Appendix — Owens-Illinois, Inc. v. Danfield
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Supreme Court, U.S.
a7 1472 FILED
No. 7 MAR 32 1988
JOSEPH F. SPANTOLT IR.
CLERK
IN THE
Supreme Court of the United States
OCTOBER TERM, 1987
oe
OWENS-ILLINOIS, INC., et al.,
Petitioners,
— y oo
BRUCE E. DANFIELD, et ux.,
Respondents.
APPENDIX TO PETITION FOR A WRIT OF
CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
ANDREW T. BERRY
(Counsel of Record)
GITA F. ROTHSCHILD
MCCARTER & ENGLISH
550 Broad Street
Newark, New Jersey 07102
(201) 622-4444
Attorneys for Petitioners,
Owens-Illinois, Inc., et al.
TABLE OF CONTENTS
U.S. Constitution, amend. ATV. § 1 ......cceoscscces
en II We) tea aa oes ees
TR Mg Ee Rene ar
Information Required by United States Supreme Court
ME we vk os as Oe ee ER ee ewe eee
Order of the Supreme Court of the United States Extend-
ing Time to File Petition For Writ of Certiorari, Dated
NS le SO i ova kaa keed cae ha eee ens
Order of the Supreme Court of the United States Extend-
ing Time To File Petition For Writ of Certiorari,
Dated January 21, 1988 ....: I et ee
Order of the United States Court of Appeals For The
Third Circuit Staying Issuance of the Certified Judg-
ment in Lieu of Formal Mandate, Dated February 5,
PE ETE TEETER CE TT OCTOR TT Er rT re er eres
Order of the United States Court of Appeals For The
Third Circuit Staying Issuance of the Certified Judg-
ment in Lieu of Formal Mandate, Dated November 30,
FE ei a ede eh Aa ae Dan Eee ee
Order of the United States Court of Appeals For The
Third Circuit Staying Issuance of the Certified Judg-
ment in Lieu of Formal Mandate, Dated November 18,
| EES One, ers WM ig ctl Rah ee yen Sieg PR ene ay i
3a
6a
7a
8a
9a
Order of the United States Court of Appeals For The
Third Circuit Staying Issuance of the Certified Judg-
ment in Lieu of Formal Mandate, Dated November 18,
N9GT 5 oc ccecssncacu tnd bales eee
Order of the United States Court of Appeals For The
PAGI
10a
Third Circuit Denying Petitions For Rehearing and Re- —
hearing In Banc, Dated November 2, 1987..........
Opinion of the United States Court of Appeals For The
Third Circuit, Jn re Asbestos Litigation, Nos. 86-5236,
86-5237 & 86-5370, Slip Op., Dated September 22,
1987 [published at 829 F.2d 1233 (3d Cir. 1987), aff’g,
628 F. Supp. T74 (D.N.5.. Fs 43 ck chansons
Order of the United States Court of Appeals For The
Third Circuit Amending Opinion in Jn re Asbestos Lit-
igation, Nos. 86-5236, 86-5237 & 86-5370, Slip Op.,
Dated September 28, 1987 [published at 829 F.2d 1233
(3d Cir. 1987), aff’g, 628 F. Supp. 774 (D.N.J. 1986)]
Order of the United States Court of Appeals For The
Third Circuit Amending Opinion in Jn re Asbestos Lit-
igation, Nos. 86-5236, 86-5237 & 86-5370, Slip Op..,
Dated October 8, 1987 [published at 829 F.2d 1233 (3d
Cir. 1987), aff’g, 628 F. Supp. 774 (D.N.J. 1986)]...
Order of the United States Court of Appeals For The
Third Circuit Granting Petition for Permission to Ap-
peal from Interlocutory Order Pursuant to 28 U.S.C.
§ 1292(b), Gregory v. General Motors Corp., Dated
May 13, WHOS «x6 ivaracddciaiacseene eee
lla
79a
82a
Order of the United States Court of Appeals For The
Third Circuit Granting Petition for Permission to Ap-
peal from Interlocutory Order Pursuant to 28 U.S.C.
§ 1292(b), Jn re Asbestos Litigation |Danfield v.
Johns-Manville Sales Corp.\, Dated March 26, 1986 .
Order of the United States Court of Appeals For The
Third Circuit Granting Petition for Permission to Ap-
peal Pursuant to 28 U.S.C, § 1292(b), Jn re Asbestos
Litigation |Raymark Industries, Inc.|, Dated March
EE OG Ee
Opinion of the United States District Court For The Dis-
trict of New Jersey, /n re Asbestos Litigation, 628 F.
as co ccavcedccnceavessense
Order of the United States District Court For The Dis-
trict of New Jersey Consolidating All Asbestos Cases
for Sole Purpose of Determining Constitutional Chal-
lenges to Beshada and Feldman, Dated October 11,
Se
Opinion of the United States Court of Appeals For The
Fifth Circuit, Hardy v. Johns-Manville Sales Corp.,
681 F.2d 334 (Sth Cir. 1982), rev’g 509 F. Supp. 1353
eC ea nk cd v ho GSES RRS H SHR ee
86a
° With the exception of the Third Circuit slip opinions appearing at
13a to 83a, all cases included in this Appendix were reprinted from opinions
published in volumes of the official reporter system. For the convenience of
the reader, page references to the West Publishing Co. reporter system ap-
pear in bold brackets as follows: [ }]. Since not part of the courts’ official
opinions, syllabi and headnotes are omitted.
PAGE
* Opinion of the Supreme Court of New Jersey, Beshada v.
Johns-Manville Products Corp., 90 N.J. 191, 447 A.2d
| PEPER ET TOUR SCV ERT Ter errs fe rer eT 147a
* Opinion of the Supreme Court of New Jersey, Feldman
v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374
ee RE ree rere ere rrr ry ee pia eee 168a
* Opinion of the Supreme Court of New Jersey, Fischer v.
Johns-Manville Corp., 103 N.J. 643, 512 A.2d 466
CRE 465 GAR AAAANSS Enea RAMEE ORR Ree A es 200a
Verdict on Special Questions to the Jury in Conley v.
Johns-Manville Sales Corp. {incorrectly captioned as
Conley v. GAF Corp.}, No. 80-2841 (D.N.J. Filed July
BE WEEE che 2a aan keke eh aea Panees ewan sen eres 242a
a With the exception of the Third Circuit slip opinions appearing at
13a to 83a, all cases included in this Appendix were reprinted from opinions
published in volumes of the official reporter system. For the convenience of
the reader, page references to the West Publishing Co. reporter system ap-
pear in bold brackets as follows: [ J]. Since not part of the courts’ official
opinions, syllabi and headnotes are omitted.
la
CONSTITUTIONAL PROVISIONS INVOLVED
United States Constitution, amendment V:
No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a
Grand Jury, except in cases arising in the land or naval forces,
or in the Militia, when in actual service in time of War or public
datiger; nor shall any person be subject for the same offence to
be twice put in jeopardy of life or limb; nor shall be compelled
in any criminal case to be a witness against himself, nor be de-
prived of life, liberty, or property, without due process of law;
nor shall private property be taken for public use, without just
compensation,
United States Constitution, amendment XIV, § 1:
All persons born or naturalized in the United States, and sub-
ject to the jurisdiction thereof, are citizens of the United States
and of the State wherein they reside. No State shall make or en-
force any law which shall abridge the privileges or immunities
of citizens of the United States; nor shall any State deprive any
person of life, liberty, or property, without due process of law;
nor deny to any person within its jurisdiction the equal protec-
tion of the laws.
2a
Federal Rules of Evidence
Rule 201. Judicial Notice of Adjudicative Facts
(a) Scope of rule. This rule governs only judicial notice of
adjudicative facts.
(b) Kinds of facts. A judicially noticed fact must be one
not subject to reasonable dispute in that it is either (1) generally
known within the territorial jurisdiction of the trial court or (2)
capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned.
(c) When discretionary. A court may take judicial notice,
whether requested or not.
(d) When mandatory. A court shall take judicial notice if
requested by a party and supplied with the necessary informa-
tion.
(e) Opportunity to be heard. A party is entitled upon
timely request to an opportunity to be heard as to the propriety
of taking judicial notice and the tenor of the matter noticed. In
the absence of prior notification, the request may be made after
judicial notice has been taken.
(f) Time of taking notice. Judicial notice may be taken at
any stage of the proceeding.
(g) Instructing jury. In a civil action or proceeding, the
court shall instruct the jury to accept as conclusive any fact ju-
dicially noticed. In a criminal case, the court shall instruct the
jury that it may, but is not required to, accept as conclusive any
fact judicially noticed.
3a
INFORMATION REQUIRED BY UNITED STATES
SUPREME COURT RULE 28.1
PETITIONERS OWENS-ILLINOIS, INC., ef al.:
Armstrong World Industries, Inc.: This petitioner has no
parent company; its affiliates and subsidiaries (other than
wholly owned subsidiaries) are Forms + Surfaces, Inc. and
ArmStar Venture Association.
The Celotex Corporation: This petitioner’s parent company
is Jim Walter Corporation. The Celotex Corporation has no
affiliates or other than wholly owned subsidiaries.
Eagle-Picher Industries, Inc.: This petitioner has no parent
company; it has no domestic affiliates or other than wholly
owned subsidiaries. This petitioner has one West German sub-
sidiary: Diehl & Eagle-Picher GmbH.
Fibreboard Corporation: This petitioner’s parent company is
Louisiana-Pacific Corporation. Fibreboard Corporation has no
affiliates or other than wholly owned subsidiaries.
Keene Corporation: This petitioner’s parent company is
Bairnco Corporation. Keene Corporation’s affiliates and sub-
Sidiaries (other than wholly owned subsidiaries) are: The
Genlyte Group, Incorporated; Kasco Corporation and Shield-
ing Systems Corporation.
Owens-Corning Fiberglas Corporation: This petitioner has
no parent company; its affiliates and subsidiaries (other than
wholly owned subsidiaries) are O.C. Birdair Corporation and
Oregon Metallurgical Corporation.
Owens-Illinois, Inc.: 100% of this petitioner’s shares are held
by Kohlberg, Kravis, Roberts & Co. Petitioner’s affiliates and
subsidiaries (other than wholly owned subsidiaries) are: Owens-
Illinois de Puerto Rico; Prudent Supply, Inc.; Emballages
Laurent S.A. (France); Manufacturera de Vidrios Planos, C.A.
(Venezuela); Kimble Italiana SpA (Italy); Papeteries d’Espaly
(France) and Companhia Industrial Sao Paulo Erio (Brazil).
4a
Pittsburgh Corning Corporation: 50% of this petitioner’s
shares are held by PPG Industries, Inc. and 50% of its shares
are held by Corning Glass Works. This petitioner has no affili-
ates or other than wholly owned subsidiaries.
PETITIONER RAYMARK INDUSTRIES, INC.:
Raymark Industries, Inc.: This petitioner’s parent company
is Raytech Corporation; it has no domestic affiliates and other
than wholly owned subsidiaries. This petitioner has one Japa-
nese affiliate: Diaken RM.
an
pe)
SUPREME COURT OF THE UNITED STATES
No. A-504
++—
OwWENS-ILLINOIS, INC., ET AL.,
Applicant,
BRUCE E. DANFIELD, ET UX.
—
ORDER EXTENDING TIME TO FILE PETITION
FOR WRIT OF CERTIORARI
UPON CONSIDERATION of the application of applicant,
IT IS ORDERED that the time for filing a petition for a writ of
certiorari in the above-entitled cause be, and the same is hereby,
extended to and including March 2, 1988.
s/ BYRON R. WHITE
Associate Justice of the Supreme Court
of the United States
Dated this 28th day of
December, 1987
6a
SUPREME COURT OF THE UNITED STATES
No. A-556
aoe
RAYMARK INDUSTRIES, INC.,
Applicant,
—_—V.—
BRUCE E. DANFIELD, ET AL.
—
ORDER EXTENDING TIME TO FILE PETITION
FOR WRIT OF CERTIORARI
UPON CONSIDERATION of the application of counsel for the
applicant,
IT IS ORDERED that the time for filing a petition for a writ of
certiorari in the above-entitled cause be, and the same is hereby,
extended to and including March 2, 1988.
s/ WILLIAM J. BRENNAN, JR.
Associate Justice of the Supreme Court
of the United States
Dated this 21st day of
January, 1988
Ta
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
$+
IN RE: Asbestos Litigation
No. 86-5236
Raymark Industries, Inc.,
Appellant.
No. 86-5237
Owens-Illinois, Inc., etc.,
Appellants.
No. 86-5370
Zelda F. Gregory, et al. °
—Vvs.—
General Motors Corp.,
Appellant.
aoe
Pursuant to Rule 41(b) of the Federal Rules of Appellate Pro-
cedure, it is ORDERED that issuance of the certified judgment in
lieu of formal mandate in the above cause be, and it is hereby
further stayed until March 2, 1988.
s/ WEIS
Circuit Judge
Dated: February 5, 1988
8a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 86-5236
++
IN RE:
Asbestos Litigation
RAYMARK INDUSTRIES, INC.,
Appellant.
7
Pursuant to Rule 41(b) of the Federal Rules of Appellate Pro-
cedure, it is ORDERED that issuance of the certified judgment in
lieu of formal mandate in the above cause be, and it is hereby
stayed until February 1, 1988.
s/ WEIS
Circuit Judge
Dated: November 30, 1987
9a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
aoe
IN RE: ASBESTOS LITIGATION
No. 86-5236
Raymark Industries, Inc.,
Appellant.
No. 86-5237
Owens-Illinois, Inc. etc.
Appellants.
7
Pursuant to Rule 41(b) of the Federal Rules of Appellate Pro-
cedure, it is ORDERED that issuance of the certified judgment in
lieu of formal mandate in the above cause be, and it is hereby
stayed until February 1, 1988.
s/ WEIS
Circuit Judge
Dated: November 18, 1987
10a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 86-5370
a
John W. Gregory and Zelda F. Gregory, his wife,
Zelda F. Gregory, etc.,
Vo)
General Motors Corporation, etc.,
General Motors Corporation,
Appellant.
++
Pursuant to Rule 41(b) of the Federal Rules of Appellate Pro-
cedure, it is ORDERED that issuance of the certified judgment in
lieu of formal mandate in the above cause be, and it is hereby
stayed until February 1, 1988.
s/ WEIS
Circuit Judge
Dated: November 18, 1987
lla
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 86-5236
—-
IN RE: ASBESTOS LITIGATION
Raymark Industries, Inc.,
Appellant.
IN RE: ASBESTOS LITIGATION
DANFIELD, ET AL.
poe ee
JOHNS-MANVILLE SALES CORP., ETC.,
Owens-Illinois, Inc., Keene Corporation, Pittsburgh-Corning
Corporation, The Celotex Corporation, Armstrong Cork
Company, Eagle-Picher Industries, Inc., Owens-Corning
Fiberglas Corporation, and Fibreboard Corporation, Ap-
pellants in No. 86-5237
IN RE: ASBESTOS LITIGATION
JOHN W. GREGORY AND ZELDA F. GREGORY, HIS WIFE,
ZELDA F. GREGORY, ADMINISTRATRIX AND ADMINISTRA-
TRIX AD PROSEQUENDUM OF THE ESTATE OF JOHN W.
GREGORY, DECEASED; ZELDA F. GREGORY, INDIVIDU-
ALLY; AND BRIAN GREGORY, A MINOR BY HIS NATURAL
PARENT AND GUARDIAN ZELDA F. GREGORY
—_—V.—
GENERAL MOTORS CORPORATION, JOSEPH DOE, TOM DOE,
HARRY DOE, ROBERT DOE, KEN DOE, DANIEL DOE,
LARRY DOE, EDWARD DOE, SAM DOE, JACK DOE, FRED
DOE, VINCE DOE,
12a
General Motors Corporation, Appellant in No. 86-5370
(D.C. Civ. Nos. 82-4031 & 85-381)
++
SUR PETITION FOR REHEARING
Present:
GIBBONS, Chief Judge,
WEIS, BECKER, STAPLETON, MANSMANN, SCIRICA,
HUTCHINSON and HUNTER’%, Circuit Judges.
oa
The petitions for rehearing filed by defendant-appellant
General Motors Corporation, and defendant-appellants Owen-
Illincis, Inc., Keene Corporation, Pittsburgh-Corning Corpo-
ration, The Celotex Corporation, Armstrong World Industries,
Inc., Eagle-Picher Industries, Inc., Owens-Corning Fiberglas
Corporation, Fibreboard Corporation, and GAF Corporation
in the above entitled cased [sic] having been submitted to the
judges who participated in the decision of this court and to all
the other available circuit judges of the circuit in regular active
service, and no judge who concurred in the decision having
asked for rehearing, and a majority of the circuit judges of the
circuit in regular active service not having voted for rehearing
by the court in banc, the petitions for rehearing are denied.
BY THE COURT,
: s/ WEIS
Circuit Judge
Dated: November 2, 1987
* As to panel rehearing only.
Judges Seitz, Higginbotham, Sloviter and Greenberg did not partici-
pate in the decision of this matter.
Judge Hutchinson would have granted rehearing.
l3a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 86-5236, 86-5237 & 86-5370
IN RE: ASBESTOS LITIGATION
Raymark Industries, Inc.
Appellant in No. 86-5236
IN RE: ASBESTOS LITIGATION
DANFIELD, ET AL V. JOHNS-MANVILLE
SALES CORP., ETC..,
Owens-Illinois, Inc., Keene Corporation,
Pittsburgh-Corning Corporation,
The Celotex Corporation, Armstrong Cork Company,
Eagle-Picher Industries, Inc..
Owens-Corning Fiberglas Corporation,
-and Fibreboard Corporation,
Appellants in No. 86-5237
IN RE: ASBESTOS LITIGATION
JOHN W. GREGORY AND ZELDA F. GREGORY, HIS
WIFE, ZELDA F. GREGORY, ADMINISTRATRLX AND
ADMINISTRATRIX AD PROSEQUENDUM OF THE
ESTATE OF JOHN W. GREGORY, DECEASED;
ZELDA F. GREGORY, INDIVIDUALLY; AND BRIAN
GREGORY, A MINOR BY HIS NATURAL PARENT AND
GUARDIAN ZELDA F. GREGORY
Vv.
