Asbestos Law Information

Executive Summary

Asbestos as a Unique Phenomenon

Asbestos litigation is sometimes equated with the growing phe­nomenon loosely described as “mass torts” or “mass toxic torts.” Asbestos litigation, however, should be distinguished from single-event mass accidents, including those involving toxic substances. Long latency periods, ranging from ten to forty years, lead to an accumulation of cases. Each case has individual characteristics: Plaintiffs suffer similar, but not identical, injuries resulting from different periods of exposure to different products. Injuries vary from fatal cancers to mild impairments of lung capacity.

Even in the group of mass torts based on latent injuries arising from product defects, asbestos litigation exhibits distinctive charac­teristics. The utility of asbestos, based on its indestructibility and its insulating properties, generated widespread industrial, commer­cial, and household usage. During a period of increasing use, asbes­tos manufacturers suppressed knowledge about the dangers of ex­posure to asbestos fibers. The result was a further accumulation of potential cases and a factual foundation for punitive damages. A by-product of suppression of unfavorable information was that com­panies failed to improve safety standards and communicate warnings that might have mitigated the dangers of continued pro­duction and use of asbestos materials.

The capacity of asbestos fibers, unlike many other toxic sub­stances, to cause serious injuries, including rare forms of cancer, is undisputed. General causation is clear; causation-in-fact, that is, whether exposure to a particular product or substance substan­tially contributed to the specific injuries of a given plaintiff, is dis­putable and often disputed, as are medical diagnoses.

Additional complications in asbestos litigation result from the number of parties and the concentration of cases. Approximately twenty defendants are involved in each case. Secondary disputes among the defendants have impeded the pretrial management and trial or settlement of the personal injury cases. Concentrations of cases in certain cities and judicial districts led to a disproportionate burden on some courts during a brief time period in the late 1970s and early 1980s. Eecent case filings are more widely dispersed; still, one-third of all federal courts account for 92 percent of the caseload (see table 1). District courts in the Fifth Circuit have more than one-third of all filings.

Convergence of all of these factors—the widespread use of a highly toxic product during an extended latency period, the sup­pression of information about its dangers, the clarity of general causation and the lack of clarity of causation-in-fact, and the num­bers and concentrations of cases—renders asbestos litigation unique. This singularity of asbestos litigation extends backwards and forwards: There are no historical analogues and no projected recurrence of similar phenomena.
Complexity and Simplification

Lawyers and judges interviewed for this study report that asbes­tos cases, in comparison to other personal injury-products liability cases, were once complex and have become routine. Overall, asbes­tos dispositions have been by settlements, with a much lower per­centage of trials (2 to 3 percent) than other personal injury-prod­ucts liability cases (see tables 3 to 5). As experience with asbestos litigation grows, the number of trials diminishes. At the same time, the number of filings and dispositions has increased dramatically (see table 11). In 1985, there were eight complete jury trials re­ported in ten of the federal courts with high concentrations of as­bestos cases. Estimates of the length of time required for trial have decreased dramatically from about three to five weeks to five to ten days.
Simplification of asbestos litigation has occurred through several means. Pretrial, trial, and appellate rulings have established pat­terns to guide case evaluations, which, in turn, support more settle­ments. Familiarity with cases in many districts has led to grouping increasing numbers for pretrial and trial scheduling.
Creation of a private asbestos claims facility agreement, known as the Wellington facility, has simplified some facets of asbestos litigation while complicating others. The clearest effect has been in the reduction of the number of defense attorneys in a given case from at least a dozen to less than a handful, thereby easing some of the pretrial management burden of the courts. Specialization of de­fense counsel now parallels that of plaintiffs’ counsel, leading in many instances to improved ability to evaluate and settle cases. Implementation of the Wellington plan has also led to a redistribu­tion of power among counsel for plaintiffs and defendants, causing complications in bargaining and changes in the patterns of early settlements by some defendants. In some jurisdictions, Wellington has upset established patterns by reopening settled legal issues.

To date, Wellington has not operated either as a claims facility for prelitigation settlements or as a vehicle for early settlements of court cases. While almost all cases scheduled for trial have settled under Wellington, the vast majority settle on the courthouse steps or after jury selection. Operation of the claims facility is scheduled to begin in early 1987, creating an opportunity for further simplifi­cation of asbestos litigation.

Simplification has also occurred through pretrial screening of cases to eliminate ones with evidence of mild impairments, dimin­ishing the number of highly disputed claims. Inactive dockets serve the same purpose and may also improve the ability of the courts and parties to give priority to cases with serious injuries. Accumu­lation of discovery materials also promotes simplification by reduc­ing redundancy in the pretrial stage.

