Malcolm v. National Gypsum Co.

• Decision Date: 25 May 1993
• Docket Number: No. 853,D,853
• Court: U.S. Court of Appeals — Second Circuit
• Parties: , 25 Fed.R.Serv.3d 801 Agnes MALCOLM, individually and as Executrix of the Estate of Robert Malcolm; Elizabeth Jane Brennan, individually and as Executrix of the Estate of John M. Brennan; Virginia Marzocca, individually and as Administratrix of the Estate of Dominick Marzocca; Anne Boos, as Executrix of the Estate of Jonny Schmidt; Patricia King, individually and as Executrix of the Estate of William J. King, Plaintiffs, Roberta Kranz, as Executrix of the Estate of Lee Lewis, Plaintiff-Appellee, v. NATIONAL GYPSUM CO.; AC & S, Inc.; Armstrong World Industries, Inc., formerly known as Armstrong Cork Company; The Celotex Company, individually and as successor-in-interest to Philip Carey Manufacturing Co., Philip Carey Corporation, Briggs Manufacturing Co., Smith & Kanzler Corporation, and Panacon Corporation; Eagle-Picher Industries, Inc.; Garlock, Inc.; GAF Corporation; Empire Ace Insulation Manufacturing Corporation, individually and as successor to Empire Asbestos Company; Nicolet, Inc., individually and as successor-in-interest to Keasbey-Mattison Company; Owens-Corning Fiberglas Corp.; W.R. Grace and Co.; H.K. Porter Company, Inc., individually and as successor to Southern Textile Corporation and Southern Asbestos Company; The Flintkote Company; Carey Canada, Inc.; Fibreboard Corporation; Rock Wool Manufacturing Co., Inc.; Owens-Illinois, Inc., Babcock & Wilcox Company; Turner & Newall, PLC, individually and as successor to Keasbey-Mattison Corporation; United States Gypsum Co.; Dana Corporation, individually and as successor to Smith & Kanzler Company, and Victor Gasket Company; Certainteed Corp TAF International, Ltd., formerly known as Turner Asbestos Fibers, Ltd.; Pittsburgh-Corning Corp., individually and as successor to Unarco Industries; H & A Construction, individually and as successor to Spraycraft Corporation, Defendants, Keene Corporation, individually and as successor-in-interest to the Baldwin-Ehret-Hill Company, Keene Building Products Company, and

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995 F.2d 346

61 USLW 2735, 25 Fed.R.Serv.3d 801

Agnes MALCOLM, individually and as Executrix of the Estate

of Robert Malcolm; Elizabeth Jane Brennan, individually and

as Executrix of the Estate of John M. Brennan; Virginia

Marzocca, individually and as Administratrix of the Estate

of Dominick Marzocca; Anne Boos, as Executrix of the Estate

of Jonny Schmidt; Patricia King, individually and as Executrix of the Estate of William J. King, Plaintiffs, Roberta Kranz, as Executrix of the Estate of Lee Lewis, Plaintiff-Appellee, v. NATIONAL GYPSUM CO.; AC & S, Inc.; Armstrong World

Industries, Inc., formerly known as Armstrong Cork Company;

The Celotex Company, individually and as

successor-in-interest to Philip Carey Manufacturing Co.,

Philip Carey Corporation, Briggs Manufacturing Co., Smith &

Kanzler Corporation, and Panacon Corporation; Eagle-Picher

Industries, Inc.; Garlock, Inc.; GAF Corporation; Empire

Ace Insulation Manufacturing Corporation, individually and

as successor to Empire Asbestos Company; Nicolet, Inc.,

individually and as successor-in-interest to

Keasbey-Mattison Company; Owens-Corning Fiberglas Corp.;