GENERAL MOTORS CORPORATION, JOSEPH DOE,
TOM DOE, HARRY DOE, ROBERT DOE, KEN DOE,
DANIEL DOE, LARRY DOE, EDWARD DOE, SAM
DOE, JACK DOE, FRED DOE, VINCE DOE,
l4a
General Motors Corporation,
Appellant in No. 86-5370
APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE
DISTRICT OF NEW JERSEY
(D.C. Civil Nos. 82-4031 & 85-381)
Argued February 24, 1987
Before: WEIS, BECKER, and HUNTER,
Circuit Judges
Filed September 22, 1987
Kathleen F. Moran, Esquire (ARGUED)
Morgan, Melhuish, Monaghan,
Arvidson, Abrutyn & Lisowski
51 W. Mt. Pleasant Avenue
Livingston, New Jersey 07039
Attorney for Appellant
Raymark Industries, Inc.
Gita F. Rothschild, Esquire (ARGUED)
McCarter & English
Broad Street
Newark, New Jersey 07102
Attorney for Appellant
Owens-Illinois, Inc., et al.
15a
David M. McCann, Esquire (ARGUED)
Carpenter, Bennett & Morrissey
Gateway Three
100 Mulberry Street
Newark, New Jersey 97102
Attorney for Appellant
General Motors Corporation
James C. Gavin. Esquire (ARGUED)
Gavin & Gavin, P.A.
28 Tanner Street
Haddonfield, New Jersey 08033
Attorney for Appellees
Bruce E. Danfield. et al.
and Zelda F. Gregory, et al.
OPINION OF THE COURT
WEIS, Circuit Judge.
The district court has certified to us the question
whether decisions of the New Jersey Supreme Court
violate the Equal Protection Clause in abolishing the
state-of-the-art defense in asbestos personal injury
cases. We determine that a common law precedent
announced by a state's highest court is “law” within
the meaning of the Equal Protection Clause. Using the
rational basis standard, we conclude that the state
court rulings survive the constitutional challenge.
The district court of New Jersey consolidated all of
its pending asbestos cases for argument and
disposition of the defendants’ attack on the state
supreme court's bar against “state-of-the-art” evidence
in those personal injury cases. Sitting in banc, the
district court rejected the defendants’ contention that
16a
they were denied equal protection and certified the
question to us under 28 U.S.C. § 1292(b). We accepted
the interlocutory appeal.
Asbestos litigation poses a serious problem for
American tort law, which traditionally has provided for
a “one-on-one” adjudication of claims.’ The formidable
number of asbestos suits has prompted efforts to adapt
the procedural framework of the existing tort system
with its inefficiencies, high costs, and inconsistent
judgments to the pressing demands of this massive
litigation. See In re School Asbestos Litigation, 789
F.2d 996, 1000-01 (3d Cir. 1986).
More than 30,000 asbestos personal injury claims
were filed nationwide by 1986, and an additional
180,000 claims are projected to be on court dockets by
the year 2010. Id. at 1000. Because no federal statute
governs the substantive law applicable to these claims,
they are controlled by the tort laws of the various states
under theories of negligence, warranty, or strict
liability. The courts in New Jersey, both state and
federal, have been confronted by a particularly heavy
concentration of these cases.
New Jersey common law recognizes the doctrine of
strict liability in products liability claims. The supreme
court of the state first adopted that theory in
Henningsen v. Bloomfield Motors, 32 N.J. 358, 161
A.2d 69 (1960), and later decisions expanded its scope.
See Restatement (Second) of Torts § 402A. Freund v.
Cellofilm Properties, Inc., 87 N.J. 229, 432 A.2d 925
:. A similar difficulty arose in the Agent Orange litigation,
where the mass tort claims challenged the capacity of traditional
rules to deal effectively with numerous suits involving multiple
plaintiffs and defendants. There, too. the practical realities of case
management coupled with the complexities of the claims imposed
substantial hardships on existing tort procedures. See In Re:
“Agent Orange” Product Liability Litigation. 506 F. Supp. 737.
782-87 (E.D.N.Y. 1979).
17a
(1981); Suter v. San Angelo Foundry & Machine Co..,
81 N.J. 150, 406 A.2d 140 (1979); Santor v. A&M
Karagheusian, 44 N.J. 52, 207 A.2d 305 (1965).
In 1982, the Supreme Court of New Jersey issued a
controversial decision in Beshada v. Johns-Manville
Products Corp., 90 N.J. 191, 447 A.2d 539 (1982). The
plaintiffs there claimed damages based on the
defendants’ failure to warn of the dangers of asbestos.
In response, the defendants asserted the
“state-of-the-art” defense -- that at the relevant times
they did not know, nor could have known, of the
danger of their products.
The state supreme court ruled that “culpability is
irrelevant” in product liability cases because “{s|trict
liability focuses on the product. not the fault of the
manufacturer.” Id. at 546. Accordingly. a rule
excluding the state-of-the-art defense would be
consistent with the underlying policies of strict liability
and would further its goals of risk spreading, accident
avoidance, and simplification of the fact-finding
process. The court reasoned that if the expenses
arising from these claims were allocated to the costs of
production, the manufacturers would be encouraged
to improve product safety. Elimination of the defense
would also ease the costly and time-consuming burden
of proving “scientific knowability” and avert juror
confusion about the differences between negligence
and strict liability. Id. at 547-49. The Beshada opinion
was not limited to asbestos cases, but applied to all
products liability suits.
Two years later, the same court allowed drug
manufacturers to assert the state-of-the-art defense,
concluding that producers of pharmaceuticals have a
duty to warn about dangers of which they know or
should know based on reasonably obtainable or
available knowledge. Feldman ov. Lederle
18a
Laboratories, 97 N.J. 429, 452, 479 A.2d 374, 386
(1984). Despite this shift in position, however,
Feldman did not overrule Beshada; the court chose
instead to explicitly restrict the earlier case to “the
circumstances giving rise to its holding.” Id.
One month later, a defendant asbestos
manufacturer relied on Feldman and sought
permission to introduce state-of-the-art evidence in a
suit then pending in the state court. The trial court
denied the motion on the ground that New Jersey law
prohibited asbestos manufacturers from asserting the
defense. In the Matter of Asbestos Litigation Venued in
Middlesex County, No. L-52237-81 (N.J. Super. Ct.,
Law Div.), affd, 99 N.J. 201, 491 A.2d 700 (1984). The
state supreme court summarily affirmed, stating:
“{hjaving recognized that Beshada {citation omitted]
applies to all pending asbestos cases, the. . . Order of
the Superior Court. . . is summarily affirmed.” In the
Matter of Asbestos Litigation Venued in Middlesex
County, 99 N.J. 201, 491 A.2d 700 (1984).
The present appeal arises out of this unsettled
background. In various personal injury cases brought
in the district court, defendant asbestos
manufacturers attempted to introduce evidence on the
state-of-the-art defense. They alleged that Beshada’'s
preclusion of that defense had the effect of treating
them discriminatorily and less favorably than all other
manufacturers. To avoid inconsistent rulings, the
district court considered the matter in banc and
entered an order applicable to all of its pending
asbestos cases. In re Asbestos Litigation, 628 F. Supp.
774 (D.N.J. 1986).
A majority of the district judges decided that the
defendants’ request should be denied. In their view,
legitimate concerns of case management, economics,
as well as social welfare policy affecting exposed
plaintiffs justified preclusion of the state-of-the-art
19a
defense. Id. at 779. Noting that strict Hability in
workmen's compensation had withstood similar equal
protection attacks, id. at 779 n.3, and finding a
rational relationship between the Beshada ruling and
its goals, the judges rejected the constitutional
challenge.
A minority of the judges dissented on the grounds
that the state supreme court had neither clearly
articulated its rationale for eliminating the defense nor
substantiated its expectations that the anticipated
benefits would result.’
On appeal to this court, defendants contend that
the New Jersey Supreme Court's decisions
unconstitutionally discriminate among categories of
civil litigants because no rational basis for the
classification can be posited. Defendants also maintain
that by failing to give adequate reason for its action,
the state court violated the Due Process Clause of the
Fourteenth Amendment.
Plaintiffs assert that the rational basis test is the
appropriate standard for reviewing this equal
protection challenge and that the wisdom ot the state
common law rule is not at issue.
First, we observe the somewhat unusual posture in
which this case reaches us. The attack on the ruling, or
more accurately the series of rulings, of the state
supreme court did not come to the district court as a
direct appeal.
A United States District Court may not entertain
an appeal from judgments of the highest court of a
state. Only the United States Supreme Court may
exercise such review, and then only in cases within its
jurisdiction. See District of Columbia Court of Appeals
2. See In re Asbestos Litigation. 628 F. Supp. 774(D.N.J. 1986)
(en banc), Judge Bissell wrote the opinion for the majority of eight
judges and Chief Judge Fisher wrote for the six dissenting judges.
20a
v. Feldman, 460 U.S. 462, 482 (1983); Rooker v.
Fidelity Trust, 263 U.S. 413, 416 (1923). The parties to
the cases at hand constitute different groups than
those in the challenged state court litigation, and
hence neither res judicata nor law of the case
principles apply. Defendants here have no avenue to
attack the precedential effect of the New Jersey
judgment governing their case except through
objections to rulings in these cases filed in federal
court.
The question presented to the district court, and
now to us, ts a variation on the theme of Erie R.R. Co.
v. Tompkins, 304 U.S. 64 (1938), that is, whether the
New Jersey decisions are binding even if their tenor is
not in harmony with the federal constitution.
Erie requires that, in diversity cases, federal courts
apply the substantive law produced by the state
legislature or the highest court of the state. The Erie
doctrine envisions a federal district court in diversity
functioning as would a state trial court in similar
circumstances.
There is, however, a fundamental difference
between the two judicial systems that affects the
application of the appropriate !aw. The state trial court
is bound by its judicial hierarchical organization to
follow the state supreme court's rulings on
constitutionality despite possible doubt about the
correctness of the decisions. In the absence of binding
federal precedent, the state trial court should defer to
the highest court of the state. The federal district
court, however, takes as its authority on federal
constitutional issues decisions of the United States
Courts of Appeals and the United States Supreme
Court, rather than those of the state supreme court.
The case before us differs from that where state
court action usually is subjected to federal scrutiny --
the habeas corpus petition. In that setting, a district
2la
court reviews the very same case adjudicated by a state
appellate court. Here, however, the district court acts
in the first instance on a case never before a state
tribunal, yet governed by that state's precedent.
The threshold issue, thus, is whether Erte controls
in circumstances where state law violates the federal
constitution. Because the United States District
Courts have the primary obligation to interpret and
apply federal law, undoubtedly they can, and must,
abjure Erie if its application would conflict with the
United States Constitution.
This case presents several other curious features.
Defendants do not contest being included within the
scope of the Beshada doctrine along with other
manufacturers. Rather, they complain that they were
not excluded from it as were the other manufacturers
in Feldman. Essentially, they do not argue that the
strict liability holding of Beshada is constitutionally
defective, whatever its other failings may be, but that
asbestos manufacturers have been singled out for
discriminatory treatment compared to other
producers. Phrased differently, they protest the failure
of the New Jersey Supreme Court to reverse Beshada
in its entirety, rather than only partially.
In addition, unlike the usual equal protection case
that challenges a legislative enactment, this attack is
directed at the common law as announced by a state's
highest court.
History shows that state supreme court holdings
were not always included within the meaning of “laws”
to which equal protection applies. The oft-cited case of
Swift v. Tyson, 41 U.S. 1 (1842), illustrates the
original judicial interpretation. Section 34 of the
Judiciary Act of 1789 provided that the “laws of the
several states ... shall be regarded as rules of
22a
eo
decision.” Initially, the Supreme Court interpreted
“laws” narrowly to include only statutory enactments
and to exclude decisional law. In Swift v. Tyson,
Justice Story commented, “[iJn the ordinary use of
language it will hardly be contended that the decisions
of Courts constitute laws. They are, at most, only
evidence of what the laws are, and are not of
themselves laws .... The laws of a state are more
usuaily understood to mean the rules and enactments
promulgated by the legislative authority thereof, or
long established local customs having the force of
laws.” 41 U.S. at 18.
In overruling Swift v. Tyson, Erie did not
specifically address the meaning of “laws” in the equal
protection context, but did expand the meaning to
encompass, as rules of decision, both statutory law and
decisional law. Justice Brandeis wrote that “whether
the law of the State shall be declared by its Legislature
in a statute or by its highest court in a decision is not a
matter of federal concern.” 304 U.S. at 78.
Since that time, the Supreme Court has continued
to use the word “laws” in its broader sense, reflecting to
a degree the influence of Legal Realism and its
conclusion that courts do, in fact, “make” law. In
Illinots v. City of Milwaukee, 406 U.S. 91, 100 (1972),
the Court saw “no reason not to give ‘laws’ its natural
meaning” and concluded that “8 1331 [federal
question] jurisdiction will support claims founded
upon federal common law as well as those of a statutory
origin.”
In Romero v. International Terminal Operating
Co., 358 U.S. 354 (1959), Justice Brennan spoke for
four members of the Court who reached the issue and
agreed that “laws” embraced federal common law.
Referring to Erie, he explained that the Court had
recognized there that the statutory word “laws”
includes court decisions, and that rules of substantive
23a
law are “as fully ‘laws’ of the United States as if they had
been enacted by Congress.” Id. at 393. See also Maine
v. Thiboutot, 448 U.S. 1. 4 (1980); Kuhn v. Fairmont
Coal Co., 215 U.S. 349, 370 (1909) (Holmes, J.,
dissenting).
Whatever may have been the reaction of the courts
in earlier times, we are persuaded that the district
court properly considered the common law of New
Jersey to be within the scope of the Equal Protection
Clause.
Il.
Because equal protection claims may be reviewed
under a number of standards which differ in intensity,
we find it necessary to select the proper test for use in
this case. As a general rule, classifications that neither
regulate suspect classes nor burden fundamental
rights must be sustained if they are rationally related
to a legitimate governmental interest. See Empire
Kosher Poultry, Inc. v. Hallowell, 816 F.2d 907 (3d
Cir. 1987); Price v. Cohen, 715 F.2d 87, 92, 94 (3d Cir.
1983), cert. dented, 465 U.S. 1032 (1984); Jamieson
v. Robinson, 641 F.2d 138, 142 (3d Cir. 1981).
The matter at issue here, the right of a
manufacturer to invoke the state-of-the-art defense, is
not fundamental under the Constitution nor is it a
suspect classification. The Supreme Court has
observed that “despite the fact that ‘otherwise settled
expectations’ may be upset.” a state may modify or
abolish a cause of action at common law. Duke Power
Co. v. Carolina Envtl. Study Group, 438 U.S. 59, 88
n.32 (1978), quoting Usery v. Turner Elkhorn Mintng
Co., 428 U.S. 1. 16 (1976).
In Duke Power, the Court upheld the
constitutionality of the Price-Anderson Act, even
though it carved out the private nuclear power
industry for federal treatment in tort liability where
24a
usually state common law would govern. That case
approved a statutory ceiling on recoverable damages
because the statute provided a ‘reasonably just”
substitute for state law remedies. 438 U.S. at 93-94. In
response to objections raised by potential
plaintiff-victims, the Court cited Munn v. Illinois, 94
U.S. 113, 134 (1876), for the principle that “[a] person
has no property, no vested interest, in any rule of the
common law.” The Munn Court had no doubt that “the
law itself, as a rule of conduct, may be changed at the
will or whim of the legislature unless prevented by
constitutional limitations.” Id.
In Silver v. Silver, 280 U.S. 117 (1929), the Court
rejected an equal protection attack on a state statute
denying recovery of damages by a gratuitous passenger
against the driver of an automobile. The Court
observed that “the Constitution does not forbid the
creation of new rights, or the abolition of old ones
recognized by the common law, to attain a possible
legislative object.” Id. at 122. See also Corey v. Jones,
650 F.2d 803 (5th Cir. 1981).
Other legislative alterations in the tort field have
also withstood constitutional challenge. Of particular
interest are the drastic changes in the traditional
negligence standard for liability. The no-fault
workmens’ compensation program is one illustration
of such treatment. See Lower Vein Coal Co. v. Indus.
Bd., 255 U.S. 144 (1921); New York Central R.R. v.
White, 243 U.S. 188 (1917). Legislation that treats
medical malpractice suits differently than other
negligence claims provides another example. See
Woods v. Holy Cross Hosp., 591 F.2d 1164 (5th Cir.
1979); Fein v. Permanente Med. Group, 38 Cal.3d
137, 695 P.2d 665 (1985); Florida Patient's
Compensation Fund v. Von Stetina, 474 So.2d 783
(Fla. 1985); Johnson v. St. Vincent Hosp., Inc., 273
25a
Ind. 374, 404 N.E.2d 585 (1980): State ex rel.
Strykowski v. Wilkie, 81 Wis. 2d 491, 261 N.W.2d 434
(1978).
In short, the nature of the right to assert a
particular defense in a tort action is not among those
characterized as “fundamental.” It is not included in
the field of human rights that touches on personal
liberty, an area of special concern to the courts.
Nothing inherent in the right to a tort defense lends
itself to demand more scrupulous review than the
other social and economic matters traditionally
examined under the rational relationship test. See G.
D. Searle & Co. v. Cohen, 455 U.S. 404 (1982); United
States R.R. Retirement Bd. v. Fritz, 449 U.S. 166
(1980); Massachusetts Bd. of Retirement v. Murgia,
427 U.S. 307 (1976); Ortwein v. Schwab, 410 U.S. 656
(1973).
It is by now well established that in confronting a
problem in the area of economic and social welfare, a
state does not violate the Equal Protection Clause
merely because the classifications drawn by its laws are
imperfect. “If the classification has some ‘reasonable
basis,’ it does not offend the Constitution simply
because the classification ‘is not made with
mathematical nicety or because in practice it results in
some inequality."" Dandridge v. Williams, 397 U.S.
471, 485 (1970). See also New Orleans v. Dukes, 427
U.S. 297 (1976).
