Court Opinion

ID: 8912346
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:31:31.367463+00
Date Added: 2024-06-11T17:08:38.782354
License: Public Domain

MERRITT, Circuit Judge,
dissenting.
As the Court states in its thoughtful opinion, this is an unusual case with far-reaching effects on injured workers, the insurance industry and asbestos manufacturers. The case presents an issue that probably deserves legislative consideration and resolution.
Asbestosis is a disease that progresses through three stages: the “exposure” stage, the “discoverability” stage, and the “manifestation” stage. It begins with exposure to asbestos fibers and remains latent or undiscoverable in the first stage; later it reveals itself as a network of scars on the lung tissue discoverable by X-ray; and then in the advanced stage of the disease it becomes “manifest” to the victim and diagnosable through physical symptoms such as shortness of breath, fatigue, clubbing of the fingers, or secretion of mucoid sputum. The question is: When does the coverage of a liability insurance carrier begin for the disease of asbestosis?
There is a better solution to the problem than either of the extremes proposed by the litigants, i.e., the “manifestation” theory and the “exposure” theory. Our Court, and also District Judge Feikens in a comprehensive opinion, reported at 451 F.Supp. 1230 (E.D.Mich.1978) have adopted the exposure theory. In my view, a carrier’s coverage should begin with the second or discovera-bility stage.
A. THE “EXPOSURE” RULE
The exposure theory, although appealing on first reading, is at odds with insurance and tort law and fairness. This rule is not satisfactory because some asbestos may be safely inhaled without the disease ever developing. With more exposure, some harm may later develop but remain latent for a significant number of years. Insurance law does not impose liability or coverage until some identifiable harm arises. An indemni-fiable act does not occur at the time of the negligent act, but at the time the legally recognizable harm appears. Thus if a worker were tortiously exposed to asbestos and no “bodily injury, sickness or disease” arose for x number of years, then the only insurers liable are those whose policies were in effect x years after exposure. See Mann v. Mann, 133 Ill.App.2d 552, 273 N.E.2d 40 (1971); Great American Ins. Co. v. Tinley Park Recreation Com., 124 Ill.App.2d 19, 259 N.E.2d 867 (1970); Muller Fuel Oil Co. v. Insurance Co. of North America, 95 N.J. Super. 564, 232 A.2d 168 (1967); see generally Annot., 57 A.L.R.2d 1385, 1389; Rem-mer v. Glens Falls Indemnity Co., 140 Cal. App.2d 84, 295 P.2d 19 (1956) (where land negligently graded and mudslide occurred 5 years after grading, insured event is at time of slide, not time of negligent grading).
The words “bodily injury, disease or sickness” are not specifically defined in the policies. Accordingly, they should be given their normal common law or traditional insurance law meaning. At the time of initial exposure, a victim could not successfully bring an action against the manufacturer because at that time he has suffered no compensable harm. Assuming harm may eventually arise in the future, the common law generally views future damage as too speculative until the victim can at least prove a probability of harm. See, e.g., Jeffrey v. Chicago Transit Authority, 37 Ill. App.2d 327, 185 N.E.2d 384 (1962); see generally W. Prosser, Handbook of The Law of Torts § 30, at 143 (4th ed. 1971).
A similar principle guides both property insurance cases (see cases cited in the preceding paragraphs) and health insurance cases. See, e.g., Broccolo v. Horace Mann Mut. Cas. Co., 37 Ill.App.2d 493, 186 N.E.2d 89 (1962); Craig v. Central Nat. Life Ins. Co., 16 Ill.App.2d 344, 148 N.E.2d 31 (1958); Kissil v. Beneficial Nat. Life Ins. Co., 64 N.J. 555, 319 A.2d 67 (1974); see generally Annot., 53 A.L.R.2d 686, 688-89 (1957) (no disease unless diagnosable with reasonable medical certainty). In both lines of cases, latent conditions that are not discoverable with a reasonable certainty do not amount to an event or condition that triggers indemnification liability. In this case to detect the scarring caused by any one of an initial batch of inhaled fibers might require *1230many random samplings of tissue from numerous different parts of the lung. Obviously this is neither a practical nor reliable process.
B. THE “MANIFESTATION” RULE
The insurance companies other than Travelers argue that we should adopt the manifestation rule. This rule would impute liability to the insurer only when the disease actually “manifests” itself through physical symptoms such as shortness of breath or through other symptoms that are actually medically diagnosed as indicia of asbestosis.
There are several difficulties with this rule. Such a rule construes the ambiguities of the words “disease” and “occurrence” most favorably to the insurer rather than the insured. In addition, the rule would most likely result in no coverage at all in the future. Insurance companies know which particular manufacturers over the years have generated a large risk pool of victims whose disease may become manifest. Carriers, knowing that they would otherwise have to pay the full unprorated amount of a number of asbestosis claims, would most likely refuse to insure such manufacturers.
In addition, the medical evidence indicates that asbestosis is a harmful, discoverable disease before it reaches the advanced or “manifestation” stage. The health insurance cases hold that a disease may exist if it is diagnosable with reasonable medical certainty. They do not require that the disease must be diagnosed as such in order to determine the beginning date of coverage.
C. THE “DISCOVERABILITY” RULE
Asbestosis is a discoverable disease long before it reaches the advanced stage of manifestation. We should adopt the dis-coverability rule. This rule is more consistent with the medical evidence and the case law since it is tied statistically to the development of a diagnosable disease. X-ray evidence, although sometimes only a harbinger of outward disability, is legally sufficient to constitute “disease” under the health insurance cases.
