The Art of Toxic Mold Litigation

Mold, the relatively innocuous-sounding inhabitant of many a bachelor's refrigerator, is generating nationwide media attention and involving homeowners, architects, construction companies, commercial and residential landlords, property managers, employers and contractors in multimillion dollar lawsuits.

Polychlorinated Biphenyls (PCBs)… Asbestos… Hexavalent Chromium… Trichloroethylene (TCE). All of these substances raise the suspicion (and challenge the vocabulary) of the reader, suggest toxicity and health concerns, and are commonly associated with significant tort and environmental liability. However, none of these substances is what some legal experts are calling the next area of massive toxic tort litigation and liability. Rather, it is mold, the relatively innocuous-sounding inhabitant of many a bachelor’s refrigerator, that is generating nationwide media attention and involving homeowners, architects, construction companies, commercial and residential landlords, property managers, employers and contractors in multimillion dollar lawsuits. The following is a brief introduction to the strange new world of toxic mold litigation.


In the last few years, an increasing number of claims alleging personal injury and property damage resulting from mold infestation and exposure have been brought by property owners, employees, tenants, building occupants, and local governments. These claims have garnered significant publicity, resulted in surprising verdicts, and caused reactions by impacted industries. Despite the recent rash of mold-related litigation, the science regarding whether certain species of mold can cause significant and permanent health effects remains unclear.

Molds are a type of fungi and are ubiquitous in the environment. Molds require moisture to survive. However, unlike most other plants, molds lack chlorophyll and thus they grow on other materials. Outdoors, molds are an integral part of natural processes, breaking down leaves, wood and plant debris. However, indoors, mold spores grow by digesting whatever organic substance they land on, including wallpaper, insulation, drywall, carpet, ceilings and roofs. Scientists have identified over 5,000 species of mold, of which around 150 can cause allergies in humans, approximately 50 are pathogenic (i.e., they can grow inside the human body), and about 50 are capable of creating “mycotoxins,” fungal metabolites which may cause toxic reactions in healthy individuals.

Plaintiffs in mold litigation have alleged that molds cause a variety of different illnesses and adverse health effects: from the more mundane and generic headaches, nausea, fatigue, asthma, hay fever-like symptoms (runny nose and scratchy throat) and respiratory problems, to exotic disorders with accompanying acronyms, such as sick building syndrome (SBS), fibromyalgia (FM), chronic fatigue syndrome (CFS), reactive airway dysfunction syndrome (RADS), toxic encephalopathy (TE), and multiple chemical sensitivity (MCS).1

Although it is generally accepted in the scientific community that certain mold species can cause allergic reactions in individuals such as coughing, sneezing and breathing problems, there is a lack of scientific consensus regarding (1) whether mold can cause permanent and severe illnesses, and (2) what level of mold exposure may cause such illnesses (or conversely, what is a permissible exposure level (PEL) to indoor mold). The U.S. Centers for Disease Control and Prevention (CDC) reviewed an investigation of pulmonary illnesses in infants in Cleveland, Ohio, in 1994, and initially agreed with the investigators’ conclusion that inhalation of Stachybotrys chartarum spores caused the children to die from pulmonary hemorrhage.2 However, the CDC later criticized the unscientific sampling and unjustifiable assumptions of the investigators, and now states on the CDC Web site that “[t]here are very few case reports that toxic molds (those containing certain mycotoxins) inside homes can cause unique or rare health conditions such as pulmonary hemorrhage or memory loss. These case reports are rare, and a causal link between the presence of the toxic mold and these conditions has not been proven.”3


  • In May 2002, mold testing in a South Atlanta apartment complex showed “a serious mold problem” in at least 37 of the 119 rent-subsidized units, causing dozens of families to vacate their apartments and subjecting the property manager and complex owners to numerous claims from residents relating to the mold growth;4
  • In June 2001, a jury awarded $32 million to a Texas family after the jury concluded that the defendant insurance company’s failure to properly cover repairs for water damage allowed the “toxic mold” Stachybotrys atra to grow in the family’s 22-room mansion;5
  • In May 2001, the Delaware Supreme Court upheld a $1 million verdict (reduced by 22% for contributory negligence) in favor of two tenants of an apartment complex who claimed that mold growth in their apartments resulting from water leakage had caused respiratory problems and cognitive impairments. In addition, the Delaware Supreme Court rejected the landlord’s contention that the testimony of the tenants’ expert witnesses should be excluded as scientifically unreliable;6
  • In 1998, the Florida Court of Appeals affirmed an over $14 million verdict in favor of Martin County and against the construction manager of a county courthouse based on the growth of “toxigenic” molds, water damage, and indoor air quality problems resulting from construction defects in the courthouse;7
  • One California lawyer says he has more than 1,000 mold-related lawsuits in development; many of which involve claims by condominium residents that they suffered illnesses because their homeowners’ associations failed to properly maintain the common areas of their properties;8
  • Recently, insurance companies in some of the states hardest hit by toxic mold litigation and mold-related insurance claims, such as Texas and California, announced moratoriums on the sale of policies that would cover mold and excluded coverage for mold and water damage in homeowners’ policies;9
  • Many residential real estate companies have begun recommending to their agents and clients that they obtain a mold inspection, along with the customary general home inspection, before purchasing a home.

