MDU Resources Group v. W.R. Grace & Co.

14 F.3d 1274, 39 Fed. R. Serv. 877, 1994 U.S. App. LEXIS 1289, 1994 WL 19127
CourtCourt of Appeals for the Eighth Circuit
DecidedJanuary 27, 1994
DocketNo. 92-2794
StatusPublished
Cited by22 cases

This text of 14 F.3d 1274 (MDU Resources Group v. W.R. Grace & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MDU Resources Group v. W.R. Grace & Co., 14 F.3d 1274, 39 Fed. R. Serv. 877, 1994 U.S. App. LEXIS 1289, 1994 WL 19127 (8th Cir. 1994).

Opinion

RICHARD S. ARNOLD, Chief Judge.

The appellant in this asbestos-removal case, MDU Resources Group, d/b/a Montana Dakota Utilities Co. (MDU), sued W.R. Grace & Co. (Grace) in 1990, two years after MDU learned that the Grace-manufactured fireproofing installed in its building in September of 1968 was releasing harmful asbestos fibers. After an eight-week trial, the jury returned a special verdict in favor of Grace on all of MDU’s theories of liability. MDU now argues that several errors occurred at trial. First, MDU argues that the District Court used the wrong measuring point to determine when the statute of limitations began to run and, in so doing, misapplied North Dakota’s discovery rule. Second, MDU argues that the District Court improperly excluded pieces of evidence MDU needed to establish key elements of its casein-chief. Third, MDU argues that the District Court incorrectly instructed the jury on strict liability because it failed to instruct that state-of-the-art is no defense to a strict-liability claim. Finally, MDU argues that the District Court’s permissive conduct towards Grace during the trial resulted in a proceeding that was fundamentally unfair. We agree with some of these contentions and now reverse.

I.

Since the trial of this case was lengthy and complicated, we will present only the facts [1276]*1276and portions of the trial relevant to the issues presented in this appeal. In 1967 and 1968, MDU completed construction of its five-story general office building in Bismarck, North Dakota. In 1968, Monokote fireproofing, manufactured by Grace, was sprayed on the structural steel and decking of the building. The application was completed by September of that year. At the time of installation, Grace was aware that the Monokote fireproofing contained asbestos. MDU, however, was not aware of this fact until September of 1980, when Health Department tests revealed that the Monokote contained 15-25% asbestos. The Health Department report also stated that the asbestos was “apparently intact” and that there were “no employee overexposure hazards.” Nonetheless, the Department recommended that MDU investigate carefully removing the material, because the Monokote eventually would begin to deteriorate and would then pose a health hazard. Although MDU received conflicting information from a subsequent test in 1985, the original test’s results were corroborated in 1987, and both parties agree that MDU was aware of its asbestos problem as early as 1980.

MDU first learned that the asbestos in the Monokote was releasing fibers and contaminating its building in early 1988. A report from HTI Engineering showed that the building had been contaminated. Subsequent tests confirmed this and found an average of more than 78 billion asbestos fibers per square foot on horizontal surfaces below the fireproofing. This number of fibers created asbestos levels in the air from 490 to 110,000 times normal, meaning that the asbestos needed to be removed immediately to protect the health of MDU workers. MDU brought this suit in 1990 to obtain the costs of removal.

MDU sued under a number of different theories: negligence, strict liability, failure to warn, and breach of warranty. Grace mounted a two-fold defense. It argued first, that the statute of limitations had run on MDU’s claims, and second, that MDU had suffered no harm from the asbestos Monokote. At trial, MDU argued that Grace was aware of the inherent dangers of asbestos, that Grace knew that Monokote contained asbestos, and that, prior to 1968, Grace had a readily-available alternative, Cellufloc.1

Grace told the jury in its opening statement that it took the asbestos out of Monokote in 1973, but claimed that a non-asbestos substitute was not available before 1968. Transcript (Tr.) 57, 3425-28. In order to prove that an alternative substance was available, MDU offered into evidence, among other things, a 1943 trademark for Cellufloc that tended to show that Cellufloc had been available before 1968. The District Court excluded this evidence because the trademark did not demonstrate the efficacy of the product. Tr. 2823.

MDU also sought to introduce a one-page document from Grace’s insurance carrier to Grace’s Safety Administrator entitled “Asbestosis.” The document, plaintiffs exhibit P-83A, summarized a 1966 article published by the American Insurance Association on the relationship between asbestos exposure and cancer. P-83A discussed the health risks inherent in fitting, cutting, and removing asbestos materials in buildings. MDU offered the document at trial to show that Grace knew, before September 1968, that asbestos was harmful to human health. While recognizing that the summary was highly probative and relevant, the Court ultimately excluded P-83A on the grounds that an improper foundation had been laid. The Court concluded that MDU had not established that Grace received the document before September of 1968.2

In addition to the evidentiary issues, MDU also disputes the District Court’s permissive treatment of Grace’s cross-examination strategy. In pre-trial conference, MDU request[1277]*1277ed that the District Court confine Grace’s cross-examination of MDU’s witnesses to the-scope of direct. The District Court gave MDU that assurance. At trial, however, the Court allowed Grace to ask MDU’s witnesses leading questions that were designed to establish Grace’s statute-of-limitations defense. Although MDU objected to this practice, the Court continued to allow it. At one point, during MDU’s case-in-chief, the Court prodded MDU to question its witness regarding Grace’s statute-of-limitations defense. Tr. 2397. MDU also alleges that several other occurrences at trial tainted the proceedings with a fundamental unfairness.3

Finally, two of the Court’s instructions to the jury are challenged. First, the District Court instructed the jury that in order to find in favor of Grace on its statute-of-limitations defense, it must find that MDU knew or with the exercise of reasonable care should have known

1. That the Monokote fireproofing installed in certain areas of MDU’s General Office Budding contained asbestos;
2. That the asbestos-containing Monokote in MDU’s General Office Building might pose a hazard; and
3. That the defendants were possibly liable.

Jury Instruction Number 27. The District Court further instructed that Grace had to prove these elements by a preponderance of the evidence.

Second, before the Court gave its striet-liability instruction, MDU requested that the Court include an instruction that it is no defense to strict liability that the product was state-of-the-art. Because the District Court had told the jury that such evidence was a valid defense to a negligence claim, MDU wanted the negative instruction included in the strict-liability instruction for clarity. Grace contended that MDU was not entitled to such an instruction. Although the District Court agreed that MDU’s proposed language correctly stated North Dakota law, it declined to give the instruction. The jury returned a verdict in favor of Grace.

II.

A.

This Court will not reverse on the basis of jury instructions if they, “as a whole, adequately and sufficiently state the law applicable to the case.” Sterkel v. Fruehauf Corp,

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Banc One Building Management Corp. v. W.R. Grace Co.
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United States v. Schultz
917 F. Supp. 1320 (N.D. Iowa, 1996)
Northstar Associates v. W.R. Grace And Company
66 F.3d 173 (Eighth Circuit, 1995)
NCR Corp. v. United States Mineral Products Co.
72 Ohio St. 3d 269 (Ohio Supreme Court, 1995)
Houghton v. SIPCO, Inc.
38 F.3d 953 (Eighth Circuit, 1994)

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Bluebook (online)
14 F.3d 1274, 39 Fed. R. Serv. 877, 1994 U.S. App. LEXIS 1289, 1994 WL 19127, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mdu-resources-group-v-wr-grace-co-ca8-1994.