Martha Jo CATHEY, Plaintiff-Appellant (82-5393), Plaintiff-Appellee (82-5425),

Mary Cavett, Administratrix, Plaintiff-Appellee (82-5580), v.

JOHNS-MANVILLE SALES CORPORATION; Raymark Industries; the Celotex Corporation; Pittsburgh-Corning Corporation; Owens-Corning Fiberglass Corporation; Fibreboard Corporation; GAF Corporation; Nicolet, Inc.; Southern Asbestos Company and Owens-Illinois, Incorporated, DefendantsAppellees (82-5393),

Johns-Manville Sales Corporation, Defendant-Appellant (82-5425, 82-5580) Nos. 82-5393, 82-5425 and 82-5580.

United States Court of Appeals, Sixth Circuit-Argued Feb. 19, 1985. Decided Nov. 13, 1985.

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H. Douglas Nichol (argued), Paul Gillenwater, Gillenwater, Whelchel & Nichol, Knoxville, Tenn., for appellant.

Fred H. Cagle, Jr., W. Kyle Carpenter (argued), Knoxville, Tenn., M. Anderson Cobb, Jr., Harris, Shelton, Dunlap & Cobb, Memphis, Tenn., H. Keith Jarvis (argued), Montgomery, Green & Jarvis, Englewood, Colo., for Johns-Manville.

Donald F. Paine, Dwight E. Tarwater (argued), T. Harold Pinkley, Egerton, McAfee, Armistead & Davis, Knoxville, Tenn., for Raymark Industries, Inc.

George B. McGugin; William Southerland (argued), Watkins, McGugin, McNeilly & Rowen, Nashville, Tenn., for Celotex Corp.

Charles C. Trabue, III, Gayle E. Malone, Jr., Gary M. Brown (argued), Trabue, Sturdivant & DeWitt, Nashville, Tenn., for Pittsburgh-Corning Corp.

Darrell G. Townsend, Howell, Fisher, Branham & North, Nashville, Tenn., for Owens Corning Fiberglass Corp.

Hugh J. Moore, Jr. (argued), Witt, Gaither & Whitaker, Chattanooga, Tenn., for GAFCorp.

Graham Bartlett, Knoxville, Tenn., for Nicolet, Inc.

William A. Young (argued), Taylor & Grover, Knoxville, Tenn., for Fibreboard Corp.

Louis C. Woolf (argued), Robert G. McDowell, J. Randolph Bibb, Jr., Baker, Worthington, Crossley, Stansherry & Woolf, Nashville, Tenn., for Owens-Illinois, Inc.

Before KEITH and JONES, Circuit Judges, and NEWBLATT ^{Footnote *} , District Judge.

KEITH, Circuit Judge: These two cases involve actions for personal injuries brought against various manufacturers of asbestos . containing insulation products. Although the two cases have been consolidated on appeal, given the number and complexity of the issues raised by each case, we will analyze each case separately.

I.

CAVETT v. JOHNS-MANVILLE SALES CORPORATION This appeal arises out of an action brought by plaintiff, James 0. Cavett, against Johns-Manville Sales Corporation and numerous other manufacturers of asbestoscontaining insulation products. By the time of the trial, however, Johns-Manville was the only remaining defendant. The case was tried in the United States District Court for the Eastern District of Tennessee before the Honorable David S. Porter, sitting by designation. The jury returned a verdict in favor of the plaintiff

for $800,000 compensatory and $1,500,000 punitive damages.

After entry of the judgment, Johns-Manville filed a motion for judgment notwithstanding the verdict, or in the alternative for a new trial. Johns-Manville also filed a motion to amend the judgment so as to allow a credit for the amount paid in settlement by other defendants. In an order entered August 20, 1982, the district court addressed the various post-judgment motions. The district court expressly denied the motion for judgment notwithstanding the verdict and instructed the clerk to enter judgment in favor of Cavett for the amount of the verdict. The court, however, granted Johns-Manville's motion allowing a credit for the amount paid by other defendants in settlement.

Johns-Manville filed a timely appeal from the district court's judgment. Although Johns-Manville had filed for Chapter 11 reorganization under the Bankruptcy code, the bankruptcy court has entered an order allowing this appeal to proceed. Also, while this appeal was pending, plaintiff, James O. Cavett, died and his administratrix, Mary Cavett, has been substituted as plaintiff-appellee.

