should have known that children could be exposed to the toxic substance, such as lead paint cases, and did not take reasonable steps to protect the safety of the children. People, companies and entities owe a higher duty of care to children than they do to adults, and they must act extra cautiously when they know children are at risk of danger.
A plaintiff can prevail against a defendant in a toxic exposure case on a theory of fraud if plaintiff can establish:
a misrepresentation (false representation, concealment or non-disclosure).
- the defendant's knowledge of the falsity.
- the defendant's intent to defraud, i.e., to induce reliance.
- justifiable reliance.
- resulting damage.
The problem with a fraud theory in most toxic tort cases is that the plaintiff will not have had any direct contact with the wrongdoer; thus, there will not have been any opportunity for the wrongdoer to make any misrepresentations. However, in cases in which the plaintiff was misled by a defendant into believing that he or she was safe from injury from toxic exposure, this may be viable cause of action.
vi. Abnormally dangerous activities.
a. Abnormally dangerous activities create strict liability.
The important aspect of being able to plead an abnormally dangerous activity cause of action is that it creates strict liability on the part of the defendant. In other words, a plaintiff does not have to prove that the defendant was negligent, the plaintiff merely needs to prove that they were damaged by the activity.
b. Maintenance and transportation of dangerous toxins is not necessarily considered an abnormally dangerous activity.
Although it would seem that defendants who use, transport or maintain toxins with known dangers will always be found to be engaged in an "abnormally dangerous" activity, the law is not at all clear that that is true.
Generally, an activity is deemed abnormally dangerous if it necessarily involves a risk of serious harm to the person or property of others that cannot be eliminated by exercising utmost care and is not a matter of common usage.
c. Six factors are utilized to determine if an activity is abnormally dangerous.
In evaluating individual toxic tort cases where there is no prior ruling, courts look to six factors to determine whether an activity is ultra hazardous:
- existence of a high degree of risk of some harm to the person or property of others.
- likelihood that harm from the activity will be great.
- inability to eliminate the risk by the exercise of reasonable care.
- extent to which the activity is not a matter of common usage.
- inappropriateness of the activity to the place where it is carried on.
- extent to which the value of the activity to the community is outweighed by its dangerous attributes.
d. Activities that have been found to be abnormally dangerous.
Activities which have been found by courts to be abnormally dangerous which could apply to a toxic tort case include:
- use of hydrocyanic acid gas in fumigating commercial buildings.
- use of open flame equipment near combustible material.
- crop dusting with toxic chemicals in some agricultural jurisdictions.
- a case in which an office building became contaminated when an underground electrical transformer containing PCBs exploded and burned.
e. Activities found not to be abnormally dangerous.
Cases in which the courts have found activities not to be abnormally dangerous include:
- use of sulfuric acid in a waste treatment facility.
- ownership of contaminated property.
- maintaining high voltage power lines and transformers.
f. If possible, plaintiff should attempt to plead an abnormally dangerous activity.
Plaintiff should always consider an ultra hazardous activity claim because strict liability is always easier to prove than negligence.
Nuisance is an act which interferes with the private use and enjoyment of one's land. In order to bring a nuisance claim, the interference must be significant, unreasonable and intentional or otherwise actionable.
Nuisance claims can be particularly important because damages are recoverable in a nuisance action for injury to real property including damages for consequential emotional distress.
Also, this theory can be important because the plaintiff does not need to establish a "pre-existing relationship" with the defendant or an intentional tort.
The principle behind nuisance cases is that one person's activities (normally uses of land) will not be permitted unlawfully to interfere with another person's comfortable use and enjoyment of life and property.
Generally speaking, trespass requires a direct physical invasion of another's right to the exclusive possession of their property and subjects the trespasser to strict liability if it is intentional or the result of an abnormally dangerous activity.
Thus, for a plaintiff to prevail on a trespass theory, he or she must establish that the property was physically invaded by the toxic substance in question.
There are cases that hold that it is a trespass to deposit water or other material on a plaintiff's property. Further, there are cases that hold that breaching the boundaries of another's real property with intangible things, such as vibrations, constitutes a trespass if there is physical damage.
Further, some courts have held that a trespass may occur above the surface, for instance encroaching overhead power lines, and under the surface, such as trespass from a slant drilling for oil.
