Due diligence analyses related to EtO exposure

Ethylene oxide (EtO) is a colorless gas used in multiple sterilization applications of goods that cannot be sterilized using steam or radiation, such as medical equipment and food products. EtO is also used as an ingredient in the preparation of a range of chemical products. Exposure to EtO has been alleged to cause numerous health issues, including headaches, dizziness respiratory irritation, and certain malignant conditions, including non-Hodgkin’s lymphoma, myeloma, and breast cancer. Though evidence of a causal effect on humans is limited, allegations of EtO-related diseases have become increasingly common in recent years.

Consideration of numerous factors is critical to the evaluation and rigorous analysis of a company’s potential exposure, expenditures, and liability risks. Work-related exposures are typically covered under workers’ compensation claims. However, personal injury and wrongful death claims from bystanders and end-users can be subject to expensive and complex litigation. For those alleged exposures, potential future expenditure modeling should include factors such as the distance of allegedly affected people’s homes or jobs from EtO facilities, population density of the areas surrounding the facilities, climate conditions (such as wind direction) and geographic features that would affect the dispersion and reach of EtO in surrounding areas, as well as EtO testing levels and the implementation of technology to measure and minimize the concentration of any emissions from those facilities.

Our experts have been retained on several matters related to EtO exposure. They employ a holistic approach that considers and incorporates the historical EtO-specific tort landscape (claim filings, resolutions, average settlement values, and bankruptcy proceedings), company-specific claims history, and the aforementioned factors to provide range estimates of a company’s potential exposure based on pending and future claims.

Most recently, our experts prepared a due diligence report to assess current and future potential expenditures associated with claims derivative of alleged exposure to EtO for a global corporation. For a private equity firm, our experts estimated an acquisition target’s potential expenditures associated with pending and future personal injury claims derivative of alleged exposure to EtO at multiple facility locations.