Petition for Writ of Certiorari — Celotex Corp. v. Johnson

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F. SPAMOL, JR.

CLERK

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

THE CELOTEX CORPORATION,

Petitioner,

—_—V.—

TOHN E. JOHNSON, ef ux.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

ANDREW T. BERRY

Counsel of Record

KEVIN J. CONNELL

McCCARTER & ENGLISH

Four Gateway Center

100 Mulberry Street

Newark, New Jersey 07102

(201) 622-4444

Attorneys for Petitioner

QUESTIONS PRESENTED

1. Whether in a product liability action the Second Circuit

misapprehended and misapplied the controlling New York

law by upholding an award of punitive damages predicated

upon merely negligent, rather «han reckless or intentional,

conduct by the defendants.

2. Whether in a ‘‘failure to warn’’ product liability action

the Second Circuit misapprehended and misapplied the con-

trolling New York law by evaluating a defendant’s knowledge

of risks posed by its product on the basis of ‘‘state of the

art’’ evidence developed after the defendant’s manufacture

of, and plaintiff’s last exposure to, that product.

3. Whether the Second Circuit erred in affirming the dis-

trict court’s consolidation for trial of two markedly dissimilar

‘failure to warn’’ product liability actions involving, inter

alia, entirely different periods of exposure to the product as

well as significantly different ‘‘state of the art’’ proofs.

PARTIES TO THE PROCEEDING AND

RULE 29.1 STATEMENT

The parties to the proceedings below included petitioner,

The Celotex Corporation (defendant-appellant below), and

respondents John E. Johnson and Anne Marie Johnson, his

wife (plaintiffs-appellees below).

Owens-Illinois, Inc. was a defendant-appellant in the pro-

ceedings below, but does not intend to participate as a peti-

tioner or respondent with respect to the filing of this petition.

(Counsel for petitioner represented Owens-Illinois, Inc. in the

court of appeals with respect to the filing of a petition for

rehearing and subsequent proceedings).

Raymark Industries, Inc. was a defendant in the district

court proceedings, but was not a party to the appeal to the

Second Circuit since the filing of an involuntary bankruptcy

petition stayed all proceedings as to that party. (See State-

ment of the Case at page 6 infra.)

Pursuant to Rule 29.1, The Celotex Corporation states that

its parent company is Jim Walter Corporation. Petitioner has

no affiliates or other than wholly owned subsidiaries.

iii

TABLE OF CONTENTS

PAGE

8 ee gy 3 gy) i

PARTIES TO THE PROCEEDING AND RULE 29.1

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REASONS FOR GRANTING THE WRIT

I. THE SECOND CIRCUIT MISAPPRE-

HENDED AND MISAPPLIED THE CON-

TROLLING NEW YORK LAW BY

UPHOLDING AN AWARD OF PUNITIVE

DAMAGES PREDICATED UPON MERELY

NEGLIGENT, RATHER THAN RECKLESS

OR INTENTIONAL, CONDUCT........... 8

A. Proceedings in the Court of Appeals..... 8

B. The Court of Appeals’ Adjudication of the

Punitive Damages Issue in the Case at Bar

Calls for an Exercise of this Court’s Power

Ct ccank ten kieuneeséedees 4 15

PAGE

II. THE SECOND CIRCUIT MISAPPRE-

HENDED AND MISAPPLIED THE CON-

TROLLING NEW YORK LAW BY

EVALUATING DEFENDANT’S KNOWL-

EDGE OF THE RISKS POSED BY ITS

PRODUCTS ON THE BASIS OF “STATE

OF THE ART’’ EVIDENCE DEVELOPED

AFTER DEFENDANT’S MANUFACTURE

OF, AND PLAINTIFF’S LAST EXPOSURE

pio Mee Bg kk ty 2 ee 17

Ill. THE SECOND CIRCUIT ERRED IN

AFFIRMING THE DISTRICT COURT’S

CONSOLIDATION FOR TRIAL OF TWO

MARKEDLY DISSIMILAR FAILURE TO

WARN PRODUCT LIABILITY ACTIONS

INVOLVING, INTER ALIA, ENTIRELY

DIFFERENT PERIODS OF EXPOSURE TO

THE PRODUCT AND SIGNIFICANTLY

DIFFERENT STATE OF THE ART PROOFS 19

RN Te Fer eR Pe rr rie 25

TABLE OF AUTHORITIES

Cases: PAGE

Bolm v. Triumph Corp., 71 A.D.2d 429, 422 N.Y.S.2d

i oe” A, eer re 4, 17, 2

Browning-Ferris Industries v. Kelco Disposal, Inc., 109

SB. CR. Fe Ci 6.08 0006s05seoksa sete 16

Dupont v. Southern Pacific Co., 366 F.2d 193 (Sth Cir.

1966), cert. denied, 386 U.S. 958 (1967)........... 20

Higgins v. The Celotex Corp., No. CV-87-0537

CRIs U Pd oncccndveandeccen se ane 3, 5, 17, passim

In re Joint Eastern and Southern Districts Asbestos

Litigation, 124 F.R.D. 538 (E.D.N.Y. 1989) ....... 2

Johnson v. The Celotex Corp., Nos. 89-7484, 89-7542,

slip op. (2d Cir. March 20, 1990) (Carman,

U.S.C.1.T., sitting by designation, [original] opinion

OF GO GRUND « occneaccdsdésness cece 1, 6, 7, 9, passim

Johnson v. The Celotex Corp., Nos. 89-7484, 89-7542,

slip op. (2d Cir. March 20, 1990) (Mahoney, C.J.,

[original opinion] concurring in part and dissenting

WR PUNE oc csnt nana tan 000s aokaeeeee 1-2, 6, 7, 8, passim

Johnson v. The Celotex Corp., 899 F.2d 1281 (2d Cir.

1990) [‘‘corrected’’ majority opinion and ‘‘revised’’ ©

concurrence and dissent]................. 2, 3, 4, passim

Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832 (2d

Civ. BED 6c iwesesecees basen 10, 11, i2, 13, 16

Constitutional provision:

5.5. Carat. QUO. Jeet © 8 602senncsndessaeenres 6, 16

PAGE

Statutes:

Be USA. | Uae CRs ockewcecrcdeccccs ere ry tre 2

SO USK. § ESE) CH cow indadencsccssvsveesecs 2

N.Y. Penal Law § 15.05(3) (McKinney 1987)......... 11, 12

Rules:

FOG. RB. Civ. PO. 4b vvavccisctusctcnscavenme 19

Miscellaneous Authorities:

Bordens & Horowitz, Mass Tort Civil Litigation: The

Impact of Procedural Changes on Jury Decisions,

Judicature (June-July, 1989)........cccccccccccces 23

D. Herr, R. Haydock & J. Stempel, Motion Practice

Ol rr A a 20

W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser

and Keeton on the Law of Torts (Sth ed. 1984).... 9, 10

Newman, Jn Banc Practice in the Second Circuit: The

Virtues of Restraint, 50 Brooklyn L. Rev. 365 (1984) 16

9 C. Wright & A. Miller, Federal Practice and Proce-

dure (1971 & Supp. 1990)...... phnebdeeeuens euean 20

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

No.

THE CELOTEX CORPORATION,

Petitioner,

—V.—

JOHN E. JOHNSON, ef ux.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioner, The Celotex Corporation [hereinafter ‘‘Celo-

tex’’], respectfully prays that a writ of certiorari issue to

review the judgment and opinion of the United States Court

of Appeals for the Second Circuit entered in this proceeding

on March 20, 1990.

OPINIONS BELOW

The original majority opinion of the United States Court

of Appeals for the Second Circuit,’ as well as the separate

1 The opinion of the court was written by the Honorable Gregory W.

Carman, Judge of the United States Court of International Trade, sit-

ting by designation. The Honorable Roger J. Miner, Circuit Judge,

joined in that opinion.

opinion of the Honorable J. Daniel Mahoney, C.J., concur-

ring in part and dissenting in part, are unpublished and

appear in slip opinion form in the appendix hereto at pages

la to 22a, and 22a to 26a, respectively.” The ‘‘corrected”’

majority opinion (Pet. App. 28a-49a) and Judge Mahoney’s

*“*revised’’ concurrence and dissent (Pet. App. 49a-52a) issued

shortly before denial of Celotex’s petition for rehearing

before the panel and en banc are reported at 899 F.2d 1281.

The ‘‘memorandum and order’’ of the Ur‘ted States Dis-

trict Court for the Eastern and Southern Lustricts of New

York addressing defendants’ post trial motions is published

under the caption Jn re Joint Eastern and Southern Districts

Asbestos Litigation, 124 F.R.D. 538 (E.D.N.Y. 1989) and is

reprinted in the appendix hereto at Pet. App. 53a-66a.

JURISDICTION

The judgment of the court of appeals was entered on

March 20, 1990. On April 3, 1990 Celotex filed a timely peti-

tion for rehearing before the panel with a suggestion of

rehearing en banc which was denied by order dated May 24,

1990. Pet. App. 67a. The jurisdiction of this Court is

invoked under 28 U.S.C. § 1254(1) (1982).

STATUTE INVOLVED

Federal Rule of Civil Procedure 42 is set forth at Pet. App.

70a.

STATEMENT OF THE CASE

Plaintiffs John Johnson and Ann Marie Johnson, his wife,

filed a diversity’ action in district court alleging personal

2 Hereinafter citations to the appendix will be stated as ‘‘Pet. App.

3 = Jurisdiction in district court was predicated upon diversity of citizen-

ship. 28 U.S.C. § 1332 (1982).

injury and loss of consortium due to Mr. Johnson’s occupa-

tional exposure from 1942-45 to asbestos-containing products

allegedly supplied by defendants and a number of other cor-

porations. Mr. Johnson’s action, like those of many other

claimants in New York’s federal and state courts, was filed

pursuant to a New York state one-year revival statute for

asbestos and various toxic tort actions. See corrected major-

ity opinion at Pet. App. 30a-3la. To manage the substantial

asbestos docket generated by that revival statute, the United

States District Courts for the Eastern and Southern Districts

of New York assigned all pretrial matters pertaining to such

cases to the Honorable Charles P. Sifton, U.S.D.J.‘

On November 4, 1988—three days before trial of the John-

son case was to begin—Judge Sifton proposed that it be con-

solidated with another case involving allegations of exposure

to asbestos products, Higgins v. Raymark Industries, Inc.,

No. CV-87-0537 (S.D.N.Y.). Defendants strenuously objected

to the consolidation stating that great prejudice would result

from combining the two markedly different cases.

Plaintiff Johnson, ‘‘essentially a well man’”’ diagnosed in

1985 with a non-impairing lung condition, never personally

used asbestos-containing products but claimed ‘‘bystander

exposure’’ to such products used by other workers during his

three-year employment as an electrician’s helper at the

Brooklyn Navy Yard from 1942-1945.° Plaintiff Higgins, on

4 See corrected majority opinion at Pet. App. 30a-3la. Although

Judge Sifton formerly had responsibility for pretrial matters arising

from the entire asbestos docket, he also served as trial judge in certain

cases, such as the one at bar. The Honorable Jack B. Weinstein,

U.S.D.J., now manages the asbestos docket of the Eastern and South-

ern districts of New York.

5 That description was provided by plaintiff Johnson’s own medical

expert, Dr. Steven Markowitz. Joint Appendix in Johnson v. The

Celotex Corp., Nos. 89-7484 and 89-7542 (2d Cir. 1990) at page 650.

[Hereinafter citations to the Joint Appendix before the Second Circuit

will be stated as ‘‘Jt. App. i

6 See corrected majority opinion at Pet. App. 3la; 32a-33a; 37a. See

also Jt. App. 10; 11; 13; 15; 19; 37; 39; 737.

the other hand, died considerably before trial from a more

serious asbestos-related lung condition allegedly attributable

to his twenty years of bystander exposure while employed as

a ‘‘chipper and caulker’’ at the yard from 1946-66. See cor-

rected majority opinion at Pet. App. 3la; 32a-33a; 37a.

Johnson and Higgins did not know each other personally,

and never worked at the huge shipbuilding facility at the

same time.’

Since plaintiffs’ actions sought compensatory and punitive

damages for defendants’ alleged failure to warn® of the health

risks posed by their asbestos-containing products, defendants

were certain that the substantially dissimilar exposure periods

would prejudice defendants’ interests since the jury would

have to ignore plaintiff Higgins’ ‘‘state of the art’’ evidence’

reflecting twenty additional years of scientific advances in

evaluating Johnson’s claim.’® (See Points IJ and III of Rea-

sons for Granting the Writ infra for a discussion of state of

the art and consolidation issues). Defendants were also con-

vinced that defense of the Johnson case would be prejudiced

by evidence of Higgins’ considerably more serious illness and

subsequent death. Jt. App. 1743-1758. Despite defendants’

objections, on November 7 Judge Sifton ordered a consoli-

7 See corrected majority opinion at Pet App. 31a; 37a. See also Jt.

App. 13; 64; 99-101.

8 In the case at bar (and most other asbestos personal injury actions

sounding in negligence and strict products liability), plaintiffs do not

claim that injury resulted from defendants’ asbestos-containing prod-

ucts’ failure to insulate as expected; rather, plaintiffs maintain that

those products were defective due to inadequate warnings regarding

health risks allegedly posed by those products.

9 Under the controlling New York law, ‘‘state of the art’’ in products

liability cases has been defined as ‘‘the safety, technical, mechanical

and scientific knowledge in existence and reasonably feasible for use at

the time of manufacture.’’ Bolm v. Triumph Corp., 71 A.D.2d 429,

438, n.2, 422 N.Y.S.2d 969 (N.Y. App. Div. 1979) (quoting Uniform

Products Liability Law § 106[a]).

10 See, e.g., Jt. App. 1743-1758.

dated trial of the Higgins and Johnson cases.'' Judge Sifton

also rejected defendants’ request that the court certify that

order for interlocutory appeal to the Second Circuit. Jt. App.

1763-1764. Although defendants made a number of applica-

tions to reduce the prejudicial effect of the consolidation, all

were rejected.”

Sir ce eight defendants settled and one filed a bankruptcy

petition prior to trial, the Johnson and Higgins cases pro-

ceeded to trial against three defendants: Owens-Illinois, Celo-

tex, and Raymark Industries, Inc. [hereinafter ‘‘Raymark’’].

The jury rendered verdicts in favor of both plaintiffs and

awarded Mr. Higgins $1 million in compensatory damages

and $3 million in punitive damages which were apportioned

equally among the three defendants. The jury awarded Mr.

Johnson $350,000.00 in compensatory damages’? and $2.8

million in punitive damages which were imposed as follows:

Celotex $1 million dollars, Owens-Illinois $800,000.00 and

Raymark $1 million. Mrs. Johnson recovered a $30,000 com-

pensatory award for loss of consortium. Due to post verdict

procedural complications apparently defeating diversity juris-

diction as to defendant Celotex in the Higgins case,'* judg-

11 Jt. App. 1767-1770. Due to deiay in obtaining a jury panel from the

Southern District of New York, counsel’s opening statements did not

begin until November 16, 1988.

12 ‘‘The [district court] declined to trifurcate or bifurcate the trial to

separate issues of causation and compensatory damages from issues of

liability and punitive damages. Appellants’ motions to have separate

juries consider claims of liability and punitive damages in Johnson

apart from claims in Higgins, were denied.’’ Pet. App. 3la. Defen-

dants also unsuccessfully moved to preclude introduction of any post-

1945 state of the art evidence. See n.55 infra for a discussion of that

application.

13 Pursuant to the controlling New York law, the jury apportioned lia-

bility between the settling and non-settling defendants -resulting in the

following percentage allocations: Celotex 12.5%, Owens Illinois 5.0%,

Raymark 12.5%. The remaining 70% of liability was equally allocated

among seven settling defendants. See corrected majority opinion at

Pet. App. 32a.

14 See majority opinion at Pet. App. 32a.

ment was entered only in favor of plaintiff Johnson. Shortly

after entry of judgment in Johnson, an involuntary bank-

ruptcy petition stayed all proceedings as to defendant Ray-

mark. Following unsuccessful post trial motions, the

remaining defendants, Celotex and Owens-Illinois [hereinafter

collectively ‘‘the defendants’’], filed notices of appeal.

The Second Circuit, speaking through the Honorable Gre-

gory W. Carman, U.S.C.1.T.,’* rejected all defendants’ con-

tentions considered,’® and affirmed the judgment of district

court in its entirety.’ The Honorable J. Daniel Mahoney,

C.J., filed a separate opinion which dissented only from the

majority’s ruling upholding the awards of punitive damages.

Following review of the Second Circuit’s majority and sep-

arate opinions, defendants sought rehearing before the panel

and en banc by timely petition filed April 3, 1990. Pet. App.

78a-94a.

1S Judge, United States Court of International Trade, sitting by desig-

nation.

16 As indicated in the court of appeals’ opinions below, defendants

raised a number of constitutional challenges to the awards of punitive

damages which the court did not reach. As in the proceedings below,

petitioner respectfully maintains that the procedural and substantive

due process arguments were adequately preserved, and that defendants

presented sufficient proofs to demonstrate an unjust result occasioned

by multiple imposition of punitive awards with respect to that latter

challenge. Moreover, petitioner wishes to preserve its right to argue

those issues in the event this Court grants certiorari and deems them

adequaiely preserved.

17 Johnson v. The Celotex Corp., Nos. 89-7484, 89-7542, slip op. (2d

Cir. 1990 March 20, 1990) (Carman, U.S.C.I.T., sitting by designa-

tion, Opinion of the court). Pet. App. la-22a. [Hereinafter cited as

“‘original majority opinion’’).

18 Judge Mahoney dissented only from ‘‘the majority’s conclusion that

punitive damages are adequately supported by the evidentiary record,”’

and stated that he ‘‘would reverse the award of punitive damages as a

matter of law.’’ Johnson v. The Celotex Corp., Nos. 89-7484; 89-7542,

slip op. (2d Cir. March 20, 1990) (Mahoney, Circuit Judge, concurring

in part and dissenting in part). Pet. App. 22a-26a. [Hereinafter cited as

**Judge Mahoney’s original opinion’’].

In their petition for rehearing defendants asserted, inter

alia, that by its own description the majority misapprehended

and misapplied the controlling New York law regarding the

type of evidence sufficient to sustain an award of punitive

damages. Pet. App. 85a-88a.

