Rothstein v. Tennessee Gas Pipeline Co. 87 N.Y.2d 90 (November 30, 1995).

TOXIC TORTS - DISCOVERY OF INJURY - STATUTE OF LIMITATIONS

REASONABLE DISCOVERY RULE APPLIES TO INJURIES NOT DISCOVERED PRIOR TO 1986

[SUMMARY] | [ISSUE & DISPOSITION] | [AUTHORITIES CITED] | [COMMENTARY]

SUMMARY

Plaintiff's decedent was given thorium dioxide, or Thorotrast in 1948. Doctors discovered a malignant tumor on his liver in 1988 immediately before his death. His wife sued Defendants, the manufacturers of the dye, alleging negligence, strict products liability, wrongful death and breach of warranty. The complaint asserted that her husband's cancer was caused by ingestion of the dye.

Supreme Court dismissed the complaint as time-barred, concluding that CPLR 214-c's reasonable discovery rule only applies to situations in which both exposure and discovery occurred after 1986. The Appellate Division reversed with two Justices dissenting, and reinstated all of Plaintiff's causes of action except for the breach of warranty claim.

ANALYSIS

ISSUE

Whether the reasonable discovery rule of CPLR 214-c applies when actual exposure occurred prior to 1986 and discovery occurred after 1986. The Appellate Divisions certified the following question to the court: "Was the opinion and order of this Court dated October 3, 1994, properly made?" The decision in question reversed the Supreme Court's dismissal of the complaint.

DISPOSITION

Order affirmed, with costs, and certified question answered in the affirmative.

CASES CITED

• Consorti v. Owens-Corning Fiberglass, slip op., (Oct. 24, 1995).
• Snyder v. Town Insulation, Inc., 81 N.Y.2d 429 (N.Y. 1993).
• Thornton v. Roosevelt Hosp, 47 N.Y.2d 780 (N.Y. 1979).
• Rocovich v. Consolidated Edison Co., 78 N.Y.2d 509 (N.Y. 1991).
• Hymowitz v. Lilly & Co., 73 N.Y.2d 487 (N.Y.), cert. denied, 493 U.S. 944 (1989).
• Alonzo M. v. New York City Dep't of Probation, 72 N.Y.2d 662 (N.Y. 1988).
• Thomas v. Bethlehem Steel Corp., 63 N.Y.2d 150 (N.Y. 1984).
• Schmidt v. Merchants Despatch Transp. Co., 270 N.Y. 287 (N.Y. 1936).
• Prego v. City of New York, 541 N.Y.S.2d 995 (N.Y. 1989).

OTHER SOURCES CITED

By the court

• N.Y. Civ. Prac. L. & R. 214[5].
• N.Y. Civ. Prac. L. & R. 214-c.
• N.Y. Civ. Prac. L. & R. 3211(a)(5).
• 1986 N.Y. Laws ch. 682, § 4.
• Governor's Mem. approving L. 1986, ch. 682, 1986 N.Y. Legis Ann. 288.
• McKinney's Statutes §§ 96, 98 (1971).
• McLaughlin, Practice Commentary to CPLR 214-c, § C214-c:6, at 636 (McKinney 1990 & Supp. 1996).
• Siegel, New York Practice § 40, at 48 (2d ed. 1991).
• 1 Weinstein-Korn-Miller, New York CPLR § 214-c.06, at 2-497 (1970).

Related Sources

• Rothstein v. Tennessee Gas Co., 616 N.Y.S.2d 902 (N.Y. App. Div. 1994).
• Haase v. Sawicki, 121 N.W.2d 876 (Wis. 1963).
• Robert F. Blomquist, American Toxic Tort Law: An Historical Background, 1979-87, 10 Pace Envtl. L. Rev. 85 (Fall 1992).
• Micheal Dore, Law of Toxic Torts (1987).
• Micheal D. Green, The Paradox of Statutes of Limitations in Toxic Substance Litigation, 76 Cal. L. Rev. 965 (1988).
• Alfred R. Light, New Federalism, Old Due Process, and Retroactive Revival: Constitutional Problems with CERCLA's Amendment of State Law, 40 Kan. L. Rev. 365 (1992).
• 2 James T. O'Reily, Toxic Torts Practice Guide (2d. ed. 1995).
• Bill Shaw et al., The Discovery Rule: Fairness in Toxic Tort Statutes of Limitations, 33 Clev. St. L. Rev. 491 (1984-85).
• Toby M. Tonaki, Note, Latent Disease and Toxic Torts in Hawaii: An Analysis of the Statute of Limitations, the Rule Against Splitting Causes of Action and Nonidentification Theories of Liability, 15 U. Haw. L. Rev. 137 (1993).
• Note, The Fairness and Constitutionality of Statutes of Limitations for Toxic Tort Suits, 96 Harv. L. Rev. 1683 (1983).

