Successor Liability in Asbestos Cases

Decisions in our library in which the court ruled on successor liability: 210 cases, by state. Each line gives what the court held, in our words; the law differs from state to state and changes, so read the opinion and talk to a lawyer before relying on any of them.

About this issue

Many asbestos product makers no longer exist in their original form. The first step is identifying the legal entity that made or sold the product and what happened to it:

• A company that only changed its name is the same company and keeps its liabilities.
• After a stock purchase, the acquired company usually remains a separate company responsible for its own liabilities; the buyer is not automatically liable.
• In an ordinary statutory merger, the surviving company generally inherits the merged company's liabilities by law, subject to any asbestos-specific statutes and bankruptcy orders.
• If the company went through an asbestos bankruptcy, its plan and channeling injunction may send claims to a trust instead of the courts; see asbestos bankruptcies.

Successor liability rules matter most when a company bought another company's assets. The general rule is that an asset buyer does not take on the seller's liabilities, with exceptions where the buyer agreed to assume them, the deal was really a merger (a de facto merger), the buyer is a mere continuation of the seller, or the transaction was a fraudulent attempt to escape obligations. A few states also recognize a product-line exception, under which a buyer that acquired a manufacturer's business and continued its product line can be liable for the earlier products, if that state's additional conditions are met. Related questions involve parent companies, piercing the corporate veil, and divisional mergers that move liabilities into a separate company.

Alabama

• Smith v. Avon Products, Inc. (2019). Specific personal jurisdiction requires that the plaintiff's claims arise out of or relate to the defendant's own contacts with the forum, and a parent company's jurisdiction cannot rest on its subsidiary's contacts unless the veil is pierced by showing complete control and domination. Oversight, shared branding and public defense of a product did not meet that standard.
• McGUFFIE v. Mead Corporation (2014). Predicting Alabama law, the court applied a two-injury rule so the mesothelioma claim was not time-barred by an earlier asbestosis diagnosis, but an unambiguous release of a company's former parents, stockholders and successors from future asbestos claims bars the suit, because inadequate consideration alone does not invalidate a written release.

