The Johns-Manville Litigation Chronology, 1968–1982

In late 1982, after Johns-Manville had filed for bankruptcy and its shareholders had sued, Manville's lawyers put together an "Asbestos Litigation Chronology." It follows the company from 1968 to September 1982, setting what its Board of Directors was told about asbestos disease and the lawsuits beside what its yearly filings with the Securities and Exchange Commission told investors. Behind it they bound the documents it rests on: board minutes, the 10-K reports, the legal department's presentations to the board, and the papers of the August 1982 Chapter 11 filing. The chronology was marked privileged. After the bankruptcy, Manville's papers went to the Manville Trust's claims office, which makes copies available, and we publish the whole binder here.

The chronology was written by the company's defense lawyers, and it presents the company's positions. Its footnotes say, for example, that Manville began warning labels "immediately" after Dr. Selikoff's 1964 study, and that it had begun installing negative-pressure dust systems in its asbestos plants in 1956. Its 10-K reports say, year after year, that the lawsuits would have no material adverse effect on the company, while the number of cases grew from 29 in 1974 to 9,300 in 1982. For what Johns-Manville knew about asbestos disease in the decades before, see the Johns-Manville Knowledge Chronology and Asbestos History.

Each entry below follows the chronology, in our words, and links to the page of the binder it rests on. A few events in the chronology have no document in the binder; those entries have no link. The chronology itself, with the complete binder, is at its own page.

1968

• August 21, 1968. Board meeting. The directors hear of a program, with the insulation workers' union and Dr. I. J. Selikoff of Mount Sinai School of Medicine, to study the health of asbestos workers, and approve $162,500 for the Johns-Manville Fund to buy an electron microscope and other equipment for Selikoff's studies. Read the document

1969

• January 15, 1969. Board meeting. The president gives the directors an updated report on "the asbestos/health situation." Read the document
• February 19, 1969. Board meeting. The directors review plans for more dust-control equipment, including a $535,000 negative-pressure system for the Toronto pipe plant. Read the document
• October 15, 1969. Board meeting. The directors discuss a health problem among asbestos textile workers. The minutes record that the exposure standard of 35 fibers per cubic centimeter is being revised to an interim 12, and will probably then be lowered to 6 and then to 2, the British standard. Read the document Editor's note: The chronology says the 12-fiber standard would be lowered to 6. The minutes it cites record a standard of 35 fibers being revised to an interim 12, with 6 and then 2 expected later.

1970

• April 15, 1970. Board meeting. The directors are told the exposure standard will likely fall from 12 to 5 fibers in 1970, and that Dr. Selikoff recommends 2. The chairman reports that all asbestos fiber shipped in the United States and Canada now carries a caution label, and that Manville is defending many asbestos-health lawsuits, any of which may bring publicity about the hazards. Read the document

1972

• January 26, 1972. Board meeting. The directors receive the testimony that Manville's representatives and medical consultants gave at EPA hearings on proposed asbestos standards. Read the document
• February 23, 1972. Special board meeting. The directors are told Manville is assessing the environmental problems of making and selling its products, that it uses 6 fibers as its own standard, and that the worker health problems of today are the result of exposures 30 years before. Read the document
• June 28, 1972. Special board meeting. The chairman reports that Manville "can live with" OSHA's new standard of 5 fibers, though compliance with the future standard of 2 has not been worked out. OSHA's labeling rules and recent press reports are discussed. Read the document

1973

• September 10, 1973. The federal court of appeals for the Fifth Circuit affirms an insulation worker's product-liability judgment against Manville and others in the Borel case (case file), the first asbestos suit to reach an appellate court. The chronology puts Manville's share at $10,000.

1974

• March 1974. Manville's Form 10-K makes the first public disclosure of the asbestos litigation: 29 cases, with adequate legal defenses and insurance, and "no material adverse effect" expected on the company's finances. Read the document
• March 1, 1974. Board meeting. A director, Mr. May, asks about Manville's compliance with OSHA regulations; the president reviews it at the April 10 meeting. Read the document Editor's note: The chronology dates this meeting March 4, 1974. The minutes are dated March 1.

1975

• March 1975. The 10-K reports 57 suits alleging failure to warn of the hazards of breathing asbestos dust. The company maintains that no basis for a warning existed until scientific studies were published in 1964, after which warnings were given, and again expects no material effect. Read the document

1976

• March 1976. The 10-K reports 124 cases, substantial defenses and adequate insurance, and says the safety measures adopted since 1964 should reduce future injuries. Read the document
• May 1976. A Form S-7 registering 2,000,000 shares reports that the suits have grown to 136, with disclosures like the 10-K's. Read the document Editor's note: The chronology says the S-7 registered 2.5 million shares. The filing's cover registers 2,000,000.

1977

• January 1977. The Herrmanns, later plaintiffs in a shareholder suit in Denver, buy 100 shares of Manville common stock.
• March 1977. The 10-K reports 271 cases, four of them brought by about 500 people together. Five cases have been tried, four ending in verdicts for the plaintiffs; the average paid per case is under $50,000. No material effect is expected. Read the document
• March 4, 1977. Board meeting. The president reports that a health survey at one plant found no asbestos disease among workers exposed for up to 15 years, along with a Selikoff study result and other developments the chronology calls favorable. Read the document

