Document Y8287Yeeyo74x30Jx6kL5beN

FILE NAME: Kentile (KEN) DATE: 1976 Mar 24 DOC#: KEN006 DOCUMENT DESCRIPTION: Memo to Board of Directors, AIA, RE A Coordinated Industry Defense to Asbestos Disease Cases March 24, 1976 TO: Board of Directors, Asbestos Information Associ cv :.r. FROM: G. G. Gabrielson, Jr. SUBJECT: A_coordinatad industry defense to asbestos disease cases ' " ( Pursuant to a request by the Executive Committee of tue toard of Directors or tee AiA, I have made a brief p r e liminary investigation of the possible merits of endeavoring to mount a coordinated industry defense to the proliferating number of suits at law assarr.In,; claims against asbestos manufacturers for alleged asbestos related injuries to the health of employees of the manufacturers' customers. In the course of the investigation, I have interviewed four attorney; read several judicial d e c i s i o n s a n d attended a meeting of defense counsel representing manufacturers and insurance carriers involved in 19' cases in Ohio. The current wave of third party liability cases ' against asbestos manufacturers probably can be traced to a i Fifth United States Circuit Court case, Fibreboard Paper i Products Corporation, et al, v. B o r e l , 493 F. 23 1076 (5th Cir. 1573) , cert! denied 419 U. S. 869. This unfortunate decision imposed liability for injury to health upon the supplier to a plaintiff's employer on the theory that asbe.3cc;3 products are dangerous materials, that the danger has b e e n known or should have beer, known to asbestos manufacturers for a long time and, therefore, that those manufacturers are under a duty adequately to warn workman handling the materials and to Instruct them in the precautions necessary to protect their health. The ta^a hold; '-i'tfc1. .oration or this duty v;v rise to liebilif' for :r.;;\vrv. A--.-,,:-r: iLSr.rq t _r.c.: i 7 - ,, - r - Dorai fy. find ir/c that rh'V. e kv.o-.,..l =_ __ ; c m saviour .. _ t .i c.?r<*v c r* ,m U^.e '. rv* mWC.*< d* -` muo u car'.car then ranv i?^ i m f 1 * as .'.id Serai tn c r y c a s e 1; oo c c u r r among contrnqur.: .ittorr.!*-? bec au rs> ~ V*"' . 7*T *' 'no.rtuptty to * suits * rr~.y c **'. u r. '..........- . J - .'i..*ce carriers in etre-un. ; r where aeriens g a i n s r : . r p i s i::c; i '2 ' s employee might ba b err: bT. the rur. ' - tsmpau s t : o n m"atv.: es. Grot.;'j of p l a i n t i f f _.c. y 'Ce.:; be stanJ .i\.c.ce C.L1'-- ,--*/ c-vara. t y r i c i - i y are .:er;i<2iv .s. 'The potential f o r e : to the liciguri n r a t t o r n e y s i s c o n i c u r . They already h a V a , j( rh cm *a lv * j <5 j r1`"" fio-''! 1 inas to effecr_. CU9 awqUlnia Board of Directors, AIA Asso. -2- March 24, 1976 greater efficiencies and to save time and expense in the preparation of their cases. Unless some way can be found to make these ventures less profitable, the number of cases will continue to grow; and the trend will become more difficult to reverse. Up to the present time, defense attorneys have made only h a l f -hearted efforts to coordinate their responses. Local attorneys for insurance companies frequently have handled the defence with a concern only for the instant case and r.o regard for the long-range implications of the growing number of similar cases being brought across the country. Tne quality of the defenses offered often has been mediocre or poor and, as a consequence, some unfortunate precedents have been set. Because these precedents later may affect any asbestos manufacturer, each such manufacturer has a significant interest in the results or every suit, whether or not he is named a defendant. It is true that a majority of cases to date have involved insulation materials, but' there is no practical' 'or legal reason why the same k i n d of ' action cannot be brought with respect to the sale and use of any product containing asbestos. At first impression, it w o u l d seetnr then, that the desirability of a higher quality coordinated defense by industry is obvious. ' At this time there appears to be a disposition on the part of several companies-,', .encouraged no doubt by their insurance carriers, to settle cases singly or in groups .