Tort Law’s Sleight of Hand – Part 3

The suppression of the industrial nature of most asbestos personal injury cases was on full display in the New Jersey’s controversial decision in Beshada v. Johns-Mansville Products Corporation.[1] Without a record of what was known or knowable, the New Jersey Supreme Court held that defendants that sold asbestos-containing products without warning of the products’ latent hazards would be liable even when the hazards were “undiscoverable” at the time of marketing.[2] This holding was based upon a trial court record devoid of the state-of-art defense. The legal issue was created on the basis of plaintiffs’ motion to strike “state of the art” as a defense, even though plaintiffs had served expert witness reports that addressed state of the art, and despite the obvious relevance of such proofs to plaintiffs’ claims of negligence and punitive damages.[3]

The Beshada Court created hyperstrict liability by holding that knowledge of an asbestos-containing product’s hazards was irrebutably imputed to the manufacturer. The Court never dealt with the epistemiologic problems raised by its holdings (such as shifting scientific paradigms of justified belief from case series and animal studies to observational epidemiologic studies, the emergence of knowledge about smoking and lung cancer at the same time the asbestos epidemiology was being done,[4] and potential Gettier problems[5]).

The Court attempted to justify its regime of hyperstrict liability by adverting to the goals of spreading costs, avoiding injury, and simplifying factfinding.[6] As with most decisions of the era, the Court believed that the cost of injuries should not be borne by “innocent victims,” but there was no record evidence of innocence or of culpable conduct. More important, the Beshada Court never asked whether the industrial purchasers benefitted more economically from the use of asbestos-containing products, or whether the industrial purchasers were better positioned to protect the workers not only through warnings but through a comprehensive safety program that involved teaching, training, industrial hygiene measurements, engineering controls in the form of ventilation, and the selection, fitting, and maintenance of appropriate personal protective equipment such as respirators.

Of the 59 plaintiffs before the court in Beshada, 57 experienced their asbestos exposure in the course of employment for three large, sophisticated companies with substantial industrial hygiene technical capabilities: Jersey Central Power and Light Company, Hercules, Inc., and Research Cottrell, Inc.[7] One of these employers was a highly regulated utility, and all three were subject to state, and later federal, regulation of workplace asbestos exposure.

The Beshada decision thus ignored the reality that the employers were in the best position to avoid the harms claimed. The court also ignored the availability of employment benefits, such as life, accident, health, and disability insurance, and the availability of workers’ compensation as a method of loss spreading for injuries and occupational diseases that arose in the course of employment. The creation of hyperstrict liability for the state policy goals also undermined sensible safety incentives for the employers, which received the benefit of liens and subrogation rights against any recovery by the employees against remote industrial suppliers.[8]

The basic error was that the court sought to squeeze a complicated three-party industrial controversy into the overly simplified, and simply wrong two-party consumer model.[9]

Beshada was quickly branded as an example of excessive judicial activism.[10] It created a perverse incentive to give vague, overly broad warnings that ultimately would be unhelpful if not hurtful to workers, while trampling on the right to litigate issues. The two law professors whose work was relied upon in Beshada both criticized the illogic of the decision.[11] Within two years after deciding Beshada, the New Jersey Supreme Court retreated from its formulation of hyper-strict liability in a pharmaceutical products liability case involving an alleged injury from the use of tetracycline antibiotic.[12] Beshada was limited to its facts; in other words, it was a derelict on the brackish jurisprudential waters of New Jersey.

The disparate treatment between asbestos-containing and pharmaceutical products led to a constitutional challenge, which was rejected by a divided en banc federal district court, and then a panel of the Third Circuit.[13] During the pendency of the appeal from the en banc court, the district court entered a stay of all trials based upon Beshada’s hyperstrict liability rule. During this stay period, one very capable plaintiff’s lawyer, waived Beshada and proceeded to trial in a case before the Hon. Stanley Brotman, on a theory of general negligence for failing to warn. The jury returned a defense verdict on liability, which implied that it had found that plaintiff had failed to show a warning was reasonably required given what was known at the time of manufacture.

