On September 1, 2021, the South Carolina Court of Appeals affirmed the circuit court's decision in the matter of Jolly v. General Electric, et al. in which it had (1) denied defendants' motion for a JNOV, (2) granted a new trial nisi additur, and (3) denied motions to quash subpoenas requiring defendants' corporate representatives to appear and testify at trial. The appeal was brought by two defendants, Fisher Controls International, LLC and Crosby Valve, LLC (hereinafter "Defendants") who had received an adverse verdict following trial in July 2017. Most notably, the circuit court had granted the Plaintiffs' motion for a new trial nisi additur and increased the total jury verdict from $300,000 to $1.87 million. This article examines several holdings in the Jolly opinion which present future implications for asbestos litigation in South Carolina, particularly with regard to the causation standard, the sophisticated intermediary doctrine, additur, and the setoff of verdicts.
In Jolly v. General Electric, et al., Plaintiffs alleged that Dale Jolly developed mesothelioma as the result of exposure to asbestos while working as a mechanical inspector for Duke Power Company in the 1980s. The case proceeded to trial against two valve manufacturers-Fisher Controls and Crosby. Plaintiffs alleged Mr. Jolly was exposed to asbestos while working in close proximity to other workers who were removing and replacing asbestos gaskets on the flanges of valves manufactured by Defendants.
At trial, the jury returned a verdict of $200,000 in actual damages to Mr. Jolly for his negligence and breach of warranty claims, and $100,000 in actual damages to Mr. Jolly's wife, Brenda Jolly, for her loss of consortium claim. The circuit court granted the Jollys' motion for a new trial nisi additur and increased Mr. Jolly's damages award to $1,580,000 and Mrs. Jolly's award to $290,000. The circuit court also granted, in part, Defendants' motion for a setoff of Mr. and Mrs. Jolly's pre-trial settlement proceeds against the increased verdicts for the Jollys, but did not allow setoff of a one-third portion of the proceeds which the Jollys had apportioned to future potential claims. Defendants filed for a Judgment Notwithstanding Verdict (JNOV), questioning the jury's conclusions in several aspects. The circuit court denied the motion for JNOV, and Defendants appealed. The South Carolina Court of Appeals affirmed the circuit court's ruling in all respects.
"Cumulative Dose" Evidence Can Be Considered To Determine Causation
The Court first addressed the Appellants' argument that there was no reliable evidence to demonstrate that Mr. Jolly's exposure to their valves was a "substantial factor" in causing his mesothelioma. Under South Carolina law, to demonstrate causation in an asbestos case, a plaintiff must present evidence of exposure to a defendant's "specific product on a regular basis over some extended period of time in proximity to where the defendant actually worked."1 Defendants contended that the Jollys failed to meet this burden because their expert witnesses unreliably relied on an "each and every exposure" theory of causation, which states that each and every breath of asbestos fibers is substantially causative of mesothelioma.
The Court found that the testimony given by the Jollys' experts did not espouse the "each and every exposure" theory, but instead represented a "cumulative dose" theory, which reasons that "all exposures contribute to the cumulative dose that causes disease." Defendants argued that the distinction between these two theories is artificial, and that the cumulative dose theory is also incompatible with the substantial factor standard required for causation. The Court disagreed, finding that cumulative dose testimony was permissible as "helpful background information essential for the jury's understanding of medical causation." The Court further opined that South Carolina allows for "multiple substantial causes" that "may combine and cooperate to produce the resulting harm to the plaintiff."