Having determined that the nature of the right
asserted here does not place it in a category requiring
heightened scrutiny, we must now consider whether
the judicial rather than legislative origin of the alleged
infringement mandates a more searching review. As
noted earlier, classifications subject to the Equal
Protection Clause generally originate in the legislature.
In the case before us, the dissenting district judges
26a
observed that where judicial action creates the
classification, the “efficacy of the checks and balances
inherent in ‘the democratic process’ is substantially
reduced.” 628 F. Supp. at 780 (Fisher, C.J.,
dissenting). For that reason, they concluded that a
more critical equal protection test should be applied
here.
The presumption of validity attaching to state
legislation is based to some extent on the proposition
that tmprovident decisions will be rectified eventually
by the democratic process. Vance v. Bradley, 440 U.S.
93. 97 (1979). However, we are not persuaded that this
consideration carries any particular weight in the
present circumstances.
The common law ruling by the New Jersey
Supreme Court is susceptible to prompt and
uncomplicated reversal by the state legislature if it
deems fit. That procedure is not in the least more
complex than if the precedent promulgated by the state
supreme court had been enacted as a statute by the
legislature. It is important to remember that speedy
statutory revision remains available to correct any
imprudent state court common law precedent. In fact,
a bill intended to overrule Beshada was introduced in
the New Jersey legislature. This bill never emerged
from the Committee on Judiciary to which it was
referred, consequently aborting the legislative effort to
restore the state-of-the-art defense in products liability
litigation to pre-Beshada status. S. 1465, 201st N.J.
Leg., Ist Sess. (1984).
The democratic process is as readily accessible to
overrule a common law precedent created by the state's
hignest court as it is to repeal a statutory enactment.
We recognize that in a democracy the iegislature may
be the more appropriate branch to draw classifications
based on public policy. As a popularly elected body, the
legislature is in a position to tap the thinking of its
27a
constituency and has the resources to secure data
generally not available to the courts.
Nevertheless, particularly in the tort field, the
common !aw tradition remains strong. States exercise
considerable latitude to accomplish fundamental shifts
in policy by judicial action as well as by legislation. For
example, the abolition of contributory negligence as a
complete defense and the substitution of comparative
negligence has been effected in some states by the
courts, see, e.g., Hoffman v. Jones, 280 So.2d 431
(Fla. Sup. 1973), while in other jurisdictions by the
legislature. See, e.g., 42 Pa. Cons. Stat. Ann. 8 7102
(Purdon 1982); N.J. Stat. Ann. 8 2A:15-5.1 (West
Supp. 1986).
We are not convinced that either the nature of the
subject matter or the procedure utilized in arriving at
the challenged ruling constitutes sufficient grounds
for requiring a stricter standard of review for common
law decisions subjected to equal protection attacks.
One other element present here -- case
management -- tips the scale in favor of the state court
ruling. The Beshada court gave prime consideration to
this concern, a subject in which the expertise of a court
substantially outweighs that of a legislature and
deserves due deference.
Taking the significant elements entering into the
state court's ruling and balancing them against the
valid competency concerns of court and legislature, we
discern no measurable imbalance that weakens the
presumption of regularity attaching to the state's
choice of alternatives.Considering the social,
economic, and administrative nature of the issues
before the state court, we cannot say that its action in
deciding the state-of-the-art defense question warrants
strict scrutiny. We therefore conclude that the rational
basis test is applicable to the classification drawn by
the Beshada and Feldman courts.
28a
If.
We now-turn to a closer examination of the
challenged state decisions.
Beshada was an appeal of six consolidated
asbestos personal injury cases. As noted earlier, the
New Jersey Supreme Court's opinion did not limit its
discussion or holding to asbestos manufacturers, but
spoke of strict liability in general. The court reasoned
that the phrase “duty to warn” was misleading because
it implied negligence concepts irrelevant to the
concerns of strict liability.
According to the court, the correct focus was
whether the product was defective for lack of a
warning. If so, the proper aim of the litigation was to
compensate the victims. Ultimately, the court
concluded that even if a manufacturer had no
knowledge of a condition that required a warning, as
between the innocent victims of a defective product
and the distributors of that product, the iatter should
bear any unforeseen costs.
Academic criticism of Beshada has been harsh.
See generally The Passage of Time: The Implications
for Product Liability, 58 N.Y.U. L. Rev. 733 (1983). One
commentator termed the decision “unjustifiable on
grounds of logic and public policy.” Schwartz, The
Post-Sale Duty to Warn: Two Unfortunate Forks in the
Road to a Reasonable Doctrine, 58 N.Y.U. L. Rev. 892,
902 (1983). Another said, “[bly and large I regard the
decision as indefensible .... If our only goal is
compensation, we should not handle products liability
cases through the tort system.” Epstein, Commentary,
58 N.Y.U. L. Rev. 930, 933 (1983).
Deans Page and Wade, whose works were favorably
cited in Beshada, also criticized the decision. Dean
Wade remarked that “[t]he Pennsylvania and New
Jersey courts appear to be straining too hard in their
efforts to develop a different standard of product
29a
actionability for strict liability actions . . ..{Blecause of
the way in which insurance premiums are set...
these tests may render a disservice to both product
suppliers and consumers throughout the country.”
Wade, On Effect in Product Liability of Knowledge
Unavailable Prior to Marketing, 58 N.Y.U. L. Rev. 734,
744 (1983). Dean Page described the policy reasons
articulated in Beshada as “weak justification{s] for a
narrower rule of strict liability.” Page, Generic Product
Risks: The Case Against Comment K and for Strict
Tort Liability, 58 N.Y.U. L. Rev. 853, 879 (1983).
The failure to warn issue next came before the New
Jersey court in the 1984 Feldman case. There, the
court reversed its former position and said,
“[glenerally, the state-of-the-art ... and available
knowledge are relevant factors” and “generally conduct
should be measured by knowledge at the time the
manufacturer distributed the product.” 479 A.2d at
386.
Feldman acknowledgeci Beshada only- by saying,
“we do not overrule Beshada,” but proceeded to
“restrict [it] to the circumstances giving rise to its
holding.” Id. at 388. The opinion further noted “in
passing, that, although not argued and determined in
Beshada, there were or may have been data and other
information generally available, aside from scientific
knowledge, that arguably cculd have alerted the
manufacturer at an early stage in the distribution of its
product to the dangers associated with its use.” Id.
At another point, the Feldman court concluded
that Beshada would not demand a contrary
conclusion in “the typical design defect or warning
case.” Id. at 387. The court also refused to agree that
Beshada held “generally or in all cases... that ina
warning context knowledge of the unknowable is
irrelevant in determining the applicability of strict
lability.” Id.
30a
These imprecise statements and the unequivocal
ruling in Middlesex Asbestos Litigation that Beshada
applies to pending asbestos cases leads us to the
following assessment: (1) in New Jersey, Beshada does
apply to asbestos cases but not to all products liability
cases; and (2) Feldman does not govern asbestos
cases, but does not necessarily apply to all other
products liability cases.
New Jersey, therefore, does treat asbestos cases
differently than other products liability cases.
However, we do not know if this disparate treatment
applies exclusively to asbestos cases. In addition to the
expressed justifications of risk-spreading, accident
avoidance, and simplification of the fact-finding.
process, Feldman provides yet another underlying
reason for precluding the state-of-the-art defense in the
asbestos setting. The opinion suggests that these
manufacturers knew the dangers of asbestos and,
consequently, the state-of-theart defense could not be
sustained.”
This theory is expressed more clearly in Fischer v.
Johns-Manville Corp., 103 N.J. 643, 512 A.2d 466
(1986), an opinion handed down after the state
supreme court refused to apply Feldman to asbestos
cases. Fischer determined that one manufacturer did
know the hazards of asbestos by the 1930s and that
other manufacturers could have gained similar
knowledge through articles published at that time in
scientific journals. Feldman had earlier held that “a
reasonably prudent manufacturer will be deemed to
know of reliable information generally available or
reasonably obtainable in the industry.” 479 A.2d at
387.
3. See Asbestos Litigation Reporter. 13.800-01 (Jan. 2, 1987)
for documentary evidence of the knowledge of asbestos diseases
available in 1930.
3la
Although it may be said that Fischer embodies —
post-hoc justification for Beshada, the latter had cited
Hardy v. Johns-Manville Sales Corp., 509 F.Supp.
1353 (E.D. Tex. 1981), one of a series of cases within
the Fifth Circuit reflecting varying judicial responses to
the state-of-the-art defense in asbestos litigation even
before Beshada appeared on the scene. See e.g. Hardy
v. Johns-Manville Sales Corp. (“Hardy II") 681 F.2d
334 (5th Cir. 1982); Migues v. Fibreboard Corp., 662
F.2d 1182 (5th Cir. 1982); Borel v. Fibreboard Paper
Products Corp.493 F.2d 1076 (5tk Cir. 1973); Hardy v.
Johns-Manville Sales Corp. (“Hardy I"), 509 F. Supp.
1353 (E.D. Tex. 1981); Flatt v. Johns-Manville Sales
Corp., 488 F. Supp. 836 (E.D. Tex. 1980); Mooney v.
Fibreboard Corp., 485 F. Supp. 242 (E.D. Tex. 1980).
Some federal courts believed that because asbestos
plaintiffs so frequently litigated the state-of-the-art
issue, they were entitled to use offensive collateral
estoppel to preclude further repetition. Hardy I, 509 F.
Supp. at 1361; Flatt v. Johns-Manville Sales Corp..
488 F. Supp. at 841. The Court of Appeals. however.
determined that to use collateral estoppel in this
context would be to “elevate judicial expedience over
considerations of justice and fair play.” Hardy II, 681
F.2d at 348.
In Hardy I, the district court applied collateral
estoppel based on an omnibus order derived from the
earlier Court of Appeals decision in Borel to preclude
relitigation of the state-of-the-art defense. The trial
court construed Borel to establish that, as a matter of
law, the plaintiffs need not prove the defendants knew
or should have known of the dangerous propensities of
their products.
4. The Court of Appeals for the Fourth Circuit has also
discussed the subject. See also Spartanburg County School Dist.
Seven v. National Gypsum Co.. 805 F.2d 1148(4th Cir. 1986); Reed
v. Tiffin Motor Homes. Inc.. 697 F 2d 1192 (4th Cir. 1982).
32a
The Court of Appeals, however, concluded that the
district court had tried to reach a result that the
binding substantive law of the forum state had not yet
reached. Consequently, because necessary procedural
prerequisites were absent and because doubts existed
as to the accuracy of the underlying findings, the Court
of Appeals refused to give preclusive effect to the issue
of the state-of-the-art defense.*
We do not overlook the fact that exposure to
asbestos may vary in degree depending on whether an
individual works in a plant that manufactures
asbestos products or simply drives an automobile
equipped with asbestos brake linings. Nevertheless,
Beshada's broad language, when applied to the
concrete facts of asbestos litigation and read together
with Fischer, is not completely divorced from reality,
despite its abstract appearance of assessing culpability
for failure to know and warn of the unknowable.
In the case at hand, the dissenting district judges
have mounted powerful arguments to sustain the
equal protection challenge. Ultimately these arguments
are grounded in the wisdom and correctness of
Beshada and its progeny. an appraisal not within the
function of the federal courts when called upon to
assess equal protection attacks on state law. This
restraint is especially appropriate when the reviewing
court employs the rational basis standard, a test that
does not permit federal courts to strike down
classifications because they are unwise or inartfully
drawn. United States R.R. Retirement Bd. v. Fritz, 449
U.S. 166 (1980); Delaware River Basin Comm'n v.
5 For a detailed analysis of the difficulties of applying collateral
estoppel to asbestos litigation, see Green. The Inability of
Offensive Collateral Estoppel to Fulfill Its Promise: An
Examination of Estoppel in Asbestos Litigation, 70 lowa L. Rev.
141 (1984).
33a
Bucks County Water & Sewer Auth., 641 F.2d 1087
(3d Cir. 1981).
Moreover, we must not overlook the importance of
allocating the burden of proof. In equal protection
cases, those who challenge state law must convince the
court that the factual assumptions on which the
classification is apparently based could not reasonably
be conceived as true by the governmental decision
maker. See Vance v. Bradley, 440 U.S. at 110. See
also Malmed v. Thornburgh, 621 F.2d 565, 571 (3d
Cir.), cert. denied, 449 U.S. 955 (1980). We cannot say
that the asbestos manufacturers have met that
burden.
Nor may we ignore the federalism concerns that
color this controversy. These considerations are
invoked by long-standing acceptance of the notion that
tort law, much like the law of domestic relations,
belongs almost exclusively to the states. Although that
principle alone would not require a federal court to stay
its hand when a violation of equal protection occurs,
we must recognize that the states possess a high
degree of competence as well as a traditional claim of
independence in this field.
From that perspective, too, it is unrealistic to
ignore the fact that the doctrine of strict products
liability advocated by the Restatement (Second) of
Torts 8 402A and adopted by New Jersey is in itself a
classification that imposes discriminatory liability ona
particular group of defendants. At the turn of the
century, the common law held manufacturers and
defendant-distributors of defective products liable in
most instances only if proved negligent. State court
decisions, however, developed tort law to wipe out the
reasonable conduct defense and to establish liability
without fault not only for manufacturers of defective
products, but also for the utterly fault-free retailer.
34a
Nevertheless, no equal protection challenge has
successfully undermined that doctrine.°®
In refining and narrowing the 8 402A theory,
Beshada eliminates one more defense to the liability of
asbestos defendants. Because the court's reasoning
may be applicable to other defendants in similar
circumstances, the justification advanced both directly
and indirectly by the New Jersey court may be regarded
as weak and ill-advised. We cannot, however, conclude
that the state court's position is irrational. The
concepts of risk-spreading and compensation for
victims by manufacturers of unreasonably dangerous
products are cornerstones of § 402A. and they may be
consistently applied to asbestos as well as to other
products.
Although not in itself a determinative factor in the
elimination of a substantive defense, the desirability of
simplifying the fact-finding process and thus making it
easier for victims to recover has been recognized by the
law. Workmens’ compensation programs and no-fault
auto insurance plans share that common goal. Under
workmens’ compensation laws, both the employer and
the employee yield common law rights in exchange for
a plan of prompt, fixed payments controlled by an
administrative agency. Nevertheless, the Supreme
Court made it clear in Duke Power that-the lack of a
quid pro quo is not a prerequisite to approval of
modification of traditional common law tort doctrine.
438 U.S. at 88.
Administrative convenience standing alone is not
an adequate ground for the elimination of a
6. See Gogol v. Johns-Manville Sales Corp., 595 F. Supp. 971,
974-75 (D.N.J. 1984), another asbestos case, where the court
addressed a similar equal protection question. Recognizing that
tort law makes numerous distinctions between classes of litigants,
the court found no constitutional violation.
35a
substantive defense. Medora v. Colautti, 602 F.2d
1149, 1153 n.9 (3d Cir. 1979). However, we cannot
help but be conscious of the extraordinary size of the
asbestos personal injury litigation. As we commented
in In Re School District Asbestos Litigation, this
unprecedented phenomenon in American tort law
requires states be given some leeway in devising their
own solutions. -
In reaching its decision, the Beshada court
considered the possibility that a jury might become
confused by the testimony of experts who would
“speculate as to what knowledge was feasible in a given
year.” Consequently, the court opined that it should
“resist legal rules that will so greatly add to the costs
both sides incur in trying a case.” 477 A.2d at 548.
It might be questioned whether the defendants
themselves worried about the potential cost of
producing evidence necessary to reduce or eliminate
their liability and whether they. in fact, welcomed the
court's concern about their litigation expenses.
Moreover, Beshada’s interest in simplifying the trial of
asbestos cases was substantially undercut by Fischer,
where the state supreme court permitted personal
injury plaintiffs to receive punitive damages on proof
that the defendants had failed to comply with the
state-of-the-art.’ Notwithstanding the distinction
between what was known and what was knowable, for
all practical purposes what Beshada preciuded from
coming in the front door, Fischer allows in the back
3 We note that this opinion tnvoked one of the grounds we
reluctantly predicted would be used by state courts to permit
punitive damages in asbestos personal injury cases. In Re School
Asbestos Litigation. 789 F.2d at 1004. The New Jersey court
rationalized its decision tn part by noting that because other states
allowed the recovery of exemplary damages. New Jersey citizens
should have similar rights
36a
door. Thus, the goal of simplifying asbestos litigation
is eroded by the New Jersey decision to award punitive
damages in these cases.
Although we find the Fischer case troubling, as did
the dissenting district judges in the case at hand, we
once again acknowledge our limited function in
reviewing cases of this type. We cannot overlook the
fact that those plaintiffs who wish to avoid the cost of
proving the foundation for an uncertain award of
punitive damages still may take advantage of the
simplified compensation claim Beshada makes
available. While the use of that alternative may be
conspicuous by its rarity, we have no empirical data
that suggests it will never be employed.
IV.
We further conclude that the due process challenge
raised on appeal is not sustainable. Appellants have
not been deprived of their due process right to be
heard; they have only been denied one available
defense. Because other defenses remain in their
arsenal, they have not lost their ability to defend
against the claims brought by asbestos victims. Nor
can the contention that the New Jersey court's
reasoning is unarticulated and irrational stand in light
of the steady evolution over the last twenty years of the
doctrine of strict products liability in that state's law.
As our discussion of equal protection indicated, there
are legitimate state interests here that have a
reasonable basis, enabling the New Jersey law to
survive scrutiny under the Due Process clause.
V.
In summary, we conclude that common law
decisions of state supreme courts are subject to equal
protection scrutiny under the same rational basis
standard applicable to legislative enactments.
37a
Decisions of the state supreme court that fall witnin
the economic and social fields are to be evaluated
under the rational relationship test. We further decide
that the policies of risk-spreading, compensation for
victims, and simplification of trials in the highly
unusual circumstances of asbestos claims furnish an
adequate, albeit minimal, basis for eliminating the
state-of-the-art defense in these cases and preclude a
successful equal protection challenge to the New Jersey
Supreme Court decision abolishing that defense.
