Ohio Reaffirms The Longstanding Principle of 'Last Injurious Exposure' Rule of Occupational Disease Claims

On April 3, 2008, the Supreme Court of Ohio re-affirmed the long-standing principle of “the last injurious exposure” rule in occupational disease claims and applied it to successor liability. Prior to this case, the rule was primarily used as a means to assign liability for long-latency occupational disease claims where an injured worker had been exposed to causative agents while working for multiple employers over the course of their careers. In State ex rel. Pilkington N. Am., Inc. v. Indus. Comm., the issue involved whether the claim should be assigned to a successor’s self-insured liability or to the predecessor’s state fund liability.

The claimant in Pilkington had been employed from 1947 through 1988 by Libbey Owens Ford. Libbey participated in the state insurance fund until 1970, when it was granted self-insured status. Pilkington N. America became a successor to Libbey’s self-insured risk sometime thereafter. In 2003, claimant was diagnosed with mesothelioma and an occupational disease claim was ultimately allowed by the Industrial Commission against Libbey’s self-insured risk pursuant to the last injurious exposure rule. Since Pilkington was the successor to Libbey’s self-insured risk, Pilkington was named the amenable employer.

Pilkington filed a writ of mandamus to challenge the risk assignment, and alleged that the Industrial Commission had abused its discretion in assigning workers’ compensation liability to it, as a self-insured entity, rather than to Libbey’s state fund risk. Pilkington argued that the last injurious exposure rule was limited to situations involving several employers in the context of the allowance of a claim. Pilkington based their argument on language in State ex. rel. Erieview Metal Treating Co. v. Indus. Comm. (2006), 109 Ohio St. 3d 147.

Ultimately, the Supreme Court of Ohio rejected this argument and reversed the decision of the Court of Appeals. The Supreme Court opined that Pilkington’s position, was based upon an incorrect reading of Erieview and stated, in dicta, that “Pilkington’s suggestion to deduct the average latency period from the year of diagnosis and assign liability to the employer that corresponds to that year is no more than a first-injurious-exposure rule, which we decline to adopt.” The Court conceded that the last injurious exposure rule is “less than perfect,” but opted for consistency in assigning liability under such circumstances.

The last injurious exposure rule is not limited solely to long-latency diseases. This case may be applied in all occupational disease claims, such as carpal tunnel syndrome, where an employee has had exposure to causative conditions through

multiple employers. Under such circumstances, the date of diagnosis and the date of documented symptoms are important factors in determining the amenable employer.

In today’s fast-paced world, corporate succession issues and transfer of risk regularly occur. Although the current BWC rules limit a successor’s opportunity to avoid liability on predecessor claims, a corporate purchaser may want to consider inclusion of indemnification language for such long-latency occupational disease cases where the liability is unknown at the time of the sale. Inclusion of such specific language in buy-sell agreements, combined with good due diligence, full investigation and disclosure, prior to finalization of any such sale might be of economic benefit to the purchaser. Without specific language in the transactional document, a purchaser would assume all risk of the predecessor entity, without question.

Should you wish to be provided with a copy of the opinion or want to discuss this or any other issue relating to workers’ compensation, please do not hesitate to contact one of our statewide Workers’ Compensation Practice Group Attorneys in Ohio and Kentucky.