Iowa Breaks Ground with Asbestos Litigation Over-Naming Law—The First of its Kind in the U.S.

Over the past year, an increasing number of state legislatures are considering bills or have passed legislation intended to promote fairness, clarity, and efficiency in asbestos litigation throughout the country. (For example, New York is currently considering a bill that would promote transparency in plaintiffs’ asbestos bankruptcy trust proof of claim submissions, a development ACT previously covered). Iowa, which has recently successfully passed various types of tort reform, is particularly notable despite not being an asbestos litigation national hot spot. Following codification of a set of laws promoting asbestos bankruptcy trust disclosure at the end of last year, just six months later, on June 1, 2020, Iowa Governor Kim Reynolds signed SF 2337 into law, thereby making Iowa the first state to pass legislation intended to significantly reduce or completely eliminate the over-naming of defendants in asbestos and silica complaints, a practice asbestos plaintiffs regularly engage in nationwide.

Generally, asbestos plaintiffs throughout the United States will name dozens of defendants in a broadly drafted complaint without providing any basis as to why a plaintiff sued a particular defendant in that asbestos-related action. According to KCIC, when asbestos litigation took off in this country, in earnest, a generation ago, plaintiffs typically named an average of 11 defendants in an individual lawsuit. Now, however, plaintiffs typically name an average of 65 defendants in a single asbestos-related lawsuit. The number of named defendants can be in the hundreds, even reaching up to close to 300.

This exponential increase in named defendants—many, if not most, of whom will be dragged through costly discovery only to obtain a no-product-identification dismissal or to surrender via a nuisance settlement value—only further slows down already overwhelmed asbestos dockets nationwide and unnecessarily increases costs. As Iowa House Representative Brian Lohse put it, following the bill’s passage through the House this past March, plaintiffs’ regular use of excessive over-naming in asbestos actions is, “a problem that drives up the cost of defense, drives up the cost of insurance, drives up the cost for plaintiffs, as well, as they struggle through the discovery to weed out those defendants that have no place whatsoever in the lawsuit.”

Plaintiffs’ regular practice of repeatedly naming the same defendants in asbestos-related lawsuits filed throughout the entire country only exacerbates the costly burden on defendants resulting from over-naming. Such prohibitive cost increases can—and has—eventually lead to defendants filing for bankruptcy when they may not have otherwise.

Therefore, Iowa’s new law aims to preempt plaintiffs’ regular practice of naming dozens of defendants in an action without first determining whether there are viable claims as to each of those individual defendants. It does so by requiring asbestos plaintiffs to file a sworn-to information form specifying the evidence providing the basis for each claim against every defendant, providing details pertaining to employers, jobsites, product manufacturers or sellers, and dates of exposure as to each individual defendant. In sum, the new law requires that the plaintiff and counsel investigate all exposure allegations relating to every single potential defendant prior to naming them in a complaint rather than plaintiffs’ current method of reflexively suing first and only afterward figuring out whether a defendant should have even been sued to begin with. Or, to put it another way, the law shifts the burden of establishing the reasonable validity of plaintiffs’ claims back to plaintiffs, where it belongs, whereas the old process forced a defendant to beg or fight its way out of a case in which it had no interest, despite there being no evidence supporting plaintiffs’ allegations as to that defendant.

The Iowa law further provides that, if a plaintiff fails to provide such information as to a defendant along with the complaint for the purposes of making a prima facie showing as required under the law, the court will dismiss said defendant, with prejudice. This portion of the law essentially disposes of the need for a defendant with likely no liabilities to participate in pointless and expensive discovery.

Given the ubiquity of plaintiffs’ practice of over-naming defendants throughout the country’s various asbestos litigation, all eyes will surely be on Iowa while we wait to see the effects of this welcome legislative development. Hopefully it will prove successful, and can serve as a model for other states with weightier asbestos dockets in dire need of procedural reform.