# Petition for Writ of Certiorari — W. R. Grace & Company-Conn v. State Farm Mutual Automobile Insurance > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0260%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1994 - **Citation:** 513 U.S. 919 ## Text Supreme Cort "1S. = : . ZN 1) 94 281 art 5 1994, No. ___perice OF THE CLERK ; Iu the Supreme Court of the United States October Term, 1994 W.R. GRACE AND COMPANY-CONN., Petitioner, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI Hugh V. Plunkett III J. Michael Schwartz Jeffrey J. Weill* POPHAM, HAIK, SCHNOBRICH & KAUFMAN, LTD. 3300 Piper Jaffray Tower 222 South Ninth Street Minneapolis, Minnesota 55402 (612) 333-4800 *Counsel of Record Counsel for Petitioner 1994 — Bachman Legal Printing @ (612) 339-9518 @ FAX (612) 337-8053 QUESTIONS PRESENTED This Petition arises from an appeal following a lengthy jury trial of multiple claims and affirmative defenses involving allegations of property damage caused by asbestos-containing fireproofing installed in buildings Respondent constructed nearly two decades before commencing suit. The Illinois construction statute of repose would bar suit if applied. Petitioner seeks a Writ of Certiorari to review the decision of the Seventh Circuit Court of Appeals affirming judgment against Petitioner on one theory of liability despite the jury’s co-equal special verdict that Petitioner engaged in the precise activity which qualifies a party as a member of the class immunized by the repose statute from any and all claims brought ten years after construction. The following Questions would be raised: 1. Does the Seventh Amendment’s right to trial by jury and its prohibition on reexamination of facts tried by a jury prohibit a federal court of appeals from disregarding a jury’s special verdict findings in toto, reexamining the same disputed dispositive facts, and reaching an opposite conclusion from that of the jury? y 3 Do the Fifth and Fourteenth Amendment guarantees of equal protection and due process under the law prohibit a federal court of appeals from construing or applying a State improvement to real property statute of repose to exclude certain classes of parties on the basis of trade status, while protecting all other like-situated parties to the improvement project, when the highest court in the forum state has declared that the statute meets constitutional scrutiny only if, and precisely because, it equally protects all parties to the improvement from all stale claims of liability? PARTIES TO THE PROCEEDING AND RULE 29.1 STATEMENT The parties to the proceedings below are those listed in the caption on the cover of this petition. W.R. Grace & Company is the parent corporation of W.R. Grace & Company-Conn. Grace’s subsidiaries or partnerships, other than wholly owned operations, are: A-O Grace Kaustik, Boodin Partnership, Carbon Dioxide Slurry Systems LP, Grace Cocoa Associates LP, Grace Offshore Turnkey, Grace Ventures Partnership I & II, Healthcare Medical, Immunecare of Hollywood, Immunecare of Key West, Infusion Systems, New Bedford Infusioncare, Nippon Dearborn Kabushiki Kisha, North Suburban Dialysis, OB One & IVtoo, Palm Springs I.V. Care II, Paramount Coal Company, Pharmacy Direct, Primecare Home Health Services, Grace Specialty Chemicals Indonesia P.T., Pursue Gas Processing and Petrochemical Company, Quality Home Care Services of Watertown, NY, Sleep Diagnostic Associates, Sisters of Charity Home Health Care, and VNA-NMC Homecare Partnership. ili TABLE OF CONTENTS PAGE Ai AMAUMIES....... sk... vi I os ss so 2 poh oe ag Le OPE ae ene ean 2 CONSTITUTIONAL PROVISIONS INVOLVED ..... 3 STATUTORY PROVISION INVOLVED ........... 3 STATEMENT OP THECASE .................. 4 I. ete 4 Il. chitin, de. i rte 6 Ill. Seventh Circuit’s RR ae ene 9 REASONS FOR GRANTING THE WRIT .......... 1] I. The Court Should Grant Certiorari To Reaffirm The Seventh Amendment’s Protection Of The Right To Trial By Jury And Its Prohibition On Courts Reexamining Facts ‘epeecitiee: cn. Gere Ore Oe ee 12 Il. The Court Should Grant Certiorari To Affirm The Equal Protection And Due Process Guarantees Of The Fifth And Fourteenth Amendments In Federal Courts’ Application esipaiinie: oie, o,. eet me eee 19 iv TABLE OF AUTHORITES CASES PAGE United States Supreme Court Cases: Anderson v. City of Besemer City, SP Be i CN rab oe Sie A 14 Atlantic & Gulf Stevedores v. Ellerman Lines, Ltd., SAG ee RR ska a SE Sicko Sarees 13, 18 Ballard v. United States, Se eR CREE BG & wie KA a eee ss Oe TK Wh 15 Bandini Petroleum Co. v. Superior Ct., Be Oe OES Fie Cea 20 Felder v. Casey, SE IE i ose bse Cae a ce ba Ee eee 21 Gallick v. Baltimore & Ohio R. Co., See Gre SO Cee oe wh os CV OSCR oe 14, 17 Justices, Etc. v. United States Ex. Rel. Murray, Fe ee EE ca 6 wh er eek wk ue xe 13 Lavender v. Kurn, er ee es ioe lek RUNG 0 ae ike 17 Lindsley v. Natural Carbonic Gas. Co., ee Be CEE eb. 6 we RARE E46 ON SOK 20-21 Lumberman’s Mut. Cas. Co. v. Elbert, ee Whe Oe CE oes beh ee eases bane ss 13 Maine v. Taylor, We OE NU 6 ie on cw oo wl Ek LU ee oe rae Parklane Hosiery Co. v. Shore, Bias fs egerm seston Oe Te ee ee 13 Parsons v. Bedford, oe Wit 19 OU) 43 (1826). 8 ss oi eo os 13 Tennant v. Peoria & Pekin Union R. Coa., FOR IO Ae eos s os coc chee. 14 United States v. Kubrick, Wr er en GS) FO ee a 5 Warner v. Kewanee Machinery & Conveyor Co., ssribecesesp te syn, rains, EC 17 Weinberger v. Wiesenfeld, WO WENO ee oc’, Vas Sook by A 20 Wilkerson v. McCarthy, ify Sg. toon! cnc, « dL Ee CL 12 Yick Wo v. Hopkins, nes ce any eo ee eer era 25 inoi Continental Ins. Co. v. Walsh Const. Co., 524 N.E.2d 1131 (Il. NN 680355065 6 Sie cs 24 Kleist v. Metrick Electric Co., 571 N.E.2d 819 (Il. MN he oe: 16, 27 St. Louis v. Rockwell Graphic Systems, GOS N.EB.36 SSS. IDBZ). 2c ccc nc ccw ere vsenete 26 Skinner v. Anderson, 231 N.E.2d S88 (iil. 1967)... nec cccccrccces 21-23, 26 Skinner v. Hellmuth, Obata and Kasabau, Inc., 482 N.E.2d 155 (Ill. App. 1985) ......- ee eee eee 23-24 SOD 00:36 SOC. ISGG) oo ccc ccc wececes 21, 24 Other Cases: Appletree Square Ltd. Partnership v. W.R.Grace & Co., __ F.3d __, 1994 WL 372036 (8th Cir., July 19, 1994)... . 6 Kailas Millwork Corp. v. Square D. Corp., 225 N.W.2d 454 (Wis. 1975)... . 2... cece cece ceees 23 Nelson v. Production Credit Ass'n of the Midlands, 930 F.2d 599 (8th Cir.), cert. denied (1991) ..........502 ees 15 Pacific Indemnity Co. v. Thompson- Yaeger, Inc., 260 N.W.2d 548 (Minn. 1977)... 2... 2. ee eee eee 22 Philips v. ABC Builders, Inc., 611 P.2d 821 (Wyo. 1980) ..... 2... cece eee eeees 23 Tabler v. Wallace, 704 S.W.2d 179 (Ky. 1985) ......- cece eee eens 22 Whiting-Turner Contracting Co. v. Coupard, 499 A.2d 178 (Md. App. 1985) .........--- eens 23 Zapata v. Burns, ~ i P & by + a. | 23 on " ‘ioe, CONSTITUTIONAL PROVISIONS I a he bon 6 oo eo vedic 3, 20 vise nis ester oe kg, EE ee een 3, 3 Wale WH PS OEE as Siese'y Cd sk oc vk cas: 3, 20 Me NS ON 06 ook ie bo ko eo rey 20 STATIS Ill. Rev. Stat., 735 ILCS 5/13-214(b) ........... passim RULES I nk Ce ack ok oo ck 29 rr A i i oe he ek 29 MISCELLANEOUS S. Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation (Harvard University Press 1993) ................. 7 G. Christie, Judicial Review of Findings of Fact, 87 Northwestern L. Rev. 14, 15 & 56 (Fall 1992) ... 15-16 NESHAP, Clarification of Intent, 58 F.R. 51784-01 (October 5, 1993) ............... 7 E. Schnapper, Judges Against Juries -- Appellate Review of Federal Jury Verdicts, Wome We me OO COD soc vc eee ke 15 Vili in The Supreme Court of the United States October Term, 1994 W.R. GRACE AND COMPANY-CONN., Petitioner, Vv. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Respondent. Petition For a Writ of Certiorari To the United States Court of Appeals For the Seventh Circuit PETITION FOR A WRIT OF CERTIORARI W.R. Grace & Company-Conn. respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Seventh Circuit in this case. OPINIONS BELOW The Opinion of the United States District Court for the Central District of Illinois denying Grace’s motion for summary judgment was issued on December 30, 1992. It is reported at 834 F. Supp. 1046 and reprinted in the Appendix ["A-_"] A-53- 64. The District Court’s Opinion during trial, taking under advisement Grace’s motion for judgment as a matier of law on repose immunity issued on April 22, 1993 is unreported, and is reprinted in A-40-52. The District Court Opinion denying Grace’s post-trial motions issued on October 26, 1993 is reported at 834 F. Supp. 1052, and reprinted at A-9-39. A panel of the Seventh Circuit issued its Opinion on May 17, 1994. That Opinion is reported at 24 F.3d 955 and reprinted at A-1-7. The jury’s special verdict on State Farm’s liability claims and Grace’s statute of repose affirmative defense was filed on May 11, 1993. These are reprinted in the Lodging [hereinafter cited "L-_"] accompanying this petition. The citations to the trial transcript are designated herein as "Tr-_." JURISDICTION The jurisdiction of this Court to review the judgment of the Seventh Circuit is invoked under 28 U.S.C. § 1254(1), which provides for review of cases in the courts of appeals "{b]y writ of certiorari granted upon the petition of any party to any civil or criminal case, before or after rendition of judgment or decree. Under 28 U.S.C. § 2101(c), the writ of certiorari to the Supreme Court must be “taken or applied for within ninety days after the entry of the such judgment or decree." See also Sup. Ct. R. 13.1. The 90 day period commences from the date of a denial of petition for rehearing, or the entry of the subsequent judgment. Id. at 13.4. In this case, Grace filed a petition for rehearing which was denied on June 16, 1994. [A-3]. The 90 day period would expire on September 14, 1994. 2 CONSTITUTIONAL PROVISIONS INVOLVED U.S. Const. Amend. VII. In suits at common law, where the value in controversy Shall exceed twenty dollars, the right of a trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law. U.S. Const. Amend. XIV. Section 1. ... No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. U.S. Const. Amend. V. . No person shall be ... deprived of life, liberty, or property without due process of law. Ill. Const., Article I, section 2. No person shall be ... denied equal protection of the laws. STATUTORY PROVISION INVOLVED Ill. Rev. Stat., 735 ILCS 5/13-214. Construction -- Design management and supervision. As used in this Section "person" means any individual, any business or legal entity, or any body politic. (b) No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or Omission. STATEMENT OF THE CASE This Petition seeks review of a federal appellate court’s cursory disregard of specific jury findings of fact that a manufacturer/supplier of fireproofing building material engaged in the precise activities that qualified it for immunity from stale claims under the Illinois improvement to real property construction statute of repose. The appellate court reexamined those same disputed facts and reached opposite findings from that of the jury. Review is also sought of the federal appellate court’s application of the state statute of repose to exclude manufacturers/suppliers of constituent elements of improvements to real property from protection under that statute protecting all other parties involved in the construction project from stale claims. The appellate court’s analytical process, factual findings, and conclusion violate the constitutional guarantees of the Fifth, Seventh, and Fourteenth Amendments. I. BACKGROUND In 1963, Petitioner W.R. Grace & Co.-Conn. ("Grace") purchased the assets of the Zonolite Company, a manufacturer of various building and construction materials including a brand of fireproofing called Monokote.' In addition to its manufacturing activities, Grace’s personnel routinely worked with architects, builders and installers on major construction projects regarding the design, planning, specifications, ' Monokote was a cementitous building material designed to prevent structural steel from buckling and collapsing in a fire. When properly applied to structural steel in thicknesses specified by Grace’s and UL tests, it provided fireproofing protection for the useful life of the building. Monokote-3 fireproofing contained vermiculite, a gypsum binder, and chrysotile asbestos. Grace explained the content of Monokote-3 to State Farm’s national architectural firm. [Eg. Def. Tr. Ex. 368]. 4 installation, and testing of its fireproofing so as to meet building code requirements and specific building needs. [Eg. Tr. 672-73, 3202; see also note 4, infra]. In 1970-73, Respondent State Farm Mutual Automobile Insurance Company ("State Farm") had Monokote-3 installed in several office buildings during their original construction. State Farm commenced this suit against Grace in January 1989 asserting property damage due to the fireproofing allegedly releasing asbestos fibers. Jurisdiction of the Illinois federal district court was premised on diversity of citizenship pursuant to 28 U.S.C. § 1332. Before trial, Grace moved for summary judgment that, like other parties to the original construction, it too was immunized from State Farm’s stale claims under the [Illinois construction statute of repose. The statute provides that: No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission. Ill. Rev. Stat. 735 ILCS 5/13-214(b)2 Despite the undisputed * This Court has affirmed the import and validity of statutes of repose which provide all members of a protected class with vested right to immunity from claims of liability after a certain number of years. See, ¢.g., United States v. Kubrick, 444 U.S. 111, 117 (1979) (statutes of repose afford to “plaintiffs what the legislature deems a reasonable time to present their claims [and] protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise"). 5 facts that Grace designed, manufactured and supplied the fireproofing material for the original construction of State Farm’s buildings, and the statutory immunity for claims arising out of "construction of an improvement to real property,” the district court denied the summary judgment motion. [A-61-63]. Grace again moved during the trial for judgment as a matter of law on repose immunity. The district court took that motion under advisement, stating that the issue was "extremely close”. [A-14; A-41]. It held that Grace’s entitlement to the repose defense would be determined "by the extent to which W.R. Grace’s involvement met the statutory threshold of ’design, planning, supervision or observation.’" [A-14; A-41-42]. II. SUMMARY OF TRIAL The case was tried to a jury over the course of seven months (a total of 50 trial days) on State Farm’s liablity claims as well as Grace’s defense of statute of repose immunity. State Farm tried to persuade the jury that Grace’s fireproofing was defective and unreasonably dangerous when it left Grace’s manufacturing plant, that Grace was fraudulent in its warnings regarding its fireproofing, and that Grace’s conduct was willful and wanton so as to impose punitive damages. The jury specifically rejected each one of those claims.’ [L-1]. It found Because asbestos-in-building property damage claims may be barred by various statutes of repose and limitations, many siates have passed so-called "revival" statutes. See, e.g., Minn. Rev. Stat. § 541.22, discussed in Appletree Square Ltd. Partnership v. W. R. Grace, __ F.3d. __, 1994 WL 372036 (8th Cir., July 19, 1994). Illinois had not instituted such legislation; the application or constitutionality of such revival statutes is not at issue here. > Grace offered evidence, inter alia, to show that allegations of hazards associated with in-place asbestos are greatly overstated and that the fireproofing in State Farm’s buildings should not be 6 Grace liable on the single count of negligence, and it also found that State Farm was 30 percent contributorily negligent. [L-1-2]. On the dispositive defense of statute of repose immunity, Grace presented evidence that its personnel consulted with State Farm’s architects about the design and planning of the fireproofing needs of this construction project. Grace further Showed that it met and consulted with State Farm on construction-related problems, inspected the fireproofing on the job site, and conducted additional on-site testing of the fireproofing. Although State Farm argued to the jury that liability should be imposed on Grace for construction-related activities, it argued that those same activities were of no significance to the jury’s resolution of the repose question.* The removed. State Farm’s own air testing showed that the levels of asbestos fibers in the ambient air in its buildings were well under OSHA and EPA standards. [Tr. at 6760-65]. See also NESHAP, Clarification of Intent, 58 F.R. 51784-01 (October 5, 1993) (clarifying previous misunderstanding of EPA’s position as “encouraging unnecessary and unwise (from a health standpoint) removals" of asbestos materials); S. Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation, at 12-13 (Harvard University Press 1993) (leaving asbestos-containing material in buildings poses no appreciable risk: "Most experts believe that white asbestos [the kind in Monokote] left in place is virtually harmless ... The risk is so small as to be virtually meaningless."). * State Farm argued to the jury on liability that: "While our job is going on, we’ve got a problem. This powdery falloff already with Monokote. This is October 1972. This is a memo concerning the problem written by Grace individuals about our job. Hard to read. Monokote has powdery falloff found on top of ceiling tile. Well, that’s the same thing we had 20 years later. Mr. Egan [Grace representative] comes down to our job, Exhibit 1228, and we'll talk about Mr. Egan’s letter. He assures us that we're going to have a problem-free future with respect to dusting 7 jury was asked to answer a special verdict question on the repose defense taken directly from the repose statute and tailored by the court to fit this case: Did W.R. Grace provide design, planning, supervision, observation or management of construction services related to installation of fireproofing to State Farm Mutual Automobile Insurance Company in addition to supplying bags of Mono-Kote 3 and Mono-Kote 4 fireproofing? [L-3].° After hearing the evidence and weighing conflicting arguments on Grace’s repose defense, the jury returned its verdict. Despite State Farm’s arguments that the jury should answer "No", the jury agreed with Grace and answered, "Yes." and no continuing maintenance problem for Monokote. And we’ll see, ladies and gentlemen, that just hasn’t turned out to be true." (Tr. at 6698). On the other hand, State Farm argued to the jury on repose immunity that: "There’s a question, did Grace provide design planning, supervision, observation, or management of construction services related to the installation in addition to selling the product. They did not. The only thing they did was come down when there was a problem just like any manufacturer would. And that’s very important because we are suing them as the manufacturer. We ask on that question whether they provided these additional services, you check no, because they did not. They had no contract to do so. The only time they came is like any other manufacturer would come if there was a problem. Of course, they didn’t tell us the truth about the problem but they came.” [Tr. at 6863]. * The aspect of the Ilinois repose statute which immunizes parties that engaged in the “construction of an improvement” per se was not asked of the jury inasmuch as Grace’s manufacture and supply of the fireproofing material was an undisputed fact. [/d.}. Thus, in addition to designing, testing, manufacturing and supplying the Monokote fireproofing to State Farm, the jury found that Grace provided the enumerated job-specific services which immunize it from State Farm's claims under the repose Statute. Following trial, Grace moved the district court to dismiss the sole remaining claim of negligence consistent with the jury’s verdict on the repose defense and its rejection of all other State Farm liability claims. The court refused to grant Grace Statutory immunity from the negligence claim despite its earlier ruling that the jury would determine whether Grace’s activities, beyond construction of the fireproofing, met the statute’s requirements and the jury’s verdict that it did. The court did not hold (nor did State Farm argue) that the jury’s repose verdict was unsupported by the evidence. Rather, it rejected the jury’s findings as non-binding. [A-25]. It entered judgment against Grace for $12.5 million on the negligence finding. [A-38]. Grace appealed on the sole issue of its repose immunity. Til. THE COURT OF APPEALS’ OPINION A three-judge panel of the Seventh Circuit Court of Appeals affirmed the judgment against Grace in a terse, three page reported opinion that ignored the jury’s verdict in its entirety® and cursorily disregarded the jury’s special verdict on * The Seventh Circuit never acknowledged the jury’s verdict explicitly rejecting three of State Farm’s liability claims and instead adopted lop-sided versions of the facts which the verdict, in its entirety, does not support. As one example, the court wrote that Grace’s motivation in selling Monokote-3 was to "unload its inventory” on State Farm and to circumvent price controls. [A-2]. These characterizations are contrary to the jury’s finding that Grace was neither fraudulent nor willful and wanton in any of its conduct. [L-1]. The court also recited allegations of Grace’s 9 the statute of repose as a "red herring" [A-3]. The court reexamined the evidence and reached the contrary factual conclusion that Grace did not engage in the construction activities found by the jury (again, on appeal, State Farm did not assert that the jury verdict was without support in the evidence). The Seventh Circuit made its own findings on this dispositive defense without any support in the record, much less the verdict, Stating that Grace "merely sold bags of Monokote" to State Farm. [A-4; emphasis in original]. Although the jury had expressly found that Grace provided "design, planning, supervision, observation or management of construction services related to installation ... in addition to supplying bags of Monokote,” the court ignored that finding. Instead, it made findings that, in its opinion: the activities in which [Grace] engaged in relation to the Monokote 3 used in the construction of State Farm’s three buildings are not reasonably interpreted as design, supervision, observation, planning, etc. [A-4]. Thus, contrary to construing facts to support the verdict, the Seventh Circuit gave no deference to the findings of the ten- person jury. It reexamined the evidence and reached its own conclusions that Grace did not engage in the precise activities set forth in the repose statute despite the jury’s explicit verdict to the contrary. The court made its own further factual findings that the jury’s verdict on negligence could only have been based on “gratuitous” use of asbestos in its Monokote-3 without mention of the jury’s rejection of State Farm’s strict liability claim and finding the product was not "defective and unsafe” when it left Grace’s control. [L-1; L-10-13]. 10 manufacturing activity unrelated to the construction project. It wrote sweepingly that: [Grace’s} negligence had nothing to do with the installation or application of the MonoKote... The problem was in the design of the Mono-Kote (to include asbestos), the failure to test the product, and the failure to warn about it... [Grace’s] negligent acts or omissions [were] remote from building construction... [A-5]. The court concluded that the statute "protects none of the activities that the jury could have found to be tortious." [Id.}. Yet, in drawing those inferences from the Single negligence finding, the court did not even consider the substantial support in the rest of jury’s verdict, the evidentiary record, or the arguments of counsel which makes the jury’s Single negligence finding consistent with the job-specific construction activities that the jury found Grace had performed in relation to State . Farm when answering the repose question. The Seventh Circuit also wrote that, in enacting the current version of the statute, the Illinois General Assembly : evidently intended "to circumscribe its protection far more narrowly [i,e. to not protect suppliers of building materials]- in fact as narrowly as the Supreme Court of Illinois would permit" [A-4] -- without even looking at the legislative history or Illinois Supreme Court pronouncements about the constitutionally- required scope of the construction statute of repose to protect exactly such parties.’ The court then held that Grace was not ” As explained, infra at p. 21-24, the current version of the Illinois construction statute of repose was rewritten and passed to broaden its scope so as to avoid discriminatory application, meet Constitutional mandates, and conform to requirements established by the Illinois Supreme Court’s criticisms of the former Statute’s overly 11 entitled to the benefit of the jury’s verdict on the statute of repose defense because Grace’s activities, as the court described them, did not turn Grace into a "designer or builder.” [A-4-5.]. Finally, ignoring extensive case law in Illinois applying the statute to constituent parts or components of overall improvements, the court concluded that "construction" of the building’s fireproofing would not itself qualify Grace for immunity because, the court decided, the allegedly defective fireproofing in State Farm’s buildings did not constitute an improvement to real property as a mere "spray." [A-6-7]. REASONS FOR GRANTING THE WRIT The Court has traditionally held that "the criterion governing the exercise of our discretion in granting or denying certiorari is not who loses below but whether the jury function in passing on disputed questions of fact and in drawing inferences from proven fact has been respected." Wilkerson v. McCarthy, 336 U.S. 53, 70-71 (1949) (Douglas, J., concurring). This case warrants the Court’s review because it raises important issues of fundamental Constitutional rights and the related constraints placed on the authority of the federal appellate courts. This Opinion, if left to stand, jeopardizes the guarantees of the Seventh Amendment’s protection of the right to have a jury’s resolution of disputed material fact issues given effect and its prohibition against courts’ reexamining facts that have been tried by a jury. The Opinion also erodes important equal protection and due process guarantees which preclude a federal court from construing a state statute contrary to what the highest court of the forum state has declared would render it unconstitutional. narrow protections excluding owners, tenants, manufacturers, and suppliers of building materials. 12 I. THE COURT SHOULD GRANT CERTIORARI TO REAFFIRM THE SEVENTH AMENDMENT’S PROTECTION OF THE RIGHT TO TRIAL BY JURY - AND ITS PROHIBITION ON COURTS REEXAMINING FACTS TRIED BY A JURY. The Seventh Amendment was adopted because the right to have facts determined by a jury in civil cases was considered “a safeguard too precious to be left to the whim of the sovereign, or it might be added, to that of the judiciary." Parklane Hosiery Co. v. Shore, 439 U.S. 322, 343 (1979) (Rehnquist, J. dissenting; emphasis added). The Amendment provides that: [T]he right of a trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law. U.S. Const., Amend. VII.* Thirty years ago, this Court enforced the Seventh Amendment proscriptions on appellate court reexamination of facts tried by a jury in Atlantic & Gulf Stevedores v. Ellerman Lines, Ltd., 369 U.S. 355 (1962). The Court reversed a federal appellate court that had ignored special jury verdict findings, and emphatically held: * In its early years, the Court stated that the Seventh Amendment was principally passed out of "the fear and alarm in respect to the appellate jurisdiction of this court over cases tried by a jury". Justices, Etc. v. United States Ex. Rel. Murray, 76 U.S. 658, 661 (1870); citing Parsons v. Bedford, 28 U.S. (3 Pet.) 443, 446 (1824). As such, the Court has noted that "[a]ppellate review in the federal courts is, of course, limited ultimately by the Seventh Amendment"). Lumberman’s Mut. Cas. Co. v. Elbert, 348 U.S. 48, 53 n.5 (1954). 13 We might agree with the Court of Appeals had the questions of fact been left to us. But neither we nor the Court of Appeals can redetermine facts found by the jury any more than the District Court can predetermine them. Id. at 359-60. See also Gallick v. Baltimore & Ohio R. Co., 372 U.S. 108, 112-14 (1963) (appellate court improperly invaded the jury’s function and province by holding that the evidence at trial of a causal connection fell short of that required for consideration of a jury). Likewise, in Tennant v. Peoria & Pekin Union R. Co., 321 U.S. 29 (1943), an appellate court concluded that insufficient proof existed to support a jury’s finding of proximate cause and then substituted its own view of the evidence for that of the jury. In reversing, this Court narrowly prescribed the limits of appellate review of facts tried to a jury as follows: {The jury’s] conclusion, whether it relates to negligence, causation, or any other factual matter, cannot be ignored. Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have | drawn different inferences or conclusions or because judges feel that other results are more reasonable. Id. at 35.° When reviewing courts disregard jury verdicts and engage in de novo fact finding contrary to clear findings by juries, the consequences fail to serve either the public or the * In the context of reviewing district courts’ findings of fact under Federal Rule of Civil Procedure 52(a), the Court in Maine v. Taylor, 477 U.S. 131, 145 n.17 (1986) emphasized that appellate courts are not "free to examine the record and draw [their] own conclusions.". See also Anderson v. City of Besemer City, 470 U.S. 564, 574-75 (1985) ("the trial on the merits should be the main event rather than a tryout on the road”). 14 courts: “the injury is not limited to the defendant, there is injury to the jury system, to the law as an institution, to the community at large, and to the democratic ideal reflected in the process of our courts." Ballard v. United States, 329 U.S. 187, 195 (1946). Commentators have pointed out that for the past few decades this Court has not granted review in a Seventh Amendment case to restrain the reviewing courts from reexamining facts tried by a jury. They note a growing trend among reviewing courts to involve themselves in the fact-finding process and substitute their own interpretations of evidence for that of the jury: In the absence of Supreme Court scrutiny or intervention, the circuit courts have been free to work their will on civil jury verdicts. This protracted Suspension of enforcement of the seventh amendment has tested the extent of the inherent self-restraint on the part of judges given the raw power to overrule any jury verdict with which they happened to disagree... The evisceration of the right to trial by jury which has become commonplace in the circuit courts is now entirely perceptible: the need for Supreme Court action to restore the vitality of the seventh amendment is equally clear. E. Schnapper, Judges Against Juries -- Appellate Review of Federal Jury Verdicts, 1989 Wis. L. Rev. 237, 353-54 (1989); cited in Nelson v. Production Credit Ass’n of the Midlands, 930 F.2d 599, 607-8, n.9 (8th Cir.), rehearing en banc denied, cert. denied, 112 S.Ct. 417 (1991) (Heaney, J. dissenting) (noting an “unfortunate trend that is eroding the protection of the seventh amendment. Appellate reversals of jury fact-finding, once relatively rare, are now occurring more frequently."); G. Christie, Judicial Review of Findings of Fact, 87 N.W.U.L. Rev. 14, 56 (Fall 1992) ("There would be no point in having a trial if the conclusions arrived at can be overturned merely because 15 a subsequent reviewer disagrees with them."). Given these warnings from numerous sources, the guidance of this Court is now required to stem the tide of arbitrary judicial discretion in reviewing special jury verdict findings in civil cases. In this case, the Seventh Circuit summarily rejected specific jury findings that Grace engaged in activities entitling it to statutory immunity from stale claims and then reexamined the same disputed facts to reach a contrary conclusion in violation of the Seventh Amendment guarantees. The jury, after hearing the evidence and weighing the conflicting arguments, found that Grace (in addition to manufacturing and supplying the fireproofing material) provided "design, planning, Supervision, observation or management of construction services" with respect to this particular building construction. The jury’s verdict confirmed that Grace’s involvement met precise job-specific activities enumerated in the Illinois statute of repose which qualify it as a member of the protected class of defendants.° Yet, without so much as articulating a standard of review, the Seventh Circuit perfunctorily disregarded those findings as a "red herring" and reached its own contrary findings of fact. It posited that Grace "merely supplied bags of Monokote" to State Farm and decided, in its view, that Grace’s activities could not be "reasonably interpreted" as those set forth in the statute or found by the jury. [A-4]. Consistent with the Seventh Amendment’s right to trial by jury, Grace spent fifty trial days rebutting State Farm’s case and presenting its own, to obtain a jury verdict in its favor on the dispositive statute of repose defense and on three of four 1° See, e.g., Kleist v. Metrick Electric Co., 571 N.E.2d 819, 822 (il. App. 1991) ("[The statute] protects on its face anyone who engages in enumerated activities. [Defendant] engaged in the protected activities and, thus, is within the protected class."). 16 liability claims. Such effort and the jury’s resulting verdict cannot be blithely set aside as a "red herring" or ignored completely by the courts of appeal without raising serious questions about the Seventh Amendment’s vitality. The precedents of this Court and principles underlying the Seventh Amendment’s right to trial by jury require that reviewing courts defer and zive effect to the jury’s special verdict findings of fact if supported by the evidence. See Lavender y. Kurn, 327 U.S. 645, 653 (1946) (where there is an evidentiary basis for the jury’s verdict, the reviewing court’s function "is exhausted ... it being immaterial that the court might draw a contrary inference or feel that another conclusion is more reasonable"); see also Warner v. Kewanee Machinery & Conveyor Co., 398 U.S. 906 (1970) (Black, J., dissenting) ("questions of the sufficiency of the evidence are for the jury -- not the trial judge or the appellate court"). Despite the Court’s pronouncements that appellate courts must construe the evidence to favor the jury’s verdict, the appellate court here did just the opposite. By engaging in de novo determination of ultimate facts, the Seventh Circuit ignored black-letter standards of appellate review and rendered hollow the Seventh Amendment’s protections of right to trial by jury without reexamination of the facts tried by the jury. The Court Should grant certiorari in this case to reaffirm the constitutional Proscriptions on appellate court fact-finding in derogation of jury verdicts and to set forth clear guidelines for reviewing jury verdicts consistently with the Seventh Amendment. Moreover, in addition to reexamining the facts decided by the jury and reaching contrary fact conclusions with respect to Grace’s affirmative defense of repose immunity, the Seventh Circuit nullified the majority of the jury’s verdict. In finding that none of the activities of Grace in relation to this construction project were of the kind that would warrant the protection of the statute, the court drew inferences from the 17 jury’s single negligence finding against Grace without acknowledging or harmonizing its analysis with the rest of the verdict or the record as a whole. The court simply speculated that the negligence finding could not have been based on Grace’s construction-related activities. [A-5]. In Gallick, supra, 372 U.S. 108 at 119, this Court held that the appellate courts have a duty under the Seventh Amendment to attempt to harmonize special verdict interrogatories for consistency. See also Atlantic & Gulf Stevedores, Inc., supra, 369 U.S. 355 at 364 ("Where there is a view of the case that makes the jury’s answers to special interrogatories consistent, they must be resolved that way. For a search for one possible view of the case which will make the jury’s findings inconsistent results in a collision with the Seventh Amendment"). When it inferred that the negligence finding could not have been related to Grace’s job-specific activities, the Seventh Circuit chose to ignore the jury’s verdict in its entirety. The jury found in its verdict that Grace did engage in “design, planning, supervision or observation of construction services related to installation ... in addition to supplying bags of ... fireproofing." In addition, the jury rejected State Farm’s strict liability claim, finding that the Monokote fireproofing was not defective nor unreasonably dangerous. [L-2; L-10-14]."' The jury also found '' The appellate court’s failure to even acknowledge the jury’s finding absolving Grace from liability under State Farm’s strict liability theory results in a Catch-22: had Grace been found liable for the manufacture of a defective and unreasonably dangerous product, it is certain that the Seventh Circuit would have pointed to that jury finding as evidence that the negligence finding was premised on Grace’s manufacturing activity which, in the courts view, would not warrant repose immunity. The jury’s finding that Grace was not strictly liable in the design and manufacture of Monokote is more consistent with the jury’s finding of negligence as based on job-specific activities. 18 that State Farm was negligent and responsible for part of its own damages. [L-1]. State Farm argued that Grace should be held liable for its construction activities, see n.4, supra; and, on its negligence claim, State Farm received a continuing duty to warn instruction covering those activities.» Any attempt on the part of the Seventh Circuit to harmonize the entire verdict and record would have prevented the court from concluding, as it did, that the jury’s negligence verdict could only have been related to Grace’s “remote” manufacturing activity. The verdict as a whole is consistent with the opposite conclusion. The Seventh Circuit’s disregard of co-equal findings of fact for Grace and its sole focus, albeit speculative, on the presumed evidentiary basis for the jury’s negligence finding rendered the vast majority of jury’s verdict in this case to be a complete nullity. In short, this Court should not permit erosion of the Seventh Amendment through the avenue of appellate court selective reexamination of facts and speculative forays into the jury’s thinking process. As the only court with authority to review and remedy infringements of Constitutional rights and principles flowing from opinions by federal courts of appeals, the Court should grant certiorari to ensure that federal courts respect and follow a jury’s determination of disputed issues of material fact. Absent review, courts of appeal may continue to disregard jury’s verdicts as distractions, construe the facts regardless of the jury’s verdict to comport with their own characterization of the evidence, and speculate as to jury thought Processes by recognizing and respecting only selected portions of the verdict and record. The district court, over Grace’s Objection, instructed in its negligence charge that: "If W.R. Grace knew or should have known at the time it sold Monokote-3 to State Farm that its product was hazardous, then W.R. Grace was under a continuing duty to communicate such knowledge to State Farm." [L-6]. 19 II, THE COURT SHOULD GRANT CERTIORARI TO AFFIRM THE EQUAL PROTECTION AND DUE PROCESS GUARANTEES OF THE FIFTH AND FOURTEENTH AMENDMENTS IN FEDERAL COURT APPLICATION OF STATE STATUTES. The Equal Protection Clause of the Fourteenth Amendment guarantees that similar-situated individuals will be treated similarly by the government. It provides: [Nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. U.S. Const., Amend. XIV." In applying a state statute, this Court has often stated that the federal courts must abide by the "construction placed upon it by the state court." Bandini Petroleum Co. v. Superior Ct., 284 U.S. 8, 18 (1931); citing Lindsley v. Natural Carbonic Gas Company, 220 U.S. 61, 73 (1911) ("it is necessary to inquire what construction has been put upon [the state statute] by the highest court of the state, for that construction must be accepted by the courts of the United States, and be regarded by them as a part of the provision when '? The Equal Protection Clause of the Fourteenth Amendment applies to the federal government through the Fifth Amendment Due Process Clause which provides that "No person shall ... be deprived of life, liberty, or property without due process of law." U.S. Const. Amend. V. The Court’s "approach to Fifth Amendment equal protection claims" is "the same as to equal protection claims under the Fourteenth Amendment." Weinberger v. Wiesenfeld, 420 U.S. 636, 638 n.2 (1975). The Illinois Constitution provides, in like measure, that "No person shall be deprived of life, liberty or property without due process of law nor be denied equal protection of the laws.” Ill. Const., Art. I, § 2. 20 they are called upon to determine whether it violates any right secured by the Federal Constitution"); see also Felder v. Casey, 487 U.S. 131, 151 (1988), citing Erie R. Co. v. Tompkins, 304 U.S. 64, 78-79 (1938) ("federal courts are constitutionally obligated to apply state law to state claims"). In this case, the Seventh Circuit ignored the dispositive pronouncements of the Illinois appellate courts with regard to the necessary scope of the Illinois construction statute of repose to meet the fundamental Constitutional requirements of equal protection. Two years after the passage of the original Illinois statute of repose in 1965, the Illinois Supreme Court in Skinner v. Anderson, 231 N.E.2d 588 (Ill. 1967) declared the statute unconstitutionally narrow because of its "discriminatory" protections. Id., at 591. The court provided a simple, clear mandate to the Illinois legislature: to pass constitutional scrutiny in Illinois, the construction statute of repose may not protect only architects and contractors involved in improving real property; it must also extend equal protection to owners, manufacturers and suppliers of the building materials who might also be subject to claims of liability arising from defective improvements to real property: ‘* The Illinois Supreme Court declared the original statute unconstitutional under the prohibition against special legislation: "The General Assembly shall not pass local or special laws ... granting to any corporation, association, or individual any special or exclusive privilege, immunity or franchise whatever.” Il. Const., Art. IV, § 23 (revised in Ml. Const., Art. IV, § 13). Since Skinner v. Anderson, the court has confirmed that a special legislation defect under Illinois law equates to a violation of equal protection. