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LEONEN v. JOHNS-MANVILLE CORP.

July 5, 1989

AVELINO LEONEN, et al., Plaintiffs,
v.
JOHNS-MANVILLE CORPORATION, et al., Defendants



The opinion of the court was delivered by: FISHER

 This litigation stems from the exposure of plaintiff, Avelino Leonen, to asbestos-containing products during his service in the Navy and also while employed at the New York Shipyard and the Philadelphia Naval Shipyard, and the injuries he suffered as a result of that exposure. The action was bifurcated, and a jury trial was commenced on the issues of defendants' liability and compensatory damages. At the completion of the first phase, judgment was entered for plaintiff in the amount of $ 25,000.00. This judgment was later amended to include $ 1500.00 in medical surveillance fees and an award of prejudgment interest. Although the court at first declined to award prejudgment interest for a seven (7) month period during which the trials of certain asbestos litigations were stayed by the United States Court of Appeals for the Third Circuit, the court amended its decision to include prejudgment interest for this period when, on a motion for reconsideration, documentation was submitted which showed that the instant suit was not among those actions stayed by the Third Circuit. A subsequent motion for a new trial, filed by the defendants, was denied by the court.

 The matter is presently before the court on motion of defendants The Celotex Corporation ("Celotex"), Owens-Illinois, Inc. ("Owens-Illinois") and Owens-Corning for summary judgment, pursuant to Fed. R. Civ. P. 56, dismissing plaintiff's punitive damages claim or, in the alternative, for a stay of the trial on punitive damages until the United States Supreme Court issues its decision in Browning-Ferris Indus. v. Kelco Disposal Inc., 845 F.2d 404 (2d Cir. 1988), cert. granted 488 U.S. 980, 109 S. Ct. 527, 102 L. Ed. 2d 559 (1988). This request has been rendered moot, however, by the issuance of the Browning-Ferris opinion on June 26, 1989. See 492 U.S. 257, 106 L. Ed. 2d 219, 109 S. Ct. 2909, 57 U.S.L.W. 4985 (1989). Defendants also request a stay of the trial until the Johns-Manville Settlement Vehicle may be joined as a defendant in the case.

 Defendants move for summary judgment on the following grounds: 1) plaintiff's punitive damage claims must be dismissed as a matter of federal constitutional law under In re Asbestos Litigation, 829 F.2d 1233 (3d Cir. 1987), cert. denied, 485 U.S. 1029, 99 L. Ed. 2d 901, 108 S. Ct. 1586 (1988); 2) New Jersey's standard for awarding punitive damages is constitutionally void for vagueness; 3) because the defendants have already been sanctioned with punitive damages in prior cases, an award of punitive damages in this case would violate the "fundamental fairness" requirement of the due process clause; 4) plaintiff's claim for punitive damages is barred by the double jeopardy clause of the fifth amendment; and 5) plaintiff's claim for punitive damages must be dismissed because his proofs are inadequate, as a matter of law, to support the necessary finding of deliberate, wanton and malicious conduct with knowledge of a high degree of probability of harm. Plaintiff opposes both the motion for summary judgment and the defendants' alternative request for a stay. Before turning to the merits of defendants' request for a stay, the court will address each of the contentions raised by defendants as a basis for dismissing plaintiff's punitive damage claims on summary judgment.

 I.

 Summary Judgment Standard

 Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be granted:

 
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

 Rule 56 directs the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party bears the ultimate burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Spangle v. Valley Forge Sewer Auth., 839 F.2d 171, 173 (3d Cir. 1988).

 The current standard for summary judgment requires that before judgment is entered as a matter of law, there be no "genuine" issue of "material" fact; however, the mere existence of some alleged factual dispute between the parties is an insufficient basis on which to deny a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). A fact is "material" only if it will affect the outcome of a lawsuit under the applicable law, and a dispute over a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.

