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South Carolina Asbestos Litigation

A newcomer to the Judicial Hellholes® list in 2020, South Carolina’s asbestos litigation has quickly developed a reputation for bias against defendants, unwarranted sanctions, low evidentiary requirements, liability expanding rulings, unfair trials, severe verdicts, and a willingness to overturn or modify jury verdicts to benefit plaintiffs. As a result, the state has become a hotspot for asbestos claims.

RULINGS FAVOR PLAINTIFFS

In 2017, retired South Carolina Supreme Court Chief Justice Jean Hoefer Toal was appointed to pre- side over South Carolina’s asbestos docket. Judge Toal has a broad record of pro-plaintiff rulings, including imposition of severe and unwarranted sanctions on defendants.

In several asbestos cases, Judge Toal has overturned or substantially modified jury verdicts she did not agree with, inappropriately consolidated substantially different cases into one trial, and has made the unusual move of naming insurance carriers as the “alter egos” of their insureds.

The South Carolina Court of Appeals has affirmed some of her expansive rulings, missing important opportunities to keep the state in the mainstream and contributing to the state’s reputation as an outlier in its handling of asbestos cases.

FILINGS ON THE RISE DESPITE NATIONAL DROP-OFF, TEXAS FIRM AT THE CENTER

Those familiar with South Carolina asbestos litigation say that Judge Toal typically sides with plaintiffs’ lawyers from Dallas, Texas, Law Offices of Dean Omar Branham Shirley, LLP, and their local counsel Kassel McVey Attorneys at Law.

Although national asbestos claim filings are down overall in recent years, lawsuits have risen dramatically in South Carolina due to the activity of out-of-state firms such as the Dean Omar firm.

In 2021, Jessica Dean, the firm’s lead partner, withdrew from several South Carolina cases after news broke that a paralegal signed and filed Dean’s out-of-state-attorney applications without her knowledge. Additionally, courts in Connecticut and Iowa rejected Dean’s requests to participate in cases in those states, and a Minnesota judge sanctioned her firm $78,000 in defense fees and costs after a plaintiff’s witness flouted a court order.

WEAK CAUSATION STANDARD APPLIED

In Edwards v. Scapa Waycross, Inc., decided in August 2022, and Jolly v. General Electric Co., decided in September 2021, the South Carolina Court of Appeals delivered a significant blow to the state’s asbestos litigation environment by affirming verdicts based on a controversial “cumulative dose” theory espoused by plaintiffs’ experts. This theory allows plaintiffs’ experts to testify that every exposure to asbestos contributes to the development of asbestos-related disease, making it easier for plaintiffs to establish causation.

The theory is an outgrowth of the discredited “each and every exposure” theory, which espouses the view that “every exposure to asbestos above a threshold level is necessarily a substantial factor in the contraction of asbestos-related diseases.” As the U.S. Court of Appeals for the Seventh Circuit has explained, “just like ‘each and every exposure,’ the cumulative exposure theory does not rely upon any particular dose or expo- sure to asbestos, but rather all exposures contribute to a cumulative dose.” Both theories are incompatible with the substantial factor standard required for causation, but the South Carolina Court of Appeals views cumulative dose testimony as “background information essential for the jury’s understanding of medical causation.”

The South Carolina appellate court’s holdings stand in stark contrast to jurisdictions such as New York, which recently reaffirmed that “plaintiffs must rely on expert opinions that establish a scientific expression of dose with sufficient, case-specific, specificity, to establish proof of causation that a particular defendant’s product caused their injuries. Conclusory or qualitative statements do not suffice.”

SEVERE AND UNWARRANTED SANCTIONS

National asbestos attorneys say Judge Toal’s discovery orders are more frequent, broader, and the sanctions more severe than in any other jurisdiction. Sanctions in asbestos cases are rare outside of South Carolina. Also, lawyers familiar with asbestos litigation in South Carolina say they cannot remember sanctions motions being filed in the seven years before Judge Toal took over the asbestos docket from Judge D. Garrison Hill.

Dean Omar Branham Shirley, LLP routinely demands overbroad discovery in conjunction with corporate defendant depositions, in which businesses are required to turn over what they believe are excessive, irrelevant, and often impossible to produce documents. When defendants cannot comply, or Dean Omar does not like the answers at the deposition, the firm seeks sanctions. In a sample of five 2020 cases, the firm filed 22 motions for discovery related sanctions, including eight in one case.

