Third Party Toxic Tort Cases: What Every Applicant Attorney Should Know

by Raphael Metzger

1.         Introduction

There are tough times for applicants’ attorneys.  Since workers’ benefits (and consequently their attorneys’ fees) have been drastically reduced under Governor Schwarzenegger’s administration,  applicants’ attorneys would be well-advised to supplement their income during these tough times by identifying viable third party cases and either litigating or referring such cases out.  Most applicants’ attorneys are fairly good at identifying viable medical malpractice, wrongful discharge, employment discrimination cases, and construction injury third party cases, but fail miserably in identifying third party toxic injury cases.  These cases can be quite valuable, often running into high six and seven figures.  This article will provide an introduction to toxic injury third party cases and help applicants’ attorneys identify such cases to benefit their clients and themselves.

In 1976 Congress published a report titled “Chemical Dangers in the Workplace.” This report noted that the National Institute for Occupational Safety and Health estimated that 390,000 new cases of occupational disease occur each year and that 100,000 Americans die from occupationally caused illness and disease every year.  The report commented that this figure may be a low estimate because of the great numbers of cases which are not recognized as having an occupational cause.  The report also observed that the National Cancer Institute estimated that 60 to 70 percent of all cancers are environmentally caused and that the Institute’s “cancer map” shows that the production and use of industrial chemicals has produced striking geographic concentrations of cancer deaths in the U.S. 

Every one of the several hundred thousand American workers who develop chemically-induced occupational diseases each year has not only a viable workers’ compensation claim, but also a potential third party toxic injury case.  Although you may be unaware of it, you probably have some such clients now and have probably always had such clients.  About 4 out of every 10 Americans develop cancer.  If 60-70% of all cancers are environmentally related, a substantial proportion of workers who develop cancer get it from chemical exposures on the job.

2.         Identifying The Toxic Injury Case

A toxic injury case is a type of third party case.  It is brought on behalf of a worker who has developed an occupational disease as a result of chemical exposure on the job.  A toxic injury case is essentially a products liability case in which the defective product is the chemical or chemicals that caused the worker's occupational disease rather than a machine, tool or device.  The case is typically brought against the manufacturers and/or distributors of the injury-causing chemicals, but may also be brought against manufacturers/distributors of machines that dispensed the toxic chemicals.

The one company that is usually not sued in toxic injury cases is the employer.  Except in extremely rare cases (e.g., where the employer failed to secure workers’ compensation coverage), the employer is immune from suit pursuant to the workers’ compensation exclusivity doctrine.

The best known toxic injury cases are caused by asbestos: mesothelioma, lung cancer, and asbestosis.  Several law firms have specialized in litigating only asbestos injury cases.  But there are many other toxic injury cases, because virtually all chemicals are toxic and cause some type of toxic injury or disease.  Other examples of prime toxic injury cases are benzene-leukemia cases and vinyl chloride-angiosarcoma of the liver cases.

Most diseases which do not have an infectious etiology can be caused by chemical exposure.  So, how can you tell whether your client has an occupational disease and hence a potential toxic injury case, or whether the client’s disease is idiopathic (of unknown cause)?  Unless you have the time and inclination to become an occupational medicine physician or toxicologist, you can’t.  But what you can do is to identify possible cases and refer your clients to occupational medicine physicians for evaluation of toxic injury claims and to toxic tort attorneys for third party evaluation.

Every time you meet with a new client, ask the client about his or her general health.  While you may be seeing the client because of a traumatic injury at work, by asking generally about the client’s health, you may find out that the client has been diagnosed with leukemia, or lung disease, or kidney cancer, or bladder cancer, or multiple sclerosis, or non-Hodgkin’s lymphoma, or any other serious disease which may be caused by occupational exposure to toxic chemicals.

If your client has such a disease and was exposed to chemicals on the job, arrange for the client to be examined by an occupational medicine physician and refer the client to a toxic tort specialist for a third party evaluation.  Don’t wait to refer the client to a toxic tort specialist until after pursuing a workers’ compensation claim for toxic injuries.  If you wait to make the third party referral, you run the risk that the third party case will become time-barred.  In such a situation, the least of your worries would be that you lost a potentially huge referral fee; you could be sued for legal malpractice for failing to make a referral to a third party specialist.

3.         How Valuable is the Toxic Injury Case Compared to the Workers’ Comp Claim?

While monetary recovery is limited in workers’ compensation (and has been even further limited by recent legislation), monetary recovery in the third party case can be substantial.  Unlike the meager benefits available as workers’ compensation, injured workers have the potential of recovering substantial verdicts and settlements in their third party cases.  Damages for pain and suffering are available and juries often render verdicts in seven figures for such noneconomic damages.  In extraordinary cases, punitive damages may also be recoverable.  Of course, workers who prove their cases to the satisfaction of juries are also entitled to past and future medical expenses, as well as past and future lost wages or lost earning capacity.  It is therefore not surprising that meritorious third party toxic injury cases often settle in six and seven figures.

