James Leroy JACKSON, Plaintiff-Appellee, '' ¦" v.

JOHNS-MANVILLE SALES CORPORATION and Raybestos-Manhattan, Inc., Defendants-Appellants.

No. 82-4288.

United States Court of Appeals, Fifth Circuit. March 23, 1984.

Opinion on Granting of Rehearing En Bane July 2, 1984.

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Megehee, Brown, Williams & Mestayer, Roy C. Williams, Pascagoula, Miss., Lively M. Wilson, Dorothy J. Chambers, Louisville, Ky., William N. Reed, John H. Holloman,

III, Jackson, Miss., for defendants-appellants.

Richard F. Pate, Mobile, Ala., Cupit & Maxey, Danny E. Cupit, Jackson, Miss., Blatt & Fales, Ronald L. Motley, Barnwell, S.C., for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of Mississippi.

Before CLARK, Chief Judge, GARZA and JOLLY, Circuit Judges.

CLARK, Chief Judge: Johns-Manville Sales Corporation (JohnsManville) and Raybestos-Manhattan, Inc. appeal a jury verdict awarding actual and punitive damages to James Jackson, a former shipyard worker, in a strict liability action for injuries allegedly caused by the defendants' failures to warn of the hazards of exposure to their asbestos products. Finding that the trial court ruled correctly on Jackson's entitlement to a strict liability cause of action but erred in admitting evidence of the mere possibility of Jackson's developing cancer and in allowing punitive damages in this strict liability action, we affirm in part, reverse in part, and remand for a new trial.

I. FACTS AND PROCEDURAL BACKGROUND James Jackson began working at Ingalls Shipbuilding Corporation (Ingalls) in Pascagoula, Mississippi, in 1953, when he was about twenty-seven years old. He worked there until 1971, first as a sheet-metal mechanic and after 1957 as a work leaderman or supervisor. Jackson testified that he was exposed to asbestos dust every day for the full time of his employment at Ingails.

As a mechanic, he installed sheet metal over ducts, shelves, pipes, boilers, and other such surfaces within ships under construction. Often these surfaces previously had been covered with asbestos insulation. To attach sheet metal, Jackson had to drill holes in the asbestos insulation. He testified that he also cut and dovetailed gaskets from asbestos material. Occasionally, he would cut asbestos cloth, three or four feet wide, with his pocket knife or shears in order to wrap and protect equipment around which he was working. He alleged that all these activities generated asbestos dust in the air.

Jackson testified that he worked alongside other craftsmen who made more direct and extensive use of asbestos products. He testified, for instance, that in lagging boilers, he worked alongside insulators who would first saw and tear blocks of asbestos, then rivet the asbestos to the boilers, all of which made the air "very dusty." He testified that when he worked in engine rooms, asbestos dust would fall upon him as insulator workmen above him on catwalks or temporary scaffolds cut and installed asbestos. Jackson testified that other workers generated asbestos dust in his work area when they dumped sacks of asbestos powder into mortar boxes and mixed the powder with water to create cement, or "mud." Workers also raised dust around him as they cut asbestos cloth to wrap pipes and other surfaces, and as they sawed prefabricated wall boards containing asbestos.

Jackson alleges that after he became a supervisor, he had to move about, the entire ship where these various activities were taking place. He also would go back to his duties as a mechanic when his supervisory duties were not pressing.

Jackson testified that asbestos dust in his work environment at Ingalls "was very thick. It would even go down your collar, it would get in your cars, and get in your hair and be white all over your clothes .... It would look like snow sometimes .... Sometimes it would be so thick you couldn't see twenty or thirty feet." In 1978, Jackson first consulted his family physician about breathing problems. He was diagnosed as having asbestosis. His treating physician, Dr. McAtee, estimated Jackson's pulmonary disability to be about 15 per cent at the time of the initial diagnosis but did not recommend that he discontinue working. Evidence introduced at trial indicated that Jackson's physiological im-

pairment has not progressed significantly since the time of the original diagnosis.

Jackson alleges that his asbestos-related disability has sapped his energy and stamina, made him susceptible to increased risks of infections and malignancies, impaired his ability to work, caused him mental frustration, necessitated the worry and expense of ongoing medical checkups, and reduced his life expectancy.

Before commencing work at Ingalls, Jackson held jobs with the Corps of Engineers and the Army. He also worked as an auto mechanic and in various other capacities. He testified that to the best of his knowledge these other jobs had never exposed him to asbestos, sandblasting, or toxic fumes. After quitting his job at Ingalls, Jackson worked for a natural gas company, first as a meter reader and at the time of this trial as a warehouseman.

Surveys of studies analyzing health hazards posed by excessive exposure to asbestos are readily available elsewhere.^{Footnote 1}

We briefly sketch the more prominent developments in the ongoing scientific inquiry which are particularly pertinent to this case. Research projects dating from the 1920's, financed in part by Johns-Manville, indicated that exposure to excessive concentrations of asbestos dust over prolonged periods of time could produce asbestosis in asbestos workers.^{Footnote 2} A 1947 report of the

American Conference of Governmental Industrial Hygienists recommended, in light of the hazards posed, threshold limit values for exposure to asbestos of five million parts per cubic foot of air.^{Footnote 3}

In 1944, the first extensive study of the effects of asbestos on shipyard workers concluded that, because the researchers found few cases of asbestosis among the Navy shipyard workers studied, "asbestos covering of naval vessels is a relatively safe operation." ^{Footnote 4}

This report indicated, however, that most of its research subjects had been exposed to asbestos for fewer than ten years and cautioned that longer exposure would have resulted in a considerably greater incidence of asbestosis.

