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September 13, 2019 Toxic Torts and Environmental Law

New Jersey Asbestos Litigation Update

Appellate Decisions Issued on the Admissibility of Statements Against Interest by Settled Defendants at Trial and Successor Jurisdiction

Statements Against Interest by Settled Defendants: On September 11, 2019, the New Jersey Supreme Court issued its unanimous decision in Rowe v. Bell & Gossett Company reinstating the judgment of the trial court and overruling the Appellate Division’s previous reversal.  The last remaining defendant in Rowe successfully moved to admit certain interrogatory answers and corporate representative testimony of eight settling codefendants to prove their share of the total liability, relying on three exceptions to the rule against hearsay: N.J.R.E. 804(b)(1) (testimony in prior proceedings); N.J.R.E. 803(b)(1) (statement by a party-opponent); and N.J.R.E. 803(c)(25) (statement against interest).  The jury then returned a verdict in plaintiffs’ favor but allocated only twenty percent of the fault to the remaining defendant, spreading the remainder among the eight settling defendants.

The New Jersey Supreme Court held that the disputed excerpts from the settling defendants’ interrogatory answers and corporate representative testimony were properly admitted as statements against interest under N.J.R.E. 803(c)(25) and reinstated the judgment entered by the trial court in accordance with the jury’s allocation of fault.  In making its ruling, the Court reasoned that when the statements at issue were made, they were, in fact, adverse to the settling defendants’ litigation positions in the matter and/or other asbestos cases, and, therefore, satisfied the requirements of N.J.R.E. 803(c)(25). The Court’s decision solidified the right of non-settling defendants in New Jersey to freely rely on N.J.R.E. 803(c)(25), where available, to “point the finger” at settled defendants for purposes of liability apportionment at trial.

Successor Jurisdiction:  Also on September 11, 2019, the Appellate Division of the New Jersey Superior Court issued its decision in Huff v. Cyprus Amax Minerals Company.  Although recognizing the importance of addressing the constitutionality of the personal jurisdiction theory based on New Jersey’s product line exception to the general rule of successor non-liability, the court ultimately declined to rule on the constitutionality question stating that the factual record did not make it clear whether the product line exception was in fact, the successor liability exception applicable in the case, and dismissed the appeal. 

The Court acknowledged that no court has addressed whether product line successor liability could support specific jurisdiction over a successor lacking minimum contacts to a forum after Daimler AG v. Bauman, 134 S.Ct. 746 (2014), and stated that the due process concerns raised by a personal jurisdiction theory based on the product line exception are much different than those raised by a more traditional successor based-theory, such as the mere continuation theory.  The Court also stated that the “derivative liability” language from Bristol-Myers Squibb v. Superior Court of California, 137 S. Ct. 1773 (2017), did not support successor jurisdiction based on the product line exception.  The Court noted that there had been no jurisdictional discovery conducted in the case since the focus of Cyprus Amax Minerals Company’s motion had been the overall constitutionality of utilizing the product line exception to establish personal jurisdiction over a defendant in the absence of any other general or specific jurisdiction contacts, yet stated that Cyprus Amax Minerals Company could again challenge personal jurisdiction in a “properly supported motion to dismiss or for summary judgment.”