Security Homestead Ass'n v. WR Grace & Co.

Citations: 743 F. Supp. 456; 1990 U.S. Dist. LEXIS 10626; 1990 WL 119462Docket: Civ. A. No. 88-5165

Court: District Court, E.D. Louisiana; August 14, 1990; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The case Security Homestead Association v. W.R. Grace & Co. involves a lawsuit stemming from the discovery of asbestos in fireproofing materials used in the construction of a 10-story office building in Metairie, Louisiana, during 1970-1971. The plaintiff, Security Homestead Association, discovered the asbestos in October 1986 and filed suit in November 1988, citing Louisiana's asbestos abatement statute, LSA R.S. 9:5644, after airborne asbestos was detected in August 1988. The plaintiff alleges that Grace Co. was aware of the health risks associated with its product "Monokote-3" and marketed it without warnings, leading to the need for costly abatement renovations and operational disruptions.

The plaintiff's claims against Grace include strict liability, negligence, breach of warranties, fraud, misrepresentation, redhibition, and restitution. Grace's response denies the allegations and claims that the plaintiff's arguments are insufficient, that the claims are time-barred, and that the asbestos abatement statute is unconstitutional. The central issue raised by Grace's motion for summary judgment is whether LSA R.S. 9:5644 is unconstitutional as a special law under the Louisiana Constitution and violates equal protection and due process rights. The court notes that the constitutionality of legislative actions is presumed, and the determination hinges on whether the statute applies uniformly to a defined class of asbestos manufacturers or unjustly targets a subset. Grace argues that the statute unfairly excludes certain manufacturers, suggesting it is influenced by special interests.

The Court concludes that exceptions to R.S. 9:5644 are justified by the Legislature's distinction between immovable, contaminated real properties, which pose a significant health risk, and contaminated personal property. The statute is deemed consistent with the Louisiana Constitution and not a special law as defined by Article 3, 12. The defendant's claim that the statute violates equal protection rights is rejected, as Louisiana's equal protection guarantee mirrors the federal standard, which allows for classifications that are rationally related to legitimate state interests. With the knowledge of asbestos-related health risks, the Court finds a rational basis for the statute aimed at asbestos abatement. The Legislature has broad discretion to enact laws impacting different groups, and the adjustments made in the statute do not violate equal protection provisions.

Additionally, the defendant argues that the adjustment of the prescriptive period for certain claims infringes upon due process rights. However, the Court asserts that due process does not prohibit the creation or abolition of causes of action for legislative purposes. Legislative enactments are presumed constitutional, and Louisiana courts have consistently upheld the Legislature's authority to regulate causes of action. The defendant's concerns about the revival statute's implications for past acts are deemed insufficient to challenge its constitutionality. The Court affirms that R.S. 9:5644 does not violate due process protections under either the Louisiana Constitution or the Fourteenth Amendment of the U.S. Constitution.

Defendant's motion for summary judgment, arguing that LSA R.S. 9:5644 is unconstitutional and that the plaintiff's complaint is prescribed or perempted, is denied. The focus of the defendant's additional motions is on the scope of Louisiana's asbestos abatement statute and whether it revives and extends prescriptive periods for Security Homestead's claims, including redhibition, breach of warranties, fraud, misrepresentation, and restitution. The statute outlines asbestos abatement as including removal of asbestos, corrective measures, and reimbursement for expenses related to these actions, holding manufacturers strictly liable for related losses once they accrue. However, claims related to manufacturer culpability are excluded. The Court concludes that the statute only extends the prescriptive period for strict liability claims concerning asbestos abatement expenses.

The defendant also seeks summary judgment regarding the plaintiff's claims in redhibition and breach of warranties. Louisiana's redhibition laws allow for the avoidance of a sale due to defects that render the product useless or significantly impaired. The Court recognizes the transaction between the plaintiff and W.R. Grace Co. as a sale, as the plaintiff constructed the office tower using the purchased materials. Prior to assessing the substantive law of redhibition and warranties, the Court addresses the issue of prescription. Redhibition and warranty claims are generally subject to a one-year prescriptive period from the date of sale, with an exception for claims discovered within a year that involve seller knowledge of defects. The plaintiff discovered asbestos in October 1986 but did not file suit until November 1988, arguing that the extent of harm was not evident until air sampling in August 1988.

The Court determined that the plaintiff was aware or should have been aware by October 1986 of a potential cause of action against W.R. Grace Co. related to redhibition, implied warranty, and express warranty. Consequently, any claims under these theories expired one year after the plaintiff became aware of the asbestos presence in their building. The Court concluded that the asbestos abatement statute, LSA R.S. 9:5644, does not extend the prescriptive period for these claims, as it pertains strictly to liability associated with abatement expenses rather than warranty claims. As a result, the defendant's motion for summary judgment regarding these claims was granted, leading to the dismissal of Counts VII, III, and IV of the plaintiff's complaint.

Additionally, the Court addressed claims of fraud and misrepresentation, which are subject to a one-year prescriptive period starting from the discovery of damage to property. The Court found that the plaintiff's discovery in October 1986 initiated this period, and thus any fraud claims had also prescribed. The limited scope of LSA R.S. 9:5644 does not revive these claims, leading to their dismissal as well. The plaintiff's claim for restitution was also denied, as restitution typically addresses unjust enrichment where no legal remedy exists, but the plaintiff had viable legal remedies that were not pursued within the one-year period. The defendant's motions regarding the fraud, misrepresentation, and restitution claims were granted, resulting in the dismissal of Counts V and VIII of the complaint. The ruling emphasized that the plaintiff retains a strict liability claim for asbestos abatement under the statute, which further precludes restitution.

Any time limitation or prescriptive period for actions to recover costs related to asbestos abatement work is extended to five years after either the completion of the abatement work or the identification of the material's manufacturer, whichever occurs later. Individuals whose claims for asbestos abatement are barred by the prescriptive period outlined in R.S. 9:5644 are granted one additional year from the effective date of this Act to file their claims. The provisions of this Section do not alter the prescription periods established by law for worker's compensation claims related to asbestos-related injuries or diseases. 

Count IX for Exemplary Damages was dismissed on summary judgment because it was not covered under La.Civ. Code article 2315.3 or LSA R.S. 9:5644, thus being prescribed. Count VI for Civil Conspiracy was dismissed unopposed by the plaintiff. Counts I (Strict Liability) and II (Negligence) are not contested in subsequent motions for summary judgment. 

The excerpt references multiple case law precedents and legal articles, suggesting extensive legal analysis related to redhibition in Louisiana, focusing on the implications of good and bad faith in seller liability. It highlights the legal backdrop of asbestos-related issues, mentioning various acts and legislation that have addressed asbestos contamination.