Dukes v. Pneumo Abex

• Court: Appellate Court of Illinois
• Decided: October 29, 2008
• Docket: 4-06-0235 Rel
• Status: Published

Opinion

NO. 4-06-0235 Filed 10/29/08

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

DORIS DUKES, Individually and as Special ) Appeal from Administratrix of the Estate of MERLON ) Circuit Court of DUKES, Deceased, ) McLean County Plaintiff-Appellee, ) No. 04L79 v. ) PNEUMO ABEX CORPORATION, ILLINOIS ) CENTRAL RAILROAD, METROPOLITAN LIFE ) INSURANCE COMPANY, and OWENS ILLINOIS, ) Defendants, ) and ) Honorable HONEYWELL INTERNATIONAL, INC., ) Charles G. Reynard, Defendant-Appellant. ) Judge Presiding. _________________________________________________________________

JUSTICE KNECHT delivered the opinion of the court:

Plaintiff, Doris Dukes, individually and as special

administratrix of the estate of Merlon Dukes, sued defendant,

Honeywell International, Inc. (Honeywell), and several others to

recover damages for harm Dukes suffered resulting from exposure

to asbestos-containing products. In October 2005 a jury returned

a verdict for plaintiff and against defendant, Honeywell, which

appeals, arguing the trial court erred by (1) allowing into

evidence a prior nolo contendere plea by defendant's predecessor

Bendix, (2) allowing into evidence a letter by one of Bendix's

employees, (3) allowing into evidence activities of alleged

coconspirators, (4) allowing into evidence trial or deposition

testimony from cases where defendant was not a party, (5) allow-

ing into evidence defendant's membership in trade organizations,

(6) giving a missing evidence instruction, (7) giving an issues

instruction inconsistent with plaintiff's burden of proof, (8) refusing to give a sole-proximate-cause instruction, (9) giving

an erroneous conspiracy elements instruction, (10) giving a

misleading agency instruction, (11) improperly responding to a

jury question, (12) denying defendant's motion for a new trial,

(13) denying defendant's motions for directed verdict and judg-

ment n.o.v., and (14) denying defendant's motion to return

certain documents produced in discovery. We reverse.

I. BACKGROUND

Dukes was employed at the Union Asbestos & Rubber

Company (Unarco) plant in Bloomington from 1954 to 1961. He was

exposed to asbestos while working at Unarco. Dukes was diagnosed

as having mesothelioma in early 2004, and he died May 20, 2005.

This suit was brought originally by Merlon and Doris Dukes in

June 2004, and after Merlon's death, Doris Dukes was substituted

plaintiff as special administratrix of Merlon's estate.

In 1985, Allied Corporation purchased Bendix. Later,

Allied Corporation changed its name to Allied Signal, Inc., and

in 1999 changed it to Honeywell International, Inc. There is no

direct connection between Bendix and Dukes, but Honeywell, under

plaintiff's theory, as a successor to Bendix, bears legal respon-

sibility for Bendix's participation in a conspiracy with other

companies that supplied or used asbestos in their products.

Bendix's product line included automobile and truck

brakes. Bendix used asbestos in its brake linings and other

friction products at least as early as the 1930s. For many

decades, Bendix purchased asbestos from Johns-Manville (J-M), the

- 2 - biggest United States asbestos company and the leading miner of

asbestos. Bendix manufactured brake linings at plants in Troy,

New York, beginning in 1939 and in Cleveland, Tennessee, begin-

ning in 1964. Some brake work was also done at other Bendix

plants and at Bendix's Canadian subsidiary in Windsor, Ontario,

prior to that plant's closing in 1980.

Bendix never employed Dukes, and no evidence shows any

Bendix product was ever used in the Unarco plant where Dukes

worked. Plaintiff's theory is defendant and others, including

Unarco, engaged in the following conspiracy: (1) they agreed to

positively assert it was safe for people to work with asbestos,

(2) they agreed to suppress information about the harmful effects

of asbestos, (3) one or more of the conspirators performed an

overt act in furtherance of the conspiracy, and (4) the agreement

and acts in furtherance were a proximate cause of Dukes' death.

During the time period Dukes worked at the Bloomington

Unarco plant, (1) asbestos fibers were released into the air at

the plant, (2) some of those fibers came from products manufac-

tured by J-M and Raybestos-Manhattan (Raybestos), and (3) Dukes

developed mesothelioma as a result of his exposure to asbestos at

the Unarco plant. Former employees at the Unarco plant testified

to the extremely dusty conditions at the plant when Dukes was

employed there.

Testimony was presented as to the acceptable level of

exposure to asbestos fiber dust in the air. The standards

promulgated by the Occupational Safety and Health Administration

- 3 - (OSHA) beginning in the early 1970s have steadily decreased, and

medical experts testified zero exposure was the only truly safe

level.

Much of the evidence presented by plaintiff related to

events prior to Dukes' exposure to asbestos and did not involve

Bendix. Dr. Barry Castleman, plaintiff's expert, testified

during the 1930s and 1940s, J-M and Raybestos attempted to

suppress asbestos research conducted by Saranac Laboratory

(Saranac) and during the 1930s, J-M and Raybestos attempted to

prevent Asbestos magazine from publishing information regarding

asbestosis.

In 1936 Saranac, Unarco, J-M, Abex, Raybestos, and

Metropolitan Life (Met Life) reached an agreement the companies

would retain control over asbestos research they funded, includ-

ing publication decisions. Unarco, J-M, Abex, Raybestos, and Met

Life commissioned Saranac to conduct a study of asbestos, but

they retained control over the study. When Saranac's 1948 report

showed findings of cancer and tumors, those companies forced

Saranac to remove the references before publication.

In 1935, the general counsel of J-M convinced a re-

searcher, Dr. A.J. Lanza, to downplay the dangers of asbestosis

in an industry study. That same year, the editors of Asbestos

magazine proposed a story on asbestosis, but Raybestos and J-M

executives objected to the story, and it was never published.

Moreover, these same companies convinced the magazine not to

publish any articles about the danger of asbestos until 1969.

- 4 - Despite their knowledge of the findings in the various

studies that had been done about the health consequences of

asbestos exposure, Unarco, J-M, Raybestos, and Abex did not

change any of their business practices concerning asbestos or

issue any warnings to their employees. J-M knew a large segment

of its workforce had asbestos-related diseases but intentionally

kept this information secret from the employees.