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 500 N.E.2d 34, 36 (1986) ("the standards used to evaluate the special legislation under the Illinois Constitution are the same standards applicable to equal protection claims”). —— ea a sao” a ee 21 [O}f all those whose negligence in connection with the construction of an improvement to real property might result in damage to property or injury to persons ... the [original] statute singles out the architect and contractor and grants them immunity... The arbitrary quality of the [original] statute clearly appears when we consider that architects and contractors are not the only persons whose negligence in the construction of a building or other improvement may cause damage to property or injury to persons. If, for example, four years after a building is completed a cornice should fall because the adhesive used was defective, the manufacturer of the adhesive is granted no ore cornice fell because of | defective | design or construction for which an architect or contractor was responsible, immunity is granted. Id. at 591 (emphasis added).'* The Seventh Circuit never 1S Other non-binding state Supreme Courts have followed Skinner v. Anderson and held that their state statutes of repose may not constitutionally exclude designers, manufacturers, or suppliers of building materials to construction projects while protecting other construction trades. E.g., Pacific Indemnity Co. v. Thompson- Yaeger, Inc., 260 N.W.2d 548, 558 (Minn. 1977) ("we too can see no_ basis for including within the protection of the statute persons who construct or design improvements to real estate, and excluding other persons against whom third parties might bring claims should they incur injury, such as owners and material suppliers"); Tabler v. Wallace, 704 S.W.2d 179, 182 (Ky. 1985), cert. denied 479 U.S. 822 (1986) ("no rational basis exists” under a construction statute of repose that conferred "special privileges and immunities upon architects, engineers, and builders" only); Philips v. ABC Builders, 22 Ee considered this mandate directed specifically to manufacturers and suppliers of building materials. To remedy the unconstitutionally discriminatory "trade- status" defect identified by the Illinois Supreme Court in Skinner v. Anderson, the Illinois General Assembly revised the language and passed the current construction statute of repose. See Il. Rev. Stat. Chapter 110, { 13-214(b) (set forth in full, supra at p. 5). Rather than impermissibly protect only some potentially liable persons by trade status, the legislature passed a new Statute that immunizes any person engaged in “design, planning, Supervision, observation or management of construction, or construction of an improvment to real property..." from any claim brought in “tort, contract, or otherwise" after ten years from the allegedly wrongful act. Id. Since the passage of the revised statute, the Illinois appellate courts have soundly rejected attempts to construe the revised statute to exclude manufacturers and suppliers of building materials on the basis of trade status. Rather, those courts have made it clear that the Illinois statute is broad and inclusive so as to withstand Constitutional scrutiny. Pointedly, in Skinner v. Hellmuth, Obata and Kasabau, Inc., 135 Ill. App. 3d 765, 482 N.E.2d 155 (1985), the Illinois Court of Appeals specifically addressed whether the new statute covered manufacturers or suppliers of building materials. That court determined that the revised _ statute remained Inc., 611 P.2d 821 (Wyo. 1980) ("no rational or reasonable justification for granting this immunity to this limited class of persons"); Kallas Millwork Corp. v. Square D Corp., 225 N.W.2d 454, 459 (Wis. 1975) (same). Other courts have not followed the Illinois Supreme Court's decision in Skinner v. Anderson. See, e.g. Zapata v. Burns, 542 A.2d 700, 709 (Conn. 1988); Whiting-Turner Contracting Co. v. Coupard, 499 A.2d 178, 186 (Md. App. 1985). 23 unconstitutional because the new statute on its face does not explicitly include suppliers of building materials: The former statute singled out the architect and contractor from those categories of persons whose negligence in the construction of an improvement to real property may cause injury or damage to others; it gave no similar immunity to suit ... to the owners or person in control or to those who may furnish materials used in constructing the improvements. In the present statute, the only additions to the classes of persons who will be immune from suit ... are those who engaged in the "observation or management of construction." Again, the snenniial wnkeebatal ; ; or dam has no immunity as in the former Statute. Id. at 159-60 (emphasis added). However, rejecting that narrow reading on review, the Illinois Supreme Court reversed the Court of Appeals’ ruling and held the revised statute comported with its earlier mandate and does not deny equal protection because: "the current statute does not exclude persons based upon their status. It protects, on its face, anyone who engages in the enumerated activites." Jd., 500 N.E.2d 34, 37 (Ill. 1986). See also Continental Ins. Co. v. Walsh Const. Co., 171 Ill. App. 3d 135, 139, 524 N.E.2d 1131, 1135-36 (1988) (rejecting argument that the construction statute of repose "limits the liability of builders" but does not give "protection to owners and suppliers pee Thus, the Illinois statute of repose has been thorougly critiqued, amended, construed, and applied by the [Illinois appellate courts to require and provide broad repose protection to all persons whose acts or omissions might subject them to claims of liability for damages or injury arising out of improvements to real property. Manufacturers and suppliers of 24 prototypical building products (such as code-required and extensively applied fireproofing materials) are necessary members of the protected class under the edicts of the Illinois courts. Yet, in this case, the Seventh Circuit never addressed or considered the Illinois courts’ explicit discussions of contractors, material manufacturers or suppliers as being necessarily protected like-situated parties - especially when engaged in job- specific activities beyond construction and supply of building materials themselves. Despite extensive briefing on the subject, the court simply chose not to address or consider any of the equal protection concerns at all.’ The facts were undisputed that Grace designed, constructed, and supplied the fireproofing used throughout the construction of the buildings at issue. Moreover, the jury specifically found that Grace did, in fact, engage in the additional job-specific activities which the district court had determined to be the genuine issue of material fact for trial on the repose defense. The Seventh Circuit ignored those facts and refused to give Grace the protections of like-situated parties - as required by the Illinois Supreme Court’s pronouncements and as due Grace under the jury’s verdict clearly showing Grace to be a member of the intended protected class. Instead, the court held that Grace was not entitled to the immunity of the construction statute of repose because Grace’s © State Farm never asserted that the statute of repose was unconstitutional - nor did Grace. However, to narrowly construe it to exclude the very parties the Supreme Court of Mlinois had discussed as being necessarily included - i.e. manufacturers and suppliers of building materials - renders the statute unconstitutional in its application. See Yick Wo v. Hopkins, 118 U.S. 356, 373-74 (1886) (neutral law may violate equal protection guarantees if applied in a discriminatory manner). No Illinois appellate court has SO applied the statute. 25 construction-related activities did not elevate it to the status of "designer or builder." [A-4-5]. In imposing such a test to be protected under the repose statute, the court skirted - three decades of judicial and legislative history which has rejected as unconstitutional a trade-status standard for application of the Illinois repose statute and which has construed the current statute as necessarily protecting manufacturers and suppliers of building materials. The Seventh Circuit further eroded the protections of the Illinois statute of repose by concluding that even if Grace was akin to a “designer or builder,” the statute would not extend to product liability claims arising out of acts "remote from building construction". [A-5]. Under its view, the suppliers’ and manufacturers’ mandated right to equal protection from liability, as explicitly directed by the Illinois Supreme Court in Skinner v. Anderson, has now been eliminated by a "remoteness" exception created without state precedent by the federal court of appeals. Finally, confronting the undisputed fact that Grace designed, tested, manufactured and supplied the fireproofing for this construction project, the court acknowledged: "[if] the Monokote itself is an improvement it unquestionably was an improvement designed and constructed by Grace, so Grace would be home free." [A-5-6]. The court also recognized that the Illinois Supreme Court "has defined improvement so broadly in terms of a list of criteria ... as to bring the Monokote sprayed onto the structural steel within the semantic, if not necessarily intended, reach of the definition.” [A-6]. Yet, remarkably, the Seventh Circuit flatly refused to apply the Illinois Supreme Court’s already established criteria for "improvement" under the Statute. Instead, the fireproofing is simply characterized as a "spray" - a "standard product incorporated into the improvement, or into the underlying building being improved" - which, the court decided, does not qualify as an improvement. [A-6-7]. Its characterization of the Monokote fireproofing as a mere "spray" and, thus, not an improvement, is not only factually unsound and 26 not grounded in the record;’’ it is contrary to the well-settled Illinois law that the repose statute encompasses components and constituent elements of improvements to real property.’® Had the court had employed, as it must, the criteria established by the Illinois highest court (ie. permanency, integral component, enhancement of value and of use), there could be no doubt that the thousands of pounds of fireproofing bonded to the internal building structures over two decades ago '’ The Monokote fireproofing was applied by trained specialists to permanently bond to steel surfaces throughout the commercial Office buildings’ structural framework of girders, columns, and decking. The building codes required fireproofing systems, and building permits and occupancy certificates would not be issued without receiving inspection of the fireproofing. The fireproofing material was supplied to fill direct orders for each construction project and Grace consulted with the architect and contractor on the job site regarding installation and performance problems during construction - as the jury explicitly found. Finally, all of State Farm's claims arose from and depend on its allegations of property damage and resulting building rehabilitation expenses due to the Suggested defective and unsafe condition of the fireproofing as an integral and extensive improvement to its real estate. '* See St. Louis v. Rockwell Graphic Systems, 605 N.E.2d 555 (Ill. 1992) (relevant criteria for what constitutes an "improvement to real property" include: whether meant to be permanent or temporary, became integral component of overall system, value of property increased, and use of property enhanced"); see also Kleist v. Metrick Electric Co., 571 N.E.2d 819 (Ill. App. 1991) ("to artificially extract each component from an improvement to real property and view it in isolation would be an unrealistic and impractical method of determining what is an improvement to real property ... if a component is an essential or integral part of the improvement to which it belongs, then it is itself an improvement to real property"). 27 during initial construction to meet code requirements qualifies the fireproofing as an improvement. The Seventh Circuit’s idiosyncratic analysis again renders the statute’s application unconstitutional and the Illinois Supreme Court’s own analysis of its broad and nondiscriminatory scope a nulllity in federal diversity cases. If the Seventh Circuit’s radical reconstruction of Illinois law to avoid application of repose immunity to Grace in this case is permitted to stand without Supreme Court scrutiny, then the equal protection guarantees of the Federal Constitution, as already enunciated and applied to the subject statute by the highest court of Illinois, will have been rendered expendable to the caprice of judicial legislation. Under the facts brought out in fifty days of trial, if the repose protections of the Illinois statute are denied this defendant, then Illinois statutory and appellate court law has been set back twenty-five years and no manufacturer or supplier can qualify for protection. In short, the court’s adoption of trade-status tests that only architects or builders can meet directly contradicts the Illinois Supreme Court’s pronouncements that, to be consistent with the guarantees of equal protection, the statute must (and does) protect any defendant that engaged in any of the enumerated activities associated with improving real property and that constituent parts of an improvement are encompassed within the statute’s immunity protection of all those whose efforts have contributed to the improvement. The Seventh Circuit’s unequal treatment denied Grace the equal statutory immunity protections consistently afforded similarly-situated parties and required by the forum state’s highest court to extend to all those potentially subject to liability for allegedly defective and unsafe real property improvements. This Opinion simply reinstates, through federal appellate court construction, the 28 original trade-status-based statute declared unconstitutionally discriminatory by the Illinois Supreme Court two decades ago." Judicial legislation by federal courts should not be encouraged in diversity matters but it must be prohibited where the judicially created state law has already been rejected by the forum state’s highest court. The Court should grant review to fulfill the promises of equal protection and due process guaranteed by the Constitution in the application in diversity actions of state law. Absent review, courts of appeal may continue to ignore state appellate court pronouncements on the construction of their own state’s statutes so as to exclude classes of parties which must be included to apply the statute consistent with the Constitution. CONCLUSION The message of the Seventh Circuit’s Opinion in this case sounds numerous Constitutional alarms. Federal district and appellate courts should not be permitted to discard unchallenged jury verdicts with which they disagree and re- examine the same facts de novo. Jury trials mean little if the Seventh Amendment so allows. Appellate courts should consider the entire record, respect and harmonize the entire verdict, and avoid speculative and one-sided excursions into their own view of the rationale for the jury’s verdict. The Seventh Amendment’s mandate so demands. In addition, the federal appellate courts must follow the constructions and Constitutional mandates of the forum state’s highest court when '° Rather than base an entire statutory construction on unsupported presumptions of the Illinois state legislature’s "evident intent" and the intent of the Illinois Supreme Court’s parameters for the sweep of the statute [A-4], the federal appellate court should have certified the issue to the state’s highest court. Ill. Sup. Ct. Rule 20; Seventh Circuit App. R. 52. 