OSHA's asbestos regulations and litigation: What insurers should know

The construction industry faces a wide variety of safety considerations, and asbestos risks have beset the industry with decades of health-related liability issues, resulting in ripple effects for insurers.

Back in 1972, Congress passed the Occupational Safety and Health Act into law, creating the Federal Occupational Safe and Health Administration (OSHA), which remains at the forefront of employee safety and has had a significant impact on modern U.S. asbestos litigation. Beyond the immediate consequences of a regulatory violation, OSHA standards impact today’s asbestos litigation in three important ways:

OSHA violations are often cited by plaintiff’s counsel arguing for the imposition of a higher degree of culpability;
OSHA’s applicability can allow certain knowledge to be legally imputed to a defendant (irrespective of what the defendant actually knew);
Because OSHA’s regulations control the actions of employers and their employees’ workplace, the adherence or non-adherence to OSHA standards may give rise to arguments for apportioning greater liability to defendants in physical control of the plaintiff’s workspace.

Historical background: Asbestos exposure regulation

OSHA’s regulatory regime has had significant impact on modern U.S. asbestos litigation, but asbestos regulation goes back even further.

The United States’ first work-related asbestos exposure standards appeared in the late 1930s, shortly after the institution of similar controls in the United Kingdom. These arose on a state-by-state basis and were not applicable nationwide. In most instances, individual states adopted an exposure level of 5,000,000 particles per cubic foot (ppcf) of total dust (not only asbestos fibers) of air based on a time-weighted average over an eight-hour work day. This level derived from a 1938 United States Public Health Service survey of several asbestos textile mills in North and South Carolina, which found that almost none of the mill workers employed for a period of 10 years or more and exposed (on average) to less than 5,000,000ppcf had asbestosis. For workers exposed above this level, substantial numbers of asbestosis were found.

In 1946, the American Conference of Governmental Industrial Hygienists (ACGIH), a private trade organization for industrial hygienists who worked in government jobs and on a yearly basis published exposure limits for various toxicants, adopted the 5,000,000ppcf level as a threshold limit value for asbestos exposure. The 5,000,000ppcf threshold limit remained essentially uniform (there are several references in contemporary medical literature characterizing it as “safe”) until the mid-1960s, when more sophisticated epidemiologic studies began being published, chief among them Irving Selikoff’s 1964 study of several thousand insulators in New York and New Jersey. It was accepted that these workers: a) had regular asbestos exposure less than 5,000,000ppcf and b) were exposed far less regularly than workers in textile plants or asbestos manufacturing facilities. Nevertheless, Selikoff’s study showed clearly elevated levels of several diseases in these workers, including asbestosis.

OSHA gets involved

OSHA issued its first standard for asbestos exposures in the workplace in May 1971. This required all states to ensure that certain worker safety measures were taken (i.e., wet down methods, segregation of work areas where asbestos was being used, shower and change facilities for workers, clearly marked disposal areas for asbestos-containing waste) if worker exposures to asbestos exceeded a measure known as the Permissible Exposure Limit (PEL). The initial PEL was defined at 12 fibers per cubic centimeter of air(f/cc) based on a time-weighted average over an eight-hour work day. This level was lowered to 5f/cc shortly afterwards. In 1976, it was again lowered to 2 f/cc. In 1986, the level was further lowered to .2f/cc. By the mid-1980s, the use of asbestos-containing products in the United States was drastically reduced in response to these regulations and other factors including:

more widespread public appreciation of asbestos-related hazards;
federal government bans on the sale and/or use of several asbestos-containing products (spray-on fireproofing(1973), molded pipe-covering(1975), and joint compound(1978)); and
the onset of nationwide asbestos personal injury litigation (exemplified by the bankruptcies of Johns-Manville, Raybestos-Manhattan, and other companies during the mid-1980′s).

The current OSHA standard for workplace exposures to asbestos is .1f/cc and has been in effect since 1994.