COMMENTARY

1.Court's Reasoning

A. Prior state of the law in New York

Before 1986, New York law held that "a cause of action for personal injuries caused by a toxic or other harmful substance accrued upon exposure to the substance without regard to the date on which the injury was discovered." In 1986 the Legislature enacted CPLR 214-c which adopted a discovery rule for "determining the accrual date of a cause of action based on the latent effects of exposure to any substance." Simultaneously, the Legislature passed a statute, 1986 N.Y. Laws ch. 682, § 4, which revived actions based on exposure to five specified substances for a period of one year if the action had been time-barred as of July 30, 1986 (the effective date of the statute) or had been dismissed solely because the statute of limitations had expired.

In a 1989 DES case (one of the five substances listed in ch. 682,), the Court determined that CPLR 214-c instituted a discovery rule for future application. Hymowitz v. Lilly & Co., 73 N.Y.2d 487, 514 (N.Y.), cert. denied, 493 U.S. 944 (1989). However, "the Hymowitz Court was not squarely faced with the issue of whether CPLR 214-c revives certain causes of action not included within the scope of the simultaneously enacted revival statute." Rothstein v. Tennessee Gas Co., 616 N.Y.S.2d 902, 907 (N.Y. App. Div. 1994).

B. Majority

The Court begins by reciting the history of toxic tort cases in New York and the longstanding rule that the statute of limitations runs from the time of exposure and not from the discovery of the injury's harmful effect. The Court then notes that the Legislature enacted chapter 682 of the Laws of 1986 to remedy the inequity of the exposure-based rule, especially in cases involving toxic torts, by creating a discovery-based rule.

In its statutory analysis the Court finds that CPLR 214-c and the revival statute, 1986 N.Y. Laws ch. 682, § 4, are interlocking, but distinct, provisions that should be read to serve the legislative intent of aiding victims of toxic torts. Under the court's construction, CPLR 214-c serves two different purposes: (1), "as a transition measure for situations in which discovery pre-dated the effective date but the injury had occurred fewer than three years before that date, allowing those claims to proceed . . . (2) as a prospective accrual mechanism . . . allowing individuals who allegedly discover or reasonably should have discovered toxic-tort related injuries on or after the effective date."

Most importantly, the court notes that the Legislature in no way limited CPLR 214-c to transition cases only. In contrast, the revival statute was enacted to cover claims dealing with the five specified chemicals already barred or dismissed before or on the effective date. The revival provision "applies to a class of cases separate from the more comprehensive range of those within the remedial purview and sweep of CPLR 214-c".

Therefore, because 214-c is not limited to transitional cases and is related to but distinct from ch. 682, § 4, 12, 214-c is applicable where the tort was committed before the effective date but "the injury or manifestation was not discovered until afterwards."

The court specifically rejects Defendants' attempt to apply Thomas v. Bethlehem Steel Corp., 63 N.Y.2d 150 (1984), to this case. That case dealt with a legislative creation of a six-month grace period in which employees who had suffered hearing losses could introduce their claims. There the court found that since the Legislature had not clearly stated an intent to apply the amendment retroactively, it should not be read as doing so. The Rothstein Court states that Thomas involved a different statutory scheme with a different history, and the analogy fails in the face of the specific statutory analysis in this case.

2. Dissent

None.

3. Survey of the Law in Other Jurisdictions

KANSAS: "Kansas follows the majority rule of the states and prevents the retroactive revival of claims barred by the applicable state statute of limitations. Indeed, the legislature's own attempt to revive barred claims in latent disease cases has been held invalid under Kansas law." Alfred R. Light, New Federalism, Old Due Process, and Retroactive Revival: Constitutional Problems with CERCLA's amendment of State Law, 40 Kan. L. Rev. 365, 367 (1992). Kansas is, however, one of the states that has adopted a discovery rule. Id.

