BOREL V. FIBREBOARD PAPER PRODUCTS CORPORATION
BOREL V. FIBREBOARD PAPER PRODUCTS CORPORATION. Decided by jury verdict in 1971 in the Beaumont court of federal judge Joe J. Fisher in the Eastern District of Texas, Borel v. Fibreboard Paper Products Corporation is the landmark decision in asbestos litigation in the United States, providing precedents for thousands of products liability cases, first for personal injury claims, when asbestos workers, their families, and their lawyers filed suit against asbestos companies for financial awards for disease and death, and later for property damage claims, when school districts and other public entities and their lawyers filed suit against asbestos companies for the costs of removing asbestos products from public buildings. Asbestos is a group of minerals which for many years was used to manufacture insulation and fire prevention products, which were widely used in the United States and elsewhere in the world. The asbestos products were often friable, that is, they released tiny invisible fibers, which, when inhaled by human beings, sometimes produced asbestosis, mesothelioma, and other dangerous diseases. Often there was a long latency period, sometimes twenty to forty years, between inhalation of the asbestos materials and the onset of disease.
In the Borel case, Ward Stephenson, a lawyer from Orange, Texas, represented Clarence Borel, a union worker who lived in the nearby town of Groves, was employed many years as an insulator in local refineries and shipyards, and was fatally ill with pulmonary asbestosis and mesothelioma, a form of lung cancer. Stephenson, an experienced plaintiff’s lawyer, handled numerous claims for other union workers suffering from occupational injuries or disease, in most cases claiming damages against employers for medical expenses and loss of income under state workers’ compensation laws. But in at least one instance, on behalf of Claude Tomplait, a refinery worker suffering from asbestosis, he had tried and lost a products liability, personal injury suit filed in 1966 against various asbestos-insulation manufacturing companies.
For Clarence Borel, Stephenson pursued a similar strategy; he initiated a personal injury case against companies that manufactured asbestos products which Borel had used when working as an insulator. On October 20, 1969, he filed suit papers in Judge Joe Fisher’s court in the Eastern District of Texas and sought $1 million in damages against Fibreboard Paper Products Corporation, Johns-Manville Products Corporation, and nine other asbestos-insulation manufacturers. On behalf of Borel, Stephenson made customary charges against the asbestos manufacturers, accusing them of negligence and breach of warranty. But he broadened his attack, arguing that the manufacturers should also be subject to the doctrine of strict liability, a doctrine amended recently by the American Law Institute. The revised doctrine was set forth in Section 402A of the Restatement of the Law of Torts (Second), which was compiled by a national committee of scholars, jurists, and lawyers and published in 1965; the new doctrine of strict liability was officially adopted in Texas by the Texas Supreme Court in 1967. Based on the new provisions of Section 402A, Stephenson charged that the asbestos manufacturers were subject to the doctrine of strict liability, arguing that their products were unreasonably dangerous because they did not carry adequate warnings of foreseeable dangers associated with them. As presented by Stephenson, the Borel case became the first litigation in the United Sates to test the application of Section 402A to asbestos materials.
Judge Fisher opened the jury trial in his Beaumont courtroom on September 21, 1971. Earlier, on June 3, 1970, Clarence Borel had died from diffuse malignant mesothelioma of the lung, and his widow, Thelma, was substituted as the plaintiff. In the trial, Stephenson attacked the asbestos manufacturers, accusing them of negligence and breach of warranty, and more importantly, charging the companies with violations of the newly-revised doctrine of strict liability and arguing that they were strictly liable for the disease and death of Borel. George Weller, John Tucker, Gordon Pate, and other Beaumont lawyers defended Fibreboard, Johns-Manville, and the other asbestos manufacturers and argued that scientific knowledge about the dangers of asbestos exposure was incomplete at the time and that the plaintiff had assumed the risk and was guilty of contributory negligence. Disputing these arguments, Stephenson produced documentation showing that years earlier, Dr. Irving J. Selikoff of Mount Sinai School of Medicine, New York, and other medical specialists had published abundant scientific information about the dangers of asbestos materials. He then charged that the manufacturers knew or should have known about the dangers of their product and had not warned Borel of their harmful effects.