1978

• March 1978. The 10-K reports 623 suits: 94 settled, 8 tried (4 won by the company), an average cost under $25,000. Because of the long latency of asbestos disease, it says, new cases are expected to come from exposure before 1964. Read the document
• April 7, 1978. Board meeting. The legal department presents the asbestos cases to the directors. Read the document
• May 5, 1978. Board meeting. The asbestos health situation is discussed. Read the document
• July 7, 1978. Board meeting. Dr. Paul Kotin reviews Dr. Selikoff's work, and after the meeting the directors go to Mount Sinai Hospital to hear Selikoff's own assessment of the asbestos health problem. Read the document
• October 6, 1978. Board meeting. John A. McKinney tells the directors that Manville meets the present standard of 2 fibers, a safe level in Dr. Kotin's opinion, and that "future asbestos-related disease is not being generated." Read the document
• November 3, 1978. Board meeting. McKinney reports a class action recently filed for shipyard workers. Read the document

1979

• March 1979. The 10-K reports 1,370 cases, including 7 class actions, and for the first time several hundred claims for punitive damages. Of 11 cases tried, 5 went to the plaintiffs; 290 have been disposed of at an average under $22,000. Insurance is adequate, it says, except perhaps for some punitive claims, which will not be substantial. The 1978 annual report is the first to mention the litigation. Read the document
• March 2, 1979. Board meeting. McKinney reports on efforts to deal with asbestos liability by legislation. The directors discuss allegations of a conspiracy to cover up knowledge of asbestos disease and review the studies Manville undertook and published. Read the document
• April 6, 1979. Board meeting. McKinney reports a defense verdict in an Ohio asbestos case and continuing efforts toward a legislative solution. Read the document
• April 20, 1979. A Form S-7 registers $100 million of notes, with the same disclosure as the March 10-K. Read the document
• May 3, 1979. Board meeting. McKinney reports the reaction to the annual report's asbestos section and to recent hearings in Congress. Read the document
• May 1979. Amendment No. 1 to the S-7 discloses the Abrams suit, filed May 4, which alleges that Manville's SEC filings misstated the financial impact of the litigation. It also reports the court's refusal to certify a class of Long Beach Naval Shipyard workers, and a House committee's $330 million program to remove asbestos from schools, with a direction to the Justice Department to look into recovering the cost from the asbestos industry. Read the document
• June 1, 1979. Board meeting. McKinney reports on the Abrams case. Read the document
• June 29, 1979. Board meeting. McKinney reports on the status of asbestos compensation legislation. Read the document
• August 2, 1979. Board meeting. The legal department presents the asbestos litigation. Read the presentation the minutes
• December 7, 1979. Board meeting. McKinney reports on asbestos health legislation. Read the document

1980

• March 1980. The 10-K reports 2,857 cases brought by about 4,000 plaintiffs, and 540 suits disposed of at under $15,000 each. Insurance is adequate except for some punitive claims, which, it says, will not be material. Read the document
• July 31, 1980. Board meeting. Richard B. Von Wald presents the asbestos litigation to the directors. Read the presentation the minutes

1981

• February 4, 1981. Coopers & Lybrand qualifies its report on Manville's financial statements because of the asbestos litigation. Read the document
• March 1981. The 10-K reports 5,800 cases brought by 10,200 plaintiffs, with new cases a month up sharply in 1980, when 402 claims were disposed of at an average of $23,300. The outcome cannot be predicted, it says, nor the liability after insurance estimated, and the cost could be substantial. Read the document Editor's note: The chronology calls $13,000 "the 1980 cost" per claim. The 10-K gives it as the company's historical average for all years before 1980.
• March 1981. In the 1980 annual report McKinney writes that the company remains optimistic, and that the litigation will not materially affect its liquidity "during the next few years, if ever." No liability is recorded, because none can reasonably be estimated. Read the document
• March 5, 1981. Audit Committee. Manville's accounting and legal staff review the reasons for the auditors' qualification and its likely impact. Read the document
• March 6, 1981. Board meeting. McKinney reviews the litigation and reports on a meeting with Dr. Selikoff. Read the document
• July 31, 1981. Board meeting. Von Wald reviews the litigation, the insurance coverage and the company's ability to meet the liabilities. Read the presentation the minutes
• September 1981. Proxy materials for a reorganization of the company are filed. McKinney's letter to shareholders says the aim is to separate Manville's businesses and increase public understanding of them. Read the document
• October 29, 1981. Shareholders approve the creation of Manville Corporation, with the business divided among five subsidiaries.

1982

• February 5, 1982. Board meeting. McKinney describes the asbestos health litigation and the litigation with the insurance companies. Read the document
• March 1982. The 10-K reports 9,300 cases brought by 12,800 plaintiffs, about 400 new cases a month in 1981, and 802 cases disposed of in 1981 at $15,430 a claim before legal fees. In 1981 the company was found liable for punitive damages for the first time, in five cases. The outcome and the company's ultimate liability cannot be determined, it says, and the costs could be substantial. Read the document
• March 5, 1982. Board meeting. McKinney reports on the insurance litigation. Read the document
• August 4, 1982. Board meeting. G. Earl Parker reports on the litigation, its disclosure and projections of asbestos disease; Von Wald on the Litigation Analysis Group, insurance and litigation costs; McKinney on the conclusions of the group's consultants. The board creates a Special Committee to study the potential impact of the pending and expected cases, and a press release says it will study the company's financial options. Read the minutes the presentation the press release
• August 16–25, 1982. The Special Committee meets on August 16–18 and 23–25 and writes a report recommending a Chapter 11 filing. Read the document
• August 25, 1982. Special board meeting. The committee's report is distributed and the board authorizes the Chapter 11 petition. Read the document
• August 26, 1982. Manville files for reorganization under Chapter 11 in New York, and explains why in a press release and a question-and-answer interview with McKinney. Read the court filing the press release the interview
• September 8, 1982. The Herrmanns' shareholder complaint is filed in federal court in Denver. The chronology ends here.