Petition — Raymark Industries, Inc. v. Clay

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838-1774 FILED

APR 24 1984

No. ALEXANDER L. STEVAS

rts

In the Supreme Court of the United States

October Term, 1983

RAYMARK INDUSTRIES, INC.,

Petitioner,

VS.

JOHN ED CLAY AND WiFE, MARIE CLAY, AND

CURTIS T. BAILEY AND WIFE, EFFIE BAILEY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Dona_p F. PAINE

(Counsel of Record)

Dwicut E. TARWATER

500 First American Center

P.O. Box 2047

Knoxville, Tennessee 37901

(615) 546-0500

Counsel for Petitioner

Of Counsel:

EGERTON, McAFEE, ARMISTEAD

& Davis, P.C.

E. L. Mumrpsnnaty, Inc. 26 Cherry Street, Kansas City, Mo. 64106, (816) 421-8080

QUESTIONS PRESENTED

1. What is a “predecessor in interest” under Fed. R. Evid.

804(b) (1)? .

2. May a Circuit Court decide an issue expressly with-

drawn by appellant without a hearing?

3. May a federal court, in the exercise of diversity juris-

diction, adhere to its Erie educated guess after con-

flicting state decision?

LIST OF PARTIES

Petitioner Raymark Industries, Inc. was incorporated

under Connecticut law on April 30, 1982, and on June 28,

1982 acquired the assets of Raybestos-Manhattan, Inc., de-

fendant in the District Court. For clarity and convenience,

this entity will be referred to as “Raymark.” Raymark and

co-defendant Johns-Manville Sales Corporation, received

jury verdicts in their favor and were-appellees in the

Sixth Circuit. The appeal as to Johns-Manville was stayed

due to its filing for reorganization under Chapter 11 of the

Bankruptcy Act of 1979, 11 U.S.C. §1101, et seq. Supp. III

1979. Respondents John Ed Clay and wife, Marie Clay,

and Curtis T. Bailey and wife, Effie Bailey, were plaintiffs

in the District Court and appellants in the Sixth Circuit.

Raymark Industries, Inc., is a wholly-owned sub-

sidiary of Raymark Corporation. Raymark Industries,

Inc., is affiliated in joint ventures with Daikin-R/M Co.,

Ltd., and Itapso, S.A. de CV.

QUESTIONS PRESENTED

LIST OF PARTIES

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

TABLE OF CONTENTS

CONSTITUTIONAL PROVISIONS, STATUTES AND

RULES INVOLVED

STATEMENT OF THE CASE

Introduction

Deposition of Dr. Kenneth Wallace Smith ........

Tennessee’s Ten-Year Statute of Repose and

the Asbestos Amendment

1. Accrual During Gap ....

2. Murphree and the Vested Rights Doctrine

REASONS FOR GRANTING THE WRIT ....................

A. The Opinion of the Sixth Circuit Has Read

the “Predecessor in Interest” Test Out of Fed.

R. Evid. 804(b)(1) in Contravention of the

Clear Congressional Mandate, Contributing to

the Conflicts Among the Circuit Courts and

District Courts, and Has So Far Departed

From the Accepted and Usual Course of Judi-

cial Proceedings As to Call for an Exercise of

This Court’s Power of Supervision ..................

This Court Should Exercise Its Supervisory

Powers to Determine Whether a Circuit Court

May Decide an Issue Expressly Withdrawn by

Appellant in a Civil Case Without a Hearing

ab oe a OM

wow Ww de

C. The Opinion of the Sixth Circuit As to Tennes-

see’s Vested Rights Doctrine, Rendered in

Arrogant Disregard of Erie, Will Have a Sub-

stantial Impact on the Allocation of Scarce

Judicial Resources, and Will So Seriously Im-

pair the Administration of Justice As to Re-

quire the Exercise of This Court’s Supervisory

Powers. This Is an “Exceptional” Diversity

Case 2 21

on 8 RRC ee A iste Bean as SRR tan 25

APPENDIX i Al

A. Order of the Court of Appeals for the Sixth

Circuit Re Petition for Rehearing (January

26, 1984) Al

Opinion of the Court of Appeals for the Sixth

Circuit (December 7, 1983) A3

B. Judgment of the United States District Court

(October 6, 1980) Al8

Opinion of the United States District Court

Re Motion for New Trial (October 7, 1980)

Alg

Constitution, Statutes, and Rules ........................ A23

Cases A28

Deposition of Dr. Kenneth Wallace Smith ... A42

Excerpt From Petition for Rehearing in the

United States Court of Appeals for the Sixth

Circuit A91

amo A

TABLE OF AUTHORITIES

Cases

Anderson v. Memphis Housing Authority, 534 S.W.2d

125 (Tenn. App. 1975) 8, 10

Baker v. Carr, 369 U.S. 186 (1962) 19

Bernhardt v. Polygraphic Co., 350 U.S. 198 (1956) ... 22

Blank v. Olsen, 662 S.W.2d 324 (Tenn. 1983) ........8, 11,23

Britt v. Fincher, 202 Ga. 661, 44 S.E.2d 372 (1947) ... 17

Buckner v. GAF Corp., No. 80-5329 (6th Cir. May 11,

1981) 7

California v. LaRue, 409 U.S. 109, reh’g denied 410 US.

acs whi 18

Collier v. Memphis Light, Gas & Water Div., 657 S. W. 2d

771 (Tenn. App.), perm. to app. denied (1983) —..8, 10, 12,

_ 22, 23

County of Allegheny v. Frank Mashuda Co., 360 U.S.

185 (1959) 18

Creamer v. General Teamsters Local Union 326, 560 F.

Supp. 495 (D. Del. 1983) 20

DeLuryea v. Winthrop Laboratories, 697 F.2d 222 (8th

Cir.), reh’g and reh’g en banc denied (1983) .......... . 20

DeRocco v. Forty-Eight Insulation, Inc., Court of Com-

mon Pleas of Allegheny County, Pennsylvania, Civil

Division No. 2880 (July Term 1974) 4,5

Durst v. United States, 434 U.S. 542 (1978) . 18

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) ................ passim

Gates Rubber Company v. USM Corporation, 508 F.2d

603 (7th Cir. 1975) 22

Girdner v. Stephens, 48 Tenn. 280 (1870) -................. 8,9

Goodloe v. Goodloe, 116 Tenn. 252, 92 S.W. 767 (1905) 7

Harrison v. Schrader, 569 S.W.2d 822 (Tenn. 1978) 24

Huddleston v. Dwyer, 322 U.S. 232 (1944) ................... 21

Johnson v. Hamilton County, Tenn. App. ES. (May

13, 1983) 8, 10

Lloyd v. American Export Lines, Inc., 580 F.2d 1179

(3d Cir. 1978), cert. denied 439 U.S. 969 —.............. 15, 16

McCroskey v. Bryant Air Conditioning Co., 524 S.W.2d

487 (Tenn. 1975) 7

State ex rel. McWilliams v. Little River Drainage Dis-

trict, 269 Mo. 444, 190 S.W. 897 (1916) 17

Mathis v. Eli Lilly & Co., 719 F.2d 134 (6th Cir. 1983) 7

Morris v. Gross, 572 S.W.2d 902 (Tenn. 1976) -........... 8

Murphree v. Raybestos-Manhattan, Inc., 696 F.2d 459

(6th Cir. 1982), reh’g and reh’g en banc denied

(1983) 9, 10, 12, 24

Norton v. Mathews, 427 U.S. 524 (1976) 18

In the Matter of Paducah Towing Company, Inc., 692

F.2d 412 (6th Cir. 1982) 20

Patsy v. Board of Regents of State of Florida, 457 U.S.

496 (1982) 18

In re Screws Antitrust Litigation, 526 F. Supp. 1316

(D. Mass. 1981) 20

State Land Board v. Corvallis Sand & Gravel Co., 429

US. 363 (1977) 18

United States v. Monico, 702 F.2d 860 (11th Cir. 1983) 20

United States v. Nixon, 418 U.S. 683 (1974) —................ 19

United States v. Pizarro, 717 F.2d 336 (7th Cir.), reh’g

denied (1983)

United States v. Poland, 659 F.2d 884 (9th Cir. 1981) -..

Watts v. Putnam County, 525 S.W.2d 488 (Tenn. 1975)

ie v. American Telephone & si eae Co., 311 U.S.

223 (1940)

Wynne’s Lessee v. Wynne, 32 Tenn. 405 (1852) ............

Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Ltd.,

505 F. Supp. 1190 (E.D. Pa. 1980), rev’d on other

grounds sub nom. In re Japanese Elec. Prod. Anti-

trust Litigation, 723 F.2d 238 (3d Cir. 1983) -........... 16, 20

Constitution, Statutes, and Rules

Tenn. Const. art. I, §20 2,8

U.S. Const. art. ITI, §2, cl. 1 2,19

U.S. Const. Tenth Am. 2

28 U.S.C. §1254(1) 2

28 U.S.C. §1652 2

BO ere) OO TOD acicricaciicciccsectisennceresvcniers 3

Tenn. Code Ann. $19-26-116 24

Tenn. Code Ann. §28-3-202 —.................. 24

Tenn. Code Ann. §§29-28-101, et seq. 6

Tenn. Code Ann. §29-28-103 (a) .. 2,6

Tenn. Code Ann. §29-28-103(b) 2,6

Fed. R. App. P. 28(j) 2 2, 18, 20

Fed. R. App. P. 34(a) 2, 19, 20

Fed. R. Evid. 804(b) (1) passim

Tenn. Sup. Ct. Rule 4 11

U.S. Sup. Ct. R. 28.4(c) ear at

Other Authorities

ABA Section of Litigation, Emerging Problems Under

the Federal Rules of Evidence (1983) 16

C. Wright, Federal Courts (3d ed. 1976) 22

D. Binder, Hearsay Handbook (2d ed. 1983) ................15-16

Graham, Federal Evidence (1981) 14, 15

S. Saltzburg and R. Redden, Federal Rules of Evidence

Manual (3d ed. 1982) 15

1974 U.S. Code Cong. & Admin. News 7074 .................... 13

1974 U.S. Code Cong. & Admin. News 7088 .............. 13

No.

In the Supreme Court of the United States

October Term, 1983

RAYMARK INDUSTRIES, INC.,

Petitioner,

vs.

JOHN ED CLAY AND WIFE, MARIE CLAY, AND

CURTIS T. BAILEY AND WIFE, EFFIE BAILEY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

OPINIONS BELOW

The Sixth Circuit’s opinion is reported at 722 F.2d

1289, was decided and filed on December 7, 1983, and is

annexed as Appendix A, p. A3. The Sixth Circuit’s order

on rehearing is not officially reported, was filed on Jan-

uary 26, 1984, and is annexed as part of Appendix A, p. Al.

The Judgment of the United States District Court for the

Eastern District of Tennessee was entered on October 6,

1980, after the return of a jury verdict in favor of Raymark

and Johns-Manville, and is annexed as part of Appendix

B, p. Al8. The opinion of the District Court overruling

plaintiffs’ Motion for a New Trial is not officially reported,

was entered on October 7, 1980, a

Appendix B, p. Al2.

JURISDICTION

The judgment of the Sixth Circuit was entered on

December 7, 1983. Appendix A, p. A3. On January 26,

1984, Raymark’s petition for rehearing was denied. Appen-

dix A, p. Al. The jurisdiction of this Court is invoked

pursuant to 28 U.S.C. §1254(1).

CONSTITUTIONAL PROVISIONS, STATUTES

AND RULES INVOLVED

This case involves the admissibility of prior testimony

and the “predecessor in interest” test under Fed. R. Evid.

804(b) (1). Counsel for the Clays and Baileys withdrew

this issue during oral argument before the Sixth Circuit.

The Sixth Circuit decided the issue anyway without a

hearing or the filing of supplemental briefs. Raymark

asked for a hearing. This request was denied. This issue

accordingly involves Fed. R. Evid. 804(b) (1), Fed. R. App.

P. 28(j), Fed. R. App. P. 34(a), and U.S. Const. art. III,

§2, cl. 1.

This case also involves the doctrine of Erie R. Co. v.

Tompkins, 304 U.S. 64 (1938) as it relates to the validity

of a Tennessee statute under the Tennessee Constitution.

The Tennessee statutes involved are the 10-year statute

of repose in products actions at T.C.A. §29-28-103(a) and

its “asbestos amendment” at T.C.A. §29-28-103(b). The

Tennessee Constitutional provision involved is the proscrip-

tion of retrospective laws at Tenn. Const. art. I, §20. The

Erie issue necessarily involves the Tenth Amendment to

the United States Constitution, the Diversity Clause of

Article ITI of the United States Constitution, and the Rules

of Decision Act, 28 U.S.C. $1652.

The Constitutional provisions, statutes and rules in-

volved are reproduced in Appendix C, p. A23.

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As the constitutionality of a Tennessee statute is

drawn in question, 28 U.S.C. §2403(b) may be applicable.

Neither the District Court nor the Sixth Circuit has

certified to the Attorney General of the State of Tennessee

the fact that the constitutionality of this statute was drawn

in question pursuant to 28 U.S.C. §2403(b). Pursuant to

Rule 28.4(c) of the Supreme Court of the United States,

this petition shall be served on the Attorney General of

the State of Tennessee.

STATEMENT OF THE CASE

A. Introduction

These are product liability actions in which the plain-

tiffs seek recovery from Raymark for injuries allegedly

suffered by John Ed Clay and Curtis T. Bailey as a result

of claimed exposure to asbestos-containing products manu-

factured by Raymark. Plaintiffs Marie Ciay and Effie

Bailey sue for loss of consortium. Jurisdiction was based

on diversity of citizenship.

At the time of trial, John Ed Clay was 47 years

old and had worked as an insulator for 26 years. He

smoked two packs of cigarettes per day for about 10 years

before tapering off to a pack a week. He testified to his

exposure to Raymark and Johns-Manville products through

a chart prepared by his attorney. While he stated that

he was exposed to Raymark asbestos cloth, he could not

tell. whether the cloth was made by one company or any

of the other cloth manufacturers.

Curtis T. Bailey had bee:. a welder/pipefitter for ap-

proximately 35 years. Over objection, Mr. Bailey stated

that he was exposed to a Raymark asbestos blanket which

he used in a shipyard in the 1950’s after being handed a

tag by his attorney which he later stated came off as-

bestos cloth in 1976. When asked the name of the com-

pany on the tag, Mr. Bailey managed to get out “Ray .. .,”

and was unable to state the name until his lawyer told

him the tag said “Raybestos Manhattan.”

Dr. Gerritt W. H. Schepers and Dr. William K. Swann

testified that both plaintiffs had asbestosis and were

impaired. Dr. James D. Snell, Chief of Pulmonary Med-

icine at Vanderbilt University Hospital, testified that

neither plaintiff had asbestosis and that neither was dis-

abled to any extent because of asbestos.

B. Deposition of Dr. Kenneth Wallace Smith

Plaintiff sought to introduce the discovery deposition

of Dr. Kenneth Wallace Smith, deceased, former medical

director of Johns-Manville. This deposition was given in

January 1976 in DeRocco v. Forty-Eight Insulation, Inc.,

Court of Common Pleas of Allegheny County, Pennsyl-

vania, Civil Division No. 2880 (July Term 1974). This

deposition is reproduced in its entirety and is annexed

as Appendix E, p. A42.

Raymark was not a party in DeRocco, did not receive

notice of the Smith deposition, was not represented at the

deposition, and had no opportunity for cross-examination.

Raymark (or Raybestos) is not mentioned in the entire

transcript of the deposition.

The District Judge excluded the Smith deposition.

Plaintiffs appealed and presented this issue to the Sixth

Circuit for review. During oral argument, plaintiffs’

counsel, Michael Y. Rowland, stood before the Sixth Circuit

and withdrew the issue involving the Smith deposition.

Counsel’s statement in open Court as gleaned from the

audio tapes of argument is as follows:

. . y 2 + 7 R > t+y ope as: - Saab te oo ae

SaaS BE SAS ESE ERIE Ea So a RS oe tl

MR. ROWLAND: ...., I must do one other thing, and

that is withdraw the first assignment of error regarding

the failure of the Trial Court to allow in evidence the

deposition testimony of Dr. Kenneth Wallace Smith,

the deceased former medical director of Johns-Manville

Sales Corporation. I do not wish to make that assign-

ment of error a basis of our argument or this appeal.

I only want to deal with Issues Nos. 2 and 3, No. 2

being the statute of limitations that the Court referred

to, and No. 3 being the use or appropriateness of

collateral estoppel in these two cases.

The Sixth Circuit ruled on the issue anyway and made

two noteworthy statements. First, in discussing relevance,

the Sixth Circuii stated:

“Dr. Smith’s deposition is peculiarly relevant to

the extent of the knowledge possessed by manufac-

turers of the hazards of asbestos containing products

during the years when appellants Clay and Bailey

allege they were exposed to asbestos.”

722 F.2d at 1294.

In holding that the DeRocco defendants are “predeces-

sors in interest” under Fed. R. Evid. 804(b)(1) to Ray-

mark, the Court stated:

“Our examination of the record submitted in this

case satisfies us that defendants in the DeRocco case

had a similar motive in confronting Dr. Smith’s testi-

mony, both in terms of appropriate objections and

searching cross-examination, to that which Raybestos

has in the current litigation. We therefore hold that

the purposes of Rule 804(b)(1) will be fulfilled by

the admission of Dr. Smith’s deposition on retrial.”

722 F.2d at 1295.

In its Petition for Rehearing, Raymark asked the Sixth

Circuit for a hearing with oral argument, or in the alterna-

tive, to withdraw that portion of its opinion relating to

the Smith deposition. Appendix F, p. A91. These requests

were denied.

C. Tennessee’s Ten-Year Statute of Repose and the

Asbestos Amendment

On July 1, 1978, the Tennessee Products Liability Act

of 1978 became effective. T.C.A, §§29-28-101, et seg. The

“10-year cap” is part of that Act and is codified at T.C.A.