Thus, in the right circumstances, trespass can provide an additional theory for plaintiff's recovery in a toxic tort case.
ix. Theories of recovery created by statute.
a. State and Federal statutes generally.
There are a number of State and Federal statutes that can be useful in litigating toxic tort claims. They include:
1. The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).
This act imposes strict liability for response costs upon:
(1) owners and operators of facilities at the time of disposal of hazardous substances.
(2) current owners and operators of facilities.
(3) generators of hazardous substances who arrange for the disposal of such substances.
(4) transporters of hazardous substances.
Unfortunately, CERCLA has two significant limitations which affect a landowner's ability to obtain relief:
(1) it only allows recovery for responding to problems caused by release of "hazardous substances" which specifically excludes petroleum including crude oil.
(2) it allows recovery of costs of response, removal and remedial work, but does not permit recovery of other forms of damages such as loss of value and economic damages.
2. California Hazardous Substance Account Act.
The California Hazardous Substance Account Act is virtually identical to the CERCLA, but provides for another potential theory of recovery.
3. The Resource Conservation Recovery Act (RCRA).
States that any person may commence a civil action to enforce a permit, standard, regulation, condition, requirement, prohibition or order against:
(1) any person who is alleged to be in violation of a permit, standard, regulation, condition, requirement, prohibition or order.
(2) any person including any past or present generator or past or present owner or operator of a treatment, storage or disposal facility who has contributed or who is contributing to the past or present handling, storage, treatment, transportation or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.
Liability for violation of this statute is considered to be strict liability. It has an advantage over the CERCLA and California Hazardous Substance Account Act because it does not exclude petroleum and the definition of "solid waste" under this Act is broader than the definition of "hazardous waste" under the other statutes.
Also, a plaintiff can obtain injunctive relief under this Act and force the defendant to fix the problem. Significantly, the RCRA provides for an award of reasonable attorneys fees to the prevailing party. The award of attorneys fees may be higher than the actual damage awarded in this type of case, so an award of attorneys fees is a powerful tool to allow a plaintiff to bring a case in the first place and to increase the defendant's desire to settle the case.
F. Causation in Toxic Substance Cases.
i. Causation is a challenging issue in most toxic tort cases.
Toxic tort claims are especially challenging because they usually involve subtle injuries or slow developing diseases from prolonged low dose exposure to imperceptible substances. Thus, it is frequently very difficult to establish that toxic exposure was a substantial factor in causing the plaintiff's damage.
ii. Plaintiff can win on liability and lose on causation.
A plaintiff may be able to prove a case of fault in a toxic tort case and still lose if they cannot prove causation, i.e., that the wrongful toxic exposure was a substantial factor in causing the plaintiff's injury or damage.
iii. A substantial factor standard.
It is critical for the plaintiff attorney in a toxic tort case, through expert testimony in the fields of medical, biochemical and statistical sciences to be able to convince the trier of fact that the toxic exposure in question was a substantial factor in causing the plaintiff's damage.
iv. The importance of scientific links.
The causation requirement can be a severe obstacle of there is a lack of literature and studies associating a given toxic exposure with a given injury. Without those studies, it may be difficult for plaintiff to prove causation even if the plaintiff can prove they were exposed to the toxic substance and they are suffering from a serious illness.
v. Factors that will help plaintiff establish causation.
Plaintiffs will be aided in establishing that a toxin was a "substantial factor" in causing their injury if:
- there was enough exposure to an identified harmful substance to activate the disease (based on studies and the literature).
- a demonstrable relationship between the substance and the biological diseases exists.
- plaintiff suffers from a disease known to be caused by the toxic substance in question.
- expert opinion that the plaintiff's illness is consistent with exposure to the harmful substance.
- the defendant's responsibility for the toxic agent which caused the disease.
vi. The importance of understanding the concept of synergy to establish causation in toxic tort cases.
Synergy involves a multiplicative effect from two or more exposures to toxic substances. While one toxic agent may individually pose a particular degree of cancer risk, when it is combined with one or more agents, the effect of the two together is not the sum of the varying degrees of risk, rather, it is a much greater risk caused by the effect of the interrelationship of the two or more cancer producing agents.
