Attempted End Run Around Wisconsin’s Exclusive Remedy of Worker’s Compensation Fails in Asbestos Litigation in the Seventh Circuit

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July 13, 2017

Wisconsin’s exclusive remedy of worker’s compensation has long been a bulwark against civil suits brought by employees (subject to a few narrow exceptions not applicable here).  This bulwark has survived a creative attack in an asbestos case in Pecher v. Owens-Illinois, Inc. 859 F.3d 396 (2017), which was decided on June 6, 2017. The case involved six plaintiffs who sued in federal district court for the Western District of Wisconsin for compensation for mesothelioma. They had built fire-proof doors that incorporated asbestos-containing materials. Three of them (the “Weyerhaeuser plaintiffs”) were former Weyerhaeuser Company employees who asserted claims against Weyerhaeuser. The other three (the “Owens-Illinois plaintiffs”) were also former Weyerhaeuser employees, but they sought instead to impose liability on Owens-Illinois, Inc. by virtue of its status as the licensor of the patent on the fire-proof door. 

The district court dismissed all of the claims, and the U.S. Court of Appeals for the Seventh Circuit upheld the dismissals. The focus of this article is on the background to the reasons for the dismissal, that background being Wisconsin’s exclusive remedy of worker’s compensation.

Weyerhaeuser operated a plant in Marshfield, Wisconsin, from 1960 until 1978 at which it made fire-proof doors, some of which contained asbestos. The doors were made under a patent that Owens-Illinois licensed to Weyerhaeuser.  All six plaintiffs alleged that they developed mesothelioma not from exposure to asbestos fibers while at work in the factory, but rather from the ambient atmosphere in their homes or their community. While the Weyerhaeuser plaintiffs brought claims grounded in the law of nuisance against their former employer, the Owens-Illinois plaintiffs tried to impose liability against the licensor of the patent by which the asbestos-containing doors were made.

The Seventh Circuit began its decision by noting:

Each of the Weyerhaeuser plaintiffs worked at Weyerhaeuser for years in close contact with asbestos. Therefore, on the surface at least, it appears their claims should be limited to the procedures set out in Wisconsin’s Worker’s Compensation Act, which provides the “exclusive remedy against the employer” for work-related injuries.

All six plaintiffs offered opinion testimony of experts that non-occupational exposure to asbestos fibers in the ambient atmosphere caused their mesothelioma.  In its role as the gatekeeper of opinion testimony, the district court determined that the individual circumstances of the Weyerhaeuser plaintiffs did not provide a sufficient basis on which reliable expert opinions on causation could be rendered. The Weyerhaeuser plaintiffs did not live close enough to the factory for a long enough period of time, so their expert opinion testimony was not admissible into evidence.  The Owens-Illinois plaintiffs had a bit stronger showing; their expert opinion testimony was admissible.  The end result for both groups, however, was the same. (The Seventh Circuit did not disturb the district court’s rulings on the admissibility of the opinion evidence since those decisions are reviewed only for abuse of discretion, and the appellate court observed that the district court’s evidentiary rulings did not meet that difficult standard of review.)

The nuisance-based claims of the Weyerhaeuser plaintiffs were dismissed for reasons (apart from having no proof of causation) of the changed circumstances and the passage of time. To state a claim under Wisconsin’s law of nuisance, there must be a current interference with a property right, i.e. the use and enjoyment of one’s property.  At the time the Weyerhaeuser plaintiffs were allegedly exposed to non-occupational asbestos fibers in the ambient atmosphere, they had the full, unimpeded use and enjoyment of their respective properties.  They were first diagnosed with mesothelioma long after the plant had stopped manufacturing the fire-proof doors. Accordingly, their claims under nuisance theories were not recognized.  In addition, the six year statute of limitations had expired. As for the Owens-Illinois plaintiffs, the law does not recognize a claim against a party based solely on its status as the licensor of a patent.  (In fact, the claims of the Owens-Illinois plaintiffs were found to be frivolous.)

I think it is fair to say that both the district and appellate courts were troubled by, and skeptical of, the obvious gambit to make an end run around the exclusive remedy of worker’s compensation.  Quoting the district court in regard to the Owens-Illinois plaintiffs, the Seventh Circuit stated:

[t]he [district] court specified it could not “ignore the real possibility that any trier of fact might be unable to balance defendant’s right to exclude liability or damages for occupational exposure under compensation laws against the understandable, if unduly prejudicial, sympathy that would be engendered at trial in light of the inexorable pain and death that results from this disease.  (Emphasis in the original.)

The Seventh Circuit went on to say that:

One not need read between the lines to note that the district court was concerned that the expert testimony proffered by plaintiffs’ counsel was an attempt to avoid the exclusive remedy provisions of Wisconsin law, offering jurors a way to reward damages under a cause of action that should otherwise be foreclosed.

While Pecher was not decided by direct application of Wisconsin’s exclusive remedy defense, it seems that the spirit of that important provision was very much at play.  Wisconsin’s exclusive remedy provision is part and parcel of the “grand bargain,” the quid pro quo, of worker’s compensation that has served this state well for more than a century. It is good to see recognition of that venerable doctrine when federal courts apply Wisconsin law.

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