# Johns-Manville Products Corp. v. Superior Court

> California Supreme Court · July 3, 1980 · 27 Cal. 3d 465

URL: https://www.frixlaw.com/law-library/cases/9847914

## Case

- **Full name:** JOHNS-MANVILLE PRODUCTS CORPORATION, Petitioner, v. THE SUPERIOR COURT OF CONTRA COSTA COUNTY, Respondent; REBA RUDKIN, Real Party in Interest
- **Court:** California Supreme Court
- **Decided:** July 3, 1980
- **Citations:** 27 Cal. 3d 465; 165 Cal. Rptr. 858; 612 P.2d 948; 9 A.L.R. 4th 758; 45 Cal. Comp. Cases 704; 1980 Cal. LEXIS 184
- **Precedential status:** Published
- **Opinion:** Dissent by Clark
- **Judges:** Mosk, Clark
- **Cited by:** 118 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9847914

## How later opinions describe it (automated extraction)

- finding allegations sufficient to state cause of action for aggravation of disease against employer notwithstanding workers’ compensation law where plaintiff alleged employer fraudulently concealed from him that he was suffering from disease caused by ingestion of asbestos, th…
- recognizing that California has adopted the “dual capacity doctrine"

## Opinion text

CLARK, J.
I dissent.
The net effect of the majority opinion is to discourage employers from engaging in medical programs designed to minimize the risks and effects of occupational disease. By imposing on the employer tort liability for compensatory and punitive damages in addition to liability for workers’ compensation benefits, today’s decision can only deter employer initiation and maintenance of such programs. Moreover, sound public policy expressed in constitutional and statutory provisions make clear that imposition of such tort liability in favor of a worker covered by compensation benefits is not permitted unless there is specific constitutional or statutory exemption. The majority do not even attempt to find language permitting such exception.
The portions of the complaint held by the majority to state a cause of action may be summarized as follows: Aware since 1924 of the dangers of working with asbestos, Johns-Manville retained physicians and surgeons to examine plaintiff and other of its employees. Johns-Manville failed to advise the retained physicians “of the development of chest pathology and/or pulmonary disease in plaintiff and other employees or that such condition was the result of working conditions at said defendant’s plant.” The foregoing were fraudulent acts in that JohnsManville intended to induce plaintiff to continue working in a dangerous environment. Had plaintiff been aware of his condition, he would have terminated his employment, avoiding further injury.
*480 Public Policy
There are a number of valuable and necessary industries in our society that—unfortunately—involve substantial risk of occupational disease. Aware of these risks, many employers provide special medical programs designed to minimize the risk. Our workers’ compensation law provides benefits for those who, despite such programs, become disabled by occupational disease. Ordinarily, those benefits are in lieu of employer liability in tort for damages.
Today’s decision holds that when an employer adopts a special medical program to minimize the risk of an occupational disease, his potential exposure for liability for the disease will include liability in tort for compensatory and punitive damages in addition to the compensation benefits ordinarily available to injured workers. I am afraid that today’s lesson will not be lost on employers: Should they try to remain ignorant of employees’ health problems and thereby disengage themselves from special medical programs for fear of triggering today’s tort liability?
The employers’ potential loss and thus the effect of today’s decision cannot be minimized. Losses from punitive awards may not be insured against (Ins. Code, § 533; Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 278-279 [ 54 Cal.Rptr. 104 , 419 P.2d 168 ]; City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36-39 [ 151 Cal.Rptr. 494 ]), and tort liability insurers traditionally exempt claims for willful misconduct (id.) and for claims like that asserted by plaintiff where workers’ compensation is available.
The majority have drawn a classification between employers who do not engage in medical programs to discover occupational illnesses and thus will have their liability limited to workers compensation, and employers who maintain such programs and thereby run the risk of tort liability in addition to compensation liability. If such a classification is warranted, does not public policy require the exposure to liability be reversed? From the employee point of view there is little reason to discriminate between victims of industrial injury based on concealment of the illness. Extent of disability should determine recovery in all cases.