By letter dated April 20, 1990 (Pet. App. 27a) the Second

Circuit supplied parties to the appeal with a ‘‘corrected’’

majority opinion (Pet. App. 28a-49a) and a ‘‘revised’’ ver-

sion of Judge Mahoney’s concurrence and dissent (Pet. App.

49a-52a).'? Although the letter did not make any reference to

defendants’ petition for rehearing, the only ‘‘correction’’ to

the majority opinion consisted of excision of crucial language

which Jefendants maintained established the majority’s

improper use of a negligence, rather than a recklessness, stan-

dard in assessing the sufficiency of evidence to support the

awards of punitive damages.” The correction did not change

the facts upon which the Second Circuit based its decision,

the essential nature of its legal analysis, nor the result

reached. Petitioner respectfully maintains that the Second

Circuit’s alteration of the majority opinion attempts a cos-

metic correction of a seriously erroneous decision.

Several weeks after issuance of the corrected majority opin-

ion, the Second Circuit denied defendants’ petition for

rehearing by order dated May 24, 1990. That order does not

refer to issuance of the corrected opinion, nor does it express

any reasons for the denial. Pet. App. 67a.

After denial of the petition for rehearing, Celotex filed a

motion with the Second Circuit requesting either a stay or

19 The corrected majority opinion and Judge Mahoney’s revised opin-

ion are reported: Johnson v. The Celotex Corp., 899 F.2d 1281 (2d Cir

1990). Where the wording of the original majority and separate opin-

ions are identical to that of the ‘‘corrected’’ and ‘‘revised’’ versions of

those documents, petitioner will hereinafter cite to both. Where lan-

guage appears in only the original version of either opinion, petitioner

will cite that document, and, if relevant, refer the reader to pertinent

passage of the corrected and revised opinions.

20 The correction is discussed infra under Point I of Reasons for

Granting the Writ.

recall of that court’s mandate pending the filing of this peti-

tion for certiorari, but the motion was denied and mandate

issued on June 6, 1990. Pet. App. 68a. Shortly thereafter,

Celotex paid the bulk of the judgment” and a partial satis-

faction was filed early in July. Pet. App. 76a. On August 8,

1990, the district court entered an amended judgment pursu-

ant to ongoing proceedings to specify the exact amounts of

principle and interest owed by petitioner and other defen-

dants. Pet App. 73a. Celotex then filed this petition for a

writ of certiorari.

REASONS FOR GRANTING THE WRIT

THE SECOND CIRCUIT MISAPPREHENDED AND MIS-

APPLIED THE CONTROLLING NEW YORK LAW BY

UPHOLDING AN AWARD OF PUNITIVE DAMAGES

PREDICATED UPON MERELY NEGLIGENT, RATHER

THAN RECKLESS OR INTENTIONAL, CONDUCT

A. Proceedings in the Court of Appeals

Although defendants raised a number of arguments against

the imposition of punitive damages in the proceedings below,

the Second Circuit reviewed only the question of whether

legally sufficient evidence was adduced at trial to permit

imposition of punitive damages under the controlling- New

York law.”

In performing that assessment, the majority recounted in

part the district court’s proper jury instructions that punitive

damages require a finding that a defendant’s conduct was

‘‘wanton and reckless,’’* but then proceeded to apply an

21 Celotex has paid $1,215,603.41; only the amount of interest between

verdict and judgment remains outstanding.

22 Original and corrected majority opinions at Pet. App. 13a-18a and

40a-45Sa, respectively; Judge Mahoney’s original and revised opinions

at 22a-26a and 49a-52a, respectively.

23 Original and corrected majority opinions at Pet. App. 17a and 44a,

respectively. The brief district court instruction quoted in the majority

opinion used the phrase ‘‘wanton and reckless’’; the majority opinion

itself uses the phrase ‘‘wanton or reckless.’’ Jd.

erroneous ordinary negligence standard to sustain the awards

at bar:

A review of the evidence shows that the award of puni-

tive damages was supported by the evidence as a matter

of law. Plaintiff produced evidence at trial through

expert witnesses, medical reports and documents from

which the jury could reasonably conclude that appellants

acted in a@ wanton or reckless manner. For example,

plaintiff’s expert witness testified that a link between

asbestos and lung cancer was suspected as early as 1930

and that this link was considered to be probable shortly

after 1940. Another expert witness stated in his deposi-

tion that by 1942 there were enough cases of the associa-

tion between lung cancer and asbestos to include this

information in a medical textbook on occupational can-

cer. A former employee of Owens-Illinois testified that

workers at a New Jersey plant, including plant execu-

tives, wore respirators in the areas of loose raw material

including asbestos. The jury was free to conclude from

this and other evidence presented that appellants knew

or should have known of the dangers of asbestos and

did not adequately protect or warn users of asbestos,

thereby acting in a wanton or reckless manner.

Original majority opinion at Pet. App. 17a (emphasis sup-

plied).

In their petition for rehearing before the panel and en

banc, defendants specifically referred to the last sentence of

the above passage in arguing that the majority had incor-

rectly interpreted and applied New York law in upholding an

award of punitive damages based upon negligent” rather than

reckless conduct.”

24 ‘*Knew or should have known”’ is clearly a negligence standard. See

generally W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and

Keeton on the Law or Torts § 32 at p. 184 (Sth ed. 1984).

25 See ‘‘Petition for Rehearing and Suggestion of Rehearing En Banc

for Defendants-Appellants Owens-Illinois, Inc. and the Celotex Cor-

In dissenting from the majority’s punitive damages ruling,”

Judge Mahoney stated that the majority had departed from

both the controlling New York law as well as Judge Friend-

ly’s

highly respected opinion in Roginsky v. Richardson-

Merrell, Inc.,”’ the applicable Second Circuit precedent.

[New York law provides that] [p]unitive damages .. .

are not properly chargeable against a defendant who

merely ‘should have known’ of the risk in question. It

must be shown that the defendant was aware of the risk,

and that he consciously disregarded it. See Roginsky,

378 F.2d at 843 (punitive damages proper where manu-

facturer shown ‘to have become aware of the danger

and to have done nothing, deliberately closing its eyes’).

There has been no such showing here.

Judge Mahoney’s original and revised opinion at Pet. App.

24a and 5la, respectively (emphasis supplied).

In addressing the punitive damages issue, Judge Mahoney

quoted Dean Prosser’s formulation of the stringent common

law rule requiring ‘‘willful or wanton’’ conduct involving a

conscious and deliberate disregard of other’s interests,”* and

poration’’ at Pet. App. 86a (‘‘Defendants respectfully maintain that

the majority’s analysis is patently erroneous. Indeed the final line of

that discussion contradicts itself since negligence is not synonymous

with recklessness.’’).

‘“*T respectfully dissent, however, from the majority’s conclusion that

punitive damages are adequately supported by the evidentiary record,

and would reverse the award of punitive damages as a matter of law.’’

Judge Mahoney’s original and revised opinions at Pet. App. 22a and

42a, respectively.

378 F.2d 832 (2d Cir. 1967) (Friendly, J., opinion of the court).

‘*(PJunitive damages may be deemed appropriate where a defendant,

while not intending to injure a plaintiff, exhibits ‘such a conscious and

deliberate disregard of the interests of others that his conduct may be

called wilful or wanton.’ ’? Judge Mahoney’s original and revised

opinions at Pet. App. 23a and 50a, respectively (quoting W. Keeton,

D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of

Torts § 2, at 9 (Sth ed. 1984)).

compared it to the more daunting New York standard for

imposition of punitive damages. ‘‘As we have said, however,

in another diversity case where we undertook a thorough

review of the applicable New York precedents, New York law

contemplates that ‘the recklessness that will give rise to puni-

tive damages must be close to criminality, see 14 N.Y. Jur.,

Damages § 181 p. 41, and... , like criminal conduct, it

must be ‘‘clearly established’’ ’ ’’”

Applying the correct punitive damages standard and ‘‘state

of the art evidence’ to the facts at bar, Judge Mahoney

concluded that there was insufficient evidence for submission

of punitive damages to the jury and that the punitive awards

should be reversed as a matter of law.”

As stated above, several weeks after the filing of defen-

dants’ petition for rehearing, the Second Circuit issued a

‘corrected’? majority opinion and a ‘‘revised’’ concurrence

and dissent. The correction to the majority opinion consisted

of the deletion of the phrase ‘for should have known’”’ from

29 Judge Mahoney’s original and revised opinions at Pet. App. 23a and

50a, respectively (quoting Roginsky v. Richardson-Merrell, Inc., 378

F.2d 832 (2d Cir. 1967)).

Judge Mahoney further noted that Roginsky ‘‘went on to quote. . .

the definition in N.Y. Penal Law § 15.05(3) (McKinney 1987), since

unchanged, as setting forth New York’s view of recklessness. Section

15.05(3) provides in pertinent part:

A person acts recklessly with respect to a result. . . when he is

aware of and consciously disregards a substantial and unjustifiable

risk that such result will occur... . The risk must be of such

nature and degree that disregard thereof constitutes a gross devia-

tion from the standard of conduct that a reasonable person would

observe in the situation.

I do not regard the evidence in this case as adequate for submission of

punitive damages to the jury under these standards.’’ Judge Maho-

ney’s original and revised opinions at Pet. App. 23a-24a and 50a-5la,

respectively.

30 See Point II of Reasons for Granting the Writ infra for a discussion

of state of the art issues.

31 Judge Mahoney’s original and revised opinions at Pet. App. 22a-26a

and 49a-52a, respectively.

the sentence in which the majority enunciated and applied the

legal standard to the evidence of record: ‘‘The jury was free

to conclude from this and other evidence presented that

appellants knew or should have known of the dangers of

asbestos and did not adequately protect or warn users of

asbestos, thereby acting in a wanton or reckless manner.”’

Compare original and corrected majority opinions at Pet.

App. 17a-18a and 44a, respectively. Aside from deletion of

the phrase ‘‘or should have known,”’ the original and cor-

rected majority opinions are identical.

Along with the corrected majority opinion the Second Cir-

cuit issued a ‘“‘revised’’ concurrence and dissent which

reflected changes in Judge Mahoney’s quotation of and refer-

ence to the majority opinion.”

Several weeks after issuance of the corrected majority opin-

ion, the Second Circuit issued an order denying defendants’

petition requesting rehearing before the panel or en banc.

Petitioner respectfully maintains that the correction of the

“majority opinion effects only a cosmetic change which does

not repair the majority’s misapprehension or misapplication

of the controlling state law, nor the seriously erroneous result

reached under that faulty legal analysis.

Petitioner does not question—and would not dispute in this

Court—the Second Circuit’s ability ve/ non to issue an opin-

ion correcting technical mistakes, nor that court’s ability to

32. = The italicized language in the following quote from Judge Maho-

ney’s Original opinion was not included in his revised concurrence and

dissent: ‘‘The majority reasons that the jury could conclude, on this

record, ‘that appellants knew or should have known of the dangers of

asbestos and did not adequately protect or warn users of asbestos,

thereby acting in a wanton or reckless manner.’ There are two prob-

lems with this rationale. First, as I have already noted, a ‘should have

known’ formulation simply does not equate with recklessness under

New York law; actual awareness is required. See Roginsky, 378 F.2d at

843; N.Y. Penal Law § 15.05(3). Second, the majority paints with

much too broad a brush, as I see it, in its reference to the ‘dangers of

asbestos.’ Compare Judge Mahoney’s original and revised opinions at

Pet. App. 25a and 52a, respectively.

reconsider a case and issue an ‘‘amended’’ opinion changing

matters of substance. Petitioner does, however, dispute the

court of appeals’ ability to avoid its responsibility to follow

the controlling law by excising language that provided the

clearest—but hardly the only—evidence that the wrong legal

standard was applied.

One cannot reasonably explain deletion of the phrase ‘‘or

should have known’’ from the sentence expressing the major-

ity’s ruling as a mere technical correction to a decision which

applied the correct law. The language remaining in the cor-

rected opinion indicates that the majority did not consider

what Celotex actually knew” regarding the dangers of asbes-

tos at the time of Mr. Johnson’s employment, rather, the

majority upheld the award of punitive damages based upon

what others suspected or thought probable:

A review of the evidence shows that the award of puni-

tive damages was supported by the evidence as a matter

of law. Plaintiff produced evidence at trial through

expert witnesses, medical reports and documents from

which the jury could reasonably conclude that appellants

acted in a wanton or reckless manner. For example,

plaintiff’s expert witness testified that a link between

asbestos and lung cancer was suspected as early as 1930

and that this link was considered to be probable shortly

after 1940. Another expert witness stated in his deposi-

tion that by 1942 there were enough cases of the associa-

tion between lung cancer and asbestos to include this

information in a medical textbook on occupational can-

cer. A former employee of Owens-Illinois testified that

workers at a New Jersey plant, including plant execu-

tives, wore respirators in the areas of loose raw material

itcluding asbestos. The jury was free to conclude from

33 As Judge Mahoney points out in both his original and revised opin-

ions: ‘‘[Under New York law] [pJunitive damages . . . are not prop-

erly chargeable against a defendant who merely ‘should have known’

of the risk in question. It must be shown that defendant was aware of

the risk, and that he consciously disregarded it. See Roginsky, 378

F.2d at 843.’’ Pet. App. 24a; Sla.

this and other evidence presented that appellants knew

[or should have known] of the dangers of asbestos and

did not adequately protect or warn users of asbestos,

thereby acting in a wanton or reckless manner.

Original majority opinion at Pet. App. 17a. [Text in brackets

omitted from corrected majority opinion. See Pet. App. 44a].

It is also highly significant that none of the punitive dam-

ages evidence discussed in the above passage properly per-

tains to plaintiff Johnson’s punitive claim against Celotex.

The majority did not consider what Celotex actually knew

from 1942-45 about risks to ‘‘bystanders’’ like Johnson

exposed to finished asbestos products. Rather, the majority,

erroneously applying a negligence standard, focused on what

Celotex ‘‘should have known’’ based upon what others knew,

**suspected,’’ or ‘‘considered to be probable.’’ Moreover,

even if one advanced the untenable argument that the major-

ity meant to say that it inferred Celotex’s actual knowledge

of those risks based upon what others knew,’’™ such actual

knowledge could not support the award of punitive damages

at bar since those risks do not relate to plaintiff Johnson.

The punitive damages proofs mentioned in the majority

opinion pertain to workers in ‘‘asbestos processing plants’’

who had ‘‘direct and sustained exposure to high concentra-

tion levels of asbestos fibers,’’** not to ‘‘bystanders’’ like

Johnson who was exposed to lower concentration levels since

he: 1) did not personally use raw asbestos fiber (or even fin-

ished asbestos products), 2) worked in a shipyard rather than

an asbestos processing plant, and 3) derived his ‘‘bystander”’

exposure from ‘‘finished hardbound insulation products con-

taining asbestos’’ used by other shipyard workers.** As Judge

34 ~—s It. is highly unlikely that a court which corrects its original opinion—

apparently in response to a petition for rehearing—would fail to

express itself accurately in its second opinion.

35 Judge Mahoney’s original and revised opinions at 24a-25a and Sla-

52a, respectively.

36 See Judge Mahoney’s original and revised opinions at Pet. App. 24a

(the last two lines) to 25a, and 52a (the last two lines) to 53a, respec-

tively.

Mahoney stated in his dissent, the record at bar contains ‘‘no

evidence’’ to support plaintiff Johnson’s punitive award

against Celotex. Pet. App. 25a; 52a (emphasis in original).

B. The Court of Appeals’ Adjudication Of The Punitive

Damages Issue In The Case At Bar Calls For An Exercise

Of This Court’s Power Of Supervision

While it is true that a case involving an erroneous result

predicated upon a court of appeals’ misapprehension and

misapplication of state law is not the most likely candidate

for a grant of certiorari, petitioner Celotex respectfully main-

tains that the punitive damages issue in the case at bar war-

rants issuance of the writ, even if not plenary consideration.”

First, the Second Circuit’s decision on the punitive dam-

ages issue was seriously and undoubtedly erroneous. That

alone warrants this Court’s corrective action short of plenary

consideration. Furthermore, the Second Circuit’s manner of

adjudication presents a compelling case for this Court’s exer-

cise of its supervisory powers. Although accorded the oppor-

tunity to correct its erroneous decision through rehearing or

rehearing en banc, the Second Circuit refused to do so in a

straightforward manner but instead attempted a cosmetic cor-

rection which deflected Celotex’s challenge and preserved the

majority’s flawed reasoning and unjust result. The practice

employed in the case at bar evinced a cavalier attitude

towards a federal court’s basic obligation to respect and fol-

low controlling state law in diversity cases. Moreover, careful

observance of state laws limiting the availability of punitive

damages is of particular importance given the threat such

37. Given the unequivocal nature of the Second Circuit’s error with

respect to the punitive damages and state of the art issues, Celotex

respectfully suggests that reversal of the punitive award as a matter of

law, or a ‘‘grant, vacate and remand’’ order may be appropriate in the

case at bar. See ‘‘Conclusion’”’ io this petition infra.

damages pose to litigants’ due process rights. See, e.g.,

Browning-Ferris Industries, Inc. v. Kelco Disposal, Inc..**

The fact that the case at bar arises from a circuit which

severely restricts rehearings en banc” also argues for grant of

certiorari. A court of appeals which does not meet its obliga-

tion to grant en banc review of a panel decision which is both

obviously erroneous and inconsistent with the controlling cir-

cuit precedent,” forces this Court to exercise its supervisory

powers or allow an injustice to occur.

109 S. Ct. 2909, 2921 (1989) (Blackmun, J., opinion of the Court)

(reserving for ‘‘another day’’ consideration of due process challenges

to punitive damages). See Justice Brennan’s concurring opinion, id. at

2923-24 (regarding availability of due process challenge). See also Jus-

tice O’Connor’s opinion concurring in part and dissenting in part. /d.

at 2924 (‘‘[NJothing in the Court’s opinion forecloses a due process

challenge to awards of punitive damages or the method by which they

are imposed, and I adhere to my comments in Bankers Life & Casualty

Co. v. Crenshaw, 486 U.S. 71, 86-89 (1988) (opinion concurring in

part) regarding the vagueness and procedural! due process problems

presented by juries given unbridled discretion to impose punitive dam-

ages.’’)

In his law review article on the subject, Second Circuit Judge Jon O.

