On October 10, 2014, a vindicated defendant continued its fight for sanctions against plaintiffs and their former attorneys in a lawsuit involving spray polyurethane foam, or SPF. In Markey v. Lapolla Industries, Inc., plaintiffs claimed that they suffered respiratory and neurological injuries from SPF installed in their home. This 2012 lawsuit sparked a series of cases targeting SPF manufacturers, distributors, and applicators, as well as SPF chemical component suppliers.
SPF is one of the fastest growing building products globally. This year, the Transparency Market Research group valued the SPF market at more than $1.135 billion in 2012, and expects 7% annual growth from 2013 to 2019. Unlike traditional insulation projects, applicators manufacture SPF onsite by mixing components together and causing a chemical reaction. SPF offers energy-efficient construction by insulating and sealing buildings with one application.
Despite SPF’s benefits, it faced significant scrutiny in Markey until, earlier this year, plaintiffs abruptly moved to dismiss their class action allegations. Although Lapolla Industries, Inc. won the dismissal with prejudice, it still spent two years defending a case that it claims never should have been brought.
Indeed, the plaintiffs’ own expert concluded that the SPF compounds would not negatively impact health, and the levels were well below permissible and recommended exposure limits.
Lapolla used the plaintiffs’ expert to turn the tables against plaintiffs and their attorneys arguing for (1) sanctions against the attorneys who failed to produce draft expert reports and emails, and (2) attorneys’ fees and costs under 28 U.S.C. § 1927, which authorizes federal courts to shift fees and costs against any attorney who multiplies the proceedings unreasonably and vexatiously.
Sanction powers, like 28 U.S.C. § 1927, can bring a measure of fairness to mass tort litigation, where plaintiffs’ attorneys use the “cost of defense” to force settlements regardless of the merits. As we noted in Recent Developments in Toxic Torts and Environmental Law, Chevron used 28 U.S.C. § 1927 last year in a potential mass tort against two plaintiffs’ firms that alleged exposure to benzene from a Gulf Oil refinery.