Supreme Court of Pennsylvania, Eastern District, Issues Opinion on 2 Critical Questions in Roverano v. John Crane, Inc & Brand Insulations, Inc.

February 19, 2020Insight

On February 19, 2020, The Supreme Court of Pennsylvania, Eastern district, issued its opinion in Roverano v. John Crane, Inc. and Brand Insulations, Inc. on two critical questions: 1. the applicability of the Pennsylvania Fair Share Act, 42 Pa.C.S. Section 7102, to strict liability asbestos cases pending in the Commonwealth’s courts; and 2. Inclusion of bankrupt entities on the verdict sheet for purposes of liability only.

Justice Mundy, writing for the majority, opined, “[T]he Act’s plain language is consistent with per capita apportionment in asbestos cases, the Act does not specifically preempt Pennsylvania common law favoring per capital apportionment, and percentage apportionment in asbestos cases is impossible of execution.”  Thus, reversing and remanding the Superior Court’s order.

Importantly, Justice Mundy wrote that the court concludes, “[T]hat upon appropriate requests and proofs, bankruptcy trusts that are either joined as third-party defendants or that have entered into a release with the plaintiff may be included on the verdict sheet for purposes of liability only.”

The practical effect of this significant decision is that all products for which liability is found by a jury are considered similar in fault and in their impact on the plaintiff’s disease, regardless of their unique properties and uses. Furthermore, there will now be joinders of any potentially in-play bankruptcy trusts to pending cases in order to have a per capita “share” of liability allocated to each such trust, thereby increasing the number of entities on a verdict sheet.

A reality in Pennsylvania asbestos litigation is that many plaintiffs do not file their bankruptcy trust applications and claims until after their underlying civil lawsuit is resolved, either via settlement, trial and/or dismissal.  Absent enactment of a statutory requirement by the Pennsylvania legislature requiring plaintiffs to file with bankruptcy trusts, as currently exists in many other jurisdictions, including neighboring West Virginia, the onus will now be on defendants to join the bankrupt entity in the underlying civil action. The impact of the regular bankruptcy stay and protection for newly filed bankruptcies will likely prevent that action for certain companies. However, entities who have since departed bankruptcy stays and protection and have established trusts for payment of asbestos liabilities, should be eligible for joinder.