There was also evidence concerning the activities of

Owens Corning (OC) and Owens-Illinois (O-I). This included the

fact O-I received a report from Saranac in 1948 concluding O-I's

asbestos-containing Kaylo pipe insulation product was potentially

hazardous and "capable of producing asbestosis." Despite this

report, O-I and OC continued to sell Kaylo and later distributed

a brochure advising Kaylo was "non-irritating to the skin and

non-toxic."

A January 1942 internal memorandum detailing OC's

strategy for 1942 proposed collecting articles identifying

asbestos as a cause of asbestosis as a "weapon-in-reserve" for

possible use in negotiations with the employees' union.

OC purchased Unarco's Bloomington plant in 1970 and

continued to operate the plant with dangerous asbestos dust

conditions even though OC knew asbestos dust levels at the plant

were unsafe and many of its employees at both its Berlin, New

Jersey, plant and Bloomington plant actually had asbestosis or

other asbestos-related diseases. Despite this knowledge, OC

issued no warnings to its employees concerning dangers of asbes-

- 5 - tos. OC and O-I bought a significant amount of raw asbestos

fibers from J-M.

Evidence was also introduced of the many historical

publications and studies of asbestos beginning around 1900. By

1965, close to 1,000 publications had addressed the ability of

asbestos to cause asbestosis, lung cancer, and mesothelioma.

J-M first put a warning on its asbestos products in

1964. In 1968, it advised its business customers it would soon

place a warning label on its shipments of raw asbestos stating:

"Persons exposed to this material should use adequate protective

devices as inhalation of this material over long periods may be

harmful."

In 1969, J-M sent a position paper about asbestos and

health to its customers, including Bendix, stating a finished

product containing asbestos presented no risk but expressed

concern about employees having long-term exposure to asbestos

dust contracting asbestosis, a nonmalignant lung disease. The

paper further noted medical studies had reported a link between

asbestos and cancer and reports of mesothelioma.

The primary trial witness with knowledge of Bendix's

activities was Joel Charm, an employee of Allied Corporation when

it acquired Bendix. Charm was in charge of reviewing all of

Bendix's product lines before the purchase of Bendix was com-

pleted in 1985. He determined Bendix instituted dust-control

measures and offered respirators to its employees in the 1940s

and began giving its employees chest X-rays in the 1950s.

- 6 - Bendix's early concern was not specific to asbestos but to

general nuisance dust generated by the grinding process that

occurs during the manufacturing of brakes. Bendix noted in a

1970 union brochure 15 tons of dust were generated per day at its

Troy, New York, plant.

Charm also admitted, however, Bendix would have known

in the 1950s lung scarring could occur as a result of exposure to

its plants' dust. The earliest communication he saw of written

communication to Bendix's employees of the dangers of asbestos

was in March 1978. Charm contended there must have been some

oral communication to the employees in the early 1970s in con-

junction with the announcement of standards by OSHA.

As early as the 1930s Bendix received correspondence

from Met Life concerning the issue of lung disease from inhala-

tion of asbestos dust. Documents generated by Bendix in the

1970s touted Bendix's long-standing knowledge about asbestos.

Bendix endeavored to meet the OSHA standards published

in 1972. It monitored asbestos levels throughout its plants and

installed additional dust-control equipment. As OSHA standards

increased, so did Bendix's dust-control programs. In 1973,

Bendix began putting labels on its products that stated the

products contained asbestos and warned against creating dust

while installing the brake shoes because breathing asbestos dust

may cause "bodily harm." During this time when OSHA held hear-

ings on asbestos standards, J-M advocated to OSHA any required

labels leave out the word "cancer" as it would "have a very

- 7 - severe" and "undeserved economic impact on the industry." The

Asbestos Information Association (AIA), of which Bendix was a

member, likewise argued against the words "asbestosis" and

"cancer", claiming "such a label would surely spell the demise of

a number of major product lines of the industry."

In 1973, Bendix distributed a bulletin to customers

requesting they comply with all OSHA regulations and recommending

(1) all operators of grinders be supplied with and wear protec-

tive equipment and (2) caution signs be displayed. The bulletin

also stated, "One cannot dispute that exposure to asbestos dust

of high enough intensity and long duration constitutes a cause

related to asbestosis and/or cancers."

In 1975, Bendix's internal studies concluded none of

its employees had suffered from asbestos-related disease. Bendix

also concluded the type of asbestos it used was less risky than

other types of asbestos but no safe level of exposure for any

type of asbestos was proven. Defendant's current medical direc-

tor testified all forms of asbestos were capable of causing

mesothelioma, lung cancer, and asbestosis.

In 1976, Bendix engaged Stanford Research Institute

(SRI) to do a morbidity study of employees who had worked at the

Troy brake-lining manufacturing plant from 1937 to 1975. The

study found no relationship between plant employment and deaths

from diseases associated with asbestos exposure. The study

results were sent to Bendix's then-current employees in 1978 with

the admonition the study did not refute the thesis that in some

- 8 - work environments and manufacturing processes a relationship

appeared to exist between asbestos and certain forms of cancer.

SRI did a follow-up study five years later and found no asbestos-

related disease had caused any deaths in the Troy work force.

In 1982, the Ontario Ministry of Labor undertook a

similar mortality study with respect to the work force at

Bendix's former plant in Windsor. The study, also updated five

years later, reported two possible deaths due to mesothelioma but

concluded overall it was not possible to demonstrate an associa-

tion between working in an asbestos-using department and the risk

of asbestos-related disease. However, a 1981 Toronto newspaper

article claimed 13 people had died of asbestos-related cancer at

Bendix's Canadian plants and stated there was concern Bendix had

not adequately complied with a 1966 government request to clean

up its plants.

In 1947, Bendix, 20 other companies including J-M,

Abex, and Raybestos, 53 individuals, and a trade association (the

Brake Lining Manufacturers Association (BLMA)) were indicted in

federal court and charged with unlawfully conspiring to fix

prices, terms, and conditions of sale of brake linings in viola-

tion of federal antitrust laws. In 1948, each party, including

Bendix, entered a plea of nolo contendere, confirmed on the

record the practices charged in the indictment had been aban-

doned, and agreed not to resume such practices in the future.