The Sophisticated Intermediary and Open and Obvious Defenses Rejected
The Court also rejected Defendants' arguments that the Jollys failed to meet their burden of proof on their failure-to-warn claims because (1) Defendants were protected by the sophisticated intermediary doctrine, and (2) the danger of asbestos gaskets was open and obvious. Under the sophisticated intermediary doctrine, a manufacturer of a product has no duty to warn of dangers inherent in a product if the product is distributed to a learned intermediary or sophisticated user. In this case, Defendants distributed their valves to Mr. Jolly's employer, Duke Power Company. The Court affirmed the circuit court's conclusion that Duke was not a sophisticated intermediary in this instance because there was testimony that while Duke was aware of the hazards of asbestos insulation, it believed asbestos gaskets to be harmless at the time of Mr. Jolly's employment. The Court also declined to disturb the jury's finding that the danger of asbestos gaskets was not "open and obvious," applying similar reasoning-at the time of Mr. Jolly's employment, the dangers of asbestos gaskets were not known to Mr. Jolly or his employer. Notably, with respect to the sophisticated intermediary doctrine, the Court held that the defense requires that a defendant demonstrate they "actually relied" on the intermediary to convey a warning. Because there was evidence from Defendants' corporate representatives that the Companies did not consider asbestos gaskets to present a health hazard at the time, it was reasonable for a jury to determine Defendants did not "actually rely" on Duke to convey a warning.
Defendants also challenged the lower court's decision to grant the Jollys a new trial nisi additur and significantly increase the verdict amount, arguing that the circuit court based its ruling on speculation and did not articulate compelling reasons for increasing damages. The Court wholly rejected this argument and affirmed the increased award. The Court noted that it will give "due deference to the circuit court's exercise of discretion" to grant a new trial nisi additur. In this case, it was reasonable for the circuit court to determine that the "jury's award of only $200,000 was not sufficient to make Dale whole for the magnitude of his losses." The ruling signals that the South Carolina Court of Appeals is unlikely to disturb a lower court's grant of a motion for a new trial nisi additur except in the rare circumstance where it finds the decision "wholly unsupported by the evidence."
Setoffs Holding Affirmed
Defendants also challenged the circuit court's refusal to apply setoffs for a portion of the settlement funds received in the case that Plaintiff's counsel had allocated to "future losses." South Carolina law requires that before entering judgment on a jury verdict, the court must reduce the amount of the verdict to account for any funds previously paid by a settling defendant, so long as the settlement funds were paid to compensate the same plaintiff on a claim for the same injury. Prior to trial, the Jollys had received $2,270,000 in settlement proceeds from co-defendants. The Jollys allocated one-third of these proceeds to Mr. Jolly's claims, one-third to Mrs. Jolly's loss of consortium claims, and one-third to "the release of future claims, including wrongful death." Defendants argued that the circuit court erred by excluding the one-third portion allocated to future claims from the setoff of the verdict. Defendants argued that this allocation was inappropriate because any future wrongful death claim against settling defendants would be barred as a matter of law.
The Court disagreed with the Appellants' assertion that if a settling defendant obtains a release of a personal injury claim, it cannot also obtain a release of any future wrongful death claim. The Court also rejected the argument that the amount that the Jollys allocated to a future wrongful death claim compensated them for the same injuries at issue in their present lawsuit, as wrongful death and survival actions are different claims for different injuries under South Carolina law. Finally, the Court found that the circuit court's refusal to allow a setoff of the settlement proceeds allocated to future claims did not result in a double recovery for the Jollys.
Several aspects of this decision will have future implications for asbestos litigation in South Carolina. The Court's acceptance of the "cumulative dose" theory of causation allows plaintiff's experts to testify that every exposure to asbestos contributes to the development of mesothelioma, and may ultimately make it easier for plaintiffs to meet their burden of proving causation in cases. Further, the Court's rulings requiring evidence of actual reliance and actual knowledge regarding the communication of warnings with respect to the dangers associated with specific components, rather than dangers of asbestos generally, demonstrate the uphill battle defendants face when asserting these defenses in South Carolina. Finally, the Court's affirmation of the lower court's additur award and setoffs holding signals that the Court of Appeals will give much deference to the circuit court and is disinclined to disturb these rulings in the absence of an obvious abuse of discretion.
This case is Beverly Dale Jolly and Brenda Rice Jolly v. General Electric Company, et al., Appellate Case No. 2017-002611.
1 Henderson v. Allied Signal, Inc., 373 S.C. 179, 185 (2007).
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