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GOLD v. JOHNS-MANVILLE SALES CORP.

July 16, 1982

JACK GOLD, et al., Plaintiff,
v.
JOHNS-MANVILLE SALES CORP., etc., et al., Defendants; GRACE MANAREVIC, et al., Plaintiffs, v. JOHNS-MANVILLE SALES CORP., etc., et al., Defendants



The opinion of the court was delivered by: ACKERMAN

 ACKERMAN, District Judge

 In these two asbestos products liability cases, defendant Raybestos Manhattan has moved for partial summary judgment, or alternatively, for bifurcation of the trial on the issue of punitive damages. It alleges in support of its motion that the documentary evidence upon which the plaintiff intends to rely as proof of its claims for punitive damages -- the Sumner Simpson papers and the A.T.I. minutes -- should be excluded as inadmissible. As I have this date ruled on these in limine motions and determined that these documents will be admitted into evidence subject to Fed.R.Evid. 402 and 403 objections at trial, I shall not consider this argument.

 Raybestos has also argued that they are entitled to judgment as a matter of law either because those documents cannot sustain a claim for punitive damages, or because such damages are inappropriate in litigation of this nature. There is also an argument that as assessment of punitive damages would be unconstitutional because it creates de facto a criminal action. Plaintiffs respond to the motion by asserting that the proofs at trial will be sufficient to raise an issue for the jury as to whether the defendant acted willfully and wantonly in suppressing knowledge of the dangers of asbestos fibers.

 As this is a novel question of state law, I take guidance from the instructive opinion of Judge Adams in Becker v. Interstate Properties, 569 F.2d 1203 (3d Cir. 1977), cert. den. 436 U.S. 906, 56 L. Ed. 2d 404, 98 S. Ct. 2237 (1978).

 
Inasmuch as no New Jersey cases are squarely on point, it is important to make clear that our disposition of this case must be governed by a prediction of what a New Jersey court would do if confronted with the facts before us. Such an estimate cannot be the product of a mere recitation of previously decided cases. Rather, as in any diversity case, a federal court must be sensitive to the doctrinal trends of the state whose law it applies, and the policies which inform the prior adjudications by the state courts. Id. at 1205-06.

 Because I have determined that an action based on strict products liability cannot support a claim for punitive damages under the most recent decision of the New Jersey Supreme Court, Beshada v. Johns-Manville Products Corp., 90 N.J. 191, 447 A.2d 539 (1982), I have not reached the defendant's other arguments. However, insofar as the plaintiffs reserve their right to present claims based upon a negligence tort theory, I will allow them to present proof of the defendants' alleged wanton conduct.

 In Beshada, the Supreme Court reviewed the development and contours of the doctrine of strict products liability. While the Court did not address the issue of punitive damages in such actions, I find that they have marked the way with signposts. The Court carefully outlined the differences between negligence and strict products liability theories, as well as between duty to warn cases and safety device cases. The former distinction is especially enlightening for the analysis of punitives. Justice Pashman stated: "Negligence is conduct-oriented, asking whether defendant's actions were reasonable; strict liability is product-oriented, asking whether the product was reasonably safe for its foreseeable purpose. Freund v. Cellofilm Properties, Inc., 87 N.J. 229 at 238, 432 A.2d 925." 90 N.J. at 200.

 In considering whether the imputation of knowledge in strict liability is inconsistent with the defense of state of the art, the Court again emphasized: "The imputation of knowledge is, of course, a legal fiction. It is another way of saying that for purposes of strict liability, the defendant's knowledge of the danger is irrelevant." Id. at 200 n.3. There can thus be no question that the focus in a strict products liability case must be "on the product, not the fault of the manufacturer". Id. at 204.

 If the defendant's conduct is not the focal point here, as it would be in a negligence action, what are the consequences for claims of punitive damages? I predict that if the issue were before the New Jersey Court that the Court would apply the reasoning of Beshada which supported its determination to strike the state of the art defense to this issue. Put another way, the claim of punitive damages based on the fact that the defendants knew too much is the flip side of the state of the art defense. Both are "negligence concepts with their attendant focus on the reasonableness of the defendant's behavior," id., which should be eschewed in product liability litigation for policy reasons.

 The underlying economic or philosophic reasons for striking the defense of state of the art were:

 (1) the costs of injuries caused by the product will be spread to that segment of the society who can best assume it, who have profited from the sale of the product, and who will adjust the price of the product to reflect the costs of injuries;

 (2) the imposition of the costs of failure to discover previously the hazards of the product will serve as an incentive upon the producers to invest more actively in safety research; and

 (3) the factfinding process will be considerably simplified if questions of blameworthiness are severed from the jury deliberations, especially where they involve consideration of what was ...


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