A 1965 study by I.J. Selikoff ^{Footnote 5} concluded that the 1944 study Was misleading. Finding evidence of asbestosis in about half the insulation workers examined, and in over 90% of the workers with over forty years experience, the Selikoff report indicated that asbestosis and related complications were "significant hazards among insulation workers" and indicated that previous threshold limit values were set too high. Other reports have confirmed these findings. See Borel v. Fibreboard Paper Products Corp.,  493 F.2d 1076, 1085 (5th Cir. 1973), cert, denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974); Special Project, An Analysis of the Legal, Social, and Political Issues Raised by Asbestos Litigation, 36 Vanderbilt L.Rev. 573, 601 (1983).

In response to a preliminary report of Dr. Selikoff's study, Johns-Manville in 1964 began placing warning labels on packages of its asbestos products. ^{Footnote 6}

Raybestos-Manhat-

tan first attached warning labels to its asbestos cloth in 1972.

Jackson testified that in the nineteen years he worked at Ingalls Shipyard, he was never warned that asbestos could be harmful to his health. He also testified that he could recall having seen no asbestos packaging and hence no warning labels. He alleges that the defendants knew in the 1930's of the hazards of exposure to asbestos, yet worked in concert to keep this information secret, actively avoiding research that might confirm the relationship of asbestos to cancer.

On November 21, 1978, Jackson, along with other parties, filed a class action in diversity against numerous manufacturers and sellers of asbestos products allegedly used in shipbuilding at Ingalls. After the district court denied class certification, Jackson filed an amended and supplemental complaint against twelve defendants. ^{Footnote 7}

Eight of these defendants settled before trial. One was granted summary judgment. ^{Footnote 8}

The remaining defendants were: Johns-Manville Sales Corp.; H.K. Porter Company, Inc.; and Raybestos-Manhattan, Inc.

Jackson originally based his cause of action on theories of negligence, breach of warranty, strict liability, and conspiracy to suppress facts about the risks of exposure to asbestos. In accordance with a pretrial order, Jackson abandoned all causes of action except for strict liability in tort.

The jury found that JohnsManville and Raybestos-Manhattan were strictly liable to Jackson and assessed actual damages of $391,500. The jury also assessed punitive damages of $500,000 against Johns-Manville and of $125,000 against Raybestos-Manhattan. The jury found that H.K. Porter Co. was not liable. Jackson does not appeal the verdict in H.K. Porter Co.'s favor.

II. STRICT LIABILITY IN TORT

A. Scope of Protection The defendants argue that Jackson has no cause of action in strict liability in tort, because he was not actually a "user or consumer" of their asbestos products. In this diversity case, Mississippi substantive law applies. See Erie Railroad v. Tomp-kins,  304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

In the seminal case of State Stove Manufacturing Co. v. Hodges, 189 So.2d 113, 118 (Miss.1966), cert, denied, Yates v. Hodges, 386 U.S. 912, 87 S.Ct. 860, 17 L.Ed.2d 784 (1967), Mississippi adopted § 402A of The Restatement (Second) of Torts (1965), "insofar as it applies to a manufacturer of a product." Section 402A provides, in part: "One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm caused to the ultimate user or consumer, or to his property . . . ." ^{Footnote 9} By way of caveat, the

authors expressed no opinion as to whether § 402A should apply to persons other than "users or consumers." The comments to § 402A indicate that the terms "users or consumers" were not meant to be interpreted in a fastidiously literal or technical fashion. "Consumers" include those who prepare the product for consumption: "the housewife who contracts tularemia while cooking rabbits for her husband is included within the rule ...." Comment (7), § 402A. "Users" include those "passively enjoying the benefit of the product" as well as those performing work upon it, as in the case of an employee repairing an automobile. Id.

Writing in 1965, the drafters noted that courts "thus far" had not extended strict liability protection beyond these rather flexible classifications of "users and consumers." The Institute expressed neither approval or disapproval of expanding the rule to encompass "casual bystanders" or "casual strangers." Comment (o), § 402A.

Soon after § 402A was published, several decisions expanded the rule to allow recovery for bystanders. In Elmore v. American Motors Corp., 70 Cal.2d 578, 75 Cal.Rptr. 652, 451 P.2d 84 (1969), Justice Peters found it consistent with the public policy of consumer protection and with economic theories of loss distribution to allow recovery for all foreseeable harm caused by defective products. Dean Prosser reports that this decision "is by now the rule of a slight majority of the courts. Its effect is obviously to put the strict liability on the same footing as negligence, as to all foreseeable injuries." Prosser, Law of Torts, § 100 at 663 (4th ed. 1971). ^{Footnote 10}

The defendants argue that the Mississippi approach to bystander protection is contrary to this modern trend. We disagree. It seems clear that Mississippi, while not explicitly adopting "bystander" and "user" as normative terminology, has in fact developed an approach to the problem of defining the reach of § 402A that is consistent with the modern trend of allowing recovery for foreseeable injuries.

In adopting § 402A, the State Stove court stated the requirements for strict liability in these terms: "the manufacturer is liable strictly in tort only if (a) he puts on the market a product which is not reasonably safe, and (b) the plaintiff is injured as a result of the contemplated use of it." 189 So.2d at 121. This formulation of strict liability made two noteworthy adjustments to the terms of § 402A. First, it abandoned the "user or consumer" terminology. Second, it added a requirement of "contemplated" use, hinting at foreseeability as a constraining factor on the class of plaintiffs protected under the rule. A review of the court's subsequent decisions on strict liability suggests that these adjustments were purposeful.

Three years after State Stove, the Mississippi court made explicit what it had previously hinted at in adding the requirement concerning "contemplated" use. The strict liability rule for products liability cases adopted by this Court eliminates the necessity to show negligence in the manufacture of the product where it is shown that the product left the hands of the manufacturer in a defective condition, but this rule does not eliminate the requirement that, even where there is a defect in the product, that there must he some duty owed to the plaintiff with regard to the defect, growing out of the intended normal use for which the product was manufactured. Walton v. Chrysler Motor Corp., 229 So.2d 568, 573 (Miss.1969) (emphasis added). In

Walton, the plaintiff's automobile was struck from behind. The impact snapped a screw in the back rest, and the seat collapsed. The plaintiff was flung backward and then forward against the steering column. The court held that the manufacturer was not strictly liable for the plaintiff's injuries, because the "intended normal use" of the automobile did not give rise to a duty on the manufacturer's part to guard against a defect that did not cause or contribute to the cause of the accident.

