US Supreme Court Bars Direct Asbestos Claims Against Travelers Insurance

The US Supreme Court ruled that the direct action claims against Travelers Insurance Company for its conduct in the asbestos conspiracy with Johns-Manville Corporation (Manville) were barred by the 1986 reorganization plan of the Manville.

"As part of the 1986 reorganization plan of the Johns-Manville Corporation (Manville), an asbestos supplier and manufacturer of asbestos containing products, the Bankruptcy Court approved a settlement providing that Manville’s insurers, including The Travelers Indemnity Company and related companies (Travelers), would contribute to the corpus of the Manville Personal Injury Settlement Trust (Trust), and releasing those insurers from any “Policy Claims,” which were channeled to the Trust. “Policy Claims” include, as relevant here, “claims” and “allegations” against the insurers “based upon, arising out of or relating to” the Manville insurance policies. 

"The settlement agreement and reorganization plan were approved by the Bankruptcy Court (1986 Orders) and were affirmed by the District Court and the Second Circuit. Over a decade later plaintiffs began filing asbestos actions against Travelers in state courts (Direct Actions), often seeking to recover from Travelers not for Manville’s wrongdoing but for Travelers’ own alleged violations of state consumer-protection statutes or of common law duties. Invoking the 1986 Orders, Travelers asked the Bankruptcy Court to enjoin 26 Direct Actions. Ultimately,a settlement was reached, in which Travelers agreed to make payments to compensate the Direct Action claimants, contingent on the court’s order clarifying that the Direct Actions were, and remained, prohibited by the 1986 Orders. 

"The court made extensive factual findings, uncontested here, concluding that Travelers derived its knowledge of asbestos from its insurance relationship with Manville and that the Direct Actions are based on acts or omissions by Travelers arising from or related to the insurance policies. It then approved the settlement and entered an order (Clarifying Order), which provided that the 1986 Orders barred the pending Direct Actions and various other claims. Objectors to the settlement (respondents here) appealed. The District Court affirmed, but the Second Circuit reversed. 

"Agreeing that the Bankruptcy Court had jurisdiction to interpret and enforce the 1986 Orders, the Circuit nevertheless held that the Bankruptcy Court lacked jurisdiction to enjoin the Direct Actions because those actions sought not to recover based on Manville’s conduct, but to recover directly from Travelers for its own.

Right To Know Hazardous Substance Fact Sheets

The State on NJ Department of Health has now made available hazardous substances fact sheets in a format for Emergency Responders. The sheets can be searched by DOT# or CAS# or in alphabetical sort. All the reference forms may be downloaded.

In-Home Care by Spouse Constitutes Treatment

A claimant who suffered from cognitive problems and partial paralysis as a result of a compensable accident and required full-time supervision, was entitle to have his spouse reimbursed for palliative, in-home care, that she provided to him.  

"If an injured worker requires services compensable under § 23-1062(A), then the employer must provide them. If the employer fails to do so and thus puts that burden on the injured employee's spouse, compensation for the necessary services is required by the statute. Those services provided by Mrs. Carbajal that would constitute compensable palliative care if performed by the Carrier-paid attendants are thus compensable."

Carabajal v. Industrial Commission of Arizona

___ P.3d____, 2009 WL 1650428 (Ariz. 2009) Decided June 15, 2009

EPA Declares Asbestos in Libby Montana is a Public Health Emergency

An historic first occurred today with the announcement by the US EPA that the asbestos in Libby, Montana constituted a Public Health Emergency. The EPA stated, "Over the past years, hundreds of asbestos-related disease cases have been documented in this small community, which covers the towns of Libby and Troy. "

