WASHINGTON-The U.S. Supreme Court's unanimous denial of damages for a worker's fear of contracting a future illness extinguishes what business groups feared could have been an explosion of new litigation.

The case, Metro-North Commuter Railroad Co. vs. Michael Buckley, involved a pipe fitter who sued his employer for negligence after being exposed on the job to large amounts of white pipe insulation dust containing asbestos. He and his colleagues were so coated with the dust they were dubbed "snowmen."

According to the Supreme Court, the employer "conceded negligence" but disputed that the worker-who has not become ill-had suffered emotional distress because of his fear of developing an asbestos-related disease. The employer, Metro-North Commuter Railroad Co., argued that under the Federal Employers Liability Act, which governs the rail industry, there was no cause for a worker with no physical injury to recover damages.

The high court agreed, to the relief of employers.

Although the decision focused on federal employers, the case was seen as having broad implications for the private sector, as well.

"We're thankful that the court took steps to limit unpredictable liability," said Quentin Riegel, deputy general counsel of the National Assn. of Manufacturers in Washington.

"RIMS is pleased to see that the Supreme Court refused to expand the breadth of the tort of negligent infliction of emotional distress," said Paul Brown, general counsel and director of government affairs for the Risk & Insurance Management Society Inc. in New York.

"We applaud the court for taking such a stand. To have found otherwise would have subjected employers and others to a potential flood of new litigation," said Mr. Brown.

But the justices did not fully answer the question of whether employers in such cases may be liable to pay for medical monitoring of employees, which the worker in this case sought.

Michael Buckley worked as a pipe fitter in Metro-North's Grand Central Terminal project in the late 1980s. Mr. Buckley sued his employer under FELA for $1 million, claiming that the exposure to the dust caused him mental distress. He also asked that Metro-North be required to pay for periodic medical monitoring to detect any sign of asbestos-related disease.

But Mr. Buckley showed no sign of having contracted any disease, and the U.S. District Court ruled in favor of Metro-North. Mr. Buckley appealed the case to the 2nd U.S. Circuit Court of Appeals, which ruled in his favor.

Metro-North then appealed to the U.S. Supreme Court, which heard oral arguments in the case in February (BI, Feb. 24) and handed down its decision last week.

Although the justices ruled unanimously that Mr. Buckley was not entitled to any damages for emotional distress, two justices filed a partial dissent on the matter of medical monitoring.

The unanimous court found that Mr. Buckley could not recover emotional distress damages "unless, and until, he manifests symptoms of a disease."

"Common law courts do permit a plaintiff who suffers from a disease to recover for related, negligently caused emotional distress," wrote Justice Stephen Breyer for the court. "Some courts permit a plaintiff who exhibits a physical symptom of exposure to recover."

But "with only a few exceptions, common law courts have denied recovery to those who, like Buckley, are disease and symptom-free," he added.

The majority was more sympathetic to Mr. Buckley's claim that he should receive compensation from the employer for the cost of periodic medical monitoring.

"We do not deny that the dissent paints a sympathetic picture of Buckley and his co-workers; this picture has force because Buckley is sympathetic and he has suffered wrong at the hands of a negligent employer," Justice Breyer wrote. "But we are more troubled than (the dissenting justices) by the potential systemic effects of creating a new, full-blown, tort law cause of action.

"Tens of millions of individuals may have suffered exposure to substances that might justify some form of substance-exposure-related medical monitoring. And that fact, along with uncertainty as to the amount of liability, could threaten both a 'flood' of less important cases-potentially absorbing resources better left available to those more seriously harmed-and the systemic harms that can accompany 'unlimited and unpredictable liability'-say, for example, vast testing liability adversely affecting the allocation of scarce medical resources.

"The dissent assumes that medical monitoring is not a 'costly' remedy. . . .But Buckley here sought damages worth $950 annually for 36 years; by comparison, of all claims settled by the Center for Claims Resolution, a group representing asbestos manufacturers, from 1988 until 1993, the average settlement for plaintiffs injured by asbestos was about $12,500, and the settlement for non-malignant plaintiffs among this group averaged $8,810."

