The Value Of GAWDA

Defend, Promote, Foster

Companies rightly often question what they get for their membership in a national trade association. In taking on the insurance industry and prevailing in what could have been “bet the company” litigation, GAWDA has recently proved its worth to both its distributor and its associate members.

Many GAWDA members are facing court cases alleging injury from exposure to welding fumes. The industry is mounting a coordinated defense to this assault from the plaintiffs’ bar, and with one exception all of the jury verdicts to date have been for the defendants. But the cost of defending those suits is enormous and the potential liability for an adverse judgment is even more troublesome.

In addition, some insurers have tried to bail out on this industry by denying their obligation to defend or cover their insureds. U.S. Fire went so far as to bring a lawsuit in federal court in Baltimore against Clendenin Brothers and its corporate affiliates. The suit claimed that the “pollution exclusion” in the company’s comprehensive general liability policy encompassed welding fume claims, as “pollution” included “fumes” by definition. U.S. Fire therefore sought a court order declaring that it had no obligation to defend or cover its insureds from any underlying welding fume claims.

The choice of venue was intentional—the federal circuit court that includes Maryland had already decided a prior case interpreting D.C. law that the pollution exclusion absolved the insurer from defending and covering welding fume claims. If U.S. Fire was successful in getting the court to find for it under Maryland law as well, the insurance industry would likely be able to persuade courts nationwide to reach the same result.

At this point GAWDA stepped in. With your contributions, GAWDA established its Joint Defense Fund and hired expert counsel (Katherine Henry and Rick Fields of Dickstein Shapiro Morin & Oshinsky) to represent the industry. GAWDA’s counsel got the case moved from federal court, where we certainly would have lost, to the Maryland State Court of Appeals, where we had a better chance of winning. And then counsel persuaded the state court to rule that the pollution exclusion was only intended to encompass “environmental pollution” and not fumes emanating from the normal use of the product in the workplace; the court held that U.S. Fire may not avoid its defense or coverage obligations under the pollution exclusion.

This is a huge victory for GAWDA members. With no insurance coverage or legal defense, a distributor could go out of business if faced with multiple welding fume lawsuits. GAWDA’s victory has made it possible for individual companies to continue operating while the industry fights the welding fume cases.

But the fight is not over. It is possible that GAWDA and others might have to litigate this same insurance coverage issue in other states despite this Maryland decision. And although the welding fume litigation itself is trending in favor of the defense at the moment, the plaintiffs’ attorneys have shown no signs yet of calling off the dogs.

Thus, GAWDA now needs your help more than ever. The association is hiring JDF counsel to monitor, manage and coordinate distributors’ responses to welding fume and insurance suits. This costs money, and will likely be necessary for at least several more years, even assuming all goes well in the courtrooms across the nation. Additionally, GAWDA is working with the National Association of Manufacturers and the U.S. Chamber of Commerce Institute for Legal Reform to encourage Congress to pass comprehensive tort reform legislation.

GAWDA has risen to the occasion so far, and with members’ steady financial support the association will continue to work to defend its members’ interests in court, promote your business opportunities, and foster your ongoing prosperity.

Gases and Welding Distributors Association
Meet the Author
GAWDA Government Affairs and Human Resources Legal Consultant Richard P. Schweitzer, Esq., is president of Richard P. Schweitzer, PLLC, in Washington, D.C. Members can reach him at 202-223-3040 and at rpschweitzer@rpslegal.com.