The district court has presented to us the question
whether, in strict liability failure to warn cases in New
Jersey. the judicially imposed denial of the
state-of-the-art defense to manufacturers of
asbestos-containing products constitutes a violation of
the Equal Protection Clause of the Fourteenth
Amendment.
We answer in the negative.
BECKER, Circuit Judge, concurring.
I join in Parts I, Il and [V of Judge Weis's opinion
and concur wholly in the result. | also join in portions
of Part III, in which Judge Weis explains why he finds a
_ rational basis for New Jersey's distinguishing asbestos
cases from prescription drug cases in terms of the
state-of-the-art defense.’ However. | do mot believe that
Judge Weis has identified with sufficient precision the
New Jersey Supreme Court's reasons for making the
distinction under review, a distinction I believe to be
supported by a valid government objective and rational
within our equal protection jurisprudence.
1. For the reasons | have not joined in the balaince of Part III. see
infra, typescript at 16-18
38a
Specifically, I believe that, on the basis of adjudicative
facts determined in cases that had the full panoply of
procedural protections, the New Jersey Supreme Court
has determined a legislative fact -- that the hazards of
asbestos exposure were knowable to the industry at all
relevant times. The subject of legislative factfinding is
rarely discussed in the jurisprudence, and I write
separately to explain why I think it validates the New
Jersey Supreme Court's distinction.
Appellants complain that the New Jersey Supreme
Court deprives manufacturers and distributors of
asbestos-containing products of the state-of-the-art
defense in products liability/failure to warn actions,
which other manufacturers and distributors are
entitled to assert in the same kind of lawsuits.
Appellants urge that no rational theoretical basis exists
for differentiating between these classes of litigants.
Judge Weis in his opinion demonstrates that is not
clear that all other manufacturers may take advantage
of the state-of-the-art defense, although he agrees that
New Jersey “does treat asbestos cases differently than
other product liability cases.” Weis Op., typescript at
-19. I believe that we need not find constitutional
infirmity even if we assume for the sake of argument
appellants’ worst case scenario, i.e., that New Jersey
singles out the asbestos industry.
I.
As I read the New Jersey Supreme Court's cases,
the court does not deny asbestos defendants the
state-of-the-art defense on theoretical grounds.
Instead, I believe that the New Jersey court, via the
Beshada-Feldman-Fischer trilogy, has determined a
legislative fact -- that, at all relevant times, asbestosis
harms were knowable to the industry. That being the
case, the New Jersey Supreme Court has reasonably
39a
decided to preclude endless relitigation of what was
“knowable” to the asbestos industry.”
Believing that “Feldman provides yet another
underlying reason for precluding the state-of-the-art
defense in the asbestos setting,” Judge Weis observes
that “the [Feldman] opinion suggests that these
manufacturers knew the dangers of asbestos and,
consequently, the state-of-the-art defense could not be
sustained.” Typescript at 20 (footnote omitted).
Although I agree with Judge Weis that the New Jersey
Supreme Court has determined that the harms of
asbestos were actually known to at least one asbestos
manufacturer, I do not believe that it found in
Feldman that the harms of asbestos were actually
known to the industry. Rather, on the basis of what
could have been known, that opinion determines
constructive knowledge sufficient to defeat the
state-of-the-art defense. It was not until Fischer v.
Johns-Manville Corp., 103 N.J. 643, 512 A.2d 466
(1986), that the court found that at least one asbestos
manufacturer actually knew of the harms.
The Beshada court did have before it the factual
dispute concerning what was known. It found,
2 The state-of-the-art defense, as the name implies, does not
merely rest on an inquiry concerning what a manufacturer knew.
Rather, the defense is intended to limit liability to those dangers of
which the seller “has knowledge. or by application of reasonable.
developed human skill and foresight should have knowledge.”
Restatement (Second) of Torts. § 402A comment J. Implicit in the
defense. therefore, is the obligation to investigate and keep abreast
of recent developments -- an obligation imposed under the aegis of
“constructive knowledgel, which] may encompass virtually all
information that is in the public domain.” Green, The Inability of
Offensive Collateral Estoppel to Fulfill Its Promise: An
Examination of Estoppel in Asbestos Litigation, 70 lowa L. Rev.
141, 190 n. 276. The relevant determination ts thus not what was
known, but what was knowable. See also infra at 8-9.
40a
however, that it need not resolve the “substantial
factual dispute about what defendanis knew and when
they knew it,” 447 A.2d at 542, referring both to a
finding that “[k)]nowledge of the danger [of asbestos]
can be attributed to the industry as early as the
mid-1930's ...." Id. at 542, (quoting Hardy v.
Johns-Manville Sales Corp., 509 F.Supp. 1352, 1355
(E.D. Texas 1981)) and the contrary assertions of the
asbestos industry. Pertinent in Feidman is the exact
manner that the court restricted the application of
Beshada when it differentiated between asbestos
products and other products in the context of the
state-of-the-art defense:
We do not overrule Beshada, but restrict Beshada
to the circumstances giving rise to its holding.
See, e.g., Friedman v. Podell, 21 N.J. 100, 105
(1956); Konrad v. Anheuser-Busch, Inc., 48 N.J.
Super. 386, 388 (Law Div. 1958) (“Cases state
principles but decide facts, and it is only the
decision on the facts that is binding precedent.”).
We note in passing, that, although not argued and
determined in Beshada, there were or may have
been data and other information generally
available, aside from scientific knowledge, that
arguably could have alerted the manufacturer at
an early stage in the distribution of its product to
the dangers associated with its use.
97 N.J. at 455. Thus, while the New Jersey Supreme
Court in Beshada expressly did not decide “what
defendants knew and when they knew it,” 447 A.2d at
542, it also refrained from deciding that question in
Feldman. In Feldman, it stated only that the
3. Hardy. in turn, rests to a significant degree on Borel vu
Fibreboard Paper Products Corp., 493 F 2d 1076 (5th Cir 1973)
cert denied, 419 U.S. 869. 95 S.Ct. 127. 42 L Ed 2d 107 (1974)
dla
manufacturers “arguably could have [been] alerted. . .
at an early stage in the distribution of its product to the
dangers associated with its use,” 97 N.J. at 455
(emphasis supplied). Rather than finding actual
knowledge, the Feldman opinion thus intimated its
views on constructive knowledge. which is sufficient to
defeat the state-of-the-art defense, based on facts
brought to its attention in Beshada.
In Fischer the New Jersey Supreme Court
determined not only that asbestosis harms were
knowable by the asbestos industry, but that those
harms were actually known by at least one
manufacturer. In that case. the court recited two
single-spaced pages of facts that determined to its
satisfaction that at least one company “did in fact have
knowledge of the hazards of asbestos. . . as early as the
1930's.” 103 N.J. 649 (quoting 193 N.J. Super. at
117). For example, the court referred to “eleven
scientific articles published between 1936 and 1941
documenting the grave pulmonary hazards of exposure
to asbestos and discussing the measures which could
be taken to protect workers.” Id. at 650 (quoting 193
N.J. Super. at 118). On the more individualized levei of
worker exposure, a doctor testified that “from the
beginning of his employment [in 1944] he saw persons
with asbestosis ‘on a regular and frequent basis’ and
frequently made recommendations that such
employees receive job reclassifications which would
remove them from continued exposure to asbestos
dust.” Id. at 651 (quoting 193 N.J. Super. at 120). As
early as 1933, noted the court, asbestos workers were
filing claims against at least one asbestos
manufacturer. See id. at 650 (quoting 193 N.J. Super.
at 118).
The state-of-the-art defense decides not what the
defendant or another party knew -- a fact relating toa
particular party -- but what was knowable -- a fact
42a
about the state of the world. In Feldman, the court
adverted to what was knowable, but in Fischer it made
a concrete determination. By deciding that even one
company in the industry -- Johns-Manville -- knew of
asbestosis, the Supreme Court of New Jersey,
culminating the trilogy, found that the harms were
knowable to the industry as a whole.
To my mind, it was not inappropriate for the court
to rely on this determination -- or even a similar earlier
determination, see, e.g.. Hardy, cited in Beshada,
447 A.2d at 542 -- in finding legislative facts* when it
determined that the rule of Beshada should continue
to govern the asbestos industry. As Justice Holmes
recognized long ago, “the court may ascertain as it sees
fit any fact that is merely a ground for laying down a
rule of law.” Chastleton Corp. v. Sinclair, 264 U.S.
543, 548-49, 44 S.Ct. 405, 406 (1924). To forbid such
recognition would force courts to fashion laws without
reference to reality.
Judge Hunter, in dissent, acknowledges that one
manufacturer was found to have known of asbestos’
harms in Fischer, but he finds that case unhelpful for
judging the rationality of the challenged differentiation
between asbestos and non-asbestos defendants
because it was decided after the differentiation was
first drawn. See Dissent, typescript at 16, n.4. I
disagree. | believe that the New Jersey Supreme Court
rested the differentiation on the views it intimated in
Feldman, i.e., the legislative fact that asbestos’ harms
were knowable. This avenue was open to New Jersey's
highest court despite the putative protestations of a
federal court, see Hardy, or the lack of “a certain
degree of consensus,” id. As Professor Davis has
opined,
4. For a definition of legislative facts and demonstratign that
knowability is a legislative fact. see infra at Part I. B.
43a
judge-made law would stop growing if judges, in
thinking about questions of law and policy, were
forbidden to take into account the facts they
believe, as distinguished from facts which are
‘clearly * * * within the domain of the
indisputable.’ Facts most needed in thinking
about problems of law and policy have a way of
being outside the domain of the clearly
indisputable.
K. Davis, A System of Judicial Notice Based on
Fairness and Convenience, in Perspectives of Law 69,
82 (1964), quoted in Fed. R. Evid. 201, advisory
committee's note.
Leaving aside the argument that the court's
pronouncement in Feldman amounted to such a
legislative fact-finding, and assuming that that fact
was not found until Fischer, | still do not believe that
we should today pronounce it irrational. Labelling the
differentiation irrational would be contrary New
Jersey's current position regarding manufacturers’
ability to have known. Moreover, it would involve this
court in a meaningless ritual of striking down a
differentiation that we know to be supportable, only for
the state court to revive it as supported on the basis we
have already identified. For similar reasons, Justice
Stevens has warned about unduly emphasizing actual
motivation for the differentiation under review in equal
protection challenges of legislative enactments.
Actual purpose is sometimes unknown. Moreover,
undue emphasis on actual motivation may result
in identically worded statutes being held valid in
one State and invalid in a neighboring State. |
therefore believe that we must discover a
correlation between the classification and either
the actual purpose of the statute or a legitimate
44a
purpose that we may reasonably presume to have
motivated an impartial legislature.
United States R.R. Retirement Bd. v. Fritz, 449 U.S.
453, 180-81, 101 S.Ct. 453, 462, 66 L.Ed.2d 368
(1980) (Stevens, J., concurring in the judgment).
Because the legislative fact-findings of Fischer may
reasonably be presumed to have motivated a
hypcthetical impartial court, we would have to affirm
even had Feldman not preceded that case.
The determination of knowability implicates the
standard to which the state is willing to hold a
manufacturer of a product: not only must a
manufacturer stay abreast of what has already been
discovered about his product, but he must also
diligently pursue information about its possible
dangers before he introduces it for distribution
throughout the marketplace. See supra typescript at
2-3 2.2. As such, under the aegis of “constructive
knowledge,” the New Jersey Supreme Court has made
a policy judgment concerning the diligence with which
the manufacturers should have undertaken additional
investigation. See Feldman, 479 A.2d at 386-87.
Thus, regardless of whether a given manufacturer is
found to have actually known of the harms, the New
Jersey Supreme Court could find that the industry was
chargeable with the knowledge that was attainable had
the manufacturers undertaken the task of discovery.
As Judge Weis indicates, the court in Feldman made
clear that “a reasonably prudent manufacturer will be
deemed to know of reliable information generally
available or reasonably obtainable in the industry.”
479 A.2d at 387 (emphasis supplied); see Weis Op..,
typescript at 21. Such a determination cannot be made
withcut reference to facts concerning the availability of
information to the asbestos industry as a whole.
However, once this factual assessment had been made,
45a
the court was also justified in precluding the
relitigation of the factual basis of the state-of-the-art
defense.*
Il.
Judge Hunter in dissent argues that, because the
use of legislative facts concerning the knowability of
asbestos harms does not satisfy the requirements of
the collateral estoppel doctrine, it violates due process.
I disagree. The above discussion demonstrates that, in
choosing to allow the state-of-the-art defense for other
industries, the New Jersey Supreme Court did not have
to turn a blind eye to its belief that the harms of
asbestos were knowable to the asbestos indutry as a
whole. Common law courts could not fashion rules
grounded in reality if they were obliged to proceed
without aid of legislative facts. As is evident from other
cases that have found legislative facts. legislative
fact-finding by such a court need not conform to the
requirements of collateral estoppel to pass due process
muster. | therefore do not believe that the New Jersey
Supreme Court can be held to have acted
unconstitutionally in finding the legislative facts it did
when fashioning the law at issue in this case.
In the New Jersey Supreme Court cases discussed
above, the factual determination concerning the
knowability of asbestos harms is a legislative fact.
“Adjudicative facts are simply the facts of the particular
case. Legislative facts, on the other hand, are those
which have relevance to legal reasoning and the
lawmaking process, whether in the formulation of a
legal principle or ruling by a judge or court or in the
enactment of a legislative body.” Fed. R. Evid. 201(a)
3. See. e.g.. Forte Towers. Inc. v. City of Miami Beach. 360
So.2d 81, 82 (Fla. App. 1978) (precluding relitigation of factual
predicate).
46a
advisory committee's note. Under this dichotomy, the
pertinent facts, which concern the nature of the
asbestos industry as a whole and what it could have
known, were properly treated by the court as
legislative. As one commentator has noted,
An industry-wide question calls for facts about the
industry; facts about each company may be
unhelpful and may even get in the way. If a court
. is making law to govern an industry of 100
companies, the useful facts are about the 100
companies as a group, not about each company.
The facts about the group are legislative, even
though they are the sum of adjudicative facts
about each company.
3 K. Davis, Administrative Law Treatise § 15:5, at
152-53 {2d ed. 1980) (emphasis in original). The issue
of the knowability of asbestos harms concerns not
what a particular litigant knew, but rather what
knowledge was in the realm of the possible for the
industry as a whole. Because the knowability of the
harms of asbestos may thus be a legislative fact upon
which a court can fashion a rule of law, it was not
inappropriate for the New Jersey Supreme Court to
base a legal rule upon these legislative facts. See
generally Fed. R. Evid. 201(a) advisory committee's
note; Morgan, Judictal Notice, 57 Harv. L. Rev. 269,
270-71 (1944).®
6. Judge Hunter believes that the state-of-the-art
determination concerning the knowability of asbestos’ harms is an
adjudicative fact. Arguing by analogy. he finds the issue similar to
whether asbestosis and mesothelioma were caused by asbestos
exposure in a particular case, held to be a matter of adjudicative
fact in Laster v. Celotex, 587 F.Supp. 542 (S.D. Ohio 1984). The
analogy fails. however, because the development of these diseases
relates to the peculiar conditions under which a person is exposed
-- for example, whether the person smokes and the ambient air
concentration of asbestos dust. See Laster, 587 F.Supp. at 543. In
47a
Many courts and commentators have argued that a
court should not rely on legislative facts without giving
the parties an opportunity for comment upon them.
the context of what was knowable by the asbestos industry,
however, the peculiarities of a specific manufacturer are irrelevant.
See supra at 2-3 n.2, 8-9. What may have been known is the heart
of the state-of-the-art inquiry; in the causation inquiry, by
contrast, “judicial notice that the inhalation of asbestos may cause
asbestosis under certain conditions would have no appreciable
lunpact.” Laster, 587 F.Supp. at 544 (emphasis in original).
In any event, if the knowability of asbestos’ harms were
purely an adjudicative fact, it could not be the subject of a
legislative fact-finding. The contrary is true, however, for the
Senate Committee on Labor and Public Welfare made a specific
legislative finding concerning the knowability of asbestos’ harms
when deciding to enact the Occupational Safety and Health Act.
Asbestos is another material which continues to
destroy the lives of workers. For 40 years it has been
known that exposure to asbestos caused the severe lung
scarring called asbestosis.
S. Rep. No. 1282, Dist Cong., 2d Sess., reprinted in 1970 U.S. Code
Cong. and Admin. News, 91st Cong., 2d Sess. 5177, 5178.
Judge Hunter also argues that “culpable knowledge.” like
disease causation, is an ultimate fact that cannot be resolved on the
basis of legislative facts. First, | am perplexed by the phrase
“culpable knowledge.” for the state-of-the-art inquiry does not look
at what was known by the individual defendant, but what could
have been known in the industry by the application of reasonable
diligence. See supra at 2-3 n.2, 8-9. Second, | fail to understand
why legislative fact-finding cannot resolve an ultimate issue;
indeed, in the Supreme Court cases Judge Hunter cites as finding
legislative facts, those facts seem to relate only to ultimate Issues.
See Dissent at 12; Church of Latter-Day Saints v. Amos, _— U.S.
—. 107 S.Ct. 2862, 2875 (1987) (O'Connor, J., concurring)
(perception of endorsement of religion in Establishment Clause
case); United States v. Leon, 468 U.S. 897, 918-21! (1984) (deterrent
effect of exclusionary rule); compare Hawkins, 358 U.S. at 77-78
(allowing adverse spousal privilege because adverse testimony
found to hurt marriage) with Trammel v. United States, 445 U.S.
40, 52 (overruling Hawkins because “|w/hen one spouse is willing
48a
See. e.g.. Bulova Watch Co. v. K. Hattort & Co., 508 F.
Supp. 1322, 1328-29 (E.D.N.Y. 1981): 3 K. Davis,
Administrative Law Treatise 8 15:9; S. Saltzburg & K.
Redden, Federal Rules of Evidence Manual 60 (4th
ed. 1986) (“We do not claim Judges cannot rely on a
broad range of facts to force the law forward. We
suggest only that the parties should be permitted to
participate in the march.”). It is therefore noteworthy
that the Beshada case was itself concerned with
developing. facts pertinent to the knowability of
asbestos harms. Additionally, the Hardy and Borel
cases, on which Beshada and Feldman appear to be
predicated, as well as the Fischer case, were litigated
with the full panoply of procedural protections.