For instance, it is known that asbestos exposure creates a two-to-five-fold increased risk of developing lung cancer than someone who has not been exposed to asbestos. Further, it is known that cigarette smoking creates a ten-fold increased risk of lung cancer. Someone who smokes and has been exposed to asbestos does not have a 12- to 15-fold increased risk of developing lung cancer; rather, they have a 50- to 90-fold risk.
vii. The importance of epidemiology in toxic substance cases.
Epidemiology is the scientific discipline dealing with the study of adverse health effects in human populations. It is concerned with groups of individuals, whereas most other medical disciplines are concerned with individual patients.
It examines patients, the agent-causing injury and the interaction among the patients, the agent and the environment in order to identify recurring associations. Such associations help establish causation in a toxic tort case.
Plaintiff attorney and their experts need to become very familiar with the epidemiologic literature in any toxic tort case. The more that the literature establishes a connection between the substance to which the plaintiff was exposed and the plaintiff's disease, the more likely that the plaintiff will prevail in a toxic tort case.
G. Retention of Experts.
There are a number of experts who can testify in toxic tort cases including toxicologists, epidemiologists, statisticians and experts in the field of the particular toxin involved, medical experts who treat the particular disease process involved, occupational health experts, environmental experts and, in cases of severe injuries, vocational experts and economists.
Plaintiff attorney needs to select the right experts for a given case.
H. Common Illnesses Arising out of Exposure to Toxins.
Toxins are known to cause any number of significant illnesses. Some of the more frequent illnesses are:
- respiratory distress — choking, coughing, difficulty in breathing, irritation of the respiratory mucosa and sometimes death.
- dermatitis (i.e., skin disease) — many chemicals have a solvency for fats and oils that is strong enough to remove the substances from a person's skin, thus affecting the integrity and performance of the skin as a protective barrier. There are also chemicals which are capable of passing through the skin and entering the circulatory system.
- narcosis — this refers to the inducement of sleep (as in narcolepsy) and leads to serious problems which can stem from somebody unwillingly falling asleep under dangerous conditions.
- gastroenteritis (food poisoning) — certain chemical agents, notably cadmium and copper, are known to produce gastroenteritis.
- neurological deficits — many toxins are capable of impairing a person's neurological functioning to the point where they lose motability and sensation in parts of their body.
- injury to the immune system.
- toxoplasmosis (a problem in all toxoplasmosis cases is that it is the most opportunistic infection associated with AIDS; therefore, a plaintiff must be able to rule out that they are suffering from AIDS as opposed to toxoplasmosis caused by an exposure to a toxic chemical).
- cancer — it is well known that toxins are capable of causing cancerous tumors in all parts of the body.
I. Investigation of chemical burn cases.
i. Understanding how chemical burns occur and the anticipated defense of the manufacturer will help determine how to investigate.
Chemical burns usually result from someone coming into contact with a household product or a worker coming into contact with a chemical product which had a strong enough chemical content to cause a severe burn to the plaintiff's skin.
Some chemicals are strong enough so that if there is a significant exposure and contact, almost anybody would suffer a severe burn. Other chemicals are only strong enough to burn people who, for one reason or another, are particularly sensitive to that chemical.
There are approximately 50,000 chemicals on the market today capable of causing burns.
In the case of a particularly sensitive plaintiff, the manufacturer, supplier or seller of the chemical will claim that it could not possibly make a chemical or a combination of chemicals safe enough so that it wouldn't possibly burn "anybody" particularly if people do not follow directions or warnings while using it.
In cases with clearly dangerous chemicals, the defendants will claim that the chemical, such as a cleaning fluid, is a product which is extremely useful for society — there is virtually no risk in the use of the chemical if the user follows warnings and instructions; therefore, again, it is a safe product.
The key in a chemical case, as in almost any product liability case, is whether the benefit of the product outweighs the risk of injury in the way the product was manufactured.
ii. How the investigation of a chemical burn should proceed.
The beginning of the investigation will always be an attempt to determine the amount of chemical exposure of the plaintiff and the duration of the exposure.
Second, the investigation will have to turn to the labels and warnings on the bottle and whether plaintiff had the opportunity to read those and whether they did read them.
Next, plaintiff will need to retain an expert to determine whether those labels and warnings were adequate under the circumstances.