During pretrial motions in limine, the trial court

first ruled evidence of the nolo contendere plea would not be

- 9 - admitted but indicated a willingness to reconsider. During

trial, plaintiff requested to use evidence of the plea, and the

trial court, acknowledging defendant's objections were "not

unreasonable" and were "credible positions," nonetheless changed

its ruling. Documents pertaining to the nolo contendere plea

were admitted into evidence but not submitted to the jury.

Instead, the court read to the jury a "limiting instruction,"

which included the substance of the documents over defendant's

objection.

In 1966, E.A. Martin, director of purchases for

Bendix's Troy plant, wrote a letter to Noel Hendry, sales

manager at J-M, in which he included an article from the Septem-

ber 1966 edition of Chemical Week magazine that asserted the

United States Public Health Service had determined 40% of Ameri-

cans had mild, chronic cases of asbestosis even though they never

worked directly with asbestos and while the average asbestos

worker was well-protected, the man on the street was not. Martin

went on to say, "My answer to the problem is: if you have enjoyed

a good life while working with asbestos products why not die from

it. There's got to be some cause." Hendry sent a reply thanking

Martin for the "101st" copy of the article he had received and

stated further, "I suppose we have to bear with people who have

nothing better to do than create alarm, but we are not alarmed

and we live and sleep with the stuff." He also noted Chemical

Week was printing a retraction and the United States Public

Health Service was mad because it had been misquoted.

- 10 - All of defendant's witnesses described Martin's remark

about dying from asbestos as a personal comment which was "stu-

pid," "in very bad taste," and "unconscionable." They also

stated it was contrary to the views of Bendix and Honeywell

management. Over defendant's objection, no evidence was pre-

sented showing Martin had the authority to speak for Bendix on

any issue of health and safety or the letter was ever ratified or

approved by a person with such authority. The trial court

allowed the letter into evidence in its entirety as an admission

by defendant.

The trial court also admitted the rest of Martin's file

into evidence over defendant's objection. It included a memo

dated October 18, 1966, from Martin to management and safety

personnel at the Troy plant advising a later issue of Chemical

Week included letters refuting the previous article. Martin added

"[t]his may help to quiet the fear that was aroused by Dr.

Selikoff's stigmatic report on 'Lung Cancer From Asbestos,'" and

he advised the purchasing department keep a file on the subject.

This file contained newspaper articles from 1964 and 1966 de-

scribing Dr. Selikoff's report, and among others, a 1949 report

of the Canadian Health Department concerning deaths from tubercu-

losis and other causes from 1943 to 1947 in cities where Canadian

asbestos mining occurred.

Over defendant's objection, plaintiff introduced

evidence J-M and Bendix shared a common director from 1959 to

1967. No other evidence pertained to the director or any

- 11 - asbestos-related actions taken by the board of directors by

either company during that time period.

Again over defendant's objection, plaintiff introduced

evidence demonstrating Bendix's membership in the Friction

Materials Standards Institute (FMSI) and the AIA, as well as

extensive evidence concerning the formation, general membership,

and activities of the FMSI. FMSI is a trade association of

companies involved in the friction-materials business incorpo-

rated in 1948 using the same offices and same secretary as the

BLMA, which was dissolved at the time of the 1948 price-fixing

nolo contendere plea. The members of FMSI and BLMA were not

identical, but there was considerable overlap. Most of the

companies alleged as coconspirators here were members of both

associations.

Plaintiff also presented evidence of activities under-

taken by FMSI and AIA representing the industry position on

legislation and governmental regulations concerning the asbestos

industry.

At the close of plaintiff's case, defendant moved for a

directed verdict on the conspiracy charge. The trial court

denied the motion, finding sufficient evidence of parallel

conduct and also sufficient additional evidence of an agreement

to satisfy the standards of McClure v. Owens Corning Fiberglas

Corp., 188 Ill. 2d 102, 720 N.E.2d 242 (1999). The court stated

the additional evidence may have been less in a "quantitative

sense" than that found insufficient in McClure but it was stron-

- 12 - ger in a "qualitative sense," noting the existence of a common

director, opportunity to associate through industry association

meetings, the arguable "close relationship" with J-M evidenced by

the E.A. Martin letter, and the 1948 nolo contendere plea.

On October 3, 2005, the jury found for plaintiff and

assessed damages of $1 million for losses sustained by Dukes

during his lifetime, $3,675,000 for the wrongful death of Dukes,

and $500,000 for losses sustained by Doris Dukes.

On October 19, 2005, defendant filed a motion for the

return of post-2002 lobbying documents it was required to produce

to plaintiff in discovery. On November 1, 2005, defendant filed

a posttrial motion for judgment n.o.v. or, alternatively, a new

trial. The trial court denied all of those motions, and this

appeal followed.

II. ANALYSIS

A. Inadmissible Evidence

A trial court's admission of evidence is reviewed under

an abuse-of-discretion standard (Leonardi v. Loyola University of

Chicago, 168 Ill. 2d 83, 92, 658 N.E.2d 450, 454-55 (1995)),

unless the admission of evidence was based on the court's inter-

pretation of law; then review is de novo. Petre v. Kucich, 331

Ill. App. 3d 935, 941, 771 N.E.2d 1084, 1089 (2002).

1. Nolo Contendere Plea

Documents pertaining to Bendix's 1948 plea in a federal

price-fixing case were admitted in evidence but not given to the

jury. Instead, the trial court summarized the factual content of

- 13 - the documents in a "limiting instruction" advising the jury of

the price-fixing charges giving rise to the plea and the judgment

of conviction entered on the plea. In addition, court's instruc-

tion No. 1 was given to the jury during the jury-instruction

phase of trial, but it contained no specifics concerning the

prior conviction, unlike the "limiting instruction" orally given

to the jury during the evidence portion of the trial.

The limiting instruction given during the evidence

portion of the case stated:

"Ladies and gentlemen, the [c]ourt has

reviewed documents offered by the [p]laintiff

from which the following information is fur-

nished to you as evidence for your consider-

ation:

In 1947 the following corporations, in

alphabetical order, plus 12 others, were

indicted for conspiracy in restraint of trade

and commerce in brake linings: American Brake

Shoe Company; Bendix Aviation Corporation;

Brake Lining Manufacturers' Association In-

corporated, Gatke Corporation; Johns-Manville

Corporation; Raybestos-Manhattan Incorpo-

rated.

