Business & Insurance Litigation Newsletter for Indiana

Statute of Repose May Now Bar Asbestos Claims

Recent decisions of the Indiana Supreme Court will dramatically impact asbestos litigation in Indiana by allowing manufacturers and distributors of products which contain asbestos to invoke Indiana's ten-year statute of repose. Black v. AC&S, Inc., 785 N.E.2d 1084 (Ind. 2003), and Allied Signal v. Ott, 785 N.E.2d 1068 (Ind. 2003).

By way of background, Indiana's Product Liability Act is divided into two sections. Section One applies to product actions in general, and Section Two governs asbestos-related product actions. The general product section establishes a ten-year statute of repose. The statute of repose bars any claims not filed within ten years of delivery of the product to the initial user. I.C. §34-20-3-1. Section Two, which governs "asbestos-related actions," eliminates the statute of repose in asbestos actions. However, Section Two applies only to "product liability actions against persons who mined and sold commercial asbestos."

Over the years, defendants have argued that this phrase includes only defendants that both mined and sold asbestos in bulk commercial form, and that companies that merely incorporated asbestos into their products are, on the other hand, governed by the general product liability section and may, therefore, invoke the ten-year statute of repose. The Indiana Court of Appeals consistently rejected defendants' arguments. See, for example, Harris v. AC&S Inc., 766 N.E.2d 383 (Ind. Ct. App. 2002) and Black v. AC&S, Inc., 752 N.E.2d 148 (Ind. Ct. App. 2001).

In Ott, however, the Indiana Supreme Court reversed the Court of Appeals by holding that as a matter of statutory construction, Section Two applies only to miners of commercial asbestos, and product manufacturers which simply incorporated asbestos into products are now governed by the more restrictive Section One, which governs general product liability actions. Now governed by Section One, manufacturers and distributors may invoke the general ten-year statute of repose applicable to all product liability actions. However, application of the statute of repose will be complicated by an exception created by the Ott court. In Ott, the court held that while manufacturers and distributors of asbestos-containing products may now invoke the statute of repose, application of the statute of repose might be unconstitutional where a plaintiff's cause of action accrued within the ten-year period, but plaintiff could not have reasonably discovered the claim. While the exception language in Ott raises many issues that will need to be resolved, the decision is a major victory for manufacturing defendants. Clearly, as in any product liability action, asbestos plaintiffs must now show exposure within the ten-year repose window. This requirement should make product identification more difficult for plaintiffs.