Lack of scheduled trials for sufficient numbers of cases remains the major complication in asbestos litigation. Failure to schedule sufficient trials has resulted in an increasing backlog of cases in most courts.

Assignment Systems
Courts use a diverse set of practices for assignment of asbestos cases to judges. Most of the systems involve special treatment for asbestos cases, resulting in their removal from the individual calen­dar/random assignment system that almost all federal courts employ. A test of the adequacy of the special treatment for asbestos cases is whether it is effective in coping with the complexity caused by the sheer number of cases.

Two of the ten courts studied use specialists who have primary responsibility for the district’s entire asbestos caseload and who have innovated extensively to cope with increasing numbers of cases in their courts. One benefit of specialization is that these judges have been able to consolidate large numbers of cases for trial and settlements.

Most of the other courts use a variety of pretrial and trial assign­ment systems that entail dispersion of responsibility among several judges or the entire court. Some of the systems include using a master trial schedule, with each judge periodically assigned to trials. Some of these systems reduce the flow of asbestos cases to a pace far slower than equivalent nonasbestos cases. An implicit justification for limiting the number of cases appears to be the cash flow claims of defendants, yet procedures for the systematic evalua­tion of such claims have not been used outside of the bankruptcy courts.

In most courts, pretrial management was performed by selected judges. In some cases, courts assigned asbestos cases to newly ap­pointed judges who had no desire to specialize in asbestos litiga­tion. In two of these districts, the use of reluctant specialists for open-ended assignments resulted in a failure of the court to devote sufficient resources to the cases. Even if specialists are used, as vol­unteers or otherwise, other judges need to be available to support the specialists either by handling some asbestos trials or relieving the specialist of some other burdens.

Assignment of cases to specialists without relief from other areas of caseload responsibility may create disincentives for judges to accept and fulfill those assignments. Formal credit in the form of relief from other case or administrative assignments should be con­sidered in courts that do not apportion asbestos cases to all judges. Several courts have developed systems for crediting asbestos case management by reducing assignment of new nonasbestos cases and, in some cases, later asbestos cases.

In districts with large numbers of cases and without a volunteer specialist, dispersion of cases to all judges has served to equalize the burden of the litigation. In two districts, assignments were made by reverse seniority: The more senior judges assigned them­selves responsibility for the first trials.

Overall, special treatment of asbestos litigation has not expedited the flow of cases in comparison with other civil cases. Such special delays may be attributable to the relative complexity of the early cases. As asbestos litigation has become more routine, special treat­ments that delay trial dates beyond the norm are difficult to jus­tify.
Development of Case Management Orders

Early warnings of the challenges of asbestos litigation came from problems with the massive paperwork generated by large numbers of defendants. Clerks, lawyers, and other judges identified these pa­perwork management problems. Groups of judges, clerks, and law­yers, sometimes with the aid of special masters, worked to create appropriate solutions on a court-by-court basis. No national model evolved, but cross-fertilization has occurred through the efforts of lawyers with national practices and the formal and informal com­munication of judges with each other.

These early case management orders tended to focus on “paper­work management.” Only after the numbers of cases became ap­parent did courts and lawyers direct more attention to what is called “disposition management.” Paperwork management has re­sulted in the creation of standard interrogatories and routine ex­change of documents, including expert medical reports. In almost all districts, lawyers now customarily follow these standard prac­tices even when they are not technically mandated by a court order.

Disposition management serves to integrate the pretrial manage­ment system into a coherent and credible schedule for disposition of a case or cluster of cases through trial or settlement. Disposition management depends on judicial initiatives, primarily through scheduling firm trial dates. Setting priorities among cases in terms of their ripeness for trial is a part of disposition management. In­novative use of an “inactive asbestos docket” has pressed plaintiffs’ counsel to set priorities among their cases and to delay cases of plaintiffs with minimal impairments.

The cornerstone of case management continues to be the schedul­ing of firm, credible trial dates. For courts to reduce current back­logs, they will have to increase the numbers of cases scheduled for trial beyond the number of new filings.

Disposition management typically involves judicial examination of the impact of the court’s case management practices on the set­tlement of cases, which is the overwhelming mode of disposition of asbestos litigation. In seven of the districts studied, judges have been active in the settlement process; in three, judges follow the more traditional practice of becoming involved only at the specific request of the parties and for a limited purpose, such as breaking an impasse.

