Document pe2abRkZpzNpXXRV8k8Nervnw

cowipgrriAt ad wtmuGip nrourrt oc--puicatiou A Febmary 3, 198!' Hr. i. H. Atilason. Croup Solicit t Turner a jmi'ii lid, Asbeetoa Sous* Fountain 9tr**t Manchester 2, Kngland tear Nr. Atkinson: I rlt* in r*opona* to tout letter of January 24, 1989, I so sur* that you can arrreclat* that our lnt*r*at In tto labeling of aabaatoa fiber la prmanly social and bunsD* rathar than lags], Bo- ever, I shall sat forth th* salient legal considerations In our present thinking. At the l should elate that toe decision to label or Isprlnt th* bags containing th* fibers has to date only been sade with respect to shipments to buyers situated In Canada or the 0.8,A, For th* present, I as going to confine eyaelf to th* lava of tbo latter. Arta*>Jtvn1i1' Th* pwepasAss! part of our fiber sold to buyers In the O.S.A. le elned la Canada (although mom la elaed la th* O.S.A.). Order* for such Canadian fiber are solicited bar* by Jobna-Sanvlll* Salsa Ccroorttlon. t jjsiisar* corporation, and are forwarder lor acceptance or rejection by a Canadian J-M corporation in Canada. Thus, title to any of such Canadian fiber sold to buyer* le th* O.S.A. Is transferred la Canada. However, chile vs would vigorously contest such an approach, vs feel that a eubetantlal poaelblllty evicts that the te-rlcsn courts sight take jurisdiction and apply "O.S.A. !'' iu >.Ui> wrought by * 0.8.A. cltlaen for injury sustained by eucb a citizen in the O.S.A. ebll* working with or being exposed to asbestos fiber In the O.S.A, The distinct possibility that the courts will assert jurledletlon over a O.S.A. J-K corporation through a "piercing of tbs corporate veil" oust be rscconlzed. (Of oouree, fiber alned in the O.S.A. elnply pr#**at* an fortiori problne.) Further,'It Indeed lies within th* reals of realistic legal coateeplatloo that in deterelalag the applicable lav, the American courts would not be governed by technical considerations of where title passed but rather would resort to th* la* of ouo of our 80 atat**, dependlug upou wfaleh state's law tbs courts dasued applicable under conflict of lass rules. Thu law that would be rulswunt say well very aoaevhat fro* state to state and eo ** onn only approach it for purpoonn of thin dincussion In tarns of gansralltlaa, Throughout the V.9.A. (on a stats by state bails) th law in thla aroa la prasantly undergoing a significant and rapid cheep: and wo atand today In tbs aldat of tba development of now loyal concepts. Traditionally, two linos of logs] thought would bo applicable to tho questions of tbo liability of a "aanufacturor' (using that tars broadly) of asbestos fiber to various parsons for daaages sustained by thea through tho Inhalation of such flbors. These are the law of tort and tbs law of contract. Until 1616 both of these approaches were generally United by the requlrsaents of privity, wblch encoopaseed botb horizontal and vertical relationships. The Initial concept horizontally was tbat only the purchaser (and not others, such as members of the purchaser's family, otbsr conteaplated users or unforeseen bystanders) could sue. The vortical concept was tbat tbe purchaser could only sue the party with respect to which tbe purchaser stood In a relationship of lamwdlit* privity. In 1616 the Court of Appeals of tbe State of New fork ellnlnated tbe privity concept wltb respect to tbe vertical rolationehlp In the landmark case of MacPberaop vs. Pul:!-. 317 N.7. 3u2. That Is, t*w CuUI l dsterained that a purchaser of an autoaoblle could sua tbe aacufacturer thereof In tort for negligence even though the purchaser was not in privity wltb tbe manufacturer because he bought tbe autouoblle froo a dealer. This was tbe beginning. Subsequent decisions have generally ellolnated the horizontal privity requirements so that anyone. wn * h-vtardw* to* :5**.*iVi*.e<! user at the product, can now sue tow manufacturer for injuries sustained as a result of the manufacturer'a negligence in the production of the product. The concept of production horn Includes the packaging and tbe failure to warn of hazards known to the producer. Tbe lew of tort throughout tho U.".A. 1" tts^y p- the verge of going even further, it is approaching tbe idea of Imposing strict manu facturer's liability (l.e. without regard to negligence) for the bene fit of all parties who could reasonably be contemplated by tbe manu facturer as usera of tho product. There is even some advocation of extending thin approach to cover unforeseen victims, l.e. persons net conteaplated by tbe manufacturer. I am enclosing n photocopy of Snc. 40S A of tbo current Aaarlcan Low Institute's ftestatenant of Torts. Vblle this particular