§29-28-103 which provides as follows:

Any action against a manufacturer or seller of a pro-

duct for injury to person or property caused by its

defective or unreasonably dangerous condition must

be brought within the period fixed by §§28-3-104,

28-3-105, 28-3-202 and 47-2-725, but notwithstanding

any exceptions to these provisions it must be brought

within six years of the date of injury in any event the

action must be brought within ten (10) years from

the date on which the product was first purchased for

use or consumption or within one (1) year after the

expiration of the anticipated life of the product, which-

ever is the shorter, except in the case of injury to

minors whose action must be brought within a period

of one (1) year after attaining the age of majority,

whichever occurs sooner.

Effective July 1, 1979, this section of the statute was

amended by adding subsection (b), the “asbestos amend-

ment”:

(b) The foregoing limitation of actions shall not apply

to any action resulting from exposure to asbestos.

Hence, the “asbestos amendment” takes effect one year

after the “10-year cap” became effective.

1. Accrual During Gap

In Tennessee, a products liability cause of action ac-

crues upon discovery of an injury, or, when in the exer-

cise of due diligence, the injury should have been discov-

ered. McCroskey v. Bryant Air Conditioning Co., 524

S.W.2d 487 (Tenn. 1975). It is hornbook law that the

statute of liinitations begins to run immediately upon the

accrual of the cause of action. This has always been the

law in Tennessee. See, e.g., Goodloe v. Goodloe, 116 Tenn.

252, 92 S.W. 767 (1905).

It is only logical that the date the cause of action

accrues controls which statute of limitations is applicable

to the action. See, e.g., Mathis v. Eli Lilly & Co., 719 F.2d

134, 137 (6th Cir. 1983), citing Buckner v. GAF Corp.,

No. 80-5329 (6th Cir. May 11, 1981) (both applying Ten-

nessee law). Appendix D, p. A28. This is so because

it is the existing law that gives birth to the cause of action,

and the existing law that provides defenses to that cause

of action.

The starting point, then, is to determine the date the

cause of action accrued. The District Judge made this a

jury question by charging as follows:

“. . . Under Tennessee Products Liability Law, if a

Plaintiff discovered, or should have discovered, his

injury, between July the Ist, 1978, and June the 30th,

1979, then, he may not recover damages if the product

which allegedly caused his injury or disease was first

purchased for use or consumption more than ten years

prior to the date on which his lawsuit was filed. It

should be remembered that this ten-year period of

limitation applies only. when the Plaintiff discovered,

or should have discovered, his injury or disease during

the year beginning July Ist, 1978 and ending June

the 30th, 1979.”

Obviously, the Court’s charge interprets the law of

Tennessee to be that the ten-year cap would be in effect

if a plaintiff’s cause of action accrued after the effective

date of the 10-year cap but before the effective date of the

asbestos amendment. John Ed Clay was first diagnosed as

having asbestosis on December 28, 1978. Curtis T, Bailey

was first diagnosed as having asbestosis on January 15,

1979. Both were diagnosed during the “gap,” or the one

year period after the effective date of the 10-year cap and

before the effective date of the asbestos amendment.

2. Murphree and the Vested Rights Doctrine

Raymark respectfully submits that retrospective appli-

cation of the asbestos amendment to these causes of action

would deprive it of its vested rights to rely on the statute

of limitations defense in contravention of Article I, Section

20 of the Tennessee Constitution which states as follows:

No retrospective laws.—That no retrospective law or

law impairing the obligation of contracts shall be

made.

The vested rights doctrine has been a principle of Ten-

nessee Constitutional law for over a century. See, e.g.,

Blank v. Olsen, 662 S.W.2d 324 (Tenn. 1983); Morris v.

Gross, 572 S.W.2d 902 (Tenn. 1976); Girdner v. Stephens,

48 Tenn. 280 (1870); Wynne’s Lessee v. Wynne, 32 Tenn.

405 (1852); Collier v. Memphis Light, Gas & Water Div.,

657 S.W.2d 771 (Tenn. App. 1983), perm. to app. denied

(1983); Anderson v. Memphis Housing Authority, 534

S.W.2d 125 (Tenn. App. 1975); and Johnson v. Hamilton

County, (Tenn. App. E.S. May 13, 1983). In Girdner, the

Tennessee Supreme Court held that “when a cause of ac-

tion is barred by a statute of limitation, in force at the

time the right to sue arose, and until the time of limitation

expired, that the right to rely upon the statute as a defense

is a vested right that cannot be disturbed by subsequent

legislation.” 48 Tenn. at 286.

The Sixth Circuit relied on its prior opinion in

Murphree v. Raybestos-Manhattan, Inc., 696 F.2d 459 (6th

Cir. 1982). In Murphree, the Court concluded that the

1979 asbestos amendment should be given retroactive ef-

fect to those causes of action accruing prior to its effective

date. The Sixth Circuit reasoned that the Tei.nessee Su-

preme Court would no longer apply under Article I, Section

20 of its Constitution a vested rights doctrine to defeat a

statutory amendment that runs a statute of limitations

from the time of discovery of the injury. 696 F.2d at 462.

The Murphree panel candidly admitted that there is no

Tennessee decision on point. As a matter of fact, the line

of Tennessee cases would seem to be contra to the result

reached in Murphree. However, in light of some of the

more current thinking on the Tennessee Supreme Court

in discovery cases, the Murphree panel made an educated

guess under Erie as to the Tennessee Supreme Court’s

next course of action when faced with this issue. In so

doing, the Murphree panel ignored the clear policy behind

the legislative act, the long string of decisions interpreting

the Tennessee Constitution, and the policies involved in

discovery statutes as opposed to statutes of repose.

Since the Murphree case was decided however, the

Tennessee intermediate appellate courts and the Tennessee

Supreme Court have been given the opportunity to re-

examine the vested rights doctrine and its applicability

to changes in statutes of limitation. Two sections of the

Tennessee Court of Appeals have continued to apply the

vested rights doctrine. One of these cases was appealed

to the Tennessee Supreme Court which let the intermediate

appellate decision stand. The vested rights doctrine has

thus been reaffirmed and is alive and well and the con-

tinuing law of Tennessee under the Tennessee Constitu-

tion.

In Johnson v. Hamilton County, Tenn. App. E.S. May

13, 1983, Appendix D, p. A31, the Eastern Section of the

Court of Appeals refused to apply a newly-enacted statute

retrospectively because it affected a vested right, citing

Anderson v. Memphis Housing Authority, 534 S.W.2d 125

(Tenn. App. 1975). The Johnsons had sued Hamilton

County and others for injuries sustained when their son

was struck by a school bus operated by a Mr. Simmons.

On appeal, the Johnsons urged that the status of the bus

driver, Mr. Simmons, as a government employee for tort

liability purposes, should be governed by the provisions of

T.C.A. §29-20-107, which became effective July 1, 1981,

notwithstanding that the accident occurred prior to its

effective date. The Eastern Section of the Court of Ap-

peals reasoned that “if the language of the 1981 amendment

is applied, it is likely that Mr. Simmons would not come

within the definition of an employee, and thus be stripped

of the immunity with which he was clothed prior to its

enactment.” The Court concluded that the 1981 amend-

ment would accordingly take away a vested right, and

consequently cannot be retrospectively applied. Johnson,

slip op. at 8.

But in the most recent pronouncement on the matter,

and the case upon which Raymark primarily relies, the

Western Section of the Court of Appeals decided an issue

markedly similar to that decided in Murphree in Collier

v. Memphis Light, Gas & Water Div., et al., 657 S.W.2d 771

(Tenn. App.), perm. to app. den’d (1983). In Collier, plain-

tiffs had sued under the Tennessee Governmental Tort

Liability Act, T.C.A. §§29-20-101, et seq., which included

a one-year statute of limitations at T.C.A. 29-20-305 at the

time the Colliers’ cause of action accrued. Subsequently,

the Act was amended to incorporate the provisions of

T.C.A. §28-1-106 which would have extended the period of

limitations for minors and others. (Plaintiff was a minor

at the time the cause of action accrued.) The Western

Section of the Court of Appeals refused to give retroactive

application to the Amendment incorporating T.C.A.

§28-1-106. The Court stated:

“. .. Since the suit of the plaintiffs was barred at the

time of the Amendment to the Act, there can be no

doubt that a retrospective application of the amend-

ment is forbidden as taking away a vested right.

Therefore, we hold that the actions of the plaintiffs

under the Act are barred by the provisions of T.C.A.

§29-20-305(b).”

The plaintiffs in Collier sought to appeal this issue to

the Tennessee Supreme Court. On August 29, 1983, the

Tennessee Supreme Court refused permission to appeal,

thus allowing the Court of Appeals’ opinion to stand as

the law of the case and of the State of Tennessee. The

Tennessee Supreme Court carefully scrutinizes the opinions

of the Courts of Appeal as to their precedential value.

Tenn. Sup. Ct. Rule 4. Appendix C, p. A25. If per-

mission to appeal is denied, “concurring in results only,”

the Tennessee Supreme Court prevents publication of in-

termediate appellate decisions with no precedential value.

However, where the Tennessee Supreme Court denies per-

mission to appeal outright, it not only concurs in results,

but also in precedence and reasoning, giving its approval

for publication, and thereby in Collier reaffirming the con-

tinued vitality of the vested rights doctrine. See also,

Blank v. Olsen, 662 S.W.2d 324 (Tenn. 1983) (Tennessee

Supreme Court refuses to give retrospective application

of an opinion changing construction of a Tennessee in-

heritance tax statute because of State’s “vested rights”).

Assuming arguendo that the opinion in Murphree was

permissible as an educated guess under Erie, Raymark

respectfully points out that the educated guess was simply

incorrect. The Tennessee Supreme Court has had the

opportunity to consider the precise issue and has con-

tinued to adhere to the vested rights doctrine. Interest-

ingly, the opinion in Collier represents an even harsher

result than what would be the result in Murphree. The

effect of Murphree would only prevent plaintiffs from

suing on causative exposures prior to ten years before

the date of the filing of the lawsuit. Asbestos plaintiffs

could still recover for exposures occurring within the

last ten years. In Collier, plaintiffs are simply without a

remedy because of defendants’ vested rights in a defense

existing at the time the cause of action accrued.

REASONS FOR GRANTING THE WRIT

A. The opinion of the Sixth Circuit has read the

‘‘predecessor in interest’’ test out of Fed. R. Evid.

804(b)1 in contravention of the clear congressional

mandate, contributing to the conflicts among the cir-

cuit courts and district courts, and has so far departed

from the accepted and usual course of judicial proceed-

ings as to call for an exercise of this court’s power of

supervision.

The Sixth Circuit’s decision that Dr. Kenneth Wallace

Smith’s deposition should be admitted under Federal Rule

of Evidence 804(b)(1) is wrong and should not be left

to stand as the law in the Sixth or any other Circuit. The

clear language of the rule, the intent of Ccngress, and

fair justice have been subordinated to expediency.

Congress amended the Supreme Court version of the

former testimony hearsay exception by adding a require-

ment thet the party at the prior hearing with a similar

motive to develop the testimony must be a “predecessor

in interest” to the party against whom the evidence is

offered at trial. The House Committee on the Judiciary

made the change to promote fairness; in fact, that is pre-

cisely what the group said:

The committee considered that it is generally

unfair to impose upon the party against whom the

hearsay evidence is being offered responsibility for

the manner in which the witness was previously han-

dled by another party. The sole exception to this,

in the Committee’s view, is when a party’s predecessor

in interest in a civil action or proceeding had an op-

portunity and similar motive to examine ‘the witness.

The Committee amended the Rule to reflect these

policy determinations.

1974 U.S. Code Cong. & Admin. News 7088. When the

Senate Committee on the Judiciary “concluded that the

difference between the two versions is not great,” 1974

U.S. Code Cong. & Admin. News 7074, that body was con-

ceding that differences existed but were not of sufficient

magnitude to require further discussion. It simply is

erroneous for the Clay court to base its result on legislative

history when it misconstrues the Senate report, and comes

up with a decisional rule for the Sixth Circuit that is con-

trary to what Rule 804(b) (1) plainly states: that litigants

are to confront only testimony previously examined by a

predecessor in interest—and one with a similar motive

and opportunity at that.

Certainly the Supreme Court’s Advisory Committee

knew that predecessor in interest meant a party in privity

with today’s litigant, as the comment to the draft rejected

by Congress reads:

As a further assurance of fairness in thrusting

upon a party the prior handling of a witness, the

common law also insisted upon identity of parties,

deviating only to the extent of allowing substitution

of successors in a narrowly construed privity. Mu-

tuality as an aspect of identity is now generally dis-

credited, and the requirement of identity of the of-

fering party disappears except as it might affect motive

to develop the testimony. The question remains

whether strict identity, or privity, should continue

as a requirement with respect to the party against

whom offered. The rule departs to the extent of

allowing substitution of one with the right and op-

portunity to develop the testimony with similar motive

and interest. The position is supported by modern

decision.

But the position was expressly rejected by Congress to

achieve fairness. Whether the difference is great or slight,

there is a difference between the Rule proposed and the

Rule enacted. Under the former the Smith deposition

might have been admissible had there been a similar

motive; under the law the Smith deposition cannot legally

be admitted because neither Raymark nor a corporation

that was its predecessor in interest was even invited to

attend and cross-examine. To hold that a separate cor-

poration whose former medical director was the deponent

could by any flight of fancy be deemed a predecessor

in interest is sheer sophistry.

Professor Michael Graham in Federal Evidence 906

(1981) accurately perceives the intent of Congress:

While the term predecessor in interest is not defined

in either the rule itself or the legislative history, ap-

parently a meaning consistent with the common law

concept of privity was intended.

He also has a comment at 908, n.77, on the disrespect lower

courts have had for Congress:

The restrictions placed upon the admissibility by

Congress with respect to identity of a party against

whom offered or predecessor in interest in a civil case

have been poorly received if not completely ignored.

The principal case cited for Graham’s observation is Lloyd

v. American Export Lines, Inc., 580 F.2d 1179 (3d Cir.

1978), cert. denied 439 U.S. 969. There the majority relied

upon the spurious “difference .. . is not great” Senatorial

rationale to reverse an admiralty plaintiff’s judgment for

exclusion of a Coast Guard hearing transcript. Appar-

ently the Coast Guard is a predecessor in interest to the

seaman, remarkable as that may seem to the seafaring

population. The concurring opinion candidly and properly

criticized the foregoing reasoning:

I believe this analysis is contrary to the Rule’s clear

language and is foreclosed by its legislative history.

It is true that Congress nowhere defined “pred-

ecessor in interest,” but it seems clear that this phrase,

a term of art, was used in its narrow, substantive law

sense. Although the commentators have expressed

disapproval of this traditional and restrictive rule, they

recognize that a “predecessor in interest” is defined in

terms of a privity relationship.

580 F.2d at 1190-91. The main opinion in Lloyd received

bad press generally. See S. Saltzburg and K. Redden,

Federal Rules of Evidence Manual 659 (3d ed. 1982) (con-

curring opinion “persuasive”); D. Binder, Hearsay Hand-

book 294 (2d ed. 1983) (majority reasoning “questionable,”

while concurrence “strong”); ABA Section of Litigation,

Emerging Problems Under the Federal Rules of Evidence

302 (1983) (Lloyd “exception” to general rule).

Perhaps the most telling analysis of Lloyd is found in

the district court’s opinion in Zenith Radio Corp. v. Matsu-

shita Elec. Indus. Co., Ltd., 505 F. Supp. 1190, 1254 (E.D. Pa.

1980), rev’d on other grounds sub nom. In re Japanese

Elec. Prod. Antitrust Litigation, 723 F.2d 238 (3d Cir.

1983):

In our view, it is highly significant that the “previ-

ous party” in Lloyd was a government investigator,

presumably impartial, who had no role in the subse-

quent legal action.

Entirely different considerations come into play

when prior testimony is offered against one co-defen-

dant on the basis of prior examination of the witness

on behalf of a different co-defendant, when the two

have potentially conflicting interests and litigation

strategies.

Even under Lloyd, then, the Clay and Bailey result is

wrong. Raymark is not a successor in interest to Johns-

Manville, and the Third Circuit’s misconstruction of

Rule 804(b)(1) would not apply where Johns-Manville,

not a government investigator, did play a major role in

the trial.

This Honorable Court can, of course, exercise its dis-

cretion to not issue the writ of certiorari and to leave

Clay and Bailey on the books as controlling. To do so,

however, would utterly frustrate the plain meaning of the

federal former testimony exception and the intent of

Congress.

B. This court should exercise its supervisory

powers to determine whether a Circuit Court may

decide an issue expressly withdrawn by appellant in

a civil case without a hearing.

There is a need for guidance from the Supreme Court

on this question because it addresses the power of the

Courts of Appeals to decide certain issues. It appears to be

a question of first impression in that no case has been

found in which a federal court disregarded an express

abandonment of an issue by an appellant.

This question may be framed very narrowly for a num-

ber of reasons. First, this case involves an express waiver

of an issue presented for review as opposed to an im-

plied waiver. Counsel for respondents announced a cal-

culated decision to withdraw the issue from the considera-

tion of the Court. This is not an implied waiver situation

where the appellant fails to address the issues adequately

in the brief and at oral argument. Thus, the question of

whether an appellate court may correct errors which have

simply not been assigned or argued need not be reached.

Second, since this is a civil case, the ability of an

appellate court to ferret out unassigned errors in a crim-

inal trial sua sponte need not be affected. The important

consideration of an individual’s liberty is not present.

Third, this is not a case involving appellants who did

not join in the waiver. Counsel for both appellants ex-

pressly waived this issue. See, e.g., Britt v. Fincher, 202

Ga. 661, 44 S.E.2d 372, 376 (1947) (one of the defendants

in error continued to contest a claim expressly admitted

by the other). Nor is this a case involving the public

interest. All of the parties to this suit are private. See,

e.g., State ex rel. McWilliams v. Little River Drainage Dis-

trict, 269 Mo. 444, 190 S.W. 897 (1916) (rights of numerous

counties involved and respondent’s counsel did not urge

implied waiver).

