Indoor Air Quality Claims

[Guest guest]

Mealey's Litigation Report: Emerging Toxic Torts

October 6, 1999

The Transformation Of Indoor Air Quality Claims From Predictable Risk To

Expanding Uncertainty

By M. Governo

I. Introduction

The genesis of the IAQ liability revolution is clear. As the American

population becomes more sensitized to health issues in general, its

awareness of indoor air quality concerns is heightened as well. Add to this

a litigious society that is witnessing large awards for previously unheard

of claims - such as those against gun and cigarette manufacturers - and the

result is a climate ripe for new forms of IAQ litigation.

Indoor air quality litigation is undergoing a revolution that exposes

countless new business people and their insurers to unexpected liability.

From Y2K computer litigation to employment discrimination complaints, novel

types of claims are transforming a dangerous, yet generally predictable

risk, into an environment of uncertainty. No longer are " sick building "

cases filed only against building owners, managers or landlords. No longer

are these claims exclusively centered on breach of warranty or constructive

eviction. Now, indoor air quality (IAQ) problems are spawning

technologically and scientifically complex claims based on creative theories

of liability that raise issues far beyond the design, construction and

operation of buildings. Potential defendants can reduce the risk these novel

IAQ claims pose by understanding their direction and taking appropriate

precautions.

As underlying claims transform so do claims for insurance coverage. New

insurance coverage issues are being raised and coverage is expanding, as has

just occurred in California. Courts are starting to spread the risk by

expanding the scope of coverage of traditionally-worded commercial general

liability ( " CGL " ) policies. Insurers, from underwriters to loss control

professionals to claims representatives, can improve their performance by

anticipating the direction of these claims.

II. IAQ's Essential Elements

Over the past several years, there have been developments in each of the

essential elements of indoor air quality claims:

Liability: Traditional theories of negligence are being expanded to include

claims for discrimination that can overcome the workers' compensation bar.

Sources: New sources of potential harm such as molds, fungi, carbonless copy

paper, and ozone generators are being identified. Even candle soot is being

implicated.

Routes of Exposure: The definition of adequate ventilation is being examined

and new standards have been proposed for residential buildings.

Medicine: Injury and disease are increasingly being attributed to indoor

air-related causes.

Whether the location is a home, school, or office building, indoor air

quality problems are a lot like other problems: the more you look, the more

you find. The Environmental Protection Agency estimates that of the 4.5

million office and public buildings in the United States, thirty percent

have problems with indoor air quality. This means that more than 100 million

Americans are exposed to indoor air of poor quality. Given the number of

potential claimants, the cost of remediation and the risk of developing

life-threatening disease, the legal issues raised by indoor air quality pose

both public health and liability and insurance concerns.

Several types of IAQ claims are typical of the changing nature of this

litigation: (1) the technologically-based claims resulting from Year 2000

computer glitches, (2) employment discrimination claims based on an

employer's response to an IAQ problem, and (3) claims based on novel toxic

sources of exposure, such as a class action filed over lead in candle wicks.

III. Y2K Claims

Media pronouncements on the Y2K problem warn that on January 1, 2000 we

should have flashlights, bottled water and cash available. People claim that

they will not ride an elevator on that date. Why would we need alternative

means of water, light, money and egress? We may require them because some

computer microchips are expected to malfunction when asked to recognize the

year 2000. Thus, not only could a building's elevators, lighting, security,

fire detectors, and telecommunications fail, but the HVAC system could

malfunction as well. If the HVAC system malfunctions, those harmed will seek

to hold the building owners, managers and engineers liable for not

correcting the Y2K problem prior to the glitch. Moreover, the HVAC system

may represent the tip of the iceberg with respect to potential sources of

Y2K-related indoor air quality claims. Subsidiary components that could go

awry include boilers, chillers, filters, thermostats, leak detectors,

underground storage tank monitors, generators and smoke detectors.

Computer-based preventive maintenance programs are at risk as well.

To avoid Y2K liability, a building owner, manager, landlord or other

potential defendant should perform a Y2K audit that includes a review of all

embedded systems and attendant software. In addition, a contingency plan

should be in place in the event of unanticipated problems.

IV. Employment Discrimination Claims

An employer's response to an employee's health problem is a delicate matter

at any time, but even more so when the potential cause of the problem is

related to the work itself. Employment discrimination claims are rising,

with IAQ concerns adding another potential source of liability. For example,

employees at the Ohio Department of Administrative Services complained that

indoor air pollution made them sick. As a result, they were transferred to a

satellite office. When one worker refused the transfer, he was terminated.

He filed a discrimination suit claiming that his employer had not made a

" reasonable accommodation " to adapt the work environment to his handicap and

that only " sick building handicapped " employees were assigned to the

satellite office, thus discriminating against that group of handicapped

persons.

The trial court ruled that the employer had made a reasonable attempt to

accommodate the plaintiff's handicap and that the employer did not

discriminate against that group of employees. This decision was upheld on

appeal with a finding that the employer had a reasonable justification for

discriminating against the employees: to protect their health. ez v.

