Johns-Manville Form 10-K for 1976: Legal Proceedings (1977)

The cover and Item 5, Legal Proceedings, of Johns-Manville's Form 10-K for the year ended December 31, 1976. As of March 1, 1977, J-M was a defendant in 271 asbestos suits, including four multi-plaintiff cases on behalf of about 500 former Raybestos-Manhattan employees and nine former employees of Owens-Corning Fiberglas. It had settled 36 cases; of five tried, four were decided for the plaintiff. "The average amount paid by the Company in such cases is less than $50,000," and the company said insurance would cover what it might pay.

What it shows

The filing is the first in the binder to give an average payment per case, and the first to describe suits by J-M's own workers. In seven cases in Contra Costa County, California, present or former employees sued the company and two former contract physicians, each seeking $11,000,000, on the claim that J-M failed to warn of the hazards of the fiber. In four more, former employees sued a contract physician for not telling them they had lung disease, and the physician cross-claimed against J-M for indemnity. The company said the trial court had sustained its demurrer to the indemnity actions.

One case had resulted in damages of more than $100,000. The company believed the injuries came from "heavy concentrations of asbestos dust prevalent many years ago" and that safety measures since 1964 would reduce future injuries. A handwritten note in the margin of this copy marks the first case tried and won and the first mention of average settlement size.