Finally, this case is distinguishable from certain other

cases in that petitioner herein detrimentally relied on the

appellants’ express waiver. Petitioner failed to address

the issue at oral argument and failed to update the brief

on this issue as allowed by Fed. R. App. P. 28(j).

The general rule is that appellate courts will not con-

sider issues which have been expressly waived in the

brief or at oral argument absent certain exigent circum-

stances not present here. In numerous cases, this Court

has recognized and followed this rule by refusing to con-

sider issues which have been expressly waived by the

appellant. See, e.g., Patsy v. Board of Regents of State

of Florida, 457 U.S. 496, 515 n.19 (1982); Durst v. United

States, 434 U.S. 542, 550 n.11 (1978); Norton v. Mathews,

427 U.S. 524, 530 n.8 (1976); California v. LaRue, 409 U.S.

109, 112 n.2, reh’g denied 410 U.S. 948 (1972); and County

of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188 n.1

(1959). Whether this rule represents a mere policy of

the courts to be invoked at their discretion or whether it

operates as a positive curtailment on their power is the

question to be decided.

The application of the doctrine of implied waiver is

discretionary. Nevertheless, it is a rare decision in which

a state or federal appellate court decides an issue which

was impliedly waived by the appellant through failure to

raise or press the issue on appeal. See, e.g., State Land

Board v. Corvallis Sand & Gravel Co., 429 U.S. 363, 384-85

(1977) (Marshall, J., dissenting).

An express waiver involves an additional factor which

calls for a limitation on the discretion of the courts. In an

express waiver the appellant has made a determination that

the issue should not be decided, either because it is with-

out merit or otherwise. It is one thing to so structure a

rule that the appellate courts have the discretion to decide

an issue which an appellant, through oversight or ignor-

ance, has failed to raise or argue. It is quite another to

allow an appellate court to decide an issue which the ap-

pellant, for reasons good and satisfactory to himself has

expressly chosen to withdraw from the consideration of

the court.

U.S. Const. art. III, §2, cl. 1 provides that “the judicial

power shall extend . . . to controversies . . . between cit-

izens of different states.” “Controversy,” in the constitu-

tional sense, has been defined as meaning “more than dis-

agreement and conflict; rather it means the kind of con-

flict courts traditionally resolve.” United States v. Nixon,

418 U.S. 683 (1974). However, when the appellant ex-

pressly withdraws an issue, there ceases to be any con-

troversy between the parties on that issue or any adverse

interests represented. Therefore, such an issue would ap-

pear to be outside the constitutional jurisdiction of the

courts.

Regardless of the constitutionality of the decision, it is

contrary to some of the basic tenets of our adversarial sys-

tem for a court to decide an issue which has no advocates

or opponents. There is no “concrete adverseness which

sharpens the presentation of issues upon which the court

so largely depends...” Baker v. Carr, 369 U.S. 186 (1962).

This calls for an examination of this question by the Su-

preme Court under its supervisory powers.

This case also involves Fed. R. App. P. 34(a) which

provides that oral argument “shall be allowed in all cases”

unless denied pursuant to local rule. In this case Rule

34(a) may have technically been complied with in that

oral argument was allowed However, neither party ad-

dressed the merits of the withdrawn issue at oral argu-

ment because of its express abandonment by appellants.

Therefore, the spirit, if not the letter, of Rule 34(a) was

frustrated.

Similarly, neither party updated their brief on this

issue as allowed by Fed. R. App. P. 28(j). Some twenty

months elapsed between oral argument and the filing of

the Sixth Circuit’s opinion. During that period, a number

of cases were cited under Fed. R. Evid. 804(b) (1), none

of which were cited in the opinion. See, e.g., United States

v. Pizarro, 717 F.2d 336 (7th Cir.), reh’g denied (1983);

United States v. Monico, 702 F.2d 860 (11th Cir. 1983);

DeLuryea v. Winthrop Laboratories, 697 F.2d 222 (8th Cir.),

reh’g and reh’g en banc denied (1983); United States v.

Poland, 659 F.2d 884 (9th Cir. 1981); In the Matter of

Paducah Towing Company, Inc., 692 F.2d 412 (6th Cir.

1982); Creamer v. General Teamsters Local Union 326,

560 F. Supp. 495 (D. Del. 1983); In re Screws Antitrust

Litigation, 526 F. Supp. 1316 (D. Mass. 1981); and Zenith

Radio Corp. v. Matsushita Electrical Industrial Co., Ltd.,

505 F. Supp. 1190 (E.D. Pa. 1980), rev’d on other grounds

sub nom. In re Japanese Electronic Products Antitrust

Litigation, 723 F.2d 238 (3rd Cir. 1983).

The power of a court to render a decision in this

situation also infringes on the strategy of counsel.

There are obvious reasons why appellant’s counsel

would decline to present certain issues for review, or

would expressly remove issues from the Court’s con-

sideration, not the least of which is the risk of suffering

an adverse ruling with precedential value in a mass tort

situation like the asbestos litigation. One only wonders

how counsel for respondents would have reacted if the

Sixth Circuit had ruled in favor of Raymark on the issue.

The logical result is that the strategy of counsel will be

peintlessly circumscribed. No longer may they determine

which issues are or are not reviewed.

The decision in this situation constitutes a waste of

judicial resources. Since the appellants chose to withdraw

this issue, they had already acquiesced in the decision of

the trial court. Therefore, judicia! resources were applied

to an issue which was no longer in dispute.

Finally, this decision needs review because it has

the appearance of injustice. It would not appear to a

disinterested observer that this decision was reached after

a judicious weighing of the merits of the arguments on

both sides. Instead, it would appear that the Court was

pre-disposed to decide this issue. Not even the express

withdrawal of this issue by the appellants could dissuade

the Sixth Circuit from pronouncing the law on this sub-

ject. The supervisory powers of this Court are called upon

to prevent the appearance of injustice.

C. The opinion of the Sixth Circuit as to Tennes-

see’s vested rights doctrine, rendered in arrogant

disregard of Erie, will have a substantial impact on

the allocation of scarce judicial resources, and will so

seriously impair the administration of justice as to

require the exercis> of this Court’s supervisory

powers. This is an ‘‘exceptional’’ diversity case.

The mandate of Huddleston v. Dwyer, 322 U.S. 232

(1944) is rigorous. Nonetheless, the Sixth Circuit has

strayed so far afield from any accepted Erie notion that

the impact will be devastating. This diversity case is

“exceptional.” 322 U.S. at 237.

This case is exceptional in two respects. First, this

case will have a significant impact on the exercise and im-

plementation of federal diversity jurisdiction. Of partic-

ular importance is the latitude given to federal courts to

adhere to an Erie educated guess in light of subsequent

state decision. This has never before been addressed. This

case is also exceptional in terms of the impact upon the

multitudinous asbestos cases pending in Tennessee and

elsewhere and the countless tort cases in Tennessee. It

will be important precedent in all cases wherein jurisdic-

tion is based on diversity.

This case does not merely involve an educated guess

which is “necessarily often ail that federal courts can

make in ascertaining what the state court would rule to

be its law.” Bernhardt v. Polygraphic Co., 350 U.S. 198

at 209 (1956) (Frankfurter, J., concurring). This case in-

volves adherence to an Erie educated guess in the face

of conflicting intervening state decision. As such, it strikes

at the heart of the Erie doctrine. For if a federal court

may continually adhere to its prediction that a state court

will decide an issue a certain way, then Erie is dead.

Such latitude would allow federal courts to rationalize

their adherence by the “maybe next time” philosophy.

This is impermissible under Erie.

Erie educated guesses ought to be based on “all avail-

able data.” West v. American Telephone & Telegraph Co.,

311 U.S. 223 (1940). But the data upon which the guess

should be made is not the data the Sixth Circuit would use

to decide the issue, but “all the data the highest court of

the state would use in an effort to determine how the

highest court of the state would decide.” C. Wright, Fed-

eral Courts, at 269 (3d ed. 1976). See, e.g., Gates Rubber

Company v. USM Corporation, 508 F.2d 603 (7th Cir. 1975)

(opinion of Judge, now Justice, Stevens).

Therein lies the difficulty with this opinion of the

result-oriented Sixth Circuit. The failure of the Sixth

Circuit to be intellectually honest under Erie has resulted

in a Sixth Circuit brand of justice which conforms te its

personal perception of who ought to win asbestos cases.

The results include total butchery of Tennessee Constitu-

tional principles and impossible predicaments for the state

and federal courts in hundreds of asbestos cases and thou-

sands of tort cases arising under Tennessee law.

Probably the most outrageous aspect of the Sixth Cir-

cuit’s opinion is its failure to even mention Collier, a case

practically on all fours. Indeed, another Tennessee Su-

preme Court case has intervened since the filing of the

Petition for Rehearing. In Blank v. Olsen, 662 S.W.2d 324

(Tenn. 1983), the Tennessee Supreme Court considered

whether one of their opinions, Pierce v. Woods, 597 S.W.2d

295 (Tenn. 1980), which held that an inheritance tax should

be paid only on 50% of the vaule of the property as op-

posed to 100% of the value under the prior law, should be

given retroactive effect to taxes paid prior to its entry.

The Tennessee Supreme Court held that “. . . no opinion

of this Court changing the construction of a statute can

constitutionally operate retroactively so as to divest the

State of title to that money. Just as a person, the State

is protected by the Constitution with respect to its vested

rights.” 662 S.W.2d at 326.’

For obvious reasons, Tennessee law as construed by

Tennessee Courts does not permit the legislature to change

the existing law (possibly as a result of personal lobby-

ing), to take away vested rights. For example, the vested

rights doctrine would not permit a “lawnmower exception”

to the 10-year statute of repose to apply retroactively to a

plaintiff who had been injured by an eleven-year-old lawn-

mower and who had lobbied for the law’s change after dis-

1. If nothing else, perhaps a remand would be appropriate

in light of Collier and Blank.

covering his claim would be otherwise barred. This would

be an impermissible intrusion into the judicial orb.

The impact will be substantial in sheer numbers alone.

There are in excess of 400 asbestos cases pending within the

state and federal courts located in Tennessee. In addi-

tion, there are countless other tort cases arising under

Tennessee law. The ripple effect on Tennessee’s other

statutes of repose could be devastating.’

The nationwide impact is just as substantial. As of

March, 1984, Raymark was defending 15,810 cases repre-

senting 19,429 plaintiffs who seek damages for personal

injuries allegedly sustained as a result of asbestos exposure.

Often there are significant medical and exposure defenses.

But if the Sixth Circuit mentality continues, many of the

manufacturers will scurry to join Johns-Manville, Unarco,

and Amatex in the cover of Chapter 11.

The predicament the litigants are left with is hopeless.

With such a well defined split between the Sixth Circuit

and the Tennessee Supreme Court, blatant forum shopping

will result. Plaintiffs will bring their actions in the fed-

eral district courts which will be placed in the untenable

position of either ignoring Erie and following the Sixth

Circuit, or discharging the Erie obligation and facing cer-

tain reversal.

2. Tenn. Code Ann. §28-3-202 provides for a four-year

period of repose for personal injury actions from defective

improvements to real property, and Tenn. Code §19-26-116

provides for a three year period of repose in medical malpractice

actions. These statutes have been expressly approved by the

Pp: . *

(Tenn. 1978); Watts v. Putnam County, 525 S.W.2d 488 (Tenn.

1975). Nonetheless, they operate to certain claims

are discovered. This is at odds with the Sixth Circuit's view

The time is right for this Court to speak again in re-

affirmance of Erie. If the federal courts are allowed to

consciously disregard their Erie obligations in the guise of

an “educated guess” there will be nothing left of Erie.

The federal courts may then always predict that the state

courts will rule a certain way on a certain issue given the

appropriate circumstances and timing. This would not

erode Erie; it would destroy Erie.

CONCLUSION

For the foregoing reasons Petitioner Raymark Indus-

tries, Inc. requests that the Writ be granted.

Respectfully submitted,

DonaLp F. PAINE

(Counsel of Record)

Dwicut E. TARWATER

500 First American Center

P.O. Box 2047

Knoxville, Tennessee 37901

(615) 546-0500

Counsel for Petitioner

Of Counsel:

Ecerton, McAFee, ARMISTEAD

& Davis, P.C,

APPENDIX

APPENDIX A

(Filed January 26, 1984)

Nos. 80-5416-17

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

JOHN ED CLAY and wife, MARIE CLAY,

Plaintiffs-Appellants,

vs.

JOHNS-MANVILLE SALES CORP. and

RAYBESTOS-MANHATTAN, INC.,

Defendants-Appellees.

CURTIS T. BAILEY and wife, EFFIE BAILEY,

Plaintiffs-Appellants,

vs.

JOHNS-MANVILLE SALES CORP. and

RAYBESTOS-MANHATTAN, INC.,

Defendants-Appellees.

ORDER

Before: EDWARDS, Circuit Judge, PECK, Senior Circuit

Judge, and CHURCHILL,®* District Judge

On receipt and consideration of a petition for rehearing

and suggestion for rehearing en banc in the above-styled

case; and

No judge in active service in this court having moved

for rehearing en banc and the motion therefore having

been referred to the panel which heard the case; and

The panel having noted nothing of substance in said

motion for rehearing which had not been carefully con-

sidered before issuance of the court’s opinion,

Now, therefore, the motion for rehearing is hereby

denied.

Entered by order of the Court

/s/ John P. Hehman

Clerk

John Ed CLAY and wife, Marie Clay,

Plaintiffs-Appellants,

JOHNS-MANVILLE SALES CORP.,

Raybestos-Manhattan, Inc.,

Defendants-Appellees.

Curtis T. BAILEY and wife, Effie Bailey,

Plaintiffs-Appellants,

JOHNS-MANVILLE SALES CORP.,

Raybestos-Manhattan, Inc.,

Defendants-Appellees.

Nos. 80-5416, 80-5417.

United States Court of Appeals,

Sixth Circuit.

Argued March 3, 1982.

Decided Dec. 7, 1983.

As Amended Dec. 22, 1983.

Rehearing and Rehearing En Banc

Denied Jan. 26, 1984.

Before EDWARDS, Circuit Judge, PECK, Senior Cir-

cuit Judge, and CHURCHILL,*, District Judge.

GEORGE CLIFTON EDWARDS, Jr., Circuit Judge.

*Honorable James P. Churchill, United States District Judge

for the Eastern District of Michigan, Southern Division, sitting

by designation.

In these two cases plaintiffs John Ed Clay and Curtis

Bailey, each joined by his wife, brought actions for dam-

ages against defendants Johns-Manville Sales Corporation

and Raybestos-Manhattan, Inc., on the basis of products

liability claims resulting from plaintiffs’ exposure to as-

bestos containing products manufactured by the defen-

dants. The cases were tried in the United States District

Court for the Eastern District of Tennessee and ended in

jury verdicts for the defendants.

Appellants urge that the District Judge committed re-

versible error in a variety of ways. In our judgment,

three of these require our discussion.

Before turning to these issues, however, we must

point out that Johns-Manville as previously recognized in

a number of cases which we cite in the footnote below,’ has

filed for reorganization under Chapter 11 of the Bankruptcy

Act of 1979, 11 U.S.C. § 1101, et seq. Supp. III 1979, in the

Bankruptcy Court for the Northern District of New York.

This action brought into play the automatic stay provision

set out in § 362499 (1) of the Act, which reads:

§ 362. Automatic stay

(a) Except as provided in subsection (b) of this

section, a petition filed under section 301, 302, or 303

of this title operates as a stay, applicable to all entities,

of—

(1) the commencement or continuation, in-

cluding the issuance or employment of process, of

a judicial, administrative, or other proceeding

against the debtor that was or could have been

1. Cathey v, Johns-Manville Sales Corp., 711 F.2d 60 (6th

ym 1983); Lynch v. Johns-Manville Sales Corp., 701 F.2d 42-44

(6th Cin i0es), Murphree v. Reybestoe-M Manhattan, Inc., 696 F.2d

459 (6th Cir.1982).

commenced before the commencement of the case

under this title, or to recover a claim against the

debtor that arose before the commencement of the

case under this title;....

The language of § 362(a)(1) quoted above states

flatly that filing of a bankruptcy petition “operates as a

stay.” Although no motion to stay has been filed by Johns-

Manville in this court, we hereby order the appeal as to

Johns-Manville to be stayed, pending further action by the

parties or the Bankruptcy Court in the Northern District

of New York, and we further instruct the clerk to place

the file as it pertains to Johns-Manville in inactive status,

pending the actions just referred to.

Turning now to the other issues remaining in relation

to defendant Raybestos-Manhattan, the first issue pertains

to the judge’s instruction to the jury on the possible effect

of a general 10-year statute of limitations, T.C.A. § 29-28-

103, which became effective in the State of Tennessee on

July 1, 1978. This statute was amended approximately

one year later by the Tennessee legislature by the adop-

tion of T.C.A. § 29-28-103(b) which provided that the 10-

year statute of limitations was inapplicable “to any action

resul'irg from exposure to asbestos.” The District Judge

in these cases instructed the jury in effect that if the jury

found that plaintiffs during the year the 10-year statute

of limitations was in effect for all cases discovered or

should have discovered that they were suffering from as-

bestosis, then the jury should find for the defendants.

Although it seems obvious to us that the legislature

of Tennessee, in adopting the 10-year statute of limitations

without any exemption of asbestos disease in the first in-

stance, simply made a serious error which it has now sought

to correct, appellees argue that the Tennessee Constitution

and the Tennessee Supreme Court have mandated the in-

terpretation which the District Judge gave to this jury.

See Article I, Section 20 of the Tennessee Constitution,

which provides: “That no retrospective law, or law im-

pairing the obligation of contracts, shall be made.” See

Ford Motors v. Moulton, 511 S.W.2d 690 (Tenn.1974), cert.

denied, 419 U.S. 870, 95 S.Ct. 129, 42 L.Ed.2d 109 (1974),

reaffirmed, 533 S.W.2d 295 (Tenn.1976).

