In Re Asbestos Litigation

628 F. Supp. 774, 54 U.S.L.W. 2427, 1986 U.S. Dist. LEXIS 29279

• Court: District Court, D. New Jersey
• Decided: February 14, 1986
• Docket: Misc. 85-381
• Status: Published

Opinions

OPINION

BISSELL, District Judge,

writing for GERRY, BROTMAN, DEBEVOISE, SA-ROKIN, ACKERMAN, THOMPSON and RODRIGUEZ, District Judges.

I. Introduction

In many asbestos related actions pending before this Court, the issue of the availability of the “state-of-the-art” defense to manufacturers of asbestos products has been presented in pretrial motions.¹ These motions take the form of either an application by a plaintiff to strike such a defense from the pleadings or one by a defendant-manufacturer to allow the defense and the submission of evidence to support it. Because of rules developed in recent decisions of the Supreme Court of New Jersey, apparently precluding that defense to strict liability claims in asbestos cases but permitting it in such actions involving other products, several defendants have argued that manufacturers of asbestos products are denied “the equal protection of the laws” of New Jersey in violation of the Fourteenth Amendment.²

That equal protection question presents a significant issue of constitutional law, not dependent upon the facts of a particular case. It has been raised in many asbestos cases pending before different judges of this Court. Therefore, it is the Court’s desire to issue a ruling which will govern all such actions under the current state of New Jersey law. On October 11, 1985 this Court entered an Order consolidating all its asbestos cases for the limited purpose of a common, single adjudication of this issue. For the reasons set forth hereafter, this Court determines that under New Jersey law the state-of-the-art defense is not available, against a strict liability claim, to a defendant-manufacturer of products containing asbestos, and that this rule, even if limited only to such defendants, does not violate their “equal protection” rights.

II. The Law of New Jersey

The history which has placed the Court in the present circumstances is well known to all involved with asbestos litigation in the State of New Jersey and accordingly will not be developed in great detail here. By way of brief review, we note the following:

In 1982 the New Jersey Supreme Court decided Beshada v. Johns-Manville, 90 N.J. 191, 447 A.2d 539 (1982), which expressly rejected the “state-of-the-art” defense in strict liability/failure to warn cases. However, on July 30, 1984, that same Court decided Feldman v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374 (1984), in which it dramatically altered this position. In Feldman, the Supreme Court ruled that actual and constructive knowledge of a defendant are relevant factors in determining whether it is strictly liable in a failure to warn case. However, the Court expressly refused to overrule Beshada. Instead, the Court restricted Beshada “to the circumstances giving rise to its holding.” 97 N.J. at 455, 479 A.2d 374.

One month after Feldman, and in reliance on that decision, Owens-Illinois, an asbestos manufacturer, in a case entitled Heckman v. Johns-Manville, pending in the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2470-81, filed a motion in limine to permit it to introduce evidence at trial demonstrating its lack of actual and constructive knowledge regarding the health hazards its product posed to users. Recognizing the importance of the issue for hundreds of other asbestos cases pending in this state, the Honorable John E. Keefe, sua sponte, entered an Order noticing the motion under the general caption In the Matter of Asbestos Litigation Venued In Middlesex County, Docket No. L-52237-81, and invited the asbestos bar to file briefs and participate in oral argument.

Judge Keefe, after hearing oral argument on September 10, 1984, denied the motion on the ground that in light of Beshada and its treatment in Feldman, an asbestos manufacturer, under New Jersey law, was prohibited from relying on the state-of-the-art defense.

Defendant Owens-Illinois then moved before the Superior Court, Appellate Division, for leave to appeal the trial court’s ruling and simultaneously petitioned the New Jersey Supreme Court for direct certification. On December 5, 1984, the Supreme Court entered an Order granting the request for direct certification and further:

ORDERED that leave to appeal is granted, and this Court, in Feldman v. Lederle Laboratories, 97 N.J. 429 [479 A.2d 374] (1984), having recognized that Beshada v. Johns-Manville, 90 N.J. 191 [447 A.2d 539] (1980) [sic ], applies to all pending asbestos eases, the September 21, 1984 Order of the Superior Court, Law Division, (L-52237-81) is summarily affirmed.

In the Matter of Asbestos Litigation Venued In Middlesex County, 99 N.J. 201, 491 A.2d 700 (1984).