In approximately 1939, Mr. Cavett began working as a boilermaker. For over forty years Mr. Cavett worked as a boilermaker, building and repairing boilers in various stone plants. As a boilermaker, Mr. Cavett worked in close proximity to insulation workers, who applied various types of insulation products to the boilers and pipes.

At the trial, Mr. Cavett described the dust conditions caused by the insulation materials as so bad that it looked as if "someone dumped a barrel of flour on you". Mr. Cavett also testified that he recalled seeing Johns-Manville insulation products on every job he worked and that Johns-Manville provided approximately 80 to 90 percent of the insulation materials for all the jobs on which he worked. Mr. Cavett's testimony was supported by two insulation workers who testified that they had worked with Mr. Cavett on particular jobs, that the insulation materials they applied were products of Johns-Manville and that the dust conditions created by the insulation products were such that dust could be seen on the boilermaker's workclothes.

Dr. William K. Swann, Mr. Cavett's treating physician, also testified at the trial. Dr. Swann testified that he had been treating Mr. Cavett since May 1980, when Mr. Cavett was initially seen for chest problems resulting from a collapsed lung. In January 1981, Dr. Swann diagnosed Mr. Cavett as suffering from lung cancer. Subsequently, Dr. Swann also diagnosed Mr. Cavett as suffering from asbestosis and in approximately November 1981, rendered the opinion that Mr. Cavett's lung cancer was caused by his asbestos exposure.

As a result of Mr. Cavett's lung cancer, surgery was performed removing the upper portion of his right lung. Mr. Cavett was again hospitalized in September 1981, at which time it was discovered that he had experienced a recurrence of lung cancer. This recurrence was treated by cobalt radiation. Mr. Cavett was again hospitalized in March 1982 for further cobalt therapy and during that hospitalization it was discovered that the cancer had spread to his bones. In April 1982, Mr. Cavett was hospitalized and started on chemotherapy. He was again hospitalized from May 30, until June 5, 1982, for supportive therapy in an effort to get him to eat, since he had lost 65 pounds from the time of his initial surgery.

At the time of trial Mr. Cavett was once again hospitalized because of his inability to eat, his weight loss, and his extreme weakness. All of these problems were a result of his lung cancer, and he was placed on pain medication consisting of morphine and percodan. Dr. Swann expressed the opinion at trial that Mr. Cavett was suffering from terminal cancer, which was spread beyond its original site to distant places and that his outlook was very poor.

Dr. Lynn Blake, Chief of Pathology and Director of Laboratories at the East Tennessee Baptist Hospital, testified that he had reviewed Mr. Cavett's lung tissue slides. Based upon this review, Dr. Blake rendered the opinion that Mr. Cavett was

suffering from asbestosis and lung cancer, and that the lung cancer was caused by Mr.

Cavett's asbestos exposure and asbestosis. Dr. Bertram Carnow, a professor of occupational and environmental medicine at the University of Illinois Medical Center in Chicago, Illinois, testified as to his review of medical records and x-rays of Mr. Cavett. Based upon this review, Dr. Carnow was also of the opinion that Mr. Cavett had asbestosis, and that Mr. Cavett's cancer was, to the largest degree, caused by asbestos. On appeal Johns-Manville raises six issues: WHETHER TENNESSEE LAW PERMITS AN AWARD OF PUNITIVE DAMAGES IN THIS PRODUCTS LIABILITY ACTION; WHETHER JOHNS-MANVILLE'S CONSTITUTIONAL RIGHT TO DUE PROCESS IS VIOLATED BY MULTIPLE AWARDS OF PUNITIVE DAMAGES FOR THE SAME COURSE OF CONDUCT; WHETHER THE DAMAGE AWARDS ARE SO EXCESSIVE THAT JOHNSMANVILLE SHOULD BE GRANTED A REMITTITUR OR NEW TRIAL; WHETHER THIS CASE SHOULD BE REMANDED TO THE TRIAL, COURT FOR A RULING ON THE DEFENDANT'S MOTION FOR NEW TRIAL; WHETHER A NEW TRIAL SHOULD BE GRANTED BECAUSE OF ERRORS IN EVIDENTIARY RULINGS IN THE TRIAL BELOW; WHETHER JOHNS-MANVILLE HAS A VESTED RIGHT IN THE STATUTE OF REPOSE CONTAINED IN THE TENNESSEE PRODUCTS LIABILITY ACT WHICH COULD NOT BE ABROGATED BY RETROACTIVE APPLICATION OF THE AMENDMENT REMOVING ASBESTOS CASES FROM THE PURVIEW OF THE STATUTE OF REPOSE. We will treat each issue.

