Arkansas Estate’s Wrongful Death/Mesothelioma Case Barred by “Catch–22”

In a deeply divided decision, the Supreme Court of Arkansas recently held that a wrongful death action filed against a deceased worker’s employer was barred by the exclusive remedy provisions of the state’s Workers’ Compensation Act in spite of the fact that the Act provided no benefits at all for the worker’s asbestos-related disease, since it did not manifest itself until more than three years after the worker’s last injurious exposure [Hendrix v. Alcoa, Inc., 2016 Ark. 453, 2016 Ark. LEXIS 384 (Dec. 15, 2016)].

Quoting extensively from Larson’s Workers’ Compensation Law, the majority drew a distinction between an injury that did not come within the fundamental coverage provisions of the act, and an injury that was in itself covered, but for which, under the facts of the particular case, no compensation was actually payable. The majority stressed that the temporal limitation on recovery did not equate to the absence of a remedy under the Act. Three dissenting justices also quoted Larson. They argued that the exclusiveness defense was a part of the quid pro quo that the employer received for providing benefits and that it was unreasonable and unconstitutional to bar the wrongful death claim where no benefits could ever be provided to the injured worker.

Background

Hendrix worked for Alcoa for almost 30 years, retiring in 1995. In 2012, he received a mesothelioma diagnosis. Almost immediately, he sought workers’ compensation benefits, but an administrative law judge determined that his claim was was barred under the provisions of Ark. Code Ann. § 11–9–702(a)(2) (Repl. 2012). Essentially, the statute provides for disability benefits for silicosis or asbestosis conditions, provided the disablement occurs within three years from the date of the last injurious exposure.

Following Hendrix’ death, his estate initiated a wrongful death action against Alcoa. Alcoa moved to dismiss on exclusive remedy grounds and the circuit court agreed. On appeal, the estate contended the circuit court had jurisdiction to hear the wrongful death claim where the employee had no recovery under the Act, that Hendrix’s opportunity to obtain workers’ compensation benefits ceased before his claim ever accrued, and that the Act provided no remedy for Hendrix’s occupational disease because the disease manifested after the limitations period had expired.

The Majority’s Reasoning

The majority agreed with the estate that an employee (or estate) could bring suit against his or her employer when no remedy was available under the Act. The issue, said the majority, was whether whether Hendrix had a remedy pursuant to the Act. Quoting Larson [see current Ch. 100, § 100.05], the majority indicated that if the injury itself came within the coverage formula, an action for damages was barred even though the particular element of damage was not compensated. Citing Porocel Corp. v. Circuit Court of Saline County, 2013 Ark. 172, the majority observed that it had left open the question presented in the present case: whether the Act provided a remedy for an asbestos-related claim if the time of disablement did not occur within three years of the last injurious exposure.

Statute of Repose—Not a Statute of Limitation

Parsing words a bit, the majority stressed the difference between a statute of repose and a statute of limitation. While the latter are generally motivated by considerations of fairness to defendants and are intended to encourage prompt resolution of disputes by providing a simple procedural mechanism to dispose of stale claims, the former created a substantive right in those protected to be free from liability after a legislatively determined period of time. While there was substantial overlap between the two “statutes,” they were not identical. Here, said the majority, the estate had faced a statute of repose.

Like a Discharge in Bankruptcy—Really?

Reaching a bit, the court analogized the statute of repose to a discharge in bankruptcy, since a statute of repose could be said “to provide a fresh start or freedom from liability.” The majority added:

As Larson instructs, and consistent with our decision in Porocel, supra, the temporal limitation on recovery does not equate to the absence of a remedy under the Act.

Hollow Ring to Act’s Remedy

The majority concluded by acknowledging that the remedy afforded by the Act “certainly rings hollow under the facts of this case.” While the result was unfair, particularly when it was well known that the disease of mesothelioma has a long latency period, the majority added that the General Assembly had seen fit to create a statute of repose with only a three-year duration.

Dissenting Opinion—No Quid Pro Quo

Speaking for the three dissenting justices, Justice Danielson indicated that where the Act did not provide a remedy for a worker’s injury or death, the worker’s action was not barred by the exclusive remedy provision, that employers and employees struck a bargain or quid pro quo, and that what the state constitution had given, the legislature could not take away. Quoting Larson, Justice Danielson indicated that:

[I]t ought logically to follow that the employer should be spared damage liability only when compensation liability has actually been provided in its place, or, to state the matter from the employee’s point of view, rights of action for damages should not be deemed taken away except when something of value has been put in their place.
Larson, Ch. 100, § 100.04.

Since there was no quid pro quo, said Danielson, there could be no bar due to the exclusive remedy provisions of the Act. Every person was entitled to a certain remedy in the laws for all injuries or wrongs he or she might receive in his or her person, property or character. That had been denied by the majority, declared Justice Danielson.

Consistent With Recent Illinois Decision

Practitioners should note that this Arkansas decision is entirely consistent with a recent decision from Illinois, Folta v. Ferro Eng’g, 2015 IL 118070, 2015 Ill. LEXIS 1264 (Nov. 4, 2015)(see my earlier blog, and with decisions from other jurisdictions [see Larson, § 100.05[3][b]]. Blame the state legislatures—not the courts.