Silica Lawsuit Risk Reduction
Shared by: etr19906
Silica Lawsuit Risk Reduction By Henry Chajet Stop Silica From Becoming The Next Asbestos Crisis June, 2005 Silica Facts • Crystalline Silica (quartz) is one of the most common minerals • 3 Billion tons/year of sand, gravel, stone, aggregates • Unknown billions of tons of silica disturbed in mining, construction, agriculture; manufacturing, and transportation • Exposed population in the millions • Inhalation of “fine” silica dust, above OSHA/MSHA limits, can cause respiratory disease and death • Silica deaths in US < 150 in 2002, down from >1800 in 1969 • Exposure limit reduction proposed by ACGIH and NIOSH • ACC: current OSHA/MSHA exposure limit protective • Scientific debate over IARC carcinogen finding Silica Lawsuit & Financial Risk Factors • 2003-05: 50,000 New silica claims ; 2005 growth slows • 1990-05: Government sampling creates evidence • 2003-06: Draft OSHA rule – massive costs & risks • 2004-05: Insurance coverage exclusion & claim denials • 2004-05: ASTM standard; ACGIH TLV @ ¼ OSHA • 2003-05: Defenses upheld, but warning duties expand • 2004-05: False Texas claims investigated by NY Grand Jury • 2004-05: Press and NIOSH increase silica awareness • 2004-05: Legal reform (medical criteria in Oh, Tx, Miss, Ga); federal asbestos reform stalled Asbestos Mortality: 1968-1999 1400 1200 1000 800 600 400 200 0 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 CDC NIOSH- Worker Health Chartbook, 2004 Underlying and Contributing Cause of Death Silica Related Mortality OSHA / MSHA sampling shows trend established while exposures were well above the PEL. OSHA Silica Compliance Data (Construction & Manufacturing) 50 % OVER STANDARD 40 30 20 10 0 79 81 83 85 87 89 91 93 95 97 99 YEAR >0.10 mg/cu M MSHA Silica Compliance Data (Metal and NonMetal Mining) 20 % OVER STANDARD 15 10 5 0 79 81 83 85 87 89 91 93 95 97 99 YEAR >0.10 mg/cu M OSHA Oct. 2003 Draft Rule • Reduced Silica Exposure Level (PEL) • Action Level (50% Reduced PEL) Triggers Duties • Air Monitoring • Medical Monitoring • Silica Restricted Work Zones • Feasible Engineering Control Priority • Respirator Use and Programs • Medical Removal, Transfers, Pay Protection • Product Substitution Proposed Rule Expected In 2005-6; Regardless Of Rejection By Small Business Review Panel Copies of rule, analysis available at: www.pattonboggs.com news –Insights. ACGIH TLV® RISK • 2004 –2d Silica (TLV®) Reduction Proposed in 5 Years – OSHA=.1 mg/m3 ; 2000 ACGIH TLV® .050; 2004 .025 • Founded By Gov Employees, Chaired By OSHA Official • Adopts Health Standards In Secret Meetings • No Disclosure of Authors or Potential Conflicts • No Independent Peer Review or Risk Assessment • No Appeal Process, Public Rights, or Due Process • Respected Group Lost Credibility Post 1990 • TLV®s Adopted by OSHA / MSHA / Foreign Govts • TLV® Must be On Product MSDS / Training Materials • Enforced by OSHA Under the General Duty Clause • Used in Litigation For Health Risk and Duty Understand The Silica Risk • Asbestos—30 Years To Bankrupt 60 Companies; Action Now Reduces Future Silica Risks • First Defendants—Silica Suppliers; Expansion To Other Producers, Users, and Equipment Suppliers • Particular State Laws And Plaintiff Friendly Forums • Contractors & Customers Pose Highest Risk: No Comp Shield; Exposure Control & Warnings More Difficult; Potential For Punitive Damages • Risk Communication (Warnings) & Risk Transfer (Insurance and Contract Provisions) Are Critical 2003-5 Key Court Decisions • 2003 Miss federal district court upholds bulk supplier & sophisticated user defense—dismisses case – Bulk supplier not in best position to relay hazard info; particularly when employer of user is sophisticated. >> BUT >> • 2004 Wisconsin—defenses may not be applicable if important information / protection given to employees, but not to contractors, customers or product users (Badger Mining). • 2003 Texas case punitive damages upheld (e.g. non employees exposed to hazards, not warned and not given same protection as similarly situated employees (Texaco). Texas Supreme Court Humble Sand & Gravel 