*481 Constitutional and Statutory Provisions
Article XIV, section 4 of our Constitution provides: “The Legislature is hereby expressly vested with plenary power, unlimited by any provision of this Constitution, to create, and enforce a complete system of workers’ compensation,... A complete system of workers’ compensation includes adequate provisions for the comfort, health and safety and general welfare of any and all workers... to the extent of relieving from the consequences of any injury.. . sustained by workers in the course of their employment... full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury.. . and full provision for vesting power, authority and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character; all of which matters are expressly declared to be the social public policy of this State, binding upon all departments of the State government.”
Pursuant to constitutional authorization the Legislature enacted a “complete system” of workers’ compensation. (Lab. Code, § 3201. j 1 The complete system established by the Legislature reflects a compromise providing—with few exceptions—that workers will be compensated by employers without regard to the latters’ fault for injuries arising out of and in the course of employment, but that tort liability based on fault shall not be permitted.
Thus, section 3600 states: “Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person except as provided in Section 3706, shall, without regard to negligence, exist against an employer for any injury sustained by his employees arising out of and in the course of the employment.. . . ” 2 (Italics added.)
*482 Section 3601 states: “(a) Where the conditions of compensation exist, the right to recover such compensation, pursuant to the provisions of this division is, except as provided in Section 3706, the exclusive remedy for injury or death of an employee against the employer or against any other employee of the employer acting within the scope of his employment, except that an employee, or his dependents in the event of his death, shall, in addition to the right to compensation against the employer, have a right to bring an action at law for damages against such other employee, as if this division did not apply, in either of the following cases: [¶] (1) When the injury or death is proximately caused by the willful and unprovoked physical act of aggression of such other employee. [¶] (2) When the injury or death is proximately caused by the intoxication of such other employee.... [¶] (c) In no event, either by legal action or by agreement whether entered into by such other employee or on his behalf, shall the employer be held liable, directly or indirectly, for damages awarded against, or for a liability incurred by such other employee under paragraph (1) or (2) of the subdivision (a) of this section. . . . ”
By providing that employer liability for compensation is “in lieu of any other liability whatsoever” (§ 3600) and an employee’s “exclusive remedy” against the employer is recovery of compensation, the Legislature has made clear beyond doubt that tort action against the employer is prohibited unless the employee can bring himself within one of the statutory exceptions. No such exception is applicable here and the majority—obviously unable to satisfactorily deal with the issue—elect to ignore the absence of statutory exception.
*483 As the majority recognize, the provisions of sections 3600 and 3601, precluding tort actions for damages against employers, are applicable to intentional injuries caused by the employer and arising out of and in the course of employment. (E.g., Busick v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal.3d 967, 975-976, fn. 11 [ 104 Cal.Rptr. 42 , 500 P.2d 1386 ]; Mercer-Fraser Co. v. Industrial Acc. Com. (1953) 40 Cal.2d 102, 117 [ 251 P.2d 955 ]; Gates v. Trans Video Corp. (1979) 93 Cal. App.3d 196, 204-206 [ 155 Cal.Rptr. 486 ]; Ankeny v. Lockheed Missiles & Space Co. (1979) 88 Cal.App.3d 531, 534 [ 151 Cal.Rptr. 828 ]; Wright v. FMC Corp. (1978) 81 Cal.App.3d 111, 779 [ 146 Cal.Rptr. 740 ]; Noe v. Travelers Ins. Co. (1959) 172 Cal.App.2d 731 , 733 et seq. [ 342 P.2d 976 ]; Hazelwerdt v. Industrial Indem. Exchange (1958) 157 Cal.App.2d 759 , 763 et seq. [ 321 P.2d 831 ]; Law v. Dartt (1952) 109 Cal.App.2d 508, 509 [ 240 P.2d 1013 ].)