The indictment charged that Brake Lining

Manufacturers' Association, Inc., Association

[sic] was a trade association whose members

- 14 - were manufacturers of friction materials

including brake linings.

That each of the defendants, during all

or part of the period covered by the indict-

ment, had been engaged in selling brake lin-

ings and had been and was a member of the

association.

That beginning sometime in 1927, and

continuing thereafter up to and including the

date of the indictment, the defendants and

other persons and corporations unknown to the

grand jurors unlawfully combined and con-

spired to fix, establish, maintain, control,

manipulate[,] and tamper with the prices,

terms[,] and conditions in the marketing of

brake linings in restraint of interstate

trade and commerce. That the combination and

conspiracy was a continuing one.

On September 22, 1948, each of the

charged corporations entered pleas of nolo

contendere, no contest, to these charges.

Facts concerning the activities relating

to the above charges were recited to the

[c]ourt, and all of the defendants confirmed

the factual statement.

The defendants were adjudged by the

- 15 - [c]ourt to be guilty as charged, were con-

victed, and were sentenced.

At the time of their being sentenced,

the defendants presented to the [c]ourt a

[c]ertificate of [v]oluntary [d]issolution of

the Brake Lining Manufacturers' Association,

Inc[.], and the defendants confirmed on the

record that they had abandoned all the prac-

tices charged in the indictment, and that

they would not resume any of such practices

in the future.

The evidence which was just related to

you concerning a conspiracy other than that

alleged in the complaint is being received

for the limited purpose of considering

[Honeywell's] motive, opportunity, common

plan or design, or absence of mistake or

accident. It may be considered by you only

for that limited purpose. It is for you to

determine whether the [d]efendant Honeywell

was involved in that conduct. And, if so,

what weight if any should be given to this

evidence on the issue of motive, opportunity,

common plan or design, or absence of mistake

or accident."

A condensed version of this instruction was given to

- 16 - the jury as a jury instruction (court's instruction No. 1):

"Evidence has been received that the

[d]efendant Honeywell has been involved in a

conspiracy other than that alleged in the

complaint. This evidence has been received

on the issue of the [d]efendant Honeywell's

motive, common plan or design, opportunity,

or absence of mistake or accident and may be

considered by you only for that limited pur-

pose. It is for you to determine whether the

[d]efendant Honeywell was involved in that

conduct and, if so, what weight, if any,

should be given to this evidence on the issue

of motive, common plan or design, opportu-

nity, or absence of mistake or accident."

Plaintiff contends this evidence is relevant because it

specifically alleged the conspirators knew if they adequately

warned of asbestos risks, "publication of such warning would

cause workers to leave those industries using asbestos and

therefore reduce the sale and usage of asbestos," which would

decrease profits for the companies involved. For companies like

Bendix and Abex, virtually the only products they manufactured

using asbestos were brake linings, referred to as "friction

materials." For others, like J-M and Raybestos, brake linings

were an important segment of their manufacturing. Defendants in

the price-fixing case included Bendix, Abex, J-M, and Raybestos.

- 17 - The indictment alleged each of these companies conspired for more

than a decade to fix prices. This was done presumably to in-

crease the companies' profits.

Plaintiff contends Bendix had been convicted of partic-

ipating with a number of the same companies with the same prod-

ucts during the same period of time as plaintiff alleges this

conspiracy for the suppression of health information began.

Plaintiff acknowledges, with the exception of not-for-profits,

corporations seek to increase revenues and maximize their bottom

line but argues "hopefully" the subset of companies willing to

engage in illegal conduct to maximize their bottom line is small.

Plaintiff argues the fact Bendix, J-M, Abex, and Raybestos were

all convicted of falling within that subset by conspiratorial

misconduct in the marketing of asbestos products is relevant when

allegations exist they entered into another separate conspiracy

to protect their market for asbestos products.

Defendant contends evidence of Bendix's nolo contendere

plea to another unrelated conspiracy is inadmissible here. While

nolo contendere pleas are not generally a part of Illinois

practice (see 725 ILCS 5/113-4.1 (West 2004)), they do act as a

guilty plea although the defendant may still deny the facts

underlying the plea in a subsequent proceeding. Gerdes v. Edgar,

148 Ill. App. 3d 646, 648, 499 N.E.2d 1016, 1018 (1986). The

fact of this conviction may be used against a defendant in a

later civil proceeding. Gerdes, 148 Ill. App. 3d at 648, 499

N.E.2d at 1018 (for purpose of revoking driver's license, the

- 18 - court properly considered defendant's driving-under-the-influence

conviction resulting from nolo contendere plea in Georgia).

This is an important distinction. For example, in

Gerdes, a driver who pleaded nolo contendere under the laws of

Georgia to driving under the influence of liquor was convicted of

an offense. Gerdes, 148 Ill. App. 3d at 647, 499 N.E.2d at 1017.

We found the Illinois Secretary of State could consider the fact

of the defendant's conviction for purposes of revoking the

defendant's driver's license. Gerdes, 148 Ill. App. 3d at 648,

499 N.E.2d at 1018. Similarly, in In re Eaton, 14 Ill. 2d 338.

339, 152 N.E.2d 850 (1958), an attorney who pleaded nolo conten-

dere to a federal crime for using the mails to defraud was

convicted of an offense. The supreme court held the Chicago Bar

Association and the Supreme Court of Illinois could consider the

fact of the defendant's conviction for purposes of considering

his disbarment. Eaton, 14 Ill. 2d at 342, 152 N.E.2d at 852.

In each of those instances, the fact of conviction is

admissible in a later proceeding, but the facts and circumstances

underlying the conviction are not. Neither party has cited nor

have we found any case where the nolo contendere plea has been

admitted to prove the facts of the underlying offense or wrongdo-

ing. For example, a driving-under-the-influence-of-alcohol

conviction in Georgia cannot be used to prove a defendant drove

under the influence of alcohol at a later time in Illinois.

The facts given in limiting instruction during the

evidence portion of the case went beyond the nolo contendere plea

- 19 - itself. While the nolo contendere plea was ostensibly admitted

for the limited purpose of showing motive, opportunity, common

plan or design, or absence of mistake or accident, in reality it

served to impermissibly demonstrate the wrongdoing at issue in

this case.

