Document jm2avy46x11VEBXp3aEbZz0Y2

t 'X . f *V - B V V i f :O t $: -`jtesTBs. MTowey*, /tvUorfG* BV lV - t* ( QA ULi A| /* ^ US^J-C- A-^* C-^- ASBESTOS TEXTILE INSTITUTE AD HOC COMMITTEE MEETING . JUNE 3, 1976 Ua-A prev/.fo^yjj I (fl T * i ~t,, i^UL ATI. %t a V-o s4r) 'tC-t 1^ \ IV) < oe\i* v> i+x`."?A^_. *rC^-, - O: . AS3ESTCS TACTILE INSTITUTE AD HOC COMI-UTTEE MEETING I June 3, 1976 Stouffer'is National Canter Inn, Arlington, Virginia Chairman: Vice Chairman: D. E. Markusson, Esq., Johns-Hanvi11e Corporation E. C. 2ratt, Southarn Asbestos Company IN ATTENDANCES . Amatex Corporation --- M. J. Scanian Asarco Inc. -- R. J. Muth.- E3q. Garlock Inc. -- A. Kuzmuk Nippon Asbestos Co. Ltd. -- S. Shir.ia Raybestos-IIanhattan, Inc. -- C. D. Colson; P. G. Dolan, V7. A. Guenther, Esq.; C. A. Kennedy; M. Q. Scowcroft Southern Asbestos Company -- E. C. Dratt T3A Industrial Products Ltd. -- H. J. Corson ' T7. 3. Alcorn, Jr., Esq., ATI Trial Counsel, -- Cadwalader, X/ickershan & Taft . D. H. Markusson, Esq, -- Johns-Manville Corporation D. H. Pagan, ATI Executive Secretary MINUTES JL. TYLER LITIGATION: No remarkable change in the Tyler Litigation is anticipated during the next 3-5 months and very little has happened with the case. ATI's posture remains unchanged. . Basically the situation can be summed up by saying that the court is remaining open for additional plaintiffs to join the lawsuit. Plaintiffs are still coming in and are being given a reasonable time for discovery. The court will not address the jurisdictional issues, including ATI's motion to dismiss, until all discovery is completed. As far as our request for a voluntary dismissal is concerned, plaintiffs' counsel will not decide until discovery is completed. 2. SHOUP LITIGATION* A complaint was filed in Inarch in Detroit, .Michigan, by William Carl Shoup against Johns-Manville Products Corporation, et al., including The Asbestos Textile Institute, a Pennsylvania corporation. more A Page 2 - Jlinutes of ATI Ad Hoc Committae Heating -- 6/3/76 a) Cf special interest is that this is tha first time ATI has been made a party in a litigation involving an insulation worker, as opposed to factory workers as is the case in the Tyler-Litigation. The Shoup action represents the first attempt to draw ATI, as a trade association, rather than a product manu facturer into user-type litigation. Hr. Alcorn was quite correct in filing a motion to dismiss -- and before the notion was heard he './as able to successfully negotiate a voluntary dismissal. The volunatary dismissal is "v/itheut prejudice,w which means that at any time until the Statute cf Limitations runs out, ATI can be rejoined as a party defendant. However, the likelihood of that happening is remote. The plaintiff has a number cf goed, solid, viable defendants who did supply insulation products and there is no question Hr. Shoup was e:cposod to those products. There is very little involvement that would warrant the rejoinder cf ATI or of any of tho trade associations. ' . b) Of interest are the allegations as to trade associations in a "user** case. The plaintiff acknowledges that: The organizations are trade associations} 3a ch is engaged in research and development and in tl\e collection, promulgation and dissemination of informa tion to its members, to users of its products and tc the public-at-large and ultimata consumers; The defendants are involved in the trade associations that, collectively, had knowledge for many years as to the hazards of the inhalation cf asbestos dust and thare wa3 a suppression or misrepresentation of that 'knowledge. The above is alternatively pleaded that either the trade associa tions engaged in a suppression of the knowledge of the hazard or they misrepresented the nature of the hazard. The other allega tion is that they did suppress or misrepresent tha knowledge but they did so in the form of a civil conspiracy with the other defendants. The civil conspiracy aspect is not too alarming because it is a difficult thing to prove. However, a charge of suppression or misrepresentation of knowledge is one of which trade associations must be cognizant and cn guard. Tho reason ing behind this statement is that since the companies are the source of the information for tho trade associations, the asso ciations become operational arms cf the companies. This might be construed that the members of the associations are liable in that they ware negligent in not doing enough investigation and in not pursuing tho leads indicated by medical literatura. more It -* It i, .