Punitive Damages The principal issue in both this case and its companion, Cathey v. Johns-Manville Sales Corporation, Nos. 82-5393, 82-5425, is whether, under Tennessee law, punitive damages can be awarded in an asbestos products liability case. Since the Tennessee Supreme Court has not ruled upon this issue, under the Erie Doctrine this Court is obligated to exercise its best judgment as to how the Tennessee High Court would rule if confronted with this issue. Bagwell v. Canal Insurance Company,  663 F.2d 710 (6th Cir.1981).

Although the trial judge below allowed the issue of punitive damages to go to the jury and upheld the jury's subsequent punitive award, the trial judge expressed doubt as to the propriety of such an award in an asbestos products liability case. See Joint Appendix at A-50. As we understand it, the trial judge was concerned about the possibility of the "overkill" of the defendant through the potential award of punitive damages in each of the numerous suits currently pending against Johns-Manville. Also, the trial judge was concerned that the repeated award of large sums for punitive damages to the current generation of litigants would quickly exhaust the resources of the defendant and the insurers, thereby depriving future litigants of a source for compensatory recoveries. Bunch v. JohnsManville Sales Corporation, No. 3-81-416 (E.D.Tenn. Jan. 16, 1982) (Posttrial order) (reproduced in Appellant's Brief at A1.720).

Notwithstanding these serious public policy concerns, we do not believe that they present a proper basis upon which this Court can rest a diversity decision. First, with respect to the so-called "overkill doctrine", in Moran v. Johns-Manville Sales Corp.,  691 F.2d 811 (6th Cir.1982), this Court directly addressed this concern: [Johns-Manville] urges with particular force that punitive damages should not be awarded against a company that faces a multitude of product liability actions. If punitive damages are awarded in many of these actions, JM argues that it will not be punished, but destroyed. We have read Judge Friendly's interesting essay on such a prospect, and its implica-

tions for the law, in Roginsky v. Richardson-Merrell, Inc.,  378 F.2d 832, 838-41 (2d Cir.1967). However eloquent the essay, it is confessed dictum. Judge Friendly noted that "the New York cases afford no basis for our predicting that the [New York] Court of Appeals would adopt a rule disallowing punitive damages in a case such as this, and the Erie doctrine wisely prevents our engaging in such extensive law-making on local tort liability, a subject which the people of New York have entrusted to their legislature and, within limits, to their own courts, not to us." Id. at 841. So it is here. The relief sought by JM may be more properly granted by the state or federal legislature than by this Court. 691 F.2d at 817. Accordingly, we adhere to reasoning of the court in Moran and reject the so-called "overkill doctrine" as a basis for denying an otherwise proper punitive damages recovery. Next, with respect to the concern pertaining to the exhaustion of a finite amount of resources, we similarly believe that such a public policy argument is not a proper basis upon which this Court can rest its decision. As an institution, this Court is empowered to exercise judicial authority over certain matters where both subject matter and personal jurisdiction exist.

Thus, we reject the exhaustion of a finite resource argument as a basis for denying an otherwise proper punitive damages recovery. In Johnson v. Husky Industries, Inc.,  536 F.2d 645 (6th Cir.1976), this Court summarized the law in Tennessee on punitive damages. Under Tennessee law punitive damages may only be awarded in cases involving fraud, malice, gross negligence or oppression, where a wrongful act is done with a bad motive or so recklessly as to imply a disregard for social obligations, or where there is such willful misconduct or entire want of care as to raise a presumption of conscious indifference to consequences. Inland Container Corp. v. March, 529 S.W.2d 43, 45 (Tenn.1975). Such damages are allowed as punishment of the wrongdoer and are not based so much upon the nature and extent of the injury as they are upon the oppression of the party who does the injury. Lazenby v. Universal Underwriters Insurance Co., 214 Tenn. 639, 642, 383 S.W.2d 1, 4 (1964). 536 F.2d at 650.

