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South Carolina Asbestos Litigation

South Carolina’s asbestos environment continues to erode following its initial appearance on the Judicial Hellholes® list in 2020. In the past three years, the state has cemented an unwelcome reputation for bias against corporate defendants, unwarranted sanctions, low evidentiary requirements, liability expanding rulings, unfair trials, severe verdicts, a willingness to overturn or modify jury verdicts to benefit plaintiffs, and frequent appointment of a receiver to maximize recoveries from insurers. The state is a hotspot for asbestos claims.

 

RULINGS FAVOR PLAINTIFFS

In 2017, retired South Carolina Supreme Court Chief Justice Jean Hoefer  Toal was appointed to preside 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 imposed unfair sanctions, overturned or substantially modi- fied jury verdicts she did not agree with, and made the unusual move of naming insurance carriers as the “alter egos” of their insureds.

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.”

The South Carolina Court of Appeals has affirmed several of Judge Toal’s expansive rulings, contributing to the state’s reputation as an outlier in its handling of asbestos cases.

Two asbestos cases pending in the South Carolina Supreme Court—Edwards v. Scapa Waycross, Inc. and Jolly v. General Electric Co.—provide important opportunities for the Palmetto State’s high court to return some elements of the state’s asbestos jurisprudence to the legal mainstream.

A DESTINATION FOR OUT-OF-STATE LAW FIRMS

South Carolina asbestos filings have risen dramatically since 2018, especially due to the activity of out-of- state plaintiffs’ firms such as the Law Offices of Dean Omar Branham Shirley, LLP from Dallas, Texas. Those familiar with South Carolina asbestos litigation say that Judge Toal typically sides with the Dean Omar firm and its local counsel, Kassel McVey Attorneys at Law.

In 2021, Jessica Dean, the Dean Omar firm 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. 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 wit- ness flouted a court order.

Recently, the Dean Omar firm’s percentage of overall South Carolina filings has declined as more firms are getting in on the action. Several more plaintiff firms have filed asbestos cases in South Carolina in recent years including Meirowitz & Wasserberg, LLP of New York City and Florida, St. Louis-based Maune Raichle Hartley French & Mudd, Houston-based Bailey Cowan Heckaman PLLC and Shrader & Associates, LLP, Tampa-based Vinson Law Office, and Flint Cooper LLC and Simmons Hanly Conroy from southern Illinois, among others.

Large Number of Defendants Named

Filing behaviors have changed along with the roughly two-fold increase in filings in 2023 compared to 2018. The number of defendants named in South Carolina cases hovered between 50-60 defendants in 2018 and 2019, then skyrocketed. Beginning in 2020, South Carolina asbestos cases have named over 105 defendants on average each year. This is much higher than the national average. According to consulting firm KCIC, 70 companies were named, on average, in asbestos lawsuits in 2022.

WEAK CAUSATION STANDARD APPLIED

In Glenn v. 3M Company, decided in April 2023, 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 significant blows to South Carolina’s asbestos litigation environment by affirming verdicts based on a controversial “cumulative dose” theory of causation espoused by plaintiffs’ experts. The theory allows plaintiff’s 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 exposure 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 reaffirmed in Nemeth v. Brenntag North America in 2022 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.”

The South Carolina Supreme Court granted review in Edwards to clarify the state’s causation standard. ATRA filed an amicus brief in Edwards joined by a number of allies. ATRA’s amicus brief explains:

The Court of Appeals erred in distinguishing the widely-rejected every exposure approach from the cumulative exposure testimony propounded by Plaintiff ’s experts. The theories are identical in foundation and application—neither one excludes minor workplace or bystander exposures. By lumping various exposures, regardless of substantiality, under the heading of “cumulative,” plain- tiff ’s experts attempt to transform even the most limited exposure into a legally “substantial” one.

“Every exposure” and “cumulative exposure” theories are inconsistent with the substantial factor causation standard in South Carolina and many other jurisdictions. The Court should join the many other courts that have rejected attempts by plaintiff experts to repackage the rejected every exposure approach as “cumulative exposure.”

