San Francisco Jury Awards Over $11.5 Million in Asbestos Case

San Francisco, CA — July 12, 2006 — A San Francisco jury awarded $1,178,294 in compensatory damages to a 75-year-old Navy veteran and retired maintenance mechanic suffering from severe asbestos pleural disease and asbestosis. His spouse was awarded $400,000 for loss of consortium. The jury also found that the defendant, Asbestos Corporation Limited, acted with legal malice or oppression and awarded an additional $10 million in punitive damages.

The defendant is the owner and former operator of asbestos mines in the Thetford Mines region of Quebec, Canada. The plaintiffs are Joseph and Mary Garza, currently residing in Longmont, Colorado.

The trial began on June 20, 2006, with jury selection before San Francisco Superior Court Judge Suzanne Bolanos. A jury was impaneled to hear the case and receive testimony. Closing arguments in the first phase of the case were presented on July 6, 2006. The jury deliberated for only 6 hours before reaching its verdict. A second phase of the case began and concluded on July 12, 2006, with a verdict of $10,000,000 in punitive damages.

Testimony during the trial concerned Asbestos Corporation Limited’s admitted knowledge of asbestos hazards dating back to the 1940s and the historical uses of asbestos in maritime and industrial settings where Mr. Garza was exposed. It also covered the state of medical knowledge regarding asbestos, pulmonary medicine, industrial hygiene, and forensic economics.

Mr. Garza was diagnosed with asbestos pleural disease and asbestosis in early 2004. He was placed on supplemental oxygen shortly thereafter. His asbestos-related lung disease has since progressed and his normal life expectancy is reduced as a result.

Asbestos Exposure As a Boilerman

Mr. Garza was first exposed to asbestos when he joined the Navy in 1948 at the age of 18. Initially, he was assigned to the aircraft carrier USS Antietam where he served as a fireman (engineman) in the engine rooms aboard the ship. During this period, he was exposed to asbestos insulation debris while sweeping up after repairs and also through removing and installing asbestos gaskets and packing from pumps and valves.

Mr. Garza was transferred to the USS Randall, a Navy troop and cargo transport vessel in 1949, where he served for over 5 years as a boilerman assigned to the boiler rooms below deck. During his service aboard the Randall, Mr. Garza was exposed on a regular basis to insulation products, including asbestos insulating cements and pipe and boiler insulation, as well as gaskets and packing. He personally mixed and applied insulation cements to make repairs and was present and in close proximity to others performing the same work.

Mr. Garza transferred to the destroyer USS Agerholm in mid–1955. This was the last ship on which he served during his Navy career. Once again, Mr. Garza worked as a boilerman. He was exposed in the same manner to the same products on the Agerholm as he was on the Randall.

Mr. Garza stated that one of the most prevalent asbestos insulating cements he and other sailors used during his Navy service was Eagle Picher Super 66. Expert testimony established that the mixing, application, and cleanup of this dry powder material released extremely high levels of asbestos in the confined spaces of the engine and boiler rooms aboard vessels.

The widespread use of Eagle Picher Super 66 insulating cement aboard Navy ships and at Navy shipyards during the 1940s and 1950s was corroborated through the testimony of a retired Navy shipyard insulator. At no time during his Navy service was Mr. Garza advised wearing any form of respiratory protection.

In June of 1957, Mr. Garza was honorably discharged from the U.S. Navy. He and his wife Mary, whom he had met while on leave in San Francisco, California, settled in the Bay Area to raise their family. Mr. Garza began working for Westinghouse Corporation in Sunnyvale, California, as a tester of steam turbines. During the 16 years, he was employed at Westinghouse, Mr. Garza was exposed on an intermittent basis to asbestos insulation used in turbines. No respiratory protection was provided.

From 1973 through 1993, Mr. Garza worked for various employers in the Bay Area, primarily as a boiler operator and maintenance mechanic. He was exposed intermittently to existing asbestos insulation, gaskets, and packing during this period. Mr. Garza was not advised to wear respiratory protection. He retired in 1993.