Thereafter, Owens-Illinois petitioned the New Jersey Supreme Court for a rehearing. The petition specifically sought clarification of the word “pending”. On December 19, 1984, the motion for rehearing was denied and forwarded to counsel with a cover letter from the Clerk of the New Jersey Supreme Court which stated:

The request has been denied essentially because Judge Keefe’s interpretation that the Court’s prior order applies to all pending asbestos cases was correct. [Emphasis in original].

III. Equal Protection

One aspect of defendants’ equal protection argument can be disposed of without extensive analysis. The application for' rehearing before the Supreme Court of New Jersey focused upon a requested construction of the term “pending” as the term was employed in the Supreme Court’s Order of December 5, 1985, supra. Since that term was not in fact clarified, either by the Order denying that motion for rehearing or by the covering letter from the Clerk of the Court, defendant-manufacturers argue before us that the use of the term “pending” by the Supreme Court of New Jersey establishes classifications within the asbestos cases themselves which deny equal protection of the laws to some defendants, in some cases, based solely upon the filing date of a particular action. Several possible constructions of the term “pending” and the date to which that term might be attributed have been posited by these defendants to this Court. We believe, however, that defendants’ construction of the term “pending” is misplaced. In December 1984, the Supreme Court of New Jersey could only rule as to cases then in existence (or “pending”) under current New Jersey law. This Court believes that the New Jersey Supreme Court carefully chose the term “pending,” later emphasized by its Clerk as being “all pending”, to encompass all asbestos litigation governed by the present state of New Jersey law. In the fourteen months since December 1984, that law regarding the state-of-the-art defense at issue here has not changed. Accordingly, there are no classifications among asbestos cases presently “pending” in New Jersey, either in state or federal court. No viable equal protection argument can be posited upon such alleged (but non-existent) classifications.

This Court now turns its attention to the more serious question of whether asbestos defendants, when compared to other. defendant-manufacturers in strict liability/failure to warn cases, are denied equal protection of the laws of New Jersey.

In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some “reasonable basis,” it does not offend the Constitution simply because the classification “is not made with mathematical nicety or because in practice it results in some inequality.”

Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161-62, 25 L.Ed.2d 491 (1970).

As the application of Beshada to the defendants involves both the areas of economics and social welfare, and “neither apportions benefits and burdens on the basis of a ‘suspect classification’ nor impinges on ‘fundamental interests,’ it violates equal protection only if it bears no rational relationship to a legitimate state .purpose.” Delaware River Basin Commission v. Bucks County Water & Sewer Authority, 641 F.2d 1087, 1092 (3d Cir.1981) (citing United States Railroad Retirement Board v. Fritz, 449 U.S. 166, 101 S.Ct. 453, 66 L.Ed.2d 368 (1980); Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976)). In Vance v. Bradley, 440 U.S. 93, 97, 99 , 59 L.Ed.2d 171 (1979), (footnotes omitted), the Court detailed this standard:

... [C]ourts are quite reluctant to overturn governmental action on the ground that it denies equal protection of the laws. The Constitution presumes that, absent some reason to infer antipathy, even improvident decisions will eventually be rectified by the democratic process and that judicial intervention is generally unwarranted no matter how unwisely we may think a political branch has acted. Thus, we will not overturn such a statute unless the varying treatment of different groups or persons is so unrelated to the achievement of any combination of legitimate purposes that we can only conclude that the legislature’s actions were irrational.

Equal (if not greater) caution should be exercised in assessing whether decisions of a state Supreme Court have denied equal protection of the laws.

The rationality test requires the Court to conduct a two-step analysis. “First, it should identify the purposes of the statute [or as here, common law rule] and assure itself that these purposes are legitimate ... Second, having identified the governmental purposes, the court must determine whether the classification is rationally related to achievement of these goals.” Delaware River, supra at 1092-3.

In identifying the purposes behind the Beshada/Feldman dichotomy, the Court may look to both an articulated purpose and “general public knowledge about the evil sought to be remedied, prior law, accompanying legislation, and formal public pronouncements.” Id. at 1093, n. 9. In addition, “in the absence of an articulated purpose in the legislation or in its history, courts have upheld challenged provisions that furthered the attainment of goals either suggested by the parties or postulated by the reviewing court itself.” Id. at 1094.