Newman states: ‘“‘One of the distinctive characteristics of the United

States Court of Appeals for the Second Circuit is the infrequency of

rehearings in banc. In the three court years ending June 30, 1983, the

Second Circuit reheard only 2 cases in banc,’’ the lowest number

granted by a court of appeals during that period. Newman, /n Banc

Practice in the Second Circuit: The Virtues of Restraint, 50 Brooklyn

L. Rev. 365-66 (1984) [citations omitted]. ‘‘In the same period in bancs

in all circuits averaged 18, reaching a high of 44 in the Fifth Circuit.”

Id. at 36S.

See discussion of Judge Friendly’s opinion in Roginsky vy.

Richardson-Merrell, Inc., 378 F.2d 832 (2d Cir. 1967) at pages 10-13 of

this petition.

Il.

THE SECOND CIRCUIT MISAPPREHENDED AND MIS-

APPLIED THE CONTROLLING NEW YORK LAW BY

EVALUATING DEFENDANT’S KNOWLEDGE OF THE

RISKS POSED BY ITS PRODUCTS ON THE BASIS OF

“STATE OF THE ART’’ EVIDENCE DEVELOPED

AFTER DEFENDANT’S MANUFACTURE OF, AND

PLAINTIFF’S LAST EXPOSURE TO,

THOSE PRODUCTS

The Second Circuit’s majority opinion not only misappre-

hended the New York punitive damages standard, it also mis-

apprehended and misapplied applicable ‘‘state of the art’’

legal principles which preclude imposition of punitive dam-

ages in the case at bar.

Under the controlling New York law, the relevant ‘‘state of

the art’’ in products liability cases has been defined as ‘‘the

safety, technical, mechanical and scientific knowledge in

existence and reasonably feasible for use at the time of manu-

facture.’’*' Under this standard the jury in the case at bar

should have evaluated plaintiff Johnson’s claim only with

respect to evidence of knowledge of asbestos risks extant and

reasonably available to asbestos-product manufacturers at or

before 1945—the date of his last exposure to those products.

Instead, however, due to the district court’s consolidation of

the Johnson and Higgins cases and denial of defendants’

motions to ameliorate the prejudicial effect of that consolida-

tion, the jury heard and applied plaintiff Higgins’ 1946-66

state of the art evidence to Johnson’s claim.”

In upholding Mr. Johnson’s award of punitive damages the

Second Circuit’s majority opinion made an error all too com-

41 Bolm vy. Triumph Corp., 422 71 A.D.2d 429, 438, n.2, 422 N.Y.S.2d

969, 975, n.2 (N.Y. App. Div. 1979) (quoting Uniform Products Lia-

bility Law, § 106[a)}).

42 See Point III infra regarding the district court’s consolidation of the

Johnson and Higgins cases and the inadequacy of the trial court's

instructions to the jury to consider each plaintiff's claims individually.

mon in ‘‘failure to warn’’ toxic tort actions. The majority

erroneously assumed that once an asbestos-product manufac-

turer had knowledge that asbestos could cause a particular

ailment (e.g., asbestosis) under a particular set of exposure

circumstances (e.g., the use of raw asbestos fiber by factory

workers manufacturing insulation products)*’ it also necessar-

ily had knowledge of all other ‘‘dangers of asbestos.’’ See

Judge Mahoney’s original and revised opinions at Pet. App.

25a and 52a, respectively.

As Judge Mahoney points out, plaintiff Johnson’s punitive

damages evidence regarding the corporate defendants’ know]-

edge of the dangers of asbestos consisted of references to

medical literature and corporate communications indicating

that as of the mid 1940s there was information that workers

in asbestos-processing plants who experienced ‘‘direct and

sustained exposure to high concentration levels of asbestos

fibers’? could be harmed thereby. Judge Mahoney’s original

and revised opinions at Pet. App. 24a-25a and 5la-52a,

respectively. The record, however, ‘‘contains no evidence that

either medical researchers or asbestos manufacturers pos-

sessed, in the mid 1940s [the time of plaintiff Johnson’s last

exposure to asbestos] information establishing, or even pre-

dicting, that ‘bystanders’ [like Johnson who did not person-

ally use raw fiber or even finished asbestos products] might

experience unsafe levels of exposure in shipyards where fin-

ished hardbound insulation products containing asbestos were

in use. The award of punitive damages is, therefore, in my

view unsustainable.’’ Jd. at Pet. App. 25a and 52a, respec-

tively. This is so because under New York law punitive dam-

ages ‘‘are not properly chargeable against a defendant who

merely ‘should have known’ of the risk in question. It must

be shown that the defendant was aware of the risk, and that

he consciously disregarded it.’’ Jd. at Pet. App. 24a and Sla,

respectively.

43 Such manufacturing workers were generally exposed to much higher

concentration levels of airborne asbestos fibers than, for example,

insulators who worked with finished asbestos-containing products, or

‘*bystanders”’ like plaintiff Johnson who claimed exposure to asbestos-

containing products used by other workers.

Since there was no evidence below that the asbestos-

product manufacturers at bar had actual knowledge in the

mid 1940s that plaintiff Johnson’s ‘‘bystander’’ exposure to

finished asbestos-containing products could result in the ail-

ment he developed, ‘‘asbestosis-related pleural disease,’’™ his

award of punitive damages is improper under New York law

and should be corrected by this Court.*°

Ill.

THE SECOND CIRCUIT ERRED IN AFFIRMING THE

DISTRICT COURT’S CONSOLIDATION FOR TRIAL OF

TWO MARKEDLY DISSIMILAR FAILURE TO WARN

PRODUCT LIABILITY ACTIONS INVOLVING, INTER

ALIA, ENTIRELY DIFFERENT PERIODS OF EXPO-

SURE TO THE PRODUCT AND SIGNIFICANTLY

DIFFERENT STATE OF THE ART PROOFS

The Second Circuit’s affirmance of the district court’s con-

solidation for trial of two” ‘‘failure to warn’’ products liabil-

ity actions involving, inter alia, entirely different periods of

product exposure and markedly different ‘‘state of the art’’

proofs deprived petitioner of a fair trial and constitutes an

impermissible practice under Federal Rule of Civil Procedure

42 requiring an exercise of this Court’s supervisory powers.

Rule 42(a) of the Federal Rules of Civil Procedure*’ per-

mits the complete or partial consolidation of pretrial or trial

44 ‘Plaintiffs’ expert medical witness apparently was unwilling to char-

acterize Mr. Johnson’s condition as the more serious disease ‘‘asbesto-

sis,’’ but did not think it sufficiently mild to classify as ‘‘pleural

disease,’’ so he chose a middle ground by using the term which appears

in the text above. See Jt. App. 715.

45 See Point IB of Reasons for Granting the Writ supra.

46 _— Petitioner is aware that courts have on occasions consolidated signif-

icantly greater numbers of asbestos actions for trial, and that some of

those trials have resulted in defense verdicts. That alone, however,

does not prove that consolidation of the markedly different Johnson

and Higgins actions was proper, nor does it justify the obviously

unfair judgment at bar.

47 Reprinted at Pet. App. 70a.

proceedings involving common questions of law or fact. In so

providing the rule grants district courts broad discretion to

manage their dockets and promote judicial economy.*

In making consolidation rulings, a court should weigh the

potential time and cost savings to the parties, witnesses and

the court against the risks of prejudice, confusion, inconven-

ience and expense that may result from consolidation.” Anal-

ysis of factors governing consolidation decisions is more

likely to indicate consolidation of pretrial rather than trial

proceedings since the dangers of confusion, expense and prej-

udice are more likely to occur with respect to the latter.

Despite the latitude accorded trial judges with respect to

consolidation, their discretion is not totally unfettered and is

subject to appellate review under the abuse of discretion stan-

dard.*' Where prejudice to the rights of either party results

from an order of consolidation, such a ruling constitutes

reversible error.”

Petitioner respectfully maintains that the consolidation rul-

ing in the case at bar deprived Celotex of a fair trial and

resulted in a verdict which is demonstrably the result of prej-

udice and confusion.

As mentioned above, the district court, over defendants’

objections, consolidated the Johnson and Higgins actions for

trial several days before their separate trials were to com-

mence. Defendants objected to the consolidation because

48 OD. Herr, R. Haydock & J. Stempel, Motion Practice 291-95 (lst ed.

1985). [Hereinafter Herr, Motion Practice}.

49 Herr, Motion Practice 291-295; 9 C. Wright & A. Miller, Federal

Practice and Procedure §§ 2382-2383 (1971 & Supp. 1990).

SO = Herr, Motion Practice 292-95. This is true since trial consolidation

should be ordered only where actions can be tried before the same jury

with overlapping and largely congruent liability proofs. Jd. at 292-93;

295.

51 Herr, Motion Practice at 295.

$2. Dupont v. Southern Pacific Co., 366 F.2d 193, 196 (Sth Cir. 1966),

cert. denied, 386 U.S. 958 (1967).

21 %

although the two actions were superficially similar in several

respects, they were fundamentally different in ways which

precluded a fair consolidated trial.

Although Johnson and Higgins both worked at the Brook-

lyn Navy Yard, a huge facility,’ they did not do so during

the same period. That difference, as well as the vastly differ-

ent duration of their respective employments proved an insur-

mountable obstacle to a fair consolidated trial of two

“failure to warn’’ product liability actions where ‘‘state of

the art’’ evidence is crucial. Johnson worked at the yard as

an electrician’s helper during the three year period from 1942

to 1945; Higgins worked as a ‘‘chipper and caulker’’ for the

20 year period from 1946 to 1966. Since Johnson was not

exposed to asbestos-containing products after leaving the

yard,™ the jury deciding his claim should not have heard or

considered post-1945 ‘‘state of the art’’ evidence. Or, to put

it in other terms, the jury should have heard and considered

evidence of only those asbestos risks known to the scientific

and industrial community prior to 1945. But, unfortunately,

due to the consolidation and denial of defendants’ motion to

preclude introduction of any post-1945 evidence,” the jury

was permitted to hear evidence pertaining to the advances in

medical, scientific and industrial knowledge achieved during

$3 Mr. Johnson described the Brooklyn Navy Yard as having approxi-

mately 100,000 employees, and covering an area about three miles long

and one-half mile wide. See Jt. App. 10; 377-378. See also Jt. App.

383. See original and corrected majority opinions at Pet. App. 6a and

33a, respectively.

$4 See original and corrected majority opinions at Pet. App. 6a and

33a, respectively.

SS The majority opinion incorrecuy states that defendants moved ‘‘to

preclude all evidence of knowledge post-1945 in relation to plaintiff

Johnson .. . .’’ Original and corrected majority opinions at Pet.

App. 4a and 3la, respectively. Defendants actually moved to com-

pletely preclude introduction of such evidence. Joint Appendix at Jt,

App. 1783; 1784, line 19. At trial and in their appeal to the Second Cir-

cuit, defendants maintained that the introduction of plaintiff Higgins’

post-1945 state of the art evidence was prejudicial to defense of the

Johnson claim.

the subsequent 20 year period when Mr. Higgins was

employed. It was only during this latter period that the ‘‘state

of the art’’ began to include information that ‘‘bystander”’

asbestos exposure like that experienced by plaintiff Johnson

could cause his type of pulmonary injury.

Petitioner maintains that the failure of the jury to consider

Mr. Johnson’s and Mr. Higgins’ claims separately despite the

trial court’s instructions’ is demonstrated by the fact that the

jury found a similar duty to warn as to both plaintiffs,* and,

more significantly, awarded the plaintiffs almost identical

punitive damages: $3 million for Higgins and $2.8 million for

56 As Judge Mahoney noted in his dissent: ‘‘This record contains no

evidence that either medical researchers or asbestos manufacturers pos-

sessed, in the mid 1940s, information establishing, or even predicting,

that ‘bystanders’ might experience unsafe levels of exposure in ship-

yards where finished hardbound insulation products containing asbes-

tos were in use.’’ Judge Mahoney’s original and revised opinions at

Pet. App. 25a and 52a, respectively.

57 See original and corrected majority opinions at Pet. App. 10a and

37a, respectively (‘‘Instructions were given throughout the trial and in

the charge to caution the jury to consider each plaintiff’s claims indi-

vidually. Two separate verdict forms were provided to the jury, one

for Johnson, the other form for Higgins’’).

58 In holding defendants liable to both plaintiffs, the jury necessarily

found a duty to warn existed during both Mr. Johnson’s and Mr. Hig-

gims’ periods of employment. Under the controlling New York law, a

defendant’s duty to warn exists, if at all, only with respect to risks rea-

sonably knowable at the time of defendant’s manufacture of the prod-

uct. See, e.g., Bolm v. Triumph Corp., 71 A.D.2d 429, 438, n.2 and

preceding text, 422 N.Y.S.2d 969 (N.Y. App. Div. 1979). Yet, as Judge

Mahoney noted, there was no evidence in the mid 1940s that the state

of the art for asbestos included information that ‘‘bystanders’’ in ship-

yards were at risk. See Judge Mahoney’s original and revised opinions

at Pet. App. 25a and 52a, respectively.

While he would reverse the award of punitive damages as a matter of

law, Judge Mahoney upheld the compensatory award on the theory

that during the time of Johnson’s exposure, ‘‘appellants were aware

that the properties of asbestos were such that it could, at some level of

exposure, injure a human being.’’ Judge Mahoney’s original and

revised opinions at Pet. App. 24a and Sla, respectively. Petitioner

respectfully maintains that such generalized information is insufficient

to support even an award of compensatory damages.

Johnson. Since Mr. Higgins’ punitive claim was predicated

upon 20 additional years of defendants’ purported inaction in

the face of a duty to warn, it is impossible to believe that the

jury did not apply Higgins’ proofs to Johnson’s claim.

While the consolidation was most obviously prejudicial

with respect to the state of the art evidence, prejudice also

appears in the fact that the jury compensating Johnson,

‘essentially a well man,’’” also heard—and was improperly

swayed by-——evidence of Higgins’ slow death from serious

lung disease in graphic detail through the testimony of his

widow and son.”

Even if the case at bar did not arise from the large and

recently acquired asbestos docket of district courts in need of

guidance with respect to consolidation issues, it would still

warrant this Court’s grant of certiorari to correct the serious

injustice visited upon petitioner Celotex. The fact that it does

arise from such a docket, however, presents a stronger case

for this Court’s exercise of its discretion.

While recognizing that this Court cannot be asked to artic-

ulate a comprehensive set of trial consolidation guidelines for

all types of cases heard in the federal courts, petitioner

respectfully suggests that guidance from this Court counseling

consolidation of only those failure to warn product liability

actions with largely congruent liability or state of the art evi-

dence would help eliminate jury confusion and prejudice to

59 Mr. Johnson was so described by his own medical expert. Jt.

App. 650.

A recent empirical study supports the proposition that consolidating

a severely injured piaintiff’s trial with that of a plaintiff less severely

injured tends to result in overcompensation of the laicer, and under-

compensation of the former. Bordens & Horowitz, Mass Tort Civil

Litigation: The Impact of Procedural Changes on Jury Decisions,

Judicature (June-July, 1989) at 23.

60 They related his difficulties in breathing; how he brought a portable

oxygen unit to church with him (Jt. App. 9S), how he could not sleep

normally and was compelled to sit upright through the night dependent

upon a nearby oxygen unit (Jt. App. 71-72); how his lips and finger-

nails turned purple, and his feet swelled (Jt. App. 98); and how he

finally suffocated to death (Jt. App. 99-101).

defendants in thousands of cases. Indeed, the fact that the

district court and the Second Circuit had to resort to and

purported to utilize a rather general (and non-hierarchical)

eight-factor trial consolidation test contained in an unre-

ported Maryland district court opinion®’ strongly suggests the

need for guidance from this Court. Even a ruling from this

Court which serves to encourage the lower courts to develop

more meaningful consolidation standards than those

employed in the case at bar would be beneficial.

Even if this Court does not find the instant case an appro-

priate vehicle for enunciation of consolidation standards for

asbestos or toxic tort dockets, an exercise of this Court’s

supervisory powers is necessary to instruct lower courts—

especially those dealing with crowded dockets—that Rule

42(a) does not provide license to consolidate markedly dissim-

ilar actions. Indeed, district courts such as the Eastern and

Southern Districts of New York with hundreds or thousands

of pending asbestos cases to choose from have absolutely no

need to prejudice defense of those cases by combining

moderately—much less markedly—dissimilar actions in order

to achieve judicial economy.”

61 Although the Second Circuit repeated and purported to utilize an

eight-factor trial consolidation test set forth in an unreported Mary-

land district court opinion, it upheld the consolidation of Johnson and

Higgins despite the fact that the two actions differed as to three of the

most crucial elements of that test: (3) period of exposure, (4) type of

disease and (5) whether plaintiffs were living or deceased. Petitioner

respectfully maintains that the district court below gave undue weight

to the criterion least important from the standpoint of avoiding deci-

sion On an improper basis: (6) both Johnson and Higgins were ready

for trial at the same time. See Statement of the Case supra regarding

consolidation of Johnson and Higgins several days before their sepa-

rate trials were to begin.

62 Given the great number of pending Brooklyn Navy Yard asbestos

personal injury actions, the district court, perhaps with the assistance

of counsel, surely could have found another case with an exposure

period similar, if not identical, to that of plaintiff Johnson.

CONCLUSION

For all the foregoing reasons, the petition should be

granted and the case given plenary review. In the event this

Court decides plenary review is umnecessary, petitioner

respectfully urges the Court to grant certiorari, vacate the

judgment below and remand the case to the district court for

a new tmal on the ground that the consolidated trial was

improper. If the Court declines to grant a new trial, peti-

tioner respectfully requests that the Court enter judgment in

favor of Celotex as a matter of law with respect to plaintiff’s

punitive damages claims, or remand the case to the Second

Circuit for reconsideration of the punitive damages, state of

the art and consolidation issues.

Respectfully submitted,

ANDREW T. BERRY

Counsel of Record

KEVIN J. CONNELL

MCCARTER & ENGLISH

Four Gateway Center

Andrew T. Berry 100 Mulberry Street

Of Counsel Newark, New Jersey 07102

Kevin J. Connell (201) 622-4444

On the Brief Attorneys for Petitioner

August 22, 1990

APPENDIX

— * Siig ate i A ee a 8

TABLE OF CONTENTS

Opinion of the United States Court of Appeals for the

Second Circuit, Dated March 20, 1990............