Given this Tennessee standard for the awarding of punitive damages, this Court sees no logical reason why a product liability litigant who presents sufficient evidence to meet this standard should be precluded from recovering punitive damages. See Cathey v. Johns-Manville, infra at 1579-81. Thus, we hold that under Tennessee law an asbestos product liability claimant, such as Mr. Cavett, can recover punitive damages if he meets the Tennessee standard for the awarding of punitive damages.

Having decided in the abstract that under Tennessee law a product liability claimant who presents sufficient evidence to satisfy the Tennessee standard for receiving punitive damages will not be foreclosed from such a recovery simply because his cause of action is founded upon a theory of products liability, it remains for us now to determine whether Mr. Cavett presented sufficient evidence to satisfy this standard. In Moran v. Johns-Manville Sales Corp., this Court was presented with the issue of the allowability of punitive damages in a diversity products liability case governed by Ohio law. In finding punitive damages appropriate in Moran, this Court held: "A jury question of punitive damages was established if a reasonable juror could have concluded that [Johns-Manville's] failure to place warning labels on insulation products before 1964 manifested such a 'flagrant indifference' to users' risk of harm." 691 F.2d at 815.

At trial, and in their pleadings before this Court, both sides have presented extensive evidence concerning the state of medical and scientific knowledge about the health hazard presented by asbestos-containing products. A reasonable jury could rationally have relied upon the plaintiff's evidence, principally the deposition testimo-

ny of a former Johns-Manville Medical Director, the late Dr. Kenneth Smith, to believe that in the late 1940's Johns-Manville was aware that it was "producing disease in employees who manufactured the [asbestos-containing] products" and that "disease [was] being produced in non-JM employees who may use certain of these products." Joint Appendix at A-203. Further, a jury could rationally have believed the testimony of Dr. Smith that he recommended the use of warning or cautionary labels on asbestos-containing products in 1951 or 1952. Joint Appendix at 201. Based upon evidence such as Dr. Smith's deposition the jury could rationally have believed that the failure of Johns-Manville to promptly warn the users of its asbestos-containing insulation products of possible health hazards was the type of wrongful act done so recklessly as to imply a disregard for social obligations or was a demonstration of an entire want of care sufficient to raise a presumption of conscious indifference to the consequences. See Johnson v. Husky Industries, Inc., 536 F.2d at 650; see also Moran v. Johns-Manville Sales Corp., 691 F.2d at 815.

Accordingly, we hold that the trial court was correct in entering judgment upon the jury's award of punitive damages to Mr. Cavett. Violation of Due Process Next we address Johns-Manville's argument that by subjecting it to multiple civil punishment for the same course of conduct its constitutional guarantee of due process is violated. This argument is derived from the language of a decision by the United States District Court for the Northern District of California in a relatively recent mass tort case. In re: Northern District of California "Dalkon Shield" IUD Products Liability Litigation, 526 F.Supp. 887 (N.D.Cal.1981), rev'd on other grounds,  693 F.2d 847 (9th Cir. 1982), cert, denied, 459 U.S. 1171, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983). In the "Dalkon Shield" case the California district court stated: A defendant has a due process right to be protected against unlimited multiple punishment for the same act. A defendant in a civil action has a right to be protected against double recoveries not because they violate "double jeopardy" but simply because overlapping damage awards violate that sense of "fundamental fairness" which lies at the heart of constitutional due process ___ Our law on punitive damages was created in an era of single plaintiff versus single defendant disputes and has not yet been adapted to the complexity of multiparty litigation. Common sense dictates that a defendant should not be subjected to multiple civil punishment for a single act or unified course of conduct which causes injury to multiple plaintiffs. 526 F.Supp. at 899-900.