W.R. Grace and Co.; H.K. Porter Company, Inc., individually

and as successor to Southern Textile Corporation and

Southern Asbestos Company; The Flintkote Company; Carey

Canada, Inc.; Fibreboard Corporation; Rock Wool

Manufacturing Co., Inc.; Owens-Illinois, Inc., Babcock &

Wilcox Company; Turner & Newall, PLC, individually and as

successor to Keasbey-Mattison Corporation; United States

Gypsum Co.; Dana Corporation, individually and as successor

to Smith & Kanzler Company, and Victor Gasket Company;

Certainteed Corp TAF International, Ltd., formerly known as

Turner Asbestos Fibers, Ltd.; Pittsburgh-Corning Corp.,

individually and as successor to Unarco Industries; H & A

Construction, individually and as successor to Spraycraft

Corporation, Defendants,

Keene Corporation, individually and as successor-in-interest

to the Baldwin-Ehret-Hill Company, Keene Building

Products Company, and Ehret Magnesia

Manufacturing Company,

Defendant-Appellant.

No. 853, Docket 92-7963.

United States Court of Appeals, Second Circuit.

Argued Jan. 19, 1993.

Decided May 25, 1993.

Richard P. O'Leary, Newark, N.J. (McCarter & English, Newark, N.J., of counsel), for defendant-appellant.

Steven J. Phillips, New York City (Alani Golanski, Levy Phillips & Konigsberg, of counsel), for plaintiff-appellee.

Before: TIMBERS, WALKER, and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge:

Keene Corporation appeals from a final judgment of the United States District Courts for the Eastern and Southern Districts of New York (Charles P. Sifton, Judge ) awarding plaintiff Roberta Kranz, as the executrix of the estate of Lee Lewis, $226,038.49 for personal injury, wrongful death, and loss of consortium. In re Joint E. & S. Dists. Asbestos Litig., 798 F.Supp. 925 & 798 F.Supp. 940 (E. & S.D.N.Y.1992). The claims arose from Lewis's exposure to asbestos products manufactured by Keene's subsidiary, the Baldwin-Ehret-Hill Company ("BEH"). For the reasons stated below, we reverse and remand for a new trial.

BACKGROUND

The Explosion Of Asbestos Litigation

One of the greatest challenges facing both state and federal courts is the crush of tort suits arising from the extensive use of asbestos as flame-retardant insulation throughout much of this century. Asbestos litigation today constitutes the largest mass toxic tort in the United States. See In re Joint E. & S. Dists. Asbestos Litig., 125 F.R.D. 60, 63 (E.D.N.Y.1989) (hereinafter "Drago "). To date, more than 200,000 asbestos cases have been filed by injured persons and their heirs, and as many as 250,000 additional cases may be filed in years to come. See Stefan Fatsis, Fallout from Asbestos Crises Still Clogs Court, Defies Solutions, L.A. Times, August 2, 1992 at A1.

Asbestos fibers--which contain highly toxic carcinogens--have debilitated and killed many workers. Asbestos-related injuries are characterized by prolonged latency periods and typically do not become apparent until years, and in some cases decades, after exposure. Thus, many potential plaintiffs were unable to recover from the manufacturers and distributors of such products because of statutes of limitations that started running from exposure to asbestos rather than from manifestation of disease.

Recognizing the inequity, New York amended its statute of limitations in 1986 to provide some recourse to asbestos victims. The new legislation triggered the limitations period from discovery of the disease, New York Toxic Tort Reform Act of 1986, L.1986 ch. 682, § 2 (codified at N.Y.C.P.L.R. § 214-c (McKinney 1990)), and explicitly revived previously time-barred asbestos actions. L.1986, ch. 682, § 4, reprinted after N.Y.C.P.L.R. § 214-c (McKinney 1990).

Because of these changes, both the state and federal courts were swamped with asbestos suits. In response, the federal courts tried several innovative procedures. For example, recognizing that "[t]he heyday of individual adjudication of asbestos mass tort lawsuits has long passed," the Judicial Panel on Multidistrict Litigation ordered the pre-trial consolidation of 26,639 pending asbestos cases in July 1991. In re Asbestos Prods. Liab. Litig. (No. VI), 771 F.Supp. 415, 419 (J.P.M.L.1991).

