Cimino v. Raymark IndustriesCimino v. Raymark Industries
Before us are appeals and cross-appeals in personal injury and wrongful death damage suits against several manufacturers of asbestos-containing insulation products and some of their suppliers, the district court‘s jurisdiction being based on diversity of citizenship and the governing substantive law being that of Texas. This is the same set of cases addressed in In re Fibreboard, 893 F.2d 706 (5th Cir. 1990),
The district court originally consolidated the some 3,031 such cases then pending in the Beaumont Division of the Eastern District of Texas for trial of certain common issues under
By the time of the phase I trial, many of the defendants had settled and others had taken bankruptcy or otherwise been disposed of, so only five remained, namely appellant Pittsburgh Corning Corporation (Pittsburgh Corning), Carey Canada, Celotex, Fibreboard, and appellant Asbestos Corporation, Limited (ACL). The case against ACL was tried to the court under the Foreign Sovereign Immunities Act,
Judgment was entered against ACL in only two of the ten class representative cases (and in none of either the phase III sample cases or the extrapolation cases). Judgment was actually entered against Pittsburgh Corning in a total of 157 cases, consisting of 9 of the class representative phase I cases, 143 of the phase III sample cases, and 5 of the extrapolation cases (1 from each of the 5 different diseases included in the class).5 In these 157 cases, Pittsburgh Corning has been cast in judgment for a total of approximately $69,000,000.6 Pittsburgh Corning and ACL each appeal the referenced judgments entered against them, and the plaintiffs
Pittsburgh Corning‘s appeal presents essentially two groups of contentions, summarized as follows: first, those challenging the implemented Cimino trial plan as a whole, particularly its asserted failure to properly try and determine individual causation and, in the five extrapolation cases, damages also, as to any plaintiffs other than the class representatives, assertedly contrary to our decision in Fibreboard and Texas substantive law and in derogation of Pittsburgh Corning‘s Seventh Amendment and Due Process rights; and second, various other issues of a more particular and traditional sort. Plaintiffs’ cross-appeal presents issues of only the latter variety. We now turn to consider Pittsburgh Corning‘s appeal, addressing first its attacks on the trial plan.
I.
PITTSBURGH CORNING APPEAL
A. Trial Plan Attack
1. Trial Plan
Initial Plan
The Cimino trial plan initially adopted by the district court, which we subsequently set aside in Fibreboard, also called for three phases. In phase I, the jury would decide which, if any, of each defendant‘s products were defective as marketed and unreasonably dangerous, when each defendant knew or should have
Fibreboard
In Fibreboard, we found “no impediment to the trial of Phase I,” id. at 712, but held the balance of the plan invalid, stating:
“It infringes upon the dictates of Erie that we remain faithful to the law of Texas, and upon the separation of powers between the judicial and legislative branches.
“Texas has made its policy choices in defining the duty owed by manufacturers and suppliers of products to consumers. These choices are reflected in the requirement that a plaintiff prove both causation and damage. In Texas, it is a ‘fundamental principle of traditional products liability law . . . that the plaintiffs must prove that the defendant supplied the product which caused the injury.’ These elements focus upon individuals, not groups. The same may be said, and with even greater confidence, of wage losses, pain and suffering, and other elements of compensation. These requirements of proof define the duty of the manufacturers.
. . . .
. . . The inescapable fact is that the individual claims of 2,990 persons will not be presented. Rather, the claim of a unit of 2,990 persons will be presented.
. . . .
. . . That procedure cannot focus upon such issues as individual causation, but ultimately must accept general causation as sufficient, contrary to Texas law. It is evident that these statistical estimates deal only with general causation, for ‘population-based probability estimates do not speak to a probability of causation in any one case; the estimate of relative risk is a property of the studied population, not of an individual‘s case.’ This type of procedure does not allow proof that a
particular defendant‘s asbestos ‘really’ caused a particular plaintiff‘s disease; the only ‘fact’ that can be proved is that in most cases the defendant‘s asbestos would have been the cause.” Id. at 711-712 (footnotes omitted; emphasis added except in interior quotation and in last clause).9
Present Plan
Following this Court‘s decision in Fibreboard, the district court initially determined that “[t]his case will now proceed under the procedures set out in Jenkins v. Raymark“——i.e. phase I to be followed by a series of mini-trials for all plaintiffs on their individual causation and damage issues (see note 8, supra)——and set its previously adopted phase I (which we had declined to block) for trial.10 The court observed that its “task appears to be insurmountable,” but stated that it would nonetheless “take[] its place behind the old mule and start down that long row.”
Some months later, however, the court changed its mind and adopted the trial plan now before us (except that a stipulation was ultimately utilized instead of phase II), observing:
“Phase One will leave unresolved the questions of exposure, comparative causation, and damages. These remaining questions could easily be resolved by the procedure established in Jenkins if the numbers were
manageable. The numbers are not manageable. Jenkins envisioned groupings of ten plaintiffs submitted to a succession of juries. If we could try one group a week, the process would take 4½ years. Additional judicial power and the utilization of multiple courtrooms could shorten the time to resolve all these cases, but it would not decrease total court time or attorney time. Transaction costs to the parties under the Jenkins procedure is unacceptable.”
Instead of utilizing the Jenkins procedure, the court determined to employ new phases II and III: “asking the jury in Phase Two to make findings on exposure that are specific to job site, craft and time; and then by submitting to a jury in Phase Three individual damage cases of a statistically significant, randomly selected sample from each of the five disease categories.”
For purposes of phase II, twenty-two different worksites——principally refineries, shipyards, and chemical plants, and also including other industrial-type facilities and a power plant——in Beaumont, Port Arthur, Orange, and Port Neches, Texas, and including two sites in Lake Charles, Louisiana, would be considered.11 The district court contemplated that the phase II jury (the same jury as in phase I) would:
“hear evidence concerning: (a) the presence of the Defendants’ products at the worksites; (b) the presence of asbestos dust at the worksites; and (c) the nаture of the various crafts at the worksites and the relationship between these crafts and the presence of asbestos dust at these facilities. Specifically, the jury will hear evidence concerning the working conditions of machinists, pipefitters, insulators, carpenters, etc. and the relationship between these workers and the Defendants’ asbestos products. The jury will make a determination as
to which crafts at the worksites were exposed to which Defendants’ asbestos products (if any) for a sufficient period of time to cause injury, harm, or disease. The Court will make a non-jury determination as to which Plaintiffs or Plaintiffs’ decedents worked for a sufficient period of time at each worksite so as to be a proper member of that worksite‘s group and which Plaintiffs were proper members of each of the crafts at these worksites. . . .
The Court will submit the issue of exposure to the jury pursuant to ten-year intervals. So, for example, the jury will be asked whether the product(s) of Defendant X were present at Worksite Y during the 1940‘s, the 50‘s, 60‘s, etc. And, for example, the jury will be asked whether the carpenters at Worksite Y were exposed to Defendant X‘s product(s) during the 1940‘s, the 50‘s, 60‘s, etc.
. . . .
During Phase Two, the jury will apportion responsibility among settling and non-settling Defendants for the Plaintiffs’ exposure (if any).”
In Phase III, two other juries would determine for 160 sample cases only “two damage issues,” namely “(e) whether the Plaintiffs suffered from an asbestos-related injury or disease and, if so, (b) what damages the Plaintiffs incurred.” The court ultimately determined, based on information from plaintiffs, that the entire class of 2,298 cases could be broken down into the 5 disease categories, and the court then randomly selected 160 sample cases, some from each disease category, as follows:
| Disease | Number of Sample Cases | Number of Cases in Class |
| Mesothelioma | 15 | 32 |
| Lung Cancer | 25 | 186 |
| Other Cancers | 20 | 58 |
| Asbestosis | 50 | 1,050 |
| Pleural Disease | 50 | 972 |
| Total | 160 | 2,29812 |
Phase I
The phase I trial lasted approximately eight weeks. The defendants then remaining were Carey Canada, Celotex, Fibreboard, and Pittsburgh Corning.13 The jury found in answer to the first four questions when the defendants knew or should have known that their “asbestos-containing insulation products” posed a risk of asbestos-related disease to “insulators” (question 1), to their household members, to other “crafts working with or near insulation products,” and to their household members. Pittsburgh Corning knew or should have known this since 1962 (when it first entered the business; it left it in 1972) as to both insulators and other crafts; the other three defendants since 1935 as to insulators and since 1955 as to other crafts; all four defendants as to both sets of household members since 1965. In answer to question 5, the jury found that, since 1962 as to Pittsburgh Corning and since 1935 as to the other defendants, the defendants’ listed insulation products “were defective and unreasonably dangerous as a result of not
Phase III
Following completion of the phase I trial (and a continuance), the district court proceeded directly into phase III, without any phase II trial. It was not until approximately seven weeks into the phase III trials that the stipulation——which ultimately replaced phase II——was entered into. It was clear from the beginning of, and throughout, the phase III trials that the two juries were not to, and did not, determine whether exposure to any of defendants’ products was a cause of the sample plaintiffs’ complained-of condition. In phase III the court instructed the jury that they were to assume exposure was sufficient to be a producing cause of all the disease categories. As plaintiffs admit in their brief here, in the phase III trial “the juries were told to assume that the claimants had sufficient exposure.”15 Indeed, for the most part evidence of exposure and its likely or possible results was not
Following the phase III jury verdicts (including 12 zero verdicts) in the 160 sample cases, the district court ordered remittiturs in 35 of these cases (“34 of the pulmonary and pleural cases and in one mesothelioma case“), and calculated the average actual damage award, after remittitur (and considering the zero verdicts), in each disease category to be the following: mesothelioma, $1,224,333; lung cancer, $545,200; other cancer, $917,785; asbestosis, $543, 783; pleural disease, $558,900. These
Phase II stipulation
We now turn to the written stipulation——entered into after some seven weeks of the phase III trials had taken place——which replaced phase II. It was executed by all the plaintiffs and by Pittsburgh Corning, Fibreboard, and Celotex, who constituted all the then-remaining defendants (except ACL, whose case was non-jury), and was approved “so ordered” by the district court.
