Connecticut's highest court just handed employers a significant win on subrogation.
In a unanimous decision released on April 21, 2026, the Connecticut Supreme Court ruled that employers can place a lien on the full net amount of tort settlement proceeds recovered by an employee's estate for an occupational disease, even when the vast majority of those proceeds stem from exposure that happened outside the workplace.
The case centered on Stephen M. Dodge, a longtime state employee who was exposed to airborne asbestos fibers both on the job and at home over the course of several decades. Dodge worked as a custodian for the Town of Manchester during the summer of 1967, sweeping and buffing asbestos-containing flooring. He then spent 30 years, from 1973 to 2003, as an analyst at the Department of Motor Vehicles headquarters in Wethersfield, a building that contained asbestos material throughout and had elevated concentrations of asbestos fibers in the air. Outside of work, Dodge had also been exposed to asbestos through products including grinding wheels, joint compounds, drywall, and insulation during his childhood and early adulthood.
In 2011, Dodge was diagnosed with malignant peritoneal mesothelioma. He died from complications the following year. His wife, Elizabeth Dodge, was appointed executrix of his estate and pursued product liability actions against the manufacturers and suppliers of the asbestos-containing products her husband had encountered over his lifetime. Those cases settled for a gross recovery of $522,424.30. The breakdown was telling: only $31,500 of that total was tied to workplace exposure.
The remaining $490,924.30 came from nonoccupational sources. After attorney's fees and expenses, the net recovery was $337,048.71, split between $101,114.61 for Elizabeth Dodge's loss of consortium and $235,934.10 for the estate.
On the workers' compensation side, the numbers were substantial. The Workers' Compensation Commission awarded the estate $41,061.71 in total incapacity benefits, a $4,000 funeral allowance, and $822,192.29 in weekly survivor's benefits to Elizabeth Dodge covering the period from her husband's death in 2012 through the commission's decision in 2024.
The fight came down to one question: could the employers, the State of Connecticut and the Town of Manchester, place a statutory lien on the entire $235,934.10 paid to the estate, or only on the small slice tied to workplace exposure?
The commission said yes to the full amount. The Compensation Review Board agreed. And now the Supreme Court has affirmed, with all seven justices on the same page.
The court's reasoning rested on a straightforward reading of the statute. Under Connecticut's Workers' Compensation Act, mesothelioma qualified as an occupational disease because workplace asbestos exposure was a substantial contributing factor in its development. The law does not require that workplace exposure be the sole cause, or even a major one. It simply needs to have materially contributed to the disease. Because the disease was a single condition, not two separate injuries, it was fully compensable without any reduction for the nonoccupational contribution. And because the employer's lien rights generally mirror its payment obligations, the lien extended to the full net settlement.
Elizabeth Dodge had argued that each tort settlement addressed a separate and distinct injury, occupational or nonoccupational, and that the employers should only be able to lien the occupational portion. The court disagreed. It found that the decedent had one disease, mesothelioma, and that disease was a work-related injury regardless of the fact that non-workplace factors also played a role.
Dodge also raised an alternative argument: that the nonoccupational tortfeasors, the manufacturers and suppliers of asbestos-containing products, were not the type of third parties contemplated by the statute because they had no employment relationship with the decedent. The court rejected that as well, noting that the statute refers broadly to any person other than the employer who has a legal liability to pay damages for the injury. There is no additional requirement of an employment connection.
The court did note one wrinkle in the lien calculation. Under the statute, an employer's reimbursement is normally reduced by one third when the tort action is brought by the employee. That reduction, however, does not apply when the employer is the State of Connecticut or a political subdivision. Since both employers here fell into that category, the full lien applied without the one-third haircut.
For employers and subrogation professionals, the practical takeaway is clear. In mixed-causation occupational disease cases in Connecticut, the lien is not limited to the slice of tort proceeds that matches workplace exposure. If the disease qualifies as a single compensable injury, and the workers' comp system paid full benefits without apportionment, the lien reaches the entire net recovery from third-party tortfeasors. That is a meaningful clarification in a state where asbestos litigation continues to generate settlements across occupational and nonoccupational exposure categories.
