New Jersey court rules Spanish citizens can sue over ship asbestos

May 28, 2008

A New Jersey state appeals court ruled Tuesday that fifteen Spanish citizens can sue over claims of health issues related to asbestos exposure while working aboard United States Navy and Coast Guard ships docked at United States-Spanish military installations. The defendant, Ohio-based company Owens Illinois, Inc., had sought a trial in a Spanish court, an opinion which was shared by the Superior Court that had heard the case earlier. The three-judge panel appellate court overturned the decision of the Superior Court in a 3-0 ruling.

The Spanish citizens worked aboard U.S. ships between 1950 and 1998, and claim that they were exposed to asbestos dust and fibers from piping insulation produced by Owens-Illinois. The piping insulation was originally manufactured in Sayreville, Middlesex County, and Berlin, Camden County, New Jersey. The workers say they suffer from diseases related to asbestos such as asbestosis. Owens-Illinois has headquarters in Toledo, Ohio and is a Delaware corporation.

The New Jersey appellate panel ruled that the Superior Court judge did not consider where the plaintiffs wanted their case heard, and also held that the U.S. ships are considered U.S. territory and thus the workers' claimed health issues did not begin on Spanish land. Attorneys for Owens-Illinois argued that U.S. ships, when docked, are subject to the law of Spain, and so the case should be heard in Spanish courts.

The court's opinion, written by Judge Anthony Parrillo, explained the ruling: "In sum, we conclude that defendant has failed to carry its burden to demonstrate that Spain is an available adequate forum to adjudicate the parties' dispute and therefore the motion to dismiss on forum non conveniens grounds should have been denied without consideration of public- and private-interest factors." The decision reversed the ruling of the Superior Court and remanded the suit back to that court for trial.

"I find it difficult to understand how an appellate division court can countenance keeping the cases in New Jersey when there is absolutely no relation to New Jersey. There is barely any relationship to the United States of America. They've made their decision," said counsel for Owens-Illinois, John Garde, in a statement in The Star-Ledger. No decision has yet been made on whether the company will appeal the ruling.

Mitchell S. Cohen, attorney for the Spanish workers, said that the Superior Court judge should have considered that the New Jersey court was the only location where the lawsuit could have been tried before dismissing the case. "Spanish law will not allow, under the facts of these cases, to file a claim in Spain," said Cohen to the Associated Press. Cohen said that Spanish law states that a case cannot be filed in Spain because the alleged injuries occurred on U.S. territory.

This is not the only asbestos-related lawsuit in which Owens-Illinois is cited as a defendant. The company is also a defendant (among other defendants) in asbestos cases filed in Ohio and other states. In an April 30 press release the company reported that asbestos-related payments had decreased slightly, stating: "Asbestos-related cash payments during the first quarter of 2008 were $40.2 million, down slightly from $41.0 million during the first quarter of 2007." According to the press release, the company had 14,000 pending asbestos-related lawsuits as of March 31, 2008. In its balance sheet for the first quarter of 2008, the company reported US$835 million in asbestos-related liabilities.

In a May 2 earnings call with financial analysts, Owens-Illinois Chief Financial Officer Edward C. White addressed asbestos-related expenses. "Only a small portion of our first quarter asbestos payments related to the company's proactive legal strategy to reduce risk and accelerate asbestos resolution on favorable terms. Nevertheless, this strategy continues and additional expected spending is reflected both on the current liability portion of our balance sheet as well as in our full-year cash flow projection," said White. "We exited the business 50 years ago and have been dealing with the legal issues for almost 30 years. For OI, this remains a limited declining liability, which we will continue to manage in a conscientious and responsible manner."

Asbestosis is a disease resulting from asbestos exposure which causes lung scarring and can lead to lung cancer. Exposure to asbestos can also lead to a more serious condition known as mesothelioma. Mesothelioma is a cancer which develops in the sac surrounding the lungs and chest cavity, abdominal cavity, or the sac surrounding the heart. Patients with malignant mesothelioma generally do not have positive outcomes, and once diagnosed typically have six months to a year to live.