789 F.2d 996 (3rd Cir. 1986), 85-1287, In re School Asbestos Litigation

Docket Nº:Grace & Co., Appellants in 84-1652 & 85-1287.
Citation:789 F.2d 996
Party Name:In re SCHOOL ASBESTOS LITIGATION. SCHOOL DISTRICT OF LANCASTER, Manheim Township School District, Lampeter- Strasburg School District, and Northeastern School District v. LAKE ASBESTOS OF QUEBEC, LTD., the Celotex Corp., Raymark Industries, Inc., Union Carbide Corp., Asbestospray Corp., Sprayo-Flake Co., National Gypsum Co., Sprayed Insulation, Inc
Case Date:May 01, 1986
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 996

789 F.2d 996 (3rd Cir. 1986)

In re SCHOOL ASBESTOS LITIGATION.

SCHOOL DISTRICT OF LANCASTER, Manheim Township School

District, Lampeter- Strasburg School District, and

Northeastern School District

v.

LAKE ASBESTOS OF QUEBEC, LTD., the Celotex Corp., Raymark

Industries, Inc., Union Carbide Corp., Asbestospray Corp.,

Sprayo-Flake Co., National Gypsum Co., Sprayed Insulation,

Inc., Asbestos Fibres, Inc., Dana Corp., U.S. Gypsum, U.S.

Mineral Products Co., Sprayon Insulation & Acoustics, Inc.,

Sprayon Research Corp., Keene Corp., Worben Co., Inc.,

Wilkin Insulation Co., W.R. Grace & Co., Owens-Corning

Fiberglas Corp., Standard Insulations, Inc., North American

Asbestos Corp., Cassiar Resources Ltd., Bell Asbestos Mines,

Ltd., Asbestos Corporation Limited, Southern Textile Corp.,

Owens-Illinois, Inc., Turner & Newall Ltd., the Flintkote

Co., Fibreboard Corp., GAF Corp., Uniroyal, Inc., Cape

Asbestos, Pfizer, Inc., Kaiser Cement Corp., Bes-Tex, Inc.,

Georgia- Pacific Corp.

BARNWELL SCHOOL DISTRICT NO. 45

v.

U.S. GYPSUM, National Gypsum Co., W.R. Grace & Co.,

Asbestospray Corp., Sprayo- Flake Co., Sprayed Insulation,

Inc., Asbestos Fibres, Inc., Dana Corp., U.S. Mineral

Products Co., Sprayon Insulation & Acoustics, Inc., Sprayon

Research Corp., Keene Corp., Wilkin Insulation Co., Turner &

Newall Ltd., J.W. Roberts, Ltd., Proko Industries, Inc.,

Raymark Industries, Inc., Owens-Corning Fiberglas Corp.,

Standard Insulations, Inc., Southern Textile Corp.,

Owens-Illinois, Inc., the Flintkote Co., Fibreboard Corp.,

Uniroyal, Inc., Rock Wool Manufacturing Co., Inc., Empire

Ace Insulation Manufacturing Corp., Eagle- Picher

Industries, Inc., Forty-Eight Insulations, Inc., Combustion

Engineering, Inc., GAF Corp., Lac d'Amiante du Quebec,

Ltee., the Celotex Corp., Carey- Canada, Inc., Union Carbide

Corp., Brinco Mining, Ltd., formerly known as Cassiar

Resources, Ltd., Bell Asbestos Mines, Ltd., Asbestos

Corporation Limited, Cape Asbestos, North American Asbestos

Corp., Turner Asbestos Fibres, Ltd., C. Tennant & Sons,

Huxley Development Corp., Asten Group, Inc., H.K. Porter

Co., Nicolet Industries, Armstrong Contracting & Supply

Corp., Benjamin Foster Co., Pittsburgh Corning Corp.,

Armstrong World Industries, Inc., Worben Co., Inc.

Appeal of GAF CORP., Appellant in 84-1642, 85-1272 & 85-1288.

Appeal of LOS ANGELES UNIFIED SCHOOL DISTRICT, Appellant in 84-1643.