This would obviously produce a harsh result from what

appears closely to have been a legislative mistake. Even

so, the federal courts in the exercise of their diversity

jurisdiction would be obligated to follow state law as that

law has been construed by the state’s highest court, absent

reason to believe from subsequent state court develop-

ments that such would no longer be the ruling of the Su-

preme Court of Tennessee.

Such reason has now been found in a recent case in

this court which raised this identical issue from a similar

ruling by the same District Judge. In Murphree v. Ray-

bestos-Manhattan, Inc., 696 F.2d 459 (6th Cir.1982), with

one of this court’s Tennessee judges writing for a unani-

mous panel, the court held on the principal legal issue pre-

sented in our instant case:

“The main question of law on appeal in this diversity

case is whether Tennessee’s ten year statute of limitations

based on sale, adopted July 1, 1978, as T.C.A. § 29-28-103

(action ‘must be brought within ten years from the date

. product . . . first purchased for use’) created for de-

tundnat & yesed right barring plaintiff’s claim despite a

July 1, 1979, statutory amendment excluding asbestos-

related disease actions from this ten year ceiling.1 The

Tennessee appellate courts have not spoken directly on

this issue. We hold that Tennessee’s vested rights doctrine

based on Tennessee Constitution Article I Section 20 does

not bar the claim and that the 1979 amendment is applicable

as a matter of law.

“Interpretation of Tennessee’s various statutes of lim-

itations governing products liability actions has created

troublesome problems for Tennessee courts in the past two

decades. In 1969 the Tennessee Supreme Court in Jackson

v. General Motors, 223 Tenn. 12, 441 S.W.2d 482 (1969),

adopted a rule widely criticized by the bench and bar of the

state. It held that Tennessee’s limitations statute in pro-

ducts cases begins to run on jeg purchase of the

product and not on the date of injury or discovery. Thus,

in some cases of latent disease and injury the limitation

period expired before discovery by the victim. The leg-

islature acted promptly to overrule the holding in Jackson

by amending the statute. In 1974 the Tennessee Supreme

Court, with Justice William Fones dissenting, prevented

the amendment from becoming effective. The Court held

in Ford Motor Company v. Moulton, 511 S.D.2d 690 (Tenn.

1974) that under Tennessee vested rights doctrine, based

on Article I, Section 20 of the Tennessee Constitution, the

statutory amendment running the limitation period from

discovery could not be applied retroactively. Thus, the

seller who sold his product outside the statutory period

was held to have a vested right to defeat an action for

injuries discovered and sued upon during the statutory

period.

“In 1975, shortly after the decision in Moulton, a new

Tennessee Supreme Court was elected. Of the members of

the old Court, only Justice William Fones remained. He

became the first Chief Justice of the new Court. The new

Court, in an opinion by Justice Joe Henry (a beloved mem-

A8&

ber of that Court until his recent untimely death), promptly

overruled Jackson v. General Motors, supra, and held that

the limitations statute runs from discovery, not sale. In

McCroskey v. Bryant Air Conditioning Co., 524 S.W.2d

487 (Tenn.1975), Justice Henry held that ‘reason, logic and

fundamental fairness’ demanded that the running of the

statute begin upon discovery, for it is ludicrous to have a

‘law which charges a litigant with sleeping upon any right

which he does not have’ just as one cannot ‘harvest a crop

never planted or burn down a house never built.’ 524

S.W.2d at 489. The McCroskey opinion announces very

clearly that judicial policy in Tennessee does not favor

doctrines that activate statutes of limitations before the

plaintiff has knowledge of his injury.

“Although the Tennessee Supreme Court in McCroskey

did not expressly overrule the vested rights doctrine as

applied to statutes of limitations in Moulton, it is clear to

us that the Moulton vested rights doctrine no longer has

any vitality. Justice Henry’s McCroskey opinion quotes

from that part of Justice Fones’ Moulton dissent that

quotes in turn from an opinion of this Court by Judges

Phillips, Edwards and Celebrezze. In McCroskey Justice

Henry said:

Our own Chief Justice [Fones] dissented from the

majority opinion in Ford Motor Company v. Moulton,

supra. We quote from his dissent:

“The following principles are stated concisely in

Hodge v. Service Machine Company, 438 F.2d 347

(6th Cir.1971).

‘A cause of action accrues when a suit may be

maintained upon it. Black’s Law Dictionary 37 (4th

ed. 1951). A suit may not be brought upon a cause

of action until it exists, and a cause of action does

not exist until all its elements coalesce. In civil ac-

tions for damages, two elements must coalesce before

a cause of action can exist: (a) a breach of some

legally recognized duty owed by the defendant to the

plaintiff; (b) which causes the plaintiff some legally

cognizable damage.’

To hold that a products liability action, which is

a recognized legal right, is barred by a statute of lim-

itations before any injury is sustained, deprives a

person of the opportunity of redress for an injury

done him in his goods or person by due process of law,

contrary to our Constitution. 511 S.W.2d at 697.”

524 S.W.2d at 490.

Regarding Moulton, the McCroskey Court stated that it

did not need to reach the retroactivity—i.e. vested rights—

question. However, the Court did make the following ob-

servation: ‘We, therefore, neither reaffirm nor reverse

Ford Motor Co. v. Moulton, but we have quoted, with ap-

proval, from the dissent of our present Chief Justice.’

“We do not find that the Tennessee Supreme Court

has had occasion to speak on the retroactivity question in

products cases since McCroskey. Justice Henry’s language

in that case quoting from Justice Fones’ reliance on our

opinion in Hodge v. Service Machine Co., 438 F.2d 347

(6th Cir.1971), and our knowledge of the careful and pro-

gressive character of the Tennessee Supreme Court, make

it clear to us that the old vested rights doctrine as applied

to statutes of limitations in Moulton is no longer the law

in Tennessee and will be overruled when the occasion

ares.

“Tennessee will no longer apply under Article I Sec-

tion 20 of its Constitution a vested rights doctrine to defeat

a statutory amendment that runs a statute of limitations

Al0

from the time of discovery of the injury. The Tennessee

Supreme Court will no longer use the vested rights doctrine

to prevent the Tennessee legislature from ameliorating the

harshness of a rule that bars a plaintiff's claim before he

discovers it.

“Thus the plaintiff’s claim here is not barred under

Tennessee law. The statutory amendment excepting as-

bestos-related disease causes of action from the ten year

limitations statute based on sale does not abridge any right

protected under the Tennessee Constitution. This brings

the Tennessee law into line with federal law on vested

rights as applied to statutes of limitations under the Fed-

eral Constitution. The United States Supreme Court has

long since rejected old doctrines of substantive due process

which said that a liberalizing change in a statute of limi-

tations abridges vested rights. See Chase Securities Corp.

v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L.Ed. 1628,

reh. denied, 325 U.S. 896, 65 S.Ct. 1561, 89 L.Ed. 2006

(1945) (statutory amendment abolishing limitations de-

fense did not deprive defendant of any right); Campbell v.

Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 483 (1885) (statutes

of limitations go to matters of remedy rather than destruc-

tion of fundamental rights). In Donaldson, supra, Justice

Jackson stated for the Court:

Statutes of limitation find their justification in

necessity and convenience rather than in logic. They

represent expedients, rather than principles. They

are practical and pragmatic devices to spare the courts

from litigation of stale claims, and the citizens from

being put to his defense after memories have faded,

witnesses have died or disappeared, and evidence has

been lost. Order of Railroad Telegraphers v. Railway

Express Agency, 321 U.S. 342, 349 [64 S.Ct. 582, 586,

88 L.Ed 788]. They are by definition arbitrary,

All

and their operation does not discriminate between the

just and the unjust claim, or the voidable and un-

avoidable delay. They have come into the law not

through the judicial process but through legislation.

They represent a public policy about the privilege to

litigate. Their shelter has never been regarded as

what now is called a “fundamental” right or what used

to be called a “natural” right of the individual. He

may, of course, have the protection of the policy while

it exists, but the history of pleas of limitation shows

them to be good only by legislative grace and to be

subject to a relatively large degree of legislative

control.

Id, 325 U.S. at 314, 65 S.Ct. at 1142.

“Therefore, the District Court erred in allowing the

statute of limitation issue to go to the jury under a charge

that allowed the jury to base a verdict for defendant on

the 10 year statutory ceiling on products liability cases.

The 1979 statutory amendment excepting asbestosis cases

applies to this case and is not made ineffective by the

vested rights doctrine.

“1 The trial court made the issue of the application of

o ten year statute a jury question, charging the jury as

llows:

limitation applies only when the plaintiff discovered, or

pee godly ~ a Bay B NH, BW

July ist, 1978 and ending June 30th, 1979.

Al2

We are bound by this opinion and we find occasion to

state that we agree with it. This issue, of course, requires

vacation of the judgment below and remand for retrial.

II.

We turn now to the second issue which requires our

consideration, namely whether the District Judge erred

in excluding a deposition taken from a witness, Dr.

Kenneth Wallace Smith, in DeRocco v. Forty-eight Installa-

tion, Inc., No. 7880 (W.D.Pa.1979). At the time of the

DeRocco proceeding, Dr. Smith was 63 year of age and had

acquired his knowledge about asbestos disease in the em-

ployment of the Johns-Manville Corporation, the largest

asbestos manufacturer in the field. Serving Johns-Man-

ville during a good portion of his 22 years of employment

as the only full-time physician in the organization, Dr.

Smith’s deposition is peculiarly relevant to the extent of the

knowledge possessed by manufacturers of the hazards of

asbestos containing products during the years when ap-

pellants Clay and Bailey allege they were exposed to as-

bestos.

Dr. Smith had died before the trial of this case. The

key question in relation to the admissibility of this evi-

dence is posed by the language of Rule 804(b)(1) of the

Federal Rules of Evidence, which reads:

Rule 804. Hearsay Exceptions; Declarant Un-

available

(a) Definition of unavailability. ‘‘Unavail-

ability as a witness” includes situations in which the

declarant—

Al3

(h) Hearsay exceptions. The following are

no’ excluded by the hearsay rule if the declarant is

. ailable as a witness:

(1) Former testimony. Testimony given

as a witness at another hearing of the same or a

different proceeding, or in a deposition taken in

compliance with law in the course of the same

or another proceeding, if the party against whom

the testimony is now offered, or, in a civil action

or proceeding, a predecessor in interest, had an

opportunity and similar motive to develop the

testimony by direct, cross, or redirect examination.

To ascertain the meaning of “predecessor in interest,”

an examination of legislative history is necessary. As

originally proposed by the Supreme Court, Rule 804(b) (1)

would have admitted prior testimony of an unavailable wit-

ness if the party against whom it is offered or a person

“with a motive and interest” similar to him had an op-

portunity to examine that witness. H.R.Rep. No. 650, 93d

Cong., Ist Sess. 15 (1973), reprinted in 1974 U.S.CopE Cone.

& Ap.News 7051, 7088. The House of Representatives

substituted the current “predecessor in interest” language.

The House Committee on the Judiciary offered the fol-

lowing explanation for the alteration:

The Committee considered that it is generally un-

fair to impose upon the party against whom the hear-

say evidence is being offered responsibility for the

manner in which the witness was previously handled

by another party. The sole exception to this, in the

Committee’s view, is when a party’s predecessor in

interest in a civil action or proceeding had an oppor-

tunity and similar motive to examine the witness.

Al4

The Committee amended the Rule to reflect these

policy determinations.

H.R.Rep. No. 650, U.S.Cop—E Conc. & Apmin.News 1974,

p. 7088, supra.

Aithough the Senate accepted the change proposed by the

House, the Senate Committee on the Judiciary made the

following observation about the import of the House ac-

tions:

Former testimony.—Rule 804(b)(1) as submitted by

the Court allowed prior testimony of an unavailable

witness to be admissible if the party against whom

it is offered or a person “with motive and interest

similar” to his had an opportunity to examine the

witness.

The House amended the rule to apply only to a

party’s predecessor in interest. Although the com-

mittee recognizes considerable merit to the rule sub-

mitted by the Supreme Court, a position which has

been advocated by many scholars and judges, we

have concluded that the difference between the two

versions is not great and we accept the House amend-

ment.

S.Rep. No. 1277, 93d Cong., 2d Sess. 28 (1974), reprinted in

1974 U.S.Cope Conc. & Ap.News 7051, 7074.

We join the Third Circuit in agreeing with the Senate

Committee that the difference between the ultimate re-

vision and the Rule, as originally proposed, is “not great.”

Lloyd v. American Export Lines, Inc., 580 F.2d 1179, 1185

(3d Cir.), cert. denied, 439 U.S. 969, 99 S.Ct. 461, 58 L.Ed.2d

428 (1978). Accordingly, we adopt the position taken by

the Lloyd court which it expressed in the following lan-

guage:

Al5

While we do not endorse an extravagant inter-

pretation of who or what constitutes a “predecessor in

interest,” we prefer one that is realistically generous

over one that is formalistically grudging. We believe

that what has been described as “the practical and

expedient view” expresses the congressional inten-

tion: “if it appears that in the former suit a party

having a like motive to cross-examine about the same

matters as the present party would have, was accorded

an adequate opportunity for such examination, the

testimony may be rece'ved against the present party.”

Under these circumstances, the previous party having

like motive to develop the testimony about the same

material facts is, in the final analysis, a predecessor

in interest to the present party.

Id. at 1187. See also Rule v. International Association of

Bridge, Structural Ornamental Iron Workers, Local 396, 568

F.2d 558, 569 (8th Cir.1977); Weinstein & Berger, Evidence

§ 804(b) (1) [04] at 804-67 (1969) (“[C]ases decided since

the enactment of Rule 804(b) (1) for the most part indicate

a reluctance to interpret ‘predecessor in interest’ in its

old, narrow, and substantive law sense, of privity”). Contra

In re IBM Peripheral EDP Devices Antitrust Litigation, 444

F.Supp. 110 (N.D.Cal.1978).

Our examination of the record submitted in this

case satisfies us that defendants in the DeRocco case had

a similar motive in confronting Dr. Smith’s testimony, both

in terms of appropriate objections and searching cross-

examination, to that which Raybestos has in the current

litigation. We therefore hold that the purposes of Rule

804(b) (1) will be fulfilled by the admission of Dr. Smith’s

deposition on retrial.

Al6

IT.

At trial appellants Clay and Bailey filed a motion seek-

ing summary judgment against both original defendants,

maintaining that they were entitled to a ruling that the

defendants were estopped from raising the issue of whether

they knew or reasonably should have known of the danger

associated with use of their products containing asbestos.

In this regard plaintiffs rely upon Borel v. Fibreboard Pa-

per Products Corp., 493 F.2d 1076 (5th Cir.1973), cert. de-

nied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974).

While Johns-Manville, an original defendant in this

case (now excluded because of its filing for bankruptcy)

was a party to Borel, Raybestos, the only defendant with

whom we deal in this opinion, was not. Collateral estoppel

prevents a party from relitigating a question put in issue

and conclusively determined against that party, where

such party had a full and fair opportunity to litigate the

issue in the first suit. It is clear that we do not have be-

fore us a proper claim for summary judgment on the basis

of collateral estoppel on the part of plaintiffs against re-

maining defendant Raybestos.

In Parklane Hosiery v. Shore, 439 U.S. 322, 99 S.Ct.

645, 58 L.Ed.2d 552 (1979), Justice Stewart’s opinion for

a nearly unanimous Court gave limited sanction to the

offensive use of collateral estoppel. On retrial of this

case, we commend to the District Judge’s attention the

standards set forth in Sections A and B of the Parklane

opinion and suggests that he allow plaintiffs opportunity

to prove, if they can, that they are entitled to the use of

the doctrine of offensive collateral estoppel. We also,

however, recognize the broad discretion that the Supreme

Court has vested in the District Judge in determining

whether or not to make use of this doctrine. Recognizing

Al7

the difficulty of applying the doctrine equitably, Justice

Stewart concluded for the Court:

We have concluded that the preferable approach

for dealing with these problems in the federal courts

is not to preclude the use of offensive collateral estop-

pel, but to grant trial courts broad discretion to de-

termine when it should be applied. The general rule

should be that in cases where a plaintiff could easily

have joined in the earlier action or where, either for

the reasons discussed above or for other reasons, the

application of offensive estoppel would be unfair to a

defendant, a trial judge should not allow the use of

offensive collateral estoppel.

439 U.S. at 331, 99 S.Ct. at 651-52.

The judgments entered below against plaintiffs are

vacated and the cases are remanded for retrial against

defendant Raybestos in accordance with this opinion.

Al8

APPENDIX B

[Clay Caption Omitted]

JUDGMENT

(Filed October 6, 1980)

This action came on for trial before the Court and a

jury, Honorable Robert L. Taylor, United States District

Judge, presiding, and the issues having been duly tried

and the jury having duly rendered its verdict,

It is Ordered and Adjudged that the plaintiffs take

nothing, that the action be dismissed on the merits, and

that the defendants, Johns-Manville Sales Corp. and

Raybestos-Manhattan, Inc., recover of the plaintiffs, John

Ed Clay and Marie Clay, their costs of action.

Dated at Knoxville, Tennessee, this 6th day of Oc-

tober, 1980.

/s/ Karl D. Saulpaw, Jr.

Clerk of Court

By /s/ Jean Medlock

[Bailey Caption Omitted]

JUDGMENT

(Filed October 6, 1980)

This action came on for trial before the Court and

a jury Honorable Robert L. Taylor, United States District

Judge, presiding, and the issues having been duly tried

and the jury having duly rendered its verdict,

It is Ordered and Adjudged that the plaintiffs take

nothing, that the action be dismissed on the merits, and

Al9

that the defendants, Johns-Manville Sales Corp. and

Raybestos-Manhattan, Inc., recover of the plaintiffs, Curtis

T. Bailey and Effie Bailey, their costs of action.

Dated at Knoxville, Tennessee, this 6th day of Oc-

tober, 1980.

/s/ Karl D. Saulpaw, Jr.

