Document K6nm132rxkaadRKDzjZov52XK

TO: FROM: DATE: RE: MEMORANDUM PRIVILEGED AND CONFIDENTIAL * ATTORN?JY-CLIENT COMMUNICATION/ ATTORNEY-WORK PRODUCT * #- ' * > 1\ V- FILE J-10-49 Wondie Russell November 3, 1982 Frederick LeGrande v. J-M Products Corporation; Summary of file located during review of B-level (J-M Knowledge) Perhaps the most interesting and potentially damaging group of documents located thus far in the ongoing review of B-level files is that pertaining to the LeGrande action. This case has been troublesome in the context of underlying actions for several years. Attorneys for plaintiffs have long contended that the LeGrande case, filed in 1957, established the latest date prior to which J-M could argue a lack of knowledge of the hazards of asbestos exposure to third party workers. LeGrande was an employee of H.W. Porter & Company, ' whose duties included the application of asbestos-containing products sold by J-M. LeGrande developed asbestosis and was awarded worker's compensation benefits from H.W. Porter. He based a subsequent civil claim against Johns-Manville Products Corporation on theories of negligence, including a negligent failure to warn, and breach of warranty. For many years, when asked to produce file copies of the pleadings or other materials in the LeGrande case, J-M has consistently responded that it possessed no such files, nor any Disc #9571 November 4, 1982 PLAINTIFF'S | EXHIBIT * id^-oo NIT 011559 record of the case. Counsel for plaintiffs have offered copies of interrogatories and other pleadings originally */ filed with the United States District Court in New York. The single file folder discovered during the B-level review represents but a small portion of the documents related to this case. The file consists primarily of material concerning the preparation of interrogatory responses. A few answers appear incorrect but this may result from literal responses to the language of interrogatories which are not sufficiently comprehensive..- For example, the earliest date of an employee asbestosis claim is only accurate if the interrogatory somehow omits the plaintiffs in the 1930 era New Jersey cases. If those workers were employed neither by J-M Products nor by a subsidiary, the answer may be proper. The most interesting documents are those generated by Travelers and counsel retained by Travelers which demonstrate the insurer's sophistication regarding the hazards of asbestos exposure to third parties. Marsh & McLennan's awareness of the risks of exposure is also documented although to a lesser extent. J-M has not yet produced the LeGrande file in any litigation. The materials have been reorganized into chronological sequence and include the following: The court's official records may have been purged in the intervening years as plaintiff's counsel apparently do not obtain certified copies of pleadings and discovery. -2- NIT 011560 1. Undated, single page, handwritten document which appears to consist of notes concerning two telephone conversa tions, one of which involved the LeGrande claim. The notations include "bad case" and the word "asbestosis". 2. Letter dated July 22, 1957 from Arthur L. Fisk, J J-M in-house attorney, to F.H. Deeg of J-M insurance department. Cover letter for Summons and Complaint in LeGrande case, served on J-M's agent on July 19, 1957 (U.S. District Court, New Jersey, Civil Action #741-57). Fisk is skeptical of LeGrande's claims but asks Deeg to forward the documents to Travelers. 3. Letter dated July 22, 1957 from Schmidt to Koncelik of MM forwarding Fisk's letter along with the Summons and Complaint. 4. Duplicate of the prior entry with a single hand written notation of no immediate significance. (See Item 3.) 5. Letter dated July 24, 1957 from Koncelik of MM to Schmidt stating that Schmidt's letter had been forwarded along with the Summons, Complaint and Fisk letter to Travelers. 6. A Travelers form letter dated August 8, 1957, from William Guist of Travelers to George Gould, J-M Insurance Department. The letter is signed by Travelers both in its own interests and as agent of its insured, H. W. Porter & Company. The substance is that Travelers intends to hold J-M responsible for reimbursement to Travelers of workers compensation benefits paid and/or to be paid to LeGrande by or on behalf of H.W. Porter & Company. -3- MT 011561 7. J-M internal memo dated August 12, 1957, from Gould to Schmidt, advising that there is no record of LeGrande ever having been employed either at the Manville plant or at J-M's research facility (Finderne). 8. Letter dated August 14, 1957 from Schmidt to George Roeckle of Travelers forwarding a copy of the form letter from William Guist (noted as item 6 above) and request ing appropriate action from Travelers on the matter. 9. Duplicate of item 8 above with handwritten notations including the Travelers file number for the LeGrande i claim, "B-8247836", the name "R. H. Fennel", and "Sup. Adjuster Frank O'Connor". 10. Letter dated September 5, 1957 from Schmidt to O'Connor of Travelers forwarding samples of tags and/or print layouts appearing on J-M product packages. 