"This is the first time EPA has made a determination under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that conditions at a site constitute a public health emergency. This determination recognizes the serious impact to the public health from the contamination at Libby and underscores the need for further action and health care for area residents who have been or may be exposed to asbestos. Investigations performed by the Agency for Toxic Substance and Disease Registry have found the incidence of occurrence of asbestosis, a lung condition, in the Libby area staggeringly higher than the national average for the period from 1979-1998. EPA is working closely with the Department of Health and Human Services, which is making available a short-term grant to provide needed asbestos-related medical care to Libby and Troy residents. "

WC Benefits May Be Heading for Retirement

The Montana Supreme Court heard oral arguments this week on whether workers' compensation benefits should terminate on retirement. Brief's available on the link below:

CATHERINE SATTERLEE, Petitioner and Appellee, v. LUMBERMSN'S MUTUAL CASUALTY COMPANY, Insurer for BUTTREY FOOD & DRUG, Employer and Appellee. --- James ZENAHLIK Petitioner and Appellant v. MONTANA STATE FUND, Insurer for EAGLE ELECTRIC, Employer and Appellee. --- JOSEPH FOSTER, Petitioner and Appellant v. MONTANA STATE FUND, Insurer for ALLEN ELECTRIC, Employer and Appellee.

NJ Budgetary Chaos Opens Court Without Cases

NJ is the mist of budgetary chaos and it continues to escalate. NJ decided at the last moment to cancel yet another furlough for state employees at the last moment resulting in the inability to list cases for hearing before the NJ Division of Workers' Compensation. Courtrooms were empty on Friday since no cases had been listed.

Originally, the administration called for yet another paid state vacation for employees because of budget shortfalls. Similar economic issues have frozen new hires, limited the use of durable resources and caused the elimination of printed court calendars. The NJ Division of Workers' compensation is funded substantially from the NJ Second Injury Fund as a line item on premium invoices.

In the recently brokered deal, Governor Corzine has negotiated 10 additional furlough days beginning on July 1st. and gather seven paid leave days for use after June 10th, 2010.

Vaccinating Workers’ Compensation Against Flu Claims

The spread of influenza A has now reached pandemic proportions. The focus has now been directed to creating a vaccine to halt the rapid community spread. The next challenge to workers’ compensation systems may be claims resulting from adverse reactions to employer sponsored vaccination programs.

The World Health Organization (WHO) had now declared the outbreak of the novel influenza A to be a world wide pandemic. Dr Margaret Chan, Director-General of the World Health Organization, announced today, “The world is now at the start of the 2009 influenza pandemic.” “The virus is contagious, spreading easily from one person to another, and from one country to another. As of today, nearly 30,000 confirmed cases have been reported in 74 countries.”

The need for the development and distribution of a preventative vaccine is of critical importance. Dr. Chan stated, “WHO has been in close dialogue with influenza vaccine manufacturers. I understand that production of vaccines for seasonal influenza will be completed soon, and that full capacity will be available to ensure the largest possible supply of pandemic vaccine in the months to come.”

Workers’ Compensation programs have been challenged by compensable claims in the past resulting from adverse reactions to vaccines. In many jurisdictions, vaccinations afforded to employees which provide benefit to the employer against possible disastrous business consequences have been considered to be a mutual benefit. Therefore any disease arising from such vaccination has been deemed compensable.

To shield both employers and pharmaceutical companies from liability claims, the federal government established a no-fault program entitled the Smallpox Emergency Personnel Protection Act of 2003 (SEPPA) in an effort to provide benefits and/or compensation to certain individuals, including health-care workers and emergency responders, who are injured as a result of the administration of smallpox countermeasures including the smallpox (vaccinia) vaccine. SEPPA also provides benefits and/or compensation to certain individuals who are injured through the result of accidental vaccinia inoculation through contact.

Many questions remain unanswered including: the ultimate spread of the disease, the development of an effective vaccine, and whether the workers’ compensation system will need to absorb claims resulting from adverse reactions. One thing is for sure, as Dr. Chan declared today. “We are all in this together, and we will all get through this, together.”

For more on workers compensation and the flu pandemic visit the Workers' Compensation Blog.