Walton has been roundly criticized, both for reaching a questionable result and for injecting a negligence concept of duty into the doctrine of strict tort liability. ^{Footnote 11}

The defendants argue that Walton manifests the Mississippi court's unwillingness to extend strict liability protection to "bystanders." We disagree. Walton's holding is not premised upon any classification of the injured driver as a "bystander" or "user." Instead, it invokes directly a standard of duty analysis to determine strict liability.

Walton's fact context makes it clear that the court was concerned more with the source of the manufacturer's duty than with the class of persons to whom any duty would extend. But the two concerns are interrelated. If the manufacturer's duty to the plaintiff grows out of the contemplated or intended normal use of the product, then the plaintiff's entitlement to protection depends upon that contemplated or intended normal use. The scope of that duty appears to be defined by foreseeability as it relates to intended use.

A series of cases in which the Mississippi court has extended strict liability protection to parties that might be considered remote users or even bystanders bolsters this view and discredits the argument that Mississippi would restrict § 402A protection to a rigidly literal class of "users and consumers." In Ford Motor Co. v. Cockrell, 211 So.2d 833 (Miss.1968), a city employee noticed smoke rising from the motor of an unattended city truck. As he was about to lift the hood, the starter engaged and caused the truck to lurch forward and strike him. The court allowed recovery against the truck's manufacturer on a theory of strict liability in tort. The court did not discuss the "bystander/user" issue, but instead quoted, as it had in State Stove, Dean Prosser's commentary on MacPherson v. Bvick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916), a negligence case: "The conclusion is clear that the duty extends to any one who may reasonably be expected to be in the vicinity of the chattel's probable use, and to be endangered if it is defective." 211 So.2d at 836, quoting State Stove, 189 So.2d at 11516, quoting Prosser, Law of Torts 661-63 (3d ed. 1964).

In Falstaff Brewing Corp. v. Williams, 234 So.2d 620 (Miss. 1970), a cafe employee was told to move some bottles of beer. As she reached into the cooler, an untouched bottle exploded, injuring her hand. The court allowed recovery on a theory of strict liability in tort without specifically addressing the "user/bystander" issue. Similarly, the court, in Fruehauf Corp. v. Trustees of First United Methodist Church, 387 So.2d 106 (Miss.1980), avoided that issue while allowing recovery in strict liability for property damage. In that case, oil spewed into a church sanctuary when the nozzle on a dump trailer hydraulic line ruptured as the trailer was being operated across the street from the church. Although not addressing explicitly the issue of duty in either decision, the court in both Fruehauf and Falstaff quoted from Escola v. Coca-Cola Bottling Co., 24 Cal.2d 453, 461, 150 P.2d 436, 440-41 (1944), in which Justice Traynor observed that even in the absence of negligence, "public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market." ^{Footnote 12}

The defendants cite Oliver v. City Builders, Inc., 303 So.2d 466 (Miss.1974) as demonstrating Mississippi's restrictive approach to strict liability. In that case, the court refused "to change the existing rule [of caveat emptor] and to apply instead the products liability rule," id. at 467, holding that, as a matter of policy, real estate should not be subject to the same rules of strict liability as manufactured goods. ^{Footnote 13}

For similar policy reasons, the Mississippi court declined to impose on retail merchants "the absolute duty of inspecting for latent defects every article of wearing apparel ... that the retailer might offer for sale." Sam Shainberg Co. v. Barlow, 258 So.2d 242, 246 (Miss.1972). Mississippi's refusal to recognize strict liability causes of action in situations that present special policy concerns does not purport to restrict the scope of § 402A in causes of action that the court has found advance public policy. Strict liability actions against the manufacturers of defective products consistently have been put in the latter category.

In sum, except in limited circumstances where special public policy considerations indicate strict liability causes of action are not appropriate, the Mississippi court has demonstrated a willingness to afford broad consumer protection.

The Mississippi court has made it clear that manufacturers' liability is not without limits. The court has repeatedly disclaimed any intention of treating manufacturers as insurers for all harm caused by their products. See General Motors Corp. v. Howard, 244 So.2d 726, 728 (Miss.1971); Ford Motor Co. v. Simpson, 233 So.2d 797, 798 (Miss. 1970); Walton v. Chrysler Motor Corp., 229 So.2d at 570; State Stove Manufacturing Co. v. Hodges, 189 So.2d at 120. The Mississippi court has also injected into its strict liability principles the negligence concept of "duty." Though it has been variously expressed and intimated, it seems to be summarized thus: The manufacturer's duty grows out of the contemplated or normally intended use of its defective product and extends at least to those persons within the area of that use who can reasonably be foreseen to be endangered.

The irial court's instruction as to the manufacturer's duty in a § 402A cause of action under Mississippi law was proper. The jury was told that the duty extended "to those persons whom it should reasonably foresee would likely use such products or who are likely to come into contact with the danger, if any, inherent in the use of its u product or products." The defendants

complain that this instruction allowed the jury to decide the legal question of whether § 402A protection extends to bystanders.

The complaint is without merit. The court correctly interpreted Mississippi law, which bases the scope of § 402A on the manufacturer's legal duty with attendant factual considerations of foreseeability.

