Opinion ID: 1897473
Heading Depth: 1
Heading Rank: 3

Heading: bragg's and freas' appeals

Text: A tale such as that of the Manville Trust must begin with a discussion of the nature and history of asbestos. As early as the fifth century B.C., asbestos was valued for its relative indestructibility and its resistance to heat and fire. See In re Joint Eastern & Southern Districts Asbestos Litigation ( Asbestos Litigation I ), 129 B.R. 710, 735 (E. & S.D.N.Y.1991) (recounting a detailed history of asbestos use), [15] vacated, 982 F.2d 721 (2d Cir.1992), modified on rehearing, 993 F.2d 7 (2d Cir.1993); Special Project: An Analysis of the Legal, Social, and Political Issues Raised by Asbestos Litigation, Part I, 36 VAND. L. REV. 573, 578 nn. 3 & 4 (1983) (hereafter cited as  Special Project ). Beginning with the industrial age, the mirac[ulous] qualities of asbestos were put to use in products designed to protect persons and property. See id. at 578; Frank J. Macchiarola, The Manville Personal Injury Settlement Trust: Lessons for the Future, 17 CARDOZO L. REV. 583, 588 (1996) (discussing the many uses of asbestos in modern times). Asbestos was used as insulation in homes, offices, factories, ships, and cars. It was also used to make, among other things, cigarette filters, fireproof clothing, and fireproof theater curtains. Id.; see also Special Project, 36 VAND. L. REV. at 578 n. 7 (listing the many consumer applications of asbestos). Although [k]nowledge of the potential health hazards of asbestos ... dates back to ancient times, Asbestos Litigation I, 129 B.R. at 735, [16] most producers and scientists through the late nineteenth century considered asbestos to be a virtually harmless, highly valuable ingredient in a variety of products designed to protect property and human life. Special Project, supra, 36 VAND. L. REV. at 578 (footnote omitted). Toward the end of the nineteenth century, however, scattered reports began to emerge concerning the dangers posed by airborne asbestos particles. Asbestos Litigation I, 129 B.R. at 737. In the 1920s and 1930s, more extensive evidence began to accumulate, and reports of the hazards of asbestos became widespread in medical journals. Id. at 737-738. Finally, by 1935, asbestos was `widely recognized as a mortal threat.' Id. at 738 (quoting B. CASTLEMAN, ASBESTOS: MEDICAL AND LEGAL ASPECTS 32 (2d ed.1978)). Nevertheless, despite this knowledge, the world's annual use of raw asbestos increased dramatically over the next thirty years, from half a million tons in 1934 to two and a half million tons in 1964. Id. at 736 (citing Selikoff, Churg & Hammond, Asbestosis Exposure and Neoplasis, 188 J.A.M.A. 22, 142 (1964)). Johns-Manville Corporation, founded in 1858, was the largest manufacturer of asbestos-containing products and the largest supplier of asbestos in the United States from the 1920s until the 1970s. Id. at 742; see also In re Johns-Manville Corp., 97 B.R. 174, 176 (Bankr.S.D.N.Y.1989). As a result, John-Manville's products saw widespread commercial, industrial and consumer use. Asbestos Litigation I, 129 B.R. at 743. As the illnesses resulting from years of exposure to asbestos started taking their toll in the 1960s, a flood of lawsuits began in the 1970s. Id. at 744. With the assistance of labor unions, thousands of asbestos workers brought suits against Johns-Manville. Id. at 745. Angered by evidence that Johns-Manville had suppressed vital information, [17] juries sought to punish the corporation by awarding punitive damages. Id. at 746. As the number of plaintiffs grew dramatically and jury awards escalated, Johns-Manville, once a highly successful company, began to suffer severe financial stress. Id. at 751. Finally, in August 1982, motivated by the realistic fear of burgeoning asbestos-related tort claims for compensatory and punitive damages, [18] Johns-Manville filed for reorganization under chapter 11 of the United States Bankruptcy Code. Id.; see also In re Johns-Manville Corp., 68 B.R. 618, 620 (Bankr.S.D.N.Y.1986). Following several years of intense negotiations and litigation, a reorganization plan was developed, establishing the Manville Trust to assume the Corporation's asbestos-related liabilities. Id. at 635; see also Kane v. Johns-Manville Corp., 843 F.2d 636 (2d Cir.1988) (affirming Second Amended and Restated Plan of Reorganization). The beneficiaries of the Trust include: (1) persons who are suffering, or who will in the future suffer, from asbestos-related diseases caused in whole or in part by exposure to Johns-Manville products; (2) co-defendants of Johns-Manville in asbestos-related litigation; and (3) manufacturers and distributors of Johns-Manville asbestos and asbestos products who have contribution and indemnification claims against Johns-Manville. In re Joint Eastern & Southern District Asbestos Litigation ( Asbestos Litigation IV ), 78 F.3d 764, 769 (2d Cir.1996). Some time later, the beneficiaries brought a non-optout class action against the Trust, pursuant to Rule 23 of the Federal Rules of Civil Procedure, seeking changes in its obligations and procedures. See Asbestos Litigation I, 129 B.R. at 767. When the assets of the Trust quickly proved to be inadequate, the first attempt to settle the litigation was vacated. See In re Joint Eastern & Southern Districts Asbestos Litigation ( Asbestos Litigation II ), 982 F.2d 721 (2d Cir.1992), modified, 993 F.2d 7 (2d Cir.1993). The matter was remanded to the Bankruptcy Court for further proceedings, including the designation of appropriate subclasses and a precise delineation of the rights accorded to co-defendant manufacturers. Asbestos Litigation IV, 78 F.3d at 770 (citing Asbestos Litigation II, 982 F.2d at 740). Eventually, after the designation of new subclasses and hard fought negotiations among them, followed by extensive trials and motions, a modified settlement emerged (the Settlement). Id.; see Asbestos Litigation III, 878 F.Supp. at 484-512 (summarizing the history and contents of the Settlement).