While this fundamental fairness public policy argument is not without some appeal, we reject it as a basis for foreclosing the awarding of punitive damages in this Tennessee diversity case. As a matter of federal constitutional law we believe that the presence of a judicial tribunal before which to litigate the propriety of a punitive damages award provides Johns-Manville with all of the procedural safeguards to which it is due. As a matter of state public policy we do not believe that the Tennessee Supreme Court would proscribe the availability of punitive damages merely because the defendant's alleged tortious behavior resulted in harm to a large number of people. Cf. Froud v. Celotex Corp., 107 Ill.App.3d 654, 63 Ill.Dec. 261, 264, 437 N.E.2d 910, 913 (1982) ("We do not believe that defendants should be relieved of liability because, through outrageous misconduct, they have managed to seriously injure a large number of persons. Such a rule would encourage wrongdoers to continue their misconduct because, if they kept it up long enough to injure a large number of people, they could escape all liability for punitive damages."), rev'd on other grounds, 98 I11.2d 324, 74 Ill.Dec. 629, 456 N.E.2d 131 (1983).

Accordingly, we hold that the defendant was not deprived of due process by the awarding of punitive damages in this case.

Remittitur

Next we address Johns-Manville's argument that the jury's award of both compensatory and punitive damages was excessive and that the trial court should have ordered a remittitur of the awards.

In Manning v. Altec, Inc.,  488 F.2d 127 (6th Cir.1973), this Court quoted approvingly the observation of the District of Columbia Circuit concerning remittiturs. In part, this Court noted: Where the jury finds a particular quantum of damages and the trial court refuses to disturb its findings on the motion for a new trial, the two factors press in the same direction, and an appellate court should be certain indeed that the award is contrary to all reason before it orders a remittitur or a new trial. 488 P.2d at 133 (quoting Taylor v. Washington Terminal Company, 409 P.2d 145, 148 (D.C.Cir.); cert, denied, 396 U.S. 835, 90 S.Ct. 93, 24 L.Ed.2d 85 (1969)). Applying this standard to the evidence presented at trial, we cannot say that we are "certain indeed that the award [was] contrary to all reason." At trial it was established that Mr. Cavett was 68 years old at the time of trial, with a life expectancy of 11.39 years. Joint Appendix at A-124, A-226. It was also established that prior to being stricken by lung cancer, Cavett was gainfully employed and earning in excess of $24,000 a year. Mr. Cavett testified that had he not gotten ill, he intended to continue working until age 70 and perhaps longer. Joint Appendix at A-141. Also, there was evidence that as of the time of trial Mr. Cavett had incurred medical expenses of approximately $26,000. Joint Appendix at A-225.

The parties are in agreement that, if he prevailed, Mr. Cavett was entitled to receive compensation for his medical expenses, loss of earning capacity, pain and suffering and loss of enjoyment of life.

Johns-Manville contends, however, that these items cannot reasonably support an $800,000 compensatory award. We ,do not agree. While we recognized that $800,000 is a sizeable compensatory award on the record before us, we are not prepared to disregard the determination of both the jury and the trial judge and reduce this award.

With respect to the punitive damages award, it is the rule in Tennessee that "[t]he amount to be awarded as punishment in a civil action, of course, must depend upon all of the circumstances." Loope v. Goodings Million Dollar Midways, Inc., 553 S.W.2d 573, 575 (Tenn. 1977). In fully laying out the circumstances of this case, Johns-Manville argues, with some force, that this Court should be mindful that it is currently involved in a large number of other suits and that punitive awards of the magnitude at bar will surely annihilate the company. While this Court is aware that a $1,500,000 punitive damage award will increase the difficulty that Johns-Manville faces in attempting a Chapter 11 reorganization, this Court is also aware that there is evidence in the record which suggests that Johns-Manville knew of the tremendous health hazards certain of its products represented and for some twelve or thirteen years refused to even warn the users of these products of the health hazards. When the particular facts and circumstances of this case are reviewed in this light, we are not prepared to disregard the determination of the jury and trial judge. Accordingly, we affirm the decision of the district court in denying the defendant's motion for a remittitur. Failure to Rule on Motion for A New Trial Next, we address Johns-Manville's argument that the district court failed to rule on its motion for a new trial. JohnsManville contends that the trial court, in ruling on defendant's posttrial motion for judgment notwithstanding the verdict, or in the alternative, for a new trial or remittitur, "apparently failed to consider defendant's grounds for new trial." Appellant's Brief at 30. It is clear that: A motion for new trial is addressed to the sound discretion of the Court, and