In three cases involving bankrupt defendant Covil Corp., Judge Toal issued what is referred to as a “doomsday sanction,” striking all of the insulation company’s pleadings. In its appeal, Covil described the sanction as a “hydrogen bomb” and wrote that the judge abused her discretion in imposing a punishment so disproportionate to the alleged litigation misconduct, which the company denied.

More recently, the South Carolina Supreme Court agreed to review “the largest monetary sanction ever reported in South Carolina jurisprudence – over $300,000 .” The sanction was imposed after a jury returned a defense verdict in Howe v. Air & Liquid Systems Co.

The asserted basis for the sanction was Cleaver-Brooks, Inc.’s production of documents during trial that rebutted a surprise theory sprung by the plaintiff’s lawyers at trial that turned out to be factually inaccurate. According to Cleaver-Brooks, the documents “were never the subject of any discovery request, and they had no relevance to the case prior to the Plaintiff’s surprise in-court questioning.” The South Carolina Court of Appeals summarily affirmed the trial court’s order “without explanation or even holding oral argument.” The South Carolina Supreme Court recently agreed to review the extraordinary sanction in Howe.

Defendants hope that the state’s high court will curb Judge Toal’s extraordinary habit of imposing sanctions in asbestos cases. In August 2022, the South Carolina Supreme Court in Kovach v. Whitley, a non-asbestos case, held that Judge Toal erred in imposing a sanction against a plaintiff who filed a lawsuit that was at odds with representations the plaintiff made in a prior criminal action. The South Carolina Supreme Court found “no factual basis on which to justify an award of sanctions.” The Court also noted there were “a host of reasons” why the amount of the sanction may have been “an additional abuse of discretion.” The Court did not address the merits of the amount of the sanction because the prior issue was dispositive.

OVERTURNED A DEFENSE VERDICT, ADDING TO JURY AWARDS

Judge Toal has a record of overturning or modifying jury verdicts with which she disagrees.

For example, in a 2018 case, after Covil Corp. said it could not produce old documents because the papers had been destroyed in a fire, the court found that spoliation occurred and sanctioned the company with an adverse instruction effectively telling the jurors to presume the company exposed the plaintiff to asbestos in his workplace.

The judge did this even though the plaintiff did not identify Covil in his deposition and a representative for another company, Daniel Construction, testified that they did not have any records indicating that Covil supplied insulation for Mr. Crawford’s workplace and could not definitively place Covil as a supplier or contractor at the plant.

Despite the judge’s instruction and after hearing all the testimony, the jury reached a defense verdict. Three months later, Judge Toal threw out the verdict by invoking South Carolina’s “thirteenth juror”

doctrine. As explained by the South Carolina Supreme Court, the effect of the thirteenth juror doctrine “is the same as if the jury failed to reach to a verdict…. When a jury fails to reach a verdict, a new trial is ordered. Neither judge nor the jury is required to give reasons for this outcome.” According to Judge Toal, “as the ‘thirteenth juror,’ the trial judge can hang the jury by refusing to agree to the jury’s otherwise unanimous verdict.” She used this incredible power in Crawford to order a new trial, giving the plaintiff a second chance to win a case that was lost.

On at least two occasions, Judge Toal increased jury awards when she believed the juries did not award enough money to the plaintiffs.

In Edwards v. Scapa Waycross, Inc., Judge Toal increased a $600,000 jury award by $400,000 for a total of $1 million. The judge also refused to reallocate plaintiff’s internal apportionment of settlement proceeds to be more reasonable under the facts. The South Carolina Court of Appeals affirmed on both issues.

In Jolly v. General Electric Co., Judge Toal increased an award to a worker and his wife by some $1.6 million. The jury awarded the worker $200,000 in actual damages and $100,000 to his wife for loss of consortium. Judge Toal increased the worker’s award to $1.58 million and his wife’s award to $290,000.

She also refused to allow a setoff for the portion of prior settlements that plaintiff’s counsel had allocated to future losses. The South Carolina Court of Appeals affirmed on both issues, signaling “the Court of Appeals will give much deference to the circuit court and is disinclined to disturb these rulings in the absence of an obvious abuse of discretion.”