Then, in a serious chemical burn case, the product should be tested to see if the chemical composition of the product is consistent with the content stated on the label.
Finally, plaintiff will need to conduct a search through formal and informal discovery in the case to determine the number of other people who suffered similar injuries from the chemical or a chemical in the product.
If plaintiff can establish that the manufacturer, supplier and sellers knew of a significant number of serious burns, then plaintiff will be able to establish the foreseeability of the risk which will, hopefully, lead to a jury concluding that the risk of the product outweighed the benefits, and defendant should have either used other chemicals in the product or have taken further steps, such as better warnings, to protect consumers.
J. What If the Plaintiff Is Partially at Fault?
A plaintiff can recover even if he or she is also at fault. California is a comparative negligence State in which a negligent plaintiff can recover damages; however, their monetary recovery is reduced by the amount of their fault. For instance, if a court or jury finds that a plaintiff's damages should be valued at a $1,000,000, but finds the plaintiff 25% at fault, his or her recovery would be reduced by $250,000 to $750,000.
K. Compensatory Damages in Toxic Tort Cases.
In a toxic tort case, plaintiff can recover for past medical expenses, future predicted medical expenses, past wage loss, future predicted wage loss and for past and future pain and suffering.
The medical expenses are determined by the testimony of physicians or other health care providers. Frequently, an economist or an expert in the industry determines the amount of future wage loss; however, no expert can testify to the value of pain and suffering.
Pain and suffering is typically the most significant element of a plaintiff's damage and it includes emotional distress. Contrary to popular belief, there is no formula for pain and suffering awards and it varies greatly from case to case depending upon the location of the case, the seriousness of the injury and how well the case is presented. Attorneys fees will be available if certain statutes are breached.
L. Claim for Loss of Consortium.
A plaintiff's spouse can also sue and recover damages for 'loss of consortium." A spouse is allowed to recover damages for the loss of society, comfort and care that result from the injured spouse's unavailability due to their injury and having to watch the plaintiff suffer. In order to recover these damages, a spouse must be named as a party to the lawsuit and must have been married to the plaintiff at the time of the injury.
There are advantages and disadvantages to filing a loss of consortium claim that should be discussed with an attorney before filing.
M. Punitive Damages.
Under California law, if a plaintiff can prove that the conduct of the wrongdoer was fraudulent, malicious or despicable, he or she is entitled to recover punitive damages which are intended to punish the wrongdoer and provide an example for the rest of society. The focus of this type of case is generally on the wrongdoing of the defendant as opposed to the injury to the plaintiff. The amount of punitive damage will vary depending upon the heinousness of the defendant's misconduct and its economic status. The law recognizes that large companies have to pay more money in punitive damages to be adequately punished than small companies or individuals. In motor vehicle cases, punitive damages are most frequently awarded against drunk drivers.
N. How soon must a complaint for damages be filed in a toxic tort case?
There is no simple answer to this question. The statute of limitations in toxic tort cases is extraordinarily complex because in many toxic tort cases, there will be a long exposure to a toxic substance, a long period in which your disease or injury slowly developed to the point of being perceptible and a not infrequent time gap between the time you began suffering from your injury and the time that your realized that it may have been caused by a toxin.
Other than cases involving asbestosis and a few other statutory causes of action, there are no special statute of limitations or laws applying to toxic tort cases. That means that generally speaking, you must bring your lawsuit against any known defendant within one year of the accrual of your cause of action or you must bring a claim within six months of the accrual of your cause of action if the defendant is a public entity.
Children are an exception in that they essentially have one year to bring a government tort claim and they have until their 19th birthday to bring a case against any non-government defendant.
The key to the statute of limitations in toxic tort cases is understanding what is meant by "accrual" of a cause of action. Under California law, a cause of action does not accrue until all of the elements of that cause of action have been met. That means a statute of limitations will not start running until a reasonable person was put on notice that they may have been injured by a toxic exposure. Once that connection is made, the plaintiff must bring a public entity claim within either six months or a lawsuit within one year.
Even this standard is not so simple to follow because you may be aware of a very minor injury, such as a skin rash, which would not necessarily cause you to suspect a toxic exposure or cause you to want to take any legal action. Further, you may know that you live in an area where there is a potential for toxic exposure but not realize that your injury or disease is imperceptibly building up in your body.