11. Duplicate of item 16 with handwritten marginal notations including "Reserve established? None as of 8/1/57". 12. Undated ten-page set of interrogatories signed by William L. Brach, attorney for plaintiff, addressed to the firm of Stryker, Tams <5 Horner as counsel for Johns-Manvilie Products Corporation. There are a total of 27 interrogatories. This copy has been marked, primarily in the left-hand margin, apparently with the initials of J-M employees likely to have responsive information. The initials include "KWS, HMJ, SC, ALF, A/R". There are additional handwritten notations. -4- MT 011562 13. Letter dated February 21, 1958 from Schmidt to E.J. Sullivan, of J-M, Philadelphia, describing the LeGrande action and requesting Sullivan's assistance in formulating responses to interrogatories. Specifically, Sullivan is asked to respond to a question concerning which asbestos and/or diatomite containing products were sold by J-M to H.W. Porter & Company between 1952 and 1956. 14. Duplicate of the previous item, but this time addressed to E.K. Wilkinson, of J-M, New York Box #270. (See Item 13.) 15. N Letter dated February 26, 1958 from Wilkinson to Schmidt providing a list of those J-M products containing asbestos and/or diatomite which were sold to H.W. Porter & Company between 1952 and 1956. 16. Letter dated February 27, 1958 from E.J. Sullivan to Schmidt providing information concerning all asbestos and/or diatomite-containing products sold to Reid Hayden, Inc. of Baltimore, Richmond and Charlotte between 1952 and 1956. The letter enclosed a two-page list of products and indicated the years in which each specific product was sold. 17. Memorandum dated February 28, 1958 from Schmidt to S. Collier of J-M, referring to Collier's recent conversation with Frank Deeg, apparently for the purpose of developing responses to interrogatories. Schmidt enclosed the letters (and enclosures) from Wilkinson and Sullivan which information -5- MT 011563 was to be used as the basis for J-M's response to Interrogatory No. 1. Schmidt requested that Collier also use that information to develop responses to Interrogatories No. 2, 3 and 6. Essen tially, Collier was to provide the technical data concerning the percentages of various raw materials that Were contained in each of the products identified in Sullivan's and Wilkinson's responses. 18. Letter dated March 12, 1958 from Arthur L. Fisk, Jr. (J-M in-house attorney) to John J. Monagan, Jr., Esq. of Stryker, Tams& Horner (J-M's outside, Travelers-retained defense attorney). ''It is my understanding from our insurance people that we are collecting the information called for by the interrogatories and as soon as it is ready, we will advise you and have a meeting looking toward the preparation of the answers." There is a bcc to Deeg. 19. An 8-1/2 x 11 chart dated March 18, 1958 showing the component ingredients and relative proportions thereof in a number of J-M products. 20. A letter dated April 4, 1958 from S. Collier to A.L. Fisk enclosing draft responses to the interrogatories and stating "In giving you this information, it is with the understanding that we must furnish because of a court order." The letter was cc'd to Schmidt and to K.W. Huffine. 21. Letter dated April 4, 1958 from Fisk to Monagan suggesting a meeting on Wednesday, April 9 at J-M's offices at which time J-M will provide "the information". -6- MT 011564 22. Undated, seven page handwritten draft of responses to LeGrande interrogatories on lined 8-1/2 x 11 paper. Inter alia, these responses include a denial of any knowledge con cerning any experiments, studies or inquiry of any sort as to .the effect upon users of asbestos containing J-M products, a denial of knowledge of any health claims based on exposure to any of the products to which LeGrande had been exposed, a denial of knowledge of any cases of applicators contracting asbestosis, a statement that asbestosis was first contracted by a J-M employee in 1946, a refer \-ice to a series of pulmonary function studies on asbestos miners conducted between 1948 and 1951 by Doctors Wright and Gregoire of Saranac. 23. Undated, handwritten notations concerning the composition of two products, "Magnes P/c" and "Superex". Appears to be same handwriting and paper as in Item 22. 24. Undated, handwritten page of notations relating to the chemical contents of the products allegedly used by LeGrande. 25. Undated, unsigned three-page preliminary draft of responses to plaintiff's interrogatories. It appears to be attorney work product and refers to items 14 and 15. 26. A duplicate copy of the three-page draft responses to interrogatories with revisions and numerous handwritten notations. 27. Cover letter dated April 24, 1958 from Monagan to Deeg enclosing "an original and a copy of page two of the answers to interrogatories, which have been corrected." -7- MT 011565 28. Five-page typed final Answers to Interrogatories, lacking signature page and verification. Responses disclose that certain interrogatories were modified or stricken by the Court on January 17, 1958. 