Dukes v. Pneumo Abex

SUPREME COURT CASES

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State: Illinois

Court: 4th District Appellate

Docket No: 4-06-0235 Rel

Case Date: 10/29/2008

Preview:NO. 4-06-0235 IN THE APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

Filed 10/29/08

DORIS DUKES, Individually and as Special ) Appeal from Administratrix of the Estate of MERLON ) Circuit Court of DUKES, Deceased, ) McLean County Plaintiff-Appellee, ) No. 04L79 v. ) PNEUMO ABEX CORPORATION, ILLINOIS ) CENTRAL RAILROAD, METROPOLITAN LIFE ) INSURANCE COMPANY, and OWENS ILLINOIS, ) Defendants, ) and ) Honorable HONEYWELL INTERNATIONAL, INC., ) Charles G. Reynard, Defendant-Appellant. ) Judge Presiding. _________________________________________________________________ JUSTICE KNECHT delivered the opinion of the court: Plaintiff, Doris Dukes, individually and as special administratrix of the estate of Merlon Dukes, sued defendant, Honeywell International, Inc. (Honeywell), and several others to recover damages for harm Dukes suffered resulting from exposure to asbestos-containing products. In October 2005 a jury returned

a verdict for plaintiff and against defendant, Honeywell, which appeals, arguing the trial court erred by (1) allowing into evidence a prior nolo contendere plea by defendant's predecessor Bendix, (2) allowing into evidence a letter by one of Bendix's employees, (3) allowing into evidence activities of alleged coconspirators, (4) allowing into evidence trial or deposition testimony from cases where defendant was not a party, (5) allowing into evidence defendant's membership in trade organizations, (6) giving a missing evidence instruction, (7) giving an issues instruction inconsistent with plaintiff's burden of proof, (8)

refusing to give a sole-proximate-cause instruction, (9) giving an erroneous conspiracy elements instruction, (10) giving a misleading agency instruction, (11) improperly responding to a jury question, (12) denying defendant's motion for a new trial, (13) denying defendant's motions for directed verdict and judgment n.o.v., and (14) denying defendant's motion to return certain documents produced in discovery. I. BACKGROUND Dukes was employed at the Union Asbestos & Rubber Company (Unarco) plant in Bloomington from 1954 to 1961. exposed to asbestos while working at Unarco. He was We reverse.

Dukes was diagnosed

as having mesothelioma in early 2004, and he died May 20, 2005. This suit was brought originally by Merlon and Doris Dukes in June 2004, and after Merlon's death, Doris Dukes was substituted plaintiff as special administratrix of Merlon's estate. In 1985, Allied Corporation purchased Bendix. Later,

Allied Corporation changed its name to Allied Signal, Inc., and in 1999 changed it to Honeywell International, Inc. There is no

direct connection between Bendix and Dukes, but Honeywell, under plaintiff's theory, as a successor to Bendix, bears legal responsibility for Bendix's participation in a conspiracy with other companies that supplied or used asbestos in their products. Bendix's product line included automobile and truck brakes. Bendix used asbestos in its brake linings and other For many

friction products at least as early as the 1930s.

decades, Bendix purchased asbestos from Johns-Manville (J-M), the - 2 -

biggest United States asbestos company and the leading miner of asbestos. Bendix manufactured brake linings at plants in Troy,

New York, beginning in 1939 and in Cleveland, Tennessee, beginning in 1964. Some brake work was also done at other Bendix

plants and at Bendix's Canadian subsidiary in Windsor, Ontario, prior to that plant's closing in 1980. Bendix never employed Dukes, and no evidence shows any Bendix product was ever used in the Unarco plant where Dukes worked. Plaintiff's theory is defendant and others, including