On the last day of the trial, after Stephenson and the opposing lawyers made their closing statements, Judge Fisher read his charge to the jury and discussed negligence, contributory negligence, and the revised doctrine of strict liability. Reviewing the new doctrine of strict liability carefully, Fisher explained to the jury that a product manufacturer is held to the skill of an expert in that business and to an expert’s knowledge of the product, and that the manufacturer is bound to keep abreast of scientific knowledge about the product and to issue warnings about possible harm that might come to people who use the product. Fisher then issued various interrogatories, instructing the jurors to answer specific questions about the negligence of the manufacturers, the contributory negligence of Borel, the strict liability of the manufacturers, and lastly, the amount of money, if any, owed to Thelma Borel. The next day, on September 29, 1971, the jury returned its verdict, finding that Borel was guilty of contributory negligence, but more importantly, finding that the asbestos manufacturers had violated the doctrine of strict liability and that they were strictly liable for the injuries and death of Borel. For Mrs. Borel, the jury found total damages of $79,436, an amount that was reduced by the court to $58,534 due to $20,902 received by Mrs. Borel in previous settlements from other asbestos companies. Mrs. Borel’s financial award was further reduced by Stephenson’s legal fee, thus leaving her a net recovery of just over $35,000, an amount she did not receive until three years later at the conclusion of the appellate process.
Lawyers for the asbestos companies appealed the Borel judgment to the United States Court of Appeals for the Fifth Circuit in New Orleans and filed their papers on April 29, 1972. Oral arguments were heard on November 14, 1972, before judges John Minor Wisdom, Elbert Tuttle, and John Milton Bryan Simpson. Ward Stephenson, who was himself ill with cancer, was there to represent the appellee, Mrs. Borel, while Fibreboard and the other appellant manufacturers were represented by W. Page Keeton, dean of the University of Texas School of Law. An eminent scholar and member of the American Law Institute, Keeton had served as an adviser in the recent publication of the Restatement of the Law of Torts (Second). In oral arguments before the Fifth Circuit, Stephenson and Keeton battled over various issues, including availability of scientific information about the dangers of asbestos materials and about theories of negligence and strict liability. In the end, the Fifth Circuit issued a ruling in favor of Thelma Borel, affirming the judgment based on the verdict of strict liability against the asbestos manufacturers. Lawyer Stephenson, who reportedly received the news of his victory by telephone, passed away on September 7, just three days before the official publication of the Borel ruling on September 10, 1973.
In the opinion authored by Judge Wisdom, the Fifth Circuit issued a landmark decision in the Borel case, pointing to Section 402A of the new Restatement of the Law of Torts (Second) which required a manufacturer to disclose the existence and the extent of reasonably foreseeable risk involved in the use of its product, saying that an insulation worker, no less than any other product user, has a right to decide whether to expose himself to the risk. The asbestos companies appealed the Fifth Circuit’s decision to the United States Supreme Court, but this appeal was denied by the court in 1974, thus affirming the application of strict liability to the asbestos manufacturers, ruling that the companies were strictly liable for the death of Borel, and thus fulfilling the legal strategy of Ward Stephenson and affirming the Borel decision rendered in the Beaumont court of Judge Joe Fisher.
The actions of attorney Stephenson, Judge Fisher, and the judges of the Fifth Circuit had enormous implications for asbestos manufacturers and their insurance companies, as well as thousands of asbestos workers, their families, and their lawyers. According to Paul Brodeur, author of Outrageous Misconduct: The Asbestos Industry on Trial (1985), the Borel decision "triggered the greatest avalanche of toxic-tort litigation in the history of American jurisprudence. Some twenty-five thousand lawsuits were brought over the next decade as word spread that asbestos manufacturers could be held strictly liable under the law."