Not all toxic injury cases are worth seven figures.  A worker's damages are reduced by his own proportionate fault and that of his employer.  If the worker got leukemia from occupational exposure to benzene, but most of his benzene exposure came from smoking cigarettes, the worker would only be entitled to that percentage of his damages attributable to the percentage of his occupational benzene exposure.  However, in practice juries these days rarely find in favor of a worker whose cancer can be attributed even in part to smoking, alcohol, or recreational drugs.  Equally problematic is the case of the worker whose occupational disease was primarily caused by an employer’s gross negligence.  In such cases, the worker may, however, have a meritorious serious and wilful claim in workers’ compensation.  Regarding S&W claims, if the worker has a decent third party case, you should not file a S&W claim against the employer, because it can be introduced as evidence against the worker in the third party case.  If the jury’s verdict is for the plaintiff for $1 million, but the jury finds that the employer was 95% at fault for causing the worker’s injuries, the worker only recovers $50,000.  So carefully consider whether you should file that S&W claim!

Since so many workers suffer from occupational diseases, and toxic injury cases can result in large settlements and verdicts, why haven’t you heard all that much about these cases?  With the exception of asbestos-related disease, few law firms litigate such cases on a third party basis, for several reasons.  The cases are extremely complex and difficult, primarily because the third party attorney must not only prove that the defendant was negligent or sold a defective chemical product, but that exposure to the chemical actually caused the worker’s disease.  It can be very difficult to prove that a worker’s cancer occurring thirty or more years after occupational exposure to a chemical was caused by that chemical.   Proving causation in toxic injury cases can also be very costly.  Costs in these cases typically run into six figures.  Why?  Many experts are necessary: a pathologist (to accurately diagnose the disease), a toxicologist (to explain the toxic effects of the chemical), an industrial hygienist (to quantify the worker’s exposure to the chemical), a chemical engineer (to establish that the chemical is a defective product), an epidemiologist (to testify that workers exposed to the chemical develop the disease the plaintiff has at a significantly greater rate than those not exposed), an occupational medicine physician or medical toxicologist (to opine that exposure to the chemical caused the worker’s disease based upon all the evidence and by ruling out alternative causes), a life care planner (to determine the cost of the worker’s medical care), and an economist (to determine lost wages, lost home services, and to reduce the future losses to present value).  Given the difficulty of proving the case, the specialized knowledge of science and medicine required, the problem of employer and worker comparative fault, and the huge costs of bringing the case, few firms choose to litigate toxic injury cases (except for asbestos cases).  For these reasons, don’t expect the usual one-third referral fee for such cases.  Most firms that litigate toxic injury cases will pay referral fees between 15% and 25% after deduction of costs.

4.         Symbiotic Working Relationship Between Applicant’s and Toxic Injury Counsel

A competent toxic tort attorney will work cooperatively with you to achieve the best result for the client.  The relationship among counsel may best be described as “symbiotic.”  The applicant’s attorney refers toxic injury cases to the toxic tort attorney for third party evaluation, satisfying his duty of due care under Nichols. (See footnote 4).

When an occupational disease case is identified, the applicant’s attorney and third party counsel should cooperate in litigating the cases for the benefit of the client.   The third party attorney evaluates the case reports to the applicant’s attorney on the viability of the third party case.   The applicant’s attorney can arrange to have the worker examined by a qualified medical examiner on a lien basis, reducing cost to the worker and the third party attorney.  The third party attorney can arrange and pay for diagnostic tests that may not be provided for by workers’ compensation.  The applicant’s attorney may be able to obtain medical treatment and disability benefits for the worker to keep the worker from going under during the pendency of the third party case.  The applicant’s attorney can obtain an order allowing inspection of the workplace before the third party case is filed and with greater ease than can the toxic injury attorney in the third party case.  The third party attorney will typically pay for an expert industrial hygienist to inspect the workplace.  The applicant’s attorney can encourage medical providers to file liens in the workers’ compensation case. Doing so benefits the client in two respects.  First, applying the Gregory and Thomas cases, these liens can be reduced to a small fraction of their face value in the workers’ compensation case.  Second, once the providers file their liens in the workers’ compensation case, they can’t assert the liens against the client’s recovery in the third party case, where the client could have to pay the full amount of the liens.  The toxic tort attorney, who has expertise in litigating toxic injury claims can, and should, assist applicant’s counsel by deposing the defense medical examiner in the comp case and by proving industrial causation if the comp case proceeds to trial.  The applicant’s attorney can negotiate waiver of the employer’s subrogation rights to prevent the employer from filing a lien on the third party case.  Likewise, the third party attorney can help negate a credit on the comp case by assisting applicant’s counsel in proving employer fault, after the third party case is concluded when employer fault is no longer an issue.  Finally, the applicant’s attorney can provide the toxic injury attorney with a stream of business, for which the toxic injury attorney will provide applicant’s counsel referral fees to supplement counsel’s fees in these tough times.

This article was first published in the October 2005 issue of “CAAAments: The Voice of the California Applicants’ Attorneys Association,” at pp. 30-31.

Raphael Metzger is the principal of the Metzger Law Group, a Long Beach firm specializing in third party toxic injury cases.  His firm handles all types of occupational toxic injury cases except asbestos cases.   It has obtained many recoveries in seven figures for clients in toxic injury cases, mostly for benzene-induced leukemias and non-asbestos occupational lung diseases.