During the past twenty years, Congress and the general public have become increasingly aware of the health hazards caused by exposure to toxic substances. Consequently, Congress has enacted statutes, such as CERCLA, requiring parties who are responsible for toxic waste to clean up the toxic waste sites and to reduce the level of toxic chemicals in the environment. Asbestos is one toxic substance that government has targeted in particular. The federal government and many states have enacted laws requiring asbestos-containing materials to be segregated or removed from schools and public buildings.
Even when government regulations do not mandate specific abatement measures, building owners often feel obliged to take action on their own in order to avoid potential tort liability. Abatement procedures, however, are very expensive and existing levels of financial support from federal and state sources are not sufficient to defray these costs entirely.
For this reason, school districts and other property owners seek through litigation to make suppliers of asbestos products pay for the removal and replacement of asbestos-containing materials in their buildings. The primary issue in these cases is whether asbestos abatement costs are a form of property damage or whether they are purely economic in character. This issue is critical because of the way tort and contract statutes of limitation operate.
The statute of limitation in a contract action runs from the time the sales contract is breached, usually the date of delivery. Often the statute of limitation has run before property owners are aware of the need to remove asbestos-containing material from their buildings. Although the statutes of limitation for tort actions are generally shorter, they often incorporate a "discovery rule" which tolls the running of the statutes of limitation until the victim discovers or should discover the injury. Accordingly, property owners normally prefer to sue in tort to take advantage of the additional time allowed by the discovery rule.
In most jurisdictions, plaintiffs may sue in tort only if they suffer physical injury—either personal injury or physical damage to their property. Asbestos suppliers maintain that abatement costs are wholly economic in nature and, therefore, not recoverable in a tort action. However, courts unwisely, but uniformly, have rejected this argument and allowed property owners to bring tort actions against asbestos manufacturers and suppliers by expanding the definition of physical injury to characterize abatement costs as property damage instead of economic harm.
Part I of this Article identifies the health risks from exposure to asbestos-containing materials in schools and public buildings. Part II provides a brief overview of applicable contract and tort principles. Part III examines a number of recent asbestos abatement cases and critiques their reasoning. Finally, Part IV suggests that courts should apply a stricter definition of physical injury in toxic substance abatement cases than they have applied in asbestos abatement cases. Under this approach, physical damage to property would be defined as damage that occurs when the victim's property is physically destroyed or altered by direct and immediate contact with a defective product. This definition would exclude property damage caused by slow deterioration of the plaintiff’s property as well as expenses incurred to remove a potentially harmful product from the property. Thus, property owners would have to sue in contract, rather than in tort, to recover their abatement expenses. Limiting property owners to contract remedies is not only doctrinally sound, but is also consistent with the policies that distinguish tort from contract law.
Richard C. Ausness, Tort Liability for Asbestos Removal Costs, 73 Or. L. Rev. 505 (1994).