California

• Darden v. Western Asbestos Settlement Trust (In re Western Asbestos Settlement Trust) (2022). Under California law, a third party not named in a release may enforce it if a reasonable person in the releasor's position would understand it was intended to cover that party, and claim preclusion under the primary rights theory bars a second asbestos claim against a predecessor in privity with the released defendant. A trust that compensates asbestos exposure claims need not pay heirs' wrongful death claims when no underlying compensable claim exists.
• Irani v. Exxon Mobil Corporation (2nd Appellate District, 7th Division, 2021). A company has no tort duty to protect refinery workers from asbestos where it did not own, possess or control the premises or asbestos sources, and a contractual guarantee of an operating company's performance to the government creates neither a J'Aire duty nor a special relationship.
• Khosravan v. Exxon Mobil Corp. (2nd Appellate District, 7th Division, 2021). A defendant owes no duty to protect workers from asbestos at premises it did not own, possess or control. A 1954 agreement guaranteeing the operating companies' performance did not create a duty to refinery workers, either through a special relationship or under the Biakanja/J'Aire factors.
• Morgan v. JM Manufacturing Co., Inc. (2nd Appellate District, 1st Division, 2021). A plaintiff seeking punitive damages against a corporation must offer clear and convincing evidence that an officer, director or managing agent had the required state of mind, whether shown directly or by piecing together managing agents' knowledge and acts; the company's size does not relax that burden.
• Booker v. Imerys Talc America, Inc. (1st Appellate District, 3rd Division, 2020). A jury may find a worker was exposed to asbestos-contaminated talc from the manufacturer's own laboratory reports, internal documents and coworker testimony, without expert analysis of the manufacturer's samples. A party seeking to allocate fault to nonparties on a verdict form must point to evidence of their wrongdoing. A buyer that broadly assumes all liabilities relating to a business's assets takes on liability for the seller's earlier product sales.
• Sabetian v. Exxon Mobil Corp. (2nd Appellate District, 7th Division, 2020). A defendant that did not own, possess or control the premises owes no premises or negligence duty to workers there, and a guarantee in a contract not intended to benefit the workers does not create a duty under the J'Aire/Biakanja factors.
• Viale v. Air & Liquid Systems Corp. (2020). A defendant is entitled to summary judgment where the plaintiffs offer no evidence that the decedent was exposed to asbestos from its product, and expert opinions resting on unsupported factual assumptions do not create a triable issue.
• Malek v. Chevron U.S.A. (In re Laosd Asbestos Cases) (2nd Appellate District, 4th Division, 2019). A defendant that did not own, operate or control a premises, was not a joint venturer or principal of the operator, and did not undertake responsibility for worker safety owes no duty of care; workers who only incidentally benefit from a contract are not intended third party beneficiaries.
• Kordestani v. ExxonMOBIL Oil Corporation (2nd Appellate District, 4th Division, 2016). Summary adjudication of one claim or one issue of duty (premises liability, strict product liability) does not preclude other negligence theories based on different duties, such as a special relationship arising from contract or an undertaking to give technical advice. A party not aggrieved by an appealable order lacks standing to cross-appeal.
• Fenicle v. Boise Cascade Company (2015). A state-law asbestos wrongful death claim does not raise a substantial federal question under Grable merely because a repealed federal statute might bear on a veil-piercing theory. The rule of unanimity does not apply to removal under § 1452, but a bankruptcy-related case may be remanded on broad equitable grounds.
• Greenberg v. Superior Court of Los Angeles County (2nd Appellate District, 4th Division, 2015). A manufacturer can be strictly liable for asbestos dust from another maker's product under the Tellez-Cordova exception if its product was intended to be used with that product for the very activity that inevitably created the hazard, even if the product could also be used with non-asbestos materials.
• Collin v. Calportland Company (3rd Appellate District, 2014). A plaintiff must show exposure to the specific defendant's asbestos-containing product, and a defendant can shift the burden on summary judgment with comprehensive discovery and factually devoid responses; the sophisticated user defense turns on what the class of users knew or should have known about the particular product's dangers.
• Lee v. Clark Reliance Corporation (2nd Appellate District, 3rd Division, 2013). A manufacturer is not liable in strict liability or negligence for harm caused by another manufacturer's asbestos-containing replacement parts used with its product, and a plaintiff must show exposure to the defendant's own asbestos-containing product to establish causation.
• Lund v. 3M Company (2013). A court may grant jurisdictional discovery when pertinent jurisdictional facts are controverted or a more satisfactory showing of the facts is necessary, including where a defendant's declaration conflicts with its own website.
• Robinson v. Ssw, Inc. (1st Appellate District, 3rd Division, 2012). California Corporations Code section 2010 does not apply to dissolved foreign corporations, so the law of the state of incorporation governs how long a dissolved corporation can be sued; under Nebraska's five-year survival statute the suit was untimely.
• Hopkins v. Plant Insulation Company (2006). State courts keep concurrent jurisdiction over bankruptcy trustee fraudulent-transfer claims under 11 U.S.C. section 544(b), and a bankruptcy-related claim removed under section 1441 as well as section 1452 can still be remanded on equitable grounds under section 1452(b).
• Franklin v. Usx Corp. (1st Appellate District, 3rd Division, 2001). A corporation that buys a predecessor's assets for adequate cash consideration under an unambiguous, integrated agreement disclaiming liabilities is not liable as successor under assumption, de facto merger or mere continuation theories. The product line successor rule applies only to strict product liability claims, not to negligence or premises claims.
• Petrini v. Mohasco Corp. (1st Appellate District, 2nd Division, 1998). A corporation that merges a subsidiary into itself is liable as successor for the subsidiary's liabilities, including unknown tort liabilities, under New York, Nevada and California law, even if the subsidiary had no assets at the merger.
• Hughes v. Western MacArthur Co. (1st Appellate District, 4th Division, 1987). A plaintiff must plead facts showing the defendant is a successor to the corporation that injured her. But a plaintiff who does not allege an employment relationship need not plead the dual capacity exception to workers' compensation exclusivity, because a complaint cannot be attacked by matters in the answer.
• Kaminski v. Western MacArthur Co. (1st Appellate District, 5th Division, 1985). Under Ray v. Alad Corp., successor liability for a predecessor's defective products can extend to a corporation that took over a distributor, not only a manufacturer. The successor's acquisition need only have caused or contributed to the loss of the plaintiff's remedies against the predecessor.