* . : - . . , * . ( Page 3 - I-Iinutes or ATI Ad Hoc Committee Meeting -- 6/3/76 ' 5' . As a practical matter, however, the livelihood of that happening .. in the Cheap case is somewhat remote. It is difficult for the plaintiff tc prove and there is little pragmatic reason for him -- to-attempt tc do so. Ee already has plenty of defendants; why . vorxy about the trade associations. . c) .It is becoming increasingly clear how people are thinking in "user-type" cases -- and that is a collective organization of defendants suppressing or misrepresenting information and the duly-elected representatives in the trade associations being negligent in their duties of pursuing the information and of investigating it --- and that leads to such questions as: After a certain committee is formed and active, what did it do with the information it gathered? TIhy did it take or not take a par ticular course of action? It seems evident there will bo mere attempts to join trado associations v/ith "user-type" litigations. 2. A PRODUCT KIPOSUIiE LITI3ATICH: A case that went to trial in Louisville, Kentucky, is of interest in that it is the type of litigation that could more directly involve, if not a trado association such as ATI, at least its member companies. It is quite unlike the usual insulation case because it involves the use of a finished product that someone other than the original manufacturer (in this case, Jchns-I-bnville) had further fhbricat- ed or processed. The plaintiff had worked in a factory for some years, was eicposed to the product, contracted mesothelioma and, subsequently, died. * a) The case was triad by a jury. Counsel for the defendants proceeded with a state-of-the-art defense to indicate what knowledge was held by the companies at what point in time. The defendant lost the case but the verdict was very "small" -- $10,000 for a 51-year-old ruin for lest wages during time of illness and for pain and suffering and medical a:m>enses; and $80,000 to the widow for what should have been the remainder of the plaintiff* s lifetime. Workmen's Compensation totaled about $22,000. The outcome reflects a minimal liability cn the part of the primary manufacturer. b) In analyzing the case, two points become clear. It is eartrenely difficult to sell jurors on a state-of-the-art defense since they are net familiar with the situation nor with the literature. The problem is translating tc the year 1575 that working with asbestos was a hazard in factories in the United Kingdom in the 1920's. 7U.1 the literature tends to be effectively lumped together by the plaintiffs and there is little mere o .....o....................... Page 4 - Minutes of ATI Ad Hoc Committee Meeting -- 6/3/76 segregation of points in tine when the data became meaningful in the insulation trade -- v/hen there began to be an awareness of i bronchogenic cancer cr mesothelioma, ` c) A surprising fact was the sophisticated reasoning of the jury. They seemed to ash was it really reasonable to expect ' companies in the past to be concerned with thr health ha*.~rd -- nobody -s".s>-. w"-M . d> in-care sting reaction on the o\ the jiuo-rs was t.wc. c.>.:hou.ga tiv-.y were aware of workman.5 ora-pensavicn. they dir. f'.-y*. strongly that the employer* r*havi.r held 'i. >..*. They 3Li nor. feel the ^nployer should bo to*. .`.1/ absolved, but there was no way to hc_d him liable because .ri the structvre of the complaint. They felt there was somethi..v inherently unfair about an employee spending his entire woririu- life in a factory, ( _ becoming ill and dying as a result of conditions at the factory *pLo-c* -- and then a third party who did nothing cut supply raw --I f* materials was charged with the whole burden, especially whan the case boiled down to whether or not the manufacturer knew . cf a hazard and labeled his products accordingly. The jury was fairly well convinced that proper labeling would have had little -{ consequence, e) Factually the case shaped up rather well. Unfortunately, the jury had difficulty working with the instructions given it by the court. The instructions did not deal with labeling but with vhether cr not there was ]knowledge and if so there was an accompanying duty -- and there was failure to satisfy the duty, f) The decision is being appealed on the grounds that the . manufacturer defendant was successful in getting the court to submit an interrogatory to the jury which asked: Do you find frem the evidence that the defendant gave adequate' warning to the defendant*s employer? The jury*s answer was "yes," To clarify, there is a series of cases under Kontuc2cy law, primarily in