Cosmetic Talc Litigation Media Coverage 12/12/2016

Client Attorney Privileged/Attorney Work Product/At Request of Counsel

US Coverage

1. The 2 Very Different Types Of Cosmetic Talc Claims

   Dec 9, 2016 | Law 360

   By Stephen Hoke
   
   
   Despite the high-profile nature of cosmetic talc litigation, there is confusion among the legal and insurance communities about the nature of the underlying cases.

Client Attorney Privileged/Attorney Work Product/At Request of Counsel

US Coverage

1. The 2 Very Different Types Of Cosmetic Talc Claims

   Dec 9, 2016 | Law 360

   By Stephen Hoke

   Despite the high-profile nature of cosmetic talc litigation, there is confusion among the legal and insurance communities about the nature of the underlying cases. Are they a by-product of the asbestos litigation? Are they an entirely new category of product liability claim? And, how does the answer impact cosmetic talc defendants’ future liability and the availability of insurance?
   
   For now, cosmetic talc litigation is settling into two distinct paths: 1) cosmetic talc causing ovarian cancer; and 2) cosmetic talc causing mesothelioma. While attention has focused on recent notable ovarian cancer verdicts, cosmetic talc claims alleging mesothelioma quietly have the potential to become a nightmare scenario for certain defendants and their insurers if they become deep pockets in the ongoing asbestos wars as de facto substitutes for insolvent defendants.
   
   Background
   
   Hope by defendants and their insurers that the cosmetic talc litigation would die an early death is dwindling. Last month, Johnson & Johnson and other defendants suffered a third large jury verdict in St. Louis — $70 million to go with previous verdicts in the same jurisdiction of $72 million and $55 million — all three including substantial punitive damage components. Each of these claims alleged that cosmetic talc exposure caused ovarian cancer. Also, in October, a Los Angeles jury rendered an $18 mesothelioma verdict against a cosmetic talc defendant.
   
   Talc defendants did score an important win in September when a New Jersey trial court dismissed two ovarian cancer cases with prejudice after granting Johnson & Johnson and Imerys Talc’s motions to bar expert testimony after finding multiple deficiencies in the testimony of the plaintiffs’ experts.
   
   History of Talc Litigation
   
   Broadly speaking there are two types of talc: industrial talc which is used most frequently in rubber, plastic and ceramics; and cosmetic talc which is of a higher grade and is used in conjunction with direct human exposures such as cosmetics, pharmaceuticals and food additives.
   
   Cosmetic Talc Litigation — Ovarian Cancer
   
   Cases alleging injury from cosmetic talc are relatively new, as best exemplified by the recent high-profile Johnson & Johnson verdicts. These cases did not depend on asbestos contamination nor did they allege mesothelioma. Instead, they alleged that talc itself causes ovarian cancer. The ovarian cancer talc cases indeed represent an entirely new class of toxic product liability litigation. The approximately 14,000 new ovarian cancer diagnoses a year, in conjunction with the widespread use of talc in everyday products such as baby powder, renders these cases a serious threat to certain defendants and their insurers.
   
   Cosmetic Talc Cases Alleging Asbestos Contamination
   
   As if cosmetic talc defendants did not have enough to contemplate with ovarian cancer claims, they are also subject to another emerging class of claims that seek to hold them liable for mesothelioma and other asbestos-related diseases. These claims depend on allegations that the talc in their products was contaminated with asbestos.
   
   In 2010, after reports found that imported talc from South Korea and China contained asbestos, the U.S. Food and Drug Administration did extensive testing of everyday talc and talc-containing consumer products. The testing found no asbestos contamination, but the agency declined to give talc a complete bill of health, labeling its tests as “informative” and not conclusive, in part due to the fact it could not obtain talc from all of the talc suppliers from which it made sample requests.
   
   While mesothelioma claims are far more limited than ovarian cancer diagnoses (approximately 3,000 per annum), the defendant pool has been increasingly exhausted by asbestos-induced bankruptcies. And, the long-awaited decline in mesothelioma incidences has failed to emerge. The most recent actuarial estimates by Willis Towers Watson suggest that, far from being over, mesothelioma diagnoses and lawsuits actually may be on the verge of climbing for the foreseeable future.
   
   If these estimates are correct, the plaintiffs’ bar will be in search of additional solvent defendants to satisfy the potential liabilities. This makes the cosmetic talc defendants, mostly heretofore immune from asbestos liabilities, attractive targets. In fact, as the traditional industrial products asbestos defendants have gone bankrupt, the plaintiffs’ bar has had to make ever more tenuous proximate cause connections to meet their burden that their clients were exposed to a particular defendant’s product. Because cosmetic talc is so widely used in everyday consumer products, exposure may be relatively easy to establish. Thus, if cosmetic talc asbestos-contamination cases take hold, the primary proximate cause issue may become whether the defendant’s talc was contaminated with asbestos and not whether a plaintiff was exposed to a particular product.
   
   To meet this burden, plaintiffs are increasingly asserting that traditional tests for asbestos contamination are not rigorous enough to detect it at low levels, and that there are no safe levels of exposure. Even when a defendant has maintained samples of talc, there can still be expert disputes over whether or not they contain asbestos. These issues are likely to be resolved in the same forums that have been the mainstay of the asbestos litigation and, thus, should be a source of concern for cosmic talc defendants.
   