There are many cases that interpret the statute of limitations in toxic exposure situations and, generally speaking, they have been favorable to plaintiffs. However, if you do suspect you have been injured by a toxic exposure, you should seek a consultation with an attorney as soon as possible rather than potentially losing your right to sue.
O. Settlement of a Toxic Exposure Case.
i. What is a settlement?
A settlement is an agreement to resolve the differences between one or more parties in a claim or lawsuit. Most settlements in civil cases involve the payment of money to the plaintiff in exchange for the plaintiff dismissing his or her claims against the defendant. However, settlements can have many non-monetary terms.
ii. When can a settlement occur?
A settlement can occur at any time from the moment that the defendant first becomes aware of a claim, before trial, during trial, or even while a case is on an appeal.
iii. If there is more than one defendant in my case, can I settle with one defendant and proceed in litigation or trial against the other(s)?
Yes. This is known as a partial settlement. A plaintiff is allowed to settle with one defendant and dismiss the case against that defendant while proceeding against the remaining wrongdoers. Sometimes it is in the best interest of the plaintiff to utilize this tactic and sometimes it is not. It must be decided on a case by case basis.
iv. Do most cases settle?
Yes. Statistics show that approximately 90% – 95% of civil cases settle at some point before trial.
v. Who has the authority to settle my case?
The authority to settle a plaintiff's case always rests in the hands of the plaintiff himself or herself. An attorney cannot settle a case for a plaintiff without the plaintiff's authority. In the case of a minor, a guardian is appointed who, along with an attorney, recommends a settlement to the court. However, a judge must approve the settlement.
vi. Who determines the amount of the settlement?
Ultimately, the parties themselves, with the advice of attorneys, determine the amount of the settlement. In cases in which the claim is covered by insurance, the insurance company determines the amount that it is willing to pay, sometimes with or sometimes without the advice of an attorney. In cases that are more difficult to settle, the parties often seek the advice of a mediator or a settlement conference judge to help them reach a settlement; however, a mediator or settlement judge does not have the power to force a party to settle the case.
vii. How is the amount of settlement determined?
There are literally hundreds of factors that go into determining the amount of a settlement in a given case. Some of the more important factors include:
(a) the value of the case as determined by a projection of what a jury will do if the case goes to trial. This is frequently determined by reviewing jury verdicts from prior similar cases;
(b) the amount of insurance coverage or assets available. If the case has a higher value than the available policy limits and the defendant does not have sufficient assets to add to the settlement, the case will generally settle at the policy limit (unless the case involves an automobile accident and the plaintiff is able to proceed against his or her own insurance company in an uninsured motorist case);
(c) the willingness of the plaintiff to settle his or her claim for less than the value to stop the emotional and economic expense of a litigation or the willingness of the defendant or insurance carrier to pay more than it views as the value of a case in order to stop the expense of litigation.
viii. How do I make sure my settlement is paid? How will my settlement proceeds be divided up?
Generally speaking, in toxic tort cases the plaintiff's lawyer accepts the case on a contingency fee basis, getting no fee if the plaintiff loses, but receiving a fee of usually 33-1/3% or 40% of a settlement when the case is over. In addition, in most cases the plaintiff's attorney advances the costs of the litigation and is reimbursed out of the settlement proceeds for advanced costs in addition to the fee. Finally, if there are any "liens," i.e., requests for reimbursement by medical care providers or insurance companies who have paid for the plaintiff's treatment, the lien claimants will receive all or part of their unpaid fees, or in the case of insurance companies or MediCal or Medicare money paid to healthcare providers out of the plaintiff's settlement. The plaintiff's net settlement amount will be the amount of money that is left over after attorney's fees have been paid, costs have been reimbursed and liens, if any, paid off.
Again, certain environmental statutes provide for an award of attorney fees if plaintiff prevails.
ix. How and where do settlements occur?
Settlements can occur in many different ways and in many different places. Sometimes cases are settled with the exchange of letters; sometimes there are letters and phone calls between plaintiff's attorney and the defense attorney/insurance adjustor; other times cases settle at a more formal settlement proceeding such as a mediation or a court ordered settlement conference. However, it is true that some cases literally do settle on the courthouse steps (or at least hallways) just before or during a trial.
x. Are settlements always paid in one lump sum of cash, or can they be paid over time?