In her partial dissent, in which she was joined by Justice John Paul Stevens, Justice Ruth Bader Ginsburg said: "The court's anticipation of a 'flood' of less important cases and 'unlimited and unpredictable liability' is overblown. The employee's 'injury' in the claim at stake is the economic burden additional medical surveillance entails; if an employer provides all that a reasonable physician would recommend for the exposed employee, the employee would incur no costs and hence have no claim for compensation. Nor does the FELA claim Buckley states pave the way for 'tens of millions of individuals' with similar claims," she wrote for the dissent. "It is doubtful that many legions in the universe of individuals ever exposed to toxic material could demonstrate that their employers negligently exposed them to a known hazardous substance, and thereby substantially increased the risk they would suffer debilitating or deadly disease. Withholding relief, moreover, is dangerous, for lives will be lost when grave disease is diagnosed too late," the dissent added.

Justice Ginsburg also called the majority decision denying medical monitoring "enigmatic" and wrote that by her reading of the decision, Mr. Buckley could "re-plead a claim for relief and recover for medical monitoring" provided that he received the relief in some form other than a lump sum.

Despite the ambiguity over liability for medical monitoring, business and insurance groups applauded the decision.

"We're quite pleased with the decision," said Craig A. Berrington, senior vp and general counsel of the American Insurance Assn. in Washington. "We always believed that the case had ramifications beyond FELA. That was one of the reasons we were so intent on getting our views before the Supreme Court in an amicus," he said.

"While the decision addresses only FELA, it sends a very strong signal to courts dealing with the so-called fear of future injury issue in other contexts on how they should address that issue," Mr. Berrington said.

"They provided for everyone a rule that can be easily understood and easily followed: Essentially an individual has a right to bring a tort action if that individual has suffered an injury; not just because the individual has been exposed or come in contact with elements that might cause injury in the future," he said.

Mr. Berrington added two caveats, however. The first is that the decision applies specifically to a FELA case, and there is no obligation for other courts to follow it in similar cases not governed by FELA, he said.

The second caution is that while the court expressed "substantial concern" about medical monitoring claims, it "did not rule that medical monitoring claims, especially when there were symptoms that actually existed, could never be properly brought," he said.

"You've got to prove your case is what they're saying," said Robin Conrad, vp of the National Chamber Litigation Center Inc. in Washington.

She noted that the U.S. Chamber of Commerce had been concerned with the "potential spillover effect" to the private sector of allowing damages for emotional distress and medical monitoring presented by the Metro North case. But the decision shows that "the court is very cautious about entertaining the idea of a separate medical monitoring tort," she said, calling it a "very pragmatic" and "thoughtful" opinion.

She pointed out that Justice Breyer noted tens of millions of people have been exposed at one time or another to toxic substances, in and out of the workplace. She said those concerns show "that the court is thinking beyond the scope of FELA. I think the court is seeing the potential for recovering for exposure only is really tremendous."

Despite the fact that the case addressed only liability under the FELA, NAM's Mr. Riegel said: "It's going to be very important nevertheless, because the Supreme Court generally does not get into interpretations of state product liability issues unless they reach constitutional dimensions. To the extent that the court is interpreting a statute at the federal level, that is very likely to be persuasive at the state level. I think it will have a significant impact on state court product liability cases and workplace safety claims."

Separately, the Supreme Court last week ruled 5-4 in another liability case that guards at private prisons do not enjoy the same legal immunity from civil actions that some guards at state-operated prisons have. The case, Richardson vs. McKnight, began when a 300-pound inmate at a privately run Tennessee prison sued guards at the facility. He claimed that his rights had been violated by being placed in tight bodily restraints when he was being transported to the prison.

Metro-North Commuter Railroad Co. vs. Buckley, U.S. Supreme Court, No. 96-320, June 23, 1997. Richardson vs. McKnight, U.S. Supreme Court, No. 96-318, June 23, 1997.