2004 Decision Flint supplier for abrasive blasting had no duty to warn its customer company (abrasive blasting operations) >> BUT >> Whether supplier has duty to warn its customers’ employees is determined on a case-by-case basis, by weighing: • Likelihood of serious injury from supplier’s failure to warn; • Burden on a supplier to give a warning; • Feasibility and effectiveness of a supplier’s warning; • Reliability of operators to warn their own employees; • Existence and efficacy of other protections; and • Social utility of requiring suppliers to warn. Kentucky Supreme Court Permits Private Lawsuit For Harm Caused By Regulatory Violation • Hargis v Baize, No. 2002-SC-0969, May 19, 2005 • 5-2 Decision Permits Lawsuit Of Widow Of Independent Contractor Employee (trucker killed while unloading) To Sue Saw Mill Owner • Multi-Employer Work Site Doctrine Adopted (owner/GC/ site controller—can be responsible for non-employee compliance) Insurance Update & Options • Silica Coverage Exclusions Initiated In 2004-5 Policies • Silica Claim Coverage Denial Based On “Pollution Exclusion” Upheld In California Case • Secure Hidden Assets: “Old” Policy Recovery ( Based on “Claims Occurrence”) Can Provide Coverage for Claims that Arose During Their Term ( 10-40 Years Ago) • Consider Expert Insurance Assistance, Financial Risk Assessment and Funding Alternatives Lessons Learned • Focus Actions on High Risk & Maximum Benefits • Insurance Coverage Essential – Asset Recovery Pays • Contractors And Customers Present Highest Financial Risk, Even Though Health Risks May Be Lowest Of All • Accurate Communication Reduces Liability Risk • Inaccurate/ Inconsistent Communication Increases Risk • Regulations: Minimum Standards ( MSDS, Labels) • Use Contract & Purchase Orders For Risk Transfer • Tools and Equipment Can Be Problems & Solutions Risk Reduction Checklist • Insurance Coverage – Old Policy Assets Recovered ? • MSDS, Labels, Warnings Accurate? Reaching Exposed Users? • Contracts, POs, Commercial Docs (e.g. weight slips) Impose Duties? • Contractor Management / Risk Reduction Program In Place? • Tool & Equipment Assessments Made? Warnings Updated? • Customer Warnings & Instructions Accurate & Coordinated? • Property & Truck Warning Signs Considered? • Customer Observation, Suggestions, Instructions, Assistance Offered? • Web Site & 800 Telephone Number In Service? • Air Sampling (work sites, customer sites, contractors) Conducted? • Respirator Program In Place For Exposed Personnel? • Health Monitoring For Employees At Risk Offered? • Inspection / Violation / Complaint Response System In Place? Patton Boggs Risk Reduction Services Companies are faced with an ever-growing array of legal mandates, funded with more than one billion federal dollars for safety and health alone. Regulatory compliance is a daunting task, but perhaps the easiest challenge posed by OSHA, MSHA, NIOSH, ATF, EPA, DOT, the Chemical Safety Board, NTSB, and others. Far greater risks are posed by evidence created by the agencies which not only leads to enforcement, but can adversely impact lawsuits, insurance coverage, and shareholder value. Patton Boggs provides coordinated risk reduction strategies that help companies focus resources on high risk, maximum benefit solutions, including: • Toxic tort risk audits • Enforcement counseling and defense • Program & policy development • Litigation, arbitration, and mediation • Management training • Informal settlement representation • Acquisition due diligence • Agency rulemaking advocacy/ litigation • Regulatory counseling and advocacy • Private standards counsel and litigation • Contractor management programs • Scientific research counsel • Crisis/ incident response & defense • Product stewardship and liability counsel • Liability and coverage analysis • Congressional counsel & lobbying • Internal investigations • “Whistleblower” / discrimination defense • Expert retention and management • “White collar” defense Visit our website to learn about our practice areas, review bios or newsletters: www.pattonboggs.com or call Henry Chajet or Mark Savit at 202-457-6000.