Did a Cost-Benefit analysis lead to a $322 million asbestos verdict?

Posted on May 09, 2011 by Justinian

The popular press is giving a lot of attention to an asbestos verdict out of Mississippi last week.  The Mississippi jury awarded a single defendant $322 million dollars in a lawsuit brought against Union Carbide Corporation and Chevron.  (The breakdown was $22 million in compensatory damages, and $300 million in punitive damages.)  The plaintiff was an oil field worker who mixed drilling mud with raw asbestos fibers.  The reason this verdict is interesting to me isn’t because the jury awarded a large sum of money, but because of why the jury did so.  Part of why the jury did so may be because of a handwritten note that indicates one of the defendants engaged in a cost-benefit analysis that concluded it was OK to give people cancer as long as the profit exceeded the cost of the ensuing lawsuits. 

First, the note contains the statement that “ACGIH et al asbestos is a carcinogen!" (That's the American Conference of Industrial Hygienists.)  Next, it contains the statement "Asbestos - causes cancer."  So the author of the note knew that asbestos causes cancer.  No surprise there, since this memo was written in 1983 and the carcinogenic properties of asbestos had been known for many decades by that point.

The surprise comes at the handwritten formula the author used to determine whether or not to sell a carcinogenic product.  Fans of the movie Fight Club might remember the scene in which Edward Norton discusses “The Formula.”  I couldn’t find a link to that scene on Youtube, but I found a very clever video that uses a custom animation along with the original dialog from the film.  Go ahead and watch it – I’ll wait.

In Fight Club, the auto manufacturer doesn’t recall a defective vehicle if the cost of the recall is less than the cost of litigation.  Here, someone decided to sell a known carcinogen because it believed it was more profitable to sell the product and settle lawsuits than it was to either reformulate the product or exit the market:

asbestoslawsuitcostbenefit.png

Defenders of cost/benefit analyses always point out that EVERY product carries with it certain risks of injuring consumers.  That’s true, and there can be a legitimate use for such an analysis.  But they are only appropriate if the product actually has enough utility to justify the sale of the product.  Raw asbestos is so incredibly dangerous that it simply should not be sold regardless of whether doing so is profitable.

Now, I wasn’t privy to all of the evidence introduced in this trial.  The jury may not have considered this to be an important piece of evidence.  I suspect that it was because it was forwarded to a friend of mine by a member of the trial team.  Here’s the entire note in PDF format.

Does a recession entitle employers to put workers at risk?

Posted on January 17, 2011 by Justinian

I personally believe that the economic climate should have no bearing whatsoever on worker safety.  If a job can't be both profitable and safe, it shouldn't be performed.  That's how I view things.  At one point in time, the Johns-Manville company thought otherwise.  I came across this memo that was produced in a Johns-Manville asbestos lawsuit, and it outlined their strategy for persuading jurors not to hold them at fault:

Additionally, because the name of the game is hindsight, the jury must be transported back in time to view things as they existed then and not as they appear in retrospect. The aura of the 1930s must be communicated to the panel.

They must be made to remember (if they are old enough) or to understand (if they are young) that in the 1930s workers were worried about just getting a job; not necessarily a safe job. We were in an economic depression and the concern was over survival and not the little understood intricacies of asbestosis.

The problem with their argument was that workers were never informed of the risks of working with asbestos.  I don't think a single hiring manager made a job offer this way: "Well, I'm pleased to offer you a job working with asbestos.  You'll make good money for a number of years, but you're eventually going to die a very slow and painful death from lung disease.  Can you start tomorrow?"

Instead, asbestos companies like Johns-Manville told workers that asbestos was perfectly safe at the same time they were actively preventing scientists from publishing information about how unsafe asbestos was.  And that, to me, is the cruel irony of the "state of the art" defense - asbestos companies corrupted the very medical journals they use to defend themselves.

I sincerely hope that no company today is using our economic crisis as an excuse to cut corners and endanger workers.  But I'm somewhere between a realist and a cynic, so I'm pretty sure that some company is.

If you have any questions about this blog post - or anything else on this site - please e-mail me at justinian@justinian.us

Games Asbestos Companies Play

Posted on January 08, 2011 by Justinian

Sometime between 1950 and 1960, it became fairly well established in the medical community that asbestos is a carcinogen, meaning it can cause cancer.  It was absolutely established that asbestos is a carcinogen by 1965.  Yet in 1973, Union Carbide Corporation (UCC) was playing word games to try and avoid telling their customers that asbestos was a carcinogen.  Look at this excerpt from a UCC memo:

UnionCarbideAsbestos.png

This memo is definitely an example of "read between the lines."  UCC hoped that its sales people would be able to dodge the question of whether asbestos is a carcinogen by using the narrow OSHA definition of a carcinogen.  If you were considering working with a substance on a daily basis, would you rather know if it (a) actually causes cancer, or (b) is on a governmental list of some chemicals that cause cancer?

This is definitely not one of the worst documents I've seen in an asbestos lawsuit.  Some asbestos companies put in writing that they knew asbestos was killing people but that they simply didn't care.  I'm only posting this document because I happen to be reviewing UCC liability documents for a mesothelioma lawsuit.

If you'd like to download a copy of the actual memo in PDF format, here it is.