Appeal of FIBREBOARD CORP., Appellant in 84-1649.

Appeal of The CELOTEX CORP., and Carey-Canada, Inc.,

Appellants in 84-1651 & 85-1243.

Appeal of NATIONAL GYPSUM CO., U.S. Gypsum Co., and W.R.

Grace & Co., Appellants in 84-1652 & 85-1287.

Appeal of BOARD OF EDUCATION OF CLIFTON, Appellant in 84-1670.

Appeal of LAC d'AMIANTE du QUEBEC, LTEE., Appellant in 84-1671.

Appeal of OWENS-CORNING FIBERGLAS CORP., Appellant in 84-1672.

Appeal of BARNWELL SCHOOL DISTRICT NO. 45, Appellant in 84-1692.

Appeal of BELL ASBESTOS MINES, LTD. and U.S. Mineral

Products Co., Appellants in 84-1693.

Appeal of ASBESTOS CORPORATION LIMITED, Appellant in 84-1694.

Appeal of BOARDS OF EDUCATION OF ANDERSON COUNTY, Johnson

County, Loudon County, Knox County, City of

Knoxville, and Hawkins County,

Tennessee, Appellants in 84-1695.

Appeal of H.K. PORTER CO., Southern Textile Corp., and

Forty-Eight Insulations, Inc., Appellants in 84-1696.

Nos. 84-1642, 84-1643, 84-1649, 84-1651, 84-1652, 84-1670 to

84-1672, 84-1692 to 84-1696, 85-1243, 85-1272,

85-1287 and 85-1288.

United States Court of Appeals, Third Circuit

May 1, 1986

Argued Jan. 6, 1986.

As Amended May 30, 1986.

Rehearing and Rehearing In Banc in Nos. 84-1651, 85-1243,

84-1642, 85-1272, 85- 1288, 84-1672, 84-1696,

84-1671, 84-1694, 84-1649, 84-1652,

85-1287 Denied June 2, 1986.

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Page 998

Arthur Miller (argued), Cambridge, Mass., Herbert B. Newberg (argued), Harvey S. Kronfeld, Gerald E. Wallerstein, Philadelphia, Pa., for appellant and class representative Barnwell School Dist. No. 45.

Edward J. Westbrook, Blatt & Fales, Charleston, S.C., Daniel A. Speights, Hampton, S.C., for appellant and class representative Barnwell School Dist. No. 45 and Spartanburg School Dist. No. 7.

Michael L. Goldberg (argued), George M. Rosenberg, Charles B. O'Reilly, Aaron H. Simon, Greene, O'Reilly, Broillet, Paul, Simon, McMillan, Wheeler & Rosenberg, Washington, D.C., for Los Angeles Unified School Dist.

Ralph W. Brenner (argued), Stephen A. Madva, Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., for the Celotex Corp. & Carey-Canada, Inc.

Edward Greer, Mesirov, Gelman, Jaffe, Cramer & Jamieson, Philadelphia, Pa., for GAF Corp.

John P. Kelley, Kursen, Evans & Byrne, Philadelphia, Pa., for Owens-Corning Fiberglas Corp.

Ellen B. Furman, Ominsky, Joseph & Welsh, Philadelphia, Pa., for Asbestos Corp., Ltd.

Lawrence T. Hoyle, Jr. (argued), Arlene Fickler, Richard M. Bernstein, Hoyle, Morris & Kerr, Philadelphia, Pa., for Nat. Gypsum Co.

Richard P. Brown, Jr. (argued), Frank L. Corrado, Jr., Morgan, Lewis, & Bockius, Philadelphia, Pa., for U.S. Gypsum Co.

Shepard M. Remis, Herrick & Smith, Boston, Mass., for W.R. Grace & Co.

Mike Rowland (argued), Rowland & Rowland, P.C., Knoxville, Tenn., for Boards of Educ. of Anderson County, Johnson County, Loudon County, Knox County, City of Knoxville, and Hawkins County, Tenn.