Moreover, the court in Beshada did not hear from only
one member of the industry; rather, a broad
cross-section of the industry was represented. See 447
A.2d at 541-42. Finally. the members of the asbestos
industry had the opportunity to advocate a contrary
conclusion in In re Asbestos Litigation Venued in
Middlesex County, 99 N.J. 201, 491 A.2d 700 (1984),
and again in Fischer. Hence, the affected industry has
had relevant opportunities to respond to the New
Jersey Supreme Court's determination of the pertinent
legislative facts.
It is unclear whether Judge Hunter would find
relevant to his due process point the legislative nature
of the facts relied on by the New Jersey Supreme Court.
Because a legislative fact is not an individualized fact.
however, the Constitution does not mandate that it be
found through a process of individualized
to testify against the other in a criminal proceeding ... their
_ relationship ts almost certainly in disrepair’). Finally, I disagree
with the characterization of the state-of-the-art defense as the
ultimate issue {n a products ltability case. It is no more or less
ultimate a determinant of liability than. to take Judge Hunter's
other example, causation.
49a
fact-finding.’ Because legislative facts are the basis for
a rule of law, they need not be relitigated in each
succeeding case that invokes the rule and thereby
indirectly relies on the legislative fact. It does not
offend due process to craft the rule without allowing
individualized process for redetermination of the
legislative facts on which the rule is based. See, e.g.,
New York Times v. Sullivan, 376 U.S. 254, 278, 84
S.Ct. 710, 725 (1964) (finding state libel law
unconstitutional because of “the pall of fear and
timidity imposed upon those who would give voice to
public criticism”); Hawkins v. United States, 358 U.S.
74, 78, 79 S.Ct. 136 (1958) (“Adverse testimony given
in criminal proceedings would, we think, be likely to
destroy almost any marriage.”). _
Judge Hunter would apparently require a state
Supreme Court to adhere to the strictures of collateral
estoppel doctrine whenever it rests a rule of law upon a
legislative fact that had been previously determined as
an adjudicative fact in a prior court case. Such a rule
would deprive courts of the ability to fashion rules with
reference to the reason borne of experience. “The
history of the common law shows a constant pattern of
questions once treated as fact growing into matters of
law after the courts have gained knowledge and
experience concerning them.” Korn, Law, Fact, and
Science in the Courts, 66 Colum. L. Rev. 1080, 1105
(1966). Thus, for example, the decision to admit into
evidence novel scientific testimony is first tested by
re Thus the Supreme Court long ago found a critical difference
between Londoner v. Denver, 210 U.S. 373 (1908), in which a small
number of people were exceptionally affected upon individual
grounds by a tax increase and therefore should have been afforded
individual due process, and Bi-Metallic Inv. Co. v. State Bd. of
Equalization, 239 U.S. 441 (1915), in which the court found that a
general tax increase could be predicated without individualized
fact-finding.
SOa
individual adjudications before judicial recognition
eliminates the need for a preliminary foundation. See
United States v. Downing, 753 F.2d 1224, 1234 (3d
Cir. 1985).* Courts have eve : elevated the fact finding
of a single jury verdict to the position of legislative fact
on which to base a rule of law.’ In all instances of
adjudicative facts’ elevation to legislative facts, the
prior adjudications, with their full panoply of
procedural protections, influence the court's view of
reality. The legislative facts, in turn, influence the rule
that is fashioned, and the due process clause does not
require individualized determination or
reconsideration of the legislative facts in all
subsequent cases.
Finally, Judge Hunter goes beyond testing the New
Jersey Supreme Court's determination against the due
process clause of the fourteenth amendment. He also
finds that, “lilf judicial notice can be taken of such
ultimate facts at all, it can only be within the strictures
of Fed. R. Evid. 201.” Dissent. typescript at 17; see
also id. typescript, at 18 (finding “does not satisfy the
requirements of Fed. R. Evid. 201"). While I find the
advisory committee's comments illuminating on the
distinction between adjudicative and legislative facts, |
do not believe that Rule 201 binds any state court.
More important, Judge Hunter's point seems
8. Specifically. although originally a subject to be re-established
by expert testimony in every case, courts long ago came to give
blood-grouping tests conclusive effect in paternity suits. See, e.g..
Jordan v. Mace, 144 Me. 351. 69 A.2d 670 (1949): see generally
Ross. The Value of Blood Tests as Evidence itn Paternity Cases, 71
Harv. L. Rev. 466 (1958).
9. See. e.g.. Commonwealth v. Sullivan. 146 Mass. 142 (1888)
(finding on the basis of a prior jury decision that. as a matter of law,
a certain game was a regulated “lottery ’). cited in Korn, Law, Fact.
and Science tn the Courts, 66 Colum. L. Rev. 1080, 1104 (1966).
Sla
inapposite to the central issue. The question is not
whether New Jersey wisely found legislative facts -- I do
not endorse the New Jersey Supreme Court's finding,
for | do not pass on the wisdom of what it has done.
Rather, for our purposes it is sufficient that New Jersey
behaved rationally.'® Because legislative facts underlie
the New Jersey Supreme Court's decision to continue
to withhold the state-of-the-art defense from asbestos
manufacturers, the differentiation under review
cannot be deemed irrational.
III.
I have not joined the balance of Part III of Judge
Weis’ opinion because | do not find a rational basis for
New Jersey's distinction in any of the other
justifications he advances. I briefly note my
diffferences with the remainder of Judge Weis’ Part III.
For the most part, the other rationales advanced by
Judge Weis do not explain the New Jersey Supreme
Court's distinction; rather, they imply that, because of
the New Jersey Supreme Court's conceded hegemony
over the development of that state's tort law, we must
defer to whatever distinction the court draws. For.
example, he appears to regard the differentiation in
and of itself as a matter of state policy in a matter of
10. As one commentator has noted in the context of legislative
fact-finding by a legislative body:
Given the bent to test due process according to the
information available to the legislature, the truth-content
of the data is not directly relevant. The question is whether
sufficient data exists which could influence a reasonable
legislature to act. not whether ultimately this data is true.
E. Cleary, McCormick on Evidence $§ 331, at 768 (2d ed. 1972)
(footnote ommitted); see also Burns Baking Co. v. Bryan, 264 U.S.
504. 517. 44 S.Ct. 412. 415. 68 L.Ed. 813 (1924) (Brandeis, J..
dissenting).
state expertise. which is said to deserve our deference.
See. e.g., Weis Op., typescript at 23, n.6
(characterizing dissent as “a spirited attack on the
wisdom of the New Jersey Supreme Court's decisions
in the asbestos cases”); id., typescript at 25 (“Because
the court's reasoning may be applicable to other
defendants in similar circumstances, the justification
advanced both directly and indirectly by the New Jersey
court may be regarded as weak and ill-advised. We
cannot, however, conclude that the state court's
position is irrational.”). Additionally, Judge Weis
draws attention to “the federalism concerns that color
this controversy” -- concerns, I must note, that are ever
present in Fourteenth Amendment challenges. Id.,
typescipt at 24. ~
To determine the issue on the basis of such
deference, however, assumes the answer to the equal
protection inquiry. If we were to defer to the extent
suggested by Judge Weis in all equal protection cases,
no differentiation could be found irrational. Moreover,
this extra dose of deference is duplicative. As Judge
Weis so artfully demonstrates in Part II of his opinion,
deference to legislative and state decisionmakers is
part of the rationale behind the rational relation
standard itself. To add greater deference would totally
eviscerate that standard. This is clearly not the
intended result of rational relation scrutiny. See, e.g.,
Clebume v. Cleburne Living Center, __ U.S. __. 105
S.Ct. 3249 (1985) (finding city ordinance
unconstitutional under rational relation equal
protection scrutiny). Rather, the rational relation
standard requires at least one justification for the
challenged differentiation. It may be that the
justification is to be judged by the lax standard
enunciated in Vance v. Bradley, 440 U.S. 93, 111
(1979) (reviewing court must be convinced “that the
legislative facts on which the classification is
S3a
apparently based could not reasonably be conceived to
be true by the governmental decisionmakers”), but one
such justification must nonetheless exist.
Additionally, although Judge Weis does not rely on
administrative convenience simpliciter, he justifies the
differeniation at least partially on that basis. | agree
with Judge Weis to the extent that he holds that
administrative convenience may play a role in
prompting differentiation when an independent
reason also supports it. As I have explained supra, |
find that the New Jersey-Supreme Court has reached
the conclusion that that the state-of-the-art defense
should not be available to the asbestos manufacturers
because the harms of asbestos were knowable to the
industry. Administrative convenience is thus a
justification for the differentiation because state
courts are not proscribed by the Equal Protection
Clause from refusing to hear a defense that, as a matter
of law, is doomed to fail. However, beyond such
considerations, administrative convenience fails as a
justification.
IV.
While states must be allowed to make their own
policy judgments in matters such as tort law, they
cannot use that discretion to arbitrarily discriminate
against a class of litigants. Where a factual basis
supports a differentiation, however, both the policy
decision and the underlying factual determination
deserves our deference.'' In an equal protection case,
11. Because the determination of legislative facts is thus a
component of fashioning a rule of law, the clearly erroneous
standard of Rule 52(a) does not apply to review of a federal court's
findings concerning legislative facts. See Lockhart v. McCree, 106
S. Ct. 1758, 1762 n.3 (1986): see generally Dunagin v. City of
Oxford, Miss., 718 F.2d 738. 748-49 n.8 (Sth Cir. 1983) (en banc)
(plurality opinion of Reaviey. J.).
—_—
Sda
those challenging the state law “must convince the
court that the legislative facts on which the
classification is apparently based could not reasonably
be conceived to be true by the governmental
decisionmaker.” Vance v. Bradley, 440 U.S. 93, 111
(1979), quoted in Minnesota v. Clover Leaf Creamery
Co., 449 U.S. 456, 464, 101 S.Ct. 715, 724 (1981)
(citing other cases). Because the court has found that
at least one asbestos manufacturer had actual
knowledge of the harms of asbestos at all relevant
times, I do not believe that its determination of
knowability “could not reasonably be conceived to be
true by the governmental decisionmaker.” I therefore
concur in this aspect of Part III of Judge Weis's
opinion."?
12. Another reason exists for deferring to a state supreme
court's determination of legislative facts. Because a state court
must make a decision concerning legislative facts despite imperfect
information, tts decision deserves deference. As Justice
Blackmun’s concurrence in United States v. Leon, 468 U.S. 897,
927, 104 S.Ct. 3405, 3423, 82 L.Ed.2d 677 (1984) (Blackmun. J..
concurring), noted concerning the issues in that case,
I see no way to avoid making an empirical judgment of this
sort and I am satisfied that the Court has made the correct
one on the information before it. Like all courts. we face
institutional limitations on our ability to gather
information about “legislative facts”... . Nonetheless, we
cannot escape the responsibility to decide the question
before us. however imperfect our information may be, and
I am prepared to join the Court on the information now at
hand.
SSa
HUNTER, Circuit Judge. DISSENTING:
PRELIMINARY STATEMENT
1. In these diversity cases, we look to the law of
New Jersey. New Jersey has embraced the full panoply
of products liability law. See, e.g.. Suter v. San Angelo
Foundry & Mach. Co., 81 N.J. 150, 406 A.2d 140
(1979); Henningsen v. Bloomfield Motors, 32 N.J. 358,
161 A.2d 69 (1960). The “state-of-the-art” defense is
normally available to defendants in products liability
actions. This defense precludes liability where the
manufacturer can prove that it did its work properly
and produced the product in accordance with the
practices and procedures appropriate to the product's
known dangers. Today this court has ruled that the
manufacturers of one product may not use the
state-of-the-art defense. That product is asbestos. The
court has said to asbestos manufacturers: there are too
many asbestos cases, these cases have clogged up the
court calendars, schedules and statistics; the proof of
“state-of-the-art” is too time-consuming and concerned
with too many variables; and, in any event, we do not
think you could prove the defense even if we gave you
the chance. Thus, one narrow class of defendants is
deprived of a potentially exculpatory defense in the
interest of expediency and calendar control. The
manufacturers of all other products -- including Agent
Orange, the Dalkon Shield and DES -- may use the
defense, even if they are also clogging up the court
calendar and causing statistical chaos. Only the
asbestos industry is treated differently. This is just
plain wrong and | dissent.
I.
2. It is beyond dispute that a classification that
neither discriminates against a suspect class nor
impinges upon a fundamental right does not violate
S6a
the Equal Protection Clause if it is rationally related to
a legitimate governmental purpose. See United States
Railroad Retirement Bd. v. Fritz, 449 U.S. 166, 175
(1980). While it is beyond our authority to strike down
laws simply because we conclude that they are unwise
or inartfully drawn, id., neither are we required to give
our stamp of approval to classifications that are
arbitrary or wholly insubstantial. See Delaware River
Basin Commission v. Bucks County Water & Sewer
Authority, 641 F.2d 1087, 1097 (3d Cir. 1981) (“the
rationality standard is not ‘toothless’”). Whether or not
the lawmakers’ “governmental purpose” under review
must be clearly articulated by the lawmakers in order
to be deemed legitimate cannot be definitively
answered by reference to Supreme Court precedent.
Compare Fritz, 449 U.S. at 170 with Fritz, 449 at 166
(Brennan, J.. dissenting) (citing Weinberger uv.
Wiesenfeld, 420 U.S. 636, 648 n.16 (1975)). However,
our own precedents teach us that “[s]o long as we are
careful not to attribute to the legislature purposes
which it cannot reasonably be understood to have
entertained, we find that in examining the challenged
provisions we may consider purposes advanced by
counsel ... or suggested initially by ourselves.”
Delaware River Basin, 641 F.2d at 1092. Our job
then, is to determine whether the common law
doctrine challenged in this case is in furtherance of a
legitimate state purpose put forward by the New Jersey
Supreme Court, the appellees, the United States
District Court for the District of New Jersey, or
ourselves, and whether the common law rule fits
closely enough with any of those purposes that it can
be said to be rationally related to them. I conclude that
New Jersey's common law rule creates a classification
that is not rationally related to a legitimate
governmental purpose, and therefore deprives asbestos
manufacturers of the equal protection of the laws in
57a
violation of the Constitution of the United States.
Before engaging in this constitutional analysis, | will
review the line of cases in question.
II.
3. In Freund v. Cellofilm Properties, Inc., 87 N.J.
229, 432 A.2d 925 (1981), the New Jersey Supreme
Court explained the difference between a failure to
warn claim based on strict liability and a failure to
warn claim based on negligence. Under either rubric,
plaintiff will recover damages from the defendant if,
given the dangerousness of the product, the
manufacturer's failure to provide warnings was
unreasonable. The failure to provide warnings will be
found unreasonabie if warnings would have made the
product safer. Negligence and strict liability actions
differ in the manner in which the manufacturer's
knowledge of the product's dangerousness is
determined. Where a negligence plaintiff must prove
that the defendant knew or should have known of the
dangerousness of the product, the defendant's
knowledge of the product's dangers is presumed as a
matter of law in the strict liability action. Thus,
“negligence is conduct-oriented, asking whether
defendant's actions were reasonable; strict liability is
product-oriented, asking whether the product was
reasonably safe for its foreseeable purposes.” Beshada
v. Johns-Manville Corp., 90 N.J. 191, 200, 447 A.2d
539, 544 (1982) (citing Freund, 87 N.J. at 238, 432
A.2d at 929).
4. In Beshada v. Johns-Manville Corp., the New
Jersey Supreme Court decided that the state-of-the-art
defense is inapplicable to a strict liability
failure-to-warn claim. Through the state-of-the-art
defense, defendants are able to introduce evidence of
the technology available at the time the product was
manufactured and distributed in order to prove that
aaa
S8a
the state of scientific knowledge was such that they
could not have known of the product's dangers when it
was put into the stream of commerce. Id. at 202, 447
A.2d at 545. The state-of-the-art defense is thus
logically incompatible with Freund, which imputes
knowledge to defendants as a matter of law. Moreover,
because state-of-the-art is essentially a negligence
defense, in that it seeks to explain why defendants are
not culpable, it seems inappropriate in a strict liability
case, in which culpability ts irrelevant. Beshada, 90
N.J. at 204, 447 A.2d at 546. The court admitted that
“the phrase ‘duty to warn’ ts misleading, [because it
implies negligence concepts with their attendant focus
on the reasonableness of defendant's behavior.” Id.
Nevertheless, the court committed itself to strict
liability in failure-to-warn cases, and firmly rejected the
state-of-the-art defense.
5. In response to a torrent of criticism, the New
Jersey Supreme Court departed from its stand against
the state-of-the-art defense in Feldman v. Lederle
Laboratortes, 97 N.J. 429, 479 A.2d 374 (1984). In
Feldman, the court concluded that strict liability for
failure to warn was inherently illogical. “A warning that
a product may have an unknowable danger warns one
of nothing.” Id. at 454, 479 A.2d at 387. The court did
not eliminate the strict liability failure to warn cause of
action, but chose instead to transform it. Where, in
Freund and Beshada., strict liability actions were
characterized by the imputation to defendant of
knowledge of the product's dangerousness, in
Feldman, they became characterized by the applicable
burden of proof. “In strict liability warning cases .. .
the defendant should properly bear the burden of
proving that the information was not reasonably
available or obtainable and that it therefore lacked
actual or constructive knowledge of the defect.” Id. at
455-56, 479 A.2d at 388. The court refused to overrule
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Beshada, but did “restrict Beshada to the
circumstances giving rise to its holding.” Id." It is in
the context of this murky state of New Jersey “law” that
we must address our problem
lil.