Although a bill is expected to be introduced in the United States Congress that would require the Environmental Protection Agency (EPA) to create guidelines establishing “what levels of toxic mold are acceptable, and what levels are dangerous,”10 currently there are no government or industry standards that specify allowable or acceptable levels of indoor, airborne fungi.[^5] In addition, there is little published information comparing indoor and outdoor fungal populations or comparing fungal populations in different parts of the United States, and only limited available information on the prevalence of certain fungal types in buildings.11

Given this scientific uncertainty, the outcome of toxic mold litigation frequently hinges on expert witness testimony and the ability of the plaintiff to establish causation between his or her alleged injuries and the particular species of mold. In order to establish causation, the plaintiff must prove both “general causation,” that the particular species of mold is capable of causing the plaintiff’s specific injury, and “specific causation,” that the plaintiff was in fact exposed to a dose of the alleged toxic mold sufficient to cause the plaintiff’s injury.12

In order to attempt to satisfy these causation thresholds, a plaintiff will frequently utilize an environmental testing firm or laboratory to conduct mold sampling in the allegedly contaminated structure and will engage expert witnesses in fields such as mycology (the study of fungi), microbiology, environmental and occupational medicine, allergy and immunology, neuropsychology, industrial hygiene, architecture and building design, and building maintenance. The focus of the defense is on convincing the Court to exclude the plaintiff’s proposed “expert” testimony as scientifically unreliable, which is a real possibility in light of the lack of scientific consensus regarding mold toxicity and the questionable methodology utilized by many environmental sampling firms. If the defense fails in its efforts to exclude the plaintiffs’ experts, mold lawsuits frequently are resolved via the jury’s determination of which side’s experts “win” the “battle of the experts” at trial.


Molds require moisture to survive, and thus they grow in damp or wet areas indoors. When excessive moisture is present in a building or home, and the moisture problem is undiscovered or not addressed, mold growth is a real threat because molds flourish on wet building materials. Common areas for indoor mold growth include bathroom tile, basement walls, areas around windows where moisture condenses, and near leaky water fountains or sinks. Common sources or causes of water or moisture problems, and the resultant mold growth, include roof leaks, delays in proper building maintenance, condensation from heating, ventilation, and air conditioning systems, condensation associated with high humidity or cold spots in a building, flooding from plumbing failures or heavy rains, slow leaks in plumbing fixtures and pipes, and the malfunction of humidification systems. Moreover, mold infestation is an increasingly problematic issue in newer buildings and homes because more recently constructed buildings and homes are much tighter and more energy efficient, and occupants rarely open windows, resulting in less ventilation of the indoor environment.

The growing awareness of mold growth and indoor air problems has spawned an industry specializing in mold testing and remediation of commercial and residential buildings. Until recently, there was little guidance and no standards governing mold remediation, and thus some unscrupulous testing and remediation companies charged exorbitant amounts for, and engaged in extensive cleanups of, relatively minor mold problems. However, in March 2001, the EPA issued a guidance document for mold remediation projects that provides some general guidelines for evaluating and responding to an indoor mold problem.14 In addition, the EPA guidance lists a number of measures to prevent indoor mold growth which, although generally common sense, are helpful for building owners and homeowners:

The key to mold control is moisture control;
– Fix leaky plumbing and leaks from outside the building as soon as possible;
– Watch for condensation and wet spots;
– To reduce the moisture level in indoor air, increase ventilation (if outside air is cold and dry), or use a dehumidifier (if outside air is warm and humid);
– Keep heating, air-conditioning and ventilation (HVAC) drip pans clean, flowing properly, and unobstructed;
– Perform regular HVAC system inspection and maintenance (do not run HVAC system if you suspect that the HVAC system is contaminated with mold);
– Do not allow building foundations to remain wet. Provide drainage and slope the ground away from the foundation; and
– Remove and replace any flooded carpets.