Attached to the stipulation as an exhibit was a special verdict form that would consist of separate interrogatories, each with a part (a) and a part (b), one each for each of the twenty-two worksites at issue. For example, question 1(a) would ask “For Worksite No. 1, do you find that the following crafts had sufficient exposure to asbestos during the specified time periods to be a producing cause of the disease of asbestosis.”17 The jury would answer yes or no separately as to each of over fifty listed crafts for each of four specified decades, namely 1942-52, 1952-62, 1962-72, and 1972-82.18 Question 1(b) would state, “For the crafts
The stipulation provides in part that:
“(3) It is stipulated that some individuals working in the listed crafts . . . at the 22 Phase Two worksites during each decade from 1942 to 1982 were exposed to asbestos during the course of their employment. The exposure of some members of each of the crafts . . . at the 22 worksites was of sufficient length and intensity
to cause pulmonary asbestosis of varying degrees. Asbestos-containing products of predecessors to the Celotex Corporation and Fibreboard Corporation were present during each decade in the specified worksites. An asbestos-containing product of Pittsburgh Corning Corporation was present during the decades 1962-1982 at the specified worksites.
The defendants do not stipulate that any members of the various crafts at the various worksites had the same exposure to any products or that any such individuals had the same susceptibility to asbestos-related diseases in the various crafts and worksites.” (Emphasis added).
The stipulation further provides that, although “[i]f the Court were to proceed with ‘Phase Two’ . . . [i]t is stipulated for purpose of appellate review that the [phase II] jury‘s verdicts would assign different [causation] percentages to each” of the defendants Pittsburgh Corning, Fibreboard, and Celotex, and “would assign different percentages with respect to each Phase Two worksite . . . craft . . . and decade combinations” submitted, nevertheless “[defendants] stipulate it shall be deemed that the Phase Two jury” assigned in all instances the following comparative causation shares, viz: Pittsburgh Corning, ten percent; Fibreboard, ten percent; Celotex, ten percent; and Manville Personal Injury Settlement Trust, thirteen percent.20 The court
Before setting out these percentages, however, the stipulation had made clear that defendants were not thereby agreeing that thе trial plan——either the originally planned phase II or the contemplated extrapolation procedure——was a permissible way to adjudicate their liability and damages. Thus, it stated:
“This stipulation relates to the percentage findings to be supplied through the Court‘s special verdict form which the Court intends to apply to individuals pursuant to the Cimino trial management plan, to which these defendants object. If the reviewing courts reject determination of individual legal causation issues by resort to general Phase Two worksite/craft findings, or reject the use of Rule 23 class trials for asbestos injury cases, the Phase Two share percentage findings specified below are void.” (Emphasis added).
“Defendants reserve all rights to object to all past and future aspects of the Cimino trial plan and to assign as error all prior, present, and future rulings of the Court, except only that Defendants shall not assert that the evidence is or would be insufficient to support a 10% finding (as compared, e.g., to a 5% finding, etc.) with respect to any particular Phase Two jobsite and craft combination.”
And, the stipulation recites that defendants specifically reserved, and would be afforded, the right to contend on appeal21 the following (among other things):
“that it is impermissible to determine medical or other causal responsibility on a jobsite or craft-wide basis; that it is impermissible to establish a single period of time sufficient to cause asbestos related disease, injury or harm except in connection with evidence presented in regard to an individual and as applied to that individual; that it is impermissible to use decades of exposure to asbestos, worksite or employment status to assess individual exposure or medical causation issues; and that it would be impermissible under governing law to assign a single percentage of ‘causation’ or ‘responsibility’ to a particular craft or job classification.”22
“(12) Without limitation, Defendants do not stipulate that: entry of any judgment based on actual or stipulated Phase Two findings is legally or factually sound; any Defendant in fact has legal responsibility to any individual plaintiff; any individual plaintiff was in fact exposed to injurious quantities of asbestos from the products of any Defendant; the products of any of the Defendants were in fact legal causes of injury to any individual plaintiff; or that any issue framed by the Cimino pleadings can be adjudicated on a jobsite or craft-wide basis. Defendants have not stipulated or agreed that evidence to be received under the Cimino trial management plan is or could be sufficient to establish in these cases that any class member plaintiff suffers from an asbestos-related disease (except as previously stipulated on the record in particular cases), or that the asbestos-containing product or products of any defendant caused or contributed to any such disease, nor that a finding of responsibility or causation in any percentage with respect to a defendant and any class member is or could be sustained by evidence limited to asbestos-related disease among, or exposure to asbestos of, members оf specified crafts at specified worksites over ten-year periods of time in the absence of evidence sufficient to show that each plaintiff class member to whom a defendant is held liable in any percent himself or herself has an asbestos-related disease and that such class member was exposed to the defendant‘s asbestos product or products in quantities and for times sufficient to cause such disease. Further, defendants have not stipulated to the sufficiency of any evidence which would permit any finding by the Court or jury that any class member plaintiff has been damaged in any sum or amount by reference or resort to damages suffered by any other plaintiff, or groups of plaintiffs, in the absence of evidence specifically showing damage suffered by such plaintiff class member himself or herself individually.” (Emphasis added).
Finally, the stipulation reflects that the court, by its
“. . . it would not submit to the jury for a verdict (or receive individual evidence for individual adjudication) as to each plaintiff class member except where it has done so in proceedings to date, several issues, including: whether he or she was exposed to an asbestos-containing product; whether that exposure was sufficient to cause injury; the identity of those who manufactured the products to which such each plaintiff was exposed; and the individual damages suffered by such person as a result of exposure.”
After the stipulation, the phase III trials continued for approximately five more weeks, conducted in all material respects on the same basis and in the same manner as they had been during the some seven weeks before the stipulation was entered into.
Extrapolation
The final phase was that of extrapolation. About a month after completion of the phase III trials, a one-day non-jury hearing was held in which the district court heard evidence concerning the degree to which the 160 sample cases were representative, in their respective disease categories, of the cases in the same disease category among the 2,128 extrapolation cases. Essentially the only evidence at this hearing was the testimony of three expert witnesses called by the plaintiffs, namely Dr. John Dement, Director, Office of Occupation Health and Technical Services, National Institute of Environmental Health Sciences; Professor Ronald Frankewitz of the University of Houston, a Ph.D. in Evaluation, Measurement, and Statistics; and University
The district court‘s opinion dealing with extrapolation does not refer, either generically or specifically, to any evidence other than Professor Frankewitz‘s testimony. He stated that he was furnished by someone in the offices of plaintiffs’ counsel computerized written data reflecting, as to each of the 160 sample cases and each of the 2,128 extrapolation cases, whether the case was a sample case or an extrapolation case, which of the 5 disease categories the case involved, and an answer to each of 12 specific variables pertaining to the particular plaintiff or plaintiff‘s decedent alleged injury to whom formed the basis of the suit. The 12 variable were gender, race, whether living, whether ever smoked, whether was a wage earner (when not specified), age, first year of exposure, last year of exposure, total years of exposure, latency, pack years smoked, trade and predominant craft. Professor Frankewitz testified that the sample cases in each of the five disease categories were representative of the extrapolation cases in the same disease category “in terms of the variables that I‘ve analyzed,” so that, for example, if one were to randomly select another 50 asbestosis cases from the 2,128 extrapolation cases, 99 out of 100 times (98 out of 100 in two minor respects) those 50 cases would have “the same mix of variables” as the 50 asbestosis cases which were a part of the 160 sample phase III cases.23 Dr.