Letter Dated April 20, 1990 Amending Opinion of the

United States Court of Appeals for the Second Cir-

Cul, GRE TE i GU Sk db nce cctsdescésccces

Corrected Opinion of the United States Court of

Appeals for the Second Circuit, Dated March 20,

PEP CT EET OCCT Oe Te Oe ee ee

Memorandum and Order of the United States District

Court (Joint Eastern and Southern Districts Asbestos

Litigation), Dated February 3, 1989...............

Order of the United States Court of Appeals for the

Second Circuit on Rehearing, Dated May 24, 1990.

Judgment of the United States Court of Appeals for

the Second Circuit, Dated March 20, 1990.........

Pee. ee Ge Ce PD a oda cccecncdcesesacses

Judgment of the United States District Court for the

Southern District of New York, Dated February 10,

SEE ccéuncnes ¢hunessbbhe seunbbdabnaeeenaanenedl

Amended Judgment of the United States District Court

for the Southern District of New York, Dated

PEE Fi Be vk scuthedeesccasecssbeogunésesexes

PAGE

27a

28a

S3a

67a

68a

70a

7la

PAGE

Partial Satisfaction of Judgment, Dated July 6, 1990. 76a

Petition For Rehearing And Suggestion Of Rehearing

En Banc, Filed in the United States Court Of

Appeals For The Second Circuit, Dated April 3,

PE dik eb end beds bnnksicedeanenedsndesekinecs 78a

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Nos. 341, 342—August Term, 1989

(Argued: November 2, 1989 Decided: March 20, 1990)

Docket Nos. 89-7484, 89-7542

JOHN E. JOHNSON and h/w ANN MARIE JOHNSON,

Plaintiffs-Appellees,

—against—

THE CELOTEX CORPORATION, OWENS-ILLINOIS, INC.,

Defendants-Appellants.

Before:

MINER and MAHONEY, Circuit Judges,

and CARMAN, Judge.*

—

Defendant-appellant The Celotex Corporation appeals

from a judgment entered after a jury verdict and from

orders of the United States District Court for the South-

S Honorable Gregory W. Carman, Judge, United States Court of

International Trade, sitting by designation.

ern District of New York regarding Joint Eastern and

Southern Districts Asbestos Litigation, (Sifton, J.),

denying its motions for judgment notwithstanding the

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

mistrial. Defendant-appellant Owens-Illinois, Inc.

appeals from the same judgment and from orders deny-

ing its motion for judgment notwithstanding the verdict

and its motion for a new trial or, in the alternative, for

a remittitur.

Affirmed. Judge Mahoney concurs in part and dis-

sents in part in a separate opinion.

STEVEN J. PHILLIPS, New York, New York

(LEVY PHILLIPS & KONIGSBERG, Diane

Paolicelli, New York, New York, of

counsel), for Plaintiffs-Appellees.

ANDREW T. BERRY, Newark, New Jersey

(MCCARTER & ENGLISH, Newark, New

Jersey, of counsel), for Defendant-

Appellant The Celotex Corporation.

FRANK H. SANTORO, Hartford, Connecticut

(DANAHER, TEDFORD, LAGNESE &

NEAL, P.C., Joyce A. Lagnese, Paul J.

Narducci, Wendy W. Wanchak, Hart-

ford, Connecticut, of counsel), for

Defendant-Appellant Owens-Illinois,

Inc.

CARMAN, Judge:

Defendant-appellant The Celotex Corporation (Celo-

tex or appellant) appeals from a judgment entered in the

Southern District of New York after a jury trial before

Charles P. Sifton, J., regarding Joint Eastern and

Southern Districts Asbestos Litigation, awarding com-

pensatory and punitive damages and damages for loss of

consortium in an asbestos products liability personal

injury case. Celotex appeals from orders denying its

motion for judgment notwithstanding the verdict, or in

the alternative, a new trial and for a mistrial.

Defendant-appellant, Owens-Illinois, Inc. (Owens-

Illinois or appellant) appeals from the same judgment

and orders denying its motion for judgment notwith-

standing the verdict and its motion for a new trial or, in

the alternative, for a remittitur.

Appellants request us to reverse the judgment below

or, in the alternative, vacate the judgment and remand

for a new trial. In the alternative, appellants ask us to

vacate the punitive damages award and remand for a

new trial on the issue of punitive damages.

BACKGROUND

This appeal is one of many which arises from thou-

sands of cases filed against manufacturers and producers

of asbestos, resulting in unparalleled litigation in Ameri-

can tort law. See Racich v. Celotex Corp., 887 F.2d 393,

394 (2d Cir. 1989); In re School Asbestos Litigation, 789

F.2d 996, 1000 (3d Cir.), cert. denied, 479 U.S. 852

(1986). The cases have been filed pursuant to New

York’s one-year revival statute for certain toxic torts,

including alleged asbestos related torts, 1986 N.Y. Laws,

ch. 682, § 4. To manage the litigation, all of the cases in

the Southern and Eastern Districts were assigned for

pre-trial purposes to Judge Sifton. Racich, 887 F.2d at

395.

At a pretrial conference on November 4, 1988, the

court proposed that another asbestos tort case, Higgins

v. Raymark Industries, Inc., CV-87-0537 (S.D.N.Y.), be

consolidated with Johnson which was scheduled for trial

on November 7, 1988. The trial court ordered on

November 7, 1988 that Higgins and Johnson be consoli-

dated for trial. Plaintiff Higgins, a chipper and caulker,

whose work included chipping off welded sections to

prepare for repair work of others, was alleged to have

died because of exposure to asbestos while at the Brook-

lyn Navy Yard from approximately 1946 to 1966.

Appellee-plaintiff, John Johnson (plaintiff), an electri-

cian’s helper, alleged that he had contracted lung disease

while working at the Brooklyn Navy Yard from 1942 to

1945 by inhaling asbestos fibers during this employment.

In Johnson and Higgins compensatory and punitive

damages were sought for claims sounding in negligence

and strict liability for defendants’ failure to warn of the

health risks of their asbestos-containing products.

The Court declined to trifurcate or bifurcate the trial

to separate issues of causation and compensatory dam-

ages from issues of liability and punitive damages.

Appellants’ motions to have separate juries consider

claims of liability and punitive damages in Johnson,

apart from claims in Higgins, were denied. Appellants’

motion to preclude all evidence of knowledge post-1945

in relation to plaintiff Johnson was denied. Eight defen-

dants settled and one filed a petition in bankruptcy prior

to trial. The Higgins and Johnson cases proceeded to

trial against defendants Celotex, Owens-Illinois and

Raymark Industries, Inc. (Raymark). The jury rendered

a verdict for the plaintiffs in both cases. In Higgins,

plaintiff was awarded $1 million in compensatory dam-

ages and $3 million in punitive damages, divided equally

among Celotex, Raymark and Owens-Illinois. In John-

son compensatory damages were $350,000 (Celotex

12.5%, Raymark 12.5%, Owens-Illinois 5.0%, seven

settling co-defendants 10% each), and punitive damages

were assessed as follows: Celotex $1 million, Raymark

$1 million and Owens-Illinois $800,000. Plaintiff Ann

Marie Johnson was awarded $30,000 for loss of services.

After the verdict, but before entry of judgment, it was

discovered that Celotex had never been named or served

as a defendant in the Higgins case. Further, since Flor-

ida was the principal place of business of Celotex and

the residence of plaintiff in Higgins, the trial court

determined there was lack of diversity as to Celotex.

In response to post-trial motions the Court ordered an

amendment to the pleadings to add Celotex as a party-

defendant pursuant to Rule 15(b) of the Federal Rules

of Civil Procedure. The Court then dismissed the com-

plaint in the Higgins case as to Celotex for lack of juris-

diction and retained its diversity jurisdiction over

defendants Raymark and Owens-Illinois. A subsequent

bankruptcy proceeding has stayed this case with regard

to Raymark.

FACTS

Plaintiff John Johnson, an employee of the United

States Navy, worked as an electrician’s helper at the

Brooklyn Navy Yard from 1942 to 1945. The Brooklyn

Navy Yard covered an area of about three miles and in

the entire yard there were approximately 20 ships under

construction or repair. He installed electrical wiring in

new and older ships. Although Johnson did not work

with any product that he knew contained asbestos, he

worked in the vicinity of other tradespeople who

installed asbestos insulation material on ships. Johnson

could not identify by name any workers in his vicinity

or the trade name or manufacturer of any asbestos

materials used at the shipyard. Johnson recalled working

on destroyers, battleships and in particular remembered

working on the Jowa, the Missouri and the Franklin at

the yard. He testified that his work area was always

dusty and that he would brush off a very fine snow-like

dust that accumulated on his clothes.

Product identification testimony was based upon the

testimony of other workers employed at the Navy Yard

at approximately the same time as Johnson. The co-

workers identified over a dozen makers of asbestos-

containing products used at the Navy Yard at different

times.

In 1945, Johnson left the Navy Yard and was not

later exposed to any other asbestos containing products.

In 1985, after retirement, Johnson was diagnosed with a

lung condition which was attributed to asbestos expo-

sure.

CONTENTIONS OF THE PARTIES

Appellants contend the trial court abused its discre-

tion in consolidating the Johnson and Higgins cases.

They further urge the connection with plaintiff’s injury

and appellants’ products was insufficient as a matter of

law. As to the issue of punitive damages, appellants

maintain the Fourteenth Amendment bars an award of

punitive damages because appellants have been subjected

to repeated punitive damages for the same course of

conduct. They also claim procedural due process viola-

tions and contend that the punitive damages were not

supported by the evidence as a matter of law. Lastly,

appellants claim the improper conduct of the trial court

together with inflammatory conduct by counsel for

plaintiff and improper rulings allowed the jury to hear

evidence that should not have been heard, all resulting

in a verdict which was the result of pressure and preju-

dice and which should be revised.

Appellants seek reversal of the judgment, or in the

alternative, request that the judgment be vacated and

the case be remanded for a new trial as to all issues.

Celotex requests that in the alternative, the punitive

damage award should be vacated and the case remanded

on the issue of punitive damages. Plaintiff seeks affirm-

ance of the judgment below.

DISCUSSION

Consolidation

Rule 42(a) of the Federal Rules of Civil Procedure

empowers a trial judge to consolidate actions for trial

when there are common questions of law or fact to

avoid unnecessary costs or delay. Ellerman Eines, Ltd.

v. Atlantic & Gulf Stevedores, Inc., 339 F.2d 673 (3d

Cir. 1964), cert. denied, 382 U.S. 812 (1965); Zervos v.

S.S. Sam Houston, 427 F. Supp. 500 (S.D.N.Y. 1976),

aff’d, 636 F.2d 1202 (2d Cir. 1980).

Consolidation of tort actions sharing common ques-

tions of law and fact is commonplace. See, e.g., Arnold

v. Eastern Air Lines, Inc., 681 F.2d 186 (4th Cir. 1982),

cert. denied, 460 U.S. 1102 (1983); Kershaw v. Sterling

Drug, Inc., 415 F.2d 1009 (Sth Cir. 1969). This is true

of asbestos-related personal injury cases as well. See,

e.g., Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d

1492 (llth Cir. 1985); Neal v. Carey Canadian Mines,

Ltd., 548 F. Supp. 357 (E.D. Pa. 1982), aff’d sub nom.

Van Buskirk v. Carey Canadian Mines, Ltd., 760 F.2d

481 (3d Cir. 1985); Wilson v. Johns-Manville Sales

Corp., 107 F.R.D. 250 (S.D. Tex. 1985).

The trial court has broad discretion to determine

whether consolidation is appropriate. See, e.g., Midwest

Community Council, Inc. v. Chicago Park Dist., 98

F.R.D. 491 (N.D. Ill. 1983); Stemler v. Burke, 344 F.2d

393 (6th Cir. 1965). In the exercise of discretion, courts

have taken the view that considerations of judicial econ-

omy favor consolidation. See, e.g., Romacho v. Stanley,

567 F. Supp. 1417, 1419 n.2 (S.D.N.Y. 1983), aff’d sub

nom. Morse v. Stanley, 732 F.2d 1139 (2d Cir. 1984).

However, the discretion to consolidate is not unfettered.

Arnold v. Eastern Air Lines, Inc., 712 F.2d 899 (4th

Cir. 1983) (en banc), cert. denied, 464 U.S. 1040 (1984).

Considerations of convenience and economy must yield

to a paramount concern for a fair and impartial trial.

Flintkote Co. v. Allis-Chalmers Corp., 73 F.R.D. 463

(S.D.N.Y. 1977). When exercising its discretion, the

court must consider:

{[W]hether the specific risks of prejudice and possi-

ble confusion [are] overborne by the risk of incon-

sistent adjudications of common factual and legal

issues, the burden on parties, witnesses and availa-

ble judicial resources posed by multiple lawsuits,

the length of time required to conclude multiple

Suits as against a single one, and the relative

expense to all concerned of the single-trial,

multiple-trial alternatives.

Hendrix, 776 F.2d at 1495 (quoting Arnold, 681 F.2d at

193). When considering consolidation, a court should

also note that the risks of prejudice and confusion may

be reduced by the use of cautionary instructions to the

jury and verdict sheets outlining the claims of each

plaintiff. Id.

In the instant case, the court properly exercised its

discretion in consolidating these two cases for trial.

Courts in the Southern and Eastern Districts of New

York have used the criteria outlined in an unreported

Maryland district court case, Jn re All Asbestos Cases

Pending in the United States District Court for the Dis-

trict of Maryland, slip op. (D. Md. Dec. 16, 1983) (en

banc), (hereinafter Jn re Maryland Asbestos Cases) as a

guideline in determining whether to consolidate asbestos

exposure cases. See, e.g., In re Joint Eastern and South-

ern Districts Asbestos Litigation, 125 F.R.D. 60, 64

(E.D.N.Y./S.D.N.Y. 1989); In re Joint Eastern and

Southern Districts Asbestos Litigation, slip op. at 7

(E.D.N.Y./S.D.N.Y. Jan. 16, 1990). In Jn re Maryland

Asbestos Cases, the criteria included: ‘‘(1) common

worksite; (2) similar occupation; (3) similar time of

exposure; (4) type of disease; (5) whether plaintiffs were

living or deceased; (6) status of discovery in each case;

(7) whether all plaintiffs were represented by the same

counsel; and (8) type of cancer alleged ... .’’ In re

Maryland Asbestos Cases at 3. Johnson and Higgins

had the following characteristics: (1) common worksite;

10a

(2) similar occupation to the extent that both workers

were exposed to asbestos in a bystander capacity (they

worked in trades that did not involve direct handling of

asbestos products); (3) Johnson’s period of exposure

was from 1942 to 1945 while Higgins’ exposure was

from approximately 1946 to 1966; (4) Johnson con-

tended that he suffered from asbestosis and asbestosis-

related pleural disease while it was alleged that Higgins

died as a result of asbestosis and lung disease; (5) John-

son was living and Higgins was deceased; (6) Johnson

and Higgins were both ready for trial; and (7) all plain-

tiffs were represented by the same counsel. Instructions

were given throughout the trial and in the charge to cau-

tion the jury to consider each plaintiff’s claims individu-

ally. Two separate verdict forms were provided to the

jury, one for Johnson, the other for Higgins.

An appellate court will not disturb a trial court’s deci-

sion to consolidate unless a clear abuse of discretion is

shown. Hendrix, 776 F.2d at 1495. In the instant case,

the trial court was well within its discretion to consoli-

date the two cases and the court acted throughout in a

manner which ensured that each plaintiff’s claim was

considered separately.

Connection Between Plaintiff’s Injury and

Appellants’ Product

In order to succeed on his claim, plaintiff had the

burden of proving to the jury that he was exposed to

appellants’ merchandise and that it is more likely than

not that this exposure was a substantial factor in his

injury. Derdiarian yv. Felix Contracting Corp., 51

N.Y.2d 308, 434 N.Y.S.2d 166, 414 N.E.2d 666 (1980).

Plaintiff had to establish that his injury was proximately

lla

caused by appellants’ asbestos and produce evidence

identifying each appellant’s product as being a factor in

his injury. Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487,

541 N.Y.S.2d 941, 539 N.E.2d 1069, cert. denied, 110 S.

Ct. 350 (1989). Piaintiff admits to presenting to the jury

‘fan unusually detailed circumstantial case.’’ Plaintiff

contends that by the ‘‘cumulative and uncontradicted

nature’’ of the case, the jury was able to conclude not

only that there was exposure, but was compelled to

come to that result.

Plaintiff worked at the Navy Yard from 1942 to 1945

as an electrician’s helper on board ships including the

Missouri, the Jowa and the Franklin. Testimony was

provided by eleven men who worked at the Navy Yard

in various capacities, some during the same time period

as Johnson, some before and after plaintiff’s employ-

ment. Witness James Shannon worked at the Navy Yard

from 1940 to 1965 as a plumber’s helper and a welder.

Shannon recalled working on the Jowa at some time

between 1940 and 1944 and identified Philip Carey

(Celotex) products, including fifty-pound bags of asbes-

tos cement with the words ‘‘Philip Carey’’ written on

them, and Owens-Illinois products, including asbestos

pipe covering and the brown boxes containing this mate-

rial both bearing the name ‘‘Owens-Illinois,’’ as being in

use during that time period on board the Jowa. Shan-

non’s testimony indicated that the only two ships he

worked on during the time period 1940-1944 were the

North Carolina and the Jowa. He remembered working

first on the North Carolina, for at least one year and

possibly two, before working on the Jowa. From his tes-

timony, the jury could infer that he worked on the Jowa

during the latter part of this time frame which would

l2a

place Shannon and Johnson on the Jowa at the same

time.

Several of the witnesses testified as to the close inter-

action of the different crews working together. Moe

Rapchik, a sheet metal worker from 1941 to 1945 who

worked on board the Jowa in 1942, stated that in the

course of his employment he worked with ‘‘almost every

different crew that the Navy Yard had to offer which

was electricians, machinists, shipfitters, pipefitters and

asbestos installers.’’ Joint Appendix at 322. Although

Rapchik could not recall the specific company names of

the products used on board the Jowa, he identified

Owens-Illinois’ Kaylo pipe covering and Celotex’s Philip

Carey asbestos cement as being in use during the time

period 1941 to 1945 and stated that the products

installed on the Jowa were the same types of products

that were installed on every other ship he worked on.

