For Whom the Bells Toll — Garlock’s Bankruptcy

One of the long survivors of the asbestos litigation, Garlock, filed for chapter 11 bankruptcy, earlier this month.  Garlock manufactured gaskets, which for many years contained asbestos, and which were widely used in fitting pipes in industrial facilities and naval shipyards around the country.  See http://blogs.wsj.com/bankruptcy/2010/06/08/the-daily-docket-garlock-enters-bankruptcy/

Garlock was a frequent co-defendant of the clients I have represented in trials over the years, and its lawyers always came ready for the fray.  Personally, I hope that Garlock will find a way to use the bankruptcy forum to obtain fairer treatment than it faced in many courtrooms around the country.

One unfairness that Garlock and other manufacturers face is tort liability law that ignores the role of customers’ knowledge, and makes a fetish out of verbal warnings, without any empirical evidence that such warnings would have changed end user behavior.

Garlock sold gaskets to the United States Navy, for use in the construction of naval vessels.  Plaintiffs fault the failure of third-party vendors, such as Garlock, to warn them of the hazards of asbestos.  The truth, however, is that plaintiffs’ employer, the United States government, had vastly more knowledge of the hazards, and of the details of the actual workplace exposures and employees’ level of training to avoid the hazards, than did the remote third-party vendors.

With the help of capable raconteurs, such as Paul Brodeur and Barry Castleman, asbestos litigation has been cast as a morality play about the evil and callousness of American corporate business.  The truth is much more nuanced and complicated.  The Brodeur version of asbestos history is easy to spin and sell to jurors when the court limits or excludes the role of the dominant player in the tragedy — the U.S. government.

The U.S. government was clearly aware of the hazards of asbestos to its military and civilian employees.  Even before the U.S. was officially at war, the increased workload of the naval shipyards brought the hazards of asbestos insulation and fabrication to the attention of naval officials.  In 1939, in commenting upon the working conditions of insulators at the Brooklyn Naval Shipyard, the Naval Surgeon General reported that “[a]sbestosis is an industrial disease of the lungs incident to the inhalation of asbestos dust for prolonged periods.”  Admiral McIntire (who also served as President Roosevelt’s personal physician) was well aware, from field memoranda, that the Navy was not protecting its workers as it should. 

Captain Ernest Brown, the senior medical officer of the Brooklyn Naval Shipyard, wrote about the hazards of asbestos in War Medicine (1941).  In 1941, with the Liberty Ship program underway, the Navy refused to permit an outside inspector to assess health hazards.  On March 11, 1941, Commander Stephenson wrote to Admiral McIntire “I told him that I had spoken to you and that you had indicated that President Roosevelt thought that this might not be the best policy, due to the fact that they might cause disturbance in the labor element….None of our foundaries [sic] would pass the necessary inspection to obtain workers’ compensation insurance from any of the insurance organizations. I doubt if any of our foundaries would be tolerated if the State industrial health people were to make surveys of them.”

The Navy, in conjunction with the Maritime Administration, did create an industrial hygiene program, under the leadership of Dr. Philip Drinker.  Drinker was perhaps the best known industrial hygienist of the era —  a professor at the Harvard School of Public Health, and the inventor of the iron lung.  In 1942, he was the president of the American Industrial Hygiene Association.  He had served as the editor in chief of editor-in-chief of The Journal of Industrial Hygiene, for many decades.  Drinker’s memoranda, from his field visits to naval and contract shipyards, in 1942, documented the hygienic deficiencies in the workplace, and the need for improved ventilation, training, and medical monitoring.

Drinker’s observations were never shared with the workers or with the government’s outside vendors.  Drinker died in 1972, before he could bear witness in the asbestos litigation.

This evidence of the government’s culpability and its suppression of information (and much more such evidence to the same effect) rarely has seen the light of day in American courtrooms.  Very few states permit an offset for employer’s negligence, and many states refuse to permit any evidence of the employer’s culpability in cases of so-called strict liability.  The result is a skewed trial in which the jury is not permitted to assess all the facts and circumstances of the reasonableness of defendants’ actions.

After trying one of the first New York state asbestos cases, in which the defendants put the government’s knowledge into issue, Judge Weinstein commented that “[t]he Navy, though aware of the hazards posed by asbestos dust, in its urge to build its warships as quickly as possible, did not inform workers of the dangers and neglected to make available protective precautions. * * * The evidence produced indicates that these risks were known to Government officials at least as high as the highest Navy personnel and probably known to the President of the United States.” Judge Weinstein refused the defendants’ motions for judgment, but opined that there was no doubt that the government was primarily responsible.   See In re Joint E. & S. Dist. Asbestos Litig., 129 B.R. 710 (E. & S.D.N.Y. 1991), aff’d, In re Brooklyn Navy Yard Asbestos Litigation (Joint Eastern and Southern District Asbestos Litigation) 971 F.2d 831 (2d Cir. 1992).

Recently, Judge Weinstein recalled his involvement with this bellwether New York case:

“I became involved with asbestos because a number of cases were assigned to me as an Eastern District Judge arising from Navy Yard exposure to asbestos. While young men of 17 and 18 were awaiting entry into the armed forces in World War II, they worked on the battle ships and aircraft carriers at the Brooklyn Navy Yard, sometimes knee deep in asbestos.

The government knew that these young people were being endangered. It furnished masks to the painters who had refused to paint the hulls with poisonous paints until they were provided with protection. The doctors in charge knew that asbestos being breathed in by these workers in the hulls of these new ships would create serious future health problems. They had seen some of them in the Manville and other factories. And there were ancient stories of workers in asbestos who suffered lung problems.”

Jack B. Weinstein, “Preliminary Reflections on Administration of Complex Litigations,” 2009 Cardozo L. Rev. de novo 1

In Philadelphia, where many cases of naval shipyard workers have been tried, courts routinely “reverse bifurcate” trials, with damages and medical causation issues proceeding first to verdict, and then, if necessary, a separate trial on liability.  This backwards approach to trying asbestos cases was first requested by defense counsel for Johns Mansville, which also had to deal with suppression of evidence issues.  When Johns Mansville went bankrupt, the remaining defendants, many of whom had good liability defenses, were saddled with having to try liability in some cases after the jury had already determined that the plaintiff should be compensated.  Plaintiffs’ counsel have been permitted to argue: “first they gave him asbestosis, now they want you to take away his compensation.” 

If not for the distorting lens of workman’s compensation, employer’s tort immunity, and sovereign immunity, there is a good chance that Garlock would be a healthy American company today, and that many of the other companies that have gone bankrupt (> 80) would be solvent.  Similarly, if Garlock, and many other companies, were permitted fairly to litigate claims of their negligence, under all the facts and circumstances of their sales, odds are that we would have had federal legislation, long ago, in which the government contributed generously to the compensation of asbestos victims, not as a “corporate bailout,” but as an acknowledgment of its moral and legal responsibilities.

So the bells really do toll for thee.

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