Defendant Supplied Asbestos Fiber Used in Insulating Cement

Evidence introduced at trial established that Asbestos Corporation Limited was the exclusive supplier of asbestos fiber to Eagle Picher Industries of Joplin, Missouri, from 1935 to 1957. The asbestos used in Eagle Picher’s Super 66 insulating cement was entirely comprised of Asbestos Corporation Limited’s chrysotile asbestos fiber.

Asbestos Corporation Limited began operating its asbestos mines in Thetford Mines, Quebec, Canada, in 1925. The company admitted that it was “certainly aware” of the health hazards posed by inhalation of asbestos by the 1940s. It shipped its raw asbestos fiber to manufacturers of finished goods in jute bags (akin to canvas) until sometime in the 1960s, when it switched to paper (later plastic) to reduce dust emissions.

The first warning label regarding asbestos health hazards appeared on Asbestos Corporation Limited bags in early 1970. Asbestos Corporation Limited sales brochures from 1935, 1956, and 1961 were introduced into evidence and established that the company never warned its customers of the known health hazards of its product, nor otherwise advised of safe work practices with asbestos.

Asbestos Corporation Limited ceased operating its mines in the mid-1980s; however, it continues to derive income from the mining and sale of asbestos worldwide through its participation in a limited partnership with other asbestos mines, known as LAB & Company, Limited. Asbestos Corporation Limited permits LAB & Company, Limited, to mine asbestos from its mines in exchange for a 22.5% interest in the partnership and the profits derived. No corporate witness appeared at trial on behalf of Asbestos Corporation Limited to testify regarding its past conduct and practices or to address its current operations.

Plaintiff’s Health Deteriorates Due to Asbestos Exposure

Mr. and Mrs. Garza moved from the Bay Area to Longmont, Colorado in 2000 to live with their youngest daughter’s family. Due to increasing difficulty with his breathing, Mr. Garza saw a pulmonologist in early 2004 and was diagnosed with asbestos pleural disease and asbestosis. He was placed on supplemental oxygen shortly thereafter and remains on supplemental oxygen on a 24-hour basis. Mr. Garza takes various medications to control the anxiety caused by his breathing problems and chest discomfort. Medical testimony at trial established that he is likely to die within the next 5 years as a consequence of his asbestos lung disease.

Mr. and Mrs. Garza have been married for 56 years. Mrs. Garza was unable to travel from Colorado to attend the trial. She is currently disabled and almost entirely dependent on her husband to perform household services, such as cooking, cleaning, gardening, and maintenance. He testified that as of the time of trial he was 80% reduced in his ability to perform these services and feared that as his disease progressed he would become completely incapacitated, requiring Mrs. Garza to live in an assisted care facility.

Plaintiffs presented the live testimony of Joseph Garza, deposition testimony from Robert Bockstahler, a corporate witness for Eagle Picher Industries, and various expert witnesses on the subjects of industrial hygiene, historical state of the art regarding asbestos health hazards, pulmonary medicine, and forensic economics in the first phase of the trial. The jury found for plaintiffs, awarding them compensatory damages totaling $1,578,294 at the conclusion of the first phase. A finding of legal malice or oppression was also made by the jury entitling plaintiffs to seek punitive damages from Asbestos Corporation Limited in a second phase that considered the company’s financial condition.

Despite Asbestos Corporation Limited’s refusal to produce its corporate officers for deposition in advance of the second phase, as ordered by the Court, and its provision of scant financial condition information, plaintiffs’ expert forensic economist, Barry Ben-Zion, Ph.D., was nonetheless able to utilize publicly available sources and provide the jury with various means for assessing the company’s fiscal health on July 12, 2006.

Plaintiffs were represented at trial by Paul Vaillancourt of Brayton Purcell LLP of Novato, California. Defendant Asbestos Corporation Limited was represented at trial by Randall Bernard of Wilson Elser Moskowitz Edelman & Dicker of San Francisco, California.