29 applying state statutes and must avoid presumptions of legislative intent, especially where inconsistent with the state appellate courts’ pronouncements. Otherwise, fashioning of state legisiation by federal appellate courts exercising their — reviewing authority threatens principles of sovereignty and due — process - and, in this case, violates equal protection guarantees of the Fourteenth Amendment. Accordingly, Grace respectfully requests the Supreme Court issue a Writ of Certiorari to review the critical Constitutional issues raised by this case. Ultimately, Grace seeks reversal of the Seventh Circuit with an order for entry of judgment dismissing State Farm’s negligence claim under the immunity of Illinois’ construction statute of repose consistent with the jury’s verdict on that issue and with the Illinois Supreme Court’s pronouncements of the Constitutionally- mandated scope of the statute’s protections. Respectfully submitted, Dated: 8/12/94 Hugh V. Plunkett III J. Michael Schwartz Jeffrey J. Weill* POPHAM, HAIK, SCHNOBRICH & KAUFMAN, LTD. 3300 Piper Jaffray Tower 222 South Ninth Street Minneapolis, Minnesota 55402 (612) 333-4800 Counsel for Petitioners * Counsel of Record 30 INDEX TO APPENDIX PAGE Opinion of the United States Court of Appeals for the Seventh Circuit een BONNE i ee ae A-1-7 Order of the Seventh Circuit Denying Petition for Rehearing With Suggestion For Rehearing En Banc (June 16, 1994) .......... A-8 Opinion of the United States District Court for the Central District of Illinois on Motion for Judgment After Trial We ee en cee ceiae A-9-39 Opinion of the United States District Court for the Central District of Illinois on Motion for Judgment as a Matter of Law Pursuant to Fed. R. Civ. P. 50(a)(1) I I it ero ccs cc cases A-40-52 Opinion of the United States District Court for the Central District of Illinois on Motion for Summary Judgment Pursuant to Fed. R. Civ. P. 56(c) Ge ee ees A-53-64 INDEX TO LODGING Jury Verdict and Answers to Special RI SA ea a L-1-7 Jury Instructions As Offered By WUD is bovis nc cc vcccoccecue L-8-16 In the UNITED STATES COURT OF APPEALS For the Seventh Circuit No. 93-3685 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. W.R. GRACE & COMPANY-CONN., Defendant-Appellant. Appeal from the United States District Court for the Central District of Illinois, Springfield Division. No. 89-3022-Richard Mills, Judge. ARGUED APRIL 5, 1994-DECIDED MAY 17, 1994 Before POSNER, Chief Judge, BAUER, Circuit Judge, and ASPEN, District Judge.* *Hon. Marvin E. Aspen of the Northern District of Illinois. POSNER, Chief Judge. In 1963 W.R. Grace & Company became the manufacturer of "Mono-Kote", fireproofing material, a dry mixture of vermiculite, gypsum, and asbestos packed and sold in 50-pound bags to construction companies. At the construction site a contractor or subcontractor would mix the Mono-Kote with water and spray the mixture on structural steel to fireproof it. In the early 1970s, State Farm Insurance Company built a corporate head-quarters and two other buildings. The architect’s plans specified "cementitious" fireproofing, of which Mono-Kote was a prominent brand. The contractors bought and used Mono-Kote for the fireproofing of the buildings. Ten years later State Farm discovered large quantities of airborne asbestos fibers in the three buildings and undertook a costly program to remove the Mono-Kote. Later State Farm brought this diversity tort action against Grace, charging that Grace had failed to warn State Farm that Mono-Kote contained asbestos and had not tested the product adequately before sale. The very use of asbestos in Mono-Kote, State Farm charged, was gratuitous because Grace had developed an asbestos-free variant (Mono-Kote 4) that worked just as well and cost only a little more. Grace had failed to sell State Farm Mono-Kote 4 only because it was trying to unload its inventory of the old Mono-Kote (Mono-Kote 3) and because the price of Mono Kote 4 was limited by price controls. (Eventually Grace did begin supplying Mono-Kote 4 for the State Farm building projects.) The suit charged negligence and breach of warranty. The district judge held the warranty claim time barred but allowed the negligence claim to go to the jury, the Supreme Court of Illinois having relaxed the "economic loss" rule in asbestos cases. Board of Education v. A, C & S, Inc., 546 N.E.2d 580, 585-90 (Ill. 1989). The jury found that Grace had been negligent, and, after a reduction in the verdict by reason of State Farm’s A-2 contributory negligence, judgment was entered for $12.5 million. The only issue raised on appeal is whether State Farm’s suit is barred by the Illinois Design and Construction Statute of Repose, which bars any tort suit "brought against any person for any act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property[,] after 10 years have elapsed from the time of such act or omission." 735 IL CS 5113-214(b). If that is the character of Grace’s act or omission, the suit is indeed barred. The judge thought not, 834 F. Supp. 1052, 1056-61 (C.D. Ill. 1993), but propounded the following special interrogatory, which the jury answered "Yes": "Did W.R. Grace provide design, planning, supervision, observation or management of construction services related to installation of fireproofing to State Farm Mutual Automobile Insurance Company in addition to supplying bags of Monokote 3 and Monokote 4 fireproofing?" The special interrogatory is a red herring. (Why it was asked eludes us.) It embellishes the Statute with the expansive term "services" and brings in Grace’s activities with regard to Mono-Kote 4, which is not the product on which the suit is based. The few visits that employees of Grace made to the building sites occurred, with one possible exception, after the Mono-Kote 3, the product in suit, had been sprayed on. Grace did not Supervise the spraying. The original version of the statute was invalidated as "special legislation,” mainly because it excluded from its protection owners or occupiers of the property on which the building was being built or the improvement being made. Skinner v. Anderson, 231 N.E.2d 588 (Ill. 1967). So the A-3 legislature amended the statute to knock out the exclusion. The revised statute was upheld in People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 500 N.E.2d 34 (IIL 1986), where the court remarked that the revised statute "does not exclude persons based upon their status” but instead protects anyone who engages in the enumerated activities.” Jd. at 37 (emphasis in original). Grace fastens on this language, arguing that the fact that it is a manufacturer rather than a designer, builder, etc. does not exclude it from the statute’s protection. That is true but the activities in which it engaged in relation to the Mono-Kote 3 used in the construction of State Farm’s three buildings are not reasonably interpreted as design, supervision, observation, planning, etc. Grace did not spray the structural steel in the buildings with a mixture of Mono-Kote and water. It merely sold bags of Mono-Kote for application by a contractor or subcontractor at the building Site. The bags came with instructions. Most products do. If including instructions with the delivered product makes a supplier a designer or builder, then virtually every supplier of building materials is protected by the statute of repose despite the legislature’s evident intent to circumscribe its protection far more narrowly-in fact as narrowly as the Supreme Court of Illinois would permit. Grace points us to a letter from a subcontractor to the contractor for one of the buildings requesting approval for the use of Mono-Kote as the material for fireproofing the building. Enclosed are a "To Whom It May Concern” letter from Grace certifying that the Mono- Kote to be supplied to the subcontractor complies with Underwriters’ Laboratories specifications and a printed brochure describing Mono-Kote, explaining how it should be installed, and reciting its Underwriters’ Laboratories ratings. Grace argues that the subcontractor followed these directions to a T and we may assume that it did, but we do not see how A-4 that turned Grace into a designer or builder. Every product used in the construction of a building has attributes that constrain its use, hence "specifications" express or implied for that use. If this is enough to make the supplier of the product a delegate of the architect, furnishing design specifications that otherwise the architect himself would have to furnish, the Statute will embrace every supplier of building materials. Surely that was not intended. Even if all this is wrong and the printed brochure made Grace a designer or builder of State Farm’s buildings, Grace would still lose. Its negligence had nothing to do with the installation or application of the Mono-Kote. So far as appears, the directions for the installation of the product were perfectly adequate and it could not have been installed better. The problem was in the design of the Mono-Kote (to include asbestos), the failure to test the product, and the failure to warn about it. These negligent acts or omissions being remote from building construction were not the sort of activities that the statute was intended to shield from late-filed products liability suits, as the California courts have held in interpreting a materially identical statute. Baker v. Walker & Walker, Inc., 184 Cal. Rptr. 245,251 (App. 1982). Grace itself emphasizes that the statute protects activities rather than particular persons. People v. Asbestospray Corp., 616 N.E.2d 652,657 (Ill. App. 1993); C.S. Johnson Co. v. Champaign National Bank, 467 N.E.2d 363, 365 (Il. App. 1984). It protects none of the activities that the jury could have found to be tortious. But our analysis is incomplete. We have been focusing on the meaning of designing, planning, constructing, etc. the building, but the statute also embraces the designing, planning, constructing, etc. of improvements to the building. If the Mono-Kote itself is an improvement it unquestionably A-5 was an improvement designed and constructed by Grace, so Grace would be home free. Of course calling a spray an "improvement" would do violence to the ordinary meaning of — the word when it is used in the context of construction, as well as impart a breathtaking scope to the statute. An extension to a kitchen is an improvement; the paint on the extension is not. But the Supreme Court of Illinois, whose interpretation of the statute’s meaning we are trying to predict, has defined improvement so broadly in terms of a list of criteria such as whether "the addition was meant to be permanent or temporary" and "whether it became an integral component of the overall system,” rare ner epg Graphic Systems, Inc., 605 N.E.2d 555,556 (Ill. 1992) -- to bring the Mono-Kote sprayed onto the structural at te in State Farm’s buildings within the semantic, if not necessarily the intended, reach of the definition. The St. Louis case involved a printing press, and the court remanded for a determination whether, given the cost of the press, its size, and the building modifications if any required for its installation, it was an improvement. Our decision in Hausman v. Monarch Machine Tool Co., 997 F.2d 351,354-55(7th Cir. 1993), interpreting the Illinois statute, found that a 150-foot-long machine for annealing steel, the installation of which had required raising the roof of the factory, was an improvement to the factory building. Witham v. Whiting Co., 975 F.2d 1342, 134~7 (7th Cir. 1992), reached the same conclusion with regard to a stationary crane that had been custom-designed to fit into the building where the accident occurred. Each of these cases involved a palpable improvement; it does not follow that a standard product incorporated into the improvement, or into the underlying building being improved, is also an improvement. Peopie v. Asbestospray Comp., supra, 616 N.E.2d at 657-58, holds, correctly in our view, that it is not. See also Hilliard v. A -6 Lummus Co., 834 F.2d 1352, 1357(7th Cir. 1987); Corbally v. W.R. Grace & Co., 993 F.2d 492(Sth Cir. 1993); Baker v. Walker & Walker, Inc., supra, 184 Cal. Rptr. at 250; Sevilla v. Steams-Roger, Inc., 161 Cal. Rptr. 700, 702 (App. 1980). No case extends the concept of improvement to a spray. The judgment for State Farm is AFFIRMED. UNITED STATES COURT OF APPEALS For the Seventh Circuit Chicago, Illinois 60604 June 16, 1994 Before Hon. Richard A. Posner, Chief Circuit Judge Hon. William J. Bauer, Circuit Judge Hon. Marvin E. Aspen, District Judge* STATE FARM MUTUAL ) Appeal from the United AUTOMOBILE ) from the Central District INSURANCE COMPANY, ) of Illinois, Plaintiff-Appellee, ) ) v. ) Springfield Division ) No. 89-3022 W.R. GRACE & COMPANY - ) No. 93-3685 CONN., ) Richard Mills, Judge ) Defendant-Appellant. ) ) ORDER On May 31, 1994, defendant-appellant filed a petition for rehearing with suggestion for rehearing en banc. All of the judges on the original panel have voted to deny the petition, and none of the active judges has requested a vote on the suggestion for rehearing en banc. The petition is therefore DENIED. * Hon. Marvin E. Aspen of the Northern District of Illinois, sitting by designation. A-8 STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Plaintiff, v. W.R. GRACE & CO., Defendant No. 89-3022. United States District Court, C.D. Illinois, Springfield Division. Oct. 26,1993. OPINION RICHARD MILLS, District Judge: Asbestos property-damage litigation. Fifty day trial conducted piecemeal from January to August 1993. End result: jury awards State Farm $17,889,632.47 damages, but also finds State Farm thirty percent negligent. Now before the Court, W.R. Grace’s motions: (1) to dismiss all claims as untimely filed under the Illinois Construction Statute of Repose; (2) for new trial; (3) for judgment after trial. A-9 I. Background State Farm brought this action to recover the costs of