IMPROPER CONSOLIDATION OF ASBESTOS TRIALS

In 2020, Judge Toal granted a motion to consolidate two vastly dissimilar cases into one trial in which the plaintiffs claimed they contracted cancer as a result of exposure to asbestos in talc products.

One lawsuit involved a man who died at the age of 70 from pleural mesothelioma, a cancer that occurs in the lining of the lungs and is associated with asbestos exposure. Before this death, the plaintiff testified that he also worked with asbestos at a facility that manufactured products containing asbestos. Defendant Johnson & Johnson argued the man’s cancer was more likely to have been caused by his occupational exposure.

The other case involved a 20-year-old woman who was diagnosed at the age of 14 with peritoneal mesothelioma, which affects the lining of the abdomen and is less strongly associated with occupational asbestos. Studies cited by J&J, show between 95-99% of that type of mesothelioma in women is the result of naturally occurring genetic errors during cell replications. The woman underwent surgery and chemotherapy and was cancer-free.

In its appeal of the consolidation order, J&J pointed out that South Carolina juries have heard three asbestos cases against the company and had yet to return a plaintiff’s verdict. One case resulted in a defense verdict and two others resulted in hung juries. Plaintiffs wanted to combine the above two cases, the company said, to “tilt the scales of the trials in their favor.”

The South Carolina Supreme Court agreed to an immediate review of Judge Toal’s consolidation order. The case settled before the appellate court had an opportunity to rule.

NUCLEAR VERDICT IN TAKE-HOME EXPOSURE TRIAL

In 2021, a jury awarded $32 million to a worker whose wife died from mesothelioma allegedly caused by second-hand asbestos exposure. Judge Toal presided over the case.

In the 1980s, Robert Weist worked for Metal Masters at a turkey processing facility owned by Kraft Heinz. Weist alleged that he and his father were exposed to asbestos through their work at the facility and brought asbestos home on their clothing. Weist’s wife was allegedly exposed to asbestos while doing the family’s laundry and later died. Kraft Heinz and Metal Masters were ordered to pay $11 million in survival damages, $10 million in wrongful death damages, and $1 million in loss of consortium damages. The jury imposed another $10 million in punitive damages against Kraft Heinz.

INSURERS “ALTER EGO” OF DEFUNCT ENTITIES

Judge Toal has made a practice of declaring insurers the “alter ego” of defunct entities to subject the com- panies to lawsuits like other asbestos defendants. Persons familiar with South Carolina asbestos litigation says that circuit court has created at least twenty-one receiverships, using the same receiver and receiver counsel, to pursue coverage under insurance issued to defunct companies.

In 2020, Zurich American Insurance Company asked the South Carolina Supreme Court to recuse Judge Toal from its litigation, writing that “factually unsubstantiated and procedurally irregular findings call into question Chief Justice Toal’s impartiality and create an unacceptable risk of actual bias.”

DOOR OPENED FOR MORE LAWSUITS

In 2021, the South Carolina Supreme Court in Keene v. CNA Holdings, LLC upheld a $16 million award to the family of a maintenance worker who died following years of asbestos exposure at a polyester fiber plant. The plaintiff’s employer had been hired by the plant’s owner to provide all maintenance and repair workers at the plant. The plant owner’s corporate successor argued that the plaintiff was a statutory employee so the state’s workers’ compensation law provided the exclusive remedy for his claims.

The South Carolina Supreme Court disagreed. In a landmark decision, the Court narrowed the state’s “statutory employee” doctrine, making it easier for workers to bring lawsuits for many workplace injuries. The court held:

If a business manager reasonably believes her workforce is not equipped to handle a certain job, or the financial or other business interests of her company are served by outsourcing the work, and if the decision to do so is not driven by a desire to avoid the cost of insuring workers, then the business manager has legitimately defined the scope of her company’s business to not include that particular work.

“In short,” a practitioner explains, “[c]ourts will honor the company’s decision to have the work per- formed by someone other than an employee, the [statutory employee] doctrine will not apply, and the company can be sued in tort for injuries suffered by the worker.” The South Carolina Supreme Court added that the original purposes of the statutory employee doctrine are “certainly not served by granting [the plant owner] immunity for its wrongful conduct.” Dissenting Justice George C. James, Jr. said that the majority’s comment “will be taken to heart,” likely leading to more litigation against employers.

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