6. By “restrictling) Beshada to_ the
circumstances giving rise to its holding,” the New
Jersey Supreme Court created the classification
challenged here. My review of the Beshada-Feldman
line of cases leads me to conclude that the challenged
classification represents nothing more than an
unprincipled, expedient, and ineffective response to
widespread criticism of the Beshada doctrine
combined with an unwillingness to give up the
application of Beshada to asbestos manufacturers. if
so. the Beshada-Feldman classification is undeniably
arbitrary. Worse yet, | fear that the New Jersey
Supreme Court's sole purpose may have been to inflict
a special punishment on asbestos manufacturers. The
Constitution does not permit the New Jersey courts to
level either an arbitrary or a punitive sanction against
asbestos manufacturers (or the manufacturer of any
other product, for that matter). Proper analysis of this
classification under the rational basis test should
disclose to us whether the classification ts
impermissibly arbitrary or punitive. | will address each
of the justifications for the common law rule advanced
by Judge Weis and Judge Becker: the asbestos
1 The meaning of this sentence is by no means clear on its
face. Subsequent case law was has shown that ‘restricting
Beshada to the circumstances giving rise to its holding” means
that asbestos defendants are not permtted to use the
state-of-the-art defense. See In re Asbestos Litigation Venued in
Middlesex County, 99 N.J. 201. 491 A.2d 700 (1984). The
restriction has not yet been applied to any other manufacturer. and
there is no indication that it will be
Ha
manufacturers knowledge of the dangers of asbestos:
case-management; and jury confusion.”
A.
7. Judge Weis and Judge Becker agree that the
principal “legitimate state purpose” underlying the
Beshada-Feldman doctrine is “the New Jersey
Supreme Court's reasonable decision] to preclude [the]
endless relitigation of what was ‘knowable’ to the
asbestos industry.” Becker at 2. According to Judge
Weis, “[t)}he [Feldman] opinion suggests that [asbestos]
manufacturers knew the dangers of asbestos and.
consequently, the state-of-the-art defense [cannot] be
sustained” by those manufacturers. Weis at 20-21.
Specifically, the New Jersey Supreme Court concluded
in Feldman that “there were or may have been data or
other information generally available. aside from
scientific knowledge. that arguably could have alerted
the manufacturer at an early stage . . . to the dangers
lof asbestos].” 97 N.J. at 456, 479 A.2d at 388. Thus.
since the majority of this panel and the New Jersey
Supreme Court claim to know for a certainty that all
asbestos manufacturers either acted with full
knowledge of the dangers of their product or could and
should have obtained such knowledge. those
manufacturers should not be permitted to litigate the
knowledge question any further. I have trouble
accepting this aim as a “legitimate state purpose”
under the Equal Protection Clause. because I believe it
2 In Beshada., the court articulated its reason for
precluding the use of the state-of-the-art defense in all strict
liability failure-to-warn cases. The court justified its ruling on the
basis of traditional strict liability policy concerns: deep pockets.
risk spreading and accident avoidance incentives. The articulation
of purposes underlying the Beshada rule does not, however.
provide any basis for the Feldman distinction. which limits the
Beshada rule to one class of defendants alone
—_
Sla
violates the Due Process Clause of the Fourteenth
Amendment. See U.S. Const. amend. XIV, Sec. | cl. 3
8. This so-called legitimate state purpose can
best be described as a de facto exercise of collateral
estoppel without benefit of the procedural niceties. On
the basis of the New Jersey Supreme Court's
declaratory dicta in Feldman that asbestos
manufacturers did indeed possess culpable knowledge
at all relevant times, those manufacturers must be
collaterally estopped from litigating the question of
their knowledge ever again. Judge Weis feels that this
“legitimate state purpose’ is a creature somehow
related to collateral estoppel, as his discussion of a
series of fifth circuit opinions dealing with the
procedural complexity of collateral estoppel in massive
asbestos litigation demonstrates. His review of the line
of cases culminating in the fifth circuit's opinion in
Hardy v. Johns-Manville Sales Corp. (“Hardy Il"), 681
F.2d 334 (5th Cir. 1982), leads him to conclude that
“Beshada’'s broad language, when applied to the
concrete facts of asbestos litigation and read together
with Fischer |v. Johns-Manville Corp., 103 N.J. 643,
512 A.2d 466 (1986)). is not completely divorced from
reality.” Weis at 23. | am not sure what this statement
means, but it is clear that Judge Weis has concluded
that, since plaintiffs have experienced difficulties in
prevailing on their collateral estoppel motions
heretofore, see, e.g.. Hardy Il, the courts may
constitutionally grant all plaintiffs the benefit ol
collateral estoppel through application of their own
wisdom rather than the traditional channels of legal
process. I believe that Hardy Il teaches a much
different lesson than this. | read Hardy II as reiterating
the wellworn legal principle that defendants will be
collaterally estopped trom relitigating factual issues
where
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The party asserting the estoppel [can] show
that: (1) the issue to be concluded is identical to
that involved in the prior action; (2) in the prior
action the issue was “actually litigated”; and (3)
the determination made of the issue in the prior
action [was] necessary and essential to the
resulting judgment. |
681 F.2d at 341. The grant of a collateral estoppel
motion where these conditions are not met violates a
party's right to due process. See Blonder-Tongue
Laboratones, Inc. v. University of lilinois Found., 402
U.S. 313, 329 (1971). A fortiori, Judge Weis’ sua
sponte grant of collateral estoppel to all future asbestos
plaintiffs violates the Due Process Clause and thus
cannot provide a legitimate state purpose under the
rationality test. Indeed. “to use collateral estoppel in
this context would be to ‘elevate judicial expedience
over considerations of justice and fair play." Weis at 22
(quoting Hardy II, 681 F.2d at 348).
9. Judge Weis points out that, after its decision
in Feldman, the New Jersey Supreme Court found that
at least one asbestos manufacturer -- Johns-Manville --
did indeed have actual knowledge of the dangers of
asbestos as early as the 1930's. See Fischer uv.
Johns-Manuville Corp., 103 N.J. 643. 512 A.2d 466
(1986). I cannot understand how the subsequent
adjudication of an unrelated party's culpable
knowledge can render the Feldman court's attribution
of knowability to all asbestos manufacturers by judicial
fiat constitutional. This conclusion very simply does
not satisfy the requirements of the collateral estoppel
doctrine. It is a fundamental tenet of our procedural
law that the court's factual findings tn the Fischer case
can only be used against Johns-Manville. “The
requirement that a person against whom the
conclusive effect of a judgment is invoked must be a
63a
party or a privy to the prior judgment. . . has been
repeatedly affirmed|.|° Hardy II, 681 F.2d at 338
(citations omitted). Accord Parklane Hosiery Co. v.
Shore, 439 U.S. 322, 327 n.7 (1979) (“It is a violation of
due process for a judgment to be binding on a litigant
who was not a party or a privy and therefore has never
had an opportunity to be heard.”) (citations omitted).
Thus, with or without the Fischer court's adjudication
of Johns-Manville’s actual knowledge, the principle
justification for the challenged classification asserted
by Judge Weis is very simply not a legitimate state
purpose for the New Jersey Supreme Court's
discriminatory treatment of asbestos manufacturers.
B.
10. Judge Becker attempts to circumvent the
collateral estoppel problem by characterizing the New
Jersey Supreme Court's conclusion in Feldman “that
the hazards of asbestos exposure were knowable to the
industry at all relevant times,’ Becker at 1, as a
“legislative fact” of which the court may freely take
judicial notice. I believe that Judge Becker's argument
fails because it relies on a misapprehension of the
nature of the legislative facts that may be judicially
noticed under the common law of evidence. There are
two kinds of fact of which courts may take judicial
notice: “adjudicative” and “legislative."* “Adjudicative
facts are simply the facts of the particular case.” Fed. R.
Evid. 201 advisory committee's note. “’Adjudicative
facts,’. . . are the ultimate facts in the case, plus those
evidential facts that are sufficiently central to the
controversy that they should be left to the jury unless
clearly indisputable.” 21 C. Wright & K. Graham,
3. The adjudicative fact legislative fact dichotomy was first
articulated by Professor Kenneth Culp Davis in 1942. See Davis, An
Approach to Problems of Evidence tn the Admintstrative Process.
55 Harv. L. Rev. 364, 404-07 (1942)
OO eo
64a
Federal Practice and Procedure 8 5103, at 478 (1977).
“Legislative facts, on the other hand, are those which
have relevance to legal reasoning and the lawmaking
process, whether in the formulation of a legal principle
or ruling by a judge or court or in the enactment of a
legislative body.” Fed. R. Evid. 201 advisory
committee's note.
11. My understanding of what constitutes a
“legislative fact” seems to be at odds with Judge
Becker's. In my view, legislative facts are those social,
economic and philosophical facts upon which we rely
to fashion just, appropriate and suitable rules of law.
We derive these legislative facts from a common-sense
assessment of how modern-day Americans live and
view their world. Legislative facts are broad
conceptions or beliefs about the interaction of law and
society that inform judicial policy-making. As such,
these legislative facts may be truisms, or may be wholly
incapable of proof or disproof. The United States
Supreme Court regularly takes judicial notice of
legislative facts to resolve cases involving major policy
determinations in the areas of constitutional law and
criminal procedure. See, e.g., Church of Latter-Day
Saints v. Amos, —_— U.S. __, 107 S. Ct. 2862, 2875
(1987) (O'Connor, J., concurring) (“The determination
of whether the objective observer will perceive an
endorsement of religion ‘is not a question of simple
historical fact. Although evidentiary submissions may
help answer it, the question is, like the question
whether racial or sex-based classifications
communicate an invidious message, in large part a
legal question to be answered on the basis of judicial
interpretation of social facts."”) (quoting Lynch v.
Donnelly, 465 U.S. 668, 693-94 (1984) (O'Connor, J..
concurring)); United States v. Leon, 468 U.S. 897,
918-21 (1984) (discussing the probable deterrent effect
of the exclusionary rule on police officers); Detroit
ae ee ee ee
>
6Sa
Edison Co. v. NLRB, 440 U.S. 301. 318 (1979) (“The
sensitivity of any human being to disclosure of
information that may be taken to bear on his or her
competence is sufficiently well known to be an
appropriate subject of judicial notice."’) (footnote
omitted); Hawkins v. United States, 358 U.S. 74,
77-78 (1958) (“The basic reason the law has refused to
pit wife against husband or husband against wife in a
trial where life or liberty is at stake was a belief that
such a policy was necessary to foster family peace, not
only for the benefit of husband. wife and children, but
for the benefit of the public as well. ... Adverse
testimony given in criminal proceedings would, we
think, be likely to destroy any marriage.”); Brown v.
Board of Education, 347 U.S. 483, 494 (1954) (“To
separate (Negro children] from others of similar age
and qualifications solely because of their race
generates a feeling of inferiority as to their status in the
community that may affect their hearts and minds ina
way unlikely ever to be undone.’).
12. I realize, of course, that not all judicially
noticed legislative facts involve the kinds of
fundamental and glamorous policy questions central to
the cases cited in the previous paragraph. Indeed, the
observations made through the medium of judicial
notice are just as likely to be obvious and mundane.
See, e.g., Kessler Inst. for Rehabilitation v. NLRB, 669
F.2d 138, 141 (3d Cir. 1982) (court takes judicial
notice of “the delays in the postal system which have
been increasing over the years’); Neeld v. National
Hockey League, 594 F.2d 1297, 1300 (9th Cir. 1979)
(court takes judicial notice of dangers posed by
one-eyed hockey players to uphold rule barring such
players from professional hockey teams). Furthermore,
courts may take judiciai notice of legislative facts for
reasons totally unrelated to the development of policy.
For example, courts regularly take judicial notice of
66a
legislative facts in order to determine whether or not
particular activities come within specified statutory
prohibitions. See, e.g., United States v. Gould, 536
F.2d 216, 220-21 (8th Cir. 1976) (court takes judicial
notice of fact that cocaine hydrochloride is derivative of
the cocoa leaf in order to determine whether or not it is
a Schedule II controlled substance). However, I have
never heard of any case in which the resolution of an
ultimate fact -- e.g., the innocence or culpability of a
products liability defendant -- was reached through the
judicial notice of legislative facts.
13. The asbestos manufacturers’ actual or
constructive knowledge of the potential harms of
asbestos does not bear any resemblance to the
legislative facts judicially noticed in the cases cited
above or in any other case I have found. The knowledge
question does not rest upon a generalized assumption
or conclusion about the state of things in order to come
to a rational policy decision, rather, it demands the
resolution of a hard, cold, specific factual dispute that
is central to the products liability litigation between
the injured plaintiffs and defendant asbestos
manufacturers before the court in each case. The
question posed involves a determination of who knew
what, when they knew it, and when they should have
known it. To my way of thinking, this has every indicia
of an adjudicative fact.
When a court... finds facts concerning the
immediate parties -- who did what, where, when,
how, and with what motive or intent -- the court
. js performing an adjudicative function, and
the facts are conveniently called adjudicative
Se
Stated in other terms, the adjudicative facts
are those to which the law ts applied in the process
of adjudication. They are the facts that normally go
67a
to the jury in a jury case. They relate to the parties,
their activities, their properties, their businesses.
2 K. Davis, Administrative Law Treatise 8 15.03, at
353 (1958) (quoted in Gould, 536 F.2d at 219).
14. Nor am I persuaded by Judge Becker's
assertion in footnote 6 of the concurring opinion that
“if the knowability of asbestos’ harms were purely an
adjudicative fact, it could not be the subject of a
legislative fact-finding.” Not every fact found by a
legislature is necessarily legislative. Legislatures can
and often do find facts that would undeniably be
classified as “adjudicative” if they had been found ina
judicial proceeding. For instance, in 1979 the House
Select Committee on Assassinations found that
A. Lee Harvey Oswald fired three shots at
President John F. Kennedy. The second and third
shots he fired struck the President. The third shot
he fired killed the President.
1. President Kennedy was struck by two rifle
shots fired from behind him.
2. The shots that struck President Kennedy
from behind him were fired from the sixth floor
window of the southeast corner of the Texas
School Book Depository building.
3. Lee Harvey Oswald owned the rifle that
was used to fire the shots from the sixth floor
window of the southeast corner of the Texas
School Book Depository building. -
4.Lee Harvey Oswald. shortly before the
assassination, had access to and was present on
the sixth floor of the Texas School Book Depository
building.
5. Lee Harvey Oswald's other actions tend to
support the conclusion that he assassinated
President Kennedy. .. .
68a
H.R. Rep. No. 1828, 95th Cong.. 2d Sess. 1 (1979).
Since these facts were found by a legislature, Judge
Becker would characterize them as legislative facts.
Thus, if Judge Becker's definition of “legislative fact” is
correct, then we would.have to reach the extraordinary
conclusion that a court trying Lee Harvey Oswald for
the murder of President Kennedy could take judicial
notice of the “legislative fact” that Lee Harvey Oswald
killed President Kennedy, and thereby the court could
avoid the inconvenience of requiring the government
to prove the ultimate fact in the case. It is beyond
peradventure that such a use of judicial notice of
“legislative facts” would constitute not only a dential of
due process but also a violation of the bill of attainder
clause. U.S. Const. art. I, § 10, cl. 1. Notwithstanding
any legislative pronouncement on the matter and
notwithstanding the firmness of the trial judge's belief
of Oswald's guilt, the court could not deprive Oswald of
his day in court simply because “he doesn't have a
chance of winning, anyway.” However, this is precisely
the way that the Beshada-Feldman rule treats
asbestos defendants. I believe that Judge Becker's
attempt to characterize the knowability of asbestos
harms as a “legislative fact” is misguided and does not
justify our countenancing this pernicious rule.
15. My conclusion that the knowledge question
requires the determination of an adjudicative rather
than a legislative fact is buoyed by analogous decisions
reached in two other asbestos cases. See Hardy II, 681
F.2d at 347-48; Laster v. Celotex Corp., 587 F. Supp.
542 (S.D. Ohio 1984). In Hardy and Laster, the courts
were asked to take judicial notice of a fact closely
related to the one before us -- whether or not exposure
to asbestos causes cancer. pleural mesothelioma or
asbestosis. Without hesitation, both courts classified
the fact to be noticed as an adjudicative fact. See
Laster, 587 F. Supp. at 543 (Clearly. the facts
69a
pertaining to whether asbestosis and mesothelioma
are caused by exposure to asbestos are ‘adjudicative
facts’ under Rule 201."). The causation issue clearly
requires the resolution of an adjudicative (rather than
a legislative) fact for the same reasons that the
knowledge or knowability issue does. First, like the
question of knowledge, the question of asbestos’ role in
the development of certain diseases “relateis] to the
[immediate] parties, their activities, [and] their
businesses,’ and thus must be classified as an
adjudicative fact. More importantly, disease causation
and culpable knowledge are both ultimate facts in
products liability litigation,* and cannot be properly
resolved by judicial notice of legislative facts.’ See
4. In footnote 6 of the concurring opinion, Judge Becker
urges that the knowability vel non of the harms of a particular
product is not an ultimate fact in a strict liability - failure to warn
case. I respectfully disagree. “Ultimate facts are those which the
law makes the occasion for imposing its sanctions.” The Evergreen
v. Nunan, 141 F.2d 927, 928 (2d Cir. 1944) (Hand, J.) “Ultimate
facts” describe those specific historical or narrative facts which are
decisive to the outcome of a particular case because their proof is
absolutely necessary to establish the elements of a claim or defense.
See Winters v. Lavine, 574 F.2d 46, 57-58 n.12 (2d Cir. 1978).
Clearly, the unknowability of harms associated with a particular
product is the ultimate narrative or historic fact that a producer of
that product must prove in order to establish the state-of-the-art
defense.
5. Judge Becker argues that adjudicative facts may be
“elevated to legislative facts” and relied upon to shape judicial
decisions in later litigation. See Becker at 12-13. | express no
opinion on this statement as a general matter. However. | find the
proposition faulty as applied to the instant case for two reasons.
First, prior to its development of the Beshada-Feldman
classification, the New Jersey Supreme Court had never found as
an adjudicative fact that any asbestos manufacturer had knowledge
of the potential harms of asbestos. Admittedly, such a finding was
made in Fischer, but that case was decided two years after
Feldman, and could not have provided a basis for the
70a
Korematsu v. United States, 584 F. Supp. 1406, 1415
(N.D. Cal. 1984). If judicial notice can be taken of such
ultimate facts at all, it can only be within the strictures
of Fed. R. Evid. 201.°
Beshada-Feldman classification. To the extent that the New
Jersey Supreme Court may have relied on the Borel-Hardy line of
cases, such reliance ts undercut by the fifth circuit's rejection in
Hardy II of a lower court's effort to rely on facts adjudicated in
previous cases by means of collateral estoppel or judictal notice.