Ohio Dept. of Admin. Services, 1997 Ohio App. Lexis 894 (Ct. of Appeals,

10th Dist.). If the employer had not taken extraordinary steps to respond to

its employees' complaints, the result would likely have been a finding of

discrimination and an award of damages.

V. Lead In Candle Wicks

Media reports about potential health hazards are becoming as ubiquitous as

the potential health hazards themselves. Products and practices previously

thought to be safe are now being linked to both common and rare health

problems. For example, our firm is defending an indoor air quality case in

which an attorney alleges she is permanently partially blind from excessive

amounts of dust and low humidity in a high rise office building. For months,

those involved in the candle manufacturing and indoor air quality arenas

have been hearing about excessive candle soot from fragranced candles. The

most recent progression of these concerns into the legal arena has related

to candle wicks that contain lead.

A proposed national class action has been filed in Dallas, Texas, against

the Gap and its supplier of candles with lead-containing wicks. The wicks in

these candles allegedly contain lead and antimony, another toxic metal, and

emit poisonous gases when they are burned. The complaint alleges breach of

implied warranty for marketing, selling and distributing a defective and

unsafe product. It seeks damages for the purchase of the candles, as well as

injunctive relief. The class action petition refers to the enhanced

bio-availability of lead that is inhaled rather than ingested. Mealey's

Emerging Toxic Torts, September 22, 1999, 8:12:12-15.

Given the ubiquity of lead in the environment and the fact that every person

in the United States has some lead burden in his or her body, it is not

irrational to think that personal injury claims from lead in candle wicks

will not be far behind. Children, for whom lead exposure can be a major

problem, are sympathetic plaintiffs. Moreover, with the recent focus on

toxic tort and other legal transgressions against children as a group, there

appears to be plenty of interest within the plaintiffs' bar. One only has to

look at the EPA's recent banning of two long-used pesticides as an

indication of the heightened awareness of childhood exposures. The EPA, for

the first time, used a model based upon the pesticides' potential effect on

children to decide against their continued use. Groups such as Greenpeace

and the Environmental Defense Fund have publicized concerns over childhood

issues, including endocrine disruption due to common plasticizers, to which

children are potentially at risk. The American Public Heath Association has

recently addressed the issue of childhood exposure to mercury. Life-saving

vaccines containing small amounts of mercury as a preservative have been

implicated as potentially causing adverse health effects.

VI. Expansion of Insurance Coverage

On August 30, 1999, the California Supreme Court issued a decision that

affects all CGL policies implicated in claims in that jurisdiction.

Vandenberg v. Superior Court (No. SO67115 CA) concerned underground waste

oil storage tanks which had leaked, thereby causing pollution. The property

owners sued the lessee who had installed and operated the tanks. The lessees

had obtained CGL insurance coverage from several insurers over the years.

The significance of this decision is that the court held that damages which

can be considered " property damage " are covered by CGL policies even where

the cause of action lies in breach of contract and not tort, and regardless

of how the language in these policies traditionally has been interpreted.

VII. Conclusion

The spectre of indoor air quality liability is now a reality even for those

only marginally associated with buildings. Risk of claims has spread beyond

the traditional targets. Insurance products that were developed to handle

traditional claims will be stretched to try to cover these previously

unheard of claims. But even those building owners, managers, contractors,

designers and maintenance professionals who expect to face IAQ claims now

need to prepare for new types of claims. The uniqueness of each building and

the varying demands of the occupants challenge those responsible for

preventing IAQ problems. As liability expands, it is critically important

that all participants in the process protect themselves from claims by

anticipating their sources and by reviewing their insurance programs.

Contact Mealey Publications Inc. at 1-800-MEALEYS or visit our website at:

http://www.mealeys.com

EDITOR-NOTE:

[Editor's Note: Mr. Governo represents defendants as National Coordinating

Counsel and trial counsel in asbestos, lead, silica, indoor air quality,

occupational toxic tort, and complex products liability cases. Mr. Governo

has a national reputation as a leader in the fields of toxic and mass torts.

In 1992, he organized and chaired the first national litigation conference

on lead poisoning, Mealey's National Lead Litigation Conference. Mr. Governo

is a member of numerous Bar associations, the Editorial Board of Indoor

Environment Connections, The American Public Health Association, the Steel

Structures Painting Council, ASTM committees, and the Editorial Board of

Lead Detection and Abatement Contractor. In 1996, he co-authored a textbook

titled Toxic Torts: Law and Science Manual. Mr. Governo has also co-authored

the Toxic Tort and Medicine Internet Directory, published by the Defense

Research Institute (1999), an on-line version of which can be found at

www.litigationforum.com. Mr. Governo is a partner at Governo and Kavanagh

LLP in Boston. His e-mail address is dgoverno@.... Copyright 1999 by

the author.]