ACTION ALERT | Legal and Financial Liabilities Related to Chemicals

S.37 is currently before the Senate Judiciary Committee, which could act on the bill as soon as this coming Tuesday, February 26.  AIV and other stakeholders have provided testimony, and will continue to engage the Committee on this bill.

As reported previously, S.37 contains provisions addressing legal and financial liability provisions that had been included in legislation introduced during the last Legislature.  Specifically, S.37 would (1) expose any person who releases a toxic substance strictly, jointly, and severally liable for any harm resulting from the release, and (2) establish a private right of action for medical monitoring damages incurred related to exposure to a toxic substance.

In both cases the scope and threshold for establishing harm and liability would be extremely broad and low.  For example, the strict, several, and joint liability would be for harm defined as any personal injury or property damage, for any release whether intentional or unintentional, permitted or unpermitted, and the “toxic” substances covered would not only include those identified as toxic under state or federal law, but also those that could be shown to cause any harm based on “expert testimony”.

Similarly, under the medical monitoring provisions, any person may recover medical monitoring damages from exposure to a toxic substance with or without a present injury or disease, and one of the standards is the person’s exposure to the toxic substance increases the risk of developing a disease but a person does not need to prove that the disease is certain or likely to develop as a result of the exposure.

The bill has wide ranging implications for the manufacturers, retailers, and other companies or public sector entities that could be exposed to unreasonable or unwarranted liabilities, from confidence in the meaning of regulatory compliance, to direct financial risks, to even the ability to afford insurance for certain risks.

In testimony before the Committee this past Friday, AIV recommended deleting the strict liability provisions of the bill and working to amend the medical monitoring provisions to be more consistent with what several other states have established in their courts.  Although AIV still remains concerned about the consequences of codifying medical monitoring liability in statute, following the examples of other states could work toward mitigating key concerns and AIV and other stakeholders have offered to work with supporters of the bill to find a more balanced approach if possible.  However, AIV remains strongly opposed to the bill if sufficient changes are not made.

AIV will continue to engage Senators on this legislation, and members are strongly encouraged to familiarize themselves with the bill.

As with other chemical related proposals, AIV is working to coordinate coalition efforts of a wide range of companies and associations concerned about this legislation.  We encourage you to review the bill and to contact us at info@aivt.org to learn more about what is going on, our efforts to work on these issues, and opportunities to stay informed and possibly consider engaging more directly.

Links to the current version of the bill being discussed in Committee, the bill as introduced, and contact information for legislators can be found at the end of this post, and you can contact AIV at info@aivt.org for more information.

AIV Testimony on S.37

The following is the text of AIV’s written testimony before the Senate Judiciary Committee this past Friday:

Thank you for the opportunity to provide comments on S.37.  S.37 would make sweeping changes to the potential liabilities that companies could face for any alleged personal injury, property damage, and medical monitoring costs that individuals might associate with releases of chemicals.  We are concerned that the legislation is seriously flawed in that it is not consistent with what courts in other states have held regarding the application of strict liability and for medical monitoring claims.  It could significantly increase operational risks and costs for a wide range of Vermont employers and make Vermont an outlier compared to states that have recognized when medical monitoring is a remedy for plaintiffs.

Some of the key problems with the bill include:

  • Companies could be held financially liable for any claim of personal injury or property damage associated with any release at any level, regardless of compliance with state or federal permits and regulations or other environmental or health standards for acceptable releases.
  • For medical monitoring costs, liability could be associated with releases that are below levels set by state or federal permits and regulations and below state or federal environmental or health thresholds.
  • The bill does not set clear or reasonable exposure thresholds that are linked to any established state or federal environmental or health thresholds for a plaintiff to make a claim.
  • Companies could be held liable for medical monitoring costs even if an alleged exposure is not considered likely to result in any disease actually developing — any increase in risk is sufficient.
  • The legislation does not provide many of the exemptions or defenses against financial liability that are included in the statutes that allow the state to hold companies liable for chemical releases.
  • The bill could make liability insurance unaffordable or unavailable to many businesses in Vermont, compounding the increased risks and costs of doing business in the state.
  • No other state has adopted similar strict liability legislation.  The bill would create potentially significant risks and disincentives to continued investment and business operations in Vermont compared to other states.

Recommendations

Although these do not entirely resolve concerns with S.37, we would offer the following recommendations as potential steps toward that end:

  • Delete the strict liability provisions of the bill.
  • Exclude permitted releases that are in compliance with statutory and regulatory requirements.
  • Delete from definitions of a toxic substance that exposure to the substance can be shown by expert testimony to increase the risk of developing a latent disease.
  • Require negligence, recklessness, or willful misconduct for liability for medical monitoring claims.
  • Require exposure to exceed background levels and, where applicable, state and federal health guidelines.
  • Require that as a proximate result of the exposure, the person has a significantly increased risk of contracting a serious latent disease.
  • Require that a prescribed monitoring regime is different from that normally recommended in the absence of exposure and that the prescribed monitoring regime is reasonably necessary according to contemporary scientific principles.
  • Make explicit that the legislation does not apply retroactively.

Conclusion

There are a number of legal and regulatory options for citizens and for the state to seek appropriate compensation and remediation from companies responsible for chemical releases that cause true harm.  As drafted, S.37 would lower thresholds and criteria and remove defenses to such an extent as to fundamentally undermine due process and reasonable or sustainable risks and costs.  The negative economic consequences would only be compounded by the extent to which Vermont would be out of line with other statesIf the objective is to codify the right for Vermont citizens to bring medical monitoring claims before the Vermont courts, then the focus should be to codify what the majority of state courts have used as a valid test for those claims.  S.37 does not do that as presently drafted. 

Action Needed

Manufacturers are strongly urged to contact the Judiciary Committee to oppose the bill on the grounds addressed above unless changes recommended by AIV and allied stakeholders are made, and to contact your Senators and urge them not to support S.37 if it comes to the floor for a vote without such changes.

To review an amended version of S.37 that is currently before the Senate Judiciary Committee, click here.

To see the bill as introduced, click here.

To find contact information for the Senate Judiciary Committee, click here.

To find contact information for your Senators, click here.

To contact Senate President Pro Tempore Tim Ashe:  (802) 828-3806  |  http://protem.vermont.gov/contact