Dr. Dement concluded that from an epidemiological point of view the distribution of certain important “risk factors” in each disease category in the 160 phase III sample cases was very comparable to or representative of the distribution of those same factors in the like disease category cases among the extrapolation cases. The “factors” were age, race, sex, whether or not the individual ever smoked (at least in some disease categories), the year of first exposure (year of last exposure was not considered), and the length of time from first exposure to the initial diagnosis (latency period). A final factor was to characterize the individual‘s “predominant work site” (site of longest employment) as having been in one of six different generic types, namely “refinery, chemical plant, shipyards, construction and trades, household exposure, and a group sort of catch-all other.” This factor also asked as to each of these six generic types of work sites whether the individual had or had not ever worked at such a site. Concerning the some 2,128 extrapolation cases, Dr. Dement was furnished by personnel in the office of plaintiffs’ counsel the answer as to each individual to each of the above “factors” as well as the appropriate disease category for that individual. Dr. Dement did not make any review of any of those 2,128 cases and relied entirely on the referenced answers furnished by the office of plaintiffs’ counsel. He did state that whether or not an individual was exposed to asbestos at a work site was not a criteria in determining the individual‘s “predominant work site” and “we have no exposure information, to my knowledge, or very little at most of these work sites.” However, in general
Professor Hazel testified that in personal injury cases generally (he had never had an asbestos case) the main factors important to evaluation for settlement purposes were the potential for liability for actual or punitive damages, the extent of the plaintiff‘s injury, the venue or forum (the particular jury selected if settled at that stage), the quality of the opposite party‘s legal representation, the defendant‘s ability to pay, and “the host of other factors I would call the plaintiff‘s characteristics . . . what is the appearance this plaintiff is likely to make? What kind of presentation in front of the jury is this plaintiff likely to make?” Professor Hazel looked at the verdicts in the 160 sample phase III cases and also at some of the evidence in some of those cases; he did not do any review of any of the extrapolation cases. He received information from some of the plaintiffs’ lawyers regarding what they thought were “pluses” and “minuses” in their sample phase III cases, and stated that smoking was a reported negative, as was age in some instances and “whether the jury won‘t like him or her“; while no one had had “ten years” in prison, there were instances counsel “said here‘s something we know but the other side doesn‘t know.” Most of the things plaintiffs’ counsel reported “as the positives and the negatives” would fit into Hazel‘s classification of “plaintiff‘s characteristics.” Reviewing memos from defense counsel concerning possible settlement of these cases, Hazel noted (over defense objections) that they mentioned disease classifications, smoking (in lung cancer cases only), whether or not over age 60 (or 65), and what Hazel assumed was job impairment; other than smoking they did not “appear to consider . . . the individual characteristics of any Plaintiff.” In reviewing the verdicts rendered in the phase III cases, Hazel “was struck” by the difference in verdicts as between the two different juries that tried those cases. Hazel recognized that attorneys generally value pleural cases with “the lowest evaluation” of all asbestos-related disease classifications, and noticed this pattern had not been followed in the phase III verdicts, but had no explanation for that. Indeed, the average phase III pleural verdict exceeded both the average asbestosis and the average lung cancer verdict by more than $10,000 (after
2. Analysis
As noted, Pittsburgh Corning attacks the Cimino trial plan, as it did at all times below, principally on the basis that it fails to properly try and determine individual causation, and in the extrapolation cases also fails to properly try and determine individual damages, as to any plaintiffs other than the ten class representatives whose individual cases were fully tried in phase I. Pittsburgh Corning asserts in this connection, among other things, that these aspects of the trial plan are contrary to Fibreboard, impose liability and damages where they would not be imposed under Texas substantive law, and invade its Seventh Amendment and due process rights. Although we do not separately address the due process contention as such, we conclude that the Cimino trial plan is invalid in these respects, necessitating reversal of all the phase III sample case judgments as well as the five extrapolation case judgments before us.26
None of the foregoing is or can be altered by the utilization of
“The language just quoted, that nothing turns on ‘the procedural devices by which the parties happen to come before the court,’ makes the Ross case controlling not only for derivative actions but also for the other procedural devices that the Civil Rules borrowed from equity. In all of these it will be for the judge to decide whether the device may be used, but once he or she does so there will be a right to jury trial on any of the underlying issues that are legal in nature. Indeed, the Ross decision itself relied in part on lower court decisions reaching this result with regard to class actions under Rule 23. The Court said that ‘it now seеms settled in the lower federal courts that class action plaintiffs may obtain a jury trial on any legal issues they present,’ and indicated its agreement with the view that derivative suits are one kind of ‘true’ class action.” 9 Wright & Miller, Federal Practice and Procedure, § 2307 at 79 (footnotes omitted).27
Similarly, use of
“This Circuit has also explained that the meaning of liability for antitrust purposes does not change simply because a trial is bifurcated under
Fed. R. Civ. P. 42(b) . In Response of Carolina, Inc. v. Leasco Response, Inc., 537 F.2d 1307 (5th Cir. 1976), this court stated that there was ‘no basis in law or logic to give liability different meanings depending upon the trial procedure used.’ Id. at 1321. The Leasco opinion explained that bifurcation in no way diminishes the requirement that a plaintiff show some evidence that a violation caused him injury before a defendant is found liable.. . . .
Just as the meaning of liability does not vary because a trial is bifurcated, the requisite proof also in no way hinges upon whether or not the action is brought on behalf of a class under
Rule 23 . It is axiomatic that a procedural rule cannot ‘abridge, enlarge, or modify any substantive right.’ [citing28 U.S.C. § 2072 ] Consequently, this court has no power to define differently the substantive right of individual plaintiffs as compared to class plaintiffs.” Id. at 317-318 (footnote omitted; emphasis added).30
“. . . [U]nder our federal system Congress is generally the body responsible for balancing competing interests and setting national policy. There is no doubt that a desperate need exists for federal legislation in the field of asbestos litigation. Congress’ silence on the matter, however, hardly authorizes the federal judiciary to assume for itself the responsibility for formulating what essentially are legislative solutions. Displacement of state law is primarily a decision for Congress, and Congress has yet to act. . . .” Id. at 1327.
When, after Fibreboard, the district court adopted the present trial plan, it initially justified doing so on the basis of its conclusion that “the Texas Supreme Court, if faced with the facts of this case, would apply a collective liability theory, such as the Court‘s plan, to an asbestos consolidated action.”31 The court based this conclusion on a passage in Gaulding v. Celotex Corp., 772 S.W.2d 66, 71 (Tex. 1989), stating “We are not to be construed
We turn first to the phase III plaintiffs. In these cases, the trial plan was adequately individualized and preserved Seventh Amendment rights with respect to each individual‘s actual damages from an asbestos-related disease. However, it was not designed or intended to, and did not, provide any trial or any determination of whether a Pittsburgh Corning product was a cause of that disease.36 It was strictly a damages trial as to those individual plaintiffs. The stipulation——not entered into until midway through phase III——established merely that “some” individuals working in each of the listed crafts, “during” each of the four decades 1942-1982 and
We note that at least two of the twenty-two sites actually each involved two plants, and another involved “the facilities” of a company “including” its powerhouse. Further, Pittsburgh Corning tendered evidence38 that a typical refinery covers several square miles and indicating that at refineries, shipyards, and other installations asbestos exposure levels were not uniform at the site or throughout a craft or within a decade or between decades, and that most individuals employed at the twenty-two worksites did not have sufficient exposure to cause asbestosis. Also so tendered was evidence indicating that exposure to asbestos below some level would not produce asbestosis and even above that level risks remain
We have noted that the district court, in the order in which it initially adopted the present plan, stated that for purposes of the then-contemplated phase II trial it would “make a non-jury determination as to which Plaintiffs or Plaintiffs’ decedents worked for a sufficient period of time at each worksite so as to be a proper member of that worksite‘s group and which Plaintiffs were proper members of each of the crafts at these worksites. . . .” As previously observed, after phase I the case proceeded directly into phase III without any phase II, and the stipulation was not entered into until phase III was half complete. It is not clear that the district court ever determined that any (or, if so, which) of the tried one hundred sixty phase III plaintiffs, or that any (or if so, which) of the unsevered extrapolation plaintiffs, actually did work at the worksites “for a sufficient period of time” to be “proper members of each of the crafts at these worksites.” And, if
With one exception, noted below, we are aware of no appellate decision approving such a group, rather than individual, determination of cause in a damage suit for personal injuries to individuals at widely different times and places. For example, in a personal injury suit by individuals living in the neighborhood of a landfill allegedly contaminated by defendant, the Sixth Circuit remarked:
“Thus, the court, as is appropriate in this type of mass tort class action litigation, divided its causation analysis into two parts. It was first established that Velsicol was responsible for the contamination and that the particular contaminants were capable of producing injuries of the types allegedly suffered by the plaintiffs. Up to this point in the proceeding, the five representative plaintiffs were acting primarily in their representative capacity to the class as a whole. This enabled the court the determine a kind of generic causation——whether the combination of the chemical contaminants and the plaintiffs’ exposure to them had the capacity to cause the harm alleged. This still left the matter of individual proximate cause to be determined. Although such generic and individual causation may appear to be inextricably intertwined, the procedural device of the class action permitted the court initially to assess the defendant‘s potential liability for its conduct without regard to the individual components of each plaintiff‘s injuries. However, from this point forward, it became the responsibility of each individual plaintiff to show that his or her specific injuries or damages were
proximately caused by ingestion or otherwise using the contaminated water.” Sterling v. Velsicol Chemical Co., 855 F.2d 1188, 1200 (6th Cir. 1988).41
See also In Re Agent Orange Product Liability Litigation, 818 F.2d 145 (2d Cir. 1987), cert. denied, 108 S.Ct. 695 (1988) (in appeal from settlement in
The district court also justified its trial plan by reliance on Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 258-63 (5th Cir. 1974), where, in a
Nor do we consider that In Re Chevron U.S.A., Inc., 109 F.3d 1016 (5th Cir. 1997), justifies the instant trial plan. That action involved claims by approximately 3,000 neighboring property owners for personal injury and property damage allegedly caused contamination from Chevron‘s former crude oil storage waste pit. Apparently no form of class action was involved, although some cases were consolidated. The district court directed that thirty individual plaintiffs be chosen, fifteen by the plaintiffs and fifteen by the defendants, and that there be “a unitary trial on the issues of ‘general liability or causation’ on behalf of the remaining plaintiffs, as well as the individual causation and
In Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996), a divided panel of the Ninth Circuit in a
In sum, as Fibreboard held, under Texas law causation must be determined as to “individuals, not groups.” And, the Seventh Amendment gives the right to a jury trial to make that determination. There was no such trial determination made, and no jury determined, that exposure to Pittsburgh Corning‘s products was a cause of the asbestos disease of any of the one hundred sixty phase III plaintiffs. Nor does the stipulation determine or establish that. Accordingly, the judgments in all the one hundred forty-three phase III cases before us must be reversed and
We turn now to the extrapolation cases. As to the matter of individual causation, it is obvious that the conclusion we have reached in respect to the phase III cases applies a fortiori to the extrapolation cases. In the extrapolation cases there was no trial and no jury determination that any individual plaintiff suffered an asbestos-related disease.47 Indeed, in the extrapolation cases there was no trial at all——by jury or otherwise——and there was no evidence presented. So, our holding as to the phase III cases necessarily requires reversal of the judgments in the five extrapolation cases before us.