Clerk of Court

By /s/ Jean Medlock

[Multiple Caption Omitted]

ORDER

(Filed October 17, 1980)

For the reasons stated in a Memorandum Opinion

this day handed to the Clerk for filing, it is ORDERED

that plaintiffs’ motion for judgment notwithstanding the

verdict, or in the alternative for a new trial be, and the

same hereby is, denied.

ENTER:

/s/ Robt. L. Taylor

United States District Judge

[Multiple Caption Omitted]

MEMORANDUM

(Filed October 17, 1980)

This case is now before the Court on the motion of

plaintiffs for judgment notwithstanding the verdict, or in

the alternative, for a new trial. As a ground, plaintiffs

argue that the verdict of the jury in favor of the defendants

was contrary to the law and the evidence. In the opinion

A20

of the Court, there was substantial evidence to support

the verdict of the jury.

As additional grounds, plaintiffs argue that the Court

erred in various evidentiary rulings. First, plaintiffs point

to the Court’s refusal to introduce the deposition of Dr.

Kenneth W. Smith. The Court has repeatedly ruled on

this question and is still of the opinion that the deposition

should not have been introduced into evidence. The depo-

sition was taken in cases involving several parties other

than those involved in the present lawsuit or their pred-

ecessors in interest. Fed. R. Evid. 804(b)(1). Also, be-

cause of the difference in parties, the Court is of the

opinion that such evidence would only tend to confuse

the jury. See Fed. R. Evid. 403.

Next, plaintiffs argue that the Court’s charge on the

defense theory of intervening cause was prejudicial to

plaintiffs’ case and confusing to the jury. This is so,

plaintiffs argue, because the theory of the intervening

[2]

negligence of plaintiffs’ employers was stricken from the

pre-trial order. In the opinion of the Court, the jury

charge did not lead to any prejudice or jury confusion.

Plaintiffs also contest the Court’s refusal to grant

plaintiffs’ pre-trial motion for partial summary judgment

on the issue of the defective and unreasonably dangerous

condition of defendants’ products. The Court has re-

peatedly ruled that summary judgment is improper in

this case because the parties in the cited cases are different

than those in the case at bar. The Court stands by its

previous rulings.

Additionally, plaintiffs argue that the Court erred in

allowing the exhibits relating to the Stephens case to go

A2l

to the jury. In support, plaintiffs cite Fed. R. Evid. 105.

Contrary to plaintiffs’ argument, it was proper for these

exhibits to go to the jury. These exhibits were admitted

into evidence without any request that the evidence be

restricted to the Stephens case. Furthermore, no jury

instruction limiting the use of the evidence was requested.

The Court told the jury that the Stephens case had been

settled and thus need not be decided. There is thus no

basis for plaintiffs’ contention that the Stephens exhibits

confused the jury or prejudiced plaintiffs’ case.

Next, plaintiffs argue that they were unfairly preju-

diced by allowing the deposition of plaintiff Bailey to

be passed to the jury. This deposition was passed to

the jury in order to shorten the cross-examination of plain-

tiff Bailey. The portions for the jury to consider were

marked. The deposition was not given to the jury when

it retired. Thus, allowing the jury to see the deposition

amounted to no more than cross-examination of plaintiff

Bailey. In the

[3]

opinion of the Court, no prejudice resulted to plaintiffs’

case.

Plaintiffs also argue that the Court erred in allowing

a summary prepared by the attorneys for Raybestos-Man-

hattan to go to the jury. Plaintiffs contend that this

summary “was given the weight of testimony.” This was

not permitted as evidence, but was allowed to go to the

jury with the instruction that if it assisted the jury, it

could be considered for that limited purpose only, but

not as evidence.

Finally, plaintiffs contend that application of the ten-

year statute of limitations contained in Tenn. Code Ann.

A22

§23-3703 to plaintiff Bailey’s case was improper. The

Court instructed the jury that

“if a plaintiff discovered, or should have discovered,

his injury between July 1, 1978 and June 30, 1979,

then he may not recover damages if the product which

allegedly caused his injury was first purchased for

use or consumption more than ten years prior to the

date on which his iawsuit was filed.”

The Court then cautioned the jury <hat the ten-year limita-

tion only applied to a plaintiff who discovered, or should

have discovered, his injury during the year beginning July

1, 1978 and ending June 30, 1979. This is a correct state-

ment of Tennessee law. Thus, the jury instruction was

proper.

For reasons stated above, the Court feels that the

grounds relied upon by plaintiffs are without merit. Ac-

cordingly, it is ORDERED that plaintiffs’ motion for judg-

ment notwithstanding the verdict, or in the alternative

for a new trial, be, and the same hereby is, denied.

Order accordingly.

/s/ Robt. L. Taylor

United States District Judge

APPENDIX C

FED. R. APP. P. 28(j)

(j) Citation of Supplemental Authorities. When

pertinent and significant authorities come to the attention

of a party afier his brief has been filed, or after oral argu-

ment but before decision, a party may promptly advise

the clerk of the court, by letter, with a copy to all counsel,

setting forth the citations. There shall be a reference either

to the page of the brief or to a point argued orally to which

the citations pertain, but the letter shall without argu-

ment state the reasons for the supplemental citations. Any

response shall be made promptly and shall be similarly

FED. R. APP. P. 34(a)

Rule 34. Oral Argument

(a) In General; Local Rule. Oral argument shall

be allowed in all cases unless pursuant to local rule a

panel of three judges, after examination of the briefs and

record, shall be unanimously of the opinion that oral argu-

ment is not needed. Any such local rule shall provide

any party with an opportunity to file a statement setting

forth the reasons why, in his opinion, oral argument should

be heard. A general statement of the criteria employed

in the administration of such local rule shall be published

in or with the rule and such criteria shall conform sub-

stantially to the following minimum standard:

Oral argument will be allowed unless

(1) the appeal is frivolous; or

hati

A24

(2) the dispositive issue or set of issues has been

recently authoritatively decided; or

(3) the facts and legal arguments are adequately

presented in the briefs and record and the decisional

process would not be significantly aided by oral argu-

ment.

FED. R. EVID. 804(b)(1)

(b) Hearsay exceptions. The following are not

excluded by the hearsay rule if the declarant is unavailable

as a witness:

(1) Former testimony. Testimony given as a

witness at another hearing of the same or a different

proceeding, or in a deposition taken in compliance

with law in the course of the same or another pro-

ceeding, if the party against whom the testimony is

now offered, or, in a civil action or proceeding, a

predecessor in interest, had an opportunity and similar

motive to develop the testimony by direct, cross, or

redirect examination.

TENN. CODE ANN. §29-28-103

29-28-103. Limitation of actions—Exception. (a)

Any action against a manufacturer or seller of a product

for injury to person or property caused by its defective

or unreasonably dangerous condition must be brought

within the period fixed by §§ 28-3-104, 28-3-105, 28-

3-202 and 47-2-725, but notwithstanding any exceptions

to these provisions it must be brought within six (6)

years of the date of injury, in any event, the action must

be brought within ten (10) years from the date on which

A25

the product was first purchased for use or consumption,

or within one (1) year after the expiration of the antici-

pated life of the product, whichever is the shorter, except

in the case of injury to minors whose action must be

brought within a period of one (1) year after attaining

the age of majority, whichever occurs sooner.

(b) The foregoing limitation of actions shall not apply

to any action resulting from exposure to asbestos. [Acts

1978 (Adj. S.), ch. 703, § 3; 1979, ch. 162, § 1; T.CA,,

§ 23-3703. ]

TENN. CONST. ART. I, § 20

Sec. 20. No restrospective laws.—That no retro-

spective law, or law impairing the obligations of contracts,

shall be made.

TENN. SUP. CT. R. 4

Rule 4

Publication of Opinions—Citation of

Unpublished Opinions

1. The clerks of this court will promptly record the

written opinions delivered by the Court, and they shall

not permit them to be taken from their offices until they

are recorded. A copy of the opinions ordered to be pub-

lished shall be delivered to the Attorney General and Re-

porter as soon as enrolled.

2. The standards for determining whether opinions

of the Supreme Court shall be designated for publication

are:

A26

a. The opinion establishes a new rule of law or alters

or modifies an existing rule; or

b. The opinion involves a legal issue of continuing

public interest; or

c. The opinion criticizes existing law; or

d. The opinion resolves an apparent conflict of au-

thority; or

e. The opinion updates, clarifies or distinguishes a

principle of law.

3. Opinions of the Court shall be published only if

the majority of the judges participating in the decision

find that a standard for publication as set out above is

satisfied. Concurring opinions shall be published only if

the majority opinion is published. Dissenting opinions may

be published along with the main opinion, if the dissenting

judge determines that a standard for publication as set

out above is satisfied. If the standards for publication as

set out above are satisfied as to only a part of an opinion,

only that part shall be published.

4. No opinion of the Court of Appeals or the Court of

Criminal Appeals shall be published until after the time

has expired for the filing of an application for permission

to appeal. If this Court grants the application, or denies

the application, concurring in result only, the opinion of

the intermediate court shall not be published.

5. All opinions that are not found to satisfy a stan-

dard for publication as prescribed in paragraph two (2)

shall be marked Not Designated for Publication. No

opinion so designated shall be cited in any court unless

a copy thereof shall be furnished to the court and to ad-

versary counsel.

A27

28 U.S.C. § 1652

§ 1652. State laws as rules of decision

The laws of the several states, except where the Con-

stitution or treaties of the United States or Acts of Con-

gress otherwise require or provide, shall be regarded as

rules of decision in civil actions in the courts of the United

States, in cases where they apply.

(June 25, 1948, c. 646, § 1, 62 Stat. 944.)

U.S. CONST. ART. III, §2, CL. 1

The judicial Power shall extend to all Cases, in Law

and Equity, arising under this Constitution, the Laws of

the United States, and Treaties made, or which shall be

made, under their Authority,—to all Cases affecting Am-

bassadors, other public Ministers and Consuls;—to all Cases

of admiralty and maritime Jurisdiction;—to Controversies

to which the United States shall be a Party;—to Contro-

versies between two or more States;—between a State

and Citizens of another State;—between citizens of differ-

ent States,—between citizens of the same State claiming

Lands under Grants of different States, and between a

State, or the Citizens thereof, and foreign States, Citizens

or Subjects.

U.S. CONST, AMEND. X

Powers reserved to states or people.

The powers not delegated to the United States by

the Constitution, nor prohibited by it to the States, are

reserved to the States respectively, or to the people.

APPENDIX D

(Filed May 11, 1981)

NO. 80-5329

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

JOHN BUCKNER and wife,

OLAVENE BUCKNER,

Plaintiffs-Appellants,

GAF CORPORATION, RUBBEROID

DIVISION, ET AL..,

Defendants,

OWENS-ILLINOIS, INC., and

NICOLET, INC.,

Defendants-Appellees.

ORDER

Before: EDWARDS, Chief Judge, and BROWN, Circuit

Judge; and, RICE.*

Appellants, Mr. & Mrs. John Buckner, brought this

products liability action against several defendants, includ-

ing appellees, in the Eastern District of Tennessee, alleg-

ing that asbestos products manufactured or sold by those

defendants proximately caused Mr. Buckner’s asbestos-

*Honorable Walter H. Rice, United States District J

United States District Court for the Southern District of

sitting by designation.

A29

related disease. The district court, Honorable Frank W.

Wilson, granted appellees’ motions for summary judgment,

holding that the action was. barred as to them by virtue of

a ten-year statute of limitations, T.C.A. § 23-3703.

Section 23-3703 became effective on July 1, 1978, and

it provided that a products liability action “must be

brought within ten (10) years from the date on which the

product was first purchased for use or consumption.”

Presumably to correct an oversight, the Tennessee legis-

lature enacted an amendment to this section, which be-

came effective on July 1, 1979. The amendment, T.C.A.

§ 23-3703(b) provided that the ten-year statute of limita-

tion was inapplicable “to any action resulting from ex-

posure to asbestos.” During the hiatus between the ef-

fective date of the ten-year statute and the effective date

of the 1979 amendment, appellants’ cause of action ac-

crued (August 11, 1978), and was filed against appellees,

by amended complaint (May 22, 1979).

The district court held that because appellants’ ac-

tion was filed more than ten years from the date appellees

last sold or manufactured asbestos products the action

was barred as to them. On the dates the action accrued and

was filed, appellees were entitled to a statute of limita-

tions defense. The district court reasoned that because

the Tennessee Constitution, Article 1, section 20, prohibits

retroactive application of any law that would deprive a

party of a vested right, and the right to rely on a statute

of limitations defense is such a right, the 1979 amendment

could not be retroactively applied to revive the Buckners’

claim and deprive appellees of their defense. In so hold-

ing, the court relied upon Ford Motor Co. v. Moulton, 511

S.W.2d 690 (Tenn. 1974), reaffirmed, 533 S.W.2d 295

(Tenn. 1976), cert. denied, 419 U.S. 870 (1974), and Bates

v. Shapard, 461 S.W. 946 (Tenn. 1970).

A30

Appellants concede, as they must, that if the right

to rely on a statute of limitations defense is a vested

right, the 1979 amendment cannot be retroactively applied

to defeat that right. Appellants argue, however, that al-

though on the date of enactment § 23-3703 provided po-

tential defendants with a statutory defense, the right to

rely on that defense does not vest until one year after

the accrual date, when the action would be otherwise

barred by T.C.A. 28-304, a one-year statute of limitations.

We find this argument unpersuasive.

Appellants also argue that this action could have

been filed after the effective date of the 1979 amendment.

This fact is of little import, however, as the date the action

accrued controls which statute of limitation is applicable

to the action. This proposition also disposes of appellants’

argument that different results will arbitrarily occur, de-

pendent upon the filing date, in that class of cases in which

the action accrued prior to the effective date of the ten-

year statute, but which could have been filed before or after

that effective date.

Although the court recognizes the perhaps unfortunate

situation created by the Tennessee legislature’s apparent

oversight with respect to this statute of limitations, this

court agrees with the district court that Tennessee law

compels the conclusion that this action is barred as to

appellees.

Accordingly, IT IS ORDERED that the judgment of

the district court be, and it hereby is, affirmed on the

basis of the opinion of Judge Wilson.

ENTERED BY ORDER OF THE COURT

/s/ John P. Hehman

Clerk

A31

(Filed May 13, 1983)

Date of judgment is same as filing date of court’s opinion.

(T.R.A.P. 38)

IN THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTION

HAMILTON LAW C.A. #613

HON. H. TED MILBURN, JUDGE

REMANDED

LANCE JOHNSON, by next friend and parent WADE

JOHNSON, WADE JOHNSON, Individually, and

SHARON JOHNSON, Individually,

Plaintiffs-Appellants

Vv.

HAMILTON COUNTY, TENNESSEE, HAMILTON

COUNTY BOARD OF EDUCATION, JIMMY SIM-

MONS, WILLIAM G. ELDRIDGE and EDWARD

M. FOSTER

Defendants-Appellees

JAMES H. LOHR OF CHATTANGOOA FOR APPEL-

LANTS MELODY J. BOCK OF CHATTANOOGA

FOR APPELLEES

OPINION

Goddard, J.

Lance Johnson and his parents, Wade Johnson and

Sharon Johnson, sue Hamilton County, the Hamilton

County Board of Education, William G. Eldridge and Ed-

ward M. Foster, employees of the Board, and Jimmy

Simmons, a school bus operator, for damages as a result

A32

of an injury sustained by Lance when struck by a school

bus operated by Mr. Simmons.

It is the Plaintiffs’ theory that Messrs. Foster and

Eldridge were negligent in failing to provide supervision

over Lance, and in directing him to play in a dangerous

area, and that Mr. Simmons was negligent in operating

the bus.

On motions for summary judgment, the Trial Court

found that actions of the Board’s employees came within

the discretionary function exclusion of the Tennessee Gov-

ernmental Tort Liability Act, and accordingly dismissed

the suit as to the County, the Board and these two in-

dividuals. He further found that Mr. Simmons was a

governmental employee, and consequently, the Plaintiffs

were not entitled to a jury trial as to him.

An interlocutory appeal was prayed and granted which

raises the following four issues:

1. Is the duty imposed upon Public School Of-

ficials and teachers tc: supervise students under their

care, and otherwise provide for the students’ safety,

a discretionary function under TCA §29-20-205(1)?

2. Are the employees of a Governmental Agency

granted immunity under the Governmental Tort Li-

ability Act or the common law for their own negligence

under the circumstances as alleged in this case?

3. Does the Governmental Tort Liability Act

remove the right to a jury trial from plaintiffs whose

alleged cause of action arose on February 9, 1981, as

against the individual defendants in this case?

4. Should the Court have applied the provisions

of T.C.A. §29-20-107 in determining whether the de-

fendant Jimmy Simmons was an employee of the

A33

Hamilton County Board of Education, or was an in-

dependent contractor?

The following facts, developed through depositions,

are excerpted from the Appellees’ brief:

[T]he minor plaintiff, Lance Johnson, and five (5)

other fellow students had been playing ball in the

grassy area adjacent to the Ooltewah High School on

the south end of the school during the lunch hour. On

Wednseday or Thursday, the week prior to this ac-

cident, which occurred on Monday, February 9, 1981,

Edward M. Foster, Ooltewah High School’s coach and

grounds supervisor, while making his rounds at lunch-

time, noted that some students playing ball on the

south end of the school had run out into the road.

He told the boys not to play in the road and subse-

quently advised William G. Eldridge of the situation.

William G. Eldridge, the school principal, advised

Mr. Foster to tell these students that they would have

to discontinue playing ball on the south end of the

school and would have to play in the normal school

designated area for play and recreational activities

which was a grassy area adjacent to the school on

the north end of the campus. Mr. Foster relayed

this message to the students, one of which was the

minor plaintiff, Lance Johnson, on Friday, February

6, 1981.

On Monday, February 9, 1981, the students met at

lunchtime and went to the north end of the school and

started playing ball.