Selective judicial intervention in settlement of different cases is the norm for federal courts. The purpose of such intervention is generally based on an information gap theory (i.e., the court pro­vides information not otherwise available to the parties) or on a communications gap theory (i.e., that there are barriers or lack of incentives to discuss settlement, especially in the early stages of the litigation). Assessment of whether and when to intervene de­pends on judgments about efficiency of judicial time investments, fairness to the parties, and improvements in the quality of results (which are difficult to measure).

Absent judicial efforts, asbestos cases exhibit a pattern of settling shortly before or after the scheduled trial dates. Earlier settle­ments involve a dramatic discount of plaintiffs claim. Intensive ju­dicial efforts in one district to advance the timing of settlements have had mixed results that are difficult to evaluate. Perhaps be­cause of the start-up costs of the system, the time from filing to dis­position far exceeds that of other districts. In this same district, however, computer-based records of prior settlement afford counsel an opportunity to use systematically collected data to guide settle­ments. This approach may serve as a model for future settlement efforts in asbestos litigation and in other types of cases. In the de­velopment phase, however, questions regarding cost, efficiency, delays, and fairness to the parties preclude a final assessment.

A simple system for accelerating the timing of settlement re­volves around the imposition of fines for announcement of late set­tlements. One judge has advanced settlements in his court to a week before trial by issuing an order detailing the fines to be im­posed for settlements beyond that time.

Evaluation of the efficiency of settlement approaches in asbestos litigation is hindered by a “ceiling effect.” Because so few cases proceed to trial, all techniques, including the traditional passive role, appear to work. Application of a pure efficiency rationale leads to the conclusion that judicial investment of time in settle­ment negotiations generally is not necessary or efficient at this stage of the litigation. Qualitative improvements in settlements may justify active judicial intervention, but such improvements have not been pinpointed for asbestos litigation.

Lawyers generally welcome intervention, even mediation, by a judge who offers an informed assessment of the value of a case or a considered forecast of legal rulings. When assessments are based on review of expert reports and briefs on the merits, lawyers benefit from the information and expertise. At the same time, lawyers report that superficial evaluations, not grounded in the record of the case at hand, impede settlement efforts.

Summary jury trial procedures have been used in two of the courts studied. In addition to questions of efficiency and necessity, similar to those addressed above, there are serious questions about the accuracy of the advisory verdict of a jury hearing summaries of evidence. Inaccurate estimates of case value may undermine other settlement efforts.

Experience with arbitration as a form of alternative dispute reso­lution for asbestos cases is very limited. Widespread use of arbitration pursuant to an agreement among the parties in the Eastern District of Texas shows promise as a structurally fair approach. As used in that district, arbitration functions primarily to regulate the flow of cases and operates with minimal monitoring by the court.

Settlement formulas are evident in certain subsets of asbestos litigation. Some defendants have negotiated districtwide settle­ments, and even one nationwide settlement, with individual law firms representing plaintiffs. Settlement of the class action in the Eastern District of Texas was based on formulas derived from prior settlements by two sets of plaintiffs’ counsel. The Wellington facil­ity provides for allocations among signatory defendants according to agreed formulas. Allocations among Wellington and non-Wel­lington defendants are worked out in each district.

Allocations of group settlements to individual plaintiffs raise issues of systemic fairness as well as ethical concerns for plaintiffs’ counsel. Often with the aid of judges, lawyers have developed a number of techniques for providing fair allocations. For example, in the Eastern District of Texas and in a national settlement, the court has exercised ite authority to review class settlements under Federal Rule of Civil Procedure 23(e). Other forms of judicial review of allocations have been reported. Counsel for both parties sometimes agree on the allocations in their settlements or even in postsettlement discussions. In other cases, plaintiffs’ counsel may satisfy ethical obligations by full disclosure to all clients.

Settlement has become the dominant mode for disposition of as­bestos litigation. Cases settle individually or in groups of hundreds when firm, credible trial dates are scheduled. Evaluation of the cases at that juncture does not seem to be a problem.

Alternative Trial Structures
The structure of trials determines the structure of settlements. Whether scheduled as individual trials, in consolidated groups, or as class actions, all but a small percentage of cases have settled at a time close to the trial date. Indeed, class actions may be more likely to settle because of the enormity of the stakes for all parties and their lawyers. When cases are grouped together for resolution of the common issues, it is generally understood that some fair pro­cedure must be devised to apply the result to each individual case.