Unarco, engaged in the following conspiracy: (1) they agreed to positively assert it was safe for people to work with asbestos, (2) they agreed to suppress information about the harmful effects of asbestos, (3) one or more of the conspirators performed an overt act in furtherance of the conspiracy, and (4) the agreement and acts in furtherance were a proximate cause of Dukes' death. During the time period Dukes worked at the Bloomington Unarco plant, (1) asbestos fibers were released into the air at the plant, (2) some of those fibers came from products manufactured by J-M and Raybestos-Manhattan (Raybestos), and (3) Dukes developed mesothelioma as a result of his exposure to asbestos at the Unarco plant. Former employees at the Unarco plant testified

to the extremely dusty conditions at the plant when Dukes was employed there. Testimony was presented as to the acceptable level of exposure to asbestos fiber dust in the air. The standards

promulgated by the Occupational Safety and Health Administration - 3 -

(OSHA) beginning in the early 1970s have steadily decreased, and medical experts testified zero exposure was the only truly safe level. Much of the evidence presented by plaintiff related to events prior to Dukes' exposure to asbestos and did not involve Bendix. Dr. Barry Castleman, plaintiff's expert, testified

during the 1930s and 1940s, J-M and Raybestos attempted to suppress asbestos research conducted by Saranac Laboratory (Saranac) and during the 1930s, J-M and Raybestos attempted to prevent Asbestos magazine from publishing information regarding asbestosis. In 1936 Saranac, Unarco, J-M, Abex, Raybestos, and Metropolitan Life (Met Life) reached an agreement the companies would retain control over asbestos research they funded, including publication decisions. Unarco, J-M, Abex, Raybestos, and Met

Life commissioned Saranac to conduct a study of asbestos, but they retained control over the study. When Saranac's 1948 report

showed findings of cancer and tumors, those companies forced Saranac to remove the references before publication. In 1935, the general counsel of J-M convinced a researcher, Dr. A.J. Lanza, to downplay the dangers of asbestosis in an industry study. That same year, the editors of Asbestos

magazine proposed a story on asbestosis, but Raybestos and J-M executives objected to the story, and it was never published. Moreover, these same companies convinced the magazine not to publish any articles about the danger of asbestos until 1969. - 4 -

Despite their knowledge of the findings in the various studies that had been done about the health consequences of asbestos exposure, Unarco, J-M, Raybestos, and Abex did not change any of their business practices concerning asbestos or issue any warnings to their employees. J-M knew a large segment

of its workforce had asbestos-related diseases but intentionally kept this information secret from the employees. There was also evidence concerning the activities of Owens Corning (OC) and Owens-Illinois (O-I). This included the

fact O-I received a report from Saranac in 1948 concluding O-I's asbestos-containing Kaylo pipe insulation product was potentially hazardous and "capable of producing asbestosis." Despite this

report, O-I and OC continued to sell Kaylo and later distributed a brochure advising Kaylo was "non-irritating to the skin and non-toxic." A January 1942 internal memorandum detailing OC's strategy for 1942 proposed collecting articles identifying asbestos as a cause of asbestosis as a "weapon-in-reserve" for possible use in negotiations with the employees' union. OC purchased Unarco's Bloomington plant in 1970 and continued to operate the plant with dangerous asbestos dust conditions even though OC knew asbestos dust levels at the plant were unsafe and many of its employees at both its Berlin, New Jersey, plant and Bloomington plant actually had asbestosis or other asbestos-related diseases. Despite this knowledge, OC

issued no warnings to its employees concerning dangers of asbes- 5 -

tos.

OC and O-I bought a significant amount of raw asbestos

fibers from J-M. Evidence was also introduced of the many historical publications and studies of asbestos beginning around 1900. By

1965, close to 1,000 publications had addressed the ability of asbestos to cause asbestosis, lung cancer, and mesothelioma. J-M first put a warning on its asbestos products in 1964. In 1968, it advised its business customers it would soon

place a warning label on its shipments of raw asbestos stating: "Persons exposed to this material should use adequate protective devices as inhalation of this material over long periods may be harmful." In 1969, J-M sent a position paper about asbestos and health to its customers, including Bendix, stating a finished product containing asbestos presented no risk but expressed concern about employees having long-term exposure to asbestos dust contracting asbestosis, a nonmalignant lung disease. The

paper further noted medical studies had reported a link between asbestos and cancer and reports of mesothelioma. The primary trial witness with knowledge of Bendix's activities was Joel Charm, an employee of Allied Corporation when it acquired Bendix. Charm was in charge of reviewing all of