B. Failure to Warn The defect that makes a product "unreasonably dangerous" for strict tort liability purposes may be a design defect, a manufacturing defect, or a marketing defect. Special Project, 36 Vand.L.Rev. at 589. See Carter v. Massey-Ferguson, Inc.,  716 F.2d 344, 346 n. 1 (5th Cir.1983); Edwards v. Sears, Roebuck & Co.,  512 F.2d 276, 288 (5th Cir.1975). Jackson alleges that the defendants' failures to give him adequate warnings or directions constituted marketing defects that rendered the defendants' asbestos products unreasonably dangerous. In Migues v. Fibreboard Corp.,  662 F.2d 1182, 1188 n. 11 (5th Cir.1982) (citations omitted), we stated: According to the Restatement, Section 402A, comment j, a seller has a duty to warn consumers or users of his product of known or knowable dangers attendant upon its use. A product may be "unavoidably unsafe," according to the Restatement, Section 402A, comment k, when it is incapable of being made safe for its "ordinary and intended use." Such a product may nevertheless be marketed if it provides important benefits, but the seller of such a product is responsible for informing consumers or users of the risk of harm. Moreover, manufacturers are "held to the knowledge and skill of an expert" in products liability cases. Manufacturers must therefore at least keep themselves informed of scientific discoveries concerning their products. Finally, a manufacturer's duty to warn extends to the ultimate user of his product, and his warnings must be given in such a way as to reach that user.

If the seller gives warning, he "may reasonably assume that it will be read and heeded .. . ." Comment j, § 402A.

The defendants argue that it is mere fantasy to suppose that bystanders or others "outside the marketing scheme" would ever receive a warning that merely accompanied the product. Rather, "the manufacturer would be required to resort to some form of public communication, such as television, radio or newspaper." Such advertising would not, they argue, be entitled to the Restatement's "presumption of efficacy." The defendants argue that under Mississippi law, the burden upon the manufacturer of undertaking such a warning campaign must be balanced against the possible benefits obtainable from such an undertaking. The defendants conclude that, as a matter of law, this balancing test would weigh in the manufacturer's favor with respect to persons in Jackson's position and that these products would thus not be unreasonably dangerous. We disagree.

This argument is partially mooted by our determination that the manufacturers' duty in strict liability did in fact extend to Jackson. Moreover, we find no precedent to indicate that Mississippi would hold that the duty to warn of dangers inherent in a product may be lessened by the difficulty of communicating that warning to those foreseeably in need of it.

The primary strict tort liability case upon which the defendants rely, Pridgett v. Jackson Iron & Metal Co., 253 So.2d 837 (Miss. 1971), held that the seller of used products breached no duty to warn its vendee's employee where the vendee had in fact warned the employee and where the evidence showed that the product was in fact reasonably safe for its intended use. To the extent that Pridgett pertains at all to the case at bar, it undercuts the defendants' argument by suggesting that, in appropriate circumstances, the duty to warn a vendee's employees may be discharged quite simply through the vendee.

Nor do we find that defendants' suggested balancing test is compatible with the Restatement theory of strict tort liabili-

ty. With respect to products that are unavoidably unsafe, the manufacturer is under a duty to provide adequate warning of those dangers that are reasonably foreseeable. Borel, 493 F.2d at 1088. If the product is distributed without adequate warnings, then even if the benefits of the product outweigh the risks, an unreasonably dangerous product remains so, and the manufacturer is strictly liable to those who are foreseeably endangered. Whether the warning is adequate as to a particular plaintiff in form, content, or dissemination is a matter of fact, not law. When a warning is required its absence is per se an inadequate warning.

The defendants do not argue that the jury lacked sufficient evidence to find their products unavoidably unsafe. Those products were distributed without any warning and hence were unreasonably dangerous. The issue of whether ability to warn a bystander could affect the adequacy of a warning actually made is not a viable issue in this case.

III. ONE CAUSE OF ACTION OR TWO During the course of the trial, Jackson called several expert witnesses who testified at length about the role that exposure to asbestos fibers plays in the etiology of lung cancer, mesothelioma, and other malignancies. Three of these expert witnesses testified that, based upon statistical risks adduced from epidemiological studies and upon examinations of portions of Jackson's medical record, they believed that Jackson had a greater than fifty percent chance of contracting an asbestos-related cancer in the future. ^{Footnote 15}

The defendants argue that this evidence about the relationship between asbestos exposure and cancer was irrelevant, because the proof showed that Jackson had only a mild case of asbestosis, resulting in a fifteen percent disability. They argue that the trial court committed reversible error in failing to exclude the testimony concerning the potential for later development of cancer, which alarmed the jury and unfairly prejudiced the defendants.

We hold as a matter of substantive law that the present state of the record limits Jackson's right to recover damages to any disability resulting from asbestosis. Therefore, the court erred in not excluding the evidence about cancer since Jackson did not prove that he presently suffers from that disease.

In arguing that the cancer evidence was properly admissible, Jackson relies on the general rule of tort law that allows for recovery of all harms'past, present, and prospective'legally caused by a tort. "[WJhere it is established that future consequences from an injury to a person will ensue, recovery may be had, but such future consequences must be established in terms of reasonable probabilities." Entex, Inc. v. Rasberry, 355.So.2d 1102, 1104 (Miss. 1978). See Garrett v. Wade, 259 So.2d 476 (Miss.1972). See also Wilson v. Johns-Manville Sales Corp.,  684 F.2d 111, 119 (D.C.Cir. 1982). This is the traditional "all or nothing" approach, whereby the plaintiff becomes entitled to full compensation for those prospective damages that are proved to be "probable" (a greater than 50 percent chance), but is not entitled to any compensation if the proof does not establish a greater than 50 percent chance. ^{Footnote 16}

Jackson argues that the expert testimony was relevant in establishing the requisite probability of future harm from cancer. ^{Footnote 17}

It is evident, however, that the all-ornothing rule is predicated on an assumption that a cause of action has accrued with respect to the prospective harm for which recovery is sought. ^{Footnote 18}

The real question is whether, when Jackson's cause of action accrued for asbestosis injuries, a cause of action accrued simultaneously for cancer injuries, even though Jackson had not developed cancer at the time of trial.