We also note section 16(a) of the Clayton Act (15

U.S.C. §16(a) (2006)) expressly provides consent judgments in

anti-trust actions, such as price-fixing, are not prima facie

evidence against a defendant, and federal courts have held

judgments entered on pleas of nolo contendere are within this

exclusion. Commonwealth Edison Co. v. Allis-Chalmers Manufactur-

ing Co., 323 F.2d 412, 417 (7th Cir. 1963).

A 1948 conviction via a nolo contendere plea to con-

spiracy to fix prices with other companies in the sale of brake

linings is not evidence of a different conspiracy involving the

health and safety of workers exposed to asbestos. The trial

court abused its discretion and erred by admitting the plea and

judgment of conviction and surrounding circumstances in the

context of this case, and the court exacerbated the error by the

limiting instruction given during the evidence portion of the

case.

2. E.A. Martin Letter

Defendant contends the letter was inadmissible hearsay

because an out-of-court statement by a corporate employee is not

admissible as an admission of the corporation unless (1) the

person who made the statement was an employee or agent of the

- 20 - corporation, (2) the statement made was about a matter over which

the employee had actual or apparent authority, and (3) the

employee spoke under or by virtue of his authority as an agent or

employee. Roberts v. Norfolk & Western Ry. Co., 229 Ill. App. 3d

706, 713-14, 593 N.E.2d 1144, 1150 (1992).

Defendant contends nothing showed Martin, an employee

of Bendix who died in 1967, had actual or apparent authority over

any issue with respect to the health and safety of Bendix's

employees or that his comment was made under that authority.

Bendix had employees with authority over such matters, but no

evidence was presented which suggested they approved or ratified

Martin's letter. All Bendix or Honeywell witnesses disavowed the

letter as a personal, distasteful remark by Martin never repre-

senting the views of Bendix or Honeywell. The comments in the

Martin letter were of a different nature than information about

the amount of products needed, potential supply problems, etc.,

which would fall within the normal scope of authority of a

purchasing director. Martin's letter was not an admission by

Bendix and was not admissible on the issue of notice. See Thomas

v. Borgsmiller, Inc., 155 Ill. App. 3d 1057, 1060-61, 508 N.E.2d

1235, 1237 (1987) ("[k]nowledge of an agent can be imputed to the

principal only when it relates to facts within the scope of the

agency").

A large part of Martin's job as the purchasing director

at the Troy plant, one of two Bendix brake plants, was to procure

asbestos, an important component in the manufacture of brake

- 21 - shoes, from J-M, the major, if not only, supplier of asbestos to

Bendix. Martin had authority to purchase asbestos, and Bendix's

brake linings, which were dependent on this product, were a large

part of its manufacturing output. Martin had authority over the

specific product discussed in the letter, asbestos. Use of

asbestos and, hence, the amount purchased, could be effected by

any adverse health effects surrounding asbestos exposure. Hence,

Martin could have been interested in the issue of the health and

safety effects of the use of asbestos.

However, simply because Martin was interested in what

Chemical Week magazine had to say about asbestos and shared in

the letter both his interest in the subject with Hendry, the

sales manager at J-M, and their apparent mutual skepticism over

the dangers of asbestos exposure, does not make Martin a spokes-

person for Bendix on the subjects of health, safety, and asbestos

exposure. The letter is no more than a note from one business

acquaintance to another and not an expression of corporate policy

or proof of any conspiracy. Nothing in the record establishes

(1) Martin had any responsibility for health or safety, (2) his

position in the company gave him authority to espouse policy on

health and safety, or (3) anyone at Bendix ratified the letter or

endorsed his attitude.

This letter is a revealing historical anecdote that may

give us insight into the thinking within the asbestos industry in

1966, but it was irrelevant. A persuasive argument can also be

made that even if it had some modest relevance, it was inflamma-

- 22 - tory, and whatever probative value it had was outweighed by its

prejudicial effect.

3. Admission of Evidence of Activities of Alleged Coconspirators

Defendant contends the bulk of plaintiff's documentary

evidence, as well as much of the testimony of Dr. Castleman

pertaining to the activities of the alleged coconspirators, was

hearsay. Before statements of a coconspirator are admissible as

an exception to the hearsay rule, there must be some independent

evidence apart from the statements themselves to establish a

conspiracy, although the independent evidence may be circumstan-

tial in that the agreement which forms the essence of the con-

spiracy may be inferred from all the surrounding facts and

circumstances. Gas Power, Inc. v. Forsythe Gas Co., 249 Ill.

App. 3d 255, 262, 618 N.E.2d 959, 965 (1993); People v. Edding-

ton, 129 Ill. App. 3d 745, 771-72, 473 N.E.2d 103, 121 (1984).

Defendant objected to the admission of the hearsay evidence

absent independent, nonhearsay evidence establishing Bendix had

an agreement with the alleged coconspirators to misrepresent or

suppress information about asbestos.

Taken together, the surrounding facts and circumstances

are not enough to support proof of conspiracy. Bendix and J-M

maintained a longtime relationship. However, we have determined

the Martin letter was not admissible, and absent the inferences

plaintiff sought to emphasize because of that letter, it appears

Bendix and J-M had the expected relationship of purchaser and

supplier. We have also concluded the prior nolo contendere plea,

- 23 - conviction, and surrounding circumstances involving conspiracy

between Bendix and several of the current alleged coconspirators

involving asbestos and brake linings was not admissible. That

leaves us with a common trade-organization membership and a

common director between J-M and Bendix. This offered the oppor-

tunity to share information and overall business strategies.

These facts do not constitute independent proof of a conspiracy,

and they are not enough to support admission of evidence regard-

ing the behavior of other companies.

Defendant makes a separate argument concerning the

admission of evidence regarding the activities of O-I and OC as

coconspirators. It contends O-I and OC previously have been

found as a matter of law not to be conspirators in this same

alleged conspiracy. Thus, any evidence of the activities of

those two companies was inadmissible as nothing showed Bendix had

any contacts at all with O-I or OC, let alone conspiratorial

contacts. Defendant argues evidence concerning the activities of

OC and O-I should be excluded and cites as support our supreme

court's decision in McClure, where evidence was presented in an

attempt to establish O-I and OC were involved in the same alleged

conspiracy as that alleged here. McClure, 188 Ill. 2d at 153-54,

720 N.E.2d at 268. Defendant further contends the same evidence

in McClure was found insufficient to show O-I and OC to be

coconspirators by this court in Burgess v. Abex Corp., 311 Ill.

