Justices clarify limitations period for toxic tort birth defect claims

The California Supreme Court recently resolved a conflict in the courts of appeal over the appropriate limitations period for in utero toxic exposure birth defect cases. The court ruled that the shorter period applied, but paradoxically, effectively extended the period for injured minors to sue.

The issue in Lopez v. Sony Electronics, Inc., 2018 DJDAR 6658 (July 5, 2018), was what limitations statute governs the minor's claim -- the six-year period for injuries caused prior to or during the plaintiff's birth (CCP Section 340.4), or the two-year period for injuries caused by toxic exposure (CCP Section 340.8)?

The paradox arises because the prenatal injury statute expressly precludes any extension for minority tolling, while the toxic exposure statute had been interpreted judicially to be subject to tolling for minority. Both periods were also subject to tolling under the delayed discovery rule.

Section 340.4 provides that an action for personal injuries to a minor "sustained before or in the course of his or her birth must be commenced within six years after the date of birth, and the time the minor is under any disability mentioned in Section 352 shall not be excluded in computing the time limited for the commencement of the action." The six-year period and bar to disability tolling were added in 1941.

Section 340.8 (a), enacted in 2004, requires that "any civil action for injury or illness based upon exposure to a hazardous material or toxic substance" be commenced within two years of injury or discovery of the potential claim. It specifically excludes actions based on medical malpractice and asbestos exposure. The declared legislative purpose was to codify and modify the discovery rule for toxic torts.

In 2014 the 6th District Court of Appeal considered the statutory conflict and ruled that the toxic exposure statute governed. Nguyen v. Western Digital Corp., 229 Cal. App. 4th 1522. In 2016, a 2nd District panel decided the Lopez case and disagreed.

The facts: Plaintiff Dominique Lopez was born April 13, 1999, with multiple birth defects. She alleged the defects were caused in utero by her mother's occupational exposure to chemicals while employed at Sony. It was undisputed that her mother discovered the cause of Dominique's injuries by August 2000. Sony sought summary judgment based on expiration of the untolled six-year period in Section 340.4(a). The trial court (pre-Nguyen) dismissed and the court of appeal (post-Nguyen) affirmed. The Supreme Court accepted review to resolve the decisional and statutory conflicts.

As one would expect when two statutes apply and produce different results, the issue was resolved through principles of statutory construction. The court found that the statutes could not be harmonized, as application of one "automatically nullifies the other." Accordingly, its task was to determine which period the Legislature intended to apply.

The court applied a hierarchy of tiebreakers -- the more specific provision prevails, and the more recent provision supersedes. The court found neither statute had the edge in specificity, but the toxic exposure statute had the obvious advantage in recency.

One can quarrel with the court's specificity analysis. It found that the critical difference between the statutes was that Section 340.4 focused on when the tort occurred while Section 340.8 focused on how the tort occurred. While it may be true that neither when nor how is inherently more specific than the other, in practice and operation, prenatal and birth injuries seems a narrower subset of claims than lifetime injuries attributable to toxic exposure.

The court found that in enacting the more recent statute, the Legislature intended Section 340.8 to apply. First, the statute spoke broadly to "any" civil action caused by toxic exposure, which means "all" such civil actions. Second, the court relied on the expressio unius maxim, that in making exceptions to the statute (medical malpractice and asbestos actions), the Legislature intended no others. And because Section 340.8(d) declared that it did not affect any existing laws concerning actions not based upon toxic exposure, the court inferred that the Legislature did intend to alter the law as to all toxic exposure actions.

Sony argued that applying Section 340.8 would produce an implied repeal of Section 340.4; an implied repeal of a long-established rule is disfavored, and can be found only where the intent to do so is "clearly expressed or necessarily implied." The court rejected that argument, reasoning that the displacement of Section 340.4 was limited. The court was therefore willing to tolerate this partial repeal. But it offered no persuasive justification, nor any basis for evaluating when similar silent "partial" repeals might be acceptable.

But the repeal by implication and frustration of the earlier Legislature's intent was far greater and more severe than the court acknowledged. Lopez entirely abrogates the 1941 Legislature's intent to preclude minority tolling from extending drastically the period to file suit for prenatal/birth injuries. Ever since enactment, Section 340.4 had expressly disallowed minority tolling to prevent lengthy suspension of repose in this category of cases where tolling can last up to two decades. Section 340.8, in contrast, was silent on minority tolling. The silent repeal permitted by the court frustrated a clearly expressed and long-standing legislative intent that minority tolling not delay repose in torts caused in utero.

The court also rejected Sony's argument that the 2004 Legislature could not have intended silently to so radically expand the period to file suit in birth defect cases. It observed that the Legislature must have been aware of Section 340.4 because it excepted two neighboring statutes related to medical malpractice and asbestos. The court theorized that the Legislature might have changed course on minority tolling because of the difficulty of discovering the cause of toxin-induced birth defects. But any such concern would be fully mitigated by the undisputed operation of the discovery rule, which Section 340.8 independently reinforced.

In the aftermath of Lopez, companies which produce or use chemical substances must now be prepared to defend themselves against very stale claims -- claims of chemical exposure causing birth defects more than 20 years after the alleged exposure. The practical consequences for toxic tort defendants are significant. The state-of-the-art and custom and practice in chemical handling, toxicology and industrial hygiene has evolved considerably over the decades and continues to advance. Proving and defending against allegations of chemical overexposure gets increasingly difficult as people transition, memories fade, and documents are discarded according to customary document retention schedules. It just got even more difficult, and the likelihood that cases will be tried and decided based on speculative and unreliable evidence just got higher.

Alan submitted a brief on behalf of the Product Liability Advisory Council in Lopez v. Sony Electronics.