Furthermore, I do not think adjudicative facts can possibly be
elevated to the level of legislative facts unless a certain degree of
consensus has been reached in the earlier litigation. Otherwise.
judges may be tempted to reach tnto an uncertain and confusing
mass of conflicting decisions and -- shunning the restraints
imposed by the laws of evidence and collateral estoppel -- pull out
the result most to their liking. Such procedures run afoul of the
proper presentation of proof in our adversary system. | hasten to
remind Judge Becker that “(t]he doctrines of ‘legislative facts’ and
‘judicial notice’ are not talismans by which gaps in a litigant’s
evidentiary presentation may be repaired on appeal.” City of New
Brunswick v. Borough of Milltown, 686 F.2d 120, 131 n.15 (3d Cir.
1982). cert. dented, 459 U.S. 1201 (1983).
For similar reasons, I think that the statement by Professor
Davis quoted by Judge Becker on page 9 of the concurrence does
not support his judicial notice thesis. First of all. | do not believe
that Professor Davis was thinking about the propriety of applying a
fact adjudicated in one or a handful of products liability cases
against an entire industry. I think his concern was with the ability
of judicial and administrative tribunals to fashion regulatory rules
on the basis of generalized observations about a specific industry.
Second. I cannot believe that Professor Davis would approve of the
development of an industry-wide “legislative fact” on the basis of a
fact adjudicated about only one company in the industry. | am
certain that he would require some broader consensus about
industry-wide knowledge before elevating an adjudicative fact
about Johns-Manville to a legislative fact about all asbestos
manufacturers. J
6. Judge Becker takes issue with my conclusion that Fed.
R. Evid. 201 applies to the cases sub judice. Becker at 15.
-
la
16. A court may only take judicial notice of an
adjudicative fact where that fact is “generally known
within the territorial jurisdiction of the trial court;
and]... capable of accurate and ready determination
by resort to sources whose accuracy cannot reasonably
be questioned.” Fed. R. Evid. 20!. Even assuming that
some potential hazards of asbestos were known in the
1930's, it is by no means “generally known” or
indisputable that the various specific uses of asbestos
(e.g., the use of asbestos to insulate automobile brake
linings) were all known to be hazardous to workers or
consumers as far back as the 1930's. The fifth circuit
and the Southern District of Ohio were not even willing
to take judicial notice of the fact that asbestos
necessarily causes the various diseases with which it
Assuming (as Judge Becker does) that the Beshada-Feldman rule
involves the taking of judicial notice of the knowability of asbestos
harms, and assuming (as | have demonstrated) that the
knowability of asbestos harms is an adjudicative fact, then it seems
clear that Fed. R. Evid. 201 applies to the cases sub judice. | note
that it is at least arguable that Fed. R. Evid. 201 defines the
minimum process due a litigant, under the Vth and XIVth
amendments. before a court can take judicial notice of an
adjudicative fact; see Eidt v. City of Natchez, 421 So. 2d 1225
(Miss. 1982); however, it is not necessary here to resolve whether
Fed. R. Evid. 201 describes minimal constitutional protections. All
of the cases sub judice are in federal district court, and, therefore.
the Federal Rules of Evidence are applicable. Gallup v. Caldwell,
120 F.2d 90, 94 (3d Cir. 1941) (“This rule as to judicial notice is not
affected by Erle R.R. v. Thompkins.”); Laster, 587 F. Supp at 542;
19 C. Wright, A. Miller & E. Cooper, Federal Practice and
Procedure 8 4512 at 190 (1982) ("Of all the procedural and
quasti-procedural rules that are applied in federal courts, the
Federal Rules of Evidence are the least affected by the Erie
doctrine.”). Thus, whether or not “Rule 201 binds any state court,”
Becker at 15, it binds the federal court in which these cases await
adjudication. If (as Judge Becker contends) the doctrine of judicial
notice lies at the bottom of this controversy, then Rule 201 supplies
the rule of decision.
72a
has been associated. According to the fifth circuit in
Hardy Il, “{t}he proposition that asbestos causes
cancer, because it is inextricably linked to a host of
disputed issues --. . . [including whether or not] this
manufacturer [was] reasonably unaware of the
asbestos hazards in 1964 -- is not at present so
self-evident a proposition as to be subject to judicial
notice.” Hardy II, 681 F.2d at 347-48. Similarly, the
issue of knowledge or knowability is “not at present so
self-evident a proposition to be subject to judicial
notice."’ Therefore, the issue of knowledge or
know-ability cannot properly be judicially noticed as an
adjudicative fact under Fed. R. Evid. 201.
17. Fed. R. Evid. 201 also provides that “{a] party
is entitled upon timely request to an opportunity to be
heard as to the propriety of taking judicial notice and
the tenor of the matter noticed.” The parties in this
case were not given such an opportunity. Judge Becker
argues that “the affected industry |t.e.. asbestos
manufacturers] had relevant opportunities to respond
to the New Jersey Supreme Court's determination of
the pertinent legislative facts.” Becker at 10-11. The
significant opportunities cited by Judge Becker
include the industry's participation in two fifth circuit
cases, Hardy and Borel, and in two cases decided by
the New Jersey Supreme Court after the
Beshada-Feidman classification had been developed.
Fischer and In re Asbestos Litigation Venued in
Middlesex County, 99 N.J. 201, 491 A.2d 700 (1984).
Judge Becker's conclusion is unprecedented. I have
never heard of any case that has permitted a party's
“opportunity to be heard” to be satisfied in subsequent
litigation before the same court, or -- even more
incredibly -- in prior litigation before an unrelated
tribunal. Furthermore, even if Judge Becker's
remarkable conclusion were to be accepted, it does not
satisfy the requirements of Fed. R. Evid. 201, which
cleanness j
J3a
requires the court to provide “an opportunity to be
heard as to the propriety of taking judicial notice.”
Fed. R. Evid. 201 (emphasis added), not simply an
opportunity to be heard on the merits. I find the New
Jersey Supreme Court's failure to give the asbestos
manufacturers an opportunity to be heard as to the
propriety of taking judicial notice understandable, in
light of the fact that they probably did not realize they
were taking judicial notice (of either a legislative or an
adjudicative fact) until so informed by Judge Becker.
18. Insum, Judge Becker has grasped the notion
of legislative facts -- a notion that this court has viewed
with the greatest of skepticism, City of New
Brunswick, 686 F.2d at 131 -in an attempt to fix the
broken shell of the Beshada decision and to patch-over
New Jersey's violation of the Equal Protection and Due
Process clauses. “All the King’s horses... ~
C.
19. Judge Weis observes that although
“{ajdministrative convenience standing alone ts not an
adequate ground for the elimination of a substantive
defense. . . {the court] cannot help but be conscious of
the extraordinary size of the asbestos personal injury
litigation.” Weis at 26. While Judge Weis has rejected
explicit reliance on the case management rationale as
an independent justification for the Beshada-
Feldman classification, he continues to believe that it
buttresses the other justifications he has put lorward.
Because I find none of the other arguments advanced
by Judge Weis or Judge Becker persuasive, | will
examine the administrative convenience argument
separately to determine whether it provides any
support for the challenged classification. | find that it
does not. The simple fact that elimination of a defense
for one group saves time is not enough to justily
discriminating between that group and another that is
74a
similarly situated. The case management rationale
simply cannot provide a legitimate basis for depriving
this one class of manufacturers of an exculpatory
defense. particularly in light of the massive
expenditure of court time and judicial energy required
by DES. Dalkon Shield. Agent Orange and
miscellaneous pharmaceutical and environmental
disaster litigation. | do not mean to imply that the
Fourteenth Amendment bars any effort to address a
perceived crisis in a particular kind of litigation;
legislatures all over the country have demonstrated
that such crises can be dealt with constitutionally by
developing means that are rationally related to the aim
of averting them.
20. Judge Weis looks to the nationwide
enactment of no-fault automobile insurance statutes to
provide support by analogy for the Beshada-Feldman
classification. Due to the extreme diversity of these
statutes, I have limited-myself to an examination of the
laws of New Jersey and Pennsylvania to determine
whether Judge Weis’ reliance its justified. The New
Jersey Automotive Reparation Act, N.J. Stat. Ann.
39:6A-8 (West 1973 & Supp. 1986), “bars suit for
bodily injury . . . unless the injury either is permanent
as opposed to ‘soft-tissue. or requires treatment with a
cost or equivalent value of $200." Rybeck v. Rybeck,
141 N.J. Super. 481, 488, 358 A.2d 828, 832 (Law Div.
1976). Similarly, the Pennsylvania No-fault Motor
Vehicle Imsurance Act, 40 Pa. Stat. Ann.
§ 1009.301(a)(5)(B) (repealed 1984) (Purdon Supp.
1987), permitted only those victims whose medical
expenses exceed $750 to sue in tort. Singer uv.
Sheppard, 464 Pa. 387. 403. 346 A.2d 897, 905
(1975). Both statutes were upheld in the face of
numerous constitutional challenges. including the
discriminatory deprivation of tort recovery for victims
eS
Sa
of lesser injuries. The state courts determined that
such a distinction served a legitimate state purpose:
{Ajuto accident injury claims were reasonably seen
by the Legislature to present a special problem
requiring reform. It was that class of claims thai
created the calendar congestion, that ate up the
investigative and administrative insurance dollar,
that represented justice worst delayed, and that
most invited compensation without fault
determination.
Rybeck, 141 N.J. Super. at 498, 358 A.2d at 837.
Further, the state courts were convinced that the
discrimination against victims of minor injuries
created a classification that was rationally related to
the achievement of the legitimate state purpose. See
Singer, 464 Pa. at 403, 346 A.2d at 905. So am I.
Wresting the adjudication of minor injuries from state
courts and assuring those victims of a certain and sure
recovery through the insurance system is rationally
related to the state's purpose of relieving an
overburdened court docket. This method of
case-management bears no resemblance to one that
simply deprives one class of litigants of a potentially
exculpatory defense. Any victim whose injuries reach
the threshhold amount is entitled to go to court and
present his negligence claim like any other tort
plaintiff; and the defendant is entitled to use all
common law defenses available. Thus, dockets are
streamlined without either party losing any legal right.
21. According to Judge Weis, workers’
compensation programs share with no-fault auto
insurance plans “|the common goal] of simplifying the
fact-finding process and thus making it easier for
victims to recover.” Weis at 25. This is not my
understanding of the goal of workers’ compensation
76a
Statutes. I had always learned that they were developed
as a kind of social insurance based on the policy
decision that the compensation of workers’ injuries
should be absorbed by the employer as a cost of doing
business. See New York Cent. R. Co. v. White, 243
U.S. 188, 205 (1917). Furthermore, I do not think that
the classification created by the workers’
compensation statutes even represents a useful
analogy to the Beshada-Feldman classification.
Workers’ compensation statutes create a classification
based on the ongoing relationship between the
employer and the employee, not on the personal (or
corporate) identities of those parties outside of that
relationship. Manufacturers of asbestos owe no greater
duty to their employees under these statutes than do
purveyors of paper clips. Workers’ compensation
statutes are analogous to inter-familial tort immunity
and guest-host statutes, but not to the discriminatory
treatment of asbestos manufacturers challenged here.’
z; Judge Weis’ observation that “the doctrine of strict
liability . . . is in itself a classification that imposes discriminatory
liability on a particular group of defendants,” Weis at 24. Its
similarly misleading. Restatement (Second) of Torts, 8 402A
(1965), sets out a special staridard of strict liability to be used by
consumers against retailers and manufacturers. This special
standard ts not discriminatorily applied to such defendants
because of who they are. however, but because of what they do, t.e.,
put products into the stream of commerce. It ts the activity, not the
particular defendant, that triggers the application of strict liability.
If the same defendant injures an individual through a means other
than product manufacture and distribution, in a mundane slip and
fall action, for example, that defendant will be liable for negligence
only. Differential regulation of different kinds of activities pervades
tort law and all other areas of public and private law, from criminal
law to conflict of interests. Furthermore, strict liability ts not
exclusively reserved for use against miscreant manufacturers and
retailers, but is also available for use against participants in
“abnormally dangerous activities.” See Restatement (Second) of
Torts 8 520 (1977).
D.
22. The final ‘legitimate state purpose” advanced
by Judge Weis is the reduction of jury confusion
through the complete elimination of the
state-of-the-art defense in asbestos cases. The
Beshada court had observed that “vast confusion .. .
is virtually certain to arise from any attempt to dealina
trial setting with the concept of scientific knowability,”
Beshada, 90 N.J. at 207, 447 A.2d at 548, and that
“discussion of state-of-the-art could easily confuse
juries into believing that blame-worthiness is at issue.”
Id. This confusion does not stem from the nature of
asbestos litigation, however, but from the interplay of
the strict liability failure-to-warn action with the
state-of-the-art defense. See Beshada, 90 N.J. at 204,
447 A.2d at 546. The likelihood of jury confusion
provides a justification for one of two paths not taken
by the New Jersey Supreme Court: (a) the elimination
of a strict liability cause of action requiring the
defendant to warn of the unknown and unknowable
through the reversal of Freund and Beshadq; or (b) the
continued unavailability of the state-of-the-art defense
to any defendant in a strict liability failure-to-warn
action. The New Jersey Supreme Court balked and
refused to make this difficult choice. The jury
confusion rationale is, in my opinion, totally
undermined by the New Jersey Supreme Court's recent
decision in Fischer v. Johns-Manville Corp., 103 N.J.
643, 512 A.2d 466 (1986). holding that punitive
damages were available to plaintiffs against asbestos
defendants in strict liability tailure-to-warn cases. The
evidence introduced to determine a punitive damages
award is the very same evidence -- the state of scientific
knowledge at the time of manufacture -- that is relied
upon in a State-of-the-art defense. Thus, if jury
confusion is to be minimized by the exclusion of such
evidence, the Fischer rule is sure to restore that
=
Sa
confusion by the introduction of such evidence. I think
the Fischer holding is fatal to the jury confusion
rationale.
CONCLUSION
23. My position by no means constitutes the
establishment of tort law for New Jersey. It simply
means that since New Jersey common law is subject to
the operation of the Equal Protection Clause, that
clause quite plainly works to bar New Jersey from
depriving asbestos manufacturers alone of the
state-of-the-art defense, a defense that is available to all
other manufacturers in products liability cases. The
Supreme Court of New Jersey simply cannot establish
a law that violates the Federal Constitution. And this
court cannot look the other way and ignore its duty to
defend that Constitution.
24. My answer to the question presented its that
the judicially imposed denial of the state-of-the-art
defense to manufacturers of asbestos-containing
products does constitute a violation of the Equal
Protection Clause of the Constitution.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circutt
TT
79a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 86-5236, 86-5237 & 86-5370
IN RE: ASBESTOS LITIGATION
Raymark Industries, Inc. Appellant in No. 86-5236
IN RE: ASBESTOS LITIGATION
DANFIELD, ET AL V. JOHNS-MANVILLE SALES
CORP.. ETC.,
Owens-lllinois, Inc., Keene Corporation,
Pittsburgh-Corning Corporation, The Celotex
Corporation. Armstrong Cork Company, Eagle-Picher
Industries, Inc.,. Owens-Corning Fiberglas
Corporation, and Fibreboard Corporation.
Appellants in No. 86-5237
IN RE: ASBESTOS LITIGATION
JOHN W. GREGORY AND ZELDA F. GREGORY, HIS
WIFE, ZELDA F. GREGORY, ADMINISTRATRIX AND
ADMINISTRATRIX AD PROSEQUENDUM OF THE
ESTATE OF JOHN W. GREGORY, DECEASED;
ZELDA F. GREGORY. INDIVIDUALLY; AND BRIAN
GREGORY, A MINOR BY HIS NATURAL PARENT AND
GUARDIAN ZELDA F. GREGORY
V.
GENERAL MOTORS CORPORATION, JOSEPH DOE,
TOM DOE, HARRY DOE, ROBERT DOE, KEN DOE,
DANIEL DOE, LARRY DOE, EDWARD DOE, SAM
DOE, JACK DOE, FRED DOE, VINCE DOE,
General Motors Corporation,
Appellant in No. 86-5370
SOa
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW JERSEY
(D.C. Civil Nos. 82-4031 & 85-381)
Present: WEIS, BECKER, and HUNTER,
Circuit Judges
ORDER AMENDING OPINION
It is ORDERED that the slip opinion filed in the
above captioned case is amended as follows:
The sentence at the beginning of the first
paragraph on page 24 is amended to read, “Although
we find the Fisher case troubling, we once again
acknowledge our limited function in reviewing cases of
this type.”
BY THE COURT,
/s/ Joseph F. Weis, Jr.
Circuit Judge
DATED: September 28, 1987
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circutt
A.O. U.S. Courts. G.M.C. Printing, Phila.. Pa. 215-568-4264)
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 86-5236, 86-5237 & 86-5370
IN RE: ASBESTOS LITIGATION
Raymark Industries, Inc.
Appellant in No. 86-5236
IN RE: ASBESTOS LITIGATION
DANFIELD, ET AL V. JOHNS-MANVILLE
SALES CORP., ETC..
Owens-Illinois, Inc..,
Keene Corporation,
Pittsburgh-Corning Corporation,
The Celotex Corporation,
Armstrong Cork Company,
Eagle-Picher Industries, Inc.,
Owens-Corning Fiberglas Corporation,
and Fibreboard Corporation,
Appellants in No. 86-5237
IN RE: ASBESTOS LITIGATION
JOHN W. GREGORY AND ZELDA F. GREGORY, HIS
WIFE, ZELDA F. GREGORY. ADMINISTRATRIX AND
ADMINISTRATRIX AD PROSEQUENDUM OF THE
ESTATE OF JOHN W. GREGORY, DECEASED:
ZELDA F. GREGORY, INDIVIDUALLY: AND BRIAN
GREGORY, A MINOR BY HIS NATURAL PARENT AND
GUARDIAN ZELDA F. GREGORY
_.