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. As one defense firm explains, “Justice Toal has ordered sanctions on several occasions, including monetary, additurs, and the striking of pleadings.”

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.

The Dean Omar firm 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 2020 sample of five 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 sanctions 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.

Defendants had hoped that the South Carolina Supreme Court would curb Judge Toal’s extraordinary habit of imposing sanctions in asbestos cases when the 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.” Cleaver-Brooks described Judge Toal’s sanction as an “historic injustice.”

Cleaver-Brooks won this case at trial by jury, yet has been slapped with the largest monetary discovery sanction in this state’s history—over $300,000—without any explanation from any court as to what it did wrong or what it could possibly have done differently.

The South Carolina Court of Appeals summarily affirmed the trial court’s order in Howe “without  explanation or even holding oral argument.”

The South Carolina Supreme Court agreed to review Howe, but in June 2023 the appeal was dismissed after the parties notified the court of an agreement ending the fully briefed dispute.

The South Carolina appellate court affirmed another post-trial sanctions order in Glenn v. 3M Co. in 2023.

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 DEFENSE VERDICT, ADDS 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 did not have any records indicating that Covil supplied insulation for the plaintiff’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 of 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 jury’s $600,000 survival damages award to $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.”

The combined effect of the trial court’s additur and setoff rulings in Jolly is that, unless reversed by the South Carolina Supreme Court, the plaintiffs will recover more than $3 million ($2.27 million in settlements and $823,333.33 from Fisher and Crosby after partial setoffs), plus interest significantly above the prime rate, for claims the jury determined were worth only $300,000.

ATRA filed amicus briefs in both the Edwards and Jolly appeals. In its Jolly amicus brief, ATRA noted that “[t]he trial court and Court of Appeals rulings essentially give the trial court absolute discretion to replace a jury’s determination of damages with the trial court’s subjective view of what the jury should have awarded.” ATRA further explained:

Additur is virtually nonexistent in asbestos cases outside of South Carolina. For instance, a Lexis+ search of the term “additur” in the Mealey’s Asbestos Litigation Reporter database— which reports regularly on rulings in asbestos cases nationwide—returns only two examples of a court outside of South Carolina awarding additur in an asbestos case in over thirty years. South Carolina, in comparison, boasts two recent examples: [Jolly] and Edwards….

Further, additur is rare in non-asbestos cases in South Carolina and nationally…. In states allowing the practice, empirical evidence suggests “almost no use of additur.”

Nuclear Verdicts

In March 2023, a woman won a $29.1 million verdict against ex-talc supplier Whittaker Clark & Daniels alleging that she developed mesothelioma from exposure to asbestos in cosmetic talc products. The company was forced to file bankruptcy after the verdict and Judge Toal appointed a receiver to “take over its operations.”

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 allegedly died from exposure to asbestos while doing their laundry. 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. What the jury did not learn is that Weist’s wife was not just exposed to asbestos on her husband’s clothing, but that her father, an insulator, and uncle also worked in places where asbestos was present.

The South Carolina Court of Appeals affirmed a $5.125 million award in 2023 in Glenn v. 3M Co.

INSURERS “ALTER EGO” OF DEFUNCT ENTITIES

Judge Toal has expanded the asbestos docket by appointing a receiver over various entity defendants. She has made a practice of declaring insurers the “alter ego” of defunct entities to subject the companies to lawsuits like other asbestos defendants. One defense firm explains, “Justice Toal has regularly appointed receivers for defunct companies who supplied, installed, manufactured asbestos products, etc., and has regularly ruled that a company’s insurance policies, which would cover claims in SC, give her the authority to appoint a receiver.” 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. They also indicate these appointments are made without any kind of substantive hearing. Some of the companies for which receivers have been appointed are not based in South Carolina, and some are not U.S. companies or even defunct.

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, but the case settled before the appellate court had an opportunity to rule.

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. 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 performed 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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