The districts studied used a range of trial structures that involve four different models: (1) individual pretrial and trial, (2) consoli­dated pretrial and individual trials, (3) consolidated pretrial and trial, and (4) class action. The number of cases combined in the consolidations and the class range from six to about one thousand.
There are three available approaches to grouping cases for pre-trial and trial purposes: consolidation, class certification, and multidistrict litigation (bankruptcy also provides an alternative na­tional structure in which claims against asbestos manufacturers are collected for common action). None of these structures was de­signed to accommodate mass latent tort actions, and calls for reform of these procedures are plentiful.

Consolidation, Federal Rule of Civil Procedure 42 gives district judges broad powers to consolidate any common issues of law or fact for a joint trial or hearing. In exercising their discretion, courts are called on to balance possible prejudice to any party, pos­sible jury confusion, risks of inconsistent adjudications, the burdens on parties and witnesses, and the relative efficiency of consolidated versus individual proceedings.

Appellate case law generally supports consolidation of asbestos cases for pretrial and trial purposes while encouraging measures to prevent prejudice to any party. Common factual and legal issues that have been subject to consolidation in asbestos litigation in­clude all issues relating to the failure to warn of the dangers of as­bestos, “state-of-the-art” issues (which address the issues of what manufacturers could have known about the dangers of asbestos and when they could have known it), statute of limitations issues, proximate cause issues involving specific products at a given work­site, punitive damages, and the “government contractor” defense. Consolidation is generally organized so that counsel for all parties, especially all plaintiffs, are the same. Combining consolidation with an interlocutory appeal can expedite appellate review of major issues.

Class actions. Two recent appellate decisions have approved “opt-out” class actions under Federal Rule of Civil Procedure 23(bX3); one involved asbestos personal injury litigation and the other involved asbestos property damage litigation. In applying rule 23 criteria, the courts specifically found that common issues predominate over individual issues and that the class action device is superior to repetitive litigation of issues such as the state of the art. In the personal injury class action, the class was limited to plaintiffs within the district, thereby avoiding problems of applying the law of more than one state. In the property damage case, which is still in litigation, the class is national. In approving the class procedure, the court of appeals noted the availability of subclasses under rule 23(cX4)(B) to accommodate variations in law or in case characteristics.

In both the class action context and the consolidation context, two federal judges who have earned the title of specialists in asbes­tos litigation evidenced a “stepladder effect” in dealing with the numbers of asbestos cases. Starting with consolidation of small groups of cases, these judges have steadily increased the number of cases grouped together until they are now dealing with hundreds of individual claims in a single group.

Multidistrict litigation (MDL) procedures have been used for some products liability cases, including Agent Orange, but the Ju­dicial Panel on Multidistrict Litigation has twice rejected such treatment for asbestos personal injury litigation and once for school property damage litigation. In each case the panel remarked on the opposition of most of the parties to MDL proceedings. De­spite these rejections, the MDL procedure has potential for improv­ing management of cases involving latent injuries caused by toxic or otherwise defective products. A major deficiency to the lack of authority for a consolidated trial, but courts have created ways of retaining jurisdiction for trial of most cases. Authority to divide the cases according to differences (e.g., in state law) could provide manageable subclasses (e.g., one for each state). A transferee court also has power to establish different tracks for discovery. With such adaptations, MDL procedures could be useful for any future waves of litigation that resemble asbestos cases.

Collateral estoppel has not been successful in forestalling repeti­tive litigation of issues in asbestos litigation. Attempts to apply the doctrine, even on a limited issue-by-issue basis, have sparked fur­ther litigation about the contours of the doctrine’s applicability. Use of test case procedures has been more productive.
Bifurcation of trials into liability and damages phases is commit­ted to the discretion of the court by Federal Rule of Civil Procedure 42(b). As with application of rule 42(a), the court is called on to bal­ance prejudicial effects, convenience of the parties and the court, and saving of resources. Because bifurcation decisions may affect the outcome of the case, they are to be made on a case-by-case basis. Courts attempt to avoid a sterile laboratory atmosphere or the separation of interrelated issues.
Variations, such as reverse bifurcation and reverse trifurcation, have been used in asbestos litigation. Such procedures are subject to the criticism that they focus on the weakest issue in the plain­tiffs case and defer consideration of defendant’s alleged misconduct until a later stage.

The ultimate question relating to trial structures is one of num­bers. Issues of efficiency and fairness to the parties are important and, at the same time, counsel seem to perceive them to be relative to the size of the caseload. For the most part, each side prefers in­dividual trials; larger numbers represent compromises on both sides. Empirical evidence suggests that each side’s point is well taken. In simulated trials, a case involving serious injuries raises the average verdict of other cases while lowering its own. Knowl­edge by the jury that hundreds of victims may be involved in­creases the amount of punitive damages.

