George v. Celotex Corp.

• Citation: 914 F.2d 26
• Decision Date: 13 September 1990
• Docket Number: No. 1339,D,1339
• Parties: 31 Fed. R. Evid. Serv. 30, Prod.Liab.Rep.(CCH)P 12,644 Marion GEORGE, Individually and as Executrix of the Estate of Stuart George, Deceased, Plaintiff-Appellee, v. The CELOTEX CORPORATION, Individually and as successor in interest to Philip Carey Corporation, Defendant-Appellant. ocket 90-7144.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 26

914 F.2d 26

31 Fed. R. Evid. Serv. 30, Prod.Liab.Rep.(CCH)P 12,644

Marion GEORGE, Individually and as Executrix of the Estate of Stuart George, Deceased, Plaintiff-Appellee, v. The CELOTEX CORPORATION, Individually and as successor in interest to Philip Carey Corporation, Defendant-Appellant.

No. 1339, Docket 90-7144.

United States Court of Appeals Second Circuit.

Argued May 22, 1990.

Decided Sept. 13, 1990.

Donald I. Marlin (Perry Weitz, P.C., New York City, of counsel), for plaintiff-appellee.

Rosanne C. Kemmet (McCarter & English, Newark, N.J., of counsel), for defendant-appellant.

Before VAN GRAAFEILAND, MESKILL and WALKER, Circuit Judges.

WALKER, Circuit Judge.

The Celotex Corporation ("Celotex") appeals from a judgment awarding plaintiff Marion George, on her own behalf and as executrix of her husband Stuart George's estate, damages in strict liability arising from her husband's exposure to asbestos manufactured by Celotex. Celotex argues that the district court (a) improperly admitted a certain scientific report into evidence on the issue of the current state of the art, and (b) erroneously let stand a jury allocation of 90 percent liability against Celotex in the face of contrary evidence. Because we disagree with both assertions, we affirm the judgment of the district court.

BACKGROUND

Stuart George, plaintiff's Marion George's decedent, was employed for 58 years as a purchasing agent by the Robert A. Keasbey Company ("Keasbey"), an asbestos insulation contractor and distributor. From approximately 1931 until his retirement in 1975, George would leave his office on a daily basis to visit the warehouse where asbestos was unpacked, stored on open racks, packed and shipped, and was thus exposed to asbestos dust. From 1903 until 1965, Keasbey was the New York area's exclusive distributor for the full line of asbestos products manufactured by Celotex's predecessor, the Philip Carey Company ("Philip Carey"). Keasbey's former president, who was employed with the company from 1931 to 1989, testified that while in more recent years Keasbey distributed the products of other manufacturers, "in the early years" Keasbey handled "almost all Carey products."

In 1976, Stuart George died of mesothelioma, a lung cancer caused by the inhalation of asbestos dust. Mesothelioma has a latency period between exposure to asbestos dust and the occurrence of the disease of up to forty years.

Plaintiff initially sued sixteen defendants, all of whom, save Celotex, had settled or otherwise obtained dismissals by the time the jury reached a verdict in this case. Accordingly, the jury returned a verdict against Celotex alone in the amount of $700,000 with liability apportioned 90% against Celotex and 10% spread among four other manufacturers. On November 3, 1989, after reducing the award to account for settling defendants, Judge Nickerson entered judgment against Celotex in the amount of $588,000. On January 4 1990, Judge Nickerson denied Celotex's motions for a judgment notwithstanding the verdict or, in the alternative, a new trial that raised, inter alia, the two issues now before us. This appeal followed.

DISCUSSION

A. The Hemeon Report

Celotex argues that Judge Nickerson erred by receiving in evidence a report written in 1947 known as the Hemeon Report as it was both hearsay and irrelevant to the issue of liability. Even if relevant and admissible, Celotex argues, the district court abused its discretion by refusing to exclude it as unfairly prejudicial pursuant to Fed.R.Evid. 403.

The district court's determination of relevance will not be disturbed unless it evidences an abuse of discretion. See McNeilab, Inc. v. American Home Products Corp., 848 F.2d 34, 38 (2d Cir.1988). Our inquiry into the relevance of the Hemeon Report begins with plaintiff's theory of liability at trial. Plaintiff sought to prove that Philip Carey breached its duty to warn users of its asbestos products, such as the plaintiff, of latent dangerous defects of which it "ha[d] knowledge or by the application of reasonable developed human skill and foresight should have [had] knowledge ..." Restatement (Second) of Torts Sec. 402A comment J (1966).

