Plaintiff’s Second Disease Claim Dismissed Due to Prior Settlement and Release

Plaintiff’s Second Disease Claim Dismissed Due to Prior Settlement and ReleaseU.S. Court of Appeals for the Third Circuit, December 16, 2016.

Plaintiff James Collier filed suit against defendant CSX Transportation, Inc. in 2015 after a diagnosis of lung cancer, allegedly arising from his exposure to asbestos while working for railroad company CSX in the 1960s and 70s. Collier had settled an earlier 1994 action against CSX relating to injuries after suffering from asbestosis allegedly caused by exposure to asbestos during his employment. In exchange for that settlement, Collier released CSX for all future claims based on exposure to a number of different contaminants, including claims for cancer arising out of his exposure to asbestos. CSX predictably filed a motion to dismiss pursuant to Rule 12(b)(6) pointing to the 1994 release agreement and order dismissing the prior case. The District Court granted CSX’s motion and Collier appealed.

On the appeal, Collier argued that the release agreement does not bar this action because (1) under § 5 of the Federal Employers’ Liability Act (FELA), all contracts that “enable any common carrier to exempt itself from any liability” created by that act are to that extent void, and (2) the Supreme Court decision Norfolk & W. Ry. Co. v. Ayers, 538 U.S. 135, 123 S.Ct. 1210 (2003), dealing with claims arising from railroad workers’ exposure to asbestos precludes CSX’s reliance on the release as a defense. Specifically, Collier argued the Supreme Court in Ayers recognized that asbestos related cancer was separate from non-malignant asbestos-related diseases. Therefore, he argued that a settlement for exposure to asbestosis could not validly cover claims for asbestos-related cancer.

CSX argued that the Ayers decision was irrelevant to the current matter as it did not mention § 5 of FELA but rather addressed whether employees who developed asbestosis from exposure to asbestos while working for a railroad can recover “pain and suffering” damages under the FELA because of their fear of developing cancer. The court agreed, finding that the Ayers court did not discuss § 5 and elaborated how its holding comported with the law in jurisdictions that followed the separate disease rule, under which most courts have held that the statute of limitations runs separately for each asbestos-related disease — an issue entirely unrelated to that the present case. [Citation Omitted].

The court further emphasized that the party attacking the enforceability of a release agreement bears the burden of proof. In the current case, Collier did not meet this burden. The undisputed documents show that the “known risks” standard had been satisfied and the release agreement is enforceable. The release including the monetary payment was given to settle the prior lawsuit. In that prior 1994 action, Collier sued in part for issues arising out of asbestos exposure. It was clear that when Collier filed suit in 1994 based on his exposure to asbestos among other contaminants, he demonstrated knowledge that he had been exposed to asbestos.

In holding that this claim was barred, this Appeals Court reasoned that, on consideration of a motion to dismiss, a court may consider unquestionably authentic exhibits in determining whether a plaintiff plausibly would be entitled to relief. The facts of this case illustrated that Collier sued CSX based on his exposure to asbestos and settled that claim by executing a release that specifically released any claim for cancer that might arise from his work-related exposure to asbestos. Moreover, he could not plausibly claim that he did not know that cancer was a risk of asbestos exposure, and it would be implausible to conclude that he did not know of his exposure to asbestos when he settled his prior asbestos-related case. Therefore, the District Court properly dismissed this case.

Read the full decision here.