Rapchik described the asbestos fibers in general as being

“‘fajll over the deck . . . . We crushed them with our

feet as we walked . . . and that is how we got it all over

our clothes and when we got home at night, we were

white all over.’’ Joint Appendix at 329. These descrip-

tions conform to plaintiff's own testimony of working

in close, dusty surroundings with other crew members.

Appellants contend that there was insufficient evi-

dence to establish proximate cause and that therefore

the case should not have gone to the jury. As an appel-

late court, we are ‘‘ ‘bound to view the evidence in the

light most favorable to [the plaintiff] and to give [him]

the benefit of all inferences which the evidence fairly

supports, even though contrary inferences might reason-

ably be drawn.’ ’’ Michelman v. Clark-Schwebel Fiber

Glass Corp., 534 F.2d 1036, 1042 (2d Cir.) (quoting

l3a

Continental Ore Co. v. Union Carbide & Carbon Corp.,

370 U.S. 690, 696 (1962)), cert. denied, 429 U.S. 885

(1976). As the Sixth Circuit noted in Pratt v. National

Distillers & Chemical Corp., ‘‘We are not to reweigh

evidence to reach our own conclusions about the cor-

rectness of a jury’s decision; our task is simply to deter-

mine whether reasonable jurors could, under any theory

submitted to them, have resolved the dispute as they

did.”’ 853 F.2d 1329, 1337 (6th Cir. 1988), cert. denied,

109 S. Ct. 1121 (1989). Reviewing the evidence in the

light most favorable to the plaintiff, we find that proxi-

mate cause existed and that the jury’s verdict must be

upheld.

Punitive Damages

Appellants contend that the Fourteenth Amendment

bars the award of punitive damages in this case because

subjecting the appellants to repeated punitive damages

violates their substantive due process rights. Appellants

further maintain that their procedural due process rights

were violated by the way in which the punitive damages

claim was tried in this case. They also claim that the

award of punitive damages was not supported by the

evidence as a matter of law.

Appellants argue that the multiple imposition of puni-

tive damages against them for the same course of con-

duct offends the fundamental fairness inherent in due

process. They cite Browning-Ferris Indus. v. Kelco Dis-

posal, Inc., __._ —U.S. ___., 109 S. Ct. 2909, 2921

(1989), where the Supreme Court explicitly refused to

consider ‘‘whether due process acts as a check on undue

jury discretion to award punitive damages in the absence

of any express statutory limit’’ because this question was

l4a

not before the court. While refraining from addressing

this issue directly, the opinions made clear that this

question was a substantial one. Jd. at 2921 n.23. See

also the opinions by Justice Brennan (joined by Justice

Marshall), id. at 2923-24, and Justice O’Connor (joined

by Justice Stevens), id. at 2924.

This Court recently reviewed the issue of punitive

damages in an asbestos-related personal injury action in

Racich v. Celotex Corp., 887 F.2d 393. In Racich,

appellant Celotex contended, inter alia, that the plain-

tiffs claim for punitive damages was not permitted

under New York’s one-year revival statute, 1986 N.Y.

Laws, ch. 682, § 4, and that punitive damages were

inappropriate as a matter of New York law and public

policy. The Court found Celotex’s arguments to be

unpersuasive. While Celotex raised a substantive due

process claim, arguing that multiple imposition of puni-

tive damages for the same course of conduct offended

fundamental fairness, the Court did not reach that issue

since Celotex did not preserve it for appellate review. Jd.

at 398. In the instant case, the substantive due process

claim that multiple imposition of punitive damages for

the same course of conduct violated fundamental fair-

ness has been preserved on appeal by only one appel-

lant, Owens-Illinois, who raised this issue in its

Memorandum in Support of a Motion for a Judgment

Notwithstanding the Verdict. Appellant Celotex failed to

raise this due process argument prior to briefing for this

appeal. A careful reading of Defendants’ Memorandum

of Law in Support of Defendants’ Motion to Dismiss

and for Summary Judgment does not bear out appellant

Celotex’s contention that this claim was raised. We

decline to set aside the punitive damages awarded by the

jury since there has been insufficient proof to demon-

15a

strate an unjust result of multiple imposition of punitive

damages for the same course of conduct.

Appellant Celotex asked this Court to take judicial

notice of punitive damages in judgments against them in

not only the Southern and Eastern Districts of New

York, but in ‘‘appeals pending in other cases before this

Court, as well as judgments entered in the dockets of

the district courts of this and other circuits.’’ Reply

Brief for Defendant-Appellant The Celotex Corporation

at 14. Appellant Owens-Illinois noted that it advised the

trial court of punitive damage awards made, but not

paid, in two Southern District cases. Plaintiff contends

that substantial portions of the punitive damages

assessed have not been paid out by appellants and that

in some cases which have been settled or are still on

appeal, no punitive damages have been paid at all.

Appellants themselves provide no documentation as to

exactly how much money they have actually paid in

punitive damages.’ The record here simply is insufficient

to permit an examination of the claim that there is a

multiple award of punitive damages offensive to the

fundamental fairness inherent in due process.

As the Court noted in Racich, ‘‘we do not write upon

a clean slate... .”’ 887 F.2d at 399. In Roginsky v.

Richardson-Merrell, Inc., 378 F.2d 832, 835 (2d Cir.

1967), a claim was made that multiple awards of puni-

tive damages based upon the same course of conduct

was a violation of due process. The Court observed that

there was ‘‘the gravest difficulty in perceiving how

claims for punitive damages in such a multiplicity of

1 Owens-Illinois has advised the Court post-argument in this case, that

a punitive damage award in the amount of $554,194.00 was recently

paid by it in Passentino v. Raymark Indus., CV-87-5019 (S.D.N.Y.).

l6a

actions throughout the nation can be so administered as

to avoid overkill.’’ Jd. at 839. The Court concluded,

however, that ‘‘the New York cases afford no basis for

our predicting that the Court of Appeals would adopt a

rule disallowing punitive damages in a case such as

{Roginsky], and the Erie doctrine wisely prevents our

engaging in such extensive law-making on locai tort lia-

bility... .’’ Id. at 841.

In Racich, the Court pointed out that while we did

not reject the argument that an award of punitive dam-

ages unless governed by precise standards violates due

process, we did not accept that argument, ‘‘believing

that the only course open . . . was ‘the more modest’

task of ‘assessing the sufficiency of the evidence within

the framework’ of New York law.’’ 887 F.2d at 399

(quoting Roginsky, 378 F.2d at 841). The Court in

Racich said:

[W]e are here asked to hold. . . that the common-

law standards applied by the courts of New York

for imposition of punitive damages are unconstitu-

tional, and that our own cases applying that law

were in error... . This would be a far-reaching

holding indeed, particularly in the context of mass

tort litigation that suggests the need for a uniform,

national rule on the issue. Under all the circum-

stances, we believe that such a step, if it is to be

taken (and we express no view as to that), is best

left for Congress or for higher judicial authority.

Id. (citations omitted). We follow this same course, and

leave for another day and a better documented record

the question of whether successive awards are violative

of due process.

17a

In the instant case, the trial judge informed the jury

in his charge that punitive damages may be awarded if

plaintiffs ‘‘clearly and convincingly established that the

acts of a defendant [the jury was] considering causing

the injury you [sic] complained of were wanton and

reckless.’’ Joint Appendix at 2123. An act was defined

as wanton and reckless when ‘‘done in such a manner

and under such circumstances as to show heedlessness

and an utter disregard of the results upon the rights and

safety of others that may flow from doing the act, or in

the manner in which it is done.’’ Jd. at 2124. No claim

has been made by appellants that this charge was not in

accordance with New York law.

A review of the evidence shows that the award of

punitive damages was supported by the evidence as a

matter of law. Plaintiff produced evidence at trial

through expert witnesses, medical reports and docu-

ments from which the jury could reasonably conclude

that appellants acted in a wanton or reckless manner.

For example, plaintiff's expert witness testified that a

link between asbestos and lung cancer was suspected as

early as 1930 and that this link was considered to be

probable shortly after 1940. Another expert witness

stated in his deposition that by 1942 there were enough

cases of the association between lung cancer and asbes-

tos to include this information in a medical textbook on

Occupational cancer. A former employee of Owens-

Illinois testified that workers at a New Jersey plant,

including plant executives, wore respirators in the areas

of loose raw material including asbestos. The jury was

free to conclude from this and other evidence presented

that appellants knew or should have known of the dan-

gers of asbestos and did not adequately protect or warn

18a

users of asbestos, thereby acting in a wanton or reckless

manner.

Appellants further maintain that their procedural due

process rights were violated by the manner in which the

punitive damages claim was tried. Owens-Illinois specifi-

cally contends that the consolidation of Johnson and

Higgins and the failure to erect procedural safeguards

during the consolidated trial violated appellants’ due

process rights. Since we have found the consolidation

was not an abuse of discretion, and since the trial judge

carefully instructed the jury throughout the trial to con-

sider each plaintiff’s claims individually, there was no

need to provide other procedural safeguards concerning

the consolidation.

Owens-Illinois admits that it never specifically made a

request for bifurcation of the damages aspect of the

punitive damages claim, but argues that it did make a

motion to bifurcate the entire punitive damages claim as

well as a motion to trifurcate all triable issues. Appel-

lant further argues that the trial judge granted bifurca-

tion in a previous asbestos-related personal injury case.

Plaintiff contends that the trial court invited appellants

to bifurcate the damages aspect of the punitive damages

claim and that appellants made a tactical decision not to

give the jury two separate opportunities to assess dam-

ages against them. Regardless of appellants’ motives in

fashioning a motion for bifurcation, the fact that bifur-

cation did not occur is not necessarily prejudicial to

appellants. The decision to bifurcate is within the discre-

tion of the trial judge. Jn re Master Key Antitrust Liti-

gation, 528 F.2d 5, 14 (2d Cir. 1975). The fact that a

previous case tried by the same judge was bifurcated has

no bearing on the instant case.

19a

Conduct of the Court and Counsel

Appellants contend that improper conduct of the trial

court and inflammatory conduct by plaintiff’s counsel

during summation denied them a fair and impartial

trial.

Owens-Illinois alleges specifically that counsel

described witnesses as ‘‘liar[s]’’, ‘‘sleaze’’ and

*‘clown[s}.’" Appellants contend they were prejudiced

both by counsel’s use of the words ‘‘evil’’ and

**vicious’’ to describe them, and counsel’s characteriza-

tion of appellants’ defense as ‘‘obscene’’, ‘‘ugly’’ and

“‘ridiculous.”’ Appellants also complain of counsel’s

invocation of the ‘‘Golden Rule’’ (do unto others as you

would have them do unto you) and the use of a strategy

that included an appeal to class prejudice. This Court

finds that counsel’s behavior did not rise to the level of

denying appellants a fair and impartial trial.

Throughout the normal course of the trial and in his

final charge, the trial judge instructed the jury to decide

the case in a rational manner based on the evidence pre-

sented and not on emotions, sympathy, prejudice, or

bias. In denying appellants’ motion for mistrial, the trial

judge determined that none of the derogatory descriptive

Statements complained of was so inflammatory as to

require a new trial. The court found that all but two of

the counsel’s alleged appeals to the Golden Rule argu-

ment related to liability only and not damages and were

therefore not improper. Burrage v. Harrell, 537 F.2d

837 (Sth Cir. 1976). The remaining two instances were

determined to be of a nature that would not unduly

affect the jury in light of the judge’s charge. The appeal

to class prejudice was found to be of a class of remarks

which are not per se grounds for a new trial and in the

20a

context of the entire summation, did not create undue

passion. We agree. Great discretion is to be given the

judge who was present throughout the trial and is best

able to determine the effect of the conduct of counsel

on the jury. Arnold, 681 F.2d at 194.

Appellants contend that the tria! judge failed to con-

trol the behavior of plaintiff’s counsel and that the

judge himself contributed to an atmosphere not condu-

cive to fair play by questioning the plaintiff and coach-

ing his answers. Celotex points specifically to two

exchanges between the judge and the plaintiff.”

2 The judge asked Mr. Johnson ‘‘to remember what it was like back

then and select the words that will describe it sufficiently so that these

people here, who weren’t there, can, in their minds, have some idea of

what you saw.’’ The judge then went on to question Mr. Johnson

about what his work site looked like. Joint Appendix at 15.

In another instance, after plaintiff had described his feelings when

learning of the results of his x-ray, the judge engaged Mr. Johnson in

the following colloquy:

THE Court: Before you go on, since the jury is going to have to

make some decisions on this, I think we ought to get a little more

on this than we have. When you talked to Doctor Spinnato in

December, he said go and have the CAT scan and pulmonary func-

tion test.

I imagine you had some reaction to what he said to you.

THE WITNESS: He just said he seen [sic] some spots on the X-ray.

THE Court: Did you react to that or no?

THE WITness: I didn’t know what to think. I didn’t know what was

wrong.

THE Court: Let me suggest some words to you over a different

range and tell me if those—if any of these is an adequate explana-

tion of what you were feeling.

These are a whole bunch of alternatives not meant to suggest that

any One is appropriate.

. . . The question is whether any of these words, if any of these

are appropriate. If none are appropriate, tell me.

2la

The trial judge also brought to the attention of all

counsel that he had heard testimony of one of appel-

lants’ expert witnesses in a previous case and had found

the witness to be less than credible. One defense counsel

expressed concern that the judge could sit fairly on the

instant case and stated that the judge had been acting in

an uncomplimentary manner throughout the witness’

testimony. The judge denied defense counsel’s character-

ization of his manner during the testimony.

It is well settled that a judge is authorized to ask

questions of a witness which may aid the understanding

of the jury. United States v. Lamont, 565 F.2d 212, 220

(2d Cir. 1977) cert. denied, 435 U.S. 914 (1978). In the

instant case, Mr. Johnson has been described by his

counsel and an expert appellant witness as a man of few

words. It would appear then, that the judge was merely

attempting to clarify matters that seemed to call for fur-

ther explanation, as the judge told the jury in his

charge.

As to the manner of the judge throughout the testi-

mony of the expert witness, we are satisfied that his

instructions to the jury cured even the appearance of

any impropriety.’ United States v. Robinson, 635 F.2d

A reaction of calm, resigned, depressed, scared, are any of those

appropriate?

THE WITNESS: Depressed and scared.

Joint Appendix at 31-32.

3. ~—‘ The judge stated:

Now, I don’t reach a determination myself or express any opin-

ion as to how you should decide the facts of the case; that’s your

function. That's why we have jurors.

(footnote continued)

22a

981, 985 (2d Cir. 1980), cert. denied, 451 U.S. 992

(1981).

CONCLUSION

For the above-stated reasons the judgment of the dis-

trict court is affirmed.

MAHONEY, Circuit Judge, concurring in part and dis-

senting in part:

I agree with the majority that the district court’s deci-

sion to consolidate Higgins and Johnson was a permissi-

ble exercise of discretion, that a reasonable jury could

find a causal connection between appellants’ products

and plaintiff’s injury, and that there is no basis for

reversal in the conduct of the trial court and plaintiff’s

counsel. I respectfully dissent, however, from the major-

ity’s conclusion that punitive damages are adequately

supported by the evidentiary record, and would reverse

the award of punitive damages as a matter of law. I

accordingly would not reach, and do not join the major-

ity’s consideration of, appellants’ constitutional objec-

tions to the imposition of punitive damages.

It’s not my function to decide any of the facts in the case, and I

haven't expressed, nor have I intended to convey any view as to

how the facts are to be decided; as to which witnesses are or aren’t

worthy of belief; as to what facts are or are not established; or as to

what inferences ought to be drawn from the evidence.

If any expression of mine during the course of this trial has

seemed to indicate an opinion regarding any of these matters, I

instruct you to disregard that expression entirely.

Joint Appendix at 2084.

23a

Our tort law system reserves punitive damages for

those extraordinary cases where an extra measure of

payment—beyond full compensation for injuries—is

thought to be necessary ‘‘for the purpose of punishing

the defendant, of teaching the defendant not to do it

again, and of deterring others from following the defen-

dant’s example.’’ W. Keeton, D. Dobbs, R. Keeton &

D. Owen, Prosser and Keeton on the Law of Torts § 2,

at 9 (Sth ed. 1984). Thus, for example, punitive damages

may be deemed appropriate where a defendant, while

not intending to injure a plaintiff, exhibits ‘‘such a con-

scious and deliberate disregard of the interests of others

that his conduct may be called wilful or wanton.’’ Jd. at

10. The case before us involves an application of that

theory.

As the majority notes, the district court’s jury instruc-

tion required a determination that defendant’s conduct

was ‘‘wanton or reckless’’ to sustain an award of puni-

tive damages, and this is a correct statement of New

York law. As we have said, however, in another diver-

sity case where we undertook a thorough review of the

applicable New York precedents, New York law contem-

plates that ‘‘the recklessness that will give rise to puni-

tive damages must be close to criminality, see 14 N.Y.

Jur., Damages § 181 p. 41, and ... , like criminal

conduct, it must be ‘clearly established.’ ’’ Roginsky v.

Richardson-Merrill, Inc., 378 F.2d 832, 843 (2d Cir.

1967) (Friendly, J.). We went on to quote, id., the defi-

nition in N.Y. Penal Law § 15.05(3) (McKinney 1987),

since unchanged, as setting forth New York’s view of

recklessness. Section 15.05(3) provides in pertinent part:

A person acts recklessly with respect to a result

. when he is aware of and consciously disre-

24a

gards a substantial and unjustifiable risk that such

result will occur . . .. The risk must be of such

nature and degree that disregard thereof constitutes

a gross deviation from the standard of conduct that

a reasonable person would observe in the situation.

I do not regard the evidence in this case as adequate

for submission of punitive damages to the jury under

these standards. The evidence at trial established that

during the time Johnson worked in the Brooklyn Navy

Yard, appellants were aware that the properties of

asbestos were such that it could, at some level of expo-

sure, injure a human being. From this, it is possible rea-

sonably to conclude that appellants had a duty to warn

Or otherwise safeguard persons such as Johnson, and

must now compensate him for whatever injuries are

attributable to their failure to do so. The award of com-

pensatory damages is therefore sustainable, even though

Johnson never worked in an asbestos plant, and did not

work directly with asbestos-containing products in the

Brooklyn Navy Yard. In the circumstances, the jury did

not exceed its authority in determining that appellants

should have known that Johnson, and others similarly

Situated, were being put at risk.

