The Growing Hazard of Mold Litigation

Wednesday, July 16, 2003 - 8:00pm

(Released July 2003)

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Executive Summary

The insurance industry has reported "toxic" mold claims in the billions of dollars. Insurance companies in Texas alone paid $1.2 billion in mold claims in 2001. Is mold the next asbestos? The U.S. Chamber Institute for Legal Reform, partnering with the Center for Legal Policy of the Manhattan Institute, commissioned two papers that take a close look at mold litigation and the science of mold. The first, by Cliff Hutchinson and Robert Powell, two experienced litigators with Hughes and Luce in Dallas and Austin, provides a legal perspective on mold claims. The second, written by a team of scientists led by Dr. Bryan Hardin, former Deputy Director of NIOSH and former Assistant Surgeon General in the Public Health Service, addresses the scientific evidence – or lack thereof – that forms the foundation of these claims.

In "A New Plague – Mold Litigation: How Junk Science and Hysteria Built an Industry," Hutchinson and Powell explain the phenomenon of mold litigation by opening with an overview of litigation over Alar and plastics, both based on a media-generated fear of alleged health hazards – fear without scientific support. It segues into a discussion of the 1980s media reports of an emerging illness – "sick building syndrome." Although this new health hazard resulted in buildings being shut down and in some cases abandoned, clear-eyed scientists have shown the threat to be highly exaggerated – more due to psycho-social factors than to any disease entity. Nonetheless, litigation over alleged health effects from indoor air quality has endured. Against this backdrop of public suspicion of indoor air and media generated fear of phantom toxics, mold claims emerged in the mid-1990s and quickly grew.

In November 1994, a Centers for Disease Control and Prevention (CDC) task force looked for possible causes of a rare bleeding lung disorder in eight babies in Cleveland. The CDC explored the possibility that molds could be at fault and concluded there could be a link. The Cleveland study generated a spate of publicity, so much publicity that the CDC convened a working group to reevaluate the findings. The second working group published a report in June 1999 contradicting the Cleveland study. It was about as negative as possible in rejecting the evidence of any association between mold and infant pulmonary hemorrhage. Despite a further CDC report in 2000 also refuting the Cleveland study, "the juggernaut of media frenzy, tort lawyers, and newly-coined [mold] remediators was rolling too fast to be slowed by mere science."

Hutchinson and Powell lay out the development of mold litigation, including some significant cases with large verdicts, and point out that the proliferation of "junk science" claims that form the foundation of mold litigation ironically occurred at the same time that the U.S. Supreme Court Daubert decision laid down new guidelines that tightened the standards for scientific testimony. The Supreme Court said that federal judges need to be gatekeepers – that they have an obligation to be vigilant against "expertise that is fausse and science that is junky." The authors examine mold litigation through the Daubert microscope and argue that the serious health claims that pervade mold litigation – brain damage, lung hemorrhage, and cancer – cannot withstand scrutiny under the "reliable science" standard of Daubert.

The scientific community has not been unresponsive to the spurious nature of mold claims. Probably the most complete examination of the scientific record was conducted by Cleveland microbiologists who published their findings in January 2003, concluding that there is no supportive evidence for serious illness from toxic mold in the contemporary environment. Other studies from the American Industrial Hygiene Association and the National Institute of Occupational Safety and Health (NIOSH) came to similar conclusions. The authors note that "science has confirmed common sense" since mold is not some rare, exotic toxic material but is everywhere, making up 25 percent of the earth's biomass. If mold were extremely toxic, one could expect to see epidemics wherever people are exposed to the highest levels of mold – vacation spots and outdoor camps, for example.

Nonetheless, the opportunism of trial lawyers and the media's love for scary stories have kept the litigation "mushrooming." The pace of litigation is increasing. The Insurance Information Institute indicates that 10,000 mold-related suits are pending nationwide, a 300 percent increase since 1999. This number may be conservative. A California plaintiffs' lawyer asserts that he has "thousands" of claims himself, including one brought by Erin Brockovich.

Hardin and his team of scientists provide a detailed primer on mold in "A Scientific View of the Health Effects of Mold." Fungi, they point out, play an "essential role in the cycle of life as the principal decomposers of organic matter, converting dead organic material into simpler chemical forms that can in turn be used by plants for their growth and nutritional needs. Without fungi performing this essential function, plant and animal debris would simply accumulate." Mold is everywhere.

The paper examines in depth each type of health complaint associated with mold and offers an extensive survey of the scientific literature on the topic. It determines that mold can cause allergies for those who are "atopic" or prone to allergic reactions. And, "despite the fact that it can produce toxic substances under appropriate growth conditions, years of intensive study have failed to establish exposure to Stachybotrys ["toxic" mold] in home, school, or office environments as a cause of adverse health effects." The paper concludes that infections caused by mold are rare, except for those individuals who are "immune-compromised." Finally, it asserts that "there is no sound scientific evidence that mold causes 'toxicity' in doses found in home environments."

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