. . . Lance Johnson was standing 30 or 40 feet

from the curb where the road that runs around the

school is located, prior to the accident, and the ball

with which they were playing was put into motion

A34

and the minor plaintiff ran out and to the side to

catch the pass which was about a ten foot longer

pass than the plaintiff had anticipated and either

plaintiff tripped or fell or ran out into the road strik-

ing the bus and falling under it whereupon his lower

torso was run over by the bus being driven by the

defendant Jimmy Simmons, who was going between

five and ten miles per hour.

Resolution of the first issue on appeal requires that

we determine the legislative intent of subsection (1) T.C.A.

29-20-205, which provides the following:

Removal of immunity for injury caused by neg-

ligent act or omission of employees — Exceptions. —

Immnity from suit of all governmental entities is

removed for injury proximately caused by a negligent

act or omission of any employee within the scope of

his employment except if the injury:

(1) Arises out of the exercise or performance

or the failure to exercise or perform a discretionary

function, whether or not the discretion is abused.

By way of background we note that under the common

law certain public officials were granted immunity when

performing discretionary, as distinguished from ministerial

acts, provided they were not acting willfully, maliciously

or corruptly. This principle was recognized as early as

1931 in the case of State v. Farmers State Bank, 162 Tenn.

499, 39 S.W.2d 281, the language of which case was quoted

with approval most recently in Buckner v. Carlton, 623

S.W.2d 102, 104 (Tenn.App.1981), as follows:

The common law rule recognized a qualified im-

munity from suit for executive officials which has been

stated as follows:

A35

Where an officer is invested with discretion

and is empowered to exercise his judgment in mat-

ters brought before him he is sometimes called

a quasi judicial officer, and when so acting he is

usually given immunity from liability to persons

who may be injured as the result of an erroneous

decision, provided the acts complained of are done

in the scope of the officer’s authority, and without

willfulness, malice, or corruption. State, ex rel.

Robertson v. Farmers State Bank, 162 Tenn. 499,

505, 39 S.W.2d 281, 282 (1931).

It is unclear whether the Legislature intended by sub-

section (1) to codify the common law rule, although argu-

ments can be made that it did not because (1) it did not

carry forward the willful, malicious and corrupt exception,

and (2) other subsections of that Code Section include acts

_ which were traditionally considered discretionary.

We find no Tennessee case construing this statute,

but we note that a number of other states have enacted

Governmental Tort Liability Act with the same or sub-

stantially the same provision as subsection (1). A partial

collection of cases from other jurisdictions addressing the

question is found in an appendix to this opinion.

The great majority of the jurisdictions have construed

discretionary function to refer to the higher policy making

level rather than the lower administrative level, recog-

nizing, of course, that there is some discretion involved

in almost any act. Typical of the reasoning behind the

majority view is the language found in Bigelow v. Ingersoll,

618 P.2d 50, 53 (1980), wherein the Supreme Court of Utah

said the following:

According to the definition of discretion estab-

lished in Frank v. State, Utah, 613 P.2d 517 (1980),

A36

a discretionary function under §63-30-10(1) is “con-

fined to those decisions and acts occurring at the ‘basic

policy making level,’ and not extended to those acts

and decisions taking place at the operational level, or,

in other words, ‘. . . those which concern routine,

everyday matters, not requiring evaluation of broad

policy factors.’” Although the acts of the State in-

volved in designing the traffic control system involve

some degree of discretion, as do almost all acts, the

design of the traffic control system does not involve

the “basic policy making level.”

This conclusion follows earlier cases dealing with

similar subject matter. This Court in Andrus v. State,

Utah, 541 P.2d 1117 (1975), held that the preparation

of plans and specifications, and the supervision of the

manner in which the building of a highway was car-

ried out, were nondiscretionary functions. In Carroll

v. State Road Commission, 27 Utah 2d 384, 496 P.2d

888 (1972), the Court held that a road maintenance

supervisor’s decision to use berms as the best means of

protection was not a basic policy determination and

was not within the discretionary function exception

of §63-30-10(1).

While we are not prepared to say that only decisions

made at the policy making level come within the exemp-

tion, we are persuaded that the acts of the principal and

coach in this case do not and that the Trial Court was in

error in so holding.

The second and third issues may be treated together.

It is true, as argued by the Appellants, that the Govern-

mental Tort Liability Act does not expressly grant im-

munity to employees. However, in our view, such a result

is clearly implied by T.C.A. 29-20-313(a), which states

A37

in part that “when one or more defendants to a lawsuit

claims that he is an employee of a governmental entity .. .

and is therefore entitled to the governmental immunity

granted by this chapter... .” We believe that this Code

Section, when considered with T.C.A. 29-20-310, which, as

Section 20 of the original Act, was entitled, “Immunity of

Employees—Determination to be made by the Court,”

shows a legislative intent to immunize employees up to

the statutory requirement or the amount of insurance car-

ried by the government entity, whichever is greater. It is

true that T.C.A. 29-20-313(a) was enacted after the acci-

dent in question and after this cause of action arose, but

the language quoted is referring to the status of the em-

ployee, at least in the mind of the Legislature prior to its

enactment. Moreover, in Johnson v. Smith, 621 S.W.2d 570

(Tenn.App.1981), such a construction was held to be the

legislative intent, even prior to the passage of 29-20-313 (a).

We accordingly conclude that individual employees

are granted a partial immunity and that suit may not be

maintained against them unless the damages sought ex-

ceed the statutory requirement or the insurance coverage.

Johnson v. Smith, supra. In the case at bar we are per-

suaded that the damages do not because the County did

not plead absolute immunity as to any portion thereof.

In light of our disposition of the second issue, the

third issue relative to the right to a jury trial against the

employees is rendered moot.

In reaching the above conclusion, we have not passed

upon the constitutionality of the Legislature granting im-

munity to the governmental employees. This issue was

not raised and the Attorney General was not made a party

or notified at the trial level as required by Rule 24.04 of

the Tennessee Rules of Civil Procedure.

A38

Apropos of the last issue, the Appellants contend that

the status of the bus driver, Mr. Simmons, should be gov-

erned by the provisions of T.C.A. 29-20-107,' which became

effective July 1, 1981, notwithstanding that the accident

29-20-107. Definition of government employee for tort

liability purposes.— (a) Any person who is not an elected

or appointed official or a member of a board, agency or

commission shall not be considered an employee of a gov-

ernmental entity for purposes of this chapter unless the

court specifically finds that all of the following elements

(1) The governmental entity itself selected and en-

gaged the person in question to perform services;

(2) The governmental entity itself is liable for the

payment of compensation for the performance of such ser-

vices and the person receives all of his compensation di-

rectly from the payroll department of the governmental

entity in question;

(3) The person receives the same benefits as all other

employees of the governmental entity in question including

retirement benefits and the eligibility to participate in insur-

ance programs;

(4) The person acts under the control and direction of

the governmental entity not as to the result to be accomplished

but as to the means and details by which the result is ac-

complished; and

(5) The person is entitled to the same job protection

system and rul such as civil service or grievance pro-

cedures, as are 0 persons employed by the governmental

entity in question.

(b) A governmental] entity’s reservation of the right

to approve employment or terminate employment by any

contract, agreement or other means or such entity’s Ypility

to control or direct a person not otherwise in the regular

employ of such entity shall not operate to make a person an

employee of such entity for the purpose of the immunity

granted by this chapter unless such person otherwise quali-

fies as an employee according to the provisions of this section.

granted by this ter to independent contractors or other

persons or entities contract, agreement or other means

nor shall the doctrine of borrowed servants operate to make

any person a governmental entity employee for the purpose

of immunity who does not otherwise meet all of the elements

set out in this section.

A3$

occurred prior to its effective date. Resolution of this ques-

tion requires that we determine whether the statute is to

be applied retrospectively, and the answer to that question

turns upon whether it affects a vested right. Anderson v.

Memphis Housing Authority, 534 S.W.2d 125, 127 (Tenn.

App.1975) , addresses the subject thusly:

The fact that a statute is retrospective in applica-

tion does not automatically render it unconstitutional

and void. It is when a statute creates a new right

or takes away a vested right or impairs contractual

obligations that its retrospective application is con-

stitutionally forbidden. Tenn.Const. Art. 1, §20;

Wynne’s Lessee v. Wynne (1852) 32 Tenn. 405. If

the statute does none of the foregoing but is only

procedurally remedial in nature, retrospective applica-

tion is constitutionally permissible. Wynne’s Lessee;

Cavender v. Hewitt (1921) 145 Tenn. 471, 239 S.W.

767, 22 A.L.R. 755; Dowlen v. Fitch (1954) 196 Tenn.

206, 264 S.W.2d 824; Sherrill v. Thomason (1921)

145 Tenn. 499, 238 S.W. 876. In point of fact, the

retrospective application of remedial statutes is not

only constitutionally permissible, but such statutes

are generally to be construed in favor of retrospective

application when possible. Dowlen v. Fitch.

Applying this test to the facts of this case, it is ap-

parent that if the language of the 1981 amendment is ap-

plied, it is likely that Mr. Simmons would not come within

the definition of an employee, and thus be stripped of the

immunity with which he was clothed prior to its enact-

ment.

It then becomes apparent that the 1981 amendment

would take away a vested right, and consequently cannot

be retrospectively applied.

A40

The case is remanded to the Circuit Court for further

proceedings consistent with the mandates of this opinion.

The costs of appeal are adjudged against the Appellees.

/s/ Houston M. Goddard

Houston M. Goddard, Judge

CONCUR:

/s/ Clifford E. Sanders

Clifford E. Sanders, J.

/s/ Herschel P. Franks

Herschel P. Franks, J.

APPENDIX

Carlson v. State, 598 P.2d 969 (Alas.1979). When to main-

tain highway lookouts in winter—discretionary; how

to implement—non-discretionary.

State v. Abbott, 498 P.2d 712 (Alas.1972). Maintenance

of highway—non-discretionary.

Johnson v. State, 447 P.2d 352 (Cal.1968). Warning to

foster parents of latent danger of accepting youth into

home—non-discretionary.

Dunbar v. United Steelworkers of America, 602 P.2d 21

(Idaho 1979). Inspection of mines decided on other

grounds; exhaustive review of state and federal cases

on subjects.

Crouch v. Hall, 406 N.E.2d 303 (Ind.Ct.App.1980). Police

officer’s investigation of rape case—discretionary.

Mills v. American Playground Device Co., 405 N.E.2d 621

(Ind.Ct.App.1980). Establishment of playground—

discretionary; implementation by carrying out decision

—non-discretionary.

A4l

Law v. Newark Board of Education, 417 A.2d 560 (N.J.

Super.Ct.1980). Supervision of recreational program

—non-discretionary.

Sutphen v. Benthian, 397 A.2d 709 (N.J.Super.Ct.1979).

Requiring participation in school hockey game and fail-

ing to providé information regarding use of equip-

ment—non-discretionary.

Baker v. State Board of Higher Education, 531 P.2d 716

(Ore.Ct.App.1975). Selection of site for “Indian

Powwow”—non-discretionary.

Bigelow v. Ingersoll, 618 P.2d 50 (Utah 1980). Care and

traffic control lights—non-discretionary.

Frank v. State, 613 P.2d 517 (Utah 1980). Care and treat-

ment of suicide-prone patient—non-discretionary.

Andrus v. State, 541 P.2d 1117 (Utah 1975). Decision to

build and locate highway—discretionary; plans and

specifications for highway—non-discretionary.

Maloney v. Tribune Publishing Co., 613 P.2d 1179 (Wash.

Ct.App.1980). Criminal investigation and disclosure

of information—discretionary.

A42

APPENDIX E

IN THE COURT OF COMMON PLEAS

OF ALLEGHENY COUNTY,

PENNSYLVANIA

CIVIL DIVISION

No. 2880 July Term, 1974

2881 July Term, 1974

JAMES ROY DeROCCO and ANDREW V. CAROLLO,

Plaintiffs,

vs.

FOFTY-EIGHT INSULATION, INC.,

a corporation, et al,

Original Defendants,

vs.

WHEELING-PITTSBURGH STEEL

CORPORATION, et al,

Additional Defendants,

vs.

UNARCO INDUSTRIES, INC., et al,

Additional Defendants.

DEPOSITION OF DR. KENNETH WALLACE SMITH,

a witness called by the plaintiffs for examination, in ac-

cordance with the Pennsylvania Rules of Civil Procedure,

taken by and before Richard E. Powers, a Registered Pro-

fessional Reporter and a Notary Public in and for the

Commonwealth of Pennsylvania, at the law offices of

Stein & Winters, 520 Frick Building, Pittsburgh, Pa., on

January 13, 1976, at 10:00 o’clock a.m.

A43

[2] APPEARANCES:

For the Plaintiffs: McArdle, Henderson, Caroselli,

Spagnolli & Beachler by Thomas W. Henderson,

Esq., and William R. Caroselli, Esq.

For Forty-Eight Insulation: Meyer, Darragh, Buckler,

Bebenek & Eck by David Patterson, Esq.

For Vimasco Corp.: Burns, Manley & Little by James

F. Manley, Esq.

For Gustin-Bacon: Bagley, Weaver & Sydor by R.

Kenneth Willman, Esq.

For Eagle-Picher Ind., Inc.: Rosenberg, Kirshner &

Kaleugher, by Michael D. Berlin, Esq.

For Pittsburgh Corning Corp.: Dickie, McCamey &

Chilcote by Randall J. McConnell, Esq.

For Owens-Corning Fiberglass Corp.: Egler & Rein-

stadtler by Robert J. Pfaff, Esq.

For Johns-Manville Products Corp.: Stein & Winter.

by Daniel B. Winters, Esq.

For Benjamin Foster: Lancaster, Mentzer, Coyne &

Duffy by Charles J. Duffy, Jr., Esq.

For United Steelworkers of America: Murovich,

Reale & Fossee by Chester S. Fossee, Esq.

For Unarco Ind., Inc.: Thomson, Rhodes & Grigsby

by James Hartline, Esq.

For Celotex Corp.: Jones, Gregg, Creehan & Gerace

by Robert C. Jones, Esq.

For George V. Hamilton: Brandt, McManus, Brandt

& Malone by Mark K. McNally, Esq.

A44

Exhibit A

KENNETH W. SMITH, M.D.

400 Huron Church Rd.

Windsor, Ontario N9C2J9

Corrections in my deposition taken on January 13, 1976.

Page 4 line 25—British Guiana

Page 5 line 6—British Guiana

Page 8 line 25—“Gulley” is pronounced “Gawlee” and

spelling might be Gauley or Galley.

Page 10 line 18—Thetford

Page 16 line 10—Should read “chemically indistinguish-

able but physically distinguishable under

the microscope—’’.

Page 17 line 11—Smithers

Page 19 line 23—Thetford

Page 20 lines 6, 7 and 10—Thetford

Page 28 line 21—Thetford

Page 29 line 6—Thetford

Page 30 line 3—Thetford

Page 30 line 15—Thetford

Page 30 line 19—Thetford

Page 30 line 24—Thetford

Page 31 line 13—Thetford

Page 34 line 7—85 percent magnesia

Page 35 line 15—Thetford

Page 35 line 18—Thetford

Page 38 line 11—Smithers

Page 47 line 12—Elsenbast

Page 49 line 7—Elsenbast

Page 50 line 4—Vandever

Page 51 line 17—Elsenbast

Page 51 line 18—Elsenbast

Page 54 line 15—Bill Fehnel

/s/ Kenneth W. Smith

Kenneth W. Smith, M.D.

A45

EXHIBIT B

POWERS AND GARRISON

Court Reporters

513 Second Avenue

Pittsburgh, PA. 15219

(412) 263-2088

February 20, 1976

David Patterson, Esq.

James F. Manley, Esq.

R. Kenneth Willman, Esq.

Michael D. Berlin, Esq.

Randall J. McConnell, Esq.

Robert J. Pfaff, Esq.

Daniel B. Winters, Esq.

Charles J. Duffy, Jr., Esq.

Chester S. Fossee, Esq.

James Hartline, Esq.

Robert C. Jones, Esq.

Mark K. McNally, Esq.

James H. McCombay, Esq.

In re: DeRocco and Carollo vs. Forty-Eight Insulation,

Inc., et al.

Gentlemen:

At the conclusion of his deposition taken in the

above-captioned case, Dr. Kenneth Wallace Smith did not

waive the reading and signing of the transcript. Dr.

Smith has now read the transcript and returned to me

a signed list of corrections. I am enclosing herewith a

copy of the corrections and would request that you con-

form your copies of the deposition.

Very sincerely yours,

/s/ Richard E. Powers

Richard E. Powers

A46

[3] MR. WINTERS: Would there by any objection

if we reserve all objections until trial time, except as

to the form of the question?

MR. HENDERSON: I’m agreeable to that. Is that

all, Dan?

MR. WINTERS: That’s all.

DR. KENNETH WALLACE SMITH, having been first

duly sworn, was examined and testified as follows:

BY MR. HENDERSON:

Q Would you state your name, sir. A Kenneth Wal-

lace Smith.

Q Whatisyourage? A Sixty-two.

Q You are a licensed physician in the provinces of

Quebec and Ontario? A Dominion of Canada and the

state of Vermont, in addition.

Q What is your office address now, Dr. Smith? A

400 Huron Church Road, Windsor, Ontario.

Q How long have you been located at that address?

A A little over one year. I was in other offices before

that.

Q How long has it been since you have been in

Windsor, Ontario? A Four and a half years.

[4] Q From what undergraduate school did you

graduate? A Bishop’s University in Lennoxville, Que-

bec, and I went on to McGill University Medical School,

Montreal.

Q In what year did you graduate from Bishop’s Uni-

versity? A ’35.

Q What year did you finish medical school at Mc-

Gill? A ’41.

Q Following your graduation from the McGill Uni-

versity Medical School, did you serve an internship at

any hospital? A The Royal Victoria Hospital, Montreal,

and the Royal Edward Laurentian Sanitarium, St. Agathe,

Quebec.

A47

Q What years were those internships, sir? A As

a student intern at the sanitarium, ’38 and ’39, and as

a graduate medical student there and the Royal Vic, ’41

and 42.