-- Payments being offered in this effort are in the general order of $50,000 per plaintiff, and the companies settling assert that they are "looking for a good case in another circuit to create a conflict with Borel." While it is logical and proper to seek a strong case for appeal .on the "state of the medical art" issue (vhen should industry have known of the hazards of asbestos), there is something co be said for a strategy of litigating at the trial court level all or nearly all cases of this type. My concern vitin settlement approach is that $50,000 per plaintiff is an ztz .'zczi: - -j -- -- -s**y a*- ,'.'.'-. ao i.v ,i earn $2-5, QC0 ;,r more on a contingent tee basis at no more cost tino and effort tnan the. preparation -.ad serving of a complaint and th: o rto .oriti-J-o anu ~ -.i.-- .:. -C .s.-.-.-Vw -- * seems to me obvious that there is here the potential for severe damage co the asbestos industry. Another factor which also might be taken into^account is the possibility that the law may develop in a way which Could 143746 Board of Directors, AIA Asso. -3- March 24 , 1976 impose liability for damages, and even criminal liability, upon asbestos industry corporate officers and other responsible management personnel for failing to use their authbrirv -'o see that the employees of customers were adequately varnc-.." .. recent United States Supreme Court case, United States v. Join R. P a r k e r , 95 S. Ct. 1903 (1975) imposed criminal sanctions upon the chief executive officer of a retail food chain for failing to use his authority to assure that food handled bv hdcompany did not become contaminated. The same rationale-, f^r individual liability could be used in the asbestos situation. It is my impression that one reason why several corpora'. defendants are "waiting for the right case" to re-litigate -y.c Borel issues; is that we really are not preoared, even cod'/, properly to present the "state*of the medical art" issue. The history of the development of cur knowledge of the health hazards of asbestos is contained in literally hundreds of scientific papers, some of which may be written in foreign languages. This voluminous body of literature has yet to be analyzed systematically. It should be reviewed critically, each paper should be summarized to indicate what it does and what it does not prove, and a chronol ogy of the evolution of our understanding of asbestos and health- should be developed. Ideally, then, a scientist of national * stature should prepare a paper which describes and evaluates each major step in the development of this body., of knowledge. If. we ' could find a man, preferably one having n o 'connecti6n'with the . asbestos industry, to write and publish a paper ,of this, kiind; the . document thereafter might constitute a useful-'-item to be introduced into-e-vidence at trial, even if the author should not be available to testify. But even if we are unable to encourage the preparation of a scholarly paper on asbestos and health, we should arrange for the review and analysis of the literature, perhaps by a medical student; and the chronology thus developed should be studied thoroughly by a qualified attorney. Finally, we need to identify and have available expert witnesses who can testify to the state of the medical art. I do not belie/a that any of these thing: have yet been d o n 2 or, at .least, done adequately. Or the four attorney when I interviewed, I was very : r ' : : bly. impressed by three. '-.:eee three dll were intelligent ar.i <eil-trained, and al.1 had had significant exposure to the asbas:: . health issue. Any one of them would be qualified to develop coordinate 'an industry dafansa -.v.-h.st lorel theory cases. It:, had interesting ideas to contribute. Two were members of large law firms and one a member of a s m a l l 1f irra. None of then Tiere inva.'at"2'i hi savarint ti.sir ncrnecticnr wlrh their firms; all interested in the assignment which I discussed but wanted their law firms to be retained in the matter. There appeared t o be little difference among the estimates of costs which each gave to 143747 Board of Directors, AIA Asso. -4- March 24, 1976 me; Che small firm was no .less expensive chan',`:he large. With difficulty, I finally have made a personal choice, largely sub jective, among the three. If AIA enters upon this ptogram, I