The owner of a former tire factory in Charlotte is asking the North Carolina Supreme Court to consider multiple lawsuits related to asbestos exposure. Petitions filed Wednesday argue that a lower court’s rulings in those suits threatens the state’s favorable business climate.
A split 2-1 decision from the state Court of Appeals last month allowed the suits to move forward against Continental Tire. That decision reversed a ruling from the North Carolina Industrial Commission, which had dismissed all the cases.
“The North Carolina General Assembly has designed numerous legal mechanisms to make North Carolina a great place for business,” lawyers for Continental Tire and Liberty Mutual Insurance wrote Wednesday in the lead case, Funderburk v. Continental Tire. “The legislature created a specialized business court to ensure expedited and experienced review of complicated business matters. It has reduced corporate income taxes to ensure that companies are motivated to remain in the State. And it designed an Industrial Commission to ensure that workers’ claims are resolved in a fair, efficient, and reliable way.”
“These legal mechanisms work together to give companies predictability and stability in crafting their business plans,” the petition continued. “That is one of the reasons why North Carolina has been ranked the best state for business for three of the last four years.”
“But the decision below jeopardizes that predictability and stability,” the company’s lawyers warned.
Starting in 2008, more than 150 former employees brought asbestos exposure complaints related to their work at the Charlotte factory, according to court records. In 2010 the parties agreed to try six representative, or bellwether, cases first.
“To minimize costs and promote efficiency of such a sprawling case, the parties and the Industrial Commission agreed to adopt a ‘bellwether’ procedure,” the Supreme Court petition explained. “Under that procedure, Plaintiffs were able to present any evidence they had that Continental did indeed expose employees to asbestos — anywhere in the factory — in amounts that could cause an asbestos-related disease.”
“Normally, bellwether procedures make sense. They give plaintiffs the opportunity to put their best foot forward in trying to prove their theory. They also create a major cost-efficiency opportunity for a defendant,” the company’s lawyers wrote. “If the defendant defeats what the plaintiffs believe to be the strongest claims, then any remaining plaintiffs will not have a chance. On the other hand, if the plaintiffs prevail in a bellwether trial, then the parties know where they stand and can make better settlement and litigation decisions.”
After a 38-day trial of the bellwether cases, the Industrial Commission “determined that Plaintiffs had failed to present evidence of sufficient asbestos exposure to cause disease anywhere at Continental’s factory,” the petition explained. The state Appeals Court affirmed that decision.
“That should have ended the matter,” company lawyers argued. “However, a few remaining Plaintiffs asked the Industrial Commission to ignore the Court of Appeals and allow them to nevertheless pursue their claims.”
The Industrial Commission ruled against the remaining plaintiffs, but a different Appeals Court panel produced the Sept. 3 split decision allowing their cases to proceed.
“According to this second panel, the first panel should have limited its decision and allowed the additional Plaintiffs to present additional evidence — even though the Plaintiffs had signed a consent order stating that they had a full opportunity to present evidence on the issue of exposure,” the petition explained. “In reaching its conclusion, the second panel conflicted with several decisions from this [Supreme] Court and created new law in North Carolina.”
Continental Tire asked the state’s highest court to clarify the law. “Most importantly, review by this Court is necessary to protect North Carolina businesses from abuse of the bellwether procedure,” according to the petition. “When all parties agree to an efficient mechanism to adjudicate claims, the losing parties must abide by that procedure — even if the results are not what they want. Businesses in North Carolina should not be promised an efficient process only to lose the benefit of the agreed-upon procedure after they demonstrate that a group of plaintiffs have a meritless claim.”
The Funderburk case focused on a worker diagnosed with lung cancer in 2012 who died in 2013. His widow, Debra Gail Funderburk, has been pursuing the legal action for more than a decade.
“Our review of the record and transcript indicate neither the parties nor the Industrial Commission when consolidating these cases understood the Bellwether Cases to bind the Consolidated Plaintiffs such that dismissal of their cases would be appropriate if the claims of the Bellwether Plaintiffs were denied,” wrote Judge Toby Hampson last month for the Appeals Court majority.
“Defendant has not identified any statement in the Record, including the transcripts and the Commission’s orders during the pendency and resolution of the Bellwether Cases, that indicates the parties intended to be bound or that the Commission understood its decision to be binding,” he added. “The status of certain of the Consolidated Cases as bellwether cases did not lend them the special preclusive effect Defendant asserts.”
Hampson rejected the argument that the Appeals Court’s original 2019 ruling blocked the current lawsuits from moving forward.
“We acknowledge this Court’s decision in Hinson purported to treat all Consolidated Plaintiffs as appellants due to the Opinion and Award addressing ‘common issues,’” he wrote. “However, appeal from that decision of the Industrial Commission was only available to the five Bellwether Plaintiffs, and only those five appealed to this Court. We were without jurisdiction to decide issues applicable to other parties, including Plaintiff.”
The Funderburk case “is remanded to the Industrial Commission for further proceedings in which the Commission shall allow the parties to produce additional evidence as to their claims and defenses,” Hampson wrote. The other remaining plaintiffs faced similar rulings.
Judge April Wood joined Hampson’s opinion. Chief Judge Chris Dillon dissented.
“The Full Commission determined that, based on the ‘law of the case’ doctrine, Plaintiff is barred by our decision in Hinson to pursue any claim based on alleged exposure to asbestos a[t] the factory,” Dillon wrote. “The majority holds that Plaintiff is not barred by Hinson to pursue her claims.”
“I agree, however, with the Commission based on the reasoning below that our holding in Hinson bars Plaintiff’s claims for any asbestos-related diseases,” Dillon added. “Therefore, my vote is to affirm the Commission’s order dismissing Plaintiff’s claims.”
The Appeals Court’s 2019 ruling barred any future asbestos-related claims from the Continental Tire plaintiffs, Dillon explained.
“[T]he sentence in the main text should rightly be read as holding that asbestos levels at Defendant’s factory were not sufficient to cause or contribute to any asbestos-related disease alleged by any of the consolidated plaintiffs, including Plaintiff,” he wrote. “In sum, I conclude Hinson affirmed a determination that the consolidated Plaintiffs failed to meet their burden to show employment at the factory exposed anyone to asbestos sufficient to cause any asbestos-related disease.”
“It may be that the Commission orders reviewed by the Hinson panel could be interpreted more narrowly, as merely deciding that the consolidated plaintiffs failed to prove asbestos at Defendant’s factory could have caused certain specific diseases alleged by the bellwether plaintiffs, including asbestosis,” Dillon added. “However, none of the consolidated plaintiffs, including Plaintiff, appealed our decision in Hinson or sought our Court to clarify or modify that decision. Accordingly, our interpretation of the Commission’s bellwether orders in Hinson became the law of the case and, therefore, binding on all the consolidated plaintiffs.”
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