Q What area of medical specialty had you been in-

volved in immediately following your internship at the

Royal Victoria Hospital in 1941, 1942? A Not as a certi-

fied specialist, sir, but as a general physician I went into

practice of industrial medicine with the Aluminum Com-

pany of Canada at their bauxite mines in British Guiana,

South America.

[5] Q For what period of time did you serve as

physician for the Aluminum Company of Canada? A

About two years.

Q Was that entire time in British Guiana? A

Right.

Q Following that two-year period, what did you do

next in connection with your medical practice? A Upon

return to Canada, I joined Canadian Johns-Manville Com-

pany at their asbestos mine in a town called Asbestos,

Quebec.

Q Did you have different titles during the time that

you were with Canadian Johns-Manville at Asbestos, Que-

bec? A I was medical officer until the retirement of

Dr. R. H. Stevenson, and then I assumed the title of

medical director, Canadian Johns-Manville.

Q What year did you have the title of medical direc-

tor of Canadian Johns-Manville? A I can’t be certain

of the exact date, but I would assume that must have

been around 1946, ’47.

Q For what period of time after you had become

medical director did you continue to work for Canadian

Johns-Manville? A Until the fall of 1951.

[6] Q Following which, in connection with your

medical practice by whom were you employed? A I

A48

went from Asbestos, Quebec, to Montreal as an assistant

corporate medical director, the Northern Electric Company.

Q What period of time did you serve with Northern

Electric? A A little more than a year and a half.

Q Following which you became employed where?

A New York City as medical director for Johns-Manville

Corporation.

Q What year was that, Doctor? A Late ’52, early

53.

Q For what period of time did you serve as medical

director of Johns-Manville Corporation? A Until 1966,

I believe.

Q Following which by whom were you employed

and in what capacity? A Corporate medical director,

the Brush Beryllium Company in Cleveland.

Q For what period of time and during what years

were you employed with Brush Beryllium? A _ ‘66 to ‘71.

Q In 1971 when you started in Windsor, Ontario?

A Right.

[7] Q And what is the nature of your medical prac-

tice now? A Family physician, primarily limited to the

psychiatric field of people problems. As a full member

of the Academy of Psychiatry, I work in the Department

of Psychiatry, too, at the Windsor Western Hospital Center

and consultant for the Addiction Research Foundation,

Ontario.

- Q Up until the time that you left the employment

of the Brush Beryllium Company and from the time that

you had started with the Aluminum Company of Canada,

had you been involved with the medical specialty of indus-

trial or occupational medicine? A Correct; primarily

occupational pulmonary diseases.

Q What titles or memberships or fellowships did you

hold and do you presently hold in connection with the

medical specialty of industrial medicine? A I was a

A49

founding member and later president of the Quebec In-

dustrial Medical Association. Fellowship in the Industrial

Medical Association, U. S. They have changed titles of

these associations several times, such as the American

Thoracic Association was a later title for American Lung

Association.

Q Were you also a member of the American Lung

Association? [8] A Yes.

Q Did you hold any offices in connection with your

memberships in any medical associations? A Only in

the Quebec Industrial was I an officer.

Q Are you a member of the Canadian Medical As-

sociation? A Definitely.

Q Did you mention your connection with the Indus-

trial Health Foundation? A No, I did not. I was think-

ing primarily of purely medical. I was a member of

the Industrial Hygiene Foundation here in Pittsburgh,

which later changed its name to the Industrial Health

Association. Then a member of their Medical Committee,

later chairman of their Medical Committee, later assistant

president of their Board of Trustees, and finally put out

to pasture as trustee emeritus.

Q What was and is the Industrial Hygiene Founda-

tion and its successor, the Industrial Health Foundation?

A I believe the Industrial Hygiene Foundation was

formed by a group of companies about 1935, who were

primarily interested in the health hazards of silicon work-

ers, instigated I think primarily because of the bad silicosis

record of the (see correction list) Tunnel workers here;

an association [9] to gather facts and figures on the health

hazards of workers, to disseminate this information, and

to promote research into the effects and prevention of

primarily pulmonary disease.

Q Doyou recall approximately what date you became

a member of the Industrial Hygiene Foundation and its

A50

successor, the Industrial Health Foundation? A Per-

sonally?

Q Yes. A Well, when I joined the corporation in

1943.

Q When you refer to “the corporation,” you are re-

ferring to A I’m sorry. I was considering Canadian

Johns-Manville as well as the corporate body.

Q Were there corporate memberships as well in the

Industrial Hygiene Foundation? A Many other com-

panies.

Q Were Canadian Johns-Manville and Johns-Man-

ville Corporation members of the Industrial Hygiene Foun-

dation and later the Industrial Health Foundation? A

Correct.

Q Were there also various other corporate member-

ships? A Many of them.

Q Specifically in the area of pulmonary disease re-

ferred to [10] as asbestosis, were you involved or were

you there studies started and information disseminated

with respect to asbestosis as part of the function of the

Industrial Hygiene Foundation and its successor, the In-

dustrial Health Foundation? A Definitely in the field

of asbestosis.

Q Have you published in any area, Dr. Smith? A

Yes. I authored and co-authored several papers on as-

bestosis concerning, for instance, the morbidity and mortal-

ity of asbestosis workers, the effects of the inhalation

of asbestos dust, and others with asbestos dust and mix-

tures of other toxic dust.

Primarily the papers were authored by Dr. Paul Gross

of the Hygiene Foundation here in Pittsburgh, and I was

a co-author with him or with him and Dr. Paul Cartier

of the Thetford Mines, Quebec, in the broadened asbestosis

field.

A51

Q What years would your co-authorship and putting

together the necessary information in collaboration with

Drs. Gross and Cartier have begun and during what period

of time did they continue? A I think that the first

publications were in the late 1940’s, and continued up

until I left JM in the middle [11] 1960's.

Q With reference to an article published in 1955

bearing your name alone, “Pulmonary Disability of As-

bestos Workers do you recall that publication? A I do.

Q And was that authored by you? A _ Right.

Q In connection with a certain textbook called, “The

Pneumoconioses,” under the authorship of A. J. Lanza,

would you describe your specific and general duties or

responsibilities in connection with that publication, and

describe the publication as well. A Tony Lanza felt

that there should be a text on the pneumoconioses or in-

dustrial pulmonary diseases as we saw them at that time,

and he and I collaborated extensively on gathering manu-

scripts from various authors, collating them and publishing

them in that text called, “The Pneumoconioses.” I went

over every manuscript, had a lot of them typed and

retyped in my office before publication, and assisted Dr.

Lanza in the choice of the x-ray films which are well-

illustrated in that text.

Tony asked me on numerous occasions to be a co-editor

[12] of that text, and I steadfastly refused because Dr.

Lanza, I called him the father of modern industrial

medicine. If you look up his qualifications, they are

numerous and quite significant, and I didn’t want my

junior name to be riding on his coattails.

Q When did the work start in connection with that

publication? At least, when did your work start in con-

nection with it? A Oh, about 1949, 1950, I’d say.

Q Does your name appear as being responsible

specifically for any particular section of that book? A I

wrote the section on asbestosis in that book.

A52

Q What other specific pneumoconioses are discussed

in the book, “The Pneumoconioses” by Lanza? A Oh,

silicosis, beryllium disease, the disease of coal workers,

soft coal and hard coal, asbestos. There are other chapters

having to do with pathology of many diseases which may

or may not be occupationally related, such as sarcoidosis.

Q When you refer to the word, “pathology,” will

you describe for us what that means? A “Pathology”

is a word used to describe a disease process, a change in

the normal structure of part of the human [13] body.

Q Has that publication, in your opinion, been widely

disseminated? A _ Internationally. ‘

Q What is the corporate relationship, if you know,

between Canadian Johns-Manville and the Johns-Manville

Corporation? A The corporation is the parent body,

made up of several divisions, and for legal purposes the

Canadian Johns-Manville is just another division of the

company, such as the Industrial Products Division or the

Celite Division or the Transite Pipe Division in this

country. Canadian Johns-Manville is a company title, but

it acts as a division of the parent corporation.

Q One or two of the things on Dr. Lanza. When

did you first meet and inter-relate professionally with

Dr. Lanza, if you can tell us? A 1944.

Q What was Dr. Lanza doing at that time? A He

was very active in the Medical Department of the Metro-

politan Life Insurance Company, the Saranac Laboratory

and Trudeau Foundation, and then or soon after the School

of Medicine at New York University.

Q What was the relationship at that time between

[14] Metropolitan Life Insurance Company and Johns-

Manville and Canadian Johns-Manville? A Metropolitan

Life carried our general insurance, and I believe in those

years it was both occupational and non-occupational in-

surance in this country. Metropolitan Life sponsored

A53

surveys in various areas, especially mine workers in

Quebec, asbestos mines. They carried our non-occupational

group life insurance in Canada.

Q Was the Metropolitan Life Insurance Company a

part of the studies begun and continued at Saranac Labora-

tory? A Definitely.

Q Who else funded those studies, to your knowledge?

A The only other organization that I can think of—well,

definitely the U. S. Public Health Service, and probably

some monies from one or two trade organizations, such

as the Asbestos Textile Institute, and perhaps the—you

will forgive me for the exact names, but I believe it was

the Asbestos Cement Products Institute, National Mineral

Wool Association. Those are the trade organizations that

were involved.

Q Did Johns-Manville provide any of the funding for

the Saranac Laboratory’s studies? A Yes, sir.

[15] Q Would you describe for us now about when

these studies began and the connection between the Tru-

deau Foundation and the Saranac Laboratory and what

the purpose of either or both was? A Well, the studies

had been going on at Saranac Lake during the late 1930’s,

and I mentally associate the Saranac Lab with the Indus-

trial (lygiene Foundation after it was formed in ’35, which

was several years before I joined CJM, and these studies

were continued after I became part of Johns-Manville.

Q CJM is Canadian Johns-Manville? A Canadian

Johns-Manville.

Q And if you refer to JM later on, that will be Johns-

Manville? A That’s right.

Q What was the purpose of the studies specifically,

Dr. Smith, that is, the Saranac Lake Laboratory studies?

A The early studies, as I recall, were to find out any

effect the inhalation of asbestos dust per se would have

on human beings, and then when they found out that there

AS4

was a deleterious effect on the lungs, they wanted to

see if there was any correlation between the inhalation

of asbestos dust and tuberculosis.

[16] When they found no correlation between the in-

halation of asbestos dust and pulmonary tuberculosis, they

then said, “Well, what part of the dust is toxic?” and

studies continued on to differentiate the rock dust in the

airborne particles and the fiber dust.

When I said the earliest studies were asbestos dust,

that included parts of the rock and parts of fiber, which

are chemically indistinguishable but physically distinguish-

able under the microscope, and they found that it was the

fibrous portion of that airborne dust that caused lung di-

sease.

Q Well, had there not been studies done in Eritain,

and perhaps even in the United States, prior to the be-

ginning of the Saranac Lake Laboratory studies which had

indicated much the same? A Very definitely. As I re-

call, Merriweather and his cohorts studied the effects of

the asbestos textile dust many years prior to 1935, and

their publications are well-documented and available world-

wide.

Q Where did the publications emanate from? A

England.

Q Were there any studies by Merriweather and

Knox, or Merriweather and his cohorts, as you described

them, to [17] indicate the effects on persons other than

textile workers in the context of the developmental pro-

cess that we have characterized as asbestos? A Using

my terminology, I would say that there were studies of

the effects of inhalation of asbestos fibers on workers and

the civilian population, those people at home or shop-

keepers or anything like that. Yes, there were studies.

The first ones that I can recall were published by Smithers

and some other doctor whose name I don’t recall] at the

A55

moment. They were both understudies of Merriweather in

England, and I think that the civilians studied were in

the London area.

Q Would you define for us what you have encom-

passed in the word, “civilians,” as opposed to “workers.”

A Well, workers are occupational civilians, and non-

occupation are such as the housewife or the merchant in

the street.

Q What did the studies indicate with respect to

the housewife or merchant in the street with respect to

the developmental aspects of asbestosis? A It showed

that these so-called civilian people are human beings, just

like the workers. They did develop x-ray changes which

you don’t find in the normal population on the street, and

they were presumed to be caused by the [18] inhalation

of asbestos fibers.

Q Are x-ray changes which have generally be-

come accepted as the indicators of asbestosis peculiar to

the extent that all other forms of pneumoconiosis can be

excluded when the proper interpretation of an x-ray is

made? And if you can answer that, I’d like you to ex-

plain it. A Yes. I'd like to be a purist or presbyterian

in my terminology.

Q So you correct me where necessary, please. A

When you look at an x-ray, you are looking only at shadows,

like the negative of an ordinary photographic picture,

and the shadows that you look at in the person exposed

only to asbestos fiber is typical. It’s in the lower part

of each lung field, not at the top.

The shadow is homogeneous. We used to call it the

snowstorm appearance, and never in the pure asbestos

exposure is it a conglomerate shadow or a big nodule, like

a baseball.

The silicosis pattern is a nodular pattern that appears

from top to bottom to the same degree in all lung fields.

A56

It goes on to conglomerate shadows. The little nodules get

larger and then coalesce to the golfball-baseball type of a

shadow. Then when you mix [19] the two together or

you add infection, you get bizarre x-ray pictures in which

you cannot say this is a pure case of asbestosis or a pure

case of silicosis. It’s a case of mixed dust, pneumoconiosis.

Q What different forms or kinds of asbestos are there

that are used at least in the United States and in Canada?

A The most prevalent form of asbestos fiber in North

America is the chrysotile, and that was the original soft,

silky fiber which could be used in textiles. Then there

is the amosite, which is a South African brown fiber used

primarily for its insulating property, and the crocidolite,

the South African blue, which is a very harsh fiber and

used primarily in asbestos cement insulation because of

its matting power and water retention in the formation

of asbestos cement products.

Q Where isa substantial portion of chrysotile asbestos

mined? A We like to believe that the mine where I

worked in Asbestos, Quebec, was the world’s largest chry-

sotile asbestos mine, and about 90 percent of the world’s

chrysotile came from that Thetford Mines in Asbestos,

Quebec.

Q At Asbestos, Quebec, was there only Canadian

Johns-Manville [20] as the miner, miller and manufac-

turer of Chrysotile asbestos? A No.

Q What about the Thetford Mines? A In Thetford

Mines there are five or six independent companies and

several smaller ancillary companies.

Q Do you know back in the ‘40s, or even in the

50s, who the principals were in the Thetford Mines?

A The names of the companies?

Q Yes. A asbestos Corporation, Johnston. I think

Carey came later.

A57

Q Would that be Philip Carey? A I believe so.

Bell. I can’t think of any specific names other than those

at the moment.

Q Were there other mines that were later opened

by Canadian Johns-Manville after the Asbestos, Quebec,

mine? A We opened a mine—

Q When you say, “we,” you are referring to Canadian

Johns-Manville? A Yes. Canadian Johns-Manville

opened a mine in Matheson, Northern Ontario. Later it

was closed and another opened north of there in Ontario.

Years and years ago [21] we operated a mine for a short

period of time in—this is Jchns-Manville Corporation oper-

ated a mine in Arizona.

Then there was one in the ’60s for a few years in

Coalinga, California; and then in the early 60s we operated

a mine and a mill in the Canadian province of Newfound-

land.

Q Going back to when you became employed as a

physician, even though that wasn’t what the specific title

was, at Canadian Johns-Manville, would you indicate

whether or not you worked under anyone initially and

at what point you became the director or chief medical

officer? A I first started under Dr. R. H. Stevenson,

he being there for many years. He started his practice

there, his private practice, about 1897, 1898; and when

he retired and still continued as an consultant, I assumed

the position and title of the chief medical officer.

Q For what period of time did you work directly

under Dr. Stevenson prior to his retirement? A From

1944 until he retired a couple of years later.

Q What were your duties and responsibilities as the

physician, and later as chief medical officer, of Canadian

Johns-Manville? A Well, at the beginning I had a small

private practice, [22] limited primarily to the English-

speaking people in this town. There were two French-

A58

speaking physicians taking care of the majority of the

population.

As far as the company was concerned, I had to de-

velop programs for the identification of health and safety

hazards, to treat disease and accident cases, and act as

consultant to other parts of Canadian Johns-Manville, as

well as Johns-Manville Corporation. There was no doctor

in the corporation at all in their headquarters in New

York.

Q Atthattime? A At that time.

Q Was there also a company-owned hospital in As-

bestos, Quebec? A Yes. The company ran a small hos-

pital for our private practice patients, as well as the treat-

ment of injuries and disease, and I was in charge of that

hospital and all its functions.

Q Following the beginning of your employment with

Canadian Johns-Manville, did you begin to see persons

who had become afflicted or who had contracted what

we are referring to as the pulmonary abnormality known

as asbestosis? [23] A Very definitely, almost from

the first day.

Q Were you seeing these patients on a regular and

frequent basis? A Very definitely, yes, because we had

the program of complete pre-employment physical exam-

inations, the history, the physical examination, chest

x-rays, routine laboratory work; and thereafter on an an-

nual basis we examined each person on the payroll.

Q Did you examine each person on the payroll in

much the same fashion as you already discussed, that

is, the physical examination, the chest x-ray, the routine

lab work, et cetera? A Definitely.

Q Did you have any decision-making powers or any

advisory powers with which certain employees may be

employable or have limited employability, and, if so, would

you describe what that was? A May I give you my

A59

basic philosophy as a physician in my life. I am a physician

in an advisory capacity, not a supervisory capacity. If,

for instance, you develop an acute bronchitis, I can say,

“Mr. Henderson, you should take this antibiotic, this cough

medicine, and stay in bed.” I cannot supervise the taking

of these [24] things.

In the same way, from 1944 on in Canadian Johns-

Manville and Johns-Manville I was advisory, not super-

visory. I advised the company that this man was fit

for employment, fit for conditional employment, or not

fit for employment. The decision was the company’s, not

mine.

And that same thing went with the periodic physical

examinations. If I saw, for instance, that a man was

developing early x-ray changes, I would declassify him

from fit for anything down to, say, employable, but I

recommend no dust exposure.