As to the matter of actual damages, the extrapolation cases are likewise fatally defective. Unlike the phase III cases, in the extrapolation cases there was neither any sort of trial determination, let alone a jury determination, nor even any evidence, of damages. The district court considered that these deficiencies were adequately compensated for by awarding each extrapolation case plaintiff who alleged an asbestos-related disease an amount of actual damages equal to the average of the awards made in the phase III cases for plaintiffs claiming the same category of disease. This plainly contravenes Fibreboard‘s holding that under the substantive law of Texas rеcoverable damages are the “wage losses, pain and suffering, and other elements of compensation” suffered by each of the several particular plaintiffs
We conclude that the extrapolation case judgments, as well as the phase III judgments, are fatally flawed, are contrary to the dictates of Fibreboard, and contravene Pittsburgh-Corning‘s Seventh Amendment rights. We do not act in ignorance or disregard of the asbestos crises. In Amchem Products, Inc. v. Windsor, 117 S.Ct. 2231, 2237-38 (1997), the Supreme Court called attention to the report of the Judicial Conference‘s Ad Hoc Committee on Asbestos Litigation, stating that “Real reform, the report concluded, required federal legislation creating a national asbestos-dispute resolution scheme.” Id. at 2238. The Court also observed, “The argument is sensibly made that a nationwide administrative claims
We accordingly reverse the judgments before us in all the one hundred forty-three phase III cases and in all the five extrapolation cases, and those one hundred forty-eight cases are remanded for further proceedings not inconsistent herewith.
B. Other Pittsburgh Corning Contentions; Plaintiffs’ Cross-Appeal as to Pittsburgh Corning
We turn now to Pittsburgh Corning‘s remaining claims of error and to plaintiffs’ cross-appeal as to Pittsburgh Corning. In light of our above holding, we pretermit any consideration of any remaining claims of Pittsburgh Corning, and of any claims of error raised by plaintiffs in their cross-appeal as to Pittsburgh
1. Prejudgment Interest
The district court held that prejudgment interest on past actual damages accrued at the expiration of six months after the plaintiff‘s last exposure. Pittsburgh Corning contends, inter alia, that such accrual date is too early; plaintiffs in their cross-appeal contend it is too late. In Owens-Illinois, Inc. v. Estate of Burt, 897 S.W.2d 765 (Tex. 1995), the Texas Supreme Court held that in asbestos personal injury actions prejudgment interest commences to accrue six months after the date the defendant received notice of the claim or the date the lawsuit was filed, whichever is earlier.53 The awards of prejudgment interest are hence vacated and remanded for recalculation.
2. Miscellaneous Asserted Trial Errors
Pittsburgh Corning complains that the district court
Pittsburgh Corning complains that plaintiffs’ counsel engaged in repeated improper appeals to bias, passion, and prejudice, as a result of which the phase I jury awards (and those in phase III, which we do not address) were excessive. While Pittsburgh Corning, understandably perhaps, rather exaggerates in this connection, it
Pittsburgh Corning asserts error in the trial court‘s refusal to furnish the prospective jurors a list of all the over two thousand class members so the jurors could be questioned about whether they knew any of them. The district court determined that this was impractical and unnecessary. The prospective jurors had the ten individual class representatives identified to them. Each
3. Recusal
We reject, as we earlier did in denying Pittsburgh Corning‘s petition for mandamus raising the identical contentions, Pittsburgh Corning‘s claims that the district judge who initially primarily presided over these cases should have recused himself earlier, as well as that the successor district judge did not properly rule on their motions raising that matter. After again thoroughly considering the matter, we find these contentions to be without merit.
4. Exemplary Damages
Pittsburgh Corning raises several challenges to the award of exemplary damages. It complains of the admission of evidence concerning its Tyler asbestos plant. Although none of the class had worked there and the asbestos exposure there was far greater than at the twenty-two sites at issue, the evidence was relevant to the exemplary damages issue as having some tendency to show Pittsburgh Corning was aware of, and consciously indifferent to, the risks posed by the asbestos it manufactured. A limiting instruction was given in this connection. No abuse of discretion in the admission of this evidence has been established. See King v. Anthony world Industries, 906 F.2d 1022, 1026 (5th Cir. 1990),
Further complaint is made by Pittsburgh Corning as to the district court‘s instructions concerning exemplary damages and what was necessary to find in order to impose them. To the extent that these contentions are predicated on proper objections made at trial, we conclude that the instructions, when taken and considered as a whole, were adequate, though not perfect, and that any deficiency did not prejudice Pittsburgh Corning‘s substantial rights. See Russell v. Plano Bank & Trust, 130 F.3d 715, 719 (5th Cir. 1997). Some challenges to the instructions that Pittsburgh Corning now raises are not supported by proper objection below, and as to these we conclude that reversal under the plain error doctrine is not appropriate here. Id. at 719, 721. The use of a multiplier to determine punitive damages is likewise challenged by Pittsburgh Corning. However, our decisions in Jenkins and Fibreboard mandate rejection of that challenge. It is also contended that the multiplier of three that the jury assigned to Pittsburgh Corning is excessive, both generally and as a matter of due process. We reject this contention. See Edwards v. Armstrong World Industries, 911 F.2d 1151, 1154-55 (5th Cir. 1990).57 In another variation of its excessiveness argument, Pittsburgh Corning calls attention to the fact that the district court, after
“Taking into account equitable considerations, and in the nature of a remittitur, the Court has decided to apply the multipliers set for a defendant to that defendant‘s allocated share of actual damages. This ruling also most closely comports with the holding in Edwards v. Armstrong World Industries, Inc., 911 F.2d at 1154.”
Plaintiffs contend “there was not an actual remittitur.” Given the
Plaintiffs present two challenges to the punitive damages award. First, they contend that the multiplier should bе applied not only to the actual damages awarded by the jury, but also to the prejudgment interest which was subsequently awarded by the court. They contend in this connection that Texas law regards prejudgment interest as a component of actual damages, citing, among other cases, Benavides v. Isles Construction Co., 726 S.W.2d 23, 25 (Tex. 1987); Paramore v. Nehring, 792 S.W.2d 210 (Tex. App.—Austin 1990, no writ); El Paso County Water Imp. Dist. No. 1 v. Grijalua, 783 S.W.2d 736, 740 (Tex. App.—El Paso 1990), writ denied, 795 S.W.2d 705 (Tex. 1990); and Wood v. Armco, 814 F.2d 211, 215 (5th Cir. 1987). These cases do not address the issue now before us. Many of them, such as Benavides, El Paso County Water Imp. Dist. No. 1, and Wood are essentially pleading cases, stating in general terms that “common law” prejudgment interest is an element of actual damages that has to be specifically pleaded for. Paramore held that prejudgment interest was a part of “the actual damages” which the Texas Deceptive Trade Practices Act (DTPA),
Plaintiffs’ final contention in their cross-appeal as to Pittsburgh Corning is that we should hold it “jointly and severally liable for the exemplary damages assessed against it and Celotex.” We reject this contention. Plaintiffs base their argument on Hofer v. Lavender, 679 S.W.2d 470 (Tex. 1984), in which the Texas Supreme
We believe plaintiffs seek to assign to Hofer and Celotex a weight which they will not bear. We reviewed those two decisions, and a host of other Texas authorities, in Estate of Moore v. C.I.R., 53 F.3d 712 (5th Cir. 1995), where we stated:
“. . . [T]he Texas Supreme Court has emphasized at least since 1847 that exemplary damages are awarded not to compensate the plaintiff for any injury received but to punish the defendant and to deter others. [citations omitted] This Court too has repeatedly stated that exemplary damages are not compensatory under Texas law. Jenkins v. Raymark Industries, Inc., 782 F.2d 468, 474 (5th Cir. 1986) (‘The purpose of punitive damages is not to compensate the victim but to create a deterrence to the defendant, and to protect the public interest.‘);
[citations omitted]. . . . .
We also note that the year after the Texas Supreme Court released its opinion in Hofer, the court determined that prejudgment interest is not available on exemplary damages precisely because of their non-compensatory nature. The court stated: ‘Punitive damages are intended to punish the defendant and to set an example to others. . . . They are assessed over and above the amount of damages necessary to indemnify the plaintiff. The plaintiff can thus be made whole even if prejudgment interest is not awarded on punitive damages.’ Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549, 555-56 (Tex. 1985) (citation omitted).
Texas courts have also rejected arguments that punitive damages should be reduced in proportion to the percentage of negligence attributed to the plaintiff. Reduction of punitive damages is not appropriate because ‘[t]he purpose of awarding exemplary damages is not to compensate the plaintiff, but to punish and set an example to others.’ Elbar, Inc. v. Claussen, 774 S.W.2d 45, 53 (Tex. App.—Dallas 1989, writ dismissed as moot); [citations omitted].
. . . .
There is no requirement that exemplary damages bear any relation to the plaintiff‘s inconvenience, attorney‘s fees, or losses too remote to be considered as elements of actual damages.” Id. at 715-716.