Punitive damages, however, are not properly charge-

able against a defendant who merely ‘‘shouid have

known’’ of the risk in question. It must be shown that

the defendant was aware of the risk, and that he con-

sciously disregarded it. See Roginsky, 378 F.2d at 843

(punitive damages proper where manufacturer shown

‘“‘to have become aware of danger and to have done

nothing, deliberately closing its eyes’’). There has been

no such showing here. All the evidence to which John-

son directs us relates to actions, correspondence and lit-

25a

erature concerning asbestos processing plants, where

workers had direct and sustained exposure to high con-

centration levels of asbestos fibers. This record contains

no evidence that either medical researchers or asbestos

manufacturers possessed, in the mid 1940s, information

establishing, or even predicting, that ‘‘bystanders’’

might experience unsafe levels of exposure in shipyards

where finished hardbound insulation products contain-

ing asbestos were in use. The award of punitive damages

is, therefore, in my view unsustainable.

The majority reasons that the jury could conclude, on

this record, ‘‘that appellants knew or should have

known of the dangers of asbestos and did not ade-

quately protect or warn users of asbestos, thereby acting

in a wanton or reckless manner.’’ There are two prob-

lems with this rationale. First, as I have already noted, a

‘‘should have known’’ formulation simply does not

equate with recklessness under New York law; actual

awareness is required. See Roginsky, 378 F.2d at 843;

N.Y. Penal Law § 15.05(3). Second, the majority paints

with much too broad a brush, as I see it, in its reference

to ‘‘the dangers of asbestos.’’

The clear implication is that once a product is shown

to be dangerous to some persons under some circum-

stances, punitive damages can be awarded against a

manufacturer who fails to anticipate its subsequently

discovered propensity to endanger other persons in

markedly different circumstances. This is hardly the

*“‘recklessness ... close to criminality’? which we

described in Roginsky as the standard for awarding

punitive damages under New York law. As Judge

Friendly there said, ‘‘error in failing to make what hind-

sight demonstrates to have been the proper response—

26a

even ‘gross’ error—is not enough to warrant submission

of punitive damages to the jury.’’ 378 F.2d at 843.

I therefore respectfully dissent from the majority’s

affirmance of the jury’s awards of punitive damages.

27a

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

United States Courthouse

Foley Square

New York 10007

(212) 791-0103

ELAINE B. GOLDSMITH

Clerk

Date: April 20, 1990

RE : JOHNSON V THE CELOTEX CoRrP.

Docket No.: 89-7484, 89-7542

Gentlemen: /Madam:

The court has rendered a decision in the above-entitled case.

The decision of the district court has been affirmed as of

March 20, 1990, the judgment was entered on that date and

copies of the opinion were mailed to all counsel. Enlcosed

please a corrected opinion by Judge Carman and revised con-

currence and dissent by Judge Mahoney.

A copy of the opinion will be mailed to you. Additional cop-

ies Of the opinion may be obtained from this office in

accordance with § 0.17(7) of the rules of this court supple-

menting the Federal Rules of Appellate Procedure.

Very truly yours,

ELAINE B. GOLDSMITH, Clerk

O.M. GEORGE

O.M. George

Deputy Clerk

056 1/21/86

28a

[CORRECTED OPINION]

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Nos. 341, 342—August Term, 1989

(Argued: November 2, 1989 Decided: March 20, 1990)

Docket Nos. 89-7484, 89-7542

JOHN E. JOHNSON and h/w ANN MARIE JOHNSON,

Plaintiffs-Appellees,

—against—

THE CELOTEX CORPORATION, OWENS-ILLINOIS, INC.,

Defendants-Appellants.

Before:

MINER and MAHONEY, Circuit Judges,

and CARMAN, Judge.*

a ae

Defendant-appellant The Celotex Corporation appeals

from a judgment entered after a jury verdict and from

orders of the United States District Court for the South-

* Honorable Gregory W. Carman, Judge, United States Court of

International Trade, sitting by designation.

29a

ern District of New York regarding Joint Eastern and

Southern Districts Asbestos Litigation, (Sifton, J.),

denying its motions for judgment notwithstanding the

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

mistrial. Defendant-appellant Owens-Illinois, Inc.

appeals from the same judgment and from orders deny-

ing its motion for judgment notwithstanding the verdict

and its motion for a new trial or, in the alternative, for

a remittitur.

Affirmed. Judge Mahoney concurs in part and dis-

sents in part in a separate opinion.

—

STEVEN J. PHILLIPS, New York, New York

(LEVY PHILLIPS & KONIGSBERG, Diane

Paolicelli, New York, New York, of

counsel), for Plaintiffs-Appellees.

ANDREW T. BERRY, Newark, New Jersey

(MCCARTER & ENGLISH, Newark, New

Jersey, of counsel), for Defendant-

Appellant The Celotex Corporation.

FRANK H. SANTORO, Hartford, Connecticut

(DANAHER, TEDFORD, LAGNESE &

NEAL, P.C., Joyce A. Lagnese, Paul J.

Narducci, Wendy W. Wanchak, Hart-

ford, Connecticut, of counsel), for

Defendant-Appellant Owens-Illinois,

Inc.

30a

CARMAN, Judge:

Defendant-appellant The Celotex Corporation (Celo-

tex or appellant) appeals from a judgment entered in the

Southern District of New York after a jury trial before

Charles P. Sifton, J., regarding Joint Eastern and

Southern Districts Asbestos Litigation, awarding com-

pensatory and punitive damages and damages for loss of

consortium in an asbestos products liability personal

injury case. Celotex appeals from orders denying its

motion for judgment notwithstanding the verdict, or in

the alternative, a new trial and for a _ mistrial.

Defendant-appellant, Owens-Illinois, Inc. (Owens-

Illinois or appellant) appeals from the same judgment

and orders denying its motion for judgment notwith-

standing the verdict and its motion for a new trial or, in

the alternative, for a remittitur.

Appellants request us to reverse the judgment below

or, in the alternative, vacate the judgment and remand

for a new trial. In the alternative, appellants ask us to

vacate the punitive damages award and remand for a

new trial on the issue of punitive damages.

BACKGROUND

This appeal is one of many which arises from thou-

sands of cases filed against manufacturers and producers

of asbestos, resulting in unparalleled litigation in Ameri-

can tort law. See Racich v. Celotex Corp., 887 F.2d 393,

394 (2d Cir. 1989); Jn re School Asbestos Litigation, 789

F.2d 996, 1000 (3d Cir.), cert. denied, 479 U.S. 852

(1986). The cases have been filed pursuant to New

York’s one-year_revival statute for certain toxic torts,

3la

including alleged asbestos related torts, 1986 N.Y. Laws,

ch. 682, § 4. To manage the litigation, all of the cases in

the Southern and Eastern Districts were assigned for

pre-trial purposes to Judge Sifton. Racich, 887 F.2d at

395.

At a pretrial conference on November 4, 1988, the

court proposed that another asbestos tort case, Higgins

v. Raymark Industries, Inc., CV-87-0537 (S.D.N.Y.), be

consolidated with Johnson which was scheduled for trial

on November 7, 1988. The trial court ordered on

November 7, 1988 that Higgins and Johnson be consoli-

dated for trial. Plaintiff Higgins, a chipper and caulker,

whose work included chipping off welded sections to

prepare for repair work of others, was alleged to have

died because of exposure to asbestos while at the Brook-

lyn Navy Yard from approximately 1946 to 1966.

Appellee-plaintiff, John Johnson (plaintiff), an electri-

cian’s helper, alleged that he had contracted lung disease

while working at the Brooklyn Navy Yard from 1942 to

1945 by inhaling asbestos fibers during this employment.

In Johnson and Higgins compensatory and punitive

damages were sought for claims sounding in negligence

and strict liability for defendants’ failure to warn of the

health risks of their asbestos-containing products.

The Court declined to trifurcate or bifurcate the trial

to separate issues of causation and compensatory dam-

ages from issues of liability and punitive damages.

Appellants’ motions to have separate juries consider

claims of liability and punitive damages in Johnson,

apart from claims in Higgins, were denied. Appellants’

motion to preclude all evidence of knowledge post-1945

in relation to plaintiff Johnson was denied. Eight defen-

dants settled and one filed a petition in bankruptcy prior

32a

to trial. The Higgins and Johnson cases proceeded to

trial against defendants Celotex, Owens-Illinois and

Raymark Industries, Inc. (Raymark). The jury rendered

a verdict for the plaintiffs in both cases. In Higgins,

plaintiff was awarded $1 million in compensatory dam-

ages and $3 million in punitive damages, divided equally

among Celotex, Raymark and Owens-Illinois. In John-

son compensatory damages were $350,000 (Celotex

12.5%, Raymark 12.5%, Owens-Illinois 5.0%, seven

settling co-defendants 10% each), and punitive damages

were assessed as follows: Celotex $1 million, Raymark

$1 million and Owens-Illinois $800,000. Plaintiff Ann

Marie Johnson was awarded $30,000 for loss of services.

After the verdict, but before entry of judgment, it was

discovered that Celotex had never been named or served

as a defendant in the Higgins case. Further, since Flor-

ida was the principal place of business of Celotex and

the residence of plaintiff in Higgins, the trial court

determined there was lack of diversity as to Celotex.

In response to post-trial motions the Court ordered an

amendment to the pleadings to add Celotex as a party-

defendant pursuant to Rule 15(b) of the Federal Rules

of Civil Procedure. The Court then dismissed the com-

plaint in the Higgins case as to Celotex for lack of juris-

diction and retained its diversity jurisdiction over

defendants Raymark and Owens-Illinois. A subsequent

bankruptcy proceeding has stayed this case with regard

to Raymark.

FACTS

Plaintiff John Johnson, an employee of the United

States Navy, worked as an electrician’s helper at the

33a

Brooklyn Navy Yard from 1942 to 1945. The Brooklyn

Navy Yard covered an area of about three miles and in

the entire yard there were approximately 20 ships under

construction or repair. He installed electrical wiring in

new and older ships. Although Johnson did not work

with any product that he knew contained asbestos, he

worked in the vicinity of other tradespeople who

installed asbestos insulation material on ships. Johnson

could not identify by name any workers in his vicinity

or the trade mame or manufacturer of any asbestos

materials used at the shipyard. Johnson recalled working

on destroyers, battleships and in particular remembered

working on the Jowa, the Missouri and the Franklin at

the yard. He testified that his work area was always

dusty and that he would brush off a very fine snow-like

dust that accumulated on his clothes.

Product identification testimony was based upon the

testimony of other workers employed at the Navy Yard

at approximately the same time as Johnson. The co-

workers identified over a dozen makers of asbestos-

containing products used at the Navy Yard at different

times.

In 1945, Johnson left the Navy Yard and was not

later exposed to any other asbestos containing products.

In 1985, after retirement, Johnson was diagnosed with a

lung condition which was attributed to asbestos expo-

sure.

CONTENTIONS OF THE PARTIES

Appellants contend the trial court abused its discre-

tion in consolidating the Johnson and Higgins cases.

They further urge the connection with plaintiff’s injury

34a

and appellants’ products was insufficient as a matter of

law. As to the issue of punitive damages, appellants

maintain the Fourteenth Amendment bars an award of

punitive damages because appellants have been subjected

to repeated punitive damages for the same course of

conduct. They also claim procedural due process viola-

tions and contend that the punitive damages were not

supported by the evidence as a matter of law. Lastly,

appellants claim the improper conduct of the trial court

together with inflammatory conduct by counsel for

plaintiff and improper rulings allowed the jury to hear

evidence that should not have been heard, al! resulting

in a verdict which was the result of pressure and preju-

dice and which should be revised.

Appellants seek reversal of the judgment, or in the

alternative, request that the judgment be vacated and

the case be remanded for a new trial as to all issues.

Celotex requests that in the alternative, the punitive

damage award should be vacated and the case remanded

on the issue of punitive damages. Plaintiff seeks affirm-

ance of the judgment below. .

DISCUSSION

Consolidation

Rule 42(a) of the Federal Rules of Civil Procedure

empowers a trial judge to consolidate actions for trial

when there are common questions of law or fact to

avoid unnecessary costs or delay. Ellerman Lines, Ltd.

v. Atlantic & Gulf Stevedores, Inc., 339 F.2d 673 (3d

Cir. 1964), cert. denied, 382 U.S. 812 (1965); Zervos v.

S.S. Sam Houston, 427 F. Supp. 500 (S.D.N.Y. 1976),

aff’d, 636 F.2d 1202 (2d Cir. 1980).

35a

Consolidation of tort actions sharing common ques-

tions of law and fact is commonplace. See, e.g., Arnold

vy. Eastern Air Lines, Inc., 681 F.2d 186 (4th Cir. 1982),

cert. denied, 460 U.S. 1102 (1983); Kershaw v. Sterling

Drug, Inc., 415 F.2d 1009 (Sth Cir. 1969). This is true

of asbestos-related personal injury cases as well. See,

e.g., Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d

1492 (llth Cir. 1985); Neal v. Carey Canadian Mines,

Ltd., 548 F. Supp. 357 (E.D. Pa. 1982), aff’d sub nom.

Van Buskirk v. Carey Canadian Mines, Ltd., 760 F.2d

481 (3d Cir. 1985); Wilson v. Johns-Manville Sales

Corp., 107 F.R.D. 250 (S.D. Tex. 1985).

The trial court has broad discretion to determine

whether consolidation is appropriate. See, e.g., Midwest

Community Council, Inc. v. Chicago Park Dist., 98

F.R.D. 491 (N.D. Ill. 1983); Stemler v. Burke, 344 F.2d

393 (6th Cir. 1965). In the exercise of discretion, courts

have taken the view that considerations of judicial econ-

omy favor consolidation. See, e.g., Romacho v. Stanley,

567 F. Supp. 1417, 1419 n.2 (S.D.N.Y. 1983), aff’d sub

nom. Morse v. Stanley, 732 F.2d 1139 (2d Cir. 1984).

However, the discretion to consolidate is not unfettered.

Arnold v. Eastern Air Lines, Inc., 712 F.2d 899 (4th

Cir. 1983) (en banc), cert. denied, 464 U.S. 1040 (1984).

Considerations of convenience and economy must yield

to a paramount concern for a fair and impartial trial.

Flintkote Co. v. Allis-Chalmers Corp., 73 F.R.D. 463

(S.D.N.Y. 1977). When exercising its discretion, the

court must consider:

{[W]hether the specific risks of prejudice and possi-

ble confusion [are] overborne by the risk of incon-

sistent adjudications of common factual and legal

issues, the burden on parties, witnesses and availa-

36a

ble judicial resources posed by multiple lawsuits,

the length of time required to conclude multiple

suits aS against a single one, and the relative

expense to all concerned of the _ single-trial,

multiple-trial alternatives.

Hendrix, 776 F.2d at 1495 (quoting Arnold, 681 F.2d at

193). When considering consolidation, a court should

also note that the risks of prejudice and confusion may

be reduced by the use of cautionary instructions to the

jury and verdict sheets outlining the claims of each

plaintiff. Id.

In the instant case, the court properly exercised its

discretion in consolidating these two cases for trial.

Courts in the Southern and Eastern Districts of New

York have used the criteria outlined in an unreported

Maryland district court case, Jn re All Asbestos Cases

Pending in the United States District Court for the Dis-

trict of Maryland, slip op. (D. Md. Dec. 16, 1983) (en

banc), (hereinafter Jn re Maryland Asbestos Cases) as a

guideline in determining whether to consolidate asbestos

exposure cases. See, e.g., In re Joint Eastern and South-

ern Districts Asbestos Litigation, 125 F.R.D. 60, 64

(E.D.N.Y./S.D.N.Y. 1989); Jn re Joint Eastern and

Southern Districts Asbestos Litigation, slip op. at 7

(E.D.N.Y./S.D.N.Y. Jan. 16, 1990). In In re Maryland

Asbestos Cases, the criteria included: ‘‘(1) common

worksite; (2) similar occupation; (3) similar time of

exposure; (4) type of disease; (5) whether plaintiffs were

living or deceased; (6) status of discovery in each case;

(7) whether all plaintiffs were represented by the same

counsel; and (8) type of cancer alleged ... .’’ In re

Maryland Asbestos Cases at 3. Johnson and Higgins

had the following characteristics: (1) common worksite;

37a

(2) similar occupation to the extent that both workers

were exposed to asbestos in a bystander capacity (they

worked in trades that did not involve direct handling of

asbestos products); (3) Johnson’s period of exposure

was from 1942 to 1945 while Higgins’ exposure was

from approximately 1946 to 1966; (4) Johnson con-

tended that he suffered from asbestosis and asbestosis-

related pleural disease while it was alleged that Higgins

died as a result of asbestosis and lung disease; (5) John-

son was living and Higgins was deceased; (6) Johnson

and Higgins were both ready for trial; and (7) all plain-

tiffs were represented by the same counsel. Instructions

were given throughout the trial and in the charge to cau-

tion the jury to consider each plaintiff’s claims individu-

ally. Two separate verdict forms were provided to the

jury, one for Johnson, the other for Higgins.

An appellate court will not disturb a trial court’s deci-

sion to consolidate unless a clear abuse of discretion 1s

shown. Hendrix, 776 F.2d at 1495. In the instant case,

the trial court was well within its discretion to consoli-

date the two cases and the court acted throughout in a

manner which ensured that each plaintiff’s claim was

considered separately.

Connection Between Plaintiff’s Injury and

Appellants’ Product

In order to succeed on his claim, plaintiff had the

burden of proving to the jury that he was exposed to

appellants’ merchandise and that it is more likely than

not that this exposure was a substantial factor in his

injury. Derdiarian v. Felix Contracting Corp., 51

N.Y.2d 308, 434 N.Y.S.2d 166, 414 N.E.2d 666 (1980).

Plaintiff had to establish that his injury was proximately

38a

caused by appellants’ asbestos and produce evidence

identifying each appellant’s product as being a factor in

his injury. Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487,

541 N.Y.S.2d 941, 539 N.E.2d 1069, cert. denied, 110 S.

Ct. 350 (1989). Plaintiff admits to presenting to the jury

‘fan unusually detailed circumstantial case.’’ Plaintiff

contends that by the ‘‘cumulative and uncontradicted

nature’’ of the case, the jury was able to conclude not

only that there was exposure, but was compelled to

come to that result.

Plaintiff worked at the Navy Yard from 1942 to 1945

as an electrician’s helper on board ships including the

Missouri, the Jowa and the Franklin. Testimony was

provided by eleven men who worked at the Navy Yard

in various Capacities, some during the same time period

as Johnson, some before and after plaintiff’s employ-

ment. Witness James Shannon worked at the Navy Yard

from 1940 to 1965 as a plumber’s helper and a welder.