During the next two decades, the implications of the Borel case continued to grow dramatically, with increasing numbers of personal injury claims based on asbestos exposure filed in federal and state courts. Many were multi-party, class action, or mass tort suits, where lawyers representing multiple plaintiffs made claims against multiple defendants. According to data published by the Rand Institute for Civil Justice in 2005 entitled “Asbestos Litigation Costs, Compensation, and Alternatives” by Stephen J. Carroll, et al., “asbestos litigation is the longest running mass tort in the United States.” More than 730,000 plaintiffs had filed personal injury claims, often against multiple defendants for asbestos-related injuries and a total of $70 billion had been paid by defendants and insurers. At least 8,400 entities had been named as defendants through the year 2002, and at least seventy-three companies, including Johns-Manville Corporation, had filed bankruptcies into 2004. The Rand Institute provided more information in 2011, when Lloyd Dixon and Geoffrey McGovern published “Asbestos Bankruptcy Trusts and Tort Compensation,” reporting that over the previous three decades, fifty-six asbestos personal injury trusts had been set up by asbestos companies which had filed for bankruptcy, and that as of 2008, the twenty-six largest trusts had paid out $10.9 billion on 2.4 million claims.
During the early 1980s, asbestos litigation was broadened to include property damage claims, in which school districts and other public entities all across the nation filed suit against asbestos companies for the costs of removing asbestos insulation and fire prevention products from public buildings. The issue was especially critical in school districts where asbestos products had been installed in many school buildings during 1946 to 1972. In response to these issues, Congress passed the Asbestos School Hazard Detection and Control Act in 1980, a law which established a federal task force to ascertain the extent of danger to school children and employees, required states to establish asbestos inspection programs, provided technical and scientific assistance to states and school districts, and authorized the United States to sue asbestos companies for the costs of asbestos abatement.
In 1980 the Environmental Protection Agency issued warnings about asbestos in the public schools, estimating that 8,500 schools contained friable asbestos which threatened the health of 3,000,000 students along with related teachers and staff. In 1985 the EPA issued new data, estimating that over 700,000 public buildings, including 31,000 schools, were contaminated by asbestos materials. In the school buildings, the EPA estimated that 15 million students and 1.4 million teachers were exposed to the dangers of asbestos. The even theoretical exposure of students and teachers was a potent issue, because of the Borel decision which documented the health danger of asbestos materials and made the manufacturers strictly liable for the death of Clarence Borel.
In response to the Asbestos School Hazard Detection and Control Act of 1980, United States Attorney General William French Smith issued “The Attorney General’s Asbestos Liability Report to the Congress” on September 21, 1981. Here the attorney general reviewed the problem of asbestos-containing materials in U. S. public schools, pointed to health hazards for students and teachers, cited the legal precedents established in the Borel case, and concluded that “failure to warn” and other charges enunciated in Borel could reasonably be extended to asbestos problems in schools. Because the new federal law did not provide funds for litigation against the asbestos companies, the attorney general recommended that school districts consult with qualified attorneys about the possibility of filing “property damage” claims against the manufacturers to recover the costs of removing the dangerous materials from school buildings.
The attorney general’s report provided information about two school district cases already filed in the United States, where the districts were seeking financial awards from asbestos manufacturers for removal of their materials from school buildings. One (out of Burlington, New Jersey) was Cinnaminson Township Board of Education v. National Gypsum Co., et al., filed May 19, 1980; and the other (out of Dayton, Texas, in Liberty County) was Dayton Independent School District v. United States Gypsum Co., filed April 22, 1981. The Dayton ISD case was filed by attorney Martin W. Dies III, a member of Stephenson, Thompson, and Dies, the same law firm in Orange, Texas, where Ward Stephenson had represented Clarence Borel. Attorney Dies filed the suit papers in the U. S. District Court of Judge Joe Fisher in Beaumont, the same court where Borel had been decided in 1971.