Gary Crawford (argued), Yvonne V. Miller, Skadden, Arps, Slate, Meagher & Flom, New York City, for the Flintkote Co.

Thomas J. Ingersoll, Deasey, Scanlon & Bender, Philadelphia, Pa., for Armstrong World Industries, Inc.

Edward J. Madeira (argued), Pepper, Hamilton & Scheetz, Philadelphia, Pa., for Lake Asbestos of Quebec, Ltd.

Patrick C. English, Aron Dines, Dines & English, Clifton, N.J., for Bd. of Educ. of the City of Clifton.

Thomas M. Keeling, Frederick J. Killion, Bishop, Liberman, Cook, Purcell & Reynolds, Washington, D.C., for amicus curiae Anchorage School Dist.

Joseph J. Armao, Liebert, Short, Fitzpatrick & Hirshland, Philadelphia, Pa., for Fibreboard Corp.

Thomas R. Cunningham, White & Williams, Philadelphia, Pa., for H.K. Porter Co. & Southern Textile Corp.

David Berger (argued), Daniel Berger, Ruthanne Gordon, Sheldon V. Toubman, David Berger Attys. At Law, Philadelphia, Pa., for Class Representatives; Charles Alan Wright, Austin, Tex., of counsel.

Before WEIS, HIGGINBOTHAM, and BECKER, Circuit Judges.

OPINION

WEIS, Circuit Judge.

In an effort to reach an equitable result in these asbestos property damage cases brought by school authorities, the district court certified a nationwide mandatory class for punitive damages and an opt-out class for compensatory damages. We conclude that the mandatory class cannot be approved because of a lack of necessary findings and for the additional reason that the class, being under-inclusive, cannot in the circumstances here accomplish the objectives for which it was created. We will, however, affirm the denial of a (b)(2) class and despite misgivings on manageability, will affirm the district court's conditional

Page 999

certification of a Rule 23(b)(3) opt-out class on compensatory damages.

The district court invoked Fed.R.Civ.P. 23(b)(1)(B) in entering the certification order designating a mandatory class for school districts seeking punitive damages and followed Rule 23(b)(3) in forming a class for those seeking compensatory damages. A request for class certification under Rule 23(b)(2) was denied.

Pursuant to 28 U.S.C. Sec. 1292(b), the court certified that the order constituting the 23(b)(1)(B) class raised a controlling question of law respecting possible violation of the Anti-Injunction Act, 28 U.S.C. Sec. 2283. Various parties have appealed, challenging not only that phase of the case but also the propriety of the (b)(3) certification as well as the denial of the (b)(2) request. 1

This litigation began with the filing of class action complaints in the Eastern District of Pennsylvania by several Pennsylvania school districts and the Barnwell, South Carolina School District. The cases were consolidated soon after filing. Defendants, numbering approximately fifty, are associated with the asbestos industry as miners, bulk suppliers, brokers, assemblers, manufacturers, distributors, and at least one contractor.

As a result of federal legislation and regulation, plaintiffs are required to test for the presence of asbestos in schools. 2 The complaints seek compensatory and punitive damages as well as injunctive relief stemming from compliance with the federal legislation and the alleged need to remove or treat materials containing asbestos. The claims are based on theories of negligence, strict liability, intentional tort, breach of warranty, concert of action, and civil conspiracy.

After a group of plaintiffs presented a motion for the formation of classes under section (b)(1) and (b)(2) of Rule 23, the court issued an order certifying such classes but limited them to claims against three defendants which had agreed not to oppose that action. This ruling led to objections by various other plaintiffs and defendants, and the court later vacated the order in part. Arguments were then heard from all parties who split, not along the usual plaintiff-defendant lines, but into a number of unusual alignments as dictated by their perceived interests. The eventual certification order included the claims against all defendants.

In conditionally creating a mandatory class under (b)(1)(B) on the punitive damage claims, the court found "a substantial possibility that early awards of punitive damages in individual cases [would] impair or impede the ability of future claimants to obtain punitive damages." In re Asbestos School Litigation, 104...

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