Pennsylvania Court Rejects Statutory Limit Challenge on Asbestos Liability

In a move that denies the rights of workers to be protected from asbestos injuries for decades after exposure, a Pennsylvania Superior Court has ruled that successor corporations do not have unlimited liability on asbestos claims.

Successor corporations are those companies who acquire, intentionally or by default, other companies whose manufacture or use of asbestos may have put employees at harm.

The case involves Philadelphia-based Crown Cork & Seal, which purchased Mundet Cork in 1963. The judges, lawyers and plaintiffs agreed that Crown Cork was not required to pay out any more money in asbestos-related liabilities because it had already paid out millions in liabilities - an amount far exceeding the fair market value of Mundet at the time of its purchase (a cap established under 15 Pa. C.S.A Section 1929.1.).

The plaintiffs differed on intent of the statute, however, arguing that it violated the Commerce Clause and the Equal Protection Clause of the U.S. Constitution, as well as other statutes of Pennsylvania's constitution, including the Equal Protection Clause.

This is where the judges differed, with a four-judge minority insisting that denying the plaintiff's standing under such statutes would require treating in-state and out-of-state corporations with prejudice. The majority ruled that the plaintiffs were not protected by a dormant commerce clause which was instituted to protect interstate commerce, and therefore didn't have a right to issue a challenge under Pennsylvania state law.
The majority, consisting of Judge Maureen Lally-Green, President Judge Kate Ford Elliott, and Judges Correale F. Stevens, Joan Orie Melvin and Susan Peikes Gantman, overruled the minority, led by Judge Richard B. Klein and joined by Judges Jack Panella, Christine Donohue and John L. Musmanno.

Klein felt the plaintiff's case had merit due to the fact that he believed the state statute was passed in an unconstitutional manner and contained prejudicial clauses. For example, he explained, the statute treats in-state and out-of-state companies differently. That is, people injured by products made by companies in other states can sue, but people facing the same injuries from companies in Pennsylvania can't, even where companies were originally out-of-state and subsequently acquired by Pennsylvania companies.

"Therefore the statute violates equal protection." Klein stated.

Klein also disputed the idea that the plaintiff's inability to sue Crown Cork was outweighed by the fact that there were other entities (tortfeasors) against whom they could file, saying that argument put the cart before the horse because there hasn't been any determination of liability for other companies.

The majority ruled that, since the constitutional doctrine was created to protect interstate commerce, and preferential treatment given to Pennsylvania companies had little effect on plaintiffs, a previous ruling - by Philadelphia Common Pleas Court Judge Allan Tereshko - was a valid expression of the law.

Steven Cooperstein, representing the plaintiffs, noted that Crown Cork was the only company he knew of which sought immunity under Section 1929. Cooperstein said the current ruling won't affect future cases that greatly, but expressed his concern that future legislative changes may prevent plaintiff's suits for asbestos claims under the under the precedent set by the current case, Johnson v. American Standard.

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