In Estate of Moore, we concluded by stating that “[t]he overwhelming weight of Texas authority holds that exemplary damages are not awarded to compensate the plaintiff for any injury” and that the “fundamental truth” is that “exemplary damages in Texas are awarded on account of and in proportion to the defendant‘s wrongful conduct.” Id. at 716. See also Ellis County State Bank v. Keever, 888 S.W.2d 790, 796, 798 (Tex. 1994), which reiterates the holding of Cavnar v. Quality Control Board, 696 S.W.2d 549, 555-56 (Tex. 1985), that prejudgment interest is not recoverable on
Whatever may be the case where defendants, each with malice, act jointly to commit a single wrong, and the jury assesses a single punitive damages award in one specified dollar amount “jointly against said defendants,” see Waggoner v. Wyatt, 94 S.W.1076, 1078 (Tex. Civ. App. 1906, writ refused),61 that is not the situation here. Here the theory of liability against defendants as submitted to the jury was not one of joint action (or civil conspiracy), but strictly of individual action, often taken at widely different times (e.g., Fibreboard and Celotex during the period after 1942, Pittsburgh Corning only after 1962). Further, the jury instructions concerning punitive damages mentioned only punishment for wrongdoing and setting an example to deter others, and did not include any Hofer-type element such as compensation for losses too remote to be covered by actual damages, or for
Finally, reliance on a Hofer-type quasi-compensatory approach to impose joint and several liability for the separate punitive damages awards would render suspect the entire multiplier concept in this kind of phased trial. As previously noted, the multiplier concept was approved in Jenkins on the basis that punitive damages were “not to compensate the victim,” id., 782 F.2d at 474, and that having them vary with actual damages (by a multiplier for each defendant severally based on the wrongfulness of its conduct) would preserve the necessary individual consideration because in the subsequent individual cases each individual‘s actual damages would
It is plain then that the trial here, and the trial plan, so far as concerned punitive damages and the multiplier, was formulated, approved, and conducted on the assumption that such damages were entirely punitive and to serve as an example and were several as to each defendant and related only to the wrongfulness of its conduct. We accordingly reject plaintiffs’ contention that Pittsburgh Corning should have been held liable for Celotex‘s punitive damages.
5. Effect of Celotex Bankruptcy
As previously noted, Celotex filed chapter 11 (and was severed) after all the phase III verdicts were returned (and before Fibreboard settled). The district court held Pittsburgh Corning liable for all of Celotex‘s fifteen percent causation share (in the phase I cases; ten percent in the phase III and extrapolation cases) of actual (not exemplary) damages. Pittsburgh Corning contends that Celotex‘s share should not all be allocated to it but should instead be ratably redistributed among the settling defendants (including Fibreboard), Pittsburgh Corning, and any contributory negligent plaintiff, in the proportion which their assigned causation percentages bear to each other. Were we to fashion what we believe would be the most appropriate rule, we would tend to agree with Pittsburgh Corning. But precedent bars the way.
Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex. 1984), which the parties agree and agreed below controls this issue, provides for joint and several liability as to nonsettled shares, with the particular view of protecting the plaintiff against an insolvent, nonsettling defendant. Id. at 429. Celotex was not a settling defendant. Had Celotex taken bankruptcy before trial, its comparative causation share would not have been submitted to the jury, and Pittsburgh Corning could not reduce its liability by virtue of any claimed partial causation by Celotex. That much is clear from Duncan, and is not really disputed by Pittsburgh Corning. See also Gideon v. Johns-Manville Sales Corp., 761 F.2d 1129, 1140-41 (5th Cir. 1985). Likewise, had Celotex taken bankruptcy after the judgment became final, Pittsburgh Corning would remain liable for Celotex‘s fifteen percent share. That, too, is clear from Duncan. So why should it make any difference that Celotex‘s bankruptcy came after the verdict but before final judgment? The answer to that question is that Celotex‘s share of causation, along with Fibreboard‘s and Pittsburgh Corning‘s and that of the previously settling defendants and, in some instances, that of a negligent plaintiff, was determined by the jury, in percentages that totaled one hundred percent (as the instructions required). Logically, it should be assumed that proportionate allocation of Celotex‘s percentage share of causation among the others would produce the same result as if Celotex‘s share had never been submitted at all (as it would not have been if it had taken bankruptcy prior to trial). For example, if at trial
“An alternative would be to reallocate the insolvent tortfeasor‘s share of liability among all parties whose actions or products were a cause of the injuries, including the negligent plaintiff. This suggestion is attractive and was endorsed by a distinguished Special Committee of the Tort and Compensation Section of the State Bar. As a judicial rule, however, reallocating the insolvent‘s share would create problems of post-trial jurisdiction and finality of judgments.” Id. at 429, n.9.
The last sentence of this passage suggests that the Duncan court may have only been speaking to the situation where a nonsettling bankrupt becomes insolvent after the judgment is final. As for pretrial insolvency, there would be no need to thus “reallocate,” as the causative fault of a nonsettling defendant would simply not have been submitted to the jury. Arguably, then, Duncan does not necessarily preclude acceptance of Pittsburgh Corning‘s argument.
On the other hand, Duncan can also perhaps reasonably be read as generally rejecting this sort of proportionate reallocation. That, in substance, is how we read it in Whatley v. Armstrong World Industries, Inc., 861 F.2d 837 (5th Cir. 1988). In that Texas law asbestos case, the plaintiff settled before trial with twelve defendants and proceeded to trial against Raymark alone. The jury
To the extent that Pittsburgh Corning complains that its subrogation rights against Celotex are prejudiced, we disagree. Pittsburgh Corning‘s discharge of the judgment will entitle it to be subrogated to plaintiffs’ rights as against Celotex. See Gideon, 761 F.2d at 1140-41.
We reject Pittsburgh Corning‘s complaints as to the effect on
C. Conclusion on Pittsburgh Corning‘s Appeal and Plaintiffs’ Related Cross-Appeal
In sum, we reverse the judgments in all the 143 phase III cases and in all the 5 extrapolation cases before us and those cases are remanded for further proceedings not inconsistent herewith. As to the judgments against Pittsburgh Corning in the nine class representative cases before us, we reject all of the contentions raised on cross-appeal by plaintiffs and, with the single exception of the date on which prejudgment interest commences to accrue, we likewise reject all of Pittsburgh Corning‘s contentions on appeal. The nine class representative cases before us as against Pittsburgh Corning are remanded for the sole purpose of recalculating prejudgment interest based on the accrual date specified in this opinion, and in all other respects said nine judgments against Pittsburgh Corning are affirmed.
II.
ACL APPEAL
A. Introduction
ACL appeals the two judgments rendered against it in two of the nine class representative cases.65 Plaintiffs cross appeal as
As previously noted, the cases against ACL were bench tried by virtue of the Foreign Sovereign Immunities Act.
ACL is a Canadian corporation, a majority of whose shares are owned by the government of Quebec, Canada. ACL mined chrysotile asbestos in Canada. During the years 1951-1961, ACL sold and shipped the raw asbestos, minimally processed by it, to Fibreboard in the United States. The product was considered raw asbestos when received. Fibreboard refined the raw asbestos, blended it with asbestos, including amosite asbestos, obtained from other suppliers, and incorporated it into many asbestos-containing finished products manufactured and sold by Fibreboard, including insulation products—the only products at issue in this case—and other products such as shingles and linoleum.66 There was evidence, which the district court credited, that during those years 1951-1961 ACL supplied at least fifty percent of the asbestos used by Fibreboard. In 1962, Fibreboard ceased its purchases from ACL. ACL was never involved in the design, manufacture, sale, or distribution of the insulation products at issue here (or, apparently, any other asbestos-containing finished products).
The district court ruled that “ACL‘s liability to the plaintiffs arises through the plaintiff‘s exposure to Fibreboard products which contained asbestos supplied by ACL.” But it went on
With respect to the two cases in which ACL was held liable, the following appears to be the district court‘s material findings and conclusions. In its initial findings and conclusions, the district court stated:
“The evidence also shows that ACL knew or should have known as early as 1935 that asbestos workers and household members of asbestos workers were at risk of getting an asbestos-related injury or disease from the application, use, or removal of Defendants’ asbestos-containing insulation products. . . . ACL sold its product to intermediaries. These intermediaries
incorporated the asbestos into finished products and sold the products to the worksites where the Plaintiffs allege they were exposed to asbestos. . . . The issue is whether ACL‘s reliance on its intermediaries to pass on warnings concerning the dangers of asbestos to users of asbestos products was reasonable. See Alm v. Aluminum Co. of America, 717 S.W.2d 588, 592 (Tex. 1986) . . . . In other words, were ACL‘s intermediaries capable of passing on a warning and, if not, did ACL know about that incapacity? The specific question this Court must answer is the following: Did ACL have actual knowledge that the raw asbestos it supplied to its intermediaries was being made into insulation products and sold by such companies without an adequate warning? The evidence in the record establishes that ACL did have such knowledge. It is apparent that ACL‘s liability is derivative of the intermediaries to which it sold its raw asbestos.
. . . .
The evidence does show that, from 1951 until 1961, Fibreboard Corporation purchased over 50% of its raw asbestos from ACL.”68
The district court later reiterated these findings.69 The district
B. ACL Claims of Error
On appeal, ACL challenges the judgments against it on essentially two bases. First, it contends, in a variety of arguments, that as a mere bulk supplier of a raw material later incorporated into various finished products by another (Fibreboard), not all of which products are unreasonably dangerous or defective, it owed no duty to the plaintiffs who were harmed by exposure to that raw material through exposure to one particular type of finished product (insulation products). Second, it contends that any liability it may have is in any event derivative of that of Fibreboard, so Fibreboard‘s settlement discharged it.