Most settlements involve the payment of the entire settlement proceeds in one lump sum within several weeks of the date of the settlement. However, if there is enough money involved and a plaintiff chooses, the parties may be able to agree on a "structured settlement" where money is paid over time. There are infinite varieties of structured settlements. Some structured settlements involve monthly life-long payments to the plaintiff; others involve larger payments over varying amounts of time. In a structured settlement, the insurance company purchases for the plaintiff an annuity policy which guarantees the future payments. Structured settlements are particularly valuable in cases involving minors, as it allows the parents to control the minor's use of the money when they are past the age of 18, and they are useful in the case of people who are not used to handling large sums of money since it provides a safe investment tool with guaranteed payouts.
xi. Considerations in evaluating cases for settlement.
a. Many different factors are taken into consideration when evaluating settlements.
There are many, many factors which are utilized when evaluating a case for settlement. The perception that many of the public have that a case settles for three times the medical bills and wage loss cannot be further from accurate. There are cases that settle for millions of dollars in which there are no medical bills or wage loss and there are cases that settle for a few thousand dollars in which there are hundreds of thousands of dollars of medical bills and wage loss. Following are some of the factors that are relevant to evaluating the case for settlement purposes:
The clarity of liability (i.e., fault) in the case is a critical settlement factor.
In a case in which liability is unclear or the plaintiff has a substantial chance of losing, the settlement value of the case has to be reduced significantly to factor in the plaintiff's chances of losing.
Theoretically, if the value of an injury claim is $100,000, but plaintiff only has a 50/50 chance of winning, a $50,000 settlement may be appropriate. However, plaintiffs must always realize that cases against large defendants or in cases in which the defendant is insured, that the plaintiff has a lot more to lose than the defendant. In the example above, if the insurance company turns down a $50,000 demand and the plaintiff wins $100,000, payment of an additional $50,000 will mean very, very little to a large insurance company or corporation. On the other hand, if the plaintiff turns down the insurance company's $50,000 offer and wins nothing at trial, it could create a devastating financial blow in which the plaintiff is unable to pay for his or her bills.
2. Comparative fault of the plaintiff.
If a plaintiff is found to be partially at fault for causing his or her own injury, then their potential jury award is reduced on the basis of their percentage of fault. In other words, if a case were to go to trial, and plaintiff were to receive a $100,000 verdict, but was found to be 25% at fault, the plaintiff's verdict would be reduced to $75,000. Thus, when settling a case, plaintiff should reduce his or her expectations of a settlement by the likely finding of percentage of fault that would occur if a case were to be tried.
3. Likely jury verdict value of the case.
In cases in which insurance policy limits are not an issue, most good attorneys attempt to settle the case based upon what a jury would be likely to award if the case went to trial.
Determining what a jury will award in a given case is more of an art than science; however, reasonable estimates can be made based upon what jurors have awarded in similar cases in similar venues (i.e., locations). Most verdicts are reported in "jury sheets" that lawyers read and utilize when attempting to assess the value of any particular case.
4. Aggravated liability.
In cases in which a jury is likely to get angry at a defendant for misconduct that was something more than negligent, it is known that jurors are likely to "spike" their verdict and award more money for a plaintiff's injury than they would if a defendant's misconduct was merely negligent. Such might be the case if a defendant knew of a toxic danger and for its own profit chose to ignore it.
5. Punitive damage exposure.
If the defendant's misconduct is so bad that there is a risk for punitive damages, i.e., the jury awarding damages specifically to punish the defendant, this should become a major factor in settlement negotiations. A potential award of punitive damages is complicated by the fact that under the law, the insurance company is not allowed to pay an award for punitive damages; however, normally, the defendant, through a personal attorney, attempts to apply pressure on the insurance carrier to pay more in settlement so that the defendant will not be exposed to the punitive damage risk.
6. The character and credibility of the parties.
A plaintiff's case is worth more if he or she is likeable and believable. It is known that jurors will award more money to people that they like and believe than people whom they dislike and don't believe.
To a lesser extent, this is also true for defendants. A likeable or believable defendant is likely to fare better in a lawsuit than someone with the opposite traits.