Bendix's product lines before the purchase of Bendix was completed in 1985. He determined Bendix instituted dust-control

measures and offered respirators to its employees in the 1940s and began giving its employees chest X-rays in the 1950s. - 6 -

Bendix's early concern was not specific to asbestos but to general nuisance dust generated by the grinding process that occurs during the manufacturing of brakes. Bendix noted in a

1970 union brochure 15 tons of dust were generated per day at its Troy, New York, plant. Charm also admitted, however, Bendix would have known in the 1950s lung scarring could occur as a result of exposure to its plants' dust. The earliest communication he saw of written

communication to Bendix's employees of the dangers of asbestos was in March 1978. Charm contended there must have been some

oral communication to the employees in the early 1970s in conjunction with the announcement of standards by OSHA. As early as the 1930s Bendix received correspondence from Met Life concerning the issue of lung disease from inhalation of asbestos dust. Documents generated by Bendix in the

1970s touted Bendix's long-standing knowledge about asbestos. Bendix endeavored to meet the OSHA standards published in 1972. It monitored asbestos levels throughout its plants and As OSHA standards In 1973,

installed additional dust-control equipment.

increased, so did Bendix's dust-control programs.

Bendix began putting labels on its products that stated the products contained asbestos and warned against creating dust while installing the brake shoes because breathing asbestos dust may cause "bodily harm." During this time when OSHA held hear-

ings on asbestos standards, J-M advocated to OSHA any required labels leave out the word "cancer" as it would "have a very - 7 -

severe" and "undeserved economic impact on the industry."

The

Asbestos Information Association (AIA), of which Bendix was a member, likewise argued against the words "asbestosis" and "cancer", claiming "such a label would surely spell the demise of a number of major product lines of the industry." In 1973, Bendix distributed a bulletin to customers requesting they comply with all OSHA regulations and recommending (1) all operators of grinders be supplied with and wear protective equipment and (2) caution signs be displayed. The bulletin

also stated, "One cannot dispute that exposure to asbestos dust of high enough intensity and long duration constitutes a cause related to asbestosis and/or cancers." In 1975, Bendix's internal studies concluded none of its employees had suffered from asbestos-related disease. Bendix

also concluded the type of asbestos it used was less risky than other types of asbestos but no safe level of exposure for any type of asbestos was proven. Defendant's current medical direc-

tor testified all forms of asbestos were capable of causing mesothelioma, lung cancer, and asbestosis. In 1976, Bendix engaged Stanford Research Institute (SRI) to do a morbidity study of employees who had worked at the Troy brake-lining manufacturing plant from 1937 to 1975. The

study found no relationship between plant employment and deaths from diseases associated with asbestos exposure. The study

results were sent to Bendix's then-current employees in 1978 with the admonition the study did not refute the thesis that in some - 8 -

work environments and manufacturing processes a relationship appeared to exist between asbestos and certain forms of cancer. SRI did a follow-up study five years later and found no asbestosrelated disease had caused any deaths in the Troy work force. In 1982, the Ontario Ministry of Labor undertook a similar mortality study with respect to the work force at Bendix's former plant in Windsor. The study, also updated five

years later, reported two possible deaths due to mesothelioma but concluded overall it was not possible to demonstrate an association between working in an asbestos-using department and the risk of asbestos-related disease. However, a 1981 Toronto newspaper

article claimed 13 people had died of asbestos-related cancer at Bendix's Canadian plants and stated there was concern Bendix had not adequately complied with a 1966 government request to clean up its plants. In 1947, Bendix, 20 other companies including J-M, Abex, and Raybestos, 53 individuals, and a trade association (the Brake Lining Manufacturers Association (BLMA)) were indicted in federal court and charged with unlawfully conspiring to fix prices, terms, and conditions of sale of brake linings in violation of federal antitrust laws. In 1948, each party, including

Bendix, entered a plea of nolo contendere, confirmed on the record the practices charged in the indictment had been abandoned, and agreed not to resume such practices in the future. During pretrial motions in limine, the trial court first ruled evidence of the nolo contendere plea would not be - 9 -

admitted but indicated a willingness to reconsider.