The proof discloses that asbestosis and cancer are distinct diseases. Asbestosis is a fibrosis or scarring of the lungs resulting from inhalation of asbestos fibers. It is not a cancerous process. It is not always fatal, but can cause progressive deterioration of the pulmonary function and lung volume. There is a direct relation between cumulative exposure levels to asbestos and development of the disease. Cigarette smoking is not a contributing factor. Generally, asbestosis has a latency period of ten to twenty-five or more years, from time of initial exposure until manifestation of the disease. ^{Footnote 19}

Mesothelioma is a rare form of malignancy which occurs in the thin membrane, or epithelium, that lines the surfaces of the lungs and of the abdominal cavity. Jackson's expert testified that as little as a week's exposure to asbestos could trigger the disease. The best available evidence does not indicate that cigarette smoking contributes to the development of the disease. The latency period may be from twenty to forty years or more. The disease is invariably fatal. ^{Footnote 20}

The development of asbestos-related lung cancer (pulmonary and bronchogenic carcinoma) occurs mainly in the lower lobes of the lungs and is correlated with the degree of exposure to asbestos fibers. Cigarette smoking greatly enhances the risks. The latency period is fifteen to thirty-five years. ^{Footnote 21}

Evidence introduced at trial indicates that asbestos is linked, to a lesser degree, with other types of malignancies. It can cause benign, non-disabling conditions, such as asbestos corns and callouses on the hands of workers who handle raw asbestos. Asbestos inhalation has also been linked to heart disease. It can also cause thickening (plaque) or calcification of the membrane (pleura) covering the outer surface of each lung.

Jackson does not claim that he has cancer. He has produced no evidence that asbestosis will inevitably lead to cancer. The proof adduced does not demonstrate any relation between the pathologies of asbestosis and cancer, except that the diseases can be precipitated by the same pathogen or carcinogen. Viewed from this perspective, Jackson's claim for asbestosis injuries adds nothing to his claim for cancer damages. Had he attempted to recover for cancer damages before he had manifested any disease at all, his evidentiary burden of establishing his entitlement to compensation for future cancer would be no different from that in the present posture of this case. It would not be carried by proof that he was exposed to asbestos fibers and that, statistically, he was at over 50% risk of contracting cancer.

Causality as an operation of physical events which may culminate in future harm must be distinguished from causality as an operation of law which may culminate in a claim for future harm. In the context of a latent disease case, causality poses a novel

question whether the accrual of a claim based on the manifestation of one disease results in the simultaneous accrual of claims based on "probable" future manifestations of physically separate diseases. The ultimate question is how abstractly to characterize the wrong that underlies the cause of action.

We find no precedent that squarely addresses the issue before us. However, courts addressing the limitation of action issue in latent disease cases frequently have addressed many of the relevant considerations. They can inform our decision.

A few courts have adopted a limitations rule that measures the accrual of a cause of action from the time the offending substance invades the body. ^{Footnote 22}

These courts employ the rule that would obtain in a traditional trauma case, reasoning that the injury is the initial harmful contact and not the maturation of disease. See Note, Preserving Causes of Action in Latent Disease Cases: The Locke v. Johns-Manvillo Corp. Date-of-the-Injury Accrual Rule, 68 Va.L. Rev. 615, 620-22 (1982).

A majority of courts, ^{Footnote 23} however, have adopted a rule of discovery, under which "the cause of action does not accrue until the injury is discovered or in the exercise of reasonable diligence should have been discovered." Borel, 493 F.2d at 1102 (construing Texas law). See Special Project, 36 Vand.L.Rev. at 642-47.

In Urie v. Thompson,  337 U.S. 163, 69 S.Ct. 1018, 93 L.Ed. 1282 (1949), the Supreme Court applied the discovery rule in determining, for limitations purposes under the Federal Employers' Liability Act, the time of accrual of a railroad fireman's claim for damages resulting from his contraction of silicosis, many years after his initial exposure to silica dust. The Supreme Court noted that a "mechanical analysis" of the accrual of the plaintiff's cause of action, attempting to measure the disease from some specific moment of contact with silica dust, would afford the plaintiff only a delusive remedy. ... It would mean that at some past moment in time, unknown and inherently unknowable even in retrospect, [the plaintiff] was charged with knowledge of the slow and tragic disintegration of his lungs; under this view [the plaintiff's] failure to diagnose within the applicable statute of limitations a disease whose symptoms had not yet obtruded on his consciousness would constitute waiver of his right to compensation at the ultimate day of discovery and disability. * * * * * *

It follows that no specific date of contact with the substance can be charged with being the date of injury, inasmuch as the injurious consequences of the exposure are the product of a period of time rather than a point of time; consequently the afflicted employee can be held to be "injured" only when the accumulated effects of the deleterious substance manifest themselves. Id. 69 S.Ct. at 1025, quoting Associated Indemnity Corp. v. Industrial Accident Commission, 124 Cal.App. 378, 381, 12 P.2d 1075, 1076 (1932).

Although the Mississippi court has not specifically addressed the time of accrual of a strict liability cause of action in a latent disease case, it is clear that Mississippi would apply the discovery rule. The Mississippi court has held, in Ford Motor Co. v. Broadway, 374 So.2d 207, 209 (Miss.1979), that the limitations period for strict products liability actions is governed by Section 15-1-49 of the Mississippi Code Ann. (1972), which provides: "All actions for which no other period of limitation is prescribed shall be commenced within six years next after

the cause of such action accrued, and not after." The court observed: The statute of limitations in strict products liability cases should strike a balance between the necessity of providing the consumer with adequate time within which to discover a defect and institute an action, and the need to provide the manufacturer with a definite period of liability and a date on which his exposure to suit ends .... fW]e hold that .. . the statute begins to run from the time that injuries are sustained. Ford Motor Co. v. Broadway, 374 So.2d at 209.