Further, the fact that the employer’s conduct might be considered fraudulent, as the majority recognize, is not sufficient alone to permit recovery in tort where compensation is available. (Wright v. FMC Corp., supra, 81 Cal.App.3d 111, 779 ; Buttner v. American Bell Tel. Co. (1940) 41 Cal.App.2d 581, 584 [ 107 P.2d 439 ].)
When compensation benefits are required by law, the fact that employer conduct may have aggravated the injury does not itself furnish a basis to ignore the exclusivity of the statutory remedy. “[I]t is clear that where an employee is injured in an industrial accident, and the employee seeks recovery for. . .the aggravation from his employer or from his insurance carrier, the Industrial Accident Commission has exclusive jurisdiction to determine this claim against the employer and his carrier.” (Duprey v. Sahne (1952) 39 Cal.2d 781, 790 [ 249 P.2d 8 ]; Hazelwerdt v. Industrial Indem. Exchange, supra, 157 Cal.App.2d 759, 762 .)
The employer’s failure to provide medical care to relieve from the effects of industrial injury also furnishes no basis for an independent action in tort. {Noe v. Travelers Ins. Co., supra, 172 Cal.App.2d 731 , 733 et seq.) In the last cited case, Justice Tobriner noted the danger of permitting tort actions against employers and insurers: “[I]f delay in *484 medical service attributable to a carrier could give rise to independent third party court actions, the system of workmen’s compensation could be subjected to a process of partial disintegration. In the practical operation of the plan, minor delays in getting medical service, such as for a few days or even a few hours, caused by a carrier, could become the bases of independent suits, and these could be many and manifold indeed. The uniform and exclusive application of the law would become honeycombed with independent and conflicting rulings of the courts. The objective of the Legislature and the whole pattern of workmen’s compensation could thereby be partially nullified.” (Italics added; 172 Cal.App.2d at p. 737 .)
There can be no question in the instant case that plaintiff is seeking recovery for injuries arising out of and in the course of employment. The complaint asserts the injury was due to working with asbestos.
Furthermore, employer liability is sought to be predicated on fraud in providing medical examinations and X-rays for an employee, and the medical examination and X-ray program must be considered within the employment context because the program is a benefit furnished by the employer for the employees incident to employment. (Saala v. McFarland (1965) 63 Cal.2d 124, 129 [ 45 Cal.Rptr. 144 ]; Fireman’s Fund Etc. Co. v. Ind. Acc. Com. (1952) 39 Cal.2d 529, 532-533 [ 247 P.2d 707 ]; Dixon v. Ford Motor Co. (1975) 53 Cal.App.3d 499, 503, 504-507 [ 125 Cal.Rptr. 872 ]; Wickham v. North American Rockwell Corp. (1970) 8 Cal.App.3d 467, 472 [ 87 Cal.Rptr. 563 ].) Accordingly, unless there is a statutory exemption, any injury suffered by the employee as a result of the medical examination program is compensable under the compensation act without regard to fault, but again liability in tort is not permitted.
Because plaintiffs injury arose out of and in the course of employment, and there is no statutory exception, tort liability of the employer may not be predicated upon intentional misconduct, including fraud, aggravation of a prior injury, or failure to provide proper medical care.
The majority rely upon a number of cases which have permitted tort actions against the employer based on the language of relevant statutes. (Duprey v. Shane, supra, 39 Cal.2d 781 ; Meyer v. Graphic Arts In *485 ternational Union (1978) 88 Cal.App.3d 176 [151 CaI.Rptr. 597]; Renteria v. County of Orange (1978) 82 Cal.App.3d 833 [ 147 Cal.Rptr. 447 ]; Magliulo v. Superior Court (1975) 47 Cal.App.3d 760 [ 121 Cal.Rptr. 621 ]; Ramey v. General Petroleum Corp. (1959) 173 Cal. App.2d 386 [ 343 P.2d 787 ]; Unruh v. Truck Insurance Exchange (1972) 7 Cal.3d 616 [ 102 Cal.Rptr. 815 , 498 P.2d 1063 ].) In each case, the court relied on language of the relevant statute in concluding there to be a basis for permitting tort in addition to compensation liability. None of the cases relied upon support the conclusion of tort liability in the instant case because the statutory language held to permit recovery in those cases does not do so in the instant case.