Shannon recalled working on the Jowa at some time

between 1940 and 1944 and identified Philip Carey

(Celotex) products, including fifty-pound bags of asbes-

tos cement with the words ‘‘Philip Carey’’ written on

them, and Owens-Illinois products, including asbestos

pipe covering and the brown boxes containing this mate-

rial both bearing the name ‘‘Owens-Illinois,’’ as being in

use during that time period on board the Jowa. Shan-

non’s testimony indicated that the only two ships he

worked on during the time period 1940-1944 were the

North Carolina and the Jowa. He remembered working

first on the North Carolina, for at least one year and

possibly two, before working on the Jowa. From his tes-

timony, the jury could infer that he worked on the Jowa

during the latter part of this time frame which would

39a

place Shannon and Johnson on the Jowa at the same

time.

Several of the witnesses testified as to the close inter-

action of the different crews working together. Moe

Rapchik, a sheet metal worker from 1941 to 1945 who

worked on board the Jowa in 1942, stated that in the

course of his employment he worked with ‘‘almost every

different crew that the Navy Yard had to offer which

was electricians, machinists, shipfitters, pipefitters and

asbestos installers.’’ Joint Appendix at 322. Although

Rapchik could not recall the specific company names of

the products used on board the Jowa, he identified

Owens-Illinois’ Kaylo pipe covering and Celotex’s Philip

Carey asbestos cement as being in use during the time

period 1941 to 1945 and stated that the products

installed on the Jowa were the same types of products

that were installed on every other ship he worked on.

Rapchik described the asbestos fibers in general! as being

‘‘fajll over the deck . . . . We crushed them with our

feet as we walked . . . and that is how we got it all over

our clothes and when we got home at night, we were

white all over.’’ Joint Appendix at 329. These descrip-

tions conform to plaintiff's own testimony of working

in close, dusty surroundings with other crew members.

Appellants contend that there was insufficient evi-

dence to establish proximate cause and that therefore

the case should not have gone to the jury. As an appel-

late court, we are ‘‘ ‘bound to view the evidence in the

light most favorable to [the plaintiff] and to give [him]

the benefit of all inferences which the evidence fairly

supports, even though contrary inferences might reason-

ably be drawn.’ ’’ Michelman v. Clark-Schwebel Fiber

Glass Corp., 534 F.2d 1036, 1042 (2d Cir.) (quoting

40a

Continental Ore Co. v. Union Carbide & Carbon Corp.,

370 U.S. 690, 696 (1962)), cert. denied, 429 U.S. 885

(1976). As the Sixth Circuit noted in Pratt v. National

Distillers & Chemical Corp., ‘‘We are not to reweigh

evidence to reach our own conclusions about the cor-

rectness of a jury’s decision; our task is simply to deter-

mine whether reasonable jurors could, under any theory

submitted to them, have resolved the dispute as they

did.’’ 853 F.2d 1329, 1337 (6th Cir. 1988), cert. denied,

109 S. Ct. 1121 (1989). Reviewing the evidence in the

light most favorable to the plaintiff, we find that proxi-

mate cause existed and that the jury’s verdict must be

upheld.

Punitive Damages

Appellants contend that the Fourteenth Amendment

bars the award of punitive damages in this case because

subjecting the appellants to repeated punitive damages

violates their substantive due process rights. Appellants

further maintain that their procedural due process rights

were violated by the way in which the punitive damages

claim was tried in this case. They also claim that the

award of punitive damages was not supported by the

evidence as a matter of law.

Appellants argue that the multiple imposition of puni-

tive damages against them for the same course of con-

duct offends the fundamental fairness inherent in due

process. They cite Browning-Ferris Indus. v. Kelco Dis-

PORE, §0C., ems Ul uum ee te a ee

(1989), where the Supreme Court explicitly refused to

consider ‘‘whether due process acts as a check on undue

jury discretion to award punitive damages in the absence

of any express statutory limit’’ because this question was

4la

not before the court. While refraining from addressing

this issue directly, the opinions made clear that this

question was a substantial one. Jd. at 2921 n.23. See

also the opinions by Justice Brennan (joined by Justice

Marshall), id. at 2923-24, and Justice O’Connor (joined

by Justice Stevens), id. at 2924.

This Court recently reviewed the issue of punitive

damages in an asbestos-related personal injury action in

Racich v. Celotex Corp., 887 F.2d 393. In Racich,

appellant Celotex contended, inter alia, that the plain-

tiff’s claim for punitive damages was not permitted

under New York’s one-year revival statute, 1986 N.Y.

Laws, ch. 682, § 4, and that punitive damages were

inappropriate as a matter of New York law and public

policy. The Court found Celotex’s arguments to be

unpersuasive. While Celotex raised a substantive due

process claim, arguing that multiple imposition of puni-

tive damages for the same course of conduct offended

fundamental fairness, the Court did not reach that issue

since Celotex did not preserve it for appellate review. Jd.

at 398. In the instant case, the substantive due process

claim that multiple imposition of punitive damages for

the same course of conduct violated fundamental fair-

ness has been preserved on appeal by only one appel-

lant, Owens-Illinois, who raised this issue in its

Memorandum in Support of a Motion for a Judgment

Notwithstanding the Verdict. Appellant Celotex failed to

raise this due process argument prior to briefing for this

appeal. A careful reading of Defendants’ Memorandum

of Law in Support of Defendants’ Motion to Dismiss

and for Summary Judgment does not bear out appellant

Celotex’s contention that this claim was raised. We

decline to set aside the punitive damages awarded by the

jury since there has been insufficient proof to demon-

eee

42a

strate an unjust result of multiple imposition of punitive

damages for the same course of conduct.

Appellant Celotex asked this Court to take judicial

notice of punitive damages in judgments against them in

not only the Southern and Eastern Districts of New

York, but in ‘‘appeals pending in other cases before this

Court, as well as judgments entered in the dockets of

the district courts of this and other circuits.’’ Reply

Brief for Defendant-Appellant The Celotex Corporation

at 14. Appellant Owens-Illinois noted that it advised the

trial court of punitive damage awards made, but not

paid, in two Southern District cases. Plaintiff contends

that substantial portions of the punitive damages

assessed have not been paid out by appellants and that

in some cases which have been settled or are still on

appeal, no punitive damages have been paid at all.

Appellants themselves provide no documentation as to

exactly how much money they have actually paid in

punitive damages.’ The record here simply is insufficient

to permit an examination of the claim that there is a

multiple award of punitive damages offensive to the

fundamental fairness inherent in due process.

As the Court noted in Racich, ‘‘we do not write upon

a clean slate... .’’ 887 F.2d at 399. In Roginsky v.

Richardson-Merrell, Inc., 378 F.2d 832, 835 (2d Cir.

1967), a claim was made that multiple awards of puni-

tive damages based upon the same course of conduct

was a violation of due process. The Court observed that

there was ‘‘the gravest difficulty in perceiving how

claims for punitive damages in such a multiplicity of

l Owens-Illinois has advised the Court post-argument in this case, that

a punitive damage award in the amount of $554,194.00 was recently

paid by it in Passentino v. Raymark Indus., CV-87-5019 (S.D.N.Y.).

43a

actions throughout the nation can be so administered as

to avoid overkill.’’ Jd. at 839. The Court concluded,

however, that ‘‘the New York cases afford no basis for

our predicting that the Court of Appeals would adopt a

rule disallowing punitive damages in a case such as

[fRoginsky], and the Erie doctrine wisely prevents our

engaging in such extensive law-making on local tort lia-

bility... .’’ Id. at 841.

In Racich, the Court pointed out that while we did

not reject the argument that an award of punitive dam-

ages unless governed by precise standards violates due

process, we did not accept that argument, ‘‘believing

that the only course open . . . was ‘the more modest’

task of ‘assessing the sufficiency of the evidence within

the framework’ of New York law.’’ 887 F.2d at 399

(quoting Roginsky, 378 F.2d at 841). The Court in

Racich said:

[W]e are here asked to hold. . . that the common-

law standards applied by the courts of New York

for imposition of punitive damages are unconstitu-

tional, and that our own cases applying that law

were in error. . . . This would be a far-reaching

holding indeed, particularly in the context of mass

tort litigation that suggests the need for a uniform,

national rule on the issue. Under all the circum-

stances, we believe that such a step, if it is to be

taken (and we express no view as to that), is best

left for Congress or for higher judicial authority.

Id. (citations omitted). We follow this same course, and

leave for another day and a better documented record

the question of whether successive awards are violative

of due process.

44a

In the instant case, the trial judge informed the jury

in his charge that punitive damages may be awarded if

plaintiffs ‘‘clearly and convincingly established that the

acts of a defendant [the jury was] considering causing

the injury you [sic] complained of were wanton and

reckless.’’ Joint Appendix at 2123. An act was defined

as wanton and reckless when ‘‘done in such a manner

and under such circumstances as to show heedlessness

and an utter disregard of the results upon the rights and

safety of others that may flow from doing the act, or in

the manner in which it is done.’’ Jd. at 2124. No claim

has been made by appellants that this charge was not in

accordance with New York law.

A review of the evidence shows that the award of

punitive damages was supported by the evidence as a

matter of law. Plaintiff produced evidence at trial

through expert witnesses, medical reports and docu-

ments from which the jury could reasonably conclude

that appellants acted in a wanton or reckless manner.

For example, plaintiff’s expert witness testified that a

link between asbestos and lung cancer was suspected as

early as 1930 and that this link was considered to be

probable shortly after 1940. Another expert witness

stated in his deposition that by 1942 there were enough

cases of the association between lung cancer and asbes-

tos to include this information in a medical textbook on

occupational cancer. A former employee of Owens-

Illinois testified that workers at a New Jersey plant,

including plant executives, wore respirators in the areas

of loose raw material including asbestos. The jury was

free to conclude from this and other evidence presented

that appellants knew of the dangers of asbestos and did

not adequately protect or warn users of asbestos,

thereby acting in a wanton or reckless manner.

45a

Appellants further maintain that their procedural due

process rights were violated by the manner in which the

punitive damages claim was tried. Owens-lilinois specifi-

cally contends that the consolidation of Johnson and

Higgins and the failure to erect procedural safeguards

during the consolidated trial violated appellants’ due

process rights. Since we have found the consolidation

was not an abuse of discretion, and since the trial judge

carefully instructed the jury throughout the trial to con-

sider each plaintiff’s claims individually, there was no

need to provide other procedural safeguards concerning

the consolidation.

Owens-Illinois admits that it never specifically made a

request for bifurcation of the damages aspect of the

punitive damages claim, but argues that it did make a

motion to bifurcate the entire punitive damages claim as

well as a motion to trifurcate all triable issues. Appel-

lant further argues that the trial judge granted bifurca-

tion in a previous asbestos-related personal injury case.

Plaintiff contends that the trial court invited appellants

to bifurcate the damages aspect of the punitive damages

claim and that appellants made a tactical decision not to

give the jury two separate opportunities to assess dam-

ages against them. Regardless of appellants’ motives in

fashioning a motion for bifurcation, the fact that bifur-

cation did not occur is not necessarily prejudicial to

appellants. The decision to bifurcate is within the discre-

tion of the trial judge. Jn re Master Key Antitrust Liti-

gation, 528 F.2d 5, 14 (2d Cir. 1975). The fact that a

previous case tried by the same judge was bifurcated has

no bearing on the instant case.

46a

Conduct of the Court and Counsel

Appellants contend that improper conduct of the trial

court and inflammatory conduct by plaintiff's counsel

during summation denied them a fair and impartial

trial.

Owens-Illinois alleges specifically that counsel

described witnesses as ‘“‘liar{s]’’, ‘‘sleaze’’ and

‘**clown[s].’’ Appellants contend they were prejudiced

both by counsel’s use of the words ‘‘evil’’ and

**vicious’’ to describe them, and counsel’s characteriza-

tion of appellants’ defense as ‘‘obscene’’, ‘‘ugly’’ and

‘**ridiculous.’’ Appellants also complain of counsel’s

invocation of the ‘‘Golden Rule’’ (do unto others as you

would have them do unto you) and the use of a strategy

that included an appeal to class prejudice. This Court

finds that counsel’s behavior did not rise to the level of

denying appellants a fair and impartial trial.

Throughout the normal course of the trial and in his

final charge, the trial judge instructed the jury to decide

the case in a rational manner based on the evidence pre-

sented and not on emotions, sympathy, prejudice, or

bias. In denying appellants’ motion for mistrial, the trial

judge determined that none of the derogatory descriptive

statements complained of was so inflammatory as to

require a new trial. The court found that all but two of

the counsel’s alleged appeals to the Golden Rule argu-

ment related to liability only and not damages and were

therefore not improper. Burrage v. Harrell, 537 F.2d

837 (Sth Cir. 1976). The. remaining two instances were

determined to be of a nature that would not unduly

affect the jury in light of the judge’s charge. The appeal

to class prejudice was found to be of a class of remarks

which are not per se grounds for a new trial and in the

47a

context of the entire summation, did not create undue

passion. We agree. Great discretion is to be given the

judge who was present throughout the trial and is best

able to determine the effect of the conduct of counsel

on the jury. Arnold, 681 F.2d at 194.

Appellants contend that the trial judge failed to con-

trol the behavior of plaintiff’s counsel and that the

judge himself contributed to an atmosphere not condu-

cive to fair play by questioning the plaintiff and coach-

ing his answers. Celotex points specifically to two

exchanges between the judge and the plaintiff.’

2 The judge asked Mr. Johnson ‘‘to remember what it was like back

then and select the words that will describe it sufficiently so that these

people here, who weren’t there, can, in their minds, have some idea of

what you saw.’’ The judge then went on to question Mr. Johnson

about what his work site looked like. Joint Appendix at 15.

in another instance, after plaintiff had described his feelings when

learning of the results of his x-ray, the judge engaged Mr. Johnson in

the following colloquy:

THe Court: Before you go on, since the jury is going to have to

make some decisions on this, I think we ought to get a little more

on this than we have. When you talked to Doctor Spinnato in

December, he said go and have the CAT scan and pulmonary func-

tron test.

| imagine you had some reaction to what he said to you.

THe Wrirness: He just said he seen [sic] some spots on the X-ray.

THe Court: Did you react to that or no?

THe Wrrness: I didn’t know what to think. I didn’t know what

was wrong.

THE Court: Let me suggest some words to you over a different

range and tell me if those—if any of these is an adequate explana-

tion of what you were feeling.

These are a whole bunch of alternatives not meant to suggest that

any one is approp™.te.

. . « The question is whether any of these words, if any of these

are appropriate. If none are appropriate, tell me.

48a

The trial judge also brought to the attention of all

counsel that he had heard testimony of one of appel-

lants’ expert witnesses in a previous case and had found

the witness to be less than credible. One defense counsel

expressed concern that the judge could sit fairly on the

instant case and stated that the judge had been acting in

an uncomplimentary manner throughout the witness’

testimony. The judge denied defense counsel’s character-

ization of his manner during the testimony.

It is well settled that a judge is authorized to ask

questions of a witness which may aid the understanding

of the jury. United States v. Lamont, 565 F.2d 212, 220

(2d Cir. 1977) cert. denied, 435 U.S. 914 (1978). In the

instant case, Mr. Johnson has been described by his

counsel and an expert appellant witness as a man of few

words. It would appear then, that the judge was merely

attempting to clarify matters that seemed to call for fur-

ther explanation, as the judge told the jury in his

charge.

As to the manner of the judge throughout the testi-

mony of the expert witness, we are satisfied that his

instructions to the jury cured even the appearance of

any impropriety.’ United States v. Robinson, 635 F.2d

A reaction of calm, resigned, depressed, scared, are any of those

appropriate?

THE WITNESS: Depressed and scared.

Joint Appendix at 31-32.

3 The judge stated:

Now, I don’t reach a determination myself or express any opin-

ion as to how you should decide the facts of the case; that’s your

function. That’s why we have jurors.

(footnote continued)

49a

981, 985 (2d Cir. 1980), cert. denied, 451 U.S. 992

(1981).

CONCLUSION

For the above-stated reasons the judgment of the dis-

trict court is affirmed.

MAHONEY, Circuit Judge, concurring in part and dis-

senting in part:

I agree with the majority that the district court’s deci-

sion to consolidate Higgins and Johnson was a permissi-

ble exercise of discretion, that a reasonable jury could

find a causal connection between appellants’ products

and plaintiff’s injury, and that there is no basis for

reversal in the conduct of the trial court and plaintiff’s

counsel. I respectfully dissent, however, from the major-

ity’s conclusion that punitive damages are adequately

supported by the evidentiary record, and would reverse

the award of punitive damages as a matter of law. I

accordingly would not reach, and do not join the major-

ity’s consideration of, appellants’ constitutional objec-

tions to the imposition of punitive damages.

It’s not my function to decide any of the facts in the case, and I

haven't expressed, nor have I intended to convey any view as to

how the facts are to be decided; as to which witnesses are or aren’t

worthy of belief; as to what facts are or are not established; or as to

what inferences ought to be drawn from the evidence.

If any expression of mine during the course of this trial has

seemed to indicate an opinion regarding any of these matters, I

instruct you to disregard that expression entirely.

Joint Appendix at 2084.

50a

Our tort law system reserves punitive damages fo

those extraordinary cases where an extra measure o

payment—beyond full compensation for injuries—i

thought to be necessary ‘‘for the purpose of punishin;

the defendant, of teaching the defendant not to do i

again, and of deterring others from following the defen

dant’s example.’’ W. Keeton, D. Dobbs, R. Keeton 4

D. Owen, Prosser and Keeton on the Law of Torts § 2

at 9 (Sth ed. 1984). Thus, for example, punitive damage

may be deemed appropriate where a defendant, whil

not intending to injure a plaintiff, exhibits ‘‘such a con

scious and deliberate disregard of the interests of other

that his conduct may be called wilful or wanton.’’ Jd. a

10. The case before us involves an application of tha

theory.