Courts have experience with clusters of up to fifty cases, but jury allocation of individual damages is generally limited to eight to ten cases at a time. Some courts have made progress in managing their asbestos dockets without any consolidation of cases by simply scheduling a steady stream of trials assigned to the dockets of indi­vidual judges.

Special Burdens on Court Personnel
Asbestos cases have been generally been superimposed on crowded dockets. The time lag for appointment of new judges means that judicial resources to cope with any increased burden re­mained static during the period of greatest need. In courts that in­vested scarce judicial resources and confronted the burden at an early stage, these investments paid dividends in the form of simpli­fication of the cases and routinization of settlements. In courts that gave priority to other types of cases and delegated asbestos cases to magistrates, the backlog grew and burdens continue.

None of the courts studied devoted the judicial resources to as­bestos litigation that the case weights derived from the Federal Ju­dicial Center’s 1979 time study (which examined and compared the judicial workload associated with various types of cases) indicates for similar products liability cases. No district appears to have in­vested more than one judge-year into all aspects of asbestos litiga­tion. Demands of the cases and burdens are generally concentrated in the early years of active case management. In most courts, the burdens have diminished as management systems begin to operate routinely or, in one case, a class action leads to a major settlement. In all courts, the judicial burden has been proportionate to the number of cases and generally far less than the burden predicted by the time study.
Clerks’ Office Burdens

Many of the clerks’ office burdens were detailed in an earlier report, T. Willging, Asbestos Case Management: Pretrial and Trial Procedures (Federal Judicial Center 1985). Some courts have pio­neered development of special computer data bases to keep track of and manage the asbestos caseload. Their experience shows the value of, and need for, automated court records for civil cases.

Delegated Burdens
In one district, a magistrate was successful in formulating a case management plan for the entire court. In two districts, delegation of asbestos cases to a magistrate for pretrial management was not successful because the courts did not provide the backup and sup­port in terms of scheduling trials. In another district, a magistrate established a computer program to monitor the progress of an arbi­tration system.

Specialist law clerks, sometimes assigned to the entire court, have served as a ready palliative to the substantive law and mana­gerial demands of this new form of litigation. In addition to being a research resource, these clerks function in the front line of admin­istration of case management orders by communicating with the parties, enforcing deadlines, and the like.

Filing Trends and Dispositions
Recorded terminations of asbestos cases lag far behind new fil­ings. Termination statistics, however, do not account for many dis­positions that are partial or that are entered only upon final pay­ment of a settlement. The number of dispositions has increased steadily in each year from 1983 to 1986 (see table 11). The number of filings increased dramatically in 1985 and the first half of 1986 (see table 12). More than half of all asbestos cases in the federal courts were filed during 1984-1986. Disposition of that number of cases will require substantial increases in the numbers of cases scheduled for trial.

Trends for filings are difficult to predict. Some lawyers indicate that the major wave is cresting due to reduced use of asbestos in the 1970s. Long-range forecasts are that asbestos filings will taper off within the next decade. In some jurisdictions with large backlogs, the asbestos burden has been shifted to state courts as counsel seek the forum most likely to respond to their clients’ needs.

New Waves of Toxic Torts?
The unique characteristics of asbestos litigation render it un­likely that this phenomenon will repeat itself in the foreseeable future. Convergence of widespread use of a dangerous product, ca­pable of causing serious injuries, through a long latency period during which some manufacturers suppressed information about the dangers is the starting point. Asbestos litigation is also unique in that general causation is clear while causation-in-fact is disput­able, involving the defenses and cross-claims of numerous defend­ants in each case.

Charting the historical and current analogues, including MER/ 29, thalidomide, DES, Agent Orange/dioxin, Dalkon Shield, silieo-sis, groundwater contamination, Bendectin, formaldehyde, tobacco, radiation, and black lung litigation demonstrates the vast differ­ences of asbestos litigation. While the coalescence of large numbers of cases with clear liability and varied injuries caused by a large number of defendants over an extensive time period seems improb­able, it is not impossible. A taxonomy derived from the asbestos ex­perience is designed to aid in forecasting future waves of similar litigation (see table 13). A collection of case management tech­niques linked to case characteristics (see table 14) provides a flexi­ble mechanism for courts to adapt case management strategies to the characteristics of new forms of litigation.