Illinois Supreme Court Slams Door on Long-Tail Toxic Tort Claims Against Employers

We previously wrote about the potential new risks facing employers’ liability insurers in light of recent case law from Pennsylvania and Illinois permitting employees to maintain long-tail occupational disease claims against former employers in the tort system, outside of the traditionally exclusive workers compensation regimes. For now, employers and their insurers can breathe a sigh of relief, at least in Illinois.

On November 4, 2015, the Illinois Supreme Court reversed an Illinois intermediate appellate court which had permitted an employee’s estate to sue his former employer in the tort system. Folta v. Ferro Eng’g, 2015 IL 118070 (Ill. Nov. 4, 2015). That employee, James Folta, worked for Ferro Engineering from 1966 to 1970 as a shipping clerk and product tester, and allegedly developed mesothelioma in part as a result of his exposure to asbestos-containing products at Ferro. The intermediate appellate court held that the identical exclusivity provisions in the Illinois Workers’ Occupational Disease Act and the Workers’ Compensation Act (collectively, the “Act”) did not bar Folta’s tort claim against Ferro because he first discovered his asbestos-related injury outside of the Act’s statute of repose. Folta v. Ferro Engineering, 14 N.E.3d 717 (Ill. App. Ct. 1st Dist. 2014).

In reversing the appellate court, the Illinois Supreme Court held that Folta’s tort claim against Ferro was barred by the exclusive remedy provisions of the Act even though Folta had no rights under the Act because his injuries manifested after the 25-year statutory time limits to file claims. Under Illinois law, “an employee can escape the exclusivity provisions of the Act if the employee establishes that the injury (1) was not accidental; (2) did not arise from his employment; (3) was not received during the course of employment; or (4) was not compensable under the Act.”  Id. at *14. In Folta, the plaintiff argued – and the intermediate appellate court accepted – that his claim was “not compensable” because his disease manifested outside of the Act’s statutory time limits to file a claim. In other words, plaintiff argued that “he never had an opportunity to recover any benefits under the Act. That is, through no fault of his own, the claim was time-barred before his disease manifested.” Id. at *16. On the other hand, the employer argued that an injury was “compensable” if the type of injury fell within the scope of the Act, regardless of whether an employee could recover thereunder.

The Folta court agreed with the employer, explaining that the legislatively-enacted time limit acts as a “statute of repose, and creates an absolute bar on the right to bring a claim.” Id. at *33. Further, the Folta court explained that such a statute of repose was not manifestly unfair because the time limitation did “not prevent an employee from seeking a remedy against other third parties for an injury or disease.” In dissent, however, Justice Freeman heralded Pennsylvania’s “persuasive” Tooey decision, which permitted employees to sue their former employers in tort for long-tail occupational disease injuries.

It remains to be seen whether other jurisdictions will follow the Pennsylvania or Illinois approach but, for now, employers and their employers’ liability insurers should continue to be prepared to address these potential newfound liabilities.