The court's recognition of the plaintiff's need to have adequate time in which to vindicate his rights commands the view that the Mississippi court would follow the judicial trend in adopting the discovery rule for strict liability latent disease cases, rather than put upon the plaintiff the uneasy burden of instituting a claim for injuries unknown and unknowable as of the time of initial exposure to the potential pathogen. In this context, the "sustained" injury must be equated with the physical manifestation of disease. The corollary is that the actionable delict in strict liability for physical injury is the generation of disease in the plaintiff's body, and not the initial exposure of the plaintiff to potentially hazardous substances or some more abstract invasion of the plaintiff's legally protectible interests.

The question remains, however, whether, upon the manifestation of one disease, a cause of action accrues for all prospective diseases, so that the plaintiff has the right (and in a limitations context, the duty) to seek recovery for physically distinct and separate diseases that may or may not develop in the future. The courts that have considered this issue in the limitations context have said no.

In Wilson v. Johns-Manville Sales Corp.,  684 F.2d 111 (D.C.Cir.1982), the court determined that a diagnosis of "mild asbestosis" in 1973 did not start the limitations period running for the separate and distinct disease of mesothelioma, first manifested in 1978. The court noted that there was a tension between the underlying evidentiary and repose considerations. The court observed that although it would best serve the defendant's interests in repose to have all contingent claims accrue simultaneously, the evidentiary concerns of "the existence of the [prospective] disease, its proximate cause, and the resultant damage" are better served by allowing the evidence to develop over time. Id. at 119. The court then determined that the plaintiff's interest in receiving adequate compensation and the defendant's interest in paying no more than that were best served by recognizing discrete causes of action for discrete injuries. Id. Finally, the court held that considerations of judicial economy weighed in favor of recognizing separate causes of action, lest the plaintiff be compelled to rush to court upon the first manifestation of an injury not in itself worthy of litigation, rather than risk losing all claims for future serious injuries. Id. at 120. Accord, Pierce v. Johns-Manville Sales Corp., 296 Md. 656, 464 A.2d 1020 (1983).

In Goodman v. Mead Johnson & Co.,  534 F.2d 566 (3d Cir.1976), in a cause of action against a manufacturer of contraceptive drugs, the court held that, for limitations purposes, the plaintiff's cause of action for cancer did not accrue simultaneously with the manifestation of thrombophlebitus years earlier. The court based its decision on a causation analysis, reasoning that the two diseases were not products of the same "chain of causality." Rather, the manufacturer had exposed the plaintiff to two distinct risks, incurred distinct duties to test and warn, and hence was subject to two distinct causes of action. Id. at 574.

In Martinez-Ferrer v. Richardson-Merrell, Inc., 105 Cal.App.3d 316, 164 Cal.Rptr. 591 (1980), a California court recognized separate causes of action for limitations purposes created by the independent and nonsimultaneous injuries of dermatitis and cataracts, though both resulted from the plaintiff's taking an anti-cholesterol drug. The court observed:

If the manufacturer of such a drug is liable for the long-delayed effects of his product, it advances no coherent public policy to absolve him of that liability simply because right after the ingestion of the drug the user suffered other, different, independent and relatively innocuous side effects for which he did not bother to sue. Id. 164 Cal.Rptr. at 595. The court concluded that the otherwise useful rule of law against claim splitting should not be applied where it would lead to injustice. Id. 164 Cal.Rptr. at 596.

The issue before us is not, of course, whether Jackson's claim has expired by the operation of the limitations period. The question is whether a cause of action has arisen for injuries other than asbestosis. As they relate to the analysis of the underlying theory of causation, however, the two issues involve identical values. Furthermore, the policy considerations that inform the divisibility of claims for purposes of measuring limitations periods and applying principles of res judicata are the same policy considerations that drive the determination of when separate causes of action arise.

As applied in limitations cases, the discovery rule operates under the assumption that the plaintiff sustains no actionable injury when the pathogen enters the body. "[T]he injurious consequences are the product of a period of time . ..." Urie v. Thompson, 69 S.Ct. at 1025. The completion of the incubation period and manifestation of the disease create the causation of actual injury and the accrual of the cause of action. When the plaintiff develops asbestosis, the causation condition is fulfilled for that injury. Causation is complete and the defendant is liable for all damages'past, present, and future'that the proof shows will probably develop as a consequence of the asbestosis injury. Until and unless the plaintiff develops cancer, however, the causation of cancer has not occurred. The plaintiff is denied recovery for prospective damages associated with cancer not because the evidence of future consequences is insufficiently reliable, but because, as a matter of substantive law, there can be no consequence until there is effect, and no effect without completed cause.

Plaintiff cannot create a cause of action for the physically separate and distinct disease of cancer from the cause of action for asbestosis injuries actually sustained by proof that if asbestos fibers have caused asbestosis, the same exposure probably will result in cancer at a later time. To permit this assumption of causation to control liability would cause massive dislocations in the rights of parties. The proof shows that asbestos fibers may cause asbestosis. It also shows that asbestos fibers may cause cancer. But it does not show that asbestosis may cause cancer. Logic and justice require that presently latent injuries must await their separate maturity as a cause of action. A doctrinaire application of the reasonable certainty rule would result in a mismatching of entitlement, liability, and compensation. "Persons who contract the first, but not the second, disease will receive a windfall and, in the aggregate, the defendant will overcompensate the injured class." Wilson v. JohnsManville Sales Corp., 684 F.2d at 120 n. 45. This problem is especially acute where the proof of greater-than-50% probability derives from statistical data that would support prospective recovery universally for a class that, according to the same proof, would suffer much less than universal disability.

To permit "recovery" for harms not yet effected would contravene Mississippi's clear policy against treating manufacturers as insurers of their products. Whatever benefit lies in allowing some plaintiffs present compensation for speculative future injury must be balanced against the need for maintaining viable enterprises that can accomplish the risk distribution purpose of strict liability for those persons who are caused injury by a defendant's product. See Ward v. Hobart Manufacturing Co.,  450 F.2d 1176, 1189 (5th Cir.1971) (construing Mississippi law).