Under the Settlement, the rights and duties of the Trust and all class members, as well as the procedures for processing and evaluating claims against the Trust, are governed by an annexed document known as the Trust Distribution Process (TDP). [19] Asbestos Litigation IV, 78 F.3d at 770; Asbestos Litigation III, 878 F.Supp. at 577-578. The TDP provides that the Trust shall be treated in litigation between Beneficiaries of the Trust as a legally responsible tortfeasor under applicable law, without the introduction of further proof. Id. at 591. The TDP then sets forth the applicable rules for contribution and set-off according to the laws of the several states and the District of Columbia: In general, the TDP refers to local law for the calculation of the set-off, recognizing different rules in three categories of states: pro tanto states, in which the judgment against nonsettling defendants is reduced by the amount paid or agreed to be paid by a released party; pro rata states, in which the total liability is divided equally among all defendants held to be responsible tortfeasors, and the judgment is reduced by a released party's pro rata share of liability; and apportionment states, in which liability is apportioned by the factfinder among those found to be tortfeasors, and the amount of the judgment is to be reduced with reference to the apportioned share of a released or absent tortfeasor. Asbestos Litigation IV, 78 F.3d at 770-771; see also Asbestos Litigation III, 878 F.Supp. at 591-594. In Berg v. Footer, 673 A.2d 1244 (D.C.1996), this court outlined the rules of contribution and set-off in the District of Columbia. When a plaintiff has settled with a party who has been deemed liable, the court awards the non-settling tortfeasor a pro rata credit  i.e., a percentage reduction based on the number of defendants  against the verdict. Id. at 1248; see Martello v. Hawley, 112 U.S.App. D.C. 129, 132, 300 F.2d 721, 724 (1962). On the other hand, [w]hen the plaintiff has settled with a party whose culpability has not been determined or with a party whom the finder of fact has not found liable, the court awards the non-settling defendant a credit against the verdict in the amount of the settlement, dollar for dollar ( pro tanto ). Berg v. Footer, 673 A.2d at 1248-1249 (citing Snowden v. D.C. Transit System, Inc., 147 U.S.App. D.C. 204, 205-206, 454 F.2d 1047, 1048-1049 (1971)). Since the TDP expressly states that the Manville Trust is to be treated as a legally responsible tortfeasor, Asbestos Litigation III, 878 F.Supp. at 591, the pro rata rule is the proper method for calculating the amount of the set-off in the instant case. Berg, 673 A.2d at 1248; see Asbestos Litigation IV, 78 F.3d at 777 (Because under the Settlement Agreement the Trust is deemed to be a settling joint tortfeasor, any judgment a Trust beneficiary health claimant obtains in the District of Columbia against defendants other than the Trust will be reduced pro rata ); see also id. at 771 (refusing to allow District of Columbia claimants to opt out of the Settlement, which would cap the amount received at 10 percent of the claim's value, even though District of Columbia law would require that a judgment against a co-defendant would be reduced by the Trust's full pro rata share of the verdict). Appellants cite Asbestos Litigation II, 982 F.2d at 730-731, for the proposition that the Manville Trust cannot be considered a joint tortfeasor. Their reliance on that decision is plainly wrong. First, the cited case cannot be regarded as interpreting the Settlement because it predated the Settlement by three years. Second, the language on which appellants rely is taken out of context and, as a result, is misleading. When read in context, the language cited by appellants merely states what the co-defendants in that case believed the court should hold, not what the court actually did hold. See Asbestos Litigation II, 982 F.2d at 731. Finally, appellants argue that a pro rata set-off is inequitable because their claims against the Manville Trust have been disqualified and are not in line for settlement. Appellants allege that they have never [received] nor will they ever receive a settlement with Manville Trust. This assertion is made for the first time on appeal and thus is not entitled to consideration by this court. See, e.g., D.D. v. M.T., 550 A.2d 37, 48 (D.C.1988); Spellman v. American Security Bank, 504 A.2d 1119, 1126 (D.C.1986); Miller v. Avirom, 127 U.S.App. D.C. 367, 369-370, 384 F.2d 319, 321-322 (1967). Moreover, Owens-Corning has submitted an affidavit from Karin Croft, Director of Operations and Strategic Planning for the Manville Trust, stating that appellants' claims, at their own request, have merely been placed on inactive status so as to allow for deferral of their settlement offers. While we do not rely in any way on this affidavit in deciding (or rather, declining to decide) this claim, it does suggest that appellants' situation is not as dire as they maintain.