1. Mere Supplier
The district court seems to have based its liability determination agаinst ACL on ACL‘s failure to warn the users of Fibreboard insulation products, given that ACL knew such insulation products were otherwise dangerous and that Fibreboard was not giving a warning, or an adequate waiving.
The district court did not find that ACL‘s raw asbestos was defective or unreasonably dangerous when sold to Fibreboard, or that Fibreboard was not a sophisticated and knowledgeable manufacturer of asbestos containing finished products; nor did the court find that all or substantially all of the diverse finished products manufactured by Fibreboard and containing ACL-supplied raw asbestos were defective or unreasonably dangerous. The only products at issue here were insulation products, and the district court imposed liability on Fibreboard and the other manufacturer defendants because their insulation products were, as the phase I jury found, “defective and unreasonably dangerous as a result of not having an adequate warning.” We have held that not all asbestos-containing finished products are defective or unreasonably dangerous. See, e.g., Gideon, 761 F.2d at 1143 (“We have refused to hold asbestos products inherently dangerous“), and 1145 (“As to Raymark, we are unable to find . . . that the danger created by the use of its products [asbestos packings] outweighed their utility. . . all asbestos-containing products cannot be lumped together in determining their dangerousness“). See also, e.g., Corrosion Proof Fittings v. EPA, 947 F.2d 1201, 1207 (5th Cir. 1991). If asbestos-
In imposing liability on ACL, the district court relied on Alm v. Aluminum Co. of America, 717 S.W.2d 588 (Tex. 1986).71 That case was a suit by James Alm for personal injuries suffered when the cap on a bottle of 7-Up he had purchased exploded off the bottle and
While Alm contains some broad dicta concerning when one in a position analogous to Alcoa‘s might be obligated to warn consumers despite warning a party such as JFW, its clear holding is that an adequate warning to JFW would have protected Alcoa. Obviously Alcoa did not—indeed could not have—warned Alm, or other consumers, and there is nothing to suggest the contrary (nor, plainly, did JFW warn anyone). If failure to warn Alm (or consumers generally) could alone have supported Alcoa‘s liability, there would have been no occasion to remand for a determination concerning the adequacy of Alcoa‘s warning to JFW. Moreover, it is clear that there was sufficient evidence that JFW was not otherwise knowledgeable of the relevant hazards.
Alm is thus distinguishable from the case at bar, in which a supplier of raw material to a sophisticated and knowledgeable manufacturer of diverse finished products which incorporate that material is held liable for failure to warn users of one type of such finished products of the dangers posed by the raw material‘s presence in the product. The general rule in this connection is stated in Restatement Third, Torts: Products Liability (1997) in the comments to its section 5. Comment a to section 5 states in relevant part:
“Product components include raw materials, bulk products, and other constituent products sold for integration into
other products. Some components, such as raw materials, valves, or switches, have no functional capabilities unless integrated into other products. Other components, such as a truck chassis or a multi-functional machine, function on their own but still may be utilized in a variety of ways by assemblers of other products. As a general rule, component sellers should not be liable when the component itself is not defective as defined in this Chapter. . . .
The refusal to impose liability on sellers of nondefective components is expressed in various ways, such as the ‘raw material supplier defense’ or the ‘bulk sales/sophisticated purchaser rule.’ However expressed, these formulations recognize that component sellers who do not participate in the integration of the component into the design of the product should not be liable merely because the integration of the component causes the product to become dangerously defective. This Section subjects component sellers to liability when the components themselves are defective or when component providers substantially participate in the integration of components into the design of the other products.”
Illustration 4 to section 5 gives an example which closely parallels ACL‘s situation:
“4. ABC Foam Co. [here ACL] manufactures bulk foam with many different uses. XYZ Co. [here Fibreboard] purchases bulk foam from ABC, then processes the foam and incorporates the processed foam in the manufacture of disposable dishware. ABC becomes aware that XYZ is using processed foam in the dishware. ABC and XYZ are both aware that there is a potential danger that processed foam may cause allergic skin reactions for some users. ABC is aware that XYZ is not warning consumers of this potential problem. ABC has no duty to warn XYZ or ultimate consumers of the dangers attendant to use of the processed foam for disposable dishware. The foam sold by ABC is not defective in itself as defined in this Chapter. A supplier of a component has no duty to warn a knowledgeable buyer of risks attendant to special application of its products when integrated into another‘s product. ABC did not participate in the design of the disposable dishware manufactured by XYZ, and is thus not subject to liability under Subsection (b).” (Emphasis added).
Comment c to section 5 focuses specifically on raw materials
”c. Raw Materials. Product components include raw materials. See Comment a. Thus, when raw materials are contaminated or otherwise defective within the meaning of § 2(a), the seller of the raw materials is subject to liability for harm caused by such defects. Regarding the seller‘s exposure to liability for defective design, a basic raw material such as sand, gravel, or kerosene cannot be defectively designed. Inappropriate decisions regarding the use of such materials are not attributable to the supplier of the raw materials but rather to the fabricator that puts them to improper use. The manufacturer of the integrated product has a significant comparative advantage regarding selection of materials to be used. Accordingly, raw-materials sellers are not subject to liability for harm caused by defective design of the end-product. The same considerations apply to failure-to-warn claims against sellers of raw materials. To impose a duty to warn would require the seller to develop expertise regarding a multitude of different end-products and to investigate the actual use of raw materials by manufacturers over whom the supplier has no control. Courts uniformly refuse to impose such an onerous duty to warn.” (Emphasis added).
Illustration 5 to section 5 is also parallel to ACL‘s case here, viz:
“5. LMN Sand Co. [here ACL] sells sand in bulk. ABC Construction Co. [here Fibreboard] purchases sand to use in mixing cement. LMN is aware that the improper mixture of its sand with other ingredients can cause cement to crack. ABC utilizes LMN‘s sand to form a cement supporting column in a building. As a result of improper mixture the cement column cracks and gives way during a mild earthquake and causes injury to the building‘s occupants. LMN is not liable to the injured occupants. The sand sold by LMN is not itself defective under §§ 1-4. LMN has no duty to warn ABC about improperly mixing sand for use in cement. LMN did not participate in ABC‘s design of the cement and is not subject to liability for harm caused by the sand as integrated into the cement.”
We observe that ACL‘s asbestos is clearly not defective for these purposes. Under section 2 of the Restatement Third, a product is defective if it contains a manufacturing defect or a
Comment b, directed at product components, contains a caveat, stating:
“Courts have not yet confronted the question of whether, in combination, factors such as the component purchaser‘s lack of expertise and ignorance of the risks of integrating the component into the purchaser‘s product, and the component supplier‘s knowledge of both the relevant risks and the purchaser‘s ignorance thereof, give rise to a duty on the part of the component supplier to warn of risks attending integration of the component into the purchaser‘s product.” (Emphasis added).72
The hypothetical situation given in the above quotation from Comment b is in some respects arguably parallel to Alm, if Alcoa there were considered the component supplier and JFW the component purchaser, as Alcoa was knowledgeable of the risks and JFW was not, and Alcoa knew or should have known JFW was not but failed to warn JFW. Here, however, there not only is no finding that ACL failed to warn Fibreboard, but it is also clear that Fibreboard was not
We believe that the Texas Supreme Court would follow the Restatement Third, Torts: Products Liability § 5 in this respect. Cf. Klem v. E.I. Dupont De Nemours Co., 19 F.3d 997 (5th Cir. 1994) (Louisiana law). The Texas Supreme Court has long looked to the Restatement of Torts as an influential guide in products liability law,73 and has recently heavily relied on the refinements in such law reflected in Restatement Third, Torts: Products Liability. See Uniroyal Goodrich Tire Company v. Martinez, ___ S.W.2d ___, 41 Tex. Sup. Ct. J. 1047, 1998 WL 352929 (Tex. 1998).
Applying section 5 of the Restatement of Torts, Third: Products Liability, as we believe the Texas Supreme Court would, we hold that no basis has been demonstrated to hold ACL liable. Its raw asbestos, as sold to Fibreboard, was not adulterated or other
Accordingly, the judgment against ACL in the Atchison аnd Nations cases is reversed and judgment is here rendered that the plaintiffs in those cases take nothing from ACL.
2. Fibreboard Settlement
Because of our above holding, ACL‘s alternative contention that any liability it might have was discharged by the Fibreboard settlement becomes moot, and we pretermit consideration of it.
C. Cross-Appeal
The contentions raised in plaintiffs’ cross-appeal as to ACL are all rendered moot by our above holding that ACL is in any event
III. CONCLUSION
In conclusion, on Pittsburgh Corning‘s appeal we reverse the judgments in all the 143 phase III cases and in all 5 extrapolation cases that are before us and such cases are remanded for further proceedings not inconsistent herewith. As to Pittsburgh Corning‘s appeal of the judgments against it in the nine phase I cases before us, we reject all of its contentions on appeal except that relating to the date on which prejudgment interest commences to accrue; as to these same nine cases, we reject plaintiffs’ cross-appeal against Pittsburgh Corning; and these nine cases, so far as they concern Pittsburgh Corning, are remanded solely to amend the judgments therein against Pittsburgh Corning so as to reflect prejudgment interest calculated from the appropriate accrual date as provided herein. With respect to ACL‘s appeal of the judgments against it in the Nations and Atchison cases (two of the class representative phase I cases), we reverse the judgments against ACL and render judgment in its favor; and we reject plaintiffs’ cross-appeal as to ACL.74
ENDRECORD
I write separately to concur in the excellent opinion in this case, but also to add some of my own comments and thoughts about these consolidated cases, which have burdened our judicial system for so many years. In particular, I wish to express my concerns raised by Pittsburgh Corning‘s attack on Judge Parker‘s ingenious but, unfortunately, legally deficient trial plan. This case is a striking example of the crisis presented by the state of asbestos litigation in our judicial system; therefore, I am also writing separately to further urge upon Congress the wisdom and necessity of a legislative solution.