the mining industry involving dynamite, that says: Warning to the employer is warning to the employee. This is not the rule in all jurisdictions but there is a growing body of lav/ leaning this way. If this is so in the Kentucky courts, it will sot up, based cn the evidence that there was an intervening cause by another party, to wit, the employer. This would absolve the manufacturer from liability. g) The results of the case have a bright side. The asbestos / < industry has a story to toll. It is a story that, whan told. more . * O 3 Tagc S - Minutes of ATI Ad 3oc Ccmittoe Ideating -- S/3/76 -I doesn't come out sounding half had. It is doubtful that anyone, absent a runaway jury, will he able to shew 'willful or wanton misconduct cn the part of the asbestos industry. When the information v/as put together and presented to the jury, no one on the jury said the asbestos industry had gone out of its way to hurt people. On the contrary, they felt there had be- in a responsible- effort by the industry. Unfortunately., run*-. cf tbav. vr:>- c_ ovV-k. was based on wrong inform ^ wn. Tho nsh^stj.' isdu-try ms propare r responsible, honest defense, cm ubrt annuli nol. L and to Lorrea-dous financial rep-.rrureionn, A *ZJ? u3 .-'"1 r.tT '^33 A Is of interest ir- the v-ross ris*- in >.-*.* V.^r.Ti-.y involving Zloybactcs-IInnhntto.r.. *s.n.y and *.fr Jr_-- mer employe os at Pascals. A taction ie pendinp to have the some certified a3 a class action and briefs have r-.:en filed in opposition. It i3 expected the class acticv. will bo denied and the case will proceed as a multiple plaintiff litigation. Informal meetings with the court indicate the defendant Canadian companies will be hold, in the case. Discovery is continuing and depositions cf sene of tho plaintiffs have been taken. The injuries thus far appear to be minimal and the case seems to be diminishing in proportion. 5. CCMPAUT DOCTCIIS: In the news recently have been reports of several cases in California involving company doctors. They involve Johns-IJanville plant contract physicians, i. e., private practitioners in the local community who have contracts with the company to provide limited time for pro-employment physicals, annual check-ups and minor medical problems. The situation arose from a case about two years ago where an employee sued the company doctor oh a straight malpractice complaint for failure on the part of the doctor to disclose to tho patient the nature of his pulmonary illness. The jury imposed about $385,000 on the doctor and the case v/as closed. Subsequently, six other employees have filed similar cases against tho doctor who, in turn, has impleaded Jchns-I-Innville on the grounds it v/as not his responsibility to disclose the information to the employee. a) There is another group of cases in California involving large punitive damage claims, where the employees have brought actions directly against Johns-Kanville and the doctor -- J-M on the theory cf gross, willful and wanton negligence; tho doctor on tho theory of malpractice. The effort is to try to got tho cases cut of the purview cf workmen's compensation; the general rule being that v/orkmen's compensation is a complete bar cn negligence but is not a complete bar if it is a willful action on tho part cf the employer. more i' .* * j . O` j Tago 5 -- Minutes of ATI Ad Hoc Coemittoo Meeting - 5/3/76 b) There has bean a great deal of union involvement in the eases and more of these types of occupational disease lav/suits are anticipated -- at least 20 or 30 in California alone. It would behoove employers to review with house counsel and the doctor e:nctly what are the ground rules in getting medical data from the doctor* s office either to the employee cr ,mo hie physician. Tlhat makes the situation awkverd is tLo* neculiarltj.ec nr a dcctor^-patient relationship. Cno way err anveher, the problems all filter through to tun doctor. C-S5A and twir:J .tepresenratives are well aware c.T: _b.c-. prr> 1^-r.: and realize ~S. tb.2 rituatr-on continues it will bec;.?;c- iu": cOo:'-iirly cif-Tier 11 to J-ad gned physicians willing c j"i?r thr liwldoo ccrr>c,,diaii.e. It is indeed a 3e::icu;i nrobl*a ,, A2 ready industry ar finding physicians reluctant tc bowonie compiey doctors and if a company is successful in Favoring one, V doctor wants full insurance coverage frzaa ~.X'i first dcllra:. To rake it even more' difficult, first dollar coverage is not avail able in the marketplace; it cannot be bought. 