GENERAL MOTORS CORPORATION, JOSEPH DOE,
TOM DOE, HARRY DOE. ROBERT DOE, KEN DOE,
82a
DANIEL DOE, LARRY DOE, EDWARD DOE, SAM
DOE, JACK DOE, FRED DOE, VINCE DOE,
General Motors Corporation,
Appellant in No. 86-5370
APPEAL FROM THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF NEW JERSEY
(D.C. Civil Nos. 82-4031 & 85-381)
Before: WEIS, BECKER, and HUNTER,
Circuit Judges
ORDER AMENDING OPINION
It is ORDERED that the slip opinion filed in the
above captioned case is amended as follows:
On page 3 the following is to be inserted before
“Opinion of the Court.”
Alan M. Darnell, Esquire
Christopher M. Placitella, Esquire
Wilentz, Goldman & Spitzer, P.C.
Plaza No. 9 Building
900 Route 9, P.O. Box 10
Woodbridge, New Jersey 07095
Attorneys for Amicus Curiae,
on behalf of various plaintiffs -
approximately 1000 individuals.
BY THE COURT
Joseph F. Weis, Jr.
Circuit Judge
Dated: October 8, 1987
83a
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
84a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
i
C.A. Misc. Record No. 86-8017
(NJ D.C. Civil No. 82-4031)
—
ZELDA F. GREGORY, et al.
—vsS.—
GENERAL MOTORS CORPORATION,
Petitioner.
Present:
HUNTER and MANSMANN,
Circuit Judges.
7
1. Petition for Permission to Appeal from an Interlocutory
Order pursuant to 28 U.S.C. § 1292(b),
2. Disclosure statement for petitioner,
in the above-entitled case.
Respectfully,
[ILLEGIBLE]
Deputy Clerk
597-3080
enc.
ks
P.S. Petitioner refers tu previous petitions at Nos. 86-5236 and
86-5237, see C109 and C110.
8Sa
The foregoing Motion is GRANTED.
By the Court,
[ILLEGIBLE]
Judge
Dated: May 13, 1986
ks/ec: John C. Heavey, Esquire
James C. Gavin, Esquire
86a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
aa
C.A. Misc. Record No. 86-8012
(NJ D.C. Misc. No. 85-381)
March 7, 1986
7
IN RE: ASBESTOS LITIGATION
Danfield, et al.,
—VS§.—
Johns-Manville, Sales Corp., etc., et al., Owens-Illinois, Inc.,
Keene Corp., Pittsburgh-Corning Corporation, The Celo-
tex Corporation, Armstrong Cork Company, Eagle-Picher
Industries, Inc., Owens-Corning Fiberglas Corporation,
and Fibreboard Corporation, fd
Petitioners.
aol
Present:
HUNTER and MANSMANN,
Circuit Judges.
+
1. Petition for Permission to Appeal from an Interlocutory
Order pursuant to 28 U.S.C. Section 1292(b),
*2. Respondents’ reply to petition for permission to appeal,
in the above-entitled case.
” Please see transmittal letter in No. 86-8011 also sent this date.
Respectfully,
(LLEGIBLE}
Deputy Clerk 7-5019
ad
The foregoing Motion is GRANTED
A TRUE COPY
{ILLEGIBLE}
Deputy Clerk
By the Court,
(LLEGIBLE}
Judge
Dated: March 26, 1986
ad/cc: All Counsel
SSa
c
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
a -
C.A. Misc. Record No. 86-801)
(NJ D.C. Misc. No. 85-381)
March 7, 1986
+
IN RI ASBESTOS LITIGATION
Raymark Industries, Inc
* —
HUNTER and MANSMANN,
Petitioner
ircuit Judges
(
$+
1. Petition for Permission to Appeal from an Interlocutory
Order pursuant to 28 U.S.C. Section 1292(b),
2. Respondents’ reply to petition for permission to a
the above-entitled case
Respectt
[ILLEGIBLE]
De ‘pul
( lerk
a S019
xYa
The foregoing Motion is GRANTED
\ TRUE COPY
(LLEGIBLE}]
Deputy Clerk
By the Court,
ILLEGIBLE}
Judge
Dated March 26. 1YS86
ad/cc: All Counsel
90a
1774]
UNITED STATES DISTRICT COURT
D. NEW JERSPY
Feb. 14, 1986
te
IN RE ASBESTOS LITIGATION
Misc. No. 85-38]
——
District court entered order consolidating its asbestos cases
for limited purpose of a common, single adjudication of an
issue. The District Court, Bissell, J., held that New Jersey
common-law rule that the state-of-the-art defense is not availa-
ble, against strict liability claim, to manufacturer of products
containing asbestos does not violate equal protection rights of
manufacturers.
Ordered accordingly.
Clarkson S. Fisher, Chief Judge, filed a dissenting opinion in
which Lacey, Stern, Barry, Cowen, and Cohen, J//.. joined.
+
OPINION
BISSELL, District Judge, writing for GERRY, BROTMAN, DE.
BEVOISE, SAROKIN, ACKERMAN, THOMPSON and RODRIGU] ¥
District Judges.
1. Introduction
In many asbestos related actions pending before this Court,
the issue of the availability of the ‘‘state-of-the-art”’ defense to
manufacturers of asbestos products has been presented in pre-
Sla
trial motions.’ These motions take the form of either an appli-
cation by a plaintiff to strike such a defense from the pleadings
or one by a defendant-manufacturer to allow the defense and
the submission of evidence to support it. Because of rules devel-
oped in recent decisions of the [775] Supreme Court of New Jer-
sey, apparently precluding that defense to strict liability claims
in asbestos cases but permitting it in such actions involving
other products, several defendants have argued that manutac-
turers of asbestos products are denied ‘‘the equal protection of
the laws’’ of New Jersey in violation of the Fourteenth Amend-
ment.”
That equal protection question presents a significant issue of
constitutional law, not dependent upon the facts of a particular
case. It has been raised in many asbestos cases pending before
different judges of this Court. Therefore, it is the Court’s desire
to issue a ruling which will govern all such actions under the
current state of New Jersey law. On October 11, 1985 this Court
entered an Order consolidating all its asbestos cases for the lim-
ited purpose of a common, single adjudication of this issue. For
the reasons set forth hereafter, this Court determines that under
New Jersey law the state-of-the-art defense is not available,
against a strict liability claim, to a defendant-manufacturer of
products containing asbestos, and that this rule, even if limited
only to such defendants, does not violate their ‘‘equal protec-
tion’’ rights.
l In the present context, defendant-manufacturers would assert such a
defense by introducing evidence that they neither knew nor should have
known of the dangers of the asbestos contained in their products and there-
fore may not be charged in strict liability for a breach of any duty to warn of
such dangers.
2 Federal jurisdiction in these matters is predicated upon diversity of
citizenship. 28 U.S.C. § 1332. Accordingly, the applicable substantive law is
that of New Jersey. Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.
1188 (1938).
9.2
Il. The Law of New Jerse,
The history which has placed the Court in the present circum-
stances is well known to all involved with asbestos litigation in
the State of New Jersey and accordingly will not be developed
in great detail here. By way of brief review, we note the follow-
ing:
In 1982 the New Jersey Supreme Court decided Beshada vy.
Johns-Manville, 90 N.J. 191, 447 A.2d 539 (1982), which ex-
pressly rejected the ‘“‘state-of-the-art’’ defense in strict liability
failure to warn cases. However, on July 30, 1984, that same
Court decided Feldman vy. Lederle Laboratories, 97 N.J. 429,
479 A.2d 374 (1984), in which it dramatically altered this posi-
tion. In Feldman, the Supreme Court ruled that actual and con-
structive knowledge of a defendant are relevant factors in
determining whether it is strictly liable in a failure to warn case.
However, the Court expressly refused to overrule Beshada. In-
stead, the Court restricted Beshada ‘‘to the circumstances giv-
ing rise to its holding.’’ 97 N.J. at 455, 479 A.2d 374.
One month after Fe/dman, and in reliance on that decision,
Owens-Illinois, an asbestos manufacturer, in a case entitled
Heckman v. Johns-Manville, pending in the Superior Court of
New Jersey, Law Division, Middlesex County, Docket No. L-
2470-81, filed a motion in limine to permit it to introduce evi-
dence at trial demonstrating its lack of actual and constructive
knowledge regarding the health hazards its its product posed to
users. Recognizing the importance of the issue for hundreds of
other asbestos cases pending in this state, the Honorable John
E. Keefe, sua sponte, entered an Order noticing the motion un-
der the general caption Jn the Matter of Asbestos Litigation
Venued In Middlesex County, Docket No. L-52237-81, and in-
vited the asbestos bar to file briefs and participate in oral argu-
ment.
Judge Keefe, after hearing oral argument on September 10,
1984, denied the motion on the ground that in light of Beshada
and its treatment in Feldman, an asbestos manufacturer, under
New Jersey law, was prohibited from relying on the state-of-
the-art defense.
93a
Defendant Owens-Illinois then moved before the Superior
Court, Appellate Division, for leave to appeal the trial court’s
ruling and simultaneously petitioned the New Jersey Supreme
Court for direct certification. On December 5, 1984, the Su-
preme Court entered an Order granting the request for direct
certification and further:
ORDERED that leave to appeal is granted, and this
Court. in Feldman v. Lederle Laboratories, 97 N.J. 429
[479 A.2d 374] (1984), having recognized that Beshada vy.
Johns-Manville, 90 N.J. 191 [447 A.2d 539] (1980) [sic],
applies to all [776] pending asbestos cases, the September
21. 1984 Order of the Superior Court, Law Division, (L-
§2237-81) is summarily affirmed.
In the Matter of Asbestos Litigation Venued In Middlesex
County, 99 N.J. 201, 491 A.2d 700 (1984).
Thereafter, Owens-Illinois petitioned the New Jersey Su-
preme Court for a rehearing. The petition specifically sought
clarification of the word ‘‘pending’’. On December 19, 1984,
the motion for rehearing was denied and forwarded to counsel
with a cover letter from the Clerk of the New Jersey Supreme
Court which stated:
The request has been denied essentially because Judge
Keefe’s interpretation that the Court’s prior order applies
to all pending asbestos cases was correct. [Emphasis in
original).
Ill. Equal Protection
One aspect of defendants’ equal protection argument can be
disposed of without extensive analysis. The application for re-
hearing before the Supreme Court of New Jersey focused upon
a requested construction of the term *‘pending”’ as the term was
employed in the Supreme ¢ ourt’s Order of December 5, 1985,
supra. Since that term was not in fact clarified, either by the Or-
der denying that motion for rehearing or by the covering letter
from the Clerk of the Court, defendant-manufacturers argue
before us that the use of the term ‘‘pending’’ by the Supreme
Court of New Jersey establishes classifications within the asbes-
94a
tos cases themselves which deny equal protection of the laws to
some defendants, in some cases, based solely upon the filing
date of a particular action. Several possible constructions of the
term *‘pending’’ and the date to which that term might be at-
tributed have been posited by these defendants to this Court.
We believe, however, that defendants’ construction of the term
‘“‘pending”’ is misplaced. In December 1984, the Supreme Court
of New Jersey could only rule as to cases then in existence (or
‘‘pending’’) under current New Jersey law. This Court believes
that the New Jersey Supreme Court carefully chose the term
‘“pending,’’ later emphasized by its Clerk as being ‘‘a// pend-
ing’’, to encompass all asbestos litigation governed by the
present state of New Jersey law. In the fourteen months since
December 1984, that law regarding the state-of-the-art defense
at issue here has not changed. Accordingly, there are no classifi-
cations among asbestos cases presently *“*pending’’ in New Jer-
sey, either in state or federal court. No viable equal protection
argument can be posited upon such alleged (but non-existent)
classifications.
This Court now turns its attention to the more serious ques-
tion of whether asbestos defendants, when compared to other
defendant-manufacturers in strict liability/failure to warn
cases, are denied equal protection of the laws of New Jersey.
In the area of economics and social welfare, a State does
not violate the Equal Protection Clause merely because the
classifications made by its laws are imperfect. If the classi-
fication has some ‘‘reasonable basis,’’ it does not offend
the Constitution simply because the classification ‘‘is not
made with mathematical nicety or because in practice it
results in some inequality.”’
Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161-
62, 25 L.Ed.2d 491 (1970).
As the application of Beshada to the defendants involves
both the areas of economics and social welfare, and ‘neither
apportions benefits and burdens on the basis of a ‘suspect clas-
sification’ nor impinges on ‘fundamental interests,’ it violates
equal protection only if it bears no rational relationship to a le-
————
eee ee
95a
gitimate state purpose.’’ Delaware River Basin Commission Vv.
Bucks County Water & Sewer Authority, 641 F.2d 1087, 1092
(3d Cir.1981) (citing United States Railroad Retirement Board
v. Fritz, 449 U.S. 166, 101 S.Ct. 453, 66 L.Ed.2d 368 (1980);
Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96
S.Ct. 2562, 49 L.Ed.2d 520 (1976)). In Vance v. Bradley, 440
U.S. 93, 97, 99 [777] S.Ct. 939, 942-43, 59 L.Ed.2d 171 (1979),
(footnotes omitted), the Court detailed this standard:
. . . [C]Jourts are quite reluctant to overturn govern-
mental action on the ground that it denies equal protection
of the laws. The Constitution presumes that, absent some
reason to infer antipathy, even improvident decisions will
eventually be rectified by the democratic process and that
judicial intervention is generally unwarranted no matter
how unwisely we may think a political branch has acted.
Thus, we will not overturn such a statute unless the vary-
ing treatment of different groups or persons is so unrelated
to the achievement of any combination of legitimate pur-
poses that we can only conclude that the legislature’s
actions were irrational.
Equal (if not greater) caution should be exercised in assessing
whether decisions of a state Supreme Court have denied equal
protection of the laws.
The rationality test requires the Court to conduct a two-step
analysis. ‘‘First, it should identify the purposes of the statute
[or as here, common law rule] and assure itself that these pur-
poses are legitimate. . . Second, having identified the govern-
mental purposes, the court must determine whether the
classification is rationally related to achievement of these
goals.’’ Delaware River, supra at 1092-3.
In identifying the purposes behind the Beshada/Feldman di-
chotomy, the court may look to both an articulated purpose
and ‘‘general public knowledge about the evil sought to be rem-
edied, prior law, accompanying legislation, and formal public
pronouncements.”’ Jd. at 1093, n. 9. In addition, ‘‘in the ab-
sence of an articulated purpose in the legislation or in its his-
tory, courts have upheld challenged provisions that furthered
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the attainment of goals either suggested by the parties or postu-
lated by the reviewing court itself.’’ Jd. at 1094.
Whiie the Supreme Court’s Order affirming Judge Keefe’s
opinion in Jn the Matter of Asbestos Litigation Venued In Mid-
dlesex County does not articulate the purposes behind treating
asbestos cases differently than others, other data for ascertain-
ing them does exist. The first is found in the Feldman decision
itself:
In our opinion Beshada, supra, would not demand a
contrary conclusion in the typical design defect or w arning
case. If Beshada were deemed to hold generally or in all
cases, particularly with respect to a situation like the
present one involving drugs vital to health, that in a warn-
ing context knowledge of the unknowable is irrelevant in
determining the applicability of strict liability, we would
not agree. Many commentators have criticized this aspect
of the Beshada reasoning and the public policies on which
it is based. [Citations omitted]. The rationale of Beshada is
not applicable to this case. We do not overrule Beshada,
but restrict Beshada to the circumstances giving rise to its
holding. See, e.g., Friedman vy. Podell, 21 N.J. 100, 105
[121 A.2d 17] (1956); Konrad v. Anheuser-Busch, Inc., 48
N.J.Super. 386, 388 [137 A.2d 633] (Law Div.1958)
(**Cases state principles but decide facts, and it is only the
decision on the facts that is binding precedent.’’).
97 N.J. at 454-55, 479 A.2d 374.
As Judge Keefe stated regarding Feldman’s treatment of
Beshada:
[The New Jersey Supreme Court] said that, ‘‘The ra-
tionale of Beshada is not applicable to this case.’’ and
when I say to this case they mean the rationale of Beshada
is not applicable to the general typical liability case. ‘‘We
do not overrule Beshada but restrict Besahda to the cir-
cumstances giving rise to its holding’’ and they use the
word circumstances as opposed to facts because there were
no facts which were decided in Beshada or the cases that
were joined with it.
a
—_
97a
The word circumstances has even broader meaning |
think than the word fact. There are circumstances about
Beshada which | think might conceivably be applied to
other types of product litigation if not in New Jersey cer-
tainly in the United States. The circumstances [778] of Be-
shada, when you consider the presence of amicus on the
part of all litigants is that we have a vast number of people
who are injured by a specific product, the injury is brought
about over a long latency period and because of those fac-
tors and circumstances it is difficult, both for Plaintiffs
and Defendants, to intelligently try the issue of state of the
art.
In justification for his reasoning in the opinion Justice
Pashman pointed to the fact finding process as being one
of the most difficult considerations for a trial Court and
jury in that setting. I think he meant it to apply to a much
broader setting but in terms of rationalizing why Beshada
was not overruled it seems to me that one of the factors
and circumstances certainly is the question of how difficult
it would be ina multiple defendant, multiple plaintiff case,
for a jury to come to some conclusion that at one point in
time one defendant knew and another didn’t, whether it
was in point of time that the actual injury occurred, things
of that nature.
In the Matter of Asbestos Venued In Middlesex County, tran-
script of proceedings of September 9, 1984, pp. 94-95. (Empha-
sis added).
Judge Gerry of this Court, prior to the New Jersey Supreme
court’s affirmance in the Middlesex County litigation, ad-
dressed the equal protection argument in the case of Gogal v.
Johns-Manville, 595 F.Supp. 971. (1984). In finding that there
was no equal protection violation, he reasoned:
Looking generally at tort law, this court recognizes
numerous distinctions made between classes of litigants.
Under the New Jersey Tort Claims Act, for example, gov-
ernmental entities and officers are at a distinct advantage
98a
Over private actors. Non-medical-malpractice plaintiffs,
- . are somewhat more favorably treated by
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