Texas law simply provides no way around Pittsburgh Corning‘s right to a jury trial as to causation or the requirement that causation and damages be determined as to individuals and not groups. See In re Fibreboard Corp., 893 F.2d 706, 711 (5th Cir. 1990) (stating that policy choices of State of Texas in defining “the duty owed by manufacturers and suppliers of products to consumers . . . are reflected in the requirement that a plaintiff prove both causation and damage. . . . These elements focus upon individuals, not groups.“). If Judge Parker had conducted phase II according to his plan, however, rather than replacing phase II with the phase II stipulation, the only issue before us today would be the propriety of the phase III damages determinations. Of course, the majority opinion correctly explains that these damages determinations were fatally deficient under Texas law and the Seventh Amendment as to the more than 2,000 “extrapolation” cases; however, these “extrapolated” damages determinations are valuable in and of themselves as indications of an appropriate settlement range for each of the five disease categories involved.
It is clear that the enigma of asbestos litigation is not readily susceptible to resolution under the standards and рractices representative of traditional tort litigation. See Jenkins v. Raymark Industries, 782 F.2d 468, 470 (5th Cir. 1986) (“Courts, including those in our own circuit, have been ill-equipped to handle this ‘avalanche of litigation.’ . . . Our numerous opinions in asbestos-related cases have repeatedly recognized the dilemma confronting our trial courts, and
What has been a frustrating problem is becoming a disaster of major proportions to both the victims and the producers of asbestos products, which the courts are ill-equipped to meet effectively.
* * *
The most objectionable aspects of asbestos litigation can be briefly summarized: dockets in both federal and state courts continue to grow; long delays are routine; trials are too long; the same issues are litigated over and over; transaction costs exceed the victims’ recovery by nearly two to one; exhaustion of assets threatens and distorts the process; and future claimants may lose altogether.
REPORT OF THE JUDICIAL CONFERENCE AD HOC COMMITTEE ON ASBESTOS LITIGATION 2-3 (Mar. 1991) [hereinafter AD HOC COMMITTEE REPORT]. The history of this case, up to and including our resolution of this appeal (which is dictated by binding authority) is a perfect illustration of the incompatibility of asbestos litigation and traditional tort litigation procedures.
This case also illustrates the need for a legislative response to the asbestos litigation crisis. As the majority opinion in this case notes, there is a dire need for legislative intervention in the arena of the asbestos litigation crisis. In its report, the Ad Hoc Committee argued that effective reform of the asbestos litigation crisis requires federal legislation creating a national asbestos dispute-resolution scheme. AD HOC COMMITTEE REPORT 3, 27-35. The Judicial Conference of the Untied States adopted the Ad Hoc Committee‘s recommendations, and urged Congress to “consider a national legislative scheme to come to grips with the impending disaster relating to resolution of asbestos personnel injury disputes, with the objectives of achieving timely, appropriate compensation of present and future asbestos victims and of maximizing the prospects for the economic survival and viability of defendants.” REPORT OF THE PROCEEDINGS OF THE
As the majority opinion convincingly establishes, the trial plan which the district court implemented below was legally deficient. As to the 160 phase III “sample” plaintiffs, who tried their cases to a jury regarding damages, the trial plan was inconsistent with the requirement of Texas law that determinations of causation be made as to “individuals, not groups.” See Fibreboard, 893 F.2d at 711. The stipulation that replaced phase II established only that “some” individuals working in each of the listed crafts during each of the relevant time periods at each of the 22 work sites were “exposed to asbestos [with] sufficient length and intensity to cause pulmonary asbestosis of varying degrees,” and that a Pittsburgh Corning asbestos product was present at thosе sites during two of the relevant time periods. As such, the stipulation was not sufficiently individualized, as it would have been if Pittsburgh Corning had stipulated that “all” of the plaintiffs were so exposed.
As to the “extrapolation” plaintiffs, the same rationale applies with respect to the issue of causation. Additionally, however, the extrapolation cases were deficient with regard to the determination of actual damages. In contrast to the “sample” phase III cases, no jury ever considered the “extrapolation” cases, and neither the court nor a jury made any individualized determinations of actual damages, as required by Texas law. See Fibreboard, 893 F.2d at 711. It is for these reasons that we are reversing the judgments in the phase III “sample” cases and the “extrapolation” cases.
It appears, however, that Judge Parker‘s phase II plan would have been sufficient if he had implemented the plan rather than disposing of it with the phase II stipulation. Under the plan, phase II would have addressed exposure on a craft and work site basis during the relevant time periods. A jury would have made exposure findings regarding specific work sites, crafts, and time
The presentation of such evidence would clearly be sufficient for a reasonable jury to conclude that the presence of the defendants’ products caused injuries to individuals working in certain crafts at certain work sites during certain time periods, and how long of a time period would be sufficient to support such causation. The jury would have also heard evidence regarding the presence of the defendants’ products at the relevant work sites during the relevant time periods. Based on that evidence, the jury would have apportioned responsibility among the settling and non-settling defendants. The court would then make a determination of which plaintiffs worked for sufficient periods of time at each work site and which plaintiffs were members of each craft at those work sites.
The evidence, if presented as the plan anticipated, would satisfy the plaintiffs’ burden of proof, and would support a reasonable jury‘s determination of causation specific to craft, work site, and relevant time period. Such evidence would also support a determination of the length of time on the job required to support causation. As such, the court‘s task of simply plugging each plaintiff into a craft, work site, and time period would be a sufficiently individualized determination of causation for the district court to grant judgment as to the causation issue.75
Although resolution of these cases, under the current state of law, would require an inordinate number of damages trials, the parties involved should not lightly cast aside the figures that Judge Parker arrived at in phase III as representative of actual damages in each category of disease. In arriving at these figures, Judge Parker tried 160 individual “sample” cases from each of the five disease categories represented by the pool of plaintiffs. The two juries that tried those 160 cases determined only whether each particular “sample” plaintiff suffered from an asbestos-related disease or injury and, if so, the amount of damages incurred. Following the trials, Judge Parker held a one day hearing after which he determined that the “sample” cases within each disease category were reliably representative of the more than 2,000 remaining “extrapolation” cases. Judge Parker then assigned each “extrapolation” case to a disease category and awarded actual damages equal to the average of the awards in the “sample” cases involving the same disease.
In sum, the judiciary‘s utter inability to adequately address the seemingly insurmountable
I tend to agree with Judge Thomas F. Hogan‘s Separate Dissenting Statement to the Ad Hoc Committee‘s report.76 Judge Thomas acknowledged the “national crisis involving asbestos litigation,” but expressed concern with the Ad Hoc Committee‘s recommendation that, if Congress chose not to accept the Committee‘s recommendation of a national legislative scheme to deal with asbestos claims, Congress should consider legislation to expressly authorize the consolidation and collective trial of asbestos cases in order to expedite disposition of cases in federal courts with heavy asbestos personal injury caseloads. AD HOC COMMITTEE REPORT 41-43 (Separate Dissenting Statement of Judge Thomas F. Hogan). Judge Hogan stated:
My concern is the underlying premise of the report regarding the use of class action “collective” trials (trials by aggregation of claims) of asbestos cases. It is a novel and radical procedure that has never been accepted by an appellate court. It has been challenged as being constitutionally suspect in denying defendants their due process and jury trial rights as to individualized claimants, as well as conflicting with the court‘s obligations to apply state law. . . .
This recommendation, aside from the constitutional question, as a practical matter may well prоve impossible to execute. See generally, the reference to the Cimino trial (passim) [referring, ironically, to the present case]. Trial by aggregation of claims and then the extrapolation of the damages by the court has been recognized by the Committee itself as being “the most radical solution . . . .” See Report at 21. As mentioned, it has never been approved by any appellate court.
Our decision in this case shows that Judge Hogan‘s prophecy rang true. Judge Hogan did agree that “a national solution is the only answer.” Id. at 42. He continued, however, that “[s]ince the aggregation or collective trial method is highly questionable, a logical and viable solution would be the passage by Congress of an administrative claims procedure similar to the Black Lung legislation.” Id. Judge Hogan concluded:
There already exists a model to follow in the Black Lung program. If there is to be any Conference action, it is hoped the Conference would suggest that Congress consider such an approach.
Id. at 43.
I agree with Judge Hogan‘s comments. Obviously, the type of consolidation attempted in this case is unworkable in practice. Fibreboard and the majority opinion in this case make that much abundantly clear. As I have discussed, it is also apparent that the federal judiciary has not been able to formulate an appropriate response to the asbestos litigation crisis. In fact, this case suggests that we may be without the power to do so.