29. Cover letter dated April 28, 1958 from Schmidt to Monagan enclosing final draft interrogatory responses "properly executed by Mr. Herbert Morton Ball and notarized by a Notary Public." Letter shows a bcc to A.L. Fisk. 30. Letter dated August 7, 1958 from Monagan to Schmidt returning the LeGrande file to J-M and requesting the return of a transcript of the plaintiff's deposition which Monagan believed he had left with Deeg. There is a hand written note at the bottom which reads "Dr. Glenn Gardiner Smith, examining physician, will contact K- W. Smith re any information required." 31. Five-page document entitled "Threshold Limit Values for 1958", dated 9/15/58, Appendix II to the J-M Manual of Standard Practices, Industrial Health (cancelling edition of 12-9-57). This document begins with a definition of the concept of threshold limit value or "TLV". The TLV for asbestos^ is listed under the entry for "Mineral Dust" as 5MPPCF (five million particles per cubic foot), with an explanatory note that the J-M internal TLV standard is one million fibres per cubic foot. -8- MT 011566 32. Letter dated September 23, 1958 from A.M. Schmidt, J-M insurance manager, to J. C. Koncelik, Marsh & McLennan ("MM"). The letter requests that MM provide Peerless Insurance Company with notice of a worker's compensation claim .on behalf of a former J-M employee from Lompoc, California. The claimant allegedly left J-M employment in 1945 as the result of an undescribed injury. 33. Three pages of handwritten notes concerning responses to the five-interrogatory supplemental set. 34. Page two of a letter dated October 3, 1958 from Monagan to Deeg discussing Interrogatory Nos. 4 and 5 of the first supplemental set. Monagan suggests that J-M should refuse to disclose the number of its employees who have contracted asbestosis and he is also reluctant to supply information concerning the circumstances under which J-M supplies respirators to its employees. 35. Letter dated October 8, 1958 from Schmidt to Koncelik. Schmidt sought MM's assistance following Peerless' denial of coverage for an excess worker's compensation claim on behalf of Antonio Ruis. Peerless had declined coverage because J-M advised it of the claim subsequent to a J-M letter report ing all known diatomaceous earth claims which had omitted the Ruis case. Schmidt informed MM that J-M only learned of the Ruis case after both the letter to Peerless and the entry of a findings and award in California. Ruis' alleged date of injury was November 3, 1947. -9- MT 011567 36. Six pages including cover sheet, draft Verifica tion and Certificate of Service relating to a Supplemental Set of Interrogatories filed on behalf of plaintiff. There are a total of five interrogatories in this set. The questions follow up on answers to the first set, particularly re: hygiene surveys, dust content of products, dust control, and respirator use. 37. A typewritten draft of responses to Interroga tories 1 through 5 with handwritten revisions. 38. Identical copy of typewritten document above (Item 37) also with handwritten notations, some of which are identical to the previous entry and some of which are different. 39. A letter dated October 21, 1958 from Schmidt to Monagan stating that after reviewing the set of five interrogatories, J-M has decided that Monagan should draft responses using information provided by Schmidt. The infor mation from Schmidt concedes that J-M is aware that insulators would be at risk in the event that finished products "were to be shaped and cut by a saw." J-M also concedes that insulating/ cements, including those with which LeGrande worked, contain dust which can be inhaled and which can potentially cause V asbestosis. J-M acknowledges that approximately twelve Although not discussed in the Le Grande materials, J-M may have been on notice of a single claim by a third party user of such cements as early as the 1930's. Dugan v. Aycock (J-M) -10- MT 011568 employees of J-M corporation or its subsidiaries have contracted asbestosis since 1946 (the alleged earliest date). J-M states that it provides respirators to all employees engaged in manufacturing operations under exposure conditions found to 1/ exceed "the maximum acceptable concentration". The draft response says that under such circumstances, respirators are "required". 40. Three pages, including a cover sheet and two pages of interrogatories, constituting a second supplemental set of interrogatories on beha V of plaintiff. This set includes a total of three questions pertaining to product composition, studies re product causing respiratory disease and safety devices or measures. 41. Three pages, including cover sheet, execution by Herbert Morton Ball, and one page of responses to the supplemental set of three interrogatories. 42. Undated, handwritten page of notes beginning with "Travelers - Frank O'Connor, Attorney - John J. Monagan". This appears to be a draft of a cover letter enclosing publications in response to a request for information about J-M products. 