Keefe: Birth Defect Claims Not Blocked by WC Exclusive Remedy

Wednesday, March 14, 2018 | 0

We consider this article required reading for the insurance/claims industry.

Eugene Keefe

In a ruling with potentially far-reaching implications, two Illinois teenagers who claimed to have suffered life-long birth defects because of their fathers' workplace exposures to toxins are not blocked by the concept of their parents' “exclusive remedy” under Section 5 of the Illinois Workers' Compensation Act.

In short, the children can and will pursue a civil suit against their parents' employer, Motorola, for millions in damages.

I assume these sorts of claims will potentially bring billions in new liability exposure to U.S. employers, as birth defects are lifetime medical/physical problems, causing decades of misery. Juries are generally very amenable to finding causation and awarding box-car verdicts.

In these claims, the Appellate Court of Illinois ruled that workers' compensation was not the exclusive remedy for 18-year-old claimant Sarina Finzer and 17-year-old claimant Jeremy Hardison, because they were seeking damages for their own injuries, not their parents'. The decision reversed the Circuit Court of Cook County, which granted Motorola's motion to dismiss, following that legal concept.

Motorola successfully argued that because “the children’s injuries were … derivative of a work-related injury to their fathers’ reproductive systems,” they should be required to adjudicate their claims through the workers’ compensation system, as their fathers would have had to. But this argument ignored the fact the children weren’t employees of or otherwise paid by Motorola, and they were suing over their own injuries, not their fathers'.

“Because minor plaintiffs seek to recover not based on workplace injuries sustained by their employee-fathers, but for their own personal injuries, the exclusive remedy provisions of the Arizona and Texas workers’ compensation laws do not apply,” Justice Mary Anne Mason wrote for the unanimous three-judge Appellate Court panel.

In contrast, the circuit court reasoned that because the validity of the claims depended on the validity of their fathers’ claims, the workers’ compensation exclusivity provision applied to the teenagers’ claims as much as it would have to their fathers.

The Appellate Court found no basis for this legal argument. The ruling compared the claims to a personal injury lawsuit brought by a claimant named Woerth in 1984. Woerth was a Kentucky man who contracted hepatitis from his wife, a nurse who allegedly got it from work.

The Illinois court specifically noted that "[w]hile Woerth’s hepatitis may derive from his wife as a matter of proximate cause, his cause of action does not,” according to its reference to Ledeaux v. Motorola. “Because Woerth was not seeking relief relating to his wife’s injuries, his claim for his own injuries was not barred by the exclusive remedy provision.”

Finzer’s father worked at Motorola’s manufacturing plant in Mesa, Arizona, from 1997 to 1998. Finzer was born in April 1999 with a club foot.

Hardison’s father worked at Motorola’s manufacturing plant in Austin, Texas, from 1991 to 2001. Hardison was born in April 2000 with an underdeveloped jaw.

In 2010, alongside almost two dozen other plaintiffs, Finzer and Hardison filed a combined complaint against Motorola, claiming negligence, willful and wanton misconduct, abnormally dangerous activity and loss of child consortium. They alleged that their fathers sustained injuries to their reproductive systems as a result of exposure to toxic chemicals on the job.

They also alleged that Motorola knew that its “limited environmental and biological sampling” did not comply with federal occupational safety guidelines.

The lawsuit further alleged that “high-level corporate employees” knew reactions between the chemicals used during Motorola’s manufacturing process and machinery at the plants “dramatically increased and/or compounded the likelihood of resultant injury to workers and their unborn children.”

When the lawsuit arrived at the Appellate Court, it had to decide how Finzer's and Hardison’s claims compared to the concept of a “derivative claim,” or a claim that “would not exist in the absence of the injury to the employee.”

Common derivative claims include loss-of-consortium and wrongful death, which are generally resolved through the workers’ compensation system.

The Appellate Court ruling decided that the teenagers’ claims were not derivative, because they were claims for “injuries personal to them that exist apart from, and regardless of, a work-related injury sustained by their parent.”

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted, with permission, from the firm's client newsletter.