 The burden of showing that no genuine issue of material fact exists rests initially on the moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). This requires only that the party seeking summary judgment "[inform] the district court of the basis of its motion, and [identify] those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, supra. Rule 56 does not require that the moving party support its motion with affidavits or materials which negate the opponent's claim; instead, this "burden may be discharged by 'showing . . . that there is an absence of evidence to support the nonmoving party's case.'" Celotex Corp. v. Catrett, 477 U.S. at 323-25.

 Once a properly supported motion for summary judgment is made, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); *fn1" Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. There is no issue for trial unless the nonmoving party can demonstrate that there is sufficient evidence favoring the nonmoving party so that a reasonable jury could return a verdict in that party's favor. Anderson v. Liberty Libby, Inc., 477 U.S. at 249. The role of the court, however, is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Id. The court is mindful that, in deciding a motion for summary judgment, it must construe the facts and inferences therefrom in a light most favorable to the nonmoving party. Pollock v. American Telephone & Telegraph Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

 1. The Availability of Punitive Damages in Asbestos Cases Under Danfield

 Defendants argue that plaintiff's punitive damages claim is constitutionally impermissible under the Court of Appeals for the Third Circuit's recent decision in In re Asbestos Litigation, 829 F.2d 1233 (3d Cir. 1987), cert denied, 485 U.S. 1029, 99 L. Ed. 2d 901, 108 S. Ct. 1586 (1988) (Danfield). In Danfield, the Court of Appeals upheld the District Court's finding that the New Jersey Supreme Court's decisions in Beshada v. Johns-Manville Prod. Corp., 90 N.J. 191, 447 A.2d 539 (1982), and Feldman v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374 (1984), precluding asbestos manufacturers from asserting a "state-of-the-art" defense in failure to warn/strict liability cases, but making this defense available to other types of manufacturers (i.e., drug manufacturers), withstood constitutional challenge on equal protection grounds. 829 F.2d at 1244.

 In Beshada, plaintiffs sought to strike a state-of-the-art defense asserted by defendants, asbestos manufacturers, in a failure to warn/strict liability action. The New Jersey Supreme Court reversed the Appellate Division's denial of plaintiffs' motion, holding that in products-liability cases "culpability is irrelevant" because "strict liability focuses on the product, not the fault of the manufacturer," and thus, in failure-to-warn cases, the medical community's presumed unawareness of the dangers of asbestos is not a defense. 90 N.J. at 204. The court further held that a rule excluding the state-of-the-art defense, thus imposing liability for failure to warn of dangers which were undiscoverable at the time of manufacture, will advance the goals sought to be achieved by the law of strict liability -- risk spreading, accident avoidance and simplification of the fact-finding process. 90 N.J. at 205-08. Significantly, the court in Beshada did not limit its holding to asbestos lawsuits, but made it applicable to all product liability cases.

 In Danfield, the New Jersey District Court consolidated all of the asbestos cases in this district for the purpose of addressing equal protection challenges to the Beshada/Feldman dichotomy brought by several of the defendants in the various cases before the court. 628 F. Supp. 774, 775 (D.N.J. 1986), aff'd, 829 F.2d 1233 (3d Cir. 1987), cert. denied, 485 U.S. 1029, 99 L. Ed. 2d 901, 108 S. Ct. 1586 (1988). The asbestos manufacturers argued that precluding the state-of-the-art defense in asbestos cases, but permitting it in actions involving other products, denied manufacturers of asbestos products the "equal protection of the laws" guaranteed them under the fourteenth amendment to the Constitution. Sitting en banc, the court concluded, in its majority opinion, that the state supreme court's decision to treat asbestos cases differently from typical products-liability cases bore a "rational relation" to a legitimate state purpose -- easing jury confusion and the resulting prejudice to litigants, and expediting trial of the issues -- and thus did not violate the equal protection clause. *fn2" Danfield, 628 F. Supp. at 779. On appeal, the Third Circuit affirmed the court's decision with regard to the equal protection challenge, and also rejected defendants' due process claims, raised for the first time in the Court of Appeals.