43. Letter dated December 9, 1958 from Schmidt to Monagan which appears to be a typed draft of the cover letter */ Presumably, respirators were actually recommended if con ditions merely exceeded TLV rather than MAC. -11- ---- MT 011569 roughed out in the previous entry. (Item 42.) Schmidt for warded three booklets describing J-M product lines for Monagan to use in preparing the LeCrande defense. In addition, J-M sent a booklet called "History of Industrial Hygiene Foundation" published by the Mellon Institute. The booklet .reportedly traced "industry's changing concept of occupational illness and Injuries in general from the early thirties to the present date." Schmidt requested that Monagan return these materials after he had completed using them. None of the booklets is contained in the file. The letter also states that Kenneth Smith is to review the x-rays of LeGrande taken by the defense physicians in the case. 44. A letter dated December 15, 1958 from Howard G. Wachenfeld of Travelers to F.C. O'Connor of Travelers summariz ing a status conference held at J-M's offices on December 2, 1958. The conference was attended by Fisk, K. W. Smith, Schmidtf 1/ and Deeg of J-M, Kalocheck [sic] of Marsh & McLennan, Fennel Monagan and Wachenfeld for Travelers. Wachenfeld states that a great deal of additional research must be done if an adequate defense on the merits is to be developed. He points out that: (1) none of the other asbestos manufacturers provide warnings on their labels (nor did J-M), (2) J-M "has for some time sought to learn of any signs of an ill effect of its yir ^ products upon applicators in general", (3) J-M has */ Probably should be Koncelik. **/ Query whether an active effort was underway at some point. -12- MT 011570 applicators in its employ in Detroit and after 35 to 40 years of such employment there has been no case of asbestosis or silicosis among the group, (4) in 1954 a manual was distributed to purchasers of J-M products warning applicators to avoid breathing dust, (5) the applicators' union has never requested the installation of dust control equipment and presumably would have done so had they suspected a risk, and (6) in 1954 Dr. Smith and Mr. Dan Cruise tried to run a series of x-ray tests on a group of applicators to determine if there were ill effects. "This test was never conducted because it was impos sible to keep a check on any one man because of the frequency with which they change jobs." Wachenfeld suggests that the defense call either Dr. Arthur Vorwald or Dr. Chick Sanders to testify that applicators were not at risk. Wachenfeld's letter was cc'd to Fisk, Schmidt and "Smith." 45. Letter dated March 6, 1959 from Monagan, J-M's Travelers retained counsel, to O'Connor of Travelers. No other distribution is shown. This is Monagan's wrap-up of the case, summarizing the reasons why settlement was appropriate. Inter alia, Monagan points out that: the defense of lack of foreseeability of the contraction of asbestosis by an asbestos applicator was the only ground upon which the issue could have been removed from the consideration of the jury. Because the plaintiff contended that five persons known to him had contx^^ted the disease, an issue of f=Stt might well have been presented, assuming that those persons were applicators. The fact that such persons asserted a claim for an occupational disease -13- MT_01t5M against their employer, while it would not necessar ily be chargeable to your insured in the present action, might very well be regarded by the trial court as presenting a jury question as to whether a reasonable corporation in its position should have . not foreseen the possibility that such disease would result to an applicator, particularly when several applicators in the employ of H. W. Porter had evi dently been so affected. As I mentioned to you, it was my wish to have a representative of your Company who was familiar with Workmen's Compensation and occupational disease hazards to appear to testify that there was no basis for concern that an applicator would contract asbestosis because of the limited exposure to which such person would be subjected, Jbit,_ I understand that such testimony could not be submitted because the raxrc is tnat such claims have been inane, and, indeed have been maae against'H. W. "FOrtei end Co., which was the employer of the plaintiff in the present action. 46. Letter dated March 9, 1959 from G.R. Fox of Marsh & McLennan to Frank Deeg of J-M. The letter is in response to a telephone conversation concerning the settlement of the LeGrande case. (J-M may have been perturbed by the information in Monagan's letter to O'Connor relating to underwriting. Item 45.) J-M had requested that Marsh & McLennan check on the rating information for the J-M risk. Fox states that he has spoken with O'Connor and been assured that "the question of the underwriter's testimony had nothing to do with their settlement of the case." Fox advised J-M that he had requested a summary of settlement negotiations from O'Connor. 