During

trial, plaintiff requested to use evidence of the plea, and the trial court, acknowledging defendant's objections were "not unreasonable" and were "credible positions," nonetheless changed its ruling. Documents pertaining to the nolo contendere plea

were admitted into evidence but not submitted to the jury. Instead, the court read to the jury a "limiting instruction," which included the substance of the documents over defendant's objection. In 1966, E.A. Martin, director of purchases for Bendix's Troy plant, wrote a letter to Noel Hendry, sales

manager at J-M, in which he included an article from the September 1966 edition of Chemical Week magazine that asserted the United States Public Health Service had determined 40% of Americans had mild, chronic cases of asbestosis even though they never worked directly with asbestos and while the average asbestos worker was well-protected, the man on the street was not. Martin

went on to say, "My answer to the problem is: if you have enjoyed a good life while working with asbestos products why not die from it. There's got to be some cause." Hendry sent a reply thanking

Martin for the "101st" copy of the article he had received and stated further, "I suppose we have to bear with people who have nothing better to do than create alarm, but we are not alarmed and we live and sleep with the stuff." He also noted Chemical

Week was printing a retraction and the United States Public Health Service was mad because it had been misquoted. - 10 -

All of defendant's witnesses described Martin's remark about dying from asbestos as a personal comment which was "stupid," "in very bad taste," and "unconscionable." They also

stated it was contrary to the views of Bendix and Honeywell management. Over defendant's objection, no evidence was pre-

sented showing Martin had the authority to speak for Bendix on any issue of health and safety or the letter was ever ratified or approved by a person with such authority. The trial court

allowed the letter into evidence in its entirety as an admission by defendant. The trial court also admitted the rest of Martin's file into evidence over defendant's objection. It included a memo

dated October 18, 1966, from Martin to management and safety personnel at the Troy plant advising a later issue of Chemical Week included letters refuting the previous article. Martin added "[t]his may help to quiet the fear that was aroused by Dr. Selikoff's stigmatic report on 'Lung Cancer From Asbestos,'" and he advised the purchasing department keep a file on the subject. This file contained newspaper articles from 1964 and 1966 describing Dr. Selikoff's report, and among others, a 1949 report of the Canadian Health Department concerning deaths from tuberculosis and other causes from 1943 to 1947 in cities where Canadian asbestos mining occurred. Over defendant's objection, plaintiff introduced evidence J-M and Bendix shared a common director from 1959 to 1967. No other evidence pertained to the director or any - 11 -

asbestos-related actions taken by the board of directors by either company during that time period. Again over defendant's objection, plaintiff introduced evidence demonstrating Bendix's membership in the Friction Materials Standards Institute (FMSI) and the AIA, as well as extensive evidence concerning the formation, general membership, and activities of the FMSI. FMSI is a trade association of

companies involved in the friction-materials business incorporated in 1948 using the same offices and same secretary as the BLMA, which was dissolved at the time of the 1948 price-fixing nolo contendere plea. The members of FMSI and BLMA were not Most of the

identical, but there was considerable overlap.

companies alleged as coconspirators here were members of both associations. Plaintiff also presented evidence of activities undertaken by FMSI and AIA representing the industry position on legislation and governmental regulations concerning the asbestos industry. At the close of plaintiff's case, defendant moved for a directed verdict on the conspiracy charge. The trial court

denied the motion, finding sufficient evidence of parallel conduct and also sufficient additional evidence of an agreement to satisfy the standards of McClure v. Owens Corning Fiberglas Corp., 188 Ill. 2d 102, 720 N.E.2d 242 (1999). The court stated

the additional evidence may have been less in a "quantitative sense" than that found insufficient in McClure but it was stron- 12 -