In New York, the Chief Judges of the Second Circuit, the Southern District, and the Eastern District transferred all cases filed in either district to the district judge in this action for purposes of discovery. 798 F.Supp. at 944. We commend Judge Sifton for his masterful stewardship of these cases. Eventually, the cases approached the Rubicon of either settling or going to trial. To facilitate settlements and provide for manageable trials, the cases were "subdivided by the location in which the plaintiff suffered primary exposure." Id.

The Consolidation Here

In the instant action, 600 cases were consolidated. The thread upon which all 600 cases hung was that each plaintiff had been exposed to asbestos in one or more of over 40 power-generating stations, or "powerhouses" as they are called, in New York State.

Forty-eight were selected from the 600 cases for trial on a reverse-bifurcated basis, i.e. damages to be tried first and then liability. The damages trial began on April 1, 1991. Each of the 48 plaintiffs had named as defendants between 14 and 42 manufacturers or distributors of asbestos-containing products. Of these, 25 appeared at trial as direct defendants. Several of the defendants impleaded third-party defendants. For example, on March 18, 1991, 13 days before the trial began, Judge Sifton allowed defendant Owens-Corning Fiberglas Corporation to implead over 200 companies. Some of the third-party defendants, in turn, impleaded fourth-party defendants.

During the four-month damages trial, evidence of the debilitating diseases and/or deaths of all 48 plaintiffs was presented to the jury. Often, the plaintiffs themselves would testify to the devastating consequences suffered as a result of asbestos-related disease. Where, as in Kranz-Lewis's case, a particular victim had died prior to trial, evidence regarding his disease and death was presented by family members. A parade of medical doctors testified on the etiologies and pathologies of the asbestos-related diseases suffered by each of the plaintiffs. Economists In addition, detailed testimony for each victim was necessary concerning his degree of impairment, specific medical history, emotional state, and medical prognosis. Further complicating matters, the jury had to sift through each victim's medical history to determine whether factors other than asbestos, such as smoking, were responsible, in whole or part, for his physical complaints. For example, Mr. Lewis's son testified that his father smoked cigarettes until the mid-1950's, suffered episodes of chronic coughing and hoarseness, switched to pipes and cigars, switched back to cigarettes, experienced a scare after an episode of hoarseness, and ultimately quit after developing a polyp on his voice box in the early 1960's. Claims by spouses and children presented extensive plaintiff-specific evidence.

testified concerning the present value of past and future income streams, and the dollar value of ordinary household services.

After four months of such evidence, the jury returned verdicts for 45 of the plaintiffs for an aggregate of over $94 million. Kranz-Lewis's damages were calculated as $1,682,795, including $1,250,000 for "Pain, Suffering and Other Non-Economic Losses to Decedent."

The liability portion of the trial began on September 11, 1991. During this phase, the jury was presented with a dizzying amount of evidence regarding each victim's work history. Where a victim, like Lewis, had died before trial, the sites where he had worked during his career, the types of asbestos-containing products with which he had been involved, and the identity of the manufacturers or distributors of the asbestos products to which he may have been exposed were reconstructed through the testimony of family members and co-workers.

The testimony of just one plaintiff illustrates the cosmic sweep of the factual data that the jury had to absorb. That plaintiff, Hubert Feeley, testified that from 1953 until 1974, he worked in "hundreds of" buildings; "could not keep track of all of them;" used "[p]ipe covering, block cement, asbestos cloth, all different sorts of cement;" worked for "[t]wenty-five or so" employers; travelled as an asbestos worker to Alaska, Egypt, Wyoming, Minnesota, West Virginia, Connecticut, White Plains and New Jersey; worked in "[o]ffice buildings, high-rises, shopping centers, [and] state office buildings" including the Chase Manhattan Building, the Exxon Building and the Holiday Inn; and worked in at least seven powerhouses throughout the greater New York area. He also testified that he used at least ten different products while working for one of...