The detriment to defendants of allowing claims for uneffected future harms is mani-

fest. A plaintiff who suffered the injury of asbestos callouses on his hands, for instance, plausibly could institute an action, based on expert testimony of statistical probability, to recover not only for callouses but for future injuries that ran the gamut from asbestosis to mesothelioma to lung cancer. The defendants' interests in repose pale against the interests of equitable exposure to liability.

On the other hand, the plaintiff suffers little if any detriment by being required to await manifestation of a condition before having a claim for damages resulting from that class of conditions. The quality of the plaintiff's evidence of cancer injury is likely to improve with the passage of time. Indeed, the plaintiff has a better chance of securing fair compensation for his injuries when the injury has actually manifested itself and medical certainty can replace speculation.

Our holding that the causes of action must be divided for purposes of seeking recovery for future harm requires that they also be discrete for limitations purposes. It would disadvantage a plaintiff unfairly and disserve judicial economy to measure the limitations periods for future diseases from the time of manifestation of a separate and distinct disease.

Because the claims for separate injuries are divisible, the plaintiff would not be barred from bringing a subsequent suit based on claims for separate and distinct injuries within the applicable limitation period following the materialization of the later disease. Cf. Everett Plywood Corp. v. United States,  512 F.2d 1082, 1087 (Ct.Cl. 1975) (separate action founded on single indivisible contract may be brought later if it was incapable of being asserted when earlier suit was commenced). Commanded by the recognition of separate causes of action, this result also is consistent with recognized exceptions to the rule against claim splitting. Section 26 of the Restatement (Second) of Judgments provides that the general rule against claim splitting is rendered inapplicable where: (b) The court in the first action has expressly reserved the plaintiff's right to maintain the second action; or ****** (f) It is clearly and convincingly shown that the policies favoring preclusion of a second action are overcome for an extraordinary reason.. .. This court has recognized that "[principles of res judicata are not ironclad," but must be applied to accomplish justice in the light of public policy. Bogard v. Cook,  586 F.2d 399,408 (5th Cir.1978), cert, denied, 444 U.S. 883, 100 S.Ct. 173, 62 L.Ed.2d 113 (1979). See also Dore v. Kleppe,  522 F.2d 1369,1374 (5th Cir.1975); Stevenson v. International Paper Co.,  516 F.2d 103, 109 (5th Cir.1975); Bennett v. Commissioner of Internal Revenue, 113 F.2d 837, 839 (5th Cir.1940) ("res judicata is a principle of peace"). In this case, justice requires that the cause of action for cancer stand upon its own base.

Jackson argues that evidence of the relationship between asbestos use and cancer is relevant to issues apart from the extent of prospective injuries to his health. He argues that the evidence is relevant to establishing elements of the defendants' liability, specifically whether the defendants had notice of foreseeable hazards, whether warnings were adequate or necessary, and whether the defendants met their duty to test their products. Because Jackson's recovery for asbestosis disability is the limit of his present right of action, however, the evidence about cancer is not relevant to establishing any element of the defendants' liability with respect to their failures to warn of the specific risks upon which Jackson's cause of action is predicated.

Jackson also argues that cancer evidence is relevant to his claim for compensation for future medical examinations that will be required to determine if any cancer has appeared. Although the cancer evidence may be relevant to this discreet issue in establishing the types and costs of future medical examinations, such evidence must be weighed by the trial court in the light of our opinion here under Rule 403 of the Federal Rules of Evidence, which provides:

Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence. There is substantial danger that the defendants would be unfairly prejudiced by proof that a dread disease is a probable result of plaintiff's exposure. The jury also may be confused about the limits of Jackson's present rights of action if the cancer evidence is put before them now. Jackson can readily establish the reasonable necessity and expense of future medical examinations by other means of proof, including, for any reasonable defendant, a stipulation. The weight of these values is for the trial court in the first instance. On the record before us now, we conclude that the trial court erred in not excluding the evidence of cancer since proof of the existence of the disease was not made. If, at any time in the future, Jackson claims that he has contracted cancer and that asbestos fibers caused that disease, he has a new cause of action, with new damages. His right to commence that action arises at the time he knows or in the exercise of reasonable diligence should have discovered that he has contracted the disease.

The statute of limitations commences to run from the same time.

We do not address the questions of res judicata or collateral estoppel that might arise later, because we cannot predict what findings the court and jury will make when this case is retried. We note generally that in a second suit on a different cause of action, "the parties are estopped from relitigating only those issues actually and necessarily decided in the first suit." Dore v. Kleppe,  522 F.2d 1369, 1374 (5th Cir. 1975). See also Castillo v. Railroad Retirement Board,  725 F.2d 1012, at 1014 (5th Cir. 1984); Stevenson v. International Paper Co.,  516 F.2d 103, 109 (5th Cir.1975).

IV. MENTAL DISTRESS The trial court denied the defendants' request that the jury be instructed that, as a matter of law, it could not consider Jackson's alleged mental anguish for his purported increased risk of cancer. The trial court instead charged the jury that Jackson was entitled to compensation for "[a]ll physical pain and mental anguish suffered by him to date and such as he is reasonably certain to suffer in the future as a direct result of his complained of condition." ^{Footnote 24} Our holding here makes a ruling on defendants' objection unnecessary.

Jackson argues that this instruction failed to authorize any recovery for fear or risk of cancer, because "there was, of

course, at no point any claim that the 'complained of condition' of Mr. Jackson was cancer." Jackson made no objection to the trial court's refusal expressly to authorize recovery for fear of risk of cancer. Since our holding here bars the proof allowed in the first trial on the issue of damages for potential cancer, we leave to the trial court's initial exercise of discretion whether evidence of Jackson's fear of the risk of cancer should be admitted on retrial under Fed.R.Evid. 403 and whether such a claim is permitted by the pleadings. While all values are not identical, many of the same considerations discussed with regard to future medical examinations are relevant.