App. 3d 900, 725 N.E.2d 792 (2000).

Defendant has misinterpreted both McClure and Burgess.

- 24 - In McClure, the supreme court found, based on the evidence in

that record, not as a matter of law, insufficient evidence

existed of contacts of OC and O-I with J-M and Unarco to estab-

lish a conspiracy. McClure, 188 Ill. 2d at 147, 720 N.E.2d at

264. The court found (1) more than parallel conduct was needed

to show a conspiracy and (2) the evidence offered in that case

was not sufficient to infer a conspiracy existed. McClure, 188

Ill. 2d at 146, 720 N.E.2d at 264. As noted in our decision in

Burgess, based on McClure, plaintiff should be permitted to

provide additional evidence indicating O-I and OC were members of

the conspiracy and ordered a new trial for that purpose. Bur-

gess, 311 Ill. App. 3d at 904, 725 N.E.2d at 796.

Plaintiff presented evidence Unarco and J-M had been

suppliers to O-I throughout the 1940s and 1950s. This evidence

was not in McClure. It is contrary to what O-I represented to

the supreme court in McClure and is at odds with that court's

determination of isolated contacts between those companies.

McClure, 188 Ill. 2d at 151, 720 N.E.2d at 267. Further evidence

included documents showing OC used asbestos sold by J-M and also

sold J-M products by rebranding them as its own asbestos prod-

ucts. These sales occurred at a time when each company possessed

knowledge asbestos was dangerous but failed to warn of the

dangers. Additional exhibits not part of the McClure record

concerning O-I showed the company experienced a tenfold increase

in sales in its asbestos products in the years immediately after

receiving the results of a Saranac study commissioned by O-I and

- 25 - OC detailing the hazards in the asbestos products O-I and OC were

manufacturing and distributing.

Defendant contends this evidence is merely additional

to that presented in McClure in a quantitative sense and not a

qualitative one. The question as to whether the additional

evidence was enough to prove a conspiracy on their part does not

effect the admissibility of the evidence.

4. Evidence of Trial or Deposition Testimony From Cases Where Defendant Was Not a Party

Plaintiff introduced the former testimony of witnesses

given in depositions or at trials in other cases. Defendant

objected to the admission of the former testimony through a

motion in limine prior to trial because nothing showed defendant

was a party to those other cases or its interests were protected.

Former testimony is not admissible unless it is estab-

lished the witness is unavailable, the action involved the same

issue between the same parties or their privies, and the party

against whom the testimony is offered had full opportunity to

cross-examine the witness in the prior proceedings. George v.

Moorhead, 399 Ill. 497, 500-01, 78 N.E.2d 216, 218 (1948).

However, the identity-of-the-parties requirement may not be

strictly enforced as long as the party against whom the evidence

is offered had full opportunity to test the veracity of the

former testimony through cross-examination, such as where testi-

mony at a defendant's criminal trial is sought to be introduced

at a civil trial against the same defendant. See Laboy v.

Industrial Comm'n, 74 Ill. 2d 18, 21-22, 383 N.E.2d 954, 956

- 26 - (1978).

Where the choice is between having testimony by way of

deposition or prior trial testimony and having no testimony, this

court has noted the identity-of-the-parties requirement should be

relaxed further to allow the introduction of former testimony

even if a party against whom the evidence is offered was not a

party to the prior proceedings if "the interests of the party

against whom the deposition is sought to be admitted were pro-

tected by the presence of a party at the deposition with the

opportunity and a similar motive to develop testimony." McClure

v. Owens Corning Fiberglas Corp., 298 Ill. App. 3d 591, 603, 698

N.E.2d 1111, 1119 (1998).

In its order denying defendant's motion in limine, the

trial court stated it would look at each prior deposition or

transcript when it was offered into evidence to determine if

defendant's interests were protected. Defendant claims no one

present in the prior cases was motivated to protect its inter-

ests. Defendant ignores the purposes for which the prior testi-

mony was given.

Most of the testimony offered was for the purpose of

showing parallel conduct by alleged coconspirators and not for

the purpose of proving conspiracy. One example cited by both

parties is the prior testimony of Wilbur Ruff, which was offered

on only one issue: the misconduct of J-M in the way it treated

its employees while taking in-house X-rays. Attorneys for J-M

were present at Ruff's deposition, and no one would have been

- 27 - more motivated than J-M to establish Ruff was lying when he

stated J-M took chest X-rays and failed to inform employees of

the presence of disease. Ruff's testimony did not go to the

ultimate issue of conspiracy but to the issue of parallel conduct

by J-M in possessing knowledge of the connection between asbestos

exposure and disease and not informing its employees.

Defendant disagrees with plaintiff's description of J-M

as "motivated" and argues no party at the prior proceedings had a

motive similar to defendant--to elicit testimony of Bendix's

noninvolvement in any activities or conduct that was the subject

of the witness's testimony. Such a motive on the part of defen-

dant is inconsequential to this case, however, as the fact a

conspirator did not actively participate in every act done in

furtherance of the conspiracy does not absolve that conspirator

from liability. See Adcock v. Brakegate, Ltd., 164 Ill. 2d 54,

65, 645 N.E.2d 888, 894-95 (1994).

Defendant argues even under a relaxed standard, how-

ever, no basis exists for the admission of former testimony

because plaintiff made no attempt to show witnesses were actually

"unavailable." Defendant contends to show a witness is unavail-

able, the party seeking to introduce the prior testimony has the

burden of proving the steps taken "to secure the presence of the

missing witness at trial were made in good faith and with due

diligence" (People v. Rogers, 79 Ill. App. 3d 745, 747-48, 398

N.E.2d 1058, 1060 (1979)), and a claim of unavailability must be

supported by affidavit or testimony (Curt Bullock Builders, Inc.

- 28 - v. H.S.S. Development, Inc., 261 Ill. App. 3d 178, 182, 634

N.E.2d 751, 754 (1994)).

In this case, some of the witnesses who gave prior

testimony were deceased. In other cases, their unavailability

was shown by testimony in the transcripts sought to be admitted

that the witnesses were nonresidents of the State of Illinois;

therefore, in such circumstances, continued unavailability is

presumed, and the burden shifts to the opponent to show a change

of residence. See Laird v. Illinois Central Gulf R.R. Co., 208

Ill. App. 3d 51, 77, 566 N.E.2d 944, 959-60 (1991).