Another empirical test of Beshada’s fairness occurred in a state court case tried before the Hon. Thomas Mannion, in Middlesex County, New Jersey. The largest plaintiffs’ firm in New Jersey of the time wanted to pursue punitive damages against a particular asbestos product manufacturer. The manufacturer objected to Beshada’s hyperstrict liability in a case in which the plaintiff was already committed to presenting state-of-the-art evidence and detailed historical proofs. In order to obviate the defense objection, the plaintiff waived Beshada and proceeded to trial on negligence and punitive damages. The jury returned a defense verdict on liability.

[1]  90 N.J. 191, 447 A.2d 539 (1982).

[2]  90 N.J. at 196, 447 A.2d at 541.

[3]  Andrew T. Berry, “Beshada v. Johns-Manville Products Corp.: Revolution or Aberration in Products Liability Law,” 52 Fordham L. Rev. 786, 792 n.44 (1984) [cited below as Berry], citing Transcript of Motion to Strike State of the Art Defense at 51, Beshada v. Johns-Manville Prods. Corp., No. L-12930-79 (N.J. Super. Ct. Law Div. Oct. 9, 1981). Despite the lack of record evidence, the Beshada court was doubtlessly influenced by the lopsided historical narrative and the harsh characterization of warnings or lack of thereof in Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076, 1104 (5th Cir. 1973) (referring to warnings first introduced on products in 1964, as “black humor,” even though the warnings were the same or similar to warnings mandated by OSHA in the early 1970s), cert. denied, 419 U.S. 869 (1974).

[4]  Collin Talley, Howard I. Kushner, and Claire E. Sterk, “Lung Cancer, Chronic Disease Epidemiology, and Medicine, 1948-1964,” 59 J. History Med. & Allied Sciences 329 (2004).

[5]  See Edmund L. Gettier, “Is Justified True Belief Knowledge?” 23 Analysis 121 (1963).

[6]  Beshada, 90 N.J. at 205-07, 447 A.2d at 547-48.

[7]  Beshada at 197-98, 447 A.2d at 543.

[8]  N.J. Stat. Ann. § 34:15-40 (1959).

[9]  See Berry at 794-95.

[10]  See, e.g., John W. Wade, “On the Effect in Product Liability of Knowledge Unavailable Prior to Marketing,” 58 N.Y.U. L. Rev. 734, 758-59 (1983); Sheila L. Birnbaum & Barbara Wrubel, “State of the Art and Strict Products Liability,” 21 Tort & Insur. L. J. 30, 33 (1985) (“In the context of a failure to warn case, it is clear that a product cannot be made safer by the addition of a warning if science and technology do not suggest to the manufacturer that there is any hazard or risk to warn about.”); C. Eric Funston, “The ‘Failure to Warn’ Defect in Strict Products Liability: A Paradigmatic Approach to ‘State of the Art’ Evidence and ‘Scientific Knowability’,” Ins. Couns. J. 39, 49 (1984) (observing that Beshada “blundered from their own jurisprudential quagmire into [the] swamp [of epistemology]”); Comment, “Requiring Omniscience: The Duty to Warn of Scientifically Undiscoverable Product Defects,” 71 Geo. L.J. 1635, 1653 (1983) (“broad generalities with little or no factual support”); Note, “Products Liability-Strict Liability in Tort-State-of-the-Art Defense Inapplicable in Design Defect Cases – Beshada v. Johns-Manville Products Corp., 90 N.J. 191, 447 A.2d 539 (1982),” 13 Seton Hall L. Rev. 625, 635 (1983) (“logically unsound”). The plaintiffs counsel of course declared Beshada a brilliant innovation. See Placitella & Darnell, “Beshada v. Johns-Manville Products Corp.: Evolution or Revolution in Strict Products Liability?” 51 Fordham L. Rev. 801 (1983).

[11]  John W. Wade, “On the Effect in Product Liability of Knowledge Unavailable Prior to Marketing,” 58 N.Y.U. L. Rev. 734, 758-59 (1983); see David Owen, “Bending Nature, Bending Law,” 62 Florida L. Rev. 570, 596 (2010) (discussing both Wade and Keaton’s criticisms).

[12]  Feldman v. Lederle Laboratories, 97 N.J. 429, 479 A.2d 374 (1984).

[13]  In re Asbestos Litigation, 628 F.Supp. 774 (D.N.J.1986) (eight to six), aff’d sub nom. Danfield v. Johns-Manville Sales Corp., 829 F.2d 1233 (3d Cir. 1987).

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