There is little question that, at least for the short-term future, toxic mold litigation and insurance claims will continue to grow, generate significant publicity, and trigger legislative and regulatory responses from government. Although individuals and companies facing indoor mold issues and/or mold-related claims should not overreact, it is important to take such issues seriously and respond in a timely manner by consulting an experienced environmental remediation firm and seeking legal advice if necessary.


  1. See, e.g., Minner v. American Mortgage & Guaranty Co., 791 A.2d 826 (Del. Super. Ct. 2000). 
  2. Walter J. Andrews, et al., Daubert v. Merrell Dow Pharmaceuticals Provides Key Challenge to Mold Injury Causation Evidence, SG004 ALI-ABA 19, 29 (October 11, 2001). 
  3. The CDC’s Web site is
  4. Andy Miller, Dispute Over Mold Forces Residents Out, Atlanta Journal & Constitution, May 30, 2002, at B1, B5. 
  5. The jury award consisted of $6.2 million in property damage, $12 million in punitive damages, $5 million in mental anguish damages, and $8.9 million in attorneys’ fees. Ballard v. Fire Insurance Exchange (Travis Co. Cause No. 99-05252); Stephanie K. Jones, Jury Sends Message to Insurance Industry in Toxic Mold Case, Insurance Journal (June 27, 2001). Surprisingly, the jury’s $32 million award was not for the plaintiffs’ personal injury claims. The trial judge excluded the plaintiffs’ expert witness testimony regarding causation of the plaintiffs’ personal injuries and thus the jury’s verdict was based on the insurance company’s bad faith and improper handling of the plaintiffs’ insurance claims. Andrews, supra note 2, at 32. 
  6. New Haverford Partnership v. Stroot, 772 A.2d 792 (Del. 2001). One of the plaintiffs in Stroot was awarded $1 million for her claim that the toxic mold in her apartment “significantly and permanently increased the severity of [her] asthma” and caused “significant cognitive impairment in the areas of attention, concentration, memory and executive functions,” while the second plaintiff was awarded $45,000 on her claim that she suffered frequent headaches, tiredness, sinus problems, chest pains and body aches while residing in the apartment (the second plaintiff’s alleged symptoms subsided upon vacating her apartment). 
  7. Centex-Rooney Construction Co., Inc. v. Martin County, 706 So.2d 20 (Fla. Ct. App. 1997). Martin County had previously settled its claims against the architect and masonry construction company involved in the construction of the courthouse for $2,750,000. 
  8. Mary Umberger, What Will Mold Cost Us? It’s a Growing Factor In Buying, Selling Homes, Chicago Tribune, July 22, 2001, at 1. 
  9. Leo John Jordan & Jennifer K. Kenchel, Recent Developments in Property Insurance Law, 37 Tort & Insurance Law Journal 675, 676 (Winter 2002). 
  10. BNA Inside E.P.A. Weekly Report, May 17, 2002, Toxic Mold Bill Would Give EPA First-Time
    Indoor Air Authority
    , at 19. In addition to requiring EPA to establish guidelines for exposure to toxic mold, the proposed bill would (1) direct EPA to set standards regulating the mold remediation industry and (2) mandate that states license and monitor mold inspectors and remediators.
    [^5] In response to the growing number of mold-related insurance claims and lawsuits, the State of California recently enacted the “Toxic Mold Protection Act of 2001.” This act requires the State of California’s Department of Health Services to determine whether it is feasible to adopt permissible exposure limits to mold in indoor environments, and if so, “[a]doptpermissible exposure limits . . . that avoid adverse effects on health, with an adequate margin of safety, and avoid any significant risk to public health.” 2001 Cal. Stat. Section 26103(a) (also directing that, in adopting permissible exposure limits for mold, the Department should balance “technological and economic feasibility” with “the protection of public health”). The act also requires commercial or industrial property sellers or landlords, public entities, and residential landlords to disclose to buyers and tenants when mold levels in a structure exceed the permissible exposure limits (once such limits are established). A number of other states, including Maryland, New York, and New Jersey, have taken or are considering legislative action directing state officials to study the effects of toxic mold. David F. Blundell, Proliferation of Mold and Toxic Mold Litigation: What Is Safe Exposure To Airborne Fungi Spores Indoors?, 8 Envtl. Law 389, 401-402 (2002). 
  11. Brian G. Shelton, et al., Profiles of Airborne Fungi in Buildings and Outdoor Environments in the United States, Applied and Environmental Microbiology, at 1743-1753 (April 2002) (conducting one of the first, and largest, studies of airborne indoor and outdoor fungal species based on air sampling of buildings across the U.S., and finding that Cladosporium, Penicillium, and Aspergillus are the most common species of indoor and outdoor mold.) 
  12. Andrews et al., supra note 2, at 27; Blundell, supra note 5, at 395. 
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