Adherence to OSHA regulations can still create unknown risks for a contractor and in turn, the company’s insurer. (Photo: Shutterstock)

Non-compliance costs contractors and insurers

Defendant companies previously found in violation of OSHA’s workplace safety standards can expect to confront arguments from plaintiffs’ counsel that such violations demonstrate a higher degree of culpability beyond ordinary negligence. In the state of New York, for example, plaintiffs can seek a jury determination that the defendant company was not only negligent but also that the company “acted with reckless disregard for the safety of others.” [See New York Civil Practice Law and Rules §§1601, 1602(7) (2017).]

The result of being held to this higher standard is that the defendant loses the ability to argue that its liability to the plaintiff was several and not joint. While a defendant company may possess other legal bases to mitigate its liability under New York law, the loss of several liability under CPLR § 1601 can, in some cases, significantly impact their ultimate legal liability.

OSHA regulations as a basis for imputed knowledge

Even where a defendant-company fully complied with OSHA’s requirements, OSHA regulations can still affect a defendant’s litigation risk because where the plaintiff’s exposure occurred after OSHA enacted asbestos-related safety standards, plaintiff’s counsel often seek to impute that knowledge to defendants.

To establish a right of recovery in most U.S. jurisdictions, an asbestos personal injury claimant must show the defendant’s failure to warn was unreasonable under the circumstances, particularly if the defendant “knew or should have known” of the potential hazards associated with asbestos exposure based on the information publicly available or reasonably ascertainable by the defendant during the plaintiff’s alleged exposure.

Where the plaintiff’s exposure took place after OSHA’s imposition of workplace regulations in the early 1970s, the plaintiff can more easily establish this element of the case by arguing the defendant was presumptively knowledgeable (i.e., they should have known) of OSHA’s regulations and regulatory statements regarding the potential asbestos-related health risks. [See e.g., Williams v. CSX Transp., Inc., 176 N.C. App. 330, 342 (2006).]

Asbestos claims can be based on exposures that occurred many years earlier. (Photo: Shutterstock)

Impact on division of liability among defendants

Another way OSHA impacts modern asbestos litigation is it potentially affects the shifting of liability among defendants. The applicability of OSHA standards in this area is drawing greater attention as asbestos plaintiffs are increasingly claiming significant (in some cases exclusive) exposure after 1972, when OSHA’s requirements took effect.

These regulations primarily target employers since they frequently control workplace exposures, where they are on the scene and exert authority over their employees. In most U.S. jurisdictions, workers are barred from suing their employers directly in tort based upon the no-fault workers’ compensation insurance system, so in many cases the OSHA regulations will not come into play for fault-shifting purposes.

However, such regulations can play an important role where a trial defendant (e.g., a manufacturer) seeks to shift fault onto another defendant (e.g., a contractor) who may have been installing or removing asbestos-containing products in a plaintiff’s vicinity at a worksite, or who was supervising and controlling activities at a worksite (and may potentially bear liability under state labor laws).

Entities are obliged to follow these regulations in order to protect their own workers (and any other workers in their vicinity). However, a defendant can point to non-adherence to OSHA standards to seek a greater jury apportionment against those entities.

Understand the timeline and regulations

As we continue to see asbestos-related claims involving plaintiffs who claim exposure during the 1970s and later, OSHA regulations are playing an increasingly important role in asbestos litigation. Whether policyholders complied tends to be a key issue, as plaintiffs will cite failure to follow these regulations as evidence of negligence. Education is the first step for insurers who wish to better understand this kind of liability and properly advise their clients in asbestos-related risk management.

Peter Dinunzio ([email protected]) is senior counsel at Clyde & Co. and a member of the firm’s insurance disputes practice. He focuses his practice on complex insurance and reinsurance litigation and arbitration and has particular experience in environmental pollution and asbestos exposures and claims. Jeffrey Fegan ([email protected]) is senior counsel at Clyde & Co. and has been a litigator and trial lawyer for more than 10 years. He has experience in various types of high-exposure cases in state and federal courts and has significant first-chair jury trial experience. He has handled multiple types of high-value cases from inception through jury trial, post-trial motions and appeals.

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