management, removal, and replacement of W.R. Grace’s asbestos containing fireproofing, Monokote-3 (MK3), from State Farm’s corporate headquarters in Bloomington, Illinois, and its regional office buildings in Tempe, Arizona and Austin, Texas. Construction of the three buildings took place between 1970 and 1973. State Farm originally sought damages based on the legal theories of strict liability, negligence, fraudulent misrepresentation, and willful and wanton misconduct. State Farm’s total prayer for compensatory damages for the three buildings was $34,494,483.23. State Farm also sought punitive damages from W.R. Grace. State Farm’s negligence Count averred that asbestos was not necessary in MK3 and that when W.R. Grace was forced to discontinue sales of MK3 in light of regulations promulgated by the Environmental Protection Agency, it replaced the asbestos with shredded paper fiber. State Farm also alleges negligence because W.R. Grace never placed any warnings on MR3, despite the fact that W.R. Grace had knowledge of the harms of asbestos from: (a) its operation of an asbestos-contaminated vermiculite mine and MR3 production facilities (where workers were getting sick); and (b) its involvement in the late 1960’s with the public health debate on asbestos. Despite this knowledge, State Farm alleges that W.R. Grace continued to sell MK3 until the federal ban in July 1973, even though W.R. Grace had developed a non-asbestos Monokote in 1970 and was selling it elsewhere. W.R. Grace denied liability under any legal theory. In addition, W.R. Grace raised the following affirmative A- 10 defenses: statute of limitation, Illinois Statute of Repose, state of the art, misuse, comparative negligence, and assumption of the risk. W.R. Grace took the position that the harms from in- place asbestos are greatly overstated. Specifically, W.R. Grace alleged that documents produced by State Farm revealed that airborne asbestos fiber levels in their buildings were well within and below any applicable government standard, demonstrating that W.R. Grace’s fireproofing should not be removed and could be managed with an effective Operation and maintenance program. Jurisdiction of this Court was invoked under 28 U.S.C. § 1332. The trial was bifurcated. On May 11, 1993, the jury returned a verdict on the liability phase of the trial. The jury returned a verdict of guilty on State Farm’s Count of negligence and not guilty on State Farm’s Counts of fraud, Strict liability, and willful and wanton conduct. In addition, the jury found that State Farm was 30 percent contributorily negligent. On August 26, 1993, the jury returned a verdict on the damages phase of the trial. The jury assessed State Farm’s damages to be $17,889,632.47. After the verdict, W.R. Grace moved for judgment as a matter of law claiming that this suit should be barred because of the Illinois Statute of Repose and the fact that the jury verdicts were inconsistent. W.R. Grace also seeks a new trial for a host of procedural and substantive issues. II. Motion for Judgment as a Matter of Law (A). Statute of Repose The Illinois Construction Statute of Repose states that: No action based upon tort, contract, or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation, or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission. Ill.Rev.Stat, ch. 110, ¥13-214(b). Because State Farm’s buildings were constructed between 1970 and 1972 and this suit was not brought until 1989, W.R. Grace claims that the ten-year repose limit in this Statute has expired and the suit should be barred. 1. Procedural History This marks the fifth time that the Court has considered whether W.R. Grace is protected by this-statute. On January 3,1993, the Court denied W.R. Grace’s motion for summary judgment on this issue. At that time, the uncontested evidence present in the record supported the finding that W.R. Grace was a "mere manufacturer” of asbestos materials. This distinction was important, we noted, because of the dicta in Witham v Whiting Corp., 975 F.2d 1342, 1346-47(7th Cir.1992). Witham was the only Seventh Circuit opinion at that time which addressed the issue. A-12 ee ag In Witham, the plaintiff sued under theories of strict products liability and negligence when he was struck by a girder attached to a 40-ton main hoist crane manufactured by the defendant. The Court noted that "[t}here may be a problem with applying the improvement to real property Statute of repose to a manufacturer of a product used in the improvement who was otherwise uninvolved with the particular construction project." Jd. at 1346. In addition, the court stated that the applicable legislative history did not extend the statute to protect the manufacturer of products.' However, this dicta was not dispositive-- by its own terms.” Witham conceded that the Illinois Supreme Court must eventually resolve the issue. However, despite the disclaimer, the court found that defendant was not a mere manufacturer (“It did not simply pluck the crane from its inventory and ship it to Allied. Instead, it specially manufactured the crane for Allied based on information Allied provided about its plant." Id. at 1347.) and extended the statute of repose to protect the defendant. Despite the forecast in Witham, Illinois Supreme Court did not resolve the issue. As a result, on January 15, 1993, this Court denied W.R. Grace’s motion for interlocutory ' "We note that Section 13-214 is titled ‘Construction-Design management and supervision,’ and the legislative history of that section indicates that its purpose is to protect architects, construction companies, engineers, and the like." (citing 81st Ill.Gen. Assem., House Proceedings. May 25, 1979. at 34). * Witham found that the Appellate Court of Ilinois rejected an argument that a manufacturer does not fall within the class of defendants intended to be protected by the statute of repose. St. Louis v. Rockwell Graphic Systems, Inc., 220 Mi.App.3d 704, 710, 163 Til.Dec. 142, 148, 581 N.E.2d 93, 99 (1991). A- 13 appeal. At issue was whether the Illinois Supreme Court opinion in St. Louis v. Rockwell Graphic Systems, 153 1.2d 1, 178 Ill.Dec. 761, 605 N.E.2d 555 (1992), superseded the analysis of Witham. With the question of whether manufacturers are included within the statute of repose before it, the Illinois Supreme Court remanded the case back to the trial court for a determination of whether the equipment in question (a printing press) was an improvement to real property. As a result, this Court denied W.R. Grace’s motion for interlocutory appeal because neither party submitted evidence on the issue of whether the asbestos was an improvement to property. On April 22,1993, the Court denied W.R. Grace’s motion for judgment as a matter of law. The court found that the statute of repose issue was extremely close and would be determined by the extent to which W.R. Grace’s involvement met the statutory threshold of "design, planning, supervision or observation." We noted that at least one federal court in our circuit had excluded asbestos manufacturers from protection under the statute of repose.’ Nevertheless, we waited for a definitive ruling from the Seventh Circuit or the Illinois Supreme Court. Finally, on May 26, 1993, we denied W.R. Grace’s motion for judgment as a matter of law after the liability portion of the trial on this issue. We invited the parties to address two issues in post-trial motions: (1) the legislative history behind the statute of repose (was the statute intended to protect only those who perform professional design and construction activities?); and (2) statutory construction (does the statute of repose protect only claims arising out of > Heider v. W.A. Grace, 815 F.Supp. 1137 (N.D.I1.1993). A- 14 "design, planning, supervision, or observation,” of the defendant, or all claims?). 2. Legislative and Judicial History [1] Contrary to Whitham’s suggestion that the legislative history of the statute of repose protects a class of defendants (architects, engineers, and the like) and excludes another class (manufacturers of products), we find that the statute of repose does not exclude persons based upon their status. Rather, the pivotal issue is whether the defendant engages in the enumerated activities (i.e., was the defendant engaged in the "design, planning, supervision, observation, or management of construction,” Ill.Rev.Stat. ch. 110, 13-214); Hausman v. Monarch Machine Tool Co., 997 F.2d 351, 353- 54 (7th Cir. 1993) (""[mJere labels are not dispositive’ and section 13-214 protects, on its face, anyone who engages in the enumerated activities." (citations omitted)). Originally, the statute of repose was drafted’to protect only certain design professionals or contractors.‘ Ill.Rev.Stat. ch. 83, § 24f (1965). This statute was struck down as unconstitutional in 1967. Skinner v. Anderson, 38 I1l.2d 455, 231 N.E.2d 588 (1967). In Skinner, the court held that section 29 of the Limitations Act (the predecessor to § 13- 214) was unconstitutional as special legislation because it protected architects and contractors from untimely lawsuits, but not others, such as owners, tenants or manufacturers of materials used in construction: The arbitrary quality of the statute clearly appears when we consider the architects and contractors are not the only persons whose negligence in the construction of a building or other improvement may cause damage to property or injury to persons. /f for example, four years after a building is completed a cornice should fall because the adhesive used was * The original statute of repose stated: No action to recover damages for any injury to property, real or personal, or injury to the person, or for bodily injury or wrongful death, arising out of the defective or unsafe condition of an improvement to real estate, nor any action for contribution or indemnity for damages sustained on account of such injury, shall be brought against any person performing or furnishing the design, planning, supervision of construction, or construction of such improvement to real property, unless such cause of action shall have accrued within four years after the performance or furnishing of such services and construction. This limitation shall not be available to any owner, tenant or person in actual possession and control of the improvement at the time such cause of action accrues. A - 16 TERE SERS ETE RT AES ety TTA Ae i : ss defective, the manufacturer of the adhesive is granted no immunity. And so it is with all others who furnish materials used in the constructing the improvement. But if the cornice fell because of defective design or construction for which an architect or contractor was responsible, immunity is granted. Id. at 38 Ill.2d at 459-60, 231 N.E.2d at 590-91. (Court’s emphasis). [2] W.R. Grace argues that the above quotation demonstrates that the Illinois Supreme Court intended a manufacturer of a basic construction material (adhesive) to be protected under the statute of repose. The Court does not agree. The Court’s conclusion is evident from the subsequent history of the statute. In 1979, the Illinois legislature passed a new statute of repose. The legislature eliminated the exclusivity language of the original statute and expanded the protection from untimely lawsuits to "any person, who, ten years or later, is accused of wrongful acts or omissions related to an improvement to real property. This statute was again struck down by the Illinois Appellate Court in People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 135 Ill.App.3d 765, 90 Ill.Dec. 448, 482 N.E.2d 155 (1985) (Hellmuth I). After citing the language of § 13-214 which protects “design, planning, supervision, observation or management of construction or construction of an improvement to real property" (90 Ill. Dec. at 450, 482 N.E.2d at 157), the panel recognized "again, the material provider whose product was defective causing injury or damages has no immunity .. ." Jd. at 452-53, 482 N.E.2d at 159-60. The court believed that the exclusion of materialmen (and owners of property) from protection was unconstitutional. A-17 However, on appeal, the Illinois Supreme Court held that the legislative classification which concerned the appellate panel (exclusion of owners and materialmen) was not unconstitutional. People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 114 M11.2d 252, 102 Ill.Dec. 412, 500 N.E.2d 34 (1986) (Hellmuth II). The court deferred to the legislature which it said could constitutionally classify "construction activities separately from other activities." Jd. 102 Ill.Dec. at 417, 500 N.E.2d at 38. More importantly for our application, Hellmuth II stated that the statute of repose did not include or exclude persons "based upon their status (e.g. architect, contractor, materialmen)." Jd. 102 [ll.Dec. at 415, 500 N.E.2d at 37. Rather, the court ruled that the statute of repose protects only those who engage in the enumerated activities protected by the statute: design, planning, supervision, observation or management of construction." In this way, the court reasoned that a surety’s issuance of a bond "cannot be deemed to be engaging in the ‘design, planning, supervision, observation or management of construction, or construction .. ." Jd. 102 Ill.Dec. at 417, 500 N.E.2d at 39. The legislative history surrounding the statute of repose also supports the interpretation that only those "persons" engaged in the "enumerated" activities are protected. In the legislative debates on the House floor, Representative John Dunn stated that the legislation was intended to protect those who exercise individual judgment (with concomitant individual responsibility) during construction projects: This is a Bill that would provide a statute of limitations for claims against architects, engineers, consulting engineers, contractors and builders. A- 18 The purpose of this Bill is to provide some relief for professionals, who are trying to exercise their sound judgment in the design and _ construction of improvements to real property . . . so that they and their families are not liable all their lives and beyond lives and into the graves. Eighty-First Illinois General Assembly, House Proceedings, May 25, 1979 at 10, 32. However, when asked if the statute of repose "would apply to architects and contractors only," Mr. Dunn replied, "No. It would apply to the architect, the engineer, the contractor, anyone who was involved in the planning, supervision, operation or management of construction or the construction of an improvement to real property." Jd. at 31 (emphasis added). At no time did the legislative history indicate that the statutory protections would specifically include or exclude the manufacturers of building products. 