As such, there must be some alternative solution. The power to devise such a solution lies solely in the halls of Congress. Although I do not express any opinion on the strengths and weaknesses of the Federal Black Lung Program as implemented, the underlying concept of setting up an administrative claims procedure to handle a massive amount of claims for disabling employment-related impairments makes sense in the context of dealing with claims for asbestos-related injuries. Congress promulgated the Black Lung Program to rectify the historical lack of adequate state compensatory schemes for miners suffering from pneumoconiosis.
The picture is not a pretty one. Decisions concerning thousands of deaths, millions of injuries, and billions of dollars are entangled in a litigation system whose strengths have increasingly been overshadowed by its weaknesses.
AD HOC COMMITTEE REPORT 2 (quoting statements of the Institute for Civil Justice of the Rand Corporation). This statement still holds true; however, the picture is much worse today. I implore Congress to heed the plight of the judiciary and the thousands of individuals and corporations involved. Congress alone has the power to devise a system to even attempt to alleviate these most pressing of concerns. Congress utilized this power in response to the plight of the coal miners. Simply stated, it is Congress’ duty and responsibility to do the same in response to the asbestos litigation crisis.
Notes
“Finally, it is questionable whether defendants’ right to trial by jury is being faithfully honored, but we need not explore this issue. It is sufficient now to conclude that Phase II cannot go forward without changing Texas law and usurping legislative prerogatives, a step federal courts lack authority to take.” Id. at 712.
“Pleural plaques have been described as ‘discrete, elevated, opaque, shiny, rounded lesions, . . . diffuse or nodular,’ of the parietal pleura or diaphragm. They strongly indicate asbestos exposure. Pleural thickening includes certain types of lesion of the visceral pleura. Unlike plaques, pleural thickening may have non-asbestos causes. Asbestosis involves non-malignant lesions of the lung tissue itself, varying from small areas of basal fibrosis to a diffuse, fine fibrosis. . . . Malignant mesothelioma, a usually rapidly-fatal form of cancer, is caused almost exclusively by asbestos. Lung cancer can also be caused by asbestos, a risk greatly compounded by smoking. Whether asbestos exposure is associated with other types of cancer remains a matter of considerable debate in the medical and legal communities.
. . . The medical literature indicates that claimants with pleural plaques unaccompanied by asbestosis are ordinarily symptomatically unimpaired. Some studies have associated pleural plaques with comparatively modest breathing decrements, but many such studies have been criticized on various grounds. It is clear that diffuse pleural thickening and some of its variants can produce significant impairments, although thickenings are less common than plaques. Asbestosis ‘[s]ymptoms include shortness of breath, coughing, fatigue, and vague feelings of sickness. When the fibrosis worsens, shortness of breath occurs even at rest. . . . In severe cases, death may be caused by respiratory or cardiac failure.’
. . . Pleural plaques are certainly markers of prior asbestos exposure, but the existing studies provide no evidence that they independently cause any progression of further asbestos-related conditions. As for asbestosis, the evidence suggests that once the disease is contracted, the symptoms tend to become progressively
more serious with continued occupational exposure. In some cases, this progression occurs even after exposure ceases.” Id. at 545-50 (footnotes omitted).
“not hear evidence concerning which product they might have been exposed to or how much exposure they might have had. Or which product they used more than others.
For most of these cases, you may assume that there has been sufficient exposure to asbestos-containing insulation products for that exposure to be a producing cause of an asbestos-related injury or disease.
Now, therefore, it will not be necessary for you to hear any evidence about the quantity or amount of exposure in most of these cases. There is a category that I wish to address separately with you.
It is not scientifically disputed that in lung cancer cases, there are two causes of lung cancer, of the types of lung cancer that we have that are the subject of claims in this case. And those two causes are exposure to asbestos fibers and smoking.
Therefore, I have ruled that it is appropriate for you to hear evidence on the lung cancer category of cases that relates to quantification of exposure.
. . . .
You may assume that there was a sufficient exposure for that exposure to be a producing cause of an asbestos-related injury or disease on the damage question.
Now, you may very well have, as I told you -- I guess it was Tuesday -- a dispute about a diagnosis in some cases. And I am going to permit in those cases you to hear evidence about amounts of exposure compared, for example, to amounts of smoking, so you can decide one way or the other.
And you will hear evidence -- it is not disputed scientifically -- that for lung cancer cases, probably laryngeal cancer cases and maybe some other cases that fall in that category of, quote, “other cancers,” that there‘s a synergistic effect between smoking and asbestos exposure.”
“The District Court is of the view, and the parties stipulate, that no appellate rights are prejudiced or waived by entering into this stipulation, and that no reviewing court should construe this stipulation as being an agreement by the parties to any part of the Cimino trial management plan, or to the trials that have occurred as of the date of this stipulation, or to further implementation of Cimino procedures by the Court.”
We also observe that the passing reference in Ross‘s footnote 10 to “the practical abilities and limitations of juries” has been explained by the Court as referring to one of the criteria to be used in assessing, under the “public rights” doctrine, “whether Congress has permissibly entrusted the resolution of certain disputes to an administrative agency or specialized court of equity, and whether jury trials would impair the functioning of the legislative scheme.” Granfinanciera, S.A. v. Nordberg, 109 S.Ct. 2782, 2790 n.4 (1989). See also Wright, Law of Federal Courts (5th ed.), § 92 at 658-59.
“The holding in Shumate [Shumate & Co. v. Ntl. Ass‘n, 509 F.2d 147 (5th Cir. 1975)] affirming the district court‘s denial of a class certification is a recognition by this court that the fact that a case is proceeding as a class action does not in any way alter the substantive proof required to prove up a claim for relief. The holding is also a recognition that ‘impact’ is a question unique to each particular plaintiff . . . .”
Similarly, the en banc Fourth Circuit stated in the anti-trust class action case of Windham v. American Brands, Inc., 565 F.2d 59, 66 (4th Cir. 1977)——which we cited with approval in Blue Bird Body Co., n.20——as follows:
“While a case may present a common question of violation, the issues of injury and damage remain the critical issues in such a case and are always strictly individualized.
. . . .
Generalized or class-wide proof of damages in a private anti-trust action would, in addition, contravene the mandate of the Rules Enabling Act that the Rules of Civil Procedure ‘shall not abridge, enlarge or modify any substantive right.‘” (Footnotes omitted).
“Texas has made its policy choices in defining the duty owed by manufacturers and suppliers of products to consumers. These choices are reflected in the requirement that a plaintiff prove both causation and damage. In Texas, it is a ‘fundamental principle of traditional products liability law . . . that the plaintiffs must prove that the defendant supplied the product which caused the injury.’ [citing Gaulding] These elements focus upon individuals, not groups. The same may be said, and with even greater confidence, of wage losses, pain and suffering, and other elements of compensation.” Id. at 711 (footnotes omitted; emphasis added).
See also id. at 711-712, invalidating procedure because it “cannot focus upon such issues as individual causation, but ultimately must accept general causation as sufficient, contrary to Texas law” and “it does not allow proof that a particular defendant‘s asbestos ‘really’ caused a particular plaintiff‘s disease; the only ‘fact’ that can be proved is that in most cases the defendant‘s asbestos would have been the cause.” Id. at 712 (footnote omitted; original emphasis).
We also note that the testimony at the extrapolation hearing, particularly that of Dr. Dement and Professor Frankewitz, was fatally flawed because their information as to the distribution of the variables among the extrapolation plaintiffs (and to a large extent among the phase III plaintiffs) was simply based on what they had been furnished by clerks or paralegals in the office of plaintiffs’ counsel, who did all the assignment of variables (and in some cases their interpretation) to particular plaintiffs, and was not supported by independent evidence.
“. . . the judge must not divide issues between separate trials in such a way that the same issue is reexamined by different juries. . . . The right to a jury trial in federal civil cases, conferred by the Seventh Amendment, is a right to have juriаble issues determined by the first jury impaneled to hear them (provided there are no errors warranting a new trial), and not reexamined by another finder of fact. This would be obvious if the second finder of fact were a judge. . . . But it is equally true if it is another jury.” Id. at 1303.
Similarly, where legal and equitable claims share one or more overlapping common factual issues, the legal issues must first be tried to the jury to protect Seventh Amendment rights that could be infringed by prior bench trial determination of the common issues. Roscello v. Southwest Airlines, 726 F.2d 217, 221 (5th Cir. 1984).
“Exemplary damages or punitive damages means an amount that you may, in your discretion, award as an example to others and as a penalty or by way of punishment, in addition to any amount that you find as actual damages.
To say it another way, therе are several purposes behind an exemplary damage award, include [sic] punishing the wrongdoer, setting an example so that others may be deterred from similar conduct in the future.
Simply put, this issue is that of just punishment, not fair compensation. The focus in this regard is on the Defendants’ conduct, not on the product.”
“With the exception of Fibreboard‘s products, it is not possible for the Court to determine from the record how much of ACL‘s raw asbestos found its way into the Defendants’ products to which the class representatives were exposed. The Court is also persuaded from the evidence that, with the exception of Fibreboard‘s products, the Plaintiffs will not be able to prove the amount of ACL fibers contained in the Defendants’ products to which the remaining Plaintiffs were exposed.”
No party has challenged this finding on appeal.
“. . . the Court found that ACL knew or should have known as early as 1935 that asbestos workers and household members of asbestos workers were at risk of getting an asbestos-related injury or disease from the application, use or removal of asbestos containing insulation products. The Court found that from 1951 until 1961, Fibreboard Corporation purchased over 50% of its raw asbestos from ACL. The Court also found that ACL had actual knowledge that the raw asbestos it supplied to Fibreboard Corporation was being made into insulation products and sold by Fibreboard without an adequate warning.”