Q Would you describe the process now of how and

in what phases asbestosis may occur and the fact that

there may be changes sometime some years earlier than

the clinical symptoms manifest themselves? A Any

company that is on its toes, as I believed Canadian Johns-

Manville and JM were at that time, they can prevent

disease by early detection; and you could see early x-ray

changes in a person in perhaps, 10, 12, 15 years bfeore

he developed any clinical signs of disability.

Q Describe what clinical signs of disability would

be in connection with the pulmonary abnormality known

as [25] asbestosis. A The man has loss of appetite,

malnutrition, dry or productive cough. The signs of a

wasting disease, as I have said: malnutrition, loss of

weight, shortness of breath, signs of heart embarrassment,

as well as pulmonary embarrassment.

Q Would you describe the mining operation as it

relates to pulling of the asbestos out of the ground, es-

A60

pecially as it was in Asbestos, Quebec. A At our mine,

the mining process was a large quarry about a mile in

diameter, with steps. I guess the most prominent one

that you might compare it to in the States is the one

at Salt Lake City, Utah, the big mines out there. An

open pit quarry where we drilled and then blasted the

rock, loaded it into railway cars and took it to the mill,

where the milling process was simply a crushing of the

rock and a separation of the basic rock materials from

the fiber, and then refining the fiber into various purer

forms and links.

Q And the manufacturing process as it was in As-

bestos? A The factory produced all kinds of asbestos

and other products, pipe coverings, insulations, textiles,

using asbestos fiber; of course, primarily our own

chrysotile, [26] but they also used some imported amosite

and very little crocidolite. The amosite and chrysotile

were used in insulation products: pipe coverings and

things like that.

Q Production of pipe covering asbestos products was

part of the manufacturing process at Asbestos, Quebec?

Is that what you are saying? A Correct.

Q What other functions or what other controls were

in operation at Asbestos, Quebec, either in connection with

its mining or its milling or its manufacturing processes,

with respect to dust and/or disease prevention? A

Primarily we were developing a very good engineering

control of the dust at its source, any dust in the drilling

or crushing or milling of the fiber. We tried to control

any airborne dust at the source.

The same in the factory. Whenever any of the asbestos

products were made, we tried to control the dust at its

source. For instance, the manufacturing of pipe covering

was simply a sheet of asbestos paper put through a cor-

rugating machine so that there were little ridges, and

A61

we filled those corrugations with pure asbestos fiber,

wound the material up on a mandrel and sealed it, and

[27] then it became pipe covering.

We tried to control that airborne dust in the forming

and design at its source, and if it was not controlled

satisfactorily, the employees wore respirators or masks.

Q Describe for us specifically what kinds of ducts or

what kinds of hoses or what kinds of whatever would be

able to exhaust the asbestos dust and/or fibers from the

source, as in the mining, milling and the manufacturing

process. A Primarily a single vacuum cleaner-type of

aspiration. If you have one of these large drills with a

30-foot drill rod, you put a collar like this (indicating)—

Q@ Describing the ashtray size. A Yes, or larger,

whatever it was. But if the steel drill points and drill

rod is a long one, it went down through a collar which

would exhaust any dust that the drill made in its opera-

tion. And the same thing with crushing and milling op-

erations. Put some kind of exhaust device at the point

of the sawing or drilling or manufacturing.

Q Did you become, and if so at what point, knowl-

edgeable with respect to asbestosis and its cause? A

Well, almost from the day I joined CJM in 1944, because I

[28] was aware of pulmonary diseases before I went to

the company; and under the tutelage of Dr. Stevenson, I

learned of the effects of asbestos on human beings from

1944 onward.

Q Describe what your knowledge is with respect

to the cause of the disease which we have characterized

as asbestosis. A Primarily it is the inhalation of the as-

bestos fiber, which causes a change, scarring of the

pulmonary tissue.

Q Doctor, at what point did you become aware, if

you did, and have knowledge of the relationship, as you

described it, between the inhalation of asbestos fibers and

A62

the development of asbestosis in persons other than em-

ployees of Johns-Manville? A The first positive knowl-

edge of x-ray changes occurring in humans other than

those occupationally exposed was, I suppose, in the years

of 1945, ’46 and ’47, when I went to Saranac Lake with

Dr. Stevenson and we sat with Dr. Leroy Gardner, the

head of Saranac, and Dr. Paul Cartier from Thetford.

Q Excuse me, Doctor. Let’s describe these indi-

viduals in somewhat more detail. Who was Dr. Stevenson?

A Dr. Stevenson was my predecessor, who had worked

for almost half a century in the town with the people

there, [29] the employees and their families. Dr. Paul

Cartier was the chief medical officer for the group of

companies mining and milling and manufacturing asbestos

products at Thetford Mines. Dr. Leroy Gardner was the

head of the Saranac Lab.

In addition to those three, there frequently was Dr.

Lanza, as I mentioned, from New York, and J. P. Woodard

from Johns-Manville headquarters.

Q What was J. P. Woodard’s title with Johns-Manville

headquarters at the time that these discussiuns were going

on at the Saranac Lake Laboratory? A _ I believe that

his title would have been in those years Director of In-

dustrial Relations.

Q Did he have the title then that Mr. Hite had and

Mr. Hart later on? Were his responsibilities the same?

A Mr. Woodard had all of the responsibilities in those

years; and later, as the company enlarged, the corporation

enlarged, Mr. Hite came in as Director of Labor Relations.

Mr. Woodard was employees benefits primarily. Mr. Hart

was the head of all of this—medical, benefits, labor, train-

ing—as vice president for Industrial Relations.

Going back to your original question, these people—

well, Mr. Woodard certainly was at some of our discus-

sions [30] in Thetford and, through him, the others were

A63

knowledgeable of the results. Dr. Cartier showed me

x-ray films of civilian population taken in this town, x-ray

changes typical of asbestosis.

Q And again defining “civilian” to mean persons other

than employees involved in the asbestos mining, milling

and manufacturing process? A No occupational ex-

posure.

Q Was Mr. Woodardalayman? A Yes, sir.

Q And was he privy or present when the results of

Dr. Cartier’s x-rays of the civilian population of Thetford

were presented? A I cannot say definitely, no. He might

or might not have been. But Mr. Woodard was there

frequently enough so that he became aware of my findings

in the town of Asbestos and Dr. Cartier’s in Thetford Mines.

Q This series of meetings, discussions, occurred about

what time? About what year? A Well, they were going

on between JM, New York, and Saranac Lake prior to my

joining the company in ’44. Dr. Cartier established his

clinic in Thetford Mines about the time that I joined CJM,

and these meetings were [31] much more frequent after-

wards at Saranac Lake; and they continued, well, practi-

cally until the time that I left JM in 66.

Q What other early incidents occurred which you

might be able to relate to us as the pieces which pre-

sented to you that persons other than employees were ex-

posed to the hazards of asbestos? A You take me back a

few years, but early in my career with CJM, in say ’44 to

’47, Metropolitan Life was conducting personnel studies of

employees and non-employees in Thetford and, to a lesser

degree, in our town; and walking through the town of

Asbestos on a dry August day, you could see little rolls of

asbestos fiber rolling along the street like tumbleweed, and

you just assumed that anybody walking the streets, the

storekeepers or policeman walking his beat or anybody in

the house, would be exposed to that airborne dust. And

A64

I can remember rather vividly Dr. Stevenson, as our senior

citizen, standing at the edge of our open pit one day—

Q Your open pit being— A The asbestos mine.

We were standing on the edge of the open pit on the esatern

side. The whole town of Asbestos was behind us, and of

course the winds are constantly [32] from the west blow-

ing across the mine, across the mill and into the town; and

Stevenson said, “What a shame that the town wasn’t built

on that hill over there on the western side of the pit.

There would have been no dust in the town.”

Q Who else was present during that statement by

Dr. Stevenson? A _ I believe A. R. Fisher was, as I recall

it.

Q Who was A. R. Fisher? A A. R. Fisher at that

time was vice president, production, for the corporation

in New York.

Q This specific incident occurred, as best you can

remember, about when? A Oh, sometime between ’45

and ’49. I remember that rather vividly because I picked

up a piece of asbestos fiber from the rock there and was

crushing it, and chrysotile fiber you can take the fiber

and crush it with your fingers like this (demonstrating)

and make a ball of wool out of it; and, in doing so, I had a

spicule enter my finger and later developed a small tumor

there (indicating).

Q You are describing your left index finger. A You

can see the skin graft that they put on after they removed

this small tumor, and I know that was definitely prior to

1949.

[33] Q Were you aware of employees in any Quebec

location or any location outside of Quebec who were in-

volved in pipe covering operations or doing the work which

insulation workers perform? A You are referring to

other than CJM?

A65

Q Yes. A_ I recall a company in the suburb of Mon-

treal, suburb called the city of St. Lambert. There was

some company, and I don’t know the name of it, where

they did manufacture and use asbestos cement products in

insulation pipe covering. I was closely associated with the

production of insulating products in the Province of On-

tario when I worked hand in hand with the Division of

Industrial Health for the Ontario provincial government.

When we were first building a plant at Port Union, On-

tario, and afterwards when we opened the mine at Mathe-

son, the plant at North Bay, all the time I was working

closely with the people in the Division of Industrial

Hygiene and went with them to see various operations

where people were applying insulating products and pipe

covering and things like that which we had made and sold

to subcontractors.

Q What kinds of insulation products were being used

and [34] what form did the asbestos take that you were

observing at Port Union and at North Bay? A Well, the

asbestos corrugated pipe covering, mineral wool insulation,

some of the block insulation, such as our 85 percent mag-

nesia, asbestos cement products we made in sheet or in

smaller forms.

Q Did you observe these employees in the operation

in which they were performing the pipe covering? A

On-the-job observations, very similar to the ones that I

saw in our own plants where we, for subcontractors, cut

different forms of block or pipe covering to their specifica-

tions for their use.

Q_ In your opinion, do you believe that the insulation

workers that you observed were exposed to substantially

the same asbestos hazard as the persons involved in the

mining, milling and manufacturing processes at Asbestos,

Quebec? A They were exposed to the same potential

hazards, definitely. I can’t say exactly the same exposure

A66

because very often the manufacturer, because of the size

of his company, can take better precautions for control

of the dust than the small operator can in the field.

[35] Q Were you familiar and knowledgeable about

the rating system for compensation purposes in the Prov-

ince of Quebec during that time that you were chief med-

ical officer of CJM? A All of the workmen’s compensa-

tion in the Province of Quebec sas controlled by the

Provincial Government Department. There were no pri-

vate insurers. The asbestos producers were grouped as a

whole, just as were the hard rock mining companies

grouped as a whole; an’ jor instance, the asbestos insula-

tors would be grouped as a unit for workmen’s compensa-

tion premium purposes, and we often were compared in

our workmen’s compensation experience with the mines

in Thetford. Because our accident and disease prevention

programs were very well balanced in our town compared

with Thetford, we were put on a merit rating system that

the Thetford Mines were not, and we, through the efforts

of prevention, saved literally hundreds of thousands of

dollars per year.

The asbestos products manufacturers and the others

in, say, the insulating line were grouped as a whole, but

they had no merit rating system.

Q Were you ever called upon to come to Pittsburgh

in [36] connection with your later work as the medical

director of the Johns-Manville Corporation in connection

with any request for a study or recommendations with

respect to certain insulation workers? A Well, to recal!

a specific incident, I can say several times I visited this

area because we ran a plant at Zelienople. That was an

insulating brick plant in manufacturing, and also it was

used as a warehouse for transportation financial reasons

for our Celite products from California.

A67

On several of the trips to Zelienople, I visited the

sales office here in Pittsburgh because of their high costs

of workmen’s compensation among asbestos insulation

workers, which they were using here in the Pittsburgh

area. These insulating people were just fellows hired

out of the union hall, I understand it, and by any one of

numerous insulating companies.

Q What year was that or range, as best you can give

us? A Middle to late ’50s.

Q Do you recall any specific conversations that you

had with anyone in the Pittsburgh sales office with re-

spect to that matter? A Just advising him or them—

there are different divisions [37] represented in the Pitts-

burgh office—just advising them that the insulating appli-

cators were exposed to the same things that we had seen

which produced disease in our own plants.

Q Were there also what I'll refer to as spray in-

sulators and a specific event that you can relate to us

with respect to New York City? A Well, the spraying,

or gunniting as we called it, of asbestos fibers I saw only

in New York City where they were spraying this slurry

of asbestos material onto steel girders in construction for

new buildings or tearing it off in the reconstruction of

buildings there. There was considerabie exposure to

asbestos hazard in that operation.

Q Were there any recommendations or any changes

in the material that was applied in connection with the

insulation of the building construction in New York City?

A Remembering that we were operating in New York

City and under rather stringent New York City fire code,

they were trying to lessen the hazard and tried to develop

a product which contained mineral wool in place of a fair

percentage of the asbestos wool.

‘Q About what year or range of years was the in-

cident with [38] respect to the insulation workers in New

York City that you just related? A Middle ’50s.

A68

MR. HENDERSON: May we break?

(Short recess)

BY MR. HENDERSON:

Q Dr. Smith, you mentioned earlier the Merri-

weather studies and publications, and other individuals

who were in some part responsible for those, such as

Knox and Smithers and others. About what period of

time did you learn of those studies which you referred

to earlier? A The Merriweather studies?

Q Yes. A _ I first became aware of them in 1945.

Q You indicated that while you were chief medical

officer of Canadian Johns-Manville, there was nobody in

headquarters at that time who was a physician? A That’s

right.

Q Were you interacting and interrelating with other

persons, other than those whom you have already named,

in headquarters with respect to the occupational hazard

and the hazard of asbestos generally? A Yes, definitely.

I was the only fulltime physician in [39] the whole cor-

porate structure, and as such I was directly responsible

to those officers in Canadian Johns-Manville at the Que-

bec location; but I did act as sort of an ad hoc consultant

to the total corporation, emanating from headquarters in

New York City, all the divisions, and I was reading the

x-rays and interpreting them and giving opinions on those

x-rays which emanated from various plants throughout the

United States.

Q Such as? A Such as Waukegan or Marrero or

Lompoc, California.

Q When you say that you were discussing this with

the various division heads of operating divisions, would

these have been the officers of Johns-Manville Corpora-

tion that you interacted and interrelated with during the

period of time from roughly ’47 to ’51 as you were chief

A69

medical officer of Canadian Johns-Manville? A The

people involved in those years would be primarily the

senior officer of the division, vice president of any one

division and his second in command, the division produc-

tion manager.

Q Do you recall who the individual or individuals

were with respect to the insulation products division dur-

ing that time? [40] A Ill have to go back. The names

on the list and the times of their appointments to various

titles I can’t recall exactly, but one was D. L. Hinmon, Don

Hinmon. There was J. B. Jobe, Ward Burleson, Tom

Eaton. They were involved in the insulation field in the

States, and Randall Gardner was their counterpart in the

Canadian Products Division throughout Canada.

Q Would this have been in the time frame of the

middle to late 40s to the early 50s? A Late ’40s to

the middle ’50s, yes.

Q Were these individuals knowledgeable or were

they made knowledgeable by you with respect to the

hazard of asbestos generally? A They were knowledge-

able, quite definitely.

Q Let’s go to the time when you first became em-

ployed as medical director of Johns-Manville Corporation.

When was that? A The exact month I can’t recall, but

it would be probably the end of ’52 or early ’53.

Q What were your duties and responsibilities in

connection with your job as medical director of Johns-

Manville Corporation? A Primarily to develop and ad-

minister programs for the [41] identification of health and

disease accident hazards, identification and control of these

hazards; too, at the plant level, develop the necessary pro-

grams for the protection of the well-being of the individ-

ual worker; to work with parttime or fulltime physicians,

nurses, technicians, county medical societies and state

medical representatives.

A70

Q During that period of time were you involved at

all in direct patient care? A At no time did I ever have

any direct patient care, as we say in the medical profession,

the laying on of hands. Never.

Q I’m referring to the period of time following the

time that you became medical director of Johns-Manville

up to 1966 or thereabouts, when you ended your tenure.

A Definitely.

Q You mentioned earlier that you acted in an ad-

visory capacity rather than a supervisory capacity. Would

you tell us a little more about what that meant in the

context of your duties and responsibilities as medical di-

rector of JM? A _ Well, for instance, if I went to Wau-

kegan or the JM plant in Jersey or in Marrero or out in

California, I [42] would sit down with the medical depart-

ments, assess what was going on, what hazards there were,

what was happening to control these hazards, any rates

of production of disease, and report the results of the given

trip to the local plant manager and any of his staff that

he wanted at the meeting before I left. Then report the

same things to my boss in New York, the senior vice pres-

ident of Industrial Relations, and then across his level to

the division vice president.

Q Who was the senior vice president in charge of

Industrial Relations during that time that you were medical

director at Johns-Manville? A First was L. C. Hart,

then C. W. Hite, and then at the very end of my tenure

it was A. B. Marchant.

Q Would you be a bit more definite about the times

when Mr. Hart, Mr. Hite and Mr. Marchant occupied that

position with the company? A Well, in order, there

was Hart, then Hite, then Marchant. And you want about

the number of years for each one?

Q That’s right. A Hart, well, two or three years.

Call it 53 to 55 or 56. Then Hite from the middle ’50s

A7l

through until about 65. Then Marchant was there only

a short time before I left.

[43] Q Now, in the context of the discussions which

you would have with either the plant manager or your im-

mediate supervisor, the senior vice president in charge of

Industrial Relations, were you making recommendations

with respect to dust cont-ol or physical examination or use

of respirators, the kinds of things that you already described

to us as your having recommended and implemented at

Asbestos, Quebec? A Oh, very definitely. I pointed out,

well, for instance used the word, “disease hazard,” in a

definite location, at a definite operation and said to‘them,

“We have a hazard there similar to what we have seen for

years in the mine and it should be controlled.” This in-

formation was given by word and in letter many times to

these division people.

Q Were the division people bound by your

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