Johns-Manville Corporation and Johns-Manville Sales Corporation v. The United States
Docket: 88-1004
Court: Court of Appeals for the Federal Circuit; August 25, 1988; Federal Appellate Court
Johns-Manville Corporation and Johns-Manville Sales Corporation (plaintiffs-appellants) appealed a decision from the United States Claims Court, which found that they failed to establish a right to recovery on any liability theories. The appeal concerns a ruling dated August 6, 1987 (reported as Johns-Manville Corp. v. United States, 13 Cl. Ct. 72). The background reveals that during World War II, Johns-Manville supplied asbestos-containing products to the U.S. for naval ships, leveraging asbestos' heat-resistant and fire-retardant properties. However, asbestos exposure has been linked to serious diseases such as asbestosis, lung cancer, and mesothelioma, with thousands of affected shipyard workers suing Johns-Manville for related injuries and fatalities. By September 30, 1986, there were 18,030 pending lawsuits against the company, indicating a much larger potential liability considering the 4.5 million WWII shipyard workers. Johns-Manville sought indemnification from the government for settlements and judgments from 57 closed third-party personal injury claims, totaling $768,361.09 for settlements and judgments and $185,741.55 for legal expenses, as well as unspecified damages for 327 ongoing claims. The court ultimately vacated the previous ruling without addressing the merits of the case.
The case is a test case involving four shipyards and 15 shipyard workers, with five workers having been exposed to asbestos post-war. Johns-Manville alleged recovery based on four legal theories: 1) breach of an implied warranty of safety regarding asbestos product design, 2) failure to disclose superior knowledge of shipyard conditions, 3) foreseeability of third-party damages, and 4) apportionment of losses under mutual mistake doctrine. After a six-week trial, the court ruled in favor of the government, dismissing both the complaint and the government's substantial counterclaim. Johns-Manville also sought damages for increased business costs and loss of reputation, but these claims were not tried.
A key issue in the appeal was the jurisdiction of the trial court over the claims. In a concurrent case, Johns-Manville Corp. v. United States, the court confirmed that the Claims Court lacked jurisdiction due to pending claims in another case. Consequently, the trial court's decision was deemed void and vacated, rendering the appeal moot. A dissenting opinion noted that only one case was tried and discussed procedural considerations related to the timing of the dismissal and appeals.