ger in a "qualitative sense," noting the existence of a common director, opportunity to associate through industry association meetings, the arguable "close relationship" with J-M evidenced by the E.A. Martin letter, and the 1948 nolo contendere plea. On October 3, 2005, the jury found for plaintiff and assessed damages of $1 million for losses sustained by Dukes during his lifetime, $3,675,000 for the wrongful death of Dukes, and $500,000 for losses sustained by Doris Dukes. On October 19, 2005, defendant filed a motion for the return of post-2002 lobbying documents it was required to produce to plaintiff in discovery. On November 1, 2005, defendant filed

a posttrial motion for judgment n.o.v. or, alternatively, a new trial. The trial court denied all of those motions, and this

appeal followed. II. ANALYSIS A. Inadmissible Evidence A trial court's admission of evidence is reviewed under an abuse-of-discretion standard (Leonardi v. Loyola University of Chicago, 168 Ill. 2d 83, 92, 658 N.E.2d 450, 454-55 (1995)), unless the admission of evidence was based on the court's interpretation of law; then review is de novo. Petre v. Kucich, 331

Ill. App. 3d 935, 941, 771 N.E.2d 1084, 1089 (2002). 1. Nolo Contendere Plea Documents pertaining to Bendix's 1948 plea in a federal price-fixing case were admitted in evidence but not given to the jury. Instead, the trial court summarized the factual content of - 13 -

the documents in a "limiting instruction" advising the jury of the price-fixing charges giving rise to the plea and the judgment of conviction entered on the plea. In addition, court's instruc-

tion No. 1 was given to the jury during the jury-instruction phase of trial, but it contained no specifics concerning the prior conviction, unlike the "limiting instruction" orally given to the jury during the evidence portion of the trial. The limiting instruction given during the evidence portion of the case stated: "Ladies and gentlemen, the [c]ourt has reviewed documents offered by the [p]laintiff from which the following information is furnished to you as evidence for your consideration: In 1947 the following corporations, in alphabetical order, plus 12 others, were indicted for conspiracy in restraint of trade and commerce in brake linings: American Brake Shoe Company; Bendix Aviation Corporation; Brake Lining Manufacturers' Association Incorporated, Gatke Corporation; Johns-Manville Corporation; Raybestos-Manhattan Incorporated. The indictment charged that Brake Lining Manufacturers' Association, Inc., Association [sic] was a trade association whose members - 14 -

were manufacturers of friction materials including brake linings. That each of the defendants, during all or part of the period covered by the indictment, had been engaged in selling brake linings and had been and was a member of the association. That beginning sometime in 1927, and continuing thereafter up to and including the date of the indictment, the defendants and other persons and corporations unknown to the grand jurors unlawfully combined and conspired to fix, establish, maintain, control, manipulate[,] and tamper with the prices, terms[,] and conditions in the marketing of brake linings in restraint of interstate trade and commerce. That the combination and

conspiracy was a continuing one. On September 22, 1948, each of the charged corporations entered pleas of nolo contendere, no contest, to these charges. Facts concerning the activities relating to the above charges were recited to the [c]ourt, and all of the defendants confirmed the factual statement. The defendants were adjudged by the - 15 -

[c]ourt to be guilty as charged, were convicted, and were sentenced. At the time of their being sentenced, the defendants presented to the [c]ourt a [c]ertificate of [v]oluntary [d]issolution of the Brake Lining Manufacturers' Association, Inc[.], and the defendants confirmed on the record that they had abandoned all the practices charged in the indictment, and that they would not resume any of such practices in the future. The evidence which was just related to you concerning a conspiracy other than that alleged in the complaint is being received for the limited purpose of considering [Honeywell's] motive, opportunity, common plan or design, or absence of mistake or accident. It may be considered by you only It is for you to

for that limited purpose.

determine whether the [d]efendant Honeywell was involved in that conduct. And, if so,

what weight if any should be given to this evidence on the issue of motive, opportunity, common plan or design, or absence of mistake or accident." A condensed version of this instruction was given to - 16 -

the jury as a jury instruction (court's instruction No. 1): "Evidence has been received that the [d]efendant Honeywell has been involved in a conspiracy other than that alleged in the complaint. This evidence has been received

on the issue of the [d]efendant Honeywell's motive, common plan or design, opportunity, or absence of mistake or accident and may be considered by you only for that limited purpose. It is for you to determine whether the