paragraph say not be applicable to asbestos' fiber fee various reasons, which will be apparent to you ebon you read it and tbe comments tbernto. It Is an indication of tbo prooont logal thinking of tho logs] Intelligentsia. In this connection, I should like to point out to you tbat the "leatatement" title la something of a misnomer an it la largely an original statement. The "Keatatsmsnt" Is prepared by a committee of loading legal mcbolaro. Judges and practitioners and expostulates what they think the las should ba. It Is in no say binding upon tbe eomrta of tho various states In the sense of stare deplete, lowever, oast of the ties Its recommendations nr# gradually adopted-Jurisdiction by Jurisdiction. Tho continuance of the trend ef Imposing strict liability in tort upon the nanufacturmr for the benefit of an over expanding auober of parsons is thus mors than a Mr* speculative possibility. A comparable trend is evident in a las of contract. Just as the re quirement of vertical privity eas eliminated In tort In MacHisrson vs. Met supra. tbs requirement of privity of contract has been ellalnatsel in the vary rscsnt case of Ksssab vs. Central Soya, (Sup. Ct. of Penna., Oct. 11, IMS), at lease Insofar as tbs dtate of Pennsylvania Is concerned. The Suprena Court of Pennsylvania, of course, speaks only for Pennsylvania, but Pennsylvania, like Hew York, Is a 1sh*- stats in tbs development of commercial las and tne courts of less Industrialised states generally follow tbs lead of tbelr sore advanced sister states. Through the approach of coupling the lapomltlrn of an loplled warranty of aercbantabillty (non-defectlveness) upon the sale of a product with the destruction of the requirement of vertical privity, the courts can approach the strict liability of the manu facturer lnpoeed In tort because tbe warranty of merchantability can be breached without regard to negligence on the part of tbs sanufactursr. Tbe possibility of horizontal expansion of this doctrine Is evidenced by Sec. 2-318 of the On1fora Commercial Code wblcb pro vides as follows: "2-318. Third Party Beneficiaries of Warranties Fxpress or Implied. A seller's warranty whether express or implied extends to any natural person who Is in the family vr ViuvwhoVi i{ '-`.s Vittr ar 'tc Vs i ruvvt in nose it it is reasonable to expect tnat suen oersoa may use, consume or be affected by the goods and who Is Injured In person by breach of the warranty. A sailer nay not exclude or limit the operation of this section." Obviously, this section does not encompass all persons Injured beca.se of defects In the product; but it, too, evidences a trend towards the elimination of the privity requirement on the horizontal level. Perhaps 1 should explain that the Uniform Commercial Code Is statutory In nature and governs, among other things, the law of sales. It has been enacted (with only minor variations) by individual state legisla tures on a state-by-state basis throughout the On 1ted States In every stats buy Louisiana (having, incidentally, been Initially enacted by the State of Pennsylvania), Thus, while the Code Is not a federal statute, Its general atate-by-state enactment gives It almost the same effect. I am enclosing a photocopy of the opinion of the Court in lassab vs. Central Soya, supra. Is summation, we feel that eshetantlal risk sxlsts that a "manufacturer of asbostom fiber mill be held liable to partloe ebo are injured as a result of the inhalatloa of theme fibers, ebethmr those parties arm purchasers of the flbor, omployoos of such purchasers or eatlro etrangsrs unloss that sasufnetursr earns of risks ksown to It. Statod iffirnatlvely, on the present state of nedlcal kssxlcdge there ay today exist a legal duty to earn against the recognized dangers of Inhalation of asbestos fiber In significant dosages over longer periods of tine. A failure to so act sight con stitute negligence and a plaintiff would not have to concern hlaself elth tn- cn-c-pt cf strict tort liability, or tne law of warranty or the concept of privity. However, these concepts night lead to even greater exposure to liability tnan would obtain under the concept of negligence. It Is with all this In nlnd that we have determined to label or Inprint all shlpnents of fiber to purchasers within the U.S.A. or Canada. I have on order and shall send yon within 20 days or so certain scholarly articles which deal sore extensively with the problens that I havs touched upon herein. If you have any queetlons of a epeclflc nature, do not heeltate to call upon ne further. Of course, you undsrstand that this letter la -tlcien to you In the strictest piolssslonnl confidence. Very trulv yours.