Delaware

• Stimson v. J-M Mfg. Co. (In re Asbestos Litigation) (2019). A plaintiff must show more than a possibility of exposure to the defendant's asbestos product, and a motion for reargument cannot rely on deposition testimony that counsel knew of and could have presented before the summary judgment ruling.
• Rogers v. Nosroc Corp. (In re Asbestos Litigation) (2019). Under Delaware law a plaintiff must show a product nexus between exposure to the defendant's product and his injury, and under maritime law that the defendant's product was a substantial factor in causing the injury; a plaintiff who identifies no exposure to the defendant's product cannot meet either test.
• Thomas-Fish v. Avborne Accessory Group, Inc. (2019). A plaintiff asserting successor liability must plead facts plausibly falling within an exception to the general rule that an asset purchaser is not liable for the seller's debts; conclusory allegations of corporate succession and bare claims of willful conduct do not suffice.
• Thomas-Fish v. Avborne Accessory Group, Inc. (2019). Under federal pleading standards, a complaint that makes collective allegations against all defendants, without facts tying a particular defendant to the exposure or to successor liability, fails to state claims for strict liability, negligence, warranty, failure to warn, conspiracy, or punitive damages. Marketing an 'ultra-hazardous product' is not an independent cause of action under New Jersey law.
• In re Viking Pump, Inc. (2016). Under New York law, anti-assignment clauses do not bar assignment of insurance rights for losses that occurred before the assignment. Whether defense costs are covered, and whether they erode limits, depends on each policy's language, with ambiguities construed against the insurer. Asbestos injury is a continuous process that begins at significant exposure and continues, so it is not limited to the period of exposure.
• Tetteh v. Alcatel-Lucent USA, Inc. (2016). Under Georgia law and Restatement (Second) of Torts § 324A, a parent corporation that gives its subsidiary safety recommendations and guidance has not assumed the subsidiary's duty to protect the subsidiary's employees. The plaintiff also failed to satisfy any of the § 324A(a), (b) or (c) requirements.
• Winhauer v. Air & Liquid Systems Corporation (2016). Under Mississippi's frequency, regularity and proximity test, a plaintiff must show exposure to a particular defendant's asbestos-containing product with sufficient frequency, regularity and proximity to support causation. Under the bare metal defense, a manufacturer is not liable for asbestos products made by others that were used with its product.
• Malone v. Air & Liquid Systems Corporation (2015). A court may not consider materials outside the pleadings, such as an affidavit, on a Rule 12(b)(6) motion without converting it to a Rule 56 summary judgment motion and giving all parties a reasonable opportunity to present pertinent material.
• Homax Products, Inc. v. Old Magic Corporation (2014). Under Ohio law, a party needs a sufficient stake in the outcome and a justiciable controversy to sue. The asset purchase agreement's indemnity covered only products sold by the named Companies, and an asset purchaser is not liable for its predecessor's liabilities absent an exception.
• In re Specialty Products Holding Corp. (2013). In estimating asbestos liability under §502(c)(1), the court relies on the debtors' own tort-system claiming and settlement history, which places a value on claims. It will not discount that history for claimed implicit defense costs, nuisance settlements, market share, or apportionment among corporate eras.
• In re Flintkote Co. (2012). Future demands under § 524(g) are those of people exposed to the debtor's asbestos whose disease has not yet manifested, so a debtor need not show post-confirmation exposure to qualify. Section 524(g) does not require continuing a viable pre-petition business, and Flintkote's new businesses satisfied any ongoing-business requirement.
• In re the Flintkote Company (2012). A § 524(g) injunction does not require that future 'demands' be limited to people first exposed after confirmation; exposed but not yet ill claimants count as future demand holders. Any 'ongoing business' requirement is met by a reorganized debtor's new, feasible business, which need not be its pre-petition business.
• Martinez v. EI DuPont De Nemours and Co. (2012). A parent corporation cannot be sued for its subsidiary's workplace conduct without specific pleaded facts of its own tortious acts. An absent foreign subsidiary that employed the worker and owned the plant is an indispensable party under Rule 19. Delaware forum non conveniens dismissal was warranted where the defendant was wrongly named in place of the foreign employer.
• In re Federal-Mogul Global, Inc. (2010). Under the 1994 asset purchase agreement, indemnity obligations ran only between the parties to it and their successors, not to PepsiAmericas, which was not a party or third-party beneficiary and whose corporate affiliation with the seller ended before 1994.
• Viking Pump, Inc. v. Century Indemnity Company (2009). Under New York law, post-loss assignments of insurance rights are not barred by anti-assignment clauses. Where policies contain non-cumulation and prior insurance provisions, they are read to require all-sums allocation, and any remaining ambiguity is construed against the insurer.
• In re Federal-Mogul Global Inc. (2008). A Section 524(g)(4)(A)(ii) channeling injunction cannot cover non-debtor third parties whose asbestos liability arises from their own conduct and products rather than derivatively from the debtor, and an unincorporated division is not a "predecessor in interest." The court also treated the injunction's lack of necessity to reorganization as a significant factor against issuing it.
• Hopkins v. Plant Insulation Co. (2006). A district court sitting in the bankruptcy case may abstain under the discretionary abstention provision rather than transfer a related personal injury and wrongful death action under 28 U.S.C. § 157(b)(5). Here the debtor's opposition and the lack of precedent for using § 157(b)(5) against a debtor/plaintiff's chosen forum supported abstention.