As the majority notes, the district court’s jury instruc

tion required a determination that defendant’s conduc

was ‘‘wanton or reckless’’ to sustain an award of puni

tive damages, and this is a correct statement of Nev

York law. As we have said, however, in another diver

sity case where we undertook a thorough review of th

applicable New York precedents, New York law contem

plates that ‘‘the recklessness that will give rise to pun

tive damages must be close to criminality, see 14 N.Y

Jur., Damages § 181 p. 41, and ..., like criminz

conduct, it must be ‘clearly established.’ ’’ Roginsky 1

Richardson-Merrill, Inc., 378 F.2d 832, 843 (2d Ci

1967)(Friendly, J.). We went on to quote, id., the defi

nition in N.Y. Penal Law § 15.05(3)(McKinney 1987)

since unchanged, as setting forth New York’s view a

recklessness. Section 15.05(3) provides in pertinent part

A person acts recklessly with respect to a resul

. when he is aware of and consciously disre

g Sla

gards a substantial and unjustifiable risk that such

result will occur. . . . The risk must be of such

nature and degree that disregard thereof constitutes

a gross deviation from the standard of conduct that

a reasonable person would observe in the situation.

I do not regard the evidence in this case as adequate

for submission of punitive damages to the jury under

these standards. The evidence at trial established that

during the time Johnson worked in the Brooklyn Navy

Yard, appellants were aware that the properties of

asbestos were such that it could, at some level of expo-

sure, injure a human being. From this, it is possible rea-

sonably to conclude that appellants had a duty to warn

Or otherwise safeguard persons such as Johnson, and

must now compensate him for whatever injuries are

attributable to their failure to do so. The award of com-

pensatory damages is therefore sustainable, even though

Johnson never worked in an asbestos plant, and did not

work directly with asbestos-containing products in the

Brooklyn Navy Yard. In the circumstances, the jury did

not exceed its authority in determining that appellants

should have known that Johnson, and others similarly

Situated, were being put at risk.

Punitive damages, however, are not properly charge-

able against a defendant who merely ‘‘should have

known’’ of the risk in question. It must be shown that

the defendant was aware of the risk, and that he con-

sciously disregarded it. See Roginsky, 378 F.2d at 843

(punitive damages proper where manufacturer shown

“to have become aware of danger and to have done

nothing, deliberately closing its eyes’’). There has been

no such showing here. All the evidence to which John-

son directs us relates to actions, correspondence and lit-

52a

erature concerning asbestos processing plants, where

workers had direct and sustained exposure to high con-

centration levels of asbestos fibers. This record contains

no evidence that either medical researchers or asbestos

manufacturers possessed, in the mid 1940s, information

establishing, or even predicting, that ‘‘bystanders’’

might experience unsafe levels of exposure in shipyards

where finished hardbound insulation products contain-

ing asbestos were in use. The award of punitive damages

is, therefore, in my view unsustainable.

The majority reasons that the jury could conclude, on

this record, ‘‘that appellants knew of the dangers of

asbestos and did not adequately protect or warn users of

asbestos, thereby acting in a wanton or reckless man-

ner.’’ The majority paints with much too broad a brush,

as I see it,-in its reference to ‘‘the dangers of asbestos.’’

The clear implication is that once a product is shown

to be dangerous to some persons under some circum-

stances, punitive Gamages can be awarded against a

manufacturer who fails to anticipate its subsequently

discovered propensity to endanger other persons in

markedly different circumstances. This is hardly the

‘‘recklessness ... close to criminality’? which we

described in Roginsky as the standard for awarding

punitive damages under New York law. As Judge

Friendly there said, ‘‘error in failing to make what hind-

sight demonstrates to have been the proper response—

even ‘gross’ error—is not enough to warrant submission

of punitive damages to the jury.’’ 378 F.2d at 843.

I therefore respectfully dissent from the majority’s

affirmance of the jury’s awards of punitive damages.

53a

UNITED STATES DISTRICT COURT

E.D. New York

S.D. New York

Feb. 3, 1989

In re JOINT EASTERN AND SOUTHERN DISTRICTS

ASBESTOS LITIGATION

This Document Relates To:

Johnson (CV-87-0724 (S.D.N.Y.)

Higgins (CV-87-0537 (S.D.N.Y.)

Nos. CV-87-0724, CV-87-0537

MEMORANDUM AND ORDER

SIFTON, District Judge.

These two asbestos-related personal injury cases are before

the court on seven motions made after the jury’s verdicts.

Four of the motions arise because of the extraordinary cir-

cumstance that one allegedly non-diverse party proceeded

through trial and verdict although never named in the com-

plaint or served with process.

The facts are not disputed except as noted. The Higgins

and Johnson cases were consolidated for trial before the

undersigned and a jury. All parties assumed that Celotex

Corp., Raymark Industries, Inc., and Owens-Illinois, Inc.

were named as defendants in both cases. After trial, the jury

rendered a verdict for plaintiffs in both cases, holding all

three defendants liable as follows:

54a

Higgins:

Compensatory damages: $1,000,000

Percentage of responsibility:

Mr. Higgins 10%

Higgins:

Celotex 10%

Raymark 10%

Owens-Illinois 10%

Ten settling co-defendants 6% each

Punitive damages:

Celotex $1,000,000

Raymark $1,000,000

Owens-Illinois $1,000,000

Johnson:

Compensatory damages: $ 350,000

Percentage of responsibility:

Celotex 12.5%

Raymark 12.5%

Owens-Illinois 5.0%

Seven settling

co-defendants 10.0% each

Punitive damages:

Celotex $1,000,000

Raymark $1,000,000

Owens-Illinois $ 800,000

After the verdict but before entry of judgment, it became

clear that Celotex had never been named or served as a

defendant in Higgins, apparently because both Higgins and

Celotex were thought to be Florida citizens.

Celotex is incorporated in Delaware, but a corporation is

also a citizen of the state of its principal place of business. 28

U.S.C. § 1332(c). Defendants assert that Celotex’s principal

place of business is in Florida, based on a terse affidavit

from one D.S. Gibson, Manager of Safety and Property

Conservation for Celotex. Plaintiff has not applied for leave

to file an amended complaint alleging diversity and has failed

rene

5Sa

to present any evidence concerning Celotex’s principal place

of business at the time these actions were commenced. Since

the burden of pleading and proof is on plaintiff to establish

diversity, I shall proceed on the premise that diversity is lack-

ing between Celotex and plaintiff in the Higgins case. Entry

of judgment on this decision will, however, be stayed until

February 15, 1989, to permit plaintiff to file an amended

complaint in the event it can do so in compliance with Rule

11 of the Federal Rules of Civil Procedure.

The motions before the court are as follows: (1) a motion

by plaintiffs, in which Owens-Illinois joins, to amend the

complaint under F.R.Civ.P. 15(b) to allege causes of action

against Celotex; (2) a motion by defendants to dismiss both

cases for lack of subject matter jurisdiction; (3) a motion by

plaintiff to drop Celotex as a defendant under Rule 21; (4) a

motion by Owens-Illinois to dismiss for failure to join an

indispensable party under Rule 19(b); (5) a motion by plain-

tiff to set aside that portion of the Higgins verdict finding

Mr. Higgins comparatively negligent; (6) a motion by Owens-

Illinois for determination of offsets required by settlements

with co-defendants under N.Y.Gen.Oblig.L. § 15-108; and (7)

a motion by defendants for a new trial because of improper

statements made during plaintiff’s closing arguments.

The four motions relating to subject matter jurisdiction are

closely interrelated. In summary, their disposition is as fol-

lows. The complaint is deemed amended to add Celotex as a

party defendant; this leads to a lack of complete diversity

between the parties; Celotex is therefore dropped as a defen-

dant under Rule 21 or 15(a) in order to preserve jurisdiction

over the-other parties, because this does not cause prejudice

to the other defendants within the meaning of Rule 19.

MOTION TO AMEND COMPLAINT

Plaintiff, joined by Owens-Illinois, moves for amendment

- of the Higgins complaint under F.R.Civ.P. 15(b) to add

Celotex as a party. Of course, this motion alone cannot

affect subject matter jurisdiction one way or the other. Even

56a

if Celotex’s having proceeded through the trial is deemed

consent to trying the issue of its liability, this consent could

not confer subject matter jurisdiction on the court. Neverthe-

less, it is appropriate to rule upon this Rule 15(b) motion

because of the bearing it has on the motion to dismiss for

lack of subject matter jurisdiction.

Implied consent to the trial of an issue will be found, in

general, when the parties ‘‘recognized that an issue not pre-

sented by the pleadings entered the case at trial.’’ 6 C.

Wright and A. Miller, Federal Practice and Procedure

§ 1493, at 462. ‘‘In a motion under rule 15(b) . . . the most

important question is whether the new issues were tried by

the parties’ express or implied consent and whether the defen-

dant ‘would be prejudiced by the implied amendment, i.e.,

whether he had a fair opportunity to defend and whether he

could offer any additional evidence if the case were to be

retried on a different theory.’ ’’ Browning Debenture Hold-

ers’ Committee v. DASA Corp., 560 F.2d 1078, 1086 (2d Cir.

1977) (citations omitted).

This implied consent can be inferred from a party’s failure

to object to the introduction of evidence relating to the issue,

see, e.z., Sun-Fun Prods., Inc. v. Suntan Research and

Devel. Inc., 656 F.2d 186 (Sth Cir. 1981), and from the intro-

duction of evidence on that issue by the very party opposing

the implied amendment, see, e.g., Bradford Audio Corp. v.

Pious, 392 F.2d 67, 73 (2d Cir. 1968). Both of these bases of

inference are present in the instant case. Nor are any counter-

vailing factors present that would tend to show lack of con-

sent: a party’s not having been represented by an attorney;

the evidence supporting consent having all also borne on

issues that were expressly included in the pleadings; or ‘‘prej-

udice’’ to a party, ‘‘prejudice in this context mean[ing] a lack

of opportunity to prepare to meet the unpleaded issue.’’ 6 C.

Wright and A. Miller, supra, § 1493, at 467-68.

Rule 15(b) cannot, itself, expand the court’s jurisdiction.

See, e.g., Falls Industries, Inc. v. Consolidated Chemical

Industries, Inc., 258 F.2d 277, 285-86 (Sth Cir. 1958); Bucky

v. Sebo, 207 F.2d 304, 307 n.7 (2d Cir. 1953). But there is

not persuasive indication that a Rule 15(b) motion should be

S7a

denied simply because it might lead to a jurisdictional defect,

so long as the court then proceeds to address that jurisdic-

tional defect as is done here.

The rule provides that issues tried by consent ‘‘shall’’ be

treated as if raised in the pleadings. In other words, once a

finding of implied consent has been made, the court has no

discretion not to treat the pleadings as amended. 6 C. Wright

and A. Miller § 1493, at 469. But, even if the matter were

discretionary, all pertinent factors would weigh in favor of

the amendment.

Therefore, the motion to amend the pleadings is granted.

MOTION TO DISMISS

All three defendants move to dismiss both cases for lack of

subject-matter jurisdiction. The two cases are best addressed

independently.

Higgins

It is clear that subject matter jurisdiction is lacking as

between plaintiff and Celotex since plaintiff has failed to

allege or establish diversity. Therefore, as to Celotex, the

motion to dismiss must be granted without prejudice, how-

ever, to the filing of an amended complaint alleging diversity

if, after reasonable inquiry, a factual and legal basis for such

an allegation exists.

The lack of diversity between plaintiff and Celotex also

impairs jurisdiction over the case as between plaintiff and the

other two defendants. The diversity statute has been con-

Strued as requiring ‘‘complete diversity,’’ that is, the Court

will not have jurisdiction over the action if the plaintiff

shares citizenship with any of the defendants. Strawbridge v.

Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806).

‘‘The presumed theory behind the original grant of

diversity jurisdiction in Article II] was to provide a neu-

tral, national forum for cases in which there would be a

danger of bias in a state court against an out-of-state Lit-

SC NAC ARERR

58a

igant. This justification for granting federal diversity

jurisdiction does not apply to cases in which there are

citizens from the same state on opposing sides of the liti-

gation.’’

13B C. Wright, A. Miller and E. Cooper § 3605, at 398.

But this finding of lack of complete diversity does not end

the inquiry into our jurisdiction over the Higgins case. See

discussion below of plaintiff's Rule 21 motion.

Johnson

Defendants’ only argument for a jurisdictional defect in

Johnson is that it was consolidated with Higgins. Defendants

assert that, had it been clear from the start that Celotex was

not a proper party to the Higgins case, then the Court would

not have consolidated Johnson and Higgins. This assertion

may or may not be correct: ‘‘although identity of parties

strengthens the case for consolidation, it is not required.’’

9 C. Wright and A. Miller § 2384, at 264.

Regardless of how the Court would have ruled on the con-

solidation question had all the facts been known, the consoli-

dation ruling is simply irrelevant to our jurisdiction over the

Johnson case. ‘‘Consolidation is permitted as a matter of

convenience and economy in administration, but does not

merge the suits into a single cause, or change the rights of the

parties, or make those who are parties in one suit parties in

another.’’ Johnson v. Manhattan Railway Co., 289 U.S. 479,

496-97, 53 S.Ct. 721, 727-28, 77 L.Ed. 1331 (1933); accord,

Garber v. Randell, 477 F.2d 711, 716 (2d Cir. 1973). Accord-

ingly, the motion to dismiss the Johnson case is denied.

MOTION TO DROP CELOTEX AS DEFENDANT

Plaintiff moves to drop Celotex as a defendant under Rule

21. This device is frequently used for the purpose of preserv-

ing diversity, so long as the defendant sought to be dropped

is not ‘‘indispensable’’ under Rule 19(b). (Celotex is not

59a

‘indispensable’ here, as is discussed below.) See generally 7

C. Wright, A. Miller, M. Kane § 1685.

But the Second Circuit has indicated that Rule 21 is inap-

propriate for this purpose and that Rule 15(a) should instead

be used. Kerr v. Compagnie de Ultramar, 250 F.2d 860, 864

(2d Cir. 1958).

I accordingly apply Rule 15(a). But although Rule 15(a) is

the nominal vehicle for a motion to drop a party, the stan-

dard to be applied here is not the usual one under Rule 15(a),

which gives broad discretion to the court. Instead, ‘‘[rJegard-

less of the procedural vehicle for the motion, unless it

appears that a non-diverse defendant cannot be dropped

from an action without prejudice to the remaining defen-

dants, the motion should be granted and a failure to do so is

an abuse of discretion.’’ Kerr v. Compagnie de Ultramar,

supra, at 864; accord Samaha v. Presbyterian — 757

F.2d 529, 531 (2d Cir. 1985).

Samaha declares that the prejudice referred to is the same

kind considered in determining whether a party is ‘‘indispen-

sable’’ under Rule 19(b). 757 F.2d at 531. For that reason,

the question of prejudice is addressed below, in connection

with the Rule 19 motion.

RULE 19 MOTION

Defendants move for dismissal of the Higgins case on the

ground that Celotex was an ‘‘indispensable’’ party that could

not be joined at trial.

The plain meaning of the opening of section (b) of this

Rule is that a case should be dismissed only when a party

described in section (a) cannot be joined. ‘‘The structure of

Rule 19 reflects the analytical sequence that a court should

follow in deciding a party joinder problem.’’ 7 C. Wright, A.

Miller and M. Kane § 1604, at 40. Here, plaintiffs have not

shown that Celotex is a party described in section (a). For

this reason, the Rule 19 motion must fail, but Rule 19 still

has a bearing here, for, as observed above, its ‘‘prejudice’’

60a

criterion is material to a decision on the Rule 21/Rule 15(a)

motion.

‘It is settled federal law that joint tortfeasors are not

indispensable parties.’ Samaha, 757 F.2d at 531. This is sen-

sible, because a joint tortfeasor fits neither of the alternatives

of Rule 19(a). Complete relief can be had between the parties

in his absence, due to joint and several liability; and the joint

tortfeasor does not ‘‘claim[ ] an interest relating to the sub-

ject of the action.”’

Defendants’ arguments on the four factors enumerated in

Rule 19(b) are considered below. However, these factors are

not the exclusive ones that I take into account; I look also to

the facts of each case in light of the ‘‘equity and good con-

science’’ test set forth in the rule.

In connection with the rule’s ‘‘prejudice’’ factor, Owens-

Illinois asserts, without giving any particulars, that in Celo-

tex’s absence Owens-Illinois would have been able to use

different trial strategies, such as calling different witnesses or

developing different theories of medical causation. Owens-

Illinois also asserts that in Celotex’s absence Owens-Illinois

would not have been ‘‘painted’’ with such a ‘‘broad brush’”’

by plaintiffs’ evidence, and that the Court’s limiting instruc-

tions were insufficient to counteract that evidence’s effect on

the jury. And last, Owens-Illinois voices concern over preju-

dice to Celotex but does not intimate what that prejudice

could be.

Prejudice under this portion of the rule is to be evaluated

pragmatically rather than with regard to theoretical possibili-

ties. ‘‘Would the absentee be adversely affected in a practical

sense, and if so, would the prejudice be immediate and seri-

ous, Or remote and minor? . . . Would any party be exposed

to a fresh action by the absentee, and if so how serious is the

threat?’’ 1966 Advisory Committee Note.

Here, Owens-Illinois’ assertions concerning differing trial

strategy is general and speculative, and its dissatisfaction with

the Court’s limiting instructions, conclusory. Moreover, it

appears that Celotex’s absence from the Higgins case wouid

not have affected the bulk of the evidence in the first place,

6la

for all of the evidence of Celotex’s knowledge over the years

would have remained relevant to the Johnson case.

Owens-lllinois argues further that the jury has apportioned

liability among several parties including Celotex and that

‘tthe Court would have no way of envisioning what verdict

the jury would have reached had Celotex not been a defen-

dant in the trial. Any attempt to do so would be a rather

straightforward violation of due process.”’

But there is precedent for ‘‘reallocating’’ proportionate

responsibility among defendants, such as a situation in which

one of the defendants has filed for bankruptcy after verdict.

See, e.g., Austin v. Raymark Industries, Inc., 841 F.2d 1184,

1195-96 (Ist Cir.1988). This Court has uncovered no prece-

dent intimating that salvaging a verdict in this way invades

the province of the jury or constitutes ‘‘prejudice’’ within the

meaning of Rule 19. Indeed, this reallocation affects the jury

verdict in a neutral manner, taking Celotex’s 10% and dis-

tributing it among the other responsible parties in proportion

to the fault that the jury found. Thus, the original jury ver-

dict found the three defendants each 10% responsible, Mr.

Higgins to have been 10% comparatively negligent, and ten

settling co-defendants each 6% responsible. Reallocat

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