By Jenna Marie Stupar on April 1, 2016
This March, the Indiana Supreme Court ruled that Section 2 of its Statute of Repose (Ind. Code § 34-20-3-1) was unconstitutional as applied to asbestos claims. The Court held the statutory provisions at issue violated the Equal Privileges and Immunities Clause in the Indiana Constitution. Thus, it is no longer a viable defense for defendants in these cases. This decision was arguably a change of course, as the Court previously ruled in AlliedSignal v. Ott (785 N.E.2d 1068 (Ind. 2003)) that certain plaintiffs’ claims were barred under the statute.
Indiana’s Statute of Repose is divided in two relevant sections: Section 1 applies to product liability causes of action generally, and Section 2 applies to certain asbestos injury claims. Significantly, Section 2 gives plaintiffs more time to file claims. However, Section 2(b) contains somewhat limiting language, stating that it applies only to defendants who mined and sold commercial asbestos. The scope of that language was directly at issue in Ott.
The Ott Court found the limiting language barred many plaintiffs from bringing their claims under the less stringent time requirements of Section 2. The Court interpreted the limiting language to mean that Section 2 applied only to defendants who both mined and sold commercial asbestos. Additionally, the Court interpreted “commercial” asbestos to “refer to either ‘raw’ or processed asbestos that is incorporated into other products.” It concluded, “[t]he legislature did not intend [Section 2] to apply to [those] defendants” who merely sold asbestos-containing products. As a result, most plaintiffs’ claims under the Ott ruling were subject to Section 1’s more rigid timing.
The Ott Court examined the constitutionality of the statute, as interpreted above, and determined the statute was constitutional because asbestos plaintiffs whose claims did not fall under Section 2 were treated the same as all other products liability plaintiffs, while those whose claims did fall under Section 2 fared better.
This March, the Indiana Supreme Court issued a new decision addressing the statute of repose in asbestos cases. In Myers et al., the Court held that the statute of repose violated the state’s Equal Privileges and Immunities Clause. As such, it was unconstitutional. At the crux of the Court’s decision was its determination that the Statute of Repose created an unequal distinction among asbestos victims: on one hand, asbestos victims who had been exposed through defendants who mined and sold commercial asbestos could sue under the more lenient Section 2, and on the other hand, asbestos victims who had not been exposed by such a class of defendants could sue only under the more rigid Section 1. The Court determined that this inequality among asbestos plaintiffs violated the Equal Privileges and Immunities Clause. Further, because the Section contained a non-severability clause, the entire Section was void.
Finally, the Court ruled that, because Section 2 was void, all asbestos plaintiffs’ claims fall under Section 1 of the statute. Therefore, the Court determined that a 1989 case, Covalt v. Carey Canada, Inc., 543 N.E.2d 382 (Ind. 1989), which ruled on whether asbestos claims were barred by Section 1, became the controlling law once again. Under Covalt, the Statute of Repose “does not apply to cases involving protracted exposure to an inherently dangerous foreign substance,” including asbestos litigation. This means plaintiffs’ claims are not subject to Indiana’s 10-year statute of repose.
The ruling in Myers et al. potentially opens up Indiana courts to more asbestos claims. Moreover, this ruling may influence other jurisdictions, as more courts are ruling on statute of repose issues as they relate to asbestos litigation. It is important for defendants to be aware of these decisions and their impact on available defense strategies as this area of the law develops.