[d]efendant Honeywell was involved in that conduct and, if so, what weight, if any, should be given to this evidence on the issue of motive, common plan or design, opportunity, or absence of mistake or accident." Plaintiff contends this evidence is relevant because it specifically alleged the conspirators knew if they adequately warned of asbestos risks, "publication of such warning would cause workers to leave those industries using asbestos and therefore reduce the sale and usage of asbestos," which would decrease profits for the companies involved. For companies like

Bendix and Abex, virtually the only products they manufactured using asbestos were brake linings, referred to as "friction materials." For others, like J-M and Raybestos, brake linings Defendants in

were an important segment of their manufacturing.

the price-fixing case included Bendix, Abex, J-M, and Raybestos. - 17 -

The indictment alleged each of these companies conspired for more than a decade to fix prices. crease the companies' profits. Plaintiff contends Bendix had been convicted of participating with a number of the same companies with the same products during the same period of time as plaintiff alleges this conspiracy for the suppression of health information began. Plaintiff acknowledges, with the exception of not-for-profits, corporations seek to increase revenues and maximize their bottom line but argues "hopefully" the subset of companies willing to engage in illegal conduct to maximize their bottom line is small. Plaintiff argues the fact Bendix, J-M, Abex, and Raybestos were all convicted of falling within that subset by conspiratorial misconduct in the marketing of asbestos products is relevant when allegations exist they entered into another separate conspiracy to protect their market for asbestos products. Defendant contends evidence of Bendix's nolo contendere plea to another unrelated conspiracy is inadmissible here. nolo contendere pleas are not generally a part of Illinois practice (see 725 ILCS 5/113-4.1 (West 2004)), they do act as a guilty plea although the defendant may still deny the facts underlying the plea in a subsequent proceeding. Gerdes v. Edgar, The While This was done presumably to in-

148 Ill. App. 3d 646, 648, 499 N.E.2d 1016, 1018 (1986).

fact of this conviction may be used against a defendant in a later civil proceeding. Gerdes, 148 Ill. App. 3d at 648, 499

N.E.2d at 1018 (for purpose of revoking driver's license, the - 18 -

court properly considered defendant's driving-under-the-influence conviction resulting from nolo contendere plea in Georgia). This is an important distinction. For example, in

Gerdes, a driver who pleaded nolo contendere under the laws of Georgia to driving under the influence of liquor was convicted of an offense. Gerdes, 148 Ill. App. 3d at 647, 499 N.E.2d at 1017.

We found the Illinois Secretary of State could consider the fact of the defendant's conviction for purposes of revoking the defendant's driver's license. 499 N.E.2d at 1018. Gerdes, 148 Ill. App. 3d at 648,

Similarly, in In re Eaton, 14 Ill. 2d 338.

339, 152 N.E.2d 850 (1958), an attorney who pleaded nolo contendere to a federal crime for using the mails to defraud was convicted of an offense. The supreme court held the Chicago Bar

Association and the Supreme Court of Illinois could consider the fact of the defendant's conviction for purposes of considering his disbarment. Eaton, 14 Ill. 2d at 342, 152 N.E.2d at 852.

In each of those instances, the fact of conviction is admissible in a later proceeding, but the facts and circumstances underlying the conviction are not. Neither party has cited nor

have we found any case where the nolo contendere plea has been admitted to prove the facts of the underlying offense or wrongdoing. For example, a driving-under-the-influence-of-alcohol

conviction in Georgia cannot be used to prove a defendant drove under the influence of alcohol at a later time in Illinois. The facts given in limiting instruction during the evidence portion of the case went beyond the nolo contendere plea - 19 -

itself.

While the nolo contendere plea was ostensibly admitted

for the limited purpose of showing motive, opportunity, common plan or design, or absence of mistake or accident, in reality it served to impermissibly demonstrate the wrongdoing at issue in this case. We also note section 16(a) of the Clayton Act (15 U.S.C.

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