3. Analysis [3] Thus, to be protected by the statute of repose, W.R. Grace must have participated in the "design, planning, supervision, observation or management of construction, or construction” and the construction that W.R. Grace took part in must constitute an "improvement to real property." Herriott v. Allied Signal, Inc., 998 F.2d 487, 489 (7th Cir. 1993) (citing Ill.Rev.Stat. ch. 110, | 13- 214(b)). i 4 ; iy (a). "Enumerated activities" The threshold level of construction-related activities that satisfy the statute of repose is not yet clear in Illinois law, or the law of our circuit. One Illinois Appellate Court recently stated that: To be included within the statute, a manufacturer must perform some role related to the construction site beyond provision of standard products generally available to the public and not custom designed for the project. People v. Asbestospray Corporation, 247 Ill. App.3d 258, 186 Ill.Dec. 462, 467-68, 616 N.E.2d 652, 657-58 (1993). However, Asbestospray does not assist this Court’s analysis. In Asbestospray, the record was absent any evidence that the defendant had a role in the construction of plaintiff's building. Accordingly, the panel found that defendant was not entitled to the protection of the statute of repose. Therefore, without any evidence in the record, it is impossible to determine what threshold of construction-related activities would have satisfied the panel in Asbestospray. [4] The Court finds the "activity analysis” formulated by the Missouri Supreme Court in Blaske v. Smith & Entzeroth, Inc., 821 S.W.2d 822 (Mo. 1991) (cited with approval in Herriott v. Allied Signal, Inc., 998 F.2d 487 (7th Cir.1993); Witham v. Whiting Corp., 975 F.2d 1342 (7th Cir.1992); Herriott v. Allied Signal, Inc., 801 F.Supp. 52 (N.D.I11.1992)) is more helpful to this Court on this issue. Using the "activity analysis," manufacturers of products are protected by the statute of repose when they engage in “substantial participation at the construction site in significant A - 20 activities in installing or incorporating” their product into the real property or, alternatively, if they custom make their product away from the construction site specifically for a particular project and then install this product at the site. Allied Signal, 801 F.Supp. at 57-8 (quoting Blaske, 821 S.W.2d at 837-38) (Emphasis ours). [5] The Court finds that W.R. Grace did not "custom design" and "install" the Monokote, nor "substantially participate" in the construction of State Farm’s buildings. The evidence showed that the Monokote product was sold in bags to the contractor. The chemical composition of a bag of Monokote fireproofing did not change from job to job. The contractor (not representatives of W.R. Grace) then mixed the Monokote with water in the contractor’s own equipment, and then applied the mixture to State Farm’s buildings--again using the contractor’s own equipment. At no stage in the construction process did W.R. Grace provide any equipment to the contractors installing the Monokote. In addition, W.R. Grace’s involvement in the construction process was minimal. The total cost of the Monokote product ($13,000) was minuscule when compared to the $23 million dollar cost of the construction project. W.R. Grace stated that it was their general policy to routinely meet with contractors to discuss mixing instructions, to check yields, and to assist in the proper application of the fireproofing. These types of services were expected by the customer. W.R. Grace also advised architects, based upon W.R. Grace’s expertise in performing “blue-print takeoffs," on how to determine the fireproofing required to obtain a desired fire rating. However, W.R. Grace offered no evidence which quantified the amount of these services which were provided to State Farm. Indeed, no W.R. Grace representative ever attended the weekly State Farm construction progress A - 21 meetings. Mr. Egan, Manager of W.R. Grace’s Mid-West Region, did visit the construction site (for one day) at State Farm’s headquarters in Bloomington, Illinois to troubleshoot a problem with the building’s curtain wall.* Aside from the visit of Mr. Egan, there is no other evidence that a representatIve of W.R. Grace assisted in the construction of State Farm’s buildings.© | Overall, the headquarters construction project was a 3 1/2 year job. At best, W.R. Grace representatives visited the job on a few isolated occasions (perhaps 4-5 days). This Court cannot find that such minuscule activities amount to "substantial participation.” (b). “Act or Omission" [6] Second, this suit does not allege W.R. Grace was negligent in any of the "enumerated" activities (the "design, planning supervision, observation or management of construction, or construction of an improvement to real property...." Ill.Rev.Stat. ch. 110, { 13- 214) of the statute of repose. Instead, State Farm claimed W.R. Grace was negligent because: (1) asbestos was unnecessary in the manufacture and sale of Monokote; (2) W.R. Grace put no warning label on Monokote packaging or literature concerning the health hazards of asbestos; and (3) W.R. Grace conducted inadequate testing on the Monokote before sale. Because State Farm claims that W.R. Grace was negligent in its manufacturing-related activities, rather than its construction- > It is undisputed that W.R. Grace representatives did not visit the construction of the S.. + Farm regional headquarters buildings in Tempe, Arizona and Austin, Texas. ° The visits of Mr. Bourke and Mr. Lyons (other agents of W.R. Grace) were not related to the construction or application of the Monokote. A - 22 related activities, State Farm argues that W.R. Grace is exempt from the statute of repose. The Court agrees. The proposition that manufacturers receive protection from the statute of repose only if they are sued for on-site construction activities appears in both Illinois judicial precedent and the legislative history of the statute of repose. In Delta Verwaltungs Raf Gesellschaft Mit Beschrankter Hafung v. Kenneth Rowe, 1985 W.L. 2055 at *1 (N.D.II1. July 5, 1985), the plaintiff employed an architect to inspect a building that plaintiff intended to buy. The architect’s inspection was negligent, resulting in plaintiff incurring additional expenses to fix damage that the architect missed. The architect moved for summary judgment arguing that he was protected by the statute of repose. Delta rejected this view, holding that even though defendant was an architect, plaintiff's cause of action did not arise out of the architect's failure to perform any of the enumerated acts of the statute of repose: There is no indication in the legislative history that Section 13-214(A) was to apply to all activities of the architects. Rather, the legislative history indicates that Section 13-214(A) applies only to those actions involving the planning, supervision, operation or management of construction, or construction of improvements to real property, and not to actions such as those described herein which are unrelated to construction. Id., McIntosh v. A. & M Insulation Co., 244 Ill.App.3d 247, 185 Ill.Dec. 69, 614 N.E.2d 203 (1993) (plaintiff with asbestos was not allowed to proceed against defendants on the A - 23 theory that defendants were sellers and distributors of asbestos containing products); Asbestospray, 247 Ill.App.3d at 262, 616 N.E.2d at 657 ("Other courts have determined that Section 13-214 of the Code would not apply to a landowner where the action is founded solely on the defendant’s status as landowner . . . but would apply to a landowner being sued for his own act or omission in one of the specified construction-related activities"); Hellmuth IT, 114 I11.2d at 256, 102 Ml.Dec. at 416, 500 N.E.3d at 38 (surety not protected by statute of repose because plaintiff's claim arises out of breach of contract). In addition, as mentioned above, Representative Dunn, a sponsor of the Illinois Statute of Repose Bill stated that the bill was intended to protect only suits against construction- related activities: "It [the bill] would apply to the architect, the engineer, the contractor, anyone who is involved in the planning supervision, operation or management of construction, or the construction of improvements to real property:" Transcript of House Debates, May 25, 1979, at 29- 32. (c). Special Jury Question [7] Following the liability portion of this trial, at the request of W.R. Grace, the following special question was submitted to the jury: Did W.R. Grace provide design, planning, supervision, observation or management of construction services related to the installation of fireproofing to State Farm Mutual Automobile Insurance Company in addition to supplying bags of Monokote 3 and Monokote 4 fireproofing? A - 24 The jury returned an answer of "YES." Nevertheless, the Court finds that this special question is without legal relevance. In St. Louis v. Rockwell Graphic Systems, Inc., 153 T1.2d 1, 178 Ill.Dec. 761, 762, 605 N.E.2d 555, 556 (1992), the court ruled that what constitutes the term "improvement" within the statute of repose is a question of law. This decision is tantamount to ruling that the interpretation of the statute of repose is a matter of law. Accordingly, for the above reasons, the Court DENIES W.R. Grace’s motion for judgment as a matter of law under the Illinois Statute of Repose. (B). Inconsistent Jury Verdicts [8] W.R. Grace also argues that judgment after trial is warranted because the jury verdict was inconsistent. First, at the end of the liability phase of the trial, the jury returned a partial verdict for State Farm on the issue of negligence. At this time, the jury also found W.R. Grace not guilty on the Strict products liability Count. W.R. Grace argues that because State Farm’s cause of action focused solely, on the manufacturing activities of W.R. Grace, the jury cannot find negligence without also finding against W.R. Grace on strict liability. {9, 10] This argument is without merit. To begin with, W.R. Grace specifically waived any objections to the facial invalidity of the jury instructions at the jury instructions conference.’ In addition, the jury could find that while the 7 Upon receiving the verdict in the liability phase, the following exchange between the Court and counsel transpired: The Court: [djo either of you see any conflict A - 25 product was not unreasonably dangerous, the manufacturer’s conduct failed to meet the appropriate standard of care. This is because the negligence theory measures the reasonableness of the manufacturer’s conduct, while strict liability measures whether the product was defective. Davis v. FMC Corp., Food Processing Machinery Div., 771 F.2d 224, 230 (7th Cir. 1985) (citing Kossifos v. Louden Machinery Company, 22 Ill.App.3d 587, 591, 317 N.E.2d 749 (1974)). [11] Second, W.R. Grace argues that the jury verdict was inconsistent because the finding that State Farm was 30 percent contributorily negligent is inconsistent with the jury’s finding that State Farm did not know about its cause of action until 1986. In other words, W.R. Grace argues that the jury must have found State Farm negligent at the time of sale and therefore knew of its claim at the time of sale. W.R. Grace offers no authority to support this position. Moreover, as stated above, this argument was waived by counsel for W.R. Grace at trial. In addition, the jury could well have found State Farm’s negligence occurred much later than at the time of sale of the fireproofing. III. Motion for New Trial (A). Standard for New Trial W.R. Grace next moves for a new trial. The discretion and authority to grant a new trial is delegated to this Court and involves this Court determining whether the "verdict is against the weight of the evidence, . . . the damages are excessive, or . . . for other reasons, the trial was between the verdict form and/or any of the special question answers? Mr. Plunkett: I do not see a direct conflict. Tr. 6941. A - 26 not fair to the party moving." Selle v. Gibb, 567 F.Supp. 1173, 1183 (N.D.II. 1983) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct 189, 194, 85 L.Ed. 147 (1940)). "Rule 59 gives the trial judge ample power to prevent what he considers to be a nviscarriage of justice. It is his right, and indeed his duty, to order a new trial if he deems it in the interest of justice to do so." Juneau Square Corp. v. First Wisconsin National Bank, 624 F.2d 798, 806-7 (7th Cir. 1980). (B). Analysis I. Testimony of Dr. Corn and Dr. Craighead [12] Throughout this trial, the Court sought to ensure both parties were allowed full discovery into their opponent’s expert witnesses. On February 5, 1993, the Court precluded State Farm’s expert witness Dr. Anderson from testifying about his mesothelioma study. The data for this Study was based on confidential (and undiscoverable) health records from the State of Wisconsin. The Court concluded that though Dr. Anderson could testify about his opinions in other matters, we would restrict his testimony concerning the mesothelioma study. W.R. Grace now objects to the application of this rule to its Own experts Dr. Corn and Dr. Craighead. During the depositions of Dr. Corn and Dr. Craighead, each was specifically asked if they had formed any opinions as to State Farm’s asbestos cross-contamination problem, State Farm’s asbestos operation and maintenance program, the reports and opinions of State Farm’s experts, and the reasonableness of State Farm’s abatement costs. Each expert had no opinions on any of these areas. Later, before trial, counsel for W.R. A - 27 Grace gave information to these experts that allowed them to formulate opinions on these areas. This strategy by W.R. Grace effectively prevented State Farm from fully discovering the opinions of W.R. Grace’s experts before trial. Therefore, to preserve fairness of the discovery process, the Court determined that Dr. Corn and Dr. Craighead would not be allowed to testify into areas which they expressed no opinion during their depositions. 