7. The extent of the injury.
Theoretically, the more serious an injury, the greater should be the value of the plaintiff's case.
8. Objective evidence of injury.
Injuries that can be visualized or that are able to be demonstrated by radiographic evidence such as x-rays, MRIs, CAT scans or other scientific tests, will normally result in higher settlements than injuries which depend upon the believability of the plaintiff to prove.
There are many injuries which may have severe consequences for the plaintiff which are not diagnosable by objective tests. Experience has shown that jurors are hesitant to award large damages in cases in which there is no objective evidence of injury; thus, the settlement value of any case is increased by objective evidence of injury and decreased by the lack of it.
However, a credible plaintiff can sometimes overcome the lack of objective evidence of an injury and this must also be taken into consideration in the right case.
9. Past and future medical bills of the plaintiff.
As long as a plaintiff can establish that past medical expenses and likely future medical expenses are reasonable and related to their injuries, the bills will be an important consideration in settlement.
However, the defense will generally claim some amount of overtreatment and, thus, some portion of the medical bills should be excluded from settlement consideration. Further, the defense will argue that plaintiff will be unlikely to need or have the claimed future treatment and/or the future treatment would not be related to the subject incident.
10. Past wage loss and future wage loss.
Wage loss is another important consideration in evaluating a claim as long as plaintiff can establish that he or she was reasonably off work or will be reasonably off work due to the subject incident. The defense will likely take the position that the amount of the wage loss should be discounted because plaintiff should have been back to work sooner and, in the case of future wage loss, the defense will claim that plaintiff could be doing some type of work which would pay them as much or almost as much as the work they were doing before the incident.
Also, for plaintiffs who are self-employed or do not have a strong consistent earning history before the accident/incident, it can become very difficult to establish a wage loss claim.
11. Is the injury permanent.
In cases in which plaintiff has a permanent injury and some objective evidence of that injury, there will likely be a higher settlement value because the case will have more jury appeal.
12. Venue (where the claim will be tried).
It is beyond question that cases tried in certain locations, particularly urban locations, result in much higher verdicts than cases tried in more rural counties. This is a factor that must be taken into consideration in settlement.
13. Policy limits and defendant's assets.
No matter how severe the injury, the plaintiff's ability to recover damages against defendant will be limited by either the defendant's policy limits or the personal assets of the defendant.
However, in cases involving motor vehicles, the plaintiff may have his or her own uninsured or underinsured motorist insurance which would provide additional coverage for the plaintiff's injury and allow the plaintiff to receive further compensation in a settlement with their own insurance carrier.
14. Target defendants.
Even though jurors are not supposed to consider the wealth of a defendant or whether or not the defendant is a corporation in their verdict, they are far more likely to make larger awards against large companies than they are people who they perceive to be middle class or poor. So this becomes another important settlement consideration.
15. Reputation and ability of attorneys.
The claims representative or defense attorney will report to the insurance carrier or defendant the ability of the plaintiff's attorney and the likelihood that the attorney will try a case and try it well.
In situations in which the defense believes that the plaintiff's attorney will not be willing to take the case to trial, there is little incentive to offer a significant amount of money in settlement.
On the other hand, if the defense believes that a plaintiff's attorney will not only go to trial, but will receive an optimum verdict, the defense's risk is increased and thus the settlement value of the case is increased.
By the same token, plaintiffs must also take into consideration the reputation and ability of the defense attorney. If the case is against a good defense attorney, plaintiff will likely receive less money from the jury; thus, the settlement value of the case, to some extent, is decreased.
16. Expense of litigation.
The expense of litigation should also be considered in settlement. There are some cases which, if worked up properly, could result in the expenses actually being higher or almost the entire amount of an eventual settlement or verdict.
Some insurance companies and corporations are cost conscious and will take into consideration the expense of proceeding in the case versus early settlement.
However, just because a case may cost the defense $200,000 to litigate does not mean that in a case they otherwise evaluate as being worth $25,000, they are going to offer the plaintiff $200,000 in settlement.
Rather, in the above example, it may cause the corporation or insurance company to raise their offer five or ten thousand dollars or to try to settle the case early for $25,000 before expenses are actually incurred. Corporations and insurance companies are loathe to make offers of settlements based on the cost of defense because of a concern that they will be seen as an easy target for plaintiffs.