The Duprey case involves the dual capacity or the two-hat doctrine. The employer or insurer in those cases acts not only as an employer but also in a second capacity in causing or aggravating the injury. Thus in Duprey the employer who was a doctor undertook to treat his nurse for industrial injury. The court recognized that while doctors treating victims of industrial accident ordinarily may be held liable in tort for malpractice, an employer is ordinarily not liable in tort to an employee for aggravation of an injury caused by malpractice. However, the court concluded that having undertaken treatment in a doctor-patient relationship, the employer should be liable in tort for acts of malpractice. In excluding tort liability, sections 3600 and 3601 exclude liability of the “employer.” Duprey is based on the construction of that term as excluding liability of the doctor when acting as such. In providing medical examinations and X-rays in the instant case, Johns-Manville, as we have seen, acted only in its employer capacity. The dual capacity or two-hat doctrine is not applicable here.
In Magliulo and in Meyer , which followed Magliulo , the employer in each case was alleged to have assaulted an employee. The cases hold that there is a statutory exception to the rule that compensation is an exclusive remedy in the case of an unprovoked assault. (§ 3601, subd. (a); 47 Cal.App.3d at pp. 779-780.) There is no statutory exemption applicable in the instant case similar to the one provided for in section 3601.
In Ramey and Renteria , the actions for damages were for injuries not compensable under the compensation law. In Ramey , the employer *486 fraudulently induced the injured employee to forego tort action against a third party tortfeasor. The claim in Ramey was not for the employee’s physical injury but for his economic injury, fraudulent deprivation of a cause of action. In Renteria , an employee seeking to recover against his employer for intentional infliction of emotional distress, did not allege any physical disability or injury. The court noted he would not be entitled to recover in compensation proceedings. (82 Cal.App.3d at pp. 839-S42.) 3 Subsequent cases in which it has been alleged that intentional infliction of emotional distress caused physical injury have distinguished Renteria , holding that compensation is the exclusive remedy. (See Gates v. Trans Video Corp., supra, 93 Cal.App.3d 196, 206 ; Ankeny v. Lockheed Missiles & Space Co., supra, 88 Cal.App.3d 531, 535-536 .) By contrast, the aggravation of the initial injury arising from the employer’s fraudulent conduct in the instant case is an injury compensable exclusively under the compensation law.
In Unruh , an investigator of the compensation carrier misrepresenting “his capacity and intentions” toward an injured employee, befriended her and enticed her to visit Disneyland where he violently shook a rope bridge causing her injury. When films surreptitiously made of the employee’s conduct were exhibited at a compensation hearing, she suffered a nervous breakdown. The court concluded that the insurer had departed from its proper role as a carrier, and relying upon Duprey concluded that under the dual personality doctrine the action might be maintained on the basis that the insurer in fraudulently obtaining evidence was acting in a capacity other than as an insurer. (7 Cal. 3d at p. 630 et seq.) As noted above, in providing for physical examinations and X-rays for employees facing the risk of occupational illness, Johns-Manville continued to act as an employer.
The foregoing cases relied upon by the majority are each based on an interpretation of a statutory provision. The instant case cannot be brought within any statutory exemption. The majority do not even attempt to point to a statutory or constitutional provision permitting tort liability herein.
*487 Courts may interpret the Constitution and statutes. But to ignore constitutional provisions granting the Legislature plenary authority, and legislative enactments expressly and unambiguously dealing with applicable law, is not only judicial usurpation of the legislative function but also judicial arrogance destructive of society’s confidence in the rule of law.