The health insurance cases turn on the concept of latency. A condition which is not latent is a disease, and latency is defined in terms of being discoverable with reasonable medical certainty. Thus the initial microscopic scarring, observable solely by taking a lung biopsy (i.e., cutting into the lung itself), is a latent condition because of the unreliable and extraordinary measures necessary for medical detection. But X-rays are a relatively reliable, commonplace means of medical diagnosis. Once asbestosis is detectable by X-ray it is therefore not latent.
It would be reasonable for the insured to expect that once X-ray pathology becomes evident the “disease” “occurs” (given the ambiguity of these words) under the insurance contract at that time. See Keaton, Insurance Law Rights at Variance with Policy Provisions, 83 Harv.L.Rev. 961, 973 (1970) (“[T]he principle of honoring reasonable expectations, though only occasionally recognized explicitly, is a better explanation of results in many cases than a strained rationale such as that ... of resolving ambiguities against the insurer.”) Under the common law notion of harm, moreover, the possibility of impending manifestation, if not already a reality, is far less speculative at the time of X-ray diagnosis than at initial exposure. One expert testified that once X-ray pathology becomes evident, the condition tends to worsen without further exposure.
In order to make the discoverability rule judicially and administratively manageable, I must draw a somewhat arbitrary line. The typical victim will not bring suit against a manufacturer until the disease has manifested itself. At this point it will be impractical if not medically impossible for anyone to determine retrospectively when asbestosis was first “discoverable” by X-ray. Yet an insured does not expect his claim to be defeated because of the difficulty of ascertaining the precise date the disease became discoverable.
Although it is not entirely satisfactory, I can find no better rule than a rule that the *1231“disease” of asbestosis “occurs” ten years from the date of first exposure. Every further exposure will be an additional com-pensable injury. Liability would thus be prorated by length of policy term among all insurers whose policies were (1) in force ten years beyond initial exposure to any manufacturer’s product and (2) also in force during a specific interval in which the victim was exposed to a product of Forty-Eight. In the unlikely event that asbestosis manifests itself before the tenth anniversary of initial exposure, the insurer whose policy is in effect at manifestation would be liable.
This ten year rule relieves the insurance companies from liability for periods during which the disease is in its latent stage. The rule prevents insurance companies from defeating coverage entirely or from shifting losses to another when they know, as a matter of statistical probability, that great numbers of victims have diagnosable asbestosis and are on the verge of manifesting the disease and filing a claim.1
The ten year rule represents a compromise. I believe, however, that this compromise is supported by the medical evidence. On deposition, Dr. George Wright testified
[T]here are some bits of information about the [X-ray detection] in some settings where the exposures have been to our knowledge quite heavy. People begin to show X-ray abnormalities about seven to eight years after the onset of this experience of being exposed. Now, mind you, they are exposed all during that time, but turn that around, it says people can be heavily exposed to asbestos and give no overt evidences of it for seven, eight, or ten years.... [I]f you saw it for the first time in 1977 for the simple reason that nobody looked back before that time, it might have been there since, oh, 1965, ten years after the beginning of exposure.
According to the deposition of Dr. Henry Anderson:
[U]nder certain circumstances you can see X-rays [sic] changes within five years....
In our studies of insulation workers, roughly one thousand chest x-rays taken, individuals with less than ten years from the onset of their first exposure, ten percent of them had abnormal x-rays. Those with forty years from onset, roughly 90 percent had abnormal x-rays....
Given a man’s exposure, somebody with twenty years, probably you can say it may well have started to have changes after ten that would perhaps be detectable.
Because the ten year average may be predicated on “heavy exposure,” I could have selected a greater number. Presumably lighter periodic exposure would result in a lengthier latency period. But the medical evidence in the record supports no better compromise. I must choose some number, and I am inclined to choose one that serves to promote coverage.
A rule that is occasionally overinclusive provides compensating public benefits that an underinclusive rule lacks. It better spreads losses that the parties claim were unforeseen by the industry as a whole. As a rule of construction it also tends to reduce the costs of future accidents by placing the burden of liability on insurers best able to evaluate the risks of hazardous activity and best able to deter or minimize the ultimate tort costs of that activity. See generally G. Calabresi, The Cost of Accidents (1971) (accident costs minimized by placing ultimate liability on “least cost avoider”). The more “early” insurers that are liable upon a victim’s exposure, the more likely it is that the potential harm will be discovered and the public warned. If an insurer sees that the product poses some risks, he may raise premiums accordingly. This may ultimately cause the manufacturer to remove the product from the market or to give better warnings in order to lower insurance premiums. *1232This in turn reduces accident costs. On the other hand, imposing liability on only “later” insurers provides less incentive for early insurers to police the insured. The insured might be lulled into irresponsibility because he will not be assessed the present costs of future harm.
Accordingly, I would reverse the judgment below and adopt the “discoverability” rule outlined above.

. There is nothing unusual or outside the common law tradition about such a 10-year rule. The common law has many times had to draw similar arbitrary lines. The 21-year rule developed by the common law in adverse possession cases and the equitable doctrine of laches are two examples. Many others could be cited.