While the Supreme Court’s Order affirming Judge Keefe’s opinion in In the Matter of Asbestos Litigation Venued In Middle-sex County does not articulate the purposes behind treating asbestos cases differently than others, other data for ascertaining them does exist. The first is found in the Feldman decision itself:

In our opinion Beshada, supra, would not demand a contrary conclusion in the typical design defect or warning case. If Beshada were deemed to hold generally or in all cases, particularly with respect to a situation like the present one involving drugs vital to health, that in a warning context knowledge of the unknowable is irrelevant in determining the applicability of strict liability, we would not agree. Many commentators have criticized this aspect of the Beshada reasoning and the public policies on which it is based. [Citations omitted]. The rationale of Beshada is not applicable to this case. We do not overrule Beshada, but restrict Beshada to the circumstances giving rise to its holding. See, e.g., Friedman v. Podell, 21 N.J. 100, 105 [121 A.2d 17] (1956); Konrad v. Anheuser-Busch, Inc., 48 N.J.Super. 386, 388 [137 A.2d 633] (Law Div.1958) (“Cases state principles but decide facts, and it is only the decision on the facts that is binding precedent.”).

97 N.J. at 454-55, 479 A.2d 374.

As Judge Keefe stated regarding Feldman’s treatment of Beshada:

[The New Jersey Supreme Court] said that, “The rationale of Beshada is not applicable to this case,” and when I say to this case they mean the rationale of Beshada is not applicable to the general typical liability case. “We do not overrule Beshada but restrict Beshada to the circumstances giving rise to its holding” and they use the word circumstances as opposed to facts because there were no facts which were decided in Beshada or the cases that were joined with it.

The word circumstances has even broader meaning I think than the word fact. There are circumstances about Beshada which I think might conceivably be applied to other types of product litigation if not in New Jersey certainly in the United States. The circumstances of Beshada, when you consider the presence of amicus on the part of all litigants is that we have a vast number of people who are injured by a specific product, the injury is brought about over a long latency period and because of those factors and circumstances it is difficult, both for Plaintiffs and Defendants, to intelligently try the issue of state of the art.

In justification for his reasoning in the opinion Justice Pashman pointed to the fact finding process as being one of the most difficult considerations for a trial Court and jury in that setting. I think he meant it to apply to a much broader setting but in terms of rationalizing why Beshada was not overruled it seems to me that one of the factors and circumstances certainly is the question of how difficult it would be in a multiple defendant, multiple plaintiff case, for a jury to come to some conclusion that at one point in time one defendant knew and another didn’t, whether it was in point of time that the actual injury occurred, things of that nature.

In the Matter of Asbestos Venued In Middlesex County, transcript of proceedings of September 9, 1984, pp. 94-95. (Emphasis added).

Judge Gerry of this Court, prior to the New Jersey Supreme Court’s affirmance in the Middlesex County litigation, addressed the equal protection argument in the case of Gogol v. Johns-Manville, 595 F.Supp. 971. (1984). In finding that there was no equal protection violation, he reasoned:

Looking generally at tort law, this court recognizes numerous distinctions made between classes of litigants. Under the New Jersey Tort Claims Act, for example, governmental entities and officers are at a distinct advantage over private actors. Non-medical-malpractice plaintiffs, ... are somewhat more favorably treated by New Jersey courts than malpractice claimants. The whole workmen’s compensation scheme places both employers and employees in a position different from those involved in non-job-related accidents. There is nothing unconstitutional about any of the above examples. All of them are the result of legitimate policy decisions of New Jersey (and other states).

Looking at tort law generally, there is a huge distinction made between those defendants subjected to strict liability and those against whom plaintiffs are only entitled to prove negligence. Again, the courts have acted on the basis of public policy. Indeed, Feldman itself is basically a case dealing with the reasons to subject or not subject drug manufacturers to strict liability. Clearly, the chasm between strict liability defendants who may advance a state of the art defense and those who may not is not nearly so wide as the chasm between defendants subjected to strict liability and those who are not.

It needs hardly be stated that asbestos cases are like no other products liability cases in terms of their volume and difficulty, as well as the massive societal problem they manifest. This alone, we believe warrants the distinction made by the Feldman court.

Gogol at 974-75. (Emphasis added). See also the very recent case of Spring Motors Distribution, Inc. v. Ford Motor Co., 98 N.J. 555, 489 A.2d 660 (1985), in which the New Jersey Supreme Court held that in a case involving solely economic loss due to a non-conforming product, between two commercial companies similarly situated, neither negligence nor strict liability was available to a plaintiff-purchaser as a basis for his action, only warranty theories.

