Assisted chemical products company with toxic tort insurance recovery

Assisted chemical products company with toxic tort insurance recovery

Stout provided privileged consulting and expert testimony services to Radiator Specialty Company (RSC) in connection with its liability for ongoing toxic tort claims filed by hundreds of claimants since the early 2000s. 

RSC manufactured several automotive chemical products, some of which contained benzene prior to 1978. In the early 2000s, RSC became the target of the plaintiff’s bar, seeking compensation for bodily injuries allegedly caused by long-term exposure to these products dating as far back as the 1930s.

Although RSC purchased over one hundred product liability policies spanning over forty years, its insurers failed to fulfill their contractual responsibility when RSC sought reimbursement for mounting defense expenses and settlement costs. RSC was forced to file suit against its insurers, starting litigation that lasted nearly a decade.

The Stout team, previously a part of The Claro Group, was engaged to assist RSC and its outside coverage counsel with modeling the benzene liability and pursuing insurance settlements to fund the influx of toxic tort claims. Our team provided expert services in the coverage litigation, issuing multiple reports leading up to trial in 2018.  The court ruled that the insurers had both a duty to defend and indemnify RSC for the benzene claims. Post-trial, RSC appealed several key insurance issues, including the trigger of coverage (exposure versus injury-in-fact), allocation (pro rata versus all sums), and exhaustion (vertical versus horizontal). In 2022, the appeal landed the case in the North Carolina Supreme Court, where the court ruled in favor of RSC’s insurers on two of the three remaining issues. Based on the amalgamation of trial decisions, RSC would have been entitled to roughly $16 million in insurance recoveries.

Despite the unfavorable appellate decisions, over the decade-long litigation, Stout repeatedly provided liability estimation, insurance allocation modeling, and advised on strategic negotiations with more than a dozen insurance carriers. These negotiations led to settlements with all but one carrier, with RSC recovering over $35 million, more than double what it was ultimately entitled to under North Carolina law.