We agree with the plaintiff that a manufacturer such as Philip Carey is held to the knowledge of an expert in its field, Borel Fibreboard Paper Products Corp., 493 F.2d 1076, 1089 (5th Cir.1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974); see also Dartez v. Fibreboard Corp., 765 F.2d 456, 461 (5th Cir.1985); Wright v. Carter Products, 244 F.2d 53, 59 (2d Cir.1957), and therefore has a duty "to keep abreast of scientific knowledge, discoveries, and advances and is presumed to know what is imparted thereby." Borel, 493 F.2d at 1089 (citing Keeton, Product Liability--Problems Pertaining to Proof of Negligence, 19 S.W.L.J. 26, 3033 (1965)); see also 1 L. Frumer & M. Friedman, Products Liability Sec. 2.22 at 2-1062-64 (1990) (collecting cases) ("manufacturer must keep abreast of scientific advances and is under a duty to make tests to ascertain the nature of its product. In this scientific age the manufacturer undoubtedly has or should have superior knowledge of his product."). In addition, a manufacturer has a duty to test fully and inspect its products to uncover all dangers that are scientifically discoverable. Id. at 1089-90; Dartez, 765 F.2d at 461. ¹

In fulfilling its duty, a manufacturer may not rest content with industry practice, for the industry may be lagging behind in its knowledge about a product, or in what, with the exercise of reasonable care, is knowable about a product. T.J. Hooper, 60 F.2d 737, 740 (2d Cir.), cert. denied 287 U.S. 662, 53 S.Ct. 220, 77 L.Ed. 571 (1932); Eaton v. Long Island Rail Road Company, 398 F.2d 738, 742 (2d Cir.1968); Kane v. Branch Motor Express Co., 290 F.2d 503, 507 (2d Cir.1961); Hall v. E.I. DuPont De Nemours and Co., 345 F.Supp. 353, 378 (E.D.N.Y.1972); Bolm v. Triumph Corp., 71 A.D.2d 429, 422 N.Y.S.2d 969, 975 n. 2 ("state of the art refers to what is realistically capable of achievement, not merely industry custom.") As Judge Learned Hand wrote in the venerable T.J. Hooper,

[a] whole calling may have unduly lagged in the adoption of new and available devices. It never may set its own tests, however persuasive be its usages. Courts must in the end say what is required; there are precautions so imperative that even their universal disregard will not excuse their omission.

T.J. Hooper, 60 F.2d at 740 (citations omitted).

Defendants challenge neither the applicability of the foregoing principles of law to the facts of this case nor Judge Nickerson's instructions to the jury setting them forth. Rather, Celotex argues that the Hemeon Report is irrelevant to the issue of liability because, since the company never saw the report, it could not have been on notice of the information contained therein. Furthermore, Celotex contends that because the report was not published, it was not part of the state of the art. These arguments miss the point. The state of the art, as embodied in Judge Nickerson's jury instructions, was defined in terms of whether the dangers of asbestos were reasonably foreseeable or scientifically discoverable at the time of plaintiff's exposure. "The actual knowledge of the individual manufacturer is not the issue." Dartez v. Fibreboard Corp., 765 F.2d 456, 461 (5th Cir.1985).

At trial, Celotex defended on the ground that it reasonably thought plaintiff's workplace to be safe since it operated its facilities below the threshold limit value ("TLV") which established a presumably safe level of exposure to asbestos dust of five million particles per cubic foot of air. Operation of a plant at this TLV was, Celotex maintains, the so-called "state of the art" since that TLV had been recommended by the American Conference of Governmental Industrial Hygienists ("ACGIH") in 1946 and was based upon the conclusions of a 1938 study of asbestos workers published by the United States Government known as the Dreesen Study. Celotex argued to the jury, both in opening and in summation, that in the context of the ACGIH recommendation, the dangers of relatively low levels of asbestos exposure, such as those experienced by the plaintiff, were both unknown and unknowable by Philip Carey during the relevant period of plaintiff's exposure to Philip Carey's asbestos products.

It was in this context that plaintiff offered and the court received in evidence the unpublished July, 1947 report containing a study of asbestos plants that was prepared by W.C.L. Hemeon, the head engineer of the Industrial Hygiene Foundation of America ("IHF"), for the Asbestos Textile Institute ("ATI"). The Hemeon Report expressed doubts as to the safety of the five million particle TLV. It explained that "scientific evidence is obscure" on the point and questioned "present dust count methods." Hemeon recommended "that studies be initiated aimed to develop another yardstick." Philip Carey was not a member of the Asbestos Textile Institute, to whose members the report was distributed, and there was no evidence presented that anyone at Philip Carey was aware of the Hemeon Report during the relevant period.

The document was relevant in plaintiff's direct case not to show what Celotex knew, or even what manufacturers knew generally, but what, if the jury so determined, Celotex reasonably should have known had it either conducted its own tests or been in contact with others in the industry, such as IHF or ATI, that were testing. The relevance of the Hemeon Report was elevated by Celotex's reliance at trial on the five million particle TLV recommended in 1946 by ACGIH that Hemeon then criticized the following year in his report. Judge Nickerson plainly did not abuse his discretion in finding the Hemeon Report relevant.

Bolm v. Triumph Corp., 71 A.D.2d 429, 422 N.Y.S.2d 969 (3rd Dep't 1980), upon which the defendant relies, is distinguishable. There the...