District of Columbia

• Consolidated Rail Corp. v. Ray EX rel. Boyd (2010). The Rail Act's requirement that rail assets be conveyed "free and clear of any liens or encumbrances" covers in rem property interests and does not categorically bar state-law successor liability for in personam FELA tort claims arising from pre-conveyance asbestos exposure.

Florida

• Volkswagen Aktiengesellschaft v. Jones (2nd District, 2017). A plaintiff proceeding on specific jurisdiction must show the nonresident defendant's own suit-related contacts with the forum; a plaintiff's or third party's unilateral activity, an unshown parent-subsidiary control, or an online order for a product does not establish purposeful availment.
• Peruyero v. Airbus Sas (2014). The Florida long-arm statute in effect when the allegedly asbestos-containing product was made or distributed controls. Under the 1955/1957 version, §47.16, specific jurisdiction requires a causal connection between the defendant's Florida activities and the claim, and a plaintiff who does not show that connection cannot establish jurisdiction.

Georgia

• Farmer v. Air and Liquid Systems Corporation (2018). Under Georgia law, an asbestos plaintiff must show exposure to asbestos-containing products the defendant made or supplied, or to a defendant's product that required an asbestos component to function. A successor that agreed to provide maintenance or repair services for a predecessor's products may be liable for failing to warn under Restatement (Third) of Torts § 13.
• Cabasug v. Crane Company (2013). Under maritime law a plaintiff must show exposure to each defendant's asbestos product, and a manufacturer is not liable for replacement parts it did not supply; a parent or successor is not liable for a subsidiary's acts absent facts supporting piercing the corporate veil.

Hawaii

• Cabasug v. Crane Company (2014). Under maritime law a plaintiff must show exposure to the particular defendant's asbestos product as a substantial factor, and a manufacturer is not liable for replacement parts it did not supply. A parent corporation or its successor is not liable for a subsidiary's acts absent a showing supporting veil-piercing.

Illinois

• Amling v. Schlage Lock Co. (2019). A declaratory judgment about who must indemnify a liability is generally not ripe until liability has been found in the underlying suit. Even if jurisdiction existed, a court may decline to hear a declaratory suit whose result could be irrelevant if the underlying case finds no liability.
• Harrow Industries LLC v. Nexus Corporation (2018). A corporation that buys another's assets is generally not liable for the seller's debts unless an exception applies (assumption, merger, mere continuation, or fraud), and a complaint must allege facts supporting such an exception. A company incorporated after a contract was signed cannot be a party to it.
• Adams v. Employers Insurance Company OF Wausau (3rd District, 2016). Section 12.80 of the Business Corporation Act bars suits against a dissolved corporation, and its shareholders, after the five-year wind-up period. A declaratory action to reach the dissolved corporation's liability insurance without a liability determination is a prohibited direct action against insurers, and courts will not use equity to override the statute.
• Flanders v. California Coastal Communities (5th District, 2005). An Illinois court cannot exercise long-arm personal jurisdiction over a corporation on the basis that it might be a predecessor's corporate successor; the court must actually determine that the corporation is the successor before jurisdiction can rest on that status.
• Burgess v. Abex Corp. (4th District, 1999). A defendant who understands the general objectives of a conspiracy to conceal asbestos hazards, accepts them, and agrees explicitly or implicitly to further them is liable as a coconspirator. Plaintiffs must prove the conspiracy by clear and convincing evidence, reviewed under the manifest weight standard, and the jury's finding here had sufficient support.