The trial court did not abuse its discretion in admit-

ting evidence via prior deposition or trial testimony.

5. Defendant's Membership in Trade Organizations

Defendant argues evidence of Bendix's membership and

involvement in trade organizations such as BLMA and FMSI should

not have been admitted and doing so violated Bendix's right to

freedom of association. Defendant contends evidence of Bendix's

trade-association activity had only one purpose--confusing the

jury and prejudicing Bendix.

Membership and involvement in a trade organization, by

itself, does not support an inference of involvement in a con-

spiracy (see McClure, 188 Ill. 2d at 149, 720 N.E.2d at 266), but

it is not inadmissible because such evidence, taken together with

other evidence, may lead to an inference of the existence of a

conspiracy.

The BLMA, of which Bendix was a member, is a trade

- 29 - organization in which its members (some of whom are alleged to be

in the conspiracy in this case), as well as the organization

itself, were convicted of a conspiracy to fix prices on brake

materials containing asbestos. We have concluded the nolo

contendere plea by Bendix was not admissible. While evidence of

trade organization membership itself does not give rise to an

inference of conspiracy, it may still be relevant to prove a

relationship among the companies alleged as coconspirators.

Membership in FMSI is relevant because (1) the trade organiza-

tion's direct predecessor and many of its members are the same

and (2) it shows the continuing relationship between the alleged

coconspirators. Defendant's freedom to associate does not mean

it can prevent evidence of membership and activities of the

association from being admitted in trials against it. No evi-

dence in this case shows either FMSI or AIA engaged in any

illegal activity or bad conduct. However, evidence of Bendix's

membership was relevant to show its relationship with the other

members and the opportunity it had to coordinate activities.

We conclude the admission of the nolo contendere plea

and judgment of conviction, coupled with the limiting instruction

and the admission of the E.A. Martin letter, deprived Honeywell

of a fair trial. We choose to address several additional issues

concerning the admissibility of certain evidence because those

issues may arise at a new trial.

We need not address the issues raised involving jury

instructions, or the trial court's response to a jury question.

- 30 - The jury instructions at a new trial may be different and will be

intertwined with the evidence that is admitted. Any question

coming from the jury will also be different.

B. Judgment N.O.V.

Defendant contends this case should not have been

allowed to go to the jury on plaintiff's conspiracy claim because

(1) no evidence was presented to show an agreement by Bendix to

assert asbestos was safe or to suppress information about the

dangers of asbestos, much less the clear and convincing evidence

necessary to prove the existence of such an agreement, and (2)

the evidence showed the acts taken by Bendix in response to the

dangers of asbestos were taken independently from or contrary to

those taken by the alleged coconspirators.

The standard of review for the denial of a motion for

judgment n.o.v. is de novo. McClure, 188 Ill. 2d at 132, 720

N.E.2d at 257. A defendant is entitled to a motion for judgment

n.o.v. only when the evidence, viewed in the light most favorable

to the plaintiff, so overwhelmingly favors the defendant that a

contrary verdict cannot stand. Pedrick v. Peoria & Eastern R.R.

Co., 37 Ill. 2d 494, 510, 229 N.E.2d 504, 513-14 (1967). In

reviewing a motion for judgment n.o.v., a court cannot reweigh

the evidence and set aside a verdict because different conclu-

sions could have been drawn. Maple v. Gustafson, 151 Ill. 2d

445, 452, 603 N.E.2d 508, 512 (1992). To recover under a theory

of civil conspiracy, a plaintiff must prove an agreement and a

tortious act committed in furtherance of that agreement.

- 31 - McClure, 188 Ill. 2d at 133-34, 720 N.E.2d at 258. The agreement

must be knowingly and intentionally made. McClure, 188 Ill. 2d

at 133, 720 N.E.2d at 258. However, a defendant who understands

the general objectives of the conspiracy, accepts them, and

agrees either explicitly or implicitly to further those objec-

tives is liable as a conspirator. Adcock, 164 Ill. 2d 64, 645

N.E.2d 894.

A conspiracy is almost never susceptible to direct

proof, but it may be proved by circumstantial evidence and

inferences from evidence. Because it may be proved by inference

and circumstantial evidence, that evidence must be clear and

convincing. McClure, 188 Ill. 2d at 134, 720 N.E.2d at 258.

The supreme court in McClure held parallel conduct may

serve as circumstantial evidence of an agreement under a civil

conspiracy theory but it does not, of itself, constitute clear

and convincing evidence of that agreement. McClure, 188 Ill. 2d

at 142, 720 N.E.2d at 262. The McClure court found the evidence,

in addition to parallel conduct, was not clear and convincing an

agreement existed to suppress information concerning the harmful

effects of asbestos exposure or to falsely represent it was safe

to work in close proximity to asbestos-containing material.

McClure, 188 Ill. 2d at 147, 720 N.E.2d at 264. Defendant

maintains the additional circumstantial evidence in this case on

which plaintiff relied to establish an agreement between Bendix

and the other alleged coconspirators was less than that found

insufficient in McClure.

- 32 - Direct evidence of an agreement involving Bendix was

not presented as it was for many of the other alleged

coconspirators. As for an agreement between the other

coconspirators, defendant does not contest that one did exist

between many of them, although it contends no such evidence

existed for finding OC and O-I were parties to the agreement.

Any evidence an agreement existed between Bendix and any of the

alleged coconspirators was circumstantial or based on inference.

Evidence of parallel conduct between the alleged

coconspirators and Bendix was shown. It was obvious the

coconspirators knew of the hazards of asbestos at least by the

1940s through the Saranac studies. The jury could reasonably

infer Bendix possessed knowledge much earlier than the 1970s that

asbestos dust was hazardous based on the following: (1) Charm's

admission Bendix must have known of hazards at least by the

1950s, in light of (a) Bendix taking chest X-rays of its employ-

ees and (b) having a dust-control system in place from the 1950s

on, and (2) Bendix admitting it was "well-versed" in asbestos.

Yet Bendix, like J-M, Unarco, and Raybestos, gave no information

to its employees until some time in the 1970s.

