Toxic Time Trick: A Trap for the Unwary Applicant’s Attorney

By Raphael Metzger, Esq.

The statute of limitations for the occupational disease case is a trap for applicant’s attorneys and third party counsel.

The statute of limitations on the workers’ compensation claim is one year, Labor Code § 5405, as is the limitations period on the third party toxic tort case.  C.C.P. § 340(3).  However, the fact that the limitations periods for the different claims are both one year is misleading and a trap for the unwary injured worker and his attorney.

One problem in determining when the statute of limitations runs arises because of the difficulty of determining when occupational diseases -- which typically have a lengthy latency period and insidious onset – occur.  A second problem arises because the year is not counted the same for both cases.

The statute of limitations on the workers’ compensation claim for an occupational disease begins to run on the latest of the following dates: (1) the date of injury; (2) the expiration of the period covered by the last payment of disability indemnity (monetary compensation for either temporary disability or permanent disability); or (3) the date of the last furnishing of medical, surgical, or hospital treatment.  Labor Code § 5405; Colonial Insurance Co. v. Industrial Accident Commission (1945) 27 Cal.2d 437, 441, 164 P.2d 490.

The date of injury for an occupational disease is the date on which the employee first suffered disability and “either knew, or in the exercise of reasonable diligence should have known’ that such disability was caused by his present or prior employment.”  Labor Code § 5412.  “Disability” has been defined as actual incapacity to perform the tasks usually encountered in one’s employment, and wage loss therefrom.  Perry v. Workers’ Compensation Appeals Board (1977) 66 Cal.App.3d 887, 890, 136 Cal.Rptr. 309, 310.

Thus, for all practical purposes, in most cases, the statute of limitations on a workers’ compensation claim for an occupational disease will begin to run when the worker becomes disabled from employment and therefore loses wages.  This is when the worker typically feels both entitled and inclined to file a workers’ compensation claim.  This rule is consistent with the public policy of allowing workers to work as long as they are able without impairing their rights to obtaining compensation for work-related injuries when they become disabling.

A much different rule applies in the context of the third party toxic tort case for an occupational disease.

The California Supreme Court has not specifically ruled when a third party cause of action for an occupational disease accrues, i.e., when the one-year limitations period begins to run.  (This issue is presently pending in a case before the Court of Appeal for the Second Appellate District).

“Under California law, a cause of action accrues and the limitation period commences ‘upon the occurrence of the last element essential to the cause of action.’”  California Sansome Co. v. U.S. Gypsum (9th Cir. 1995) 55 F.3d 1402, 1406, quoting, City of San Diego v. U.S. Gypsum (1994) 30 Cal.App.4th 575, 582, 35 Cal.Rptr.2d 876, 881; CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536, 282 Cal.Rptr. 80, 85 [The discovery rule assumes that all conditions of accrual of the action exist, but postpones commencement of the limitation period until “the plaintiff discovers or should have discovered all facts essential to his cause of action . . . .” (emphasis added)]

In Bockrath v. Aldrich Chemical Co. (1999) 21 Cal.4th 71, 86 Cal.Rptr.2d 846, the Supreme Court established special pleading requirements for the element of causation in third party occupational disease cases: (1) Plaintiff must allege that he was exposed to each of the toxic materials claimed to have caused a specific illness; (2) He must identify each product that allegedly caused the injury;(3) He must allege that as a result of the exposure, the toxins entered his body; (4) He must allege that he suffers from a specific illness, and that each toxin that entered his body was a substantial factor in bringing about, prolonging, or aggravating that illness;  (5) Finally, he must allege that each toxin he absorbed was manufactured or supplied by a named defendant.  Id., 21 Cal.4th at 80 (emphasis added).  (See, also, 42 U.S.C. § 9658, which preempts the accrual of state statutes of limitations in toxic substance cases by mandating that toxic injury claims accrue no earlier than the date on which the plaintiff knew or reasonably should have known that the injury or damage was caused by a particular hazardous substance.  Angeles Chemical Co. v. Spencer & Jones (1996) 44 Cal.App.4th 112, 123, 51 Cal.Rptr.2d 594).

Thus, according to Bockrath, a third party cause of action for an occupational disease should first accrue when the plaintiff learns that he has a “specific illness” and identifies the “toxin(s)” that caused that specific illness.  A contrary conclusion would result in the anomalous situation that the statute of limitations on the claim would expire before it accrues!  However, no California court to date has interpreted Bockrath to so hold.

In the absence of any appellate decision applying the Bockrath pleading requirements as an accrual rule, courts often continue to apply the delayed discovery rule of Jolly v. Eli Lilly (1988) 44 Cal.3d 1103, 245 Cal.Rptr. 658.  Under Jolly, the statute of limitations is tolled until the plaintiff suffers appreciable injury, knows the cause of his injury, and suspects wrongdoing.  However, in Norgart v. The Upjohn Company (1999) 21 Cal.4th 383, 87 Cal.Rptr.2d 453, the Court held that the limitations period is only tolled until the plaintiff should suspect his injury, its cause, and wrongdoing by someone.

There are two major difficulties with applying the Jolly rule in occupational disease cases. 
First, applying Jolly in such cases presents counsel with an unascertainable date on which the statute of limitations begins to run, because it is difficult if not impossible to determine when an injured worker should suspect the cause of his disease and wrongdoing.

Second, by not requiring a diagnosis of a “specific illness” and ascertainment of the causative “toxins,” application of the Jolly rule would bar many third party occupational disease cases before they could even be filed according to Bockrath. Obviously, such a result is inequitable, because it would either require injured workers and their third party counsel (1) to file their cases before they could allege the Bockrath causation elements (which the Bockrath court deemed a “harsh practice” worthy of sanctions and would probably result in the sustaining of a demurrer without leave to amend), or (2) wait until the Bockrath causation elements can be properly alleged (as required by the Supreme Court in Bockrath), in which case the action would be barred by the statute of limitations according to Jolly and Norgart.

Thus, the difference between the limitations periods in the two types of cases can have drastic consequences for the injured worker.  If Applicant’s counsel does not refer the case to third party counsel until the worker becomes disabled and the statute of limitations commences on the workers’ compensation claim, the third party case may often be deemed time-barred under Jolly and Norgart.

Therefore, until the Supreme Court determines when a cause of action on a third party occupational disease case accrues, Applicant’s counsel would be well-advised to refer occupational disease cases to third party counsel as soon as counsel recognizes that the worker may have an occupational disease.

Raphael Metzger, is the principal of the Metzger Law Group, a Professional Law Corporation, which specializes in third party occupational disease cases.