The asbestos litigation has revealed the vast exposure of thousands of people, decades ago, through numerous different contacts, with products made by many manufacturers, resulting in latent injury detected 30 years and more after exposure, where evidence of actual or constructive knowledge will undoubtedly create widely differing circumstances between various defendants. These factors combine to create a situation where legitimate concerns of case management, economics, and social welfare and policy regarding exposed persons and their families amply justify a rule precluding the state-of-the-art defense in these atypical products liability cases. This decisional rule evolving from such considerations of public policy is indeed similar to the legislative decision in workers’ compensation matters, imposing liability without proof of fault (or the defense of contributory fault) upon the employer, unlike that imposed upon other defendants to claims resulting from the very same work-related injuries.³ Furthermore, these considerations in support of the Beshada rule are so self-evident for asbestos cases that the New Jersey Supreme Court’s failure to articulate them in its ruling of December 1984 is not fatal. Asbestos cases are different than typical products liability cases and treating them as such under different rules of law is permissible.

The purposes then,, as this Court sees them, for treating asbestos cases differently than typical products liability cases are to ease jury confusion and resulting prejudice to litigants, and to expedite trial of the issues, both of which are areas in which a state Supreme Court has traditionally played a leading role. As Judge Keefe stated, asbestos cases involve “a vast number of people who are injured by a specific product, the injury is brought about over a long latency period and because of those factors and circumstances it is difficult, both for plaintiffs and defendants, to intelligently try the issue of state of the art.” In the Matter of Asbestos Litigation Venued In Middlesex County, supra, transcript at 94-5. In addition, there is the difficulty in a multiple defendant case “for a jury to come to some conclusion that at one point in time one defendant knew and another didn’t [that their products posed potential health hazards].” Id. at 95. That difficult jury function is compounded when the task of determining when the plaintiffs’ exposure occurred is included in the equation. While it is true that none of these variables is exclusive to asbestos cases, it is equally true that in such cases all of them come together in one action at one time.

Creating a common law rule, which prevents a defendant in an atypical products liability case such as asbestos litigation from relying on the state-of-the-art defense, eases the jury’s burden by removing voluminous and often conflicting testimony concerning the knowledge possessed by the industry as a whole, and by each individual defendant in particular, on a myriad of different, remote dates. It thus serves to facilitate the trial of each of these numerous cases by removing an issue which, as stated earlier, is very difficult for the jury to grasp and fairly adjudicate as to each defendant separately.

Having identified what this Court feels are the purposes behind treating asbestos cases differently than typical cases, and having assured itself that those purposes are legitimate, the Court must now determine whether the Beshada/Feldman dichotomy is rationally related to the achievement of those goals. It is this Court’s determination that there is a rational relationship. Eliminating the issue of the state of the art, for the reasons set forth above, is an appropriate rule for minimizing jury confusion (and resulting error regarding a particular defendant’s responsibility) and expediting the trial of the hundreds of cases filed in this state.

Accordingly, this Court determines that the Beshada/Feldman dichotomy has a “reasonable, rational basis” and as such does not violate the equal protection clause of the Fourteenth Amendment. This Opinion and the enclosed Order implementing it shall be filed in and shall govern each asbestos action presently pending in this District. This decision shall have no retroactive effect upon any asbestos cases previously adjudicated or otherwise disposed of, and may not serve as a ground for the reopening of any such concluded action. On the Court’s own motion, a determination of the suitability of an interlocutory appeal to the United States Court of Appeals for the Third Circuit, pursuant to 28 U.S.C. § 1292(b), is included in the enclosed Order.

1 . In the present context, defendant-manufacturers would assert such a defense by introducing evidence that they neither knew nor should have known of the dangers of the asbestos contained in their products and therefore may not be charged in strict liability for a breach of any duty to warn of such dangers.

2 . Federal jurisdiction in these matters is predicated upon diversity of citizenship. 28 U.S.C. § 1332. Accordingly, the applicable substantive law is that of New Jersey. Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

3 . Workers’ compensation statutes have withstood other equal protection attacks. Lower Vein Coal Company v. Industrial Board, 255 U.S. 144, 41 S.Ct. 252, 65 L.Ed. 555 (1921); New York Central Railroad v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667 (1917); Davidson v. Hobart Corp., 643 F.2d 1386 (10th Cir.1981). There is no reason to believe that the feature of workers' compensation regarding an employer’s liability violates such a defendant’s equal protection rights.