USING THE BANKRUPTCY CODE TO FIGHT TOXIC EXPOSURE IN WORKERS COMPENSATION
By Ross A. Bridges, VBM Attorney
Article written August 26, 2021
I wanted to take a moment to provide a recent story from a case I have as it relates to the new, enhanced benefits for toxic exposure under the Missouri Workers' Compensation Act. As you may know, the Missouri Workers' Compensation Statutes were amended in 2014 to allow for an enhanced benefit if an employee sustained an occupational injury due to exposure to certain toxic chemicals. Those chemicals and conditions are listed in the statute and the enhanced benefit is limited to those chemicals and conditions. The most widely known is asbestos or mesothelioma, which is caused by asbestos exposure.
The enhanced benefit can be quite costly in excess of $500,000.00. The enhanced benefit is also in addition to the traditional benefits for occupational disease under the statute. Even though the new statute didn’t’ exist until 2014, the Missouri courts, have concluded that Employers and Insurers are liable for the enhanced benefit even if the employee was exposed many years before 2014. Therefore, if an employee sustains injury due to exposure to these toxic chemicals which happened many years in the past, Employers and Insurers will have exposure at the time that the employee is made aware that they have sustained an injury due to that exposure.
In a recent case that I have, we had an employer who used asbestos-containing materials in its manufacturing before the dangers of asbestos were widely known. This company hired a particular employee to begin work in 1965. This employee continued to work at this facility until the employee died 2019 from mesothelioma. The company, however, stopped using asbestos-containing materials in the late '70s. The company then went into bankruptcy in 1989 and sold all of its assets to a new company. The
claimant's attorney attempted to argue that the new company inherited the liability of the old company when it continued to employ this particular employee.
Knowing that the Missouri workers' compensation system is often overly friendly to injured employees, we recommended to our client that they pursue an action in the bankruptcy courts to enforce the previous bankruptcy order from 1989.
We filed a motion in the bankruptcy court to reopen the bankruptcy from October 1989. The bankruptcy court ultimately held that its bankruptcy order foreclosed all liabilities or claims whatsoever as they existed in 1989 to include any claim of toxic exposure by its employees, even if the employees were not yet aware they had been exposed. The bankruptcy court held that the estate of the deceased employee was forbidden from pursuing a Missouri workers’ compensation claim under any theory that the employee’s claim arose before the bankruptcy order.
Of course, there is still the last exposure rule in Missouri. If the injured employee can prove that they were continually exposed even after bankruptcy, then the new employer may still have liability under the last exposure rule. However, since the dangers of asbestos have been widely known since the mid 1970’s, it is much less likely than any such exposure continues to the present day.
Therefore, you may consider looking into whether any of your employers with a pending toxic exposure claim were the same employer when the injured employee was exposed to the toxic chemicals. If not, you may want to look for any evidence of a bankruptcy at any point in the past. The bankruptcy court is a federal court, and federal law and court orders trump any state law or court. Furthermore, if you obtain an order from the bankruptcy court, and the claimant’s attorney continues pursuit of the work comp claim in violation of the bankruptcy order, you can return to bankruptcy court and seek an order of sanctions and attorney’s fees for the claimant’s violation of the bankruptcy order.
If we can assist you or provide counsel in any toxic exposure case in the Missouri workers' compensation system, do not hesitate to contact our office.
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