The Dayton ISD case, the first asbestos property damage suit in Texas, was a multiparty dispute, where multiple plaintiffs claimed financial damages against multiple defendants. In this litigation, which lasted six years, attorney Martin Dies represented Dayton ISD and eighty-two other Texas school districts that made property damage claims against U. S. Gypsum, Grace Company, and other asbestos manufacturers. While the Dayton ISD case was being litigated in Beaumont, other property damage lawsuits were underway in courts elsewhere in the nation. On April 9, 1984, in the nation’s first school asbestos lawsuit to go to trial, School District Five of Lexington County, South Carolina, reached an out-of-court settlement of $675,000 from United States Gypsum Company. In City of Greenville v. W. R. Grace & Co., the first case in America resulting in a verdict on behalf of a building owner, the city won actual and punitive damages of $8.4 million from the Grace Company for removal of asbestos fireproofing materials from the city hall. Argued on April 8, 1987, and affirmed on August 28, 1987, by the United States Court of Appeals, Fourth Circuit, the City of Greenville decision related closely to the Borel decision, ruling that asbestos materials posed a health risk, that the manufacturers knew of the dangers posed by their asbestos products, that they had failed to take reasonable steps to correct such dangers, and that they were liable for actual and punitive damages.
On the Dayton ISD case, attorney Dies worked with his partner Richard Hile and co-counsel Kelly Frels of Bracewell & Patterson of Houston and took more than 1,000 depositions and collected abundant evidence on behalf of his clients—the eighty-three Texas school districts. In May 1987, when a jury had been selected and the trial was about to begin, Dies negotiated a financial settlement with the Grace Company and other asbestos manufacturers on behalf of the school districts. The amounts of the financial settlement remain confidential, but critical issues are obvious. As ruled in the Borel personal injury case in Judge Fisher’s court and affirmed in the Fifth Circuit, and as affirmed in the Fourth Circuit in the City of Greenville property damage case, the asbestos manufacturers knew of the dangers of their products, had failed to issue warnings, and were liable for resulting injuries and damages.
Later, Dies & Hile and other attorneys initiated numerous other asbestos claims in the Beaumont Division of the Eastern District of Texas, where they were handled by Judge Fisher and Judge Robert M. Parker, who was appointed to the bench in 1979 by President Jimmy Carter. Confronted with large numbers of both personal injury and property damage suits, judges Fisher and Parker developed new procedures, including consolidation, for expeditious handling of the many asbestos cases—all initiated because of Borel v. Fibreboard, the landmark asbestos case which opened the door for thousands of personal injury and property damage claims.
Borel v. Fibreboard Paper Products Corp., 493 F. 2d. 1076 (5th Cir. 1973), cert. denied, 419 U. S. 869 (1974). Michael Bowker, Fatal Deception: The Untold Story of Asbestos (Emmaus, Pennsylvania: Rodale, 2003). Paul Brodeur, Outrageous Misconduct: The Asbestos Industry on Trial (New York: Pantheon Press, 1985). Stephen J. Carroll, et al, “Asbestos Litigation Costs and Compensation” (Santa Monica, California, RAND, 2002). Stephen J. Carroll, et al, “Asbestos Litigation Costs, Compensation, and Alternatives” (Santa Monica, CA, RAND, 2005). Barry Castleman, Asbestos: Medical and Legal Aspects (4th edition, Englewood Cliffs, New Jersay: Aspen Law & Business, 1996). Jacqueline Karnell Corn, Environmental Public Health Policy for Asbestos in Schools: Unintended Consequences (Boca Raton, Florida: Lewis Publishers, 2000). Dewey J. Gonsoulin, “Historical Notebook,” Jefferson County Bar Journal, Winter 2009. Deborah R. Hensler, et al, “Asbestos in the Courts: The Challenge of Mass Toxic Torts” (Santa Monica, California, RAND, 1985). Deborah R. Hensler, “Asbestos Litigation in the United States: A Brief Overview” (Santa Monica, California, RAND, 1991). Deborah R. Hensler, et al, “Class Action Dilemmas: Pursuing Public Goals for Private Gain” (Santa Monica, California: RAND, 2000). Richard Hile, Dies & Hile, L.L.P., Notes, “Asbestos Property Litigation in Texas,” 2012. Rachel Maines, Asbestos and Fire: Technological Trade-offs and the Body At Risk (New Brunswick, New Jersey: Rutgers University Press, 2005). Jock McCulloch and Geoffrey Tweedale, Defending the Indefensible: The Global Asbestos Industry and its Fight for Survival (New York: Oxford University Press, 2008). Michelle J. White, Explaining the Flood of Asbestos Litigation: Consolidation, Bifurcation, and Bouquet Trials (Cambridge: National Bureau of Economic Research, 2002).
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