2. Testimony of Kevin Boles and Gerald Karches [13] On May 27,1993, W.R. Grace disclosed its intention to call Kevin Boles and Gerald Karches as fact witnesses during the damages phase of this trial. These witnesses had personal knowledge of State Farm’s asbestos removal costs, specifically, the alleged inflated fees of State Farm’s asbestos consultant Hall-Kimbrell. Plaintiff moved to exclude the adding of these witnesses to the witness list. On July 30,1993, the Court, by written order, refused to add these witnesses to the witness list. The Court reconfirms its July 30, 1993 ruling. To begin with, these witnesses were added four months after the final pre-trial conference (held on January 19, 1993) in this case. At that conference both sides were required to list their witnesses or be precluded from calling them at trial. Eight days after the conference, State Farm moved to add an additional witness who had just testified against W.R. Grace in another case. The Court refused to allow the addition of this witness citing: "The Court has no desire to open the flood gates and allow this trial to be prolonged ad nauseam. No additional witnesses will be allowed after the final pretrial conference." Order, February 17, 1993, at p. 1. Throughout the trial, the Court enforced A - 28 this even-handed approach to both parties-- no witness testified who was not identified at the time of the final pretrial conference. Finally, W.R. Grace had at least constructive knowledge of the J & S and Southwest Hazard problems (the areas that these witnesses would have testified to at trial) long before the final pre-trial conference in this case. Indeed, W.R. Grace included some of the correspondence between State Farm and J & S on their original exhibit list. Therefore, W.R. Grace’s claim of prejudice or surprise about the J & S and Southwest Hazard issue, or the claim that these witnesses could not be identified at an earlier date, lacks merit. 3. American Insurance Association [14] On April 28,1993, three months, after the pre- trial cutoff, W.R. Grace sought to add witnesses and documents pertaining to the American Insurance Association (AIA). Many of these documents were available to W.R. Grace before the final pre-trial conference in this case. Nevertheless, W.R. Grace sought to add witnesses and evidence purporting to show that State Farm had knowledge about AIA published information regarding asbestos- containing products when State Farm constructed its buildings. At that time, the Court deferred ruling on whether to allow evidence of State Farm’s connection with the AIA. The Court granted W.R. Grace leave to obtain additional foundational evidence on this issue. However, the Court warned W.R. Grace that it would strike all reference to the AIA if W.R. Grace failed to link State Farm to the AIA. Finally, on May 4, 1993, the Court instructed the jury to disregard any information concerning the AIA. A jury instruction was submitted to the jury during the liability portion of the trial with the same guidance. The Court adheres to its previous position because W.R. Grace failed to establish any foundation or connection between State Farm and the AIA. Indeed, State Farm produced an affidavit from the Executive Vice President of the AIA showing that State Farm was not-- nor had ever been--a member of the AIA. Moreover, W.R. Grace had knowledge of the AIA before final pre-trial conference. This issue should have been investigated long before trial began- instead of during the middle of the trial. In addition, the jury instruction submitted on the AIA was not prejudicial to W.R. Grace. The Court rejected a more strongly worded instruction proposed by State Farm. The instruction given to the jury merely required the jury to disregard information concerning the AIA. 4. John Walsh [15] During the damages phase of trial, W.R. Grace introduced (over objection of State Farm) the testimony of its expert witness John Walsh. Mr. Walsh’s testimony was limited to projects which he had "personally bid." W.R. Grace moves for a new trial on this limitation. W.R. Grace’s position is frivolous. On June 4, 1993, the Court denied State Farm’s motion in limine to exclude the testimony of John P. Walsh during the damages phase of this trial. It was a close call. State Farm had twice deposed Mr. Walsh (October 28, 1992 and January 15, 1993). Before both depositions, Mr. Walsh had been presented with State Farm’s A - 30 "damage summary" indicating what State Farm would include or exclude from its claim. Nevertheless, at both depositions, Mr. Walsh was unable to form an opinion on State Farm’s documents comprising its "damages summary." See e.g. Walsh Depo. 10/28/92 at p. 90. At trial, State Farm moved to exclude the testimony of Mr. Walsh because now, after having been unprepared at two depositions to offer opinions, he now had opinions as to State Farm’s damages. The Court reluctantly denied State Farm’s motion with the caveat that State Farm would be allowed full _ discovery during trial of Mr. Walsh’s newly formed opinions. State Farm then sought to depose Mr. Walsh’s former employer Mr. Kynoch. At the behest of W.R. Grace’s motion for a protective order, the Court limited State Farm’s discovery of Mr. Kynoch to jobs that Mr. Walsh "bid personally." Indeed, W.R. Grace’s counsel at the deposition of Mr. Kynoch took the position that Mr. Walsh’s opinions were based on jobs that Mr. Walsh "bid personally." Based on this position, W.R. Grace’s counsel refused to produce any documents on projects other than those which Mr. Walsh had "bid personally." Accordingly, the Court limited Mr. Walsh’s expert opinion at trial to jobs in which he "bid personally." Now, contrary to its position at the deposition of Mr. Kynoch, W.R. Grace claims it was prejudiced when the Court precluded Mr. Walsh from testifying about his experience from other jobs. The Court finds that no prejudice existed. Though Mr. Walsh was supposed to be limited to jobs in which he "bid personally," his testimony was much more expansive and included his experience while working on other A - 31 nie it jobs.* More importantly, W.R. Grace cannot now claim prejudice when the limitation on the scope of Mr. Walsh’s testimony was created by: (1) its own motion for protective order; (2) the position of W.R. Grace’s counsel during the deposition of Mr. Kynoch; (3) Mr. Walsh’s lack of preparation at his first two depositions. 5. Mr. Walsh’s Damage Notebooks [16] During the damages phase of trial, State Farm outlined its damages in a series of 15 three-ring notebooks. These exhibits were compilations of invoices incurred by State Farm as a result of abatement activities. To rebut State Farm’s claim that abatement of asbestos was necessary, W.R. Grace called Mr. Walsh as a damages expert witness. As part of Mr. Walsh’s trial preparation, he went through the 15 notebooks and marked which invoices he thought were not related to the State Farm’s abatement project. Mr. Walsh’s notebooks were identical to State Farm’s with the exception that: (1) the invoices were printed on pink paper (as opposed to white); (2) the invoices were flagged with a red post-it sticker. Mr. Walsh’s series of notebooks were marked as defense exhibits 1949.1-1949.15. The Court ruled that these exhibits could be used as demonstrative evidence only and would not be allowed to go to the jury. The Court properly treated these exhibits at trial. To begin with, these exhibits were never timely listed by W.R. Grace on any exhibit list as part of the pretrial order. Indeed, Mr. Walsh admitted during cross-examination that his * Tr. 8284, 8286, 8557, 8558, 8567, 8695, 8707, 8764. A - 32 notebooks were not prepared until trial. Accordingly, these notebooks violated the Court’s pre-trial order and were properly excluded. Second, during the liability portion of the trial, the Court prevented State Farm from introducing evidence that was highlighted and evidence with tabs from reaching the jury. The Court insisted that all highlighting be removed from the evidence (if the highlighting did not accompany the original production of the evidence to the opposing party). The Court excluded the highlighted exhibits of Mr. Walsh under the same principle. (C) Jury Instructions 1. Duty to Warn [17] The Court charged the jury with the following instruction: If W.R. Grace knew or should have known at the time it sold the MK3 to State Farm that its product was hazardous, then W.R. Grace was under a continuing duty to communicate such knowledge to State Farm. (Emphasis ours). W.R. Grace objects to this instruction citing Carrizales v. Rheem Manufacturing Co., 226 Ill.App.3d 20, 168 Ill.Dec. 169, 179, 589 N.E.2d 569, 579 (1991), app. denied, 146 Ill.2d 623, 176 Ill.Dec. 794, 602 N.E.2d 448 (1992). However, Carrizales actually supports the Court’s position: Illinois law has been reluctant to impose a duty to warn beyond the time when the product leaves the manufacturer’s control unless the manufacturer knew or should have known at that time that the product was defective. A - 33 Id. 168 Tll.Dec. at 179, 589 N.E.2d at 579 (Emphasis ours). Here, the Court did not impose a duty to warn on the manufacturer where a manufacturer learns of a hazard subsequent to the time the product left its control. Rather, consistent with Illinois law, the instruction imposed a duty on the manufacturer to warn if the manufacturer had knowledge of the defective product at the time of the sale. 2. Assumption of Risk [18] Next, W.R. Grace frivolously argues that the Court’s assumption of risk special interrogatory was in error. This instruction properly instructed the jury to consider the assumption of risk defense if it found against W.R. Grace on the basis of strict liability or negligence. The special interrogatory also told the jury only to consider the assumption of risk defense with regard to strict liability in tort. Ironically, it was W.R. Grace who suggested the necessity of this instruction. Originally, the Court submitted its Own assumption of risk instruction because neither party submitted this requisite instruction as part of their proposed jury instructions.’ Then, at the behest of both parties, the Court amended the assumption of risk instruction to the form that was submitted to the jury: * Indeed, W.R. Grace, then, and now, cites no authority for their proposition. Now, in their brief for new trial, they neither cite the specific jury instruction which they claim was in error (the Court is left to guess which assumption of risk instruction W.R. Grace refers to), nor is there a direct citation to the transcript. A - 34 If you find that State Farm assumed the risks relating to the hazards of the fireproofing in its building, enter the percent of fault, if any, on Special Question No. 6. Special Question No. 6 states: As to Count I (Strict Liability), if you find Plaintiff, State Farm assumed the risk, what percentage. if any, was State Farm at fault? [19] Counsel for W.R. Grace assisted in the crafting of the language of these instructions which both parties specifically agreed was proper. W.R. Grace cannot now object to the validity of this instruction. 3. Choice of Repair [20] State Farm’s position at trial was that it should be able to choose the appropriate method to repair the asbestos-contamination. State Farm removed much of the asbestos in its buildings. Therefore, State Farm took the position that damages should be largely based on removal costs. W.R. Grace took the position that State Farm should not have removed the asbestos, but instead should have managed the asbestos with an operation and maintenance program until demolition of the building. Hence, according to W.R. Grace, the measure of damages should only be the cost of the operation and maintenance program. However, both choices require the eventual removal of asbestos. Federal regulations (NESHAPS) require the removal of all asbestos at the demolition of the building. The Court submitted the following instruction to the jury: In this case, the proper measure of damages is the cost of repair, which is the cost of removing the asbestos fireproofing and its damage from State Farm’s buildings and the costs associated therewith. Although you have heard evidence that all of the asbestos has not yet been removed, that does not change the measure of damages. The future cost of removal of the remaining asbestos should be calculated as well. It is for you to decide when the fireproofing should have been or should be removed. The owner of damaged property has discretion to decide how to fix the damage to the property. He may choose the repair method which he deems to be best suited to the restoration of its property to its pre- damaged state.... This instruction was crafted from two parts. The second paragraph of the instruction was proposed by State Farm. The first paragraph was drafted by the Court over the strenuous objection of State Farm at trial. W.R. Grace never proposed any instruction on this issue. Nevertheless, W.R. Grace now objects to the second paragraph of this instruction. The Court’s instruction was proper. First, the instruction is firmly grounded in Illinois law." Northwest Commerce Bank v. Continental Data Forms, Inc., 233 Ill.App.3d 124, 174 Ill.Dec. 249, 251, 598 N.E.2d 446, 448 (1992); United States v. Peavey Barge Line, 590 F.Supp. 319, 323 (C.D.Il. 1984) aff'd 748 F.2d 395 (7th Cir.1984). 10 W.R. Grace offers no authority for their position that the victim of a tort does not have a choice of repair. A - 36 Second, W.R. Grace suffered no prejudice. The Court gave W.R. Grace wide latitude to argue that a building owner such as State Farm should have managed the asbestos in place instead of promptly removing the fireproofing. Even though W.R. Grace never offered a jury instruction, the Court added the last sentence to the first paragraph of the instruction in light of W.R. Grace’s position at trial. In any event, there is nothing inconsistent with the two paragraphs. Paragraph two addresses the method of repair (removal vs. operation and maintenance). Paragraph one deals with the timing of the repair (e.g. must the asbestos be removed now or at demolition?). W.R. Grace took every opportunity to argue to the jury that State Farm should have managed its asbestos in place until some later date in the future when the building is inevitably demolished. The jury simply disagreed. 4. Nominal Damages {21} The Court also refused to submit a nominal damage instruction to the jury. This refusal was appropriate. First, the jury did not consider any evidence in the damages phase of the trial that nominal damages are appropriate. Unlike the one case W.R. Grace cites in support of its proposition,” the position of W.R. Grace throughout the trial had been that the measure of damages should be the Operation and maintenance costs of containing the asbestos. At a minimum, the expert witnesses for W.R. Grace testified that this cost would run into the millions of dollars. Given W.R. Grace’s position, and the fact that W.R. Grace never submitted any evidence to the jury that damages would be '! 'W.R. Grace cites no authority for its position i [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0260%3A1. Public record. Not legal advice.