3. FINANCIAL FEPCBT: As of April 30, 1576, the cash balance on hand in tha Litigation Defense Fund totaled $3,757,91, From tint total, the following bills will be maid by tha end cf JUne 1975: ",, Tyler -- Hathaway; 10/15/75 thru 4/20/75 *= $1,599,00 * lyier -- Cadv/alader; First Quarter 1975 - 570,23 Shoup -- Itorr, Wattles and Eussoll * 1,549,09 ' Shcup -- Cadwaladar, Wickersham & Taft *= 927.59 $4,745.95 Based on the above known disbursements, the errpected cash balance at June 30, 1975, will bo $4,011,95, deemed by the Committee to be sufficient through the end of this Fiscal Year. Tha Financial Deport as of April 30, 1976, is attached to these Minutes as Attachment I, 7. FUTURE MEETINGS: It was agreed that although a low profile is being maintained in the Tyler Litigation, it would bo helpful to all Committee members to continue to meet at least twice a year. Doing so would enable all members to keep abreast of other litigations that are concerned with asbestos. It was decided that when there are sufficient data cf interest to ATI member companies, the Chairman of the Ad Hoc Committee will call a meeting. B. ALA/NA LEGAL ADVISORY COMMITTEE: The Board of Directors of the / i Asbestos Information Association/Horth America has approved tha mere.. Page 7 O - '` ~) ' Einutes of ATI Ad Hoc Ccrraittoa Hooting " "S/3/7 S establishment cf a Legal Advise inf Censaitteo that will employ ccunsol to address the broad spectrum cf the various typos of currant asbestos litigation. This will plac^ AZA/lA in position to fumirh valuable data to its moobar ccsr.panlee and thor.r manage ments and to servn as an r information'' liaision wiuh locrl counsel in an effort to provide sene "legal assistance. ~>o Legal Advisory Committee will offer same degree cf collaboration in the polling together of nodical infemotion and of analyses of parti "art legal precedents in the field of product liability a) The Crrj.t^o vii.1 he chaired by <, G. Gebriulcnn, Cr. Chairmen cf Micolor, Inc* Comittoa 'ierbers will arcing: P. It. r-ier.^ness. Hremotive Director of AIb/2h~r r. ~L lierizirsPO-v Psq.. of ronas-hanville Cc-rporaticn; 17. A. Guenther. sq. Core tary of Paybestos-^anhattan, In_v ? Kurt Pontz, Ik r. cf Coifainfr Crrparation; C. Wilson, Esq,, of Jin Whiter Gcooratior.? ana representative of the snail member connaries. ' b) Part cf the scope cf the Committee's initial discussions will be the area of cooperation, primarily agreement amongst insurance carriers as to who will handle a given segment of a product liability lawsuit. c) Via a comment from the floor, the hope was expressed that the Committee could help toward forming a positive approach that would assist in avoiding the hind cf devisive battling that is going on in tho machine tool industry -- where machine tool manufacturers are being pitted against their customers. Perhaps the problem could be resolved by mahing workmen's compensation the principal avenue cf recourse and having seller and user cooperate in limiting common law liability cf all kinds outside workmen* s compensation. d) There is activity afoot as to suggesting some alternative remedies for third party lav/suits -- a legislative solution. If that germinates, it is something to which the A3A/11A Committoo could address itself. It is a matter that cannot be resolved in the courts but must bo settled in Congress. ->. AIXTCUHiCIENT: There being no further items to bo discussed by the ATI Ad Hoc Committee, the meeting was adjourned at 3:15 p.m. Respectfully submitted, Oli *Jy%WasrtS Doris II. Fagan, ^ Executive Secretary Asbestos textile institute LITIGATION DEFENSE FUND ;' ' ,,1 ' ESTABLISHED :' APRIL 2, 1974 . . PERIOD: JANUARY 1, 1976, THRU APRIL 30, 1976 -- FISCAL YEAR 1975-76 BALANCE DN HAND - January 1, 1976 ....................................................... $ 9.,364.96 RECEIPTS: . .. 2/13/76 - Bank Service Charge/Waived ... $ .96 3/25/76 - Bank Service Charge/Waived ... .46 ' 3/31/76 -- Interest on Savings ........................... 116.02 TOTAL RECEIPTS.......................................................................'. .. + 117.44 - $ 9,482.40 DISBURSEMENTS: 1/30/76 - Bank Service Charge............................$ ` .96 2/23/76 - Cadwalader, `Wickersham & Taft -- 4th Quarter 1975 ............................ 646.56 2/ 2/76 -- Bank Service Charge ............................ 4/ 6/76 - C. R. Stober/Sundry Services re DMF Affidavit in Shoup Case . . .46 % 15.18 4/30/76 - Office Expenses - 12/75-4/76 . . 61.33 TOTAL DISBURSEMENTS . . .................................................................-$ 724.49 BALANCE ON HAND - APRIL 30, 1976 ................................. $ 8,757.91* Checking Account: $ 3DO.47