propose Chat we use Wendell B. Alcorn, Jr. of Che New Yor k office of Citdvalader, Wickersham and Taft. For your -Information., I attach hereto a memorandum sent to me by Alcorn. Because I believe that Che growing number of Bore! theory cases presents a se-ious threat to the asbestos Indusr.r-', I recommend that AIA retain Wendell B Alcorn, Jr. of C a d v a l a d e r , Wickersham and Taft as special counsel to the Association to ' i * _ ____ r ____ __ j _____ _______ \ ____ . * i ^ . acv z.s2 members and non-members alike cn the defense of t"t.e casas I .prop.ose chat Alcorn's w ork be supervised by a me.;: standing* commit^ then efl, ^cao 1ll1 e d/-} perhapsp the TLeg^ al1 rC*ummitt'ee, o fJ >C.1he Board of Directors; and that the Association fund the cost of caking the following steps: * 1. Review and analysis by counsel of all past an d current ' cases pertaining to asbestos and health, the pleadings filed, issues raised, defenses offered, holdings as to law and fact, . results of appeal, damages awarded, settlements reached, etc. Al'l- this information might be entered into th Cadwalader computer fpr facility of retrieval in the months ahead. ? 2. Preparation, perhaps by a medical student, of a chronology of the development of our knowledge of asbestos disease. It may be appropriate to do this work at the offices of the IOEHC in ` Montreal. _ `3. Opinion of counsel concerning strengths and weaknesses of the industry position in Borel type cases, and a recommendation of an industry strategy or strategies to be followed. 4. Development by counsel of standard forms of pleadings to be offered by defendants on those issues which are common to all cases of this type, interviews by counsel of prospective expert witnesses on the state of the medical art issue, ^_and prepara tion by counsel of a file of materials which might be of gener?! utility as documentary evidence in Borel type cases. . The cost of completing aLl the above steps might b e $50.033 'the cost of .settling one Borel theory a ) . If . hove at ar.v step in the process. Che AIA were to i_ c t t ch.-c program was not worth pursuing, it could be t a r m a c a:', -c chat time, with no further costs incurred. find After she-.barks step a had been taken, I vault andaocor ' reuucabia radical scholar to embody in a published trea ti.) - a critical evaluation of the development of medical knowledge concernir..- the c::T; ers of aveostes and health. in anv ey^nt, ! AIA then would publicize to \he industry that i: had aval .ante use by any company, experienced spetial counsel, prepared and equipped :o advise c o m c r a t e attorneys and locsi trial coiunsel on 143748 Board of Directors,. AIA Asso. -5- March 24, 1976 defenses Cto Borel theory cases. Individual companies 'v.vuld be billed for the ^services of the special counsel wher.ov-. him, but use of this attorney by corporate defendants them moneyy on balance, because their cun attorneys wou ld have j stjrv-.rl a I n t lLeasss t i m ae on t h ae rp ; <^!pps TThhao, rmnc hr *"*rn> t-k < ;/ j -- k asoestC's/haalth issue. A.lltthhoouuggh the role of special counsel would be cast in passive form (he would be on call to assist defendant carpers who ask for his h e l p ) , the ; isociaticn actively should encoua his use, and he should endeaver dapLomatically to contact both" counsel for defendant companies and their insurance companies to urge support for and adherence to any industry-wide strategy w h i c h "may be developed. If step #3 above indicates the wisd om of an aggressive defense (force p l a i n t i f f s 1''counsel to t r y every case so that the undertaking is less profitable to them) , the . most difficult part of our program may be to persuade companies . in the industry and their insurors to resist the temptation to settle. Someone must express to them the opinion that settlement only encourages further actions at law, pays, for .the. cos t of ' subsequent suits, and may open the floodgates of personal injury litigation. While settlement of current cases may look attractive to the i n s u r o r s , the aggregate of such settlements in th e future could amount to hundreds of millions of dollars and become a virtual disaster for them and companies in our industry as well. GGG '.ss 143749