School Asbestos Litigation, In re

Decision Date30 May 1986
Docket NumberOWENS-CORNING,Nos. 84-1642,84-1670,84-1651,84-1649,84-1652,84-1643,s. 84-1642
Parties, 4 Fed.R.Serv.3d 750, 32 Ed. Law Rep. 50 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., T
CourtU.S. Court of Appeals — Third Circuit

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 OF THE COURT

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 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 F.R.D. 422, 437 (E.D.Pa.1984). Although plaintiffs had advanced the argument that the defendants' funds would be exhausted before all claimants were paid, no substantive evidence was presented demonstrating that those assets would be insufficient, and accordingly the district judge declined to...

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