WISCONSIN: Wisconsin bars revival under the case of Haase v. Sawicki, 121 N.W.2d 876, 878-79 (Wis. 1963). There the court found that a retroactive extension of a statute of limitations in wrongful death actions violated due process and was therefore unconstitutional.

The following states have adopted a discovery rule by statute (see, Bill Shaw et al., The Discovery Rule: Fairness in Toxic Tort Statutes of Limitations, 33 Clev. St. L. Rev. 491, 494-95 (1984-85)):

• Alabama, Ala. Code § 6-5-502 (1984).
• Connecticut, Conn. Gen. Stat. § 52-584 (1994).
• Kansas, Kan. Stat. Ann. § 60-513(b) (1983).
• North Carolina, N.C. Gen Stat. § 1-15 (1983).
• Ohio, Ohio Rev. Code Ann. § 2305.10 (Anderson 1995).
• South Carolina, S.C. Code Ann. § 15-3-535 (Law Co-op Supp. 1983).
• Vermont, Vt. Stat. Ann. tit. 12, § 518(a) (1973).

The following states have adopted a discovery rule by judicial decision (see, Bill Shaw et al., The Discovery Rule: Fairness in Toxic Tort Statutes of Limitations, 33 Clev. St. L. Rev. 491, 494-95 (1984-85)):

• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Delaware
• Florida
• Hawaii
• Illinois
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Montana
• Nebraska
• New Hampshire
• Oregon
• Pennsylvania
• Tennessee
• Washington
• West Virginia
• Wyoming

The following states have found the revival of barred claims to violate state constitutional process (see Alfred R. Light, New Federalism, Old Due Process, and Retroactive Revival: Constitutional Problems with CERCLA's Amendment of State Law, 40 Kan. L. Rev. 365, 392 (1992)):

• Arkansas
• Delaware
• Florida
• Illinois
• Kentucky
• Louisiana
• Maine
• Maryland
• Nebraska
• North Carolina
• Virginia
• Wisconsin

For further readings on specific states see:

• CALIFORNIA: Craig S. Bloomgarden et al., How Does California Handle Toxic Torts? in 2 James T. O'Reily, Toxic Torts Practice Guide (2d. ed. 1995).
• FLORIDA: Donald E. Henke, How Does Florida Handle Toxic Torts? in 2 James T. O'Reily, Toxic Torts Practice Guide (2d. ed. 1995).
• HAWAII: Toby M. Tonaki, Note, Latent Disease and Toxic Torts in Hawaii: An Analysis of the Statute of Limitations, the Rule Against Splitting Causes of Action and Nonidentification Theories of Liability, 15 U. Haw. L. Rev. 137 (1993).
• NEW JERSEY: Charles J. Walsh & Steven R. Rowlane, How Does New Jersey Handle Toxic Torts? in 2 James T. O'Reily, Toxic Torts Practice Guide (2d. ed. 1995).
• TEXAS: Ann McNaughton Turner & Robert B. Walls, How Does Texas Handle Toxic Torts? in 2 James T. O'Reily, Toxic Torts Practice Guide (2d. ed. 1995).

4. Unanswered Questions

The Court consciously limited its holding by emphasizing its precise nature in "noting the CPLR 3211 procedural stage of this matter and the fact that no implications or inferences are appropriate at this stage concerning causation with respect to a 1948 ingestion of an allegedly dangerous product with a facially asserted 1988 injury." What is unclear is how far the court may extend revival beyond the statutory substances. Whether the holding is also limited to Thorotrast, as a toxic substance, is also unclear; but the court's language and broad interpretation of the statute to effect its "core and overriding purpose" makes such a limitation unlikely.

5. Implications

The Court may have effectively increased the potential amount of toxic tort litigation. By allowing CPLR 214-c to apply retroactively to substances not enumerated in ch. 682, § 4, the threat of suit for countless number of companies has increased dramatically. Regardless, such claims are limited in number, so any increase should eventually subside.

The Court's recognition of the time / causation factor makes it clear that although these other claims may now be viable in New York, the traditional legal hurdles remain. This additional constraint will limit the amount of litigation that may be brought in the next few years.

Prepared By:

• Richard J. Colosimo, 97
• Reese E. Solberg, 97