The majority properly reject the offered but erroneous grounds of statutory interpretation. Nevertheless, they then proceed to adopt a rule contrary to legislative direction. In the face of constitutional delegation to the Legislature and express legislative mandate, and in the absence of any asserted constitutional or statutory basis for their action, the majority arrogantly have usurped the legislative function in violation of the separation of powers doctrine and thus thwart the people’s will.
A number of occasions have arisen in the past where members of the court have disagreed as to the meaning of constitutional and statutory provisions or as to the proper rule of law to be applied by courts in the absence of such provisions. But no such disagreement exists in this case. The majority simply refuse to address the constitutional plenary grant of power and the Legislature’s express prohibition against tort action.
We all have compassion for those incurring industrial injury or industrial disease. The workers’ compensation law reflects that compassion —providing compensation for all employees suffering employment injury or illness—whether or not the employer is at fault.
Permitting both compensation benefits and tort recovery from the employer for employment injury creates “partial disintegration” as described by Justice Tobriner of our system of workers’ compensation. Realizing that tort recovery is now allowed by our court when the employer is at fault, the Legislature may conclude that compensation is the determinative remedy only where the employer is not at fault, and it may refuse to adjust compensation benefits to reflect the basic compromise. Further, the level of compensation to be fixed by the Legislature will take into account employer costs, and today’s decision means employers must obtain liability insurance against employee injury as well as compensation insurance. The majority’s decision providing special tort award for a few of those suffering occupational illness jeopardizes the amount of the benefits available to the many victims of industrial illness and injury.
*488 I would issue the writ and order respondent court to grant the motion for judgment on the pleadings.
Richardson, J., concurred.
On August 28, 1980, the opinion was modified to read as printed above. The concurring and dissenting opinion of Manuel, J., was thereupon withdrawn.
Unless otherwise indicated all statutory references are to the Labor Code.
Section 3600 provides: “Liability for the compensation provided by this division, in lieu of any other liability whatsoever to any person except as provided in Section 3706, shall, without regard to negligence, exist against an employer for any injury sustained by his employees arising out of and in the course of the employment and for the death of any employee if the injury proximately causes death, in those cases where the following conditions of compensation concur: [¶] (a) Where, at the time of the injury, both the employer and the employee are subject to the compensation provisions of this division. [¶] (b) Where, at the time of the injury, the employee is performing service *482 growing out of and incidental to his employment and is acting within the course of his employment. [¶] (c) Where the injury is proximately caused by the employment, either with or without negligence. [¶] (d) Where the injury is not caused by the intoxication of the injured employee. [¶] (e) Where the injury is not intentionally self-inflicted. [¶] (f) Where the employee has not willfully and deliberately caused his own death. [¶] (g) Where the injury does not arise out of an altercation in which the injured employee is the initial physical aggressor. [¶] (h) Where the injury does not arise out of voluntary participation in any off-duty recreational, social, or athletic activity not constituting part of the employee’s work-related duties, except where such activities are a reasonable expectancy of, or are expressly or impliedly required by, the employment. The administrative director shall promulgate reasonable rules and regulations requiring employers to post and keep posted in a conspicuous place or places a notice advising employees of the provisions of this subdivision. Failure of the employer to post such a notice shall not constitute an expression of intent to waive the provisions of this subdivision.”
In Renteria the court concluded: ‘“If the essence of the tort, in law, is non-physical, and if the injuries are of the usual non-physical sort, with physical injuries being at most added to the list of injuries as a makeweight, the suit should not be barred. But if the essence of the action is recovery for physical injury or death, the action should be barred even if it can be cast in the form of a normally non-physical tort.’ (2A Larson, Workmen’s Compensation Law § 68.34, pp. 13-31, 13-32.)” ( 82 Cal.App.3d at p. 842 .)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9847914. Public record. Not legal advice.