47. File memorandum dated March 10, 1959 from Frank ; O'Connor to "File B-8247836, LeGrande." No distribution is -14- MT 011572 shown. Inter alia O'Connor reports that he was approached by plaintiff's counsel, Brach, shortly before trial to discuss settlement. Brach had just been appointed City Counsel in New (f Jersey and was very interested in settling the case rather than possibly substituting counsel for the trial. O'Connor offered $15,000 plus a waiver of the $8,000 previously paid to LeGrande under worker's compensation. Brach demanded $55,000. The trial began on March 4, 1959. The plaintiff had to be wheeled into the courtroom in a wheelchair and presented a very sympathetic figure. O'Conner noted that the wife also promised to be a very good witness in plaintiff's cause. When LeGrande testified, his voice was very weak and he coughed frequently. The judge arranged to have LeGrande's wheelchair positioned immediately in front of the jury and the judge himself moved down next to the jury rail to hear the testimony. O'Connor described the jury as "an excellent one" without explaining from whose perspective. O'Connor noted that plaintiff testified very well concerning his occupational exposure and noted that LeGrande also testified concerning several jobs "that Porter had not told us about." O'Connor concluded that the plaintiff's condition had a profound effect on the jury. Fisk, Vandiver Brown, and Dan Cruise attended the trial on behalf of J-M. Fisk inquired "of our Mr. Fennel" concerning the possibilities of settlement several times but did not make a direct request that Travelers settle. -15- MT 011573 After a single day of trial, O'Connor became con vinced that a verdict for plaintiff would be forthcoming. He then obtained clearance from Mr. Campbell to dispose of the case. On the second morning of trial O'Connor immediately advised the defense attorney, Monagan, that Travelers was interested in settling and was willing to offer $35,000 plus a waiver of worker's compensation payments made. A conference was then held. Plaintiff accepted the offer. Once the settle ment was on the record, the trial judge, the Honorable Reynier J. Wortendyke, Jr., observed that it was a very wise disposition. Interestingly, the final paragraph of the memo reviews Travelers' concept of the defense strategy which was primarily to prove that the plaintiff did not adequately protect himself, ignored instructions and so on. O'Connor reports that this was contrary to Monagan's concept of the defense strategy which amounted to an attempt to prove that asbestos was simply not dangerous. Travelers had also intended to "present a top under writer" to testify that the underwriters do not look upon asbestos exposure as hazardous. However, after investigation, O'Connor concluded that he: would not dare to ask such a man to take the stand and so testify, for on cross-examination the attorney for the plaintiff would question him regarding the claims against H. W. Porter where the men had asbestosis prior to the institution of this lawsuit. Mr. Brach knows all about the Meeves case and in fact intended to produce Meeves' doctor as a witness. -16- MT 011574 That is compensation fiTe B-7780220. Whenthis case-- is (sic] put on the record after settlement had been agreed upon, it was not put on the record as asbestosis, but the man had been examined and it was found that he was suffering from asbestosis. I had talked to Mr. Tierney, underwriter at 80 John Street, before approaching the Home Office for such a witness. Mr. Tierney is well aware of the hazards, compensationwise, not only to applicators, but of course the hazard in the manufacturing of these products. I was of the opinion that this testimony would be more embarrassing to us before we were done than if we failed to present it. We also considered very seriously the affect that any settlement would have upon the industry and what claims, if any, might result from our action. It should be remembered in this regard that if we had a very large judgment against us which would fill the newspapers, our situation would be much worse than it is today with the case settled. As I explained to Mr. Fisk and his associates, this particular case was not the one to try. If we had a man, perhaps 25% disabled as a result of this exposure, our chances would be much better. This plaintiff arouses a great deal of sympathy and is perhaps the worst case we should try. 48. Letter dated April 2, 1959, from [illegible] of Marsh & McLennan to Schmidt re J-M's Travelers issued workmen's compensation policy #RUE-7458578. Confirms that Travelers has not applied any surcharge to J-M's rates for asbestosis. "The rates found in your workmen's compensation contract are manual, modified by your experience modifications." 49. Letter dated April 10, 1959 from Schmidt to H.M. Ball enclosing the Marsh & McLennan letter (Item 48) which -17- NlT 011575 confirmed that J-M's worker's compensation rates from Travelers did not include a surcharge for the asbestos risk. A complete set of this material is available from the J-M Knowledge Files. -IB- MT 011576