Evidence beyond parallel conduct was presented. J-M

was the exclusive supplier of asbestos fiber to Bendix for many

decades. Despite this long-standing relationship, defendant

contends no correspondence pertaining to this relationship exists

other than Martin's letter in 1966. We have found the Martin

letter to be inadmissible.

- 33 - However, J-M assisted Bendix with a position paper on

asbestos in the late 1960s. At this time, neither Bendix nor J-M

placed labels on its products stating asbestos could cause cancer

despite J-M having such knowledge dating back to the 1930s.

Also, plaintiff presented evidence concerning Bendix's

membership in the BLMA and the FMSI. In addition to Bendix, J-M,

Raybestos, and Abex were members of these trade organizations.

As we earlier noted, in 1948, all of these companies, as well as

others, were convicted of participating in a price-fixing con-

spiracy for brake linings, the products containing asbestos at

issue in this case. However, the nolo contendere plea by Bendix

is inadmissible. Thus, it cannot be used, as it was used in this

case, as evidence of a closer relationship between these compa-

nies than the typical business relationship.

Bendix and J-M also shared a common director. The

significance of this fact is these companies, in addition to

being supplier and client, were competitors in the sale of

asbestos-containing brake linings during the years 1959 to 1967.

Boards of directors for companies plan long-term strategy and

have responsibility for important decisions affecting corpora-

tions. For these reasons, under the Clayton Act, interlocking

directors are not permitted in two or more corporations if they

are competitors. See 15 U.S.C. §19 (2006); Protectoseal Co. v.

Barancik, 484 F.2d 585, 589 (7th Cir. 1973). This prohibition is

a recognition interlocking directors implies a relationship is

not at "arm's length."

- 34 - We conclude the evidence, when viewed in a light most

favorable to plaintiff, does not so overwhelmingly favor defen-

dant that the jury's verdict in favor of plaintiff could never

stand. See Pedrick v. Peoria & Eastern R.R. Co., 37 Ill. 2d 494,

510, 229 N.E.2d 504, 513-14 (1967). Thus, we reverse and remand

for a new trial.

C. Return of Documents Produced in Discovery

During pretrial discovery, the trial court allowed

plaintiff, over defendant's objection, to take the deposition of

David Cote, defendant's chairman, president, and chief executive

officer. On August 12, 2005, six days before Cote's scheduled

deposition and one month before trial, plaintiff served the

following production request:

"[A]ll documents received by, or authored by,

[Cote] in connection with his employment by

[Honeywell] or any corporate predecessor of

[Honeywell], in which the subject matters

included or referenced asbestos, its effect

on human health, asbestos litigation, the

past or present activities of [Honeywell] or

any of its corporate predecessors in regard

to the manufacture, distribution or sale of

asbestos or asbestos-containing products, or

interaction between [Honeywell], or any of

its corporate predecessors, and any other

corporate entity in regard to asbestos or its

- 35 - effect on human health ***."

At Cote's deposition, defendant objected to the produc-

tion request to the extent it sought documents in Cote's files

pertaining to defendant's post-2002 lobbying advocacy efforts

concerning proposed federal asbestos-litigation-reform legisla-

tion. Defendant argued these "lobbying documents" were privi-

leged under the first amendment as well as common-law attorney-

client and confidentiality privileges. At his deposition, Cote

testified over the previous two years he had met with and spoken

to various members of Congress with respect to pending federal

legislation concerning asbestos litigation. He also testified he

had met and communicated with various officers of other companies

during and after 2003 regarding advocacy efforts on the pending

federal legislation. The only file he had referencing asbestos

or asbestos litigation related to the proposed federal legisla-

tion.

After the deposition, defendant produced a privilege

log itemizing each document contained in Cote's file and docu-

menting each privilege asserted for that document. Plaintiff

responded with a motion to compel, which the trial court granted,

except for those documents which demonstrated on their face the

applicability of the attorney-client privilege. The court

further ordered "except for their use within legal proceedings in

this case, [p]laintiff and her counsel shall not disseminate the

[lobbying documents] being produced or their content, to any

third party without obtaining further order of the [c]ourt."

- 36 - Plaintiff did not offer any of the "lobbying documents"

at trial. Cote was called to testify, but neither he nor any

other witness was asked any questions about the post-2002 lobby-

ing efforts. After trial, defendant moved for an order compel-

ling plaintiff to return the "lobbying documents," which the

trial court denied.

The trial court shielded from discovery any documents

covered by attorney-client privilege. The remaining documents

apparently dealt with communications between companies affected

by asbestos litigation concerning how they should lobby Congress

and what arguments they should make in order to obtain asbestos

litigation reform legislation. No relationship exists between

these documents and the cases cited by defendant protecting

disclosure of membership in minor political parties and the

confidentiality of discussions of a school board concerning union

negotiations.

Defendant contends the documents should be returned

because they are not relevant to this case. The fact the docu-

ments were not introduced into evidence in this case does not

mean they were not helpful in obtaining relevant evidence which

was introduced. Further, the materials Cote received discussing

asbestos and its health effects were relevant themselves as they

go directly to defendant's claim Cote knew nothing about asbes-

tos. To the extent the documents show Cote's knowledge of

asbestos, they are relevant.

In the supreme court rules, nothing requires the return

- 37 - of documents produced during discovery. Further, at the time

defendant presented the trial court its motion to return the

documents, this case was not over as seen by this appeal. A new

trial has been ordered, and the documents may still be used by

plaintiff, so plaintiff may keep them.

As for any other cases, plaintiff's counsel is already

under a court order requiring court permission to use the docu-

ments in any other case. The repetitive nature of asbestos

litigation is well-known. The same parties, witnesses, and

lawyers appear in many cases. Cote's appearance may be ordered

in later cases. Should plaintiff's counsel obtain the required

court permission in another case, counsel would not then be

required to re-obtain the documents in each case, an impractical

and unnecessary step. Finally, return of the documents may make

their reconstruction for further cases impossible.

The trial court's order requiring court permission to

use the produced documents protects defendant from public dissem-

ination of the documents. Thus, the trial court did not err in

denying defendant's motion to return the documents.

III. CONCLUSION

For the foregoing reasons, the judgment of the trial

court is reversed and remanded for a new trial.

Reversed and remanded.

APPLETON, P.+J., and TURNER, J., concur.

- 38 -