California Appeals Court Rejects San Diego City Workers' Asbestos Lawsuit

A California appeals court has ruled that approximately 40 San Diego city employees who were exposed to asbestos during building renovations cannot sue the city in civil court. The 4th District Court of Appeal affirmed a lower court’s decision, holding that workers’ compensation is the exclusive legal remedy for the claims.

The ruling, filed February 17, 2026, stems from a lawsuit brought by employees who worked in the Executive Complex at 1010 Second Ave. in downtown San Diego. The workers alleged that city officials knowingly kept them at their desks while contractors disturbed an estimated 40 tons of asbestos-containing material during a renovation project that began in mid-2017.

What Happened at 1010 Second Ave.

The city of San Diego leased several floors of the privately owned 25-story Executive Complex, housing approximately 550 employees. In 2017, building owner Tower 180 Owner LLC began a renovation project that included removing about 5,000 square feet of asbestos-containing fireproofing and replacing windows.

Employees began reporting health problems almost immediately after construction started in August 2017. Workers described bronchial issues, deep coughing, burning throats, difficulty swallowing, and shortness of breath. Some were placed on inhalers. Construction crews wore respirators while demolishing windows, but inadequate sealing allowed debris to drift into occupied offices.

In January 2018, the San Diego County Air Pollution Control District inspected the site after an emergency notification that asbestos had been disturbed during lobby renovations. Seven separate samples taken between January 25 and 29, 2018, showed asbestos content ranging from 20% to 65% in fireproofing material and wall debris. Four of those samples came from floors occupied by city workers.

The county issued seven violations against the building owner for improper material analysis, failure to remove all regulated asbestos, unsafe handling, inadequate containment, untimely disposal, and creating a public nuisance.

On January 31, 2018, the city announced it was moving all 550 employees from the building. A senior city official later acknowledged that the city had been reluctant to break the lease due to more than $1 million in potential liability.

The Lawsuit and Court Rulings

Approximately 40 employees filed suit in San Diego Superior Court in June 2019, alleging intentional infliction of emotional distress and fraudulent concealment. They sought punitive damages, attorney fees, lifetime medical insurance, and regular cancer monitoring.

In May 2024, Judge Kenneth J. Medel granted summary judgment for the city, finding that workers’ compensation exclusivity applied. The appeals court affirmed that decision.

The central legal question was whether the “fraudulent concealment” exception to workers’ compensation exclusivity applied. Under California law, that exception requires proof of three elements: the employer concealed the existence of the injury, concealed the connection between the injury and employment, and the injury was aggravated following the concealment.

The appeals court found the workers could not clear that bar. To invoke the exception, employees must demonstrate that the employer had “actual, prior knowledge” of the work-related injury and deliberately concealed it. The court held that constructive knowledge, meaning the employer “should have known,” is not sufficient.

“It is not enough to rely on evidence from which a trier of fact might conclude the city should have known of their injuries before they were reported,” the court wrote. “Only evidence of actual knowledge would raise an issue of fact precluding the grant of summary judgment.”

What Happens Next

Attorney Michael Aguirre, a former San Diego city attorney who represents the workers, said he plans to first seek a rehearing before the appeals court. If that fails, he intends to petition the California Supreme Court for review.

“We cannot and will not accept that they are not entitled to a jury trial until we have exhausted every legal means,” Aguirre said.

The decision is unpublished, meaning it cannot be cited as precedent in other California cases, though it reflects the court’s application of existing law on workers’ compensation exclusivity.

The 101 Ash St. Connection

After the evacuation from the Executive Complex, some displaced workers were relocated to 101 Ash St., a former Sempra Energy building the city had leased. That building was later found to have its own asbestos violations and was shut down in January 2020. It remains vacant, costing the city $18,000 per day in lease payments.