   The Depoian and Winkel Verdicts
   
   The risk of cosmetic talc defendants becoming targets in the traditional asbestos wars is evidenced by two recent verdicts in Los Angeles. On Oct. 19, 2016, a Los Angeles County jury returned an $18 million verdict for the plaintiff, Philip Depoian, finding Whittaker Clark & Daniels 30 percent responsible for his mesothelioma as a result of being exposed to a variety of cosmetic talc-containing products used at barbershops where his father worked. The jury apportioned the liability against Whittaker and several other cosmetic talc product defendants that had previously settled. The products involved included Old Spice, Clubman, Kings Men and Mennen Shave Talc.
   
   This is in addition to a $13 million verdict in April 2015 against Colgate-Palmolive in Los Angeles for mesothelioma contracted by Judith Winkel as a result of alleged exposure to baby powder talc used by the plaintiff (Law360, April 29, 2015). Colgate argued that its Cashmere Bouquet talcum powder was harmless and mischaracterized as containing asbestos fibers by plaintiff’s experts. One plaintiff-oriented website reported that the evidence showed that the talc was contaminated with up to 20 percent asbestos fiber, including amphibole. Colgate had argued unsuccessfully that the talc particles in question were “cleavage fragments,’’ or nonfibrous chunks unlikely to be inhaled or lodged in the lungs.
   
   Both juries found that the defendants acted with malice, but the cases were settled confidentially before the punitive damage phases of the respective trials. These cases are notable because they were rendered against cosmetic talc defendants for causing mesothelioma, not ovarian cancer. If this represents a trend, it should worry cosmetic talc defendants that sold personal care products that could be inhaled. To the extent that the plaintiffs’ bar can successfully meet their burden to show that the talc in question was contaminated with asbestos, it renders these cosmetic talc defendants vulnerable for asbestos liability writ large. It is easy to imagine a jury presuming exposure to an everyday product such as talcum powder caused mesothelioma when a lifelong office worker, such as Depoian, contracts mesothelioma with no personal history of substantial occupational exposure.
   
   Insurance Implications
   
   Like asbestos, talc claims are nearly all “long-tail” and are arguably indistinguishable on coverage issues such as allocation. If a cosmetic claim alleges asbestos contamination, it will be difficult to challenge long-standing asbestos trigger approaches. Ovarian cancer claims raise the possibility of a different trigger theory because the science of how talc might cause ovarian cancer is different from how asbestos inhalation damages the respiratory system. This could result in later trigger inception or trigger cessation dates. It also may call into question the continuous trigger that tends to predominate in regular asbestos coverage cases.
   
   Whether or not the applicable trigger approaches are in dispute, the relative ease by which a plaintiff can assert exposure to consumer products (e.g., for baby powder, theoretically from birth to present) suggests that, as long as the trigger theory is tied to exposure, the spread of potentially triggered years will be far wider for cosmetic talc cases than regular noncosmetic talc asbestos cases. However, triggering additional policy periods is not always a positive. To the extent a policyholder is in a jurisdiction which requires it to access all available years of insurance on a pro rata basis — including coverage with large self-insured retentions, deductibles and retro’s — more “insurance” could actually be a significant negative.
   
   With respect to asbestos exclusions, if a talc claim alleges only ovarian cancer and no asbestos contamination, they should not apply, raising the issue set forth in the prior paragraph. Conversely, if the claim involves asbestos-contaminated talc, the insurers will assert their exclusions. There are rare gray areas when a claim does not specifically assert asbestos contamination, but does allege mesothelioma. To the extent a claim alleges talc caused mesothelioma merely because of the allegedly similar mineral composition of asbestos and talc, the application of the exclusion is more questionable and may be a source of dispute.
   
   Additional analysis of talc-related insurance coverage issues including trigger of coverage, allocation, asbestos exclusions, fortuity, punitive damages, lost policies and choice of law can be found in “Insurance Coverage Implications of the J & J Talc Verdicts” (Law360 May 6, 2016).
   
   Conclusion
   
   The threat posed by claims that cosmetic talc causes ovarian cancer is well known by virtue of the large verdicts suffered by Johnson & Johnson, and will ultimately depend on whether the science is sound and if cases can be made in jurisdictions outside of St. Louis. However, cases alleging cosmetic talc is contaminated with asbestos ultimately may turn out to be the biggest danger to the defendants and their insurers. If these cases can be successfully made, it makes for an entirely new class of high-profile, financially solvent defendants available to fund settlements and verdicts for traditional mesothelioma diagnoses. It does not increase the number of claims to be filed, but it does redistribute responsibility to an entirely new class of defendants. It also is a convenient way to avoid difficulties in demonstrating exposure when there are not clearly responsible parties or they are insolvent. If the plaintiffs are successful, policyholders and insurers can be expected to aggressively seek ways to limit their respective exposure by testing new insurance theories and creatively repackaging old theories in order to limit their liabilities.
   

   Stephen Hoke is a partner in Hoke LLC’s Chicago office.

   http://www.law360.com/articles/870989/the-2-very-different-types-of-cosmetic-talc-claims
   

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