V. PROXIMATE CAUSATION For the guidance of the district court on retrial we now hold that the quantum of evidence Jackson adduced in the original trial was sufficient to raise a jury issue as to causation in fact.

It is undisputed that Jackson suffers from asbestosis and that asbestos fibers caused the disease. Jackson is unable, however, to prove with certainty that on a specific day in a specific compartment of a specific ship he came in contact with the defendants' products. Rather, he relies on circumstantial evidence which shows that Raybestos-Manhattan products were ordered for use on at least seven to ten of the approximately sixty-nine hulls on which he worked during his career. Johns-Manville products were ordered for use on thirty or more of the hulls. Some of Jackson's former co-workers testified that they recalled working with Johns-Manville and Raybestos-Manhattan products in very dusty conditions.

Under Mississippi substantive law, the plaintiff's burden is to show that the defendant "shall have been the proximate, or a contributing, cause of injury to anothCORP. er; and in order that it shall be a proximate or contributing cause it must have been a substantial factor in producing the injury." New Orleans & N.E.R. Co. v. Burge, 191 Miss. 303, 2 So.2d 825, 826 (1941).

Federal law provides the standard for determining the sufficiency of the evidence. Fairley v. American Hoist & Derrick Co.,  640 F.2d 679, 681 (5th Cir.1981). Under that standard, we do not find that the facts and inferences point so strongly and overwhelmingly in favor of one party that reasonable men could not arrive at the conclusion that the products of these defendants were substantial factors in producing Jackson's injuries. See Borel, 493 F.2d at 1094; Boeing Co. v. Shipman,  411 F.2d 365, 375 (5th Cir.1969) (en bane).

The jury had sufficient evidence to find that the defendants' failures to warn proximately caused Jackson's injuries. If warnings are given, a presumption arises that they will be read and heeded. Restatement (Second) of Torts § 402A, comment j. In the absence of any warning, the burden shifts to the defendant to show that the plaintiff would have sustained his injuries even if warnings had been given. See New Orleans & N.KR. Co. v. Burge, 2 So.2d at 827. ^{Footnote 25}

The defendants made no such showing.

Raybestos-Manhattan argues that it and H.K. Porter Co. were in legally and factually indistinguishable positions with regard to their distributions of asbestos cloth to the shipyard, except that H.K. Porter Co. supplied asbestos cloth on many more of the vessels on which Jackson worked. Nevertheless, the jury absolved H.K. Porter Co. while holding Raybestos-Manhattan liable. Raybestos-Manhattan argues that the jury could have reached this result only on the basis of a chain of untenable inferences.

We addressed a similar issue in Borel, 493 F.2d at 1094:

This inconsistency in the jury's verdicts, although puzzling, need not detain us. It has long been the rule that consistency in general verdicts is not required. Dunn v.

United States, 1932,  284 U.S. 390, 52 S.Ct.

189, 76 L.Ed. 356. "Whether the jury's verdict was the result of carelessness or compromise or a belief that the responsible individual should suffer the penalty ... is immaterial. Juries may indulge in precisely such motives or vagaries." United States v. Dotterweich, 1943,  320 U.S. 277, 279, 64 S.Ct. 134, 135, 88 L.Ed.

48. Thus, even if the general verdicts are internally inconsistent, such is the jury's prerogative if, as we have found, there is evidence to support the finding reached by the jury.

VI. PUNITIVE DAMAGES Special problems attend awards of punitive damages in the myriad actions which have arisen from the catastrophic nationwide exposure of workers to asbestos. The scope of this mass litigation is without precedent and practically without dimension. A recent independent study for the U.S. Department of Labor estimates that "there are presently more than 21 million American workers ... who, in the past forty years, were significantly exposed to asbestos." Selikoff, Report to the U.S. Department of Labor, Disability Compensation for Asbestos-Associated Disease in the United States 4 (1982), reported in Seltzer, Punitive Damages in Mass Tort Litigation: Addressing the Problems of Fairness, Efficiency and Control, 52 Fordham L.Rev. 37, 37 n, 1 (1983). The study projected over 200,000 deaths from asbestos-related cancers by the end of the century. Id. That number does not include deaths from asbestosis. Id.

It has been reported that over 20,000 personal injury lawsuits have been filed in connection with workers' asbestos injuries. Congress Grapples with Toxic Torts, Nati L.J., Jan. 31, 1983, at 30, col. 1, reported in Seltzer, 52 Fordham L.Rev. at 37 n. 1. Johns-Manville states on brief that currently over 14,000 cases are pending against it in the United States, seeking over fifty billion dollars in damages, far beyond its financial resources. It reports that over 9,300 of those suits seek punitive damages and that over three million dollars in punitive damages already have been awarded. See Seltzer, 52 Fordham L.Rev. 37, 39 n. 11 (itemizing punitive damages awarded in previous cases). Raybestos-Manhattan states that as of May 1, 1982, it was a defendant in 11,071 suits involving 14,007 plaintiffs. It reports it has been assessed punitive damages of $500,000, in addition to those assessed in the instant verdict. Of the hundreds of these cases pending in the federal courts in Mississippi, this is the first to come before us on appeal.

Even assuming that the scope of the problem were overstated by defendants or that many of the cases currently pending against the defendants eventually would be settled, the defendants still would face an open-ended and overwhelming liability. Independent studies establish that if currently latent injuries become manifest among those workers who have been exposed to asbestos at the rates projected, the results could be catastrophic. The defendants argue that repeated assessments of punitive damages in the actions already filed threaten to exhaust their resources, making them unable to satisfy future compensatory or punitive awards. ^{Footnote 26}

The grave reality of the need to maintain viable enterprises to meet future compensation liabilities to already injured persons