 Defendants now argue that to allow plaintiff to proceed with his claim for punitive damages is violative of federal constitutional law under the Third Circuit's decision in Danfield. It is defendant's contention that the only ground upon which the Court of Appeals found the Beshada/Feldman classification to withstand an equal protection challenge was that New Jersey had a legitimate state interest in easing jury confusion and expediting trial of the overwhelming number of asbestos cases flooding the courts, and that streamlining these litigations through the elimination of the state-of-the-art defense was rationally related to this interest. Permitting plaintiff to proceed with a punitive damages trial in which evidence relating to defendants' knowledge or the availability of knowledge regarding the dangers of asbestos at the time of distribution must be introduced after plaintiff "chose" a simplified liability trial under Beshada, free of any evidence pertaining to conduct, defendants assert, removes the sole basis on which the Court of Appeals upheld the Beshada/Feldman dichotomy against the equal protection challenge.

 In support of their contention that plaintiff in the instant matter is now barred from asserting a claim for punitive damages, defendants point to the following statements in Danfield :

 
. . . The goal of simplifying asbestos litigation is eroded by the New Jersey decision to award punitive damages in these cases.
 
Although we find the Fischer case troubling, we once again acknowledge our limited function in reviewing cases of this type. We cannot overlook the fact that those plaintiffs who wish to avoid the cost of proving the foundation for an uncertain award of punitive damages still may take advantage of the simplified compensation claim Beshada makes available.

 829 F.2d at 1244 (emphasis added). Defendants apparently construe the above statement to mean that any time an asbestos plaintiff, in a bifurcated trial, has the advantage of proving liability in the simplified manner permitted under Beshada, that plaintiff is then precluded from seeking an award of punitive damages. According to defendants, this result is mandated under Danfield because to permit a punitive damages trial with the requisite introduction of conduct-related evidence in a second proceeding virtually destroys the constitutional basis upon which the Beshada/Feldman classification was upheld.

 Only when read in complete isolation from the remainder of the Danfield opinion can this passage support the result urged by defendants. Parts of an opinion, however, cannot be severed from the whole merely to further the interests of a party who seeks an interpretation beneficial to itself. In light of the remaining reasoning set forth by the Court of Appeals in upholding the Beshada/Feldman classification against constitutional challenge, reasoning which defendants carefully choose to ignore, the court finds defendants' argument unpersuasive.

 First, the principal "legitimate state interest" found by the Third Circuit as underlying the Beshada/Feldman doctrine was the "suggestion" in Feldman that "these manufacturers knew the dangers of asbestos, and consequently, the state-of-the-art defense could not be sustained. *fn3" Danfield, 829 F.2d at 1241. The court found further support for this theory in the later Fischer decision, in which the New Jersey Supreme Court "determined that one manufacturer did know the hazards of asbestos by the 1930's and that other manufacturers could have gained similar knowledge through articles published at that time in scientific journals." Id. at 1242. Under these circumstances, the Court of Appeals found reasonable the state court's decision to preclude introduction of a defense which it had determined was unsustainable, as a matter of law.

 Whatever criticism can be leveled at either the majority's finding that the New Jersey Supreme Court based its decision to treat asbestos manufacturers differently from other manufacturers with regard to the state-of-the-art defense, or its determination that the asbestos industry had information concerning the harmful effects of asbestos exposure available to it, or at the propriety of taking judicial notice of this fact without granting the parties an opportunity to be heard on this issue, *fn4" it cannot seriously be argued that simplification of the fact-finding process was the only basis upon which the court rejected the defendants' equal protection arguments. Even if it were the sole justification given by the majority for finding the Beshada/Feldman doctrine constitutional, the statement quoted by defendants merely evidences the majority's recognition that while an asbestos trial free of conduct-related evidence would be rare because plaintiffs can, under Fischer, seek punitive damages, the Beshada/Feldman holdings will streamline litigation of those asbestos suits in which the plaintiff seeks only compensatory damages. Danfield, 829 F.2d at 1244. It does not support the conclusion ...


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