In a 4-3 decision, the Iowa Supreme Court issued an opinion that significantly narrowed Iowa’s new statutory asbestos defense – holding the defense only protects asbestos product defendants who did not manufacture or sell the asbestos in question. See Beverage v. Alcoa, Inc., No. 19-1852, 2022 WL 2182351 (Iowa June 17, 2022). This statutory asbestos defense was part of Iowa’s 2017 tort reform.

Case Background

Mr. Charles Beverage worked in Alcoa’s Bettendorf, IA plant in the 1950s–70s. In 2015, he was diagnosed with mesothelioma and passed away shortly afterward. In 2017, Mr. Beverage’s children filed a lawsuit against Alcoa, Inc. (“Alcoa”)  and Iowa-Illinois Taylor Insulation (“IITI”). The lawsuit alleged that Mr. Beverage’s illness and death were caused by exposure to asbestos used by Alcoa on its premises and from asbestos contained in IITI products.

Alcoa and IITI filed summary judgment motions in district court, arguing a recent Iowa statute blocked liability. In 2017, the Iowa General Assembly enacted three chapters of detailed tort reform, including the statute in question. Under this statute: “[a] defendant in an asbestos action or silica action shall not be liable for exposures from a product or component part made or sold by a third party.” Iowa Code § 686B.7(5). The product at issue in Beverage v. Alcoa was manufactured by Johns Manville and Eagle-Pitcher. The district court granted summary judgment for both defendants, concluding § 686B.7(5) protected any defendant who did not actually manufacture asbestos-containing products. The court of appeals affirmed summary judgment. It agreed that § 686B.7(5) unambiguously protected Alcoa and IITI because the asbestos-containing insulation at issue was manufactured by third parties (i.e. Johns Manville and Eagle-Pitcher). See generally Iowa Court of Appeals Affirms Summary Judgment in Asbestos Litigation, Jessica Prosperi and Nikki Multer (July 23, 2021).

Iowa Supreme Court’s Decision   

On June 17, 2022, the Iowa Supreme Court reversed summary judgment and remanded the case for further proceedings. Rejecting the defendants’ arguments – and those of the lower courts – the Iowa Supreme Court decided § 686B.7(5) only applied to product liability claims and did not apply to premises liability claims. Given that the claims against ALCOA were based on its status as a premises defendant, the summary judgement in ALCOA’s favor was reversed.

IITI fared no better. IITI argued § 686B.7(5) blocked liability because IITI distributed asbestos but did not manufacture asbestos – an argument that succeeded in the lower courts. But the Iowa Supreme Court disagreed. It held that although § 686B.7(5) could hypothetically apply to a product defendant, the statute did not help IITI because IITI “sold the insulation to Alcoa.” In the Iowa Supreme Court’s view, § 686B.7(5) was essentially just a codified “bare metal” defense. The statute only protects product defendants who “did not make or distribute” the asbestos part.

The dissenting opinion agreed with the majority regarding IITI. Reversal was proper because “IITI supplied much of the asbestos-containing insulation at issue.” But the dissenters thought § 686B.7(5) should apply to premises defendants, like Alcoa. They reasoned §686A.2(2) broadly defined “asbestos actions” and did not exclude premises actions.

Lessons Learned

Beverage v. Alcoa is a significant development in Iowa asbestos litigation because it closes the door on the type of broad protections sought by Defendants in that case. The Iowa Supreme Court has ruled that the protections of § 686B.7(5) do not apply to premises defendants. Likewise, product defendants who manufactured asbestos do not come within § 686B.7(5)’s exclusions. Finally, product defendants who distribute asbestos have been cut out of the class of defendants to which § 686B.7(5) could apply.

Section 686B.7(5) only blocks liability where a defendant is sued for product liability but that defendant did not manufacture or sell the asbestos in question. This sometimes happens with post-sale equipment modifications (e.g. adding asbestos insulation, gaskets, or friction components to a piece of equipment). In such circumstances, § 686B.7(5) might operate as a “bare metal” defense and block liability.

Regardless, a knowledgeable attorney can explore additional defenses to asbestos liability. For example, in Iowa this may include (1) comparative fault, Iowa Code § 668.1; (2) state of the art, Iowa Code § 668.12; and (3) statute of limitations, Iowa Code § 614.1.