should be granted if it will do substantial justice. The trial judge has a responsibility to weigh the evidence and to set aside the jury's verdict when, in his conscientious opinion, the verdict is contrary to the weight of the evidence. Cecil Corely Motor Company, Inc. v. General Motors Corporation, 380 F.Supp. 819, 859 (M.D.Tenn.1974). Johns-Manville was also entitled to have the court pass upon its motion for a new trial in the exercise of its own independent judgment. General American Life Insurance Company v. Central National Bank of Cleveland, 136 F.2d 821, 823 (6th Cir.1943). We do not, however, believe that it is accurate for Johns-Manville to state that the triai court failed to properly consider and rule on defendant's motion for a new trial. The court did pass upon defendant's motion for judgment notwithstanding the verdict, or in the alternative, for a new triai or remittitur. Defendant's motion was denied and the clerk was instructed to enter judgment in favor of plaintiff for the verdict amount. Implicit in that instruction is the fact that defendant's motions were denied.

The decision of a trial judge to deny a motion for a new trial should be reversed only on the showing of an abuse of discretion. Hannah v. Haskins,  612 F.2d 373 (8th Cir.1980). Similarly, the trial judge, in ruling on the sufficiency of the evidence in a motion for a new trial, is afforded broad discretion by a reviewing court. See Music Research, Inc. v. Vanguard Recording Society,  547 F.2d 192 (2d Cir.1976). Since Johns-Manville has not demonstrated that the trial judge abused his discretion, we find no merit in this argument and accordingly affirm the trial judge's denial of the motion for a new trial.

Evidentiary Rulings Next we address Johns-Manville's argument that the trial court Committed various prejudicial errors in admitting incompetent evidence, irrelevant evidence and evidence which was unduly prejudicial. Specifically, Johns-Manville contends that the trial court committed reversible error in admitting four categories of evidence. We will briefly address each category of evidence. At trial, the court admitted into evidence certain documents commonly called the "Sumner Simpson Papers." Johns-Manville complains that the court "apparently" held that it was collaterally estopped to deny the authenticity of those documents because they were found to be authentic in a proceeding before the United States District Court in South Carolina, and that the court subsequently misapplied the doctrine of collateral estoppel. We do not agree.

On March 24, 1982, a hearing was held before Judge Porter, in chambers, by telephone communication with the attorneys for the parties. During the course of the hearing, the court admitted the Sumner Simpson Papers as "admissible or relevant to the issue of notice and punitive damages." Joint Appendix at A-40. (Transcript of Pretrial Conference (March 24, 1982)). The court stated further that "We were advised this morning of a late filing of that by Mr. Gillenwater indicating a court ruling elsewhere that these were admissible as ancient documents. But, in any event our ruling is the same. It will be the same as it was in the Bunch case and was in the Bollinger case. So, we will'if there's any reason why we should depart from that ruling, we'll take another look at it." Id. at 40-41.

Federal Rule of Evidence 901 provides: "The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." The trial judge obviously found that the evidence provided by Cavett was sufficient to support a finding that the Sumner Simpson Papers were authentic. On the record before us we cannot say that the trial judge abused his discretion in so ruling. Accordingly we find that the trial court did not err in admitting the Sumner Simpson Papers into evidence.

Johns-Manville also complains that the trial court improperly and without proper authentication admitted into evidence two letters from Dr. Daniel Braun to Hugh Jackson, the so called "Braun Letters".

We note that in the companion case also before this Court, Cathey v. Johns-Manville, Johns-Manville admitted the authenticity of the letters while denying their admissibility. See Appellees Brief at Appendix 2, Appendix 3. Apparently, it was this admission of authenticity which lead the trial court to admit the Braun Letters into evidence. See Joint Appendix at A218-20.

Before this Court, Johns-Manville contends that there may be strategic reasons for not contesting the admissibility of evidence in one case and denying the admissibility of that same evidence in another case. While this may well be true, we believe that once a definitive ruling on the authentication of the evidence was made in the Cathey case and this ruling was brought to the attention of the court, Johns-Manville was obligated to somehow rebut the force of that prior admission. On the record before us we find no contradictory evidence which effectively challenges the authenticity of the Braun Letters and thus, we cannot say that the trial judge abused his discretion in this respect. Accordingly, we find that the trial court did not err in admitting the Braun Letters into evidence.

Johns-Manville also complains that the trial court improperly allowed a defense witness, Mr. William Reitze, to be cross-examined concerning the labeling of asbestos fiber shipping bags. On direct examination Mr. Reitze testified concerning defendant-appellant's labeling of its asbestos-containing products and was allowed to read a caution label exemplar into evidence. Mr. Reitze also testified concerning changes made in the caution labels by Johns-Manville as a result of the passage of Occupational Safety and Health Administration Law and the implementation of various OSHA regulations.

On cross-examination, and over JohnsManville's objections, Mr. Reitze testified that as a member of Johns-Manville's Labeling Review Committee, he was involved in the determination of the suitability of the present warning labels used with asbestos fiber and products containing asbestos fiber. Our review of the record convinces us that this cross-examination is within the subject matter of the direct examination and therefore proper under the Federal Rules of Evidence. See Fed.R.Evid. 611(b). Accordingly, we find that the trial court did not err in allowing the cross-examination of Mr. Reitze.

Johns-Manville also complains that the trial court erred in allowing into evidence the deposition testimony of its former Medical Director, Dr. Kenneth Smith. Further, Johns-Manville specifically objected to two portions of Dr. Smith's deposition concerning: a conversation between Dr. Smith and the Medical Director of Canadian JohnsManville, and the labeling of JohnsManville's diatomaceous earth products.

Johns-Manville contends that the statement by the Medical Director of Canadian Johns-Manville, Dr. Stephenson was irrelevant hearsay, unduly prejudicial, and should have been excluded. When taken within the context from which it came, however, the relevance of the statement of Dr. Stephenson becomes apparent. Dr. Smith testified concerning his knowledge of the relationship between the inhalation of asbestos fibers and the development of asbestosis in persons other than employees of Johns-Manville, specifically civilians not exposed occupationally to asbestos. Dr. Smith related the story of his conversation with Dr. Stephenson as but one early facet of the development of that knowledge. We believe such knowledge by a Johns-Manville employee is relevant to the issue of Johns-Manville's knowledge of the hazards associated with exposure to airborne asbestos fibers.

Federal Rule of Evidence 804(b)(3) provides, in part: Rule 804(b) Hearsay exceptions. The following are not excluded by the hearsay rule if the declarant is unavailable as a witness: * * * * * * (3) Statement against interest. A statement which was at the time of its making so far contrary to the declarant's

pecuniary or proprietary interest, or so far tended to subject him to civil or criminal liability, or to render invalid a claim by him against another, that a reasonable man in his position would not have made the statement unless he believed it to be true. Given the context of Dr. Stephenson's statement, and considering his position as Medical Director of Canadian Johns-Manville, we believe Dr. Stephenson's statement fits within this hearsay exception and we hold that the trial court did not err in allowing this testimony.

Johns-Manville also claims that the trial court erred in allowing in evidence the testimony of Dr. Smith concerning the labeling of diatomaceous earth, since such testimony is irrelevant to the issues concerning asbestos products. In arguing for the admission of this evidence, we believe that counsel for Mr. Cavett adequately demonstrated the relevance of this evidence by pointing out: [T]he purpose of the inquiry concerning diatomaceous earth was that they labeled the diatomaceous earth, and the studies on diatomaceous earth were done after the studies, initial studies were done on asbestos, and the hazards of asbestos were established even before the hazards of diatomaceous earth, and yet they put the warning labels on diatomaceous earth and not asbestos. That's the significance of it. Joint Appendix at A-175.

With respect to many of these evidentiary issues Johns-Manville has complained that the trial court erred by admitting prejudicial evidence and thereby deprived it of a fair trial. We do not agree. Under Federal Rule of Evidence 403 the admission of allegedly unduly prejudicial evidence is placed within the sound discretion of the trial judge. See In re Beverly Hills Fire Litigation,  695 F.2d 207, 217-18 (6th Cir.1982), cert, denied, 461 U.S. 929, 103 S.Ct. 2090, 77 L.Ed.2d 300 (1983). Consequently, a trial judge's ruling will not be overturned unless he has clearly abused his discretion. See id.; United States v. Johnson,  558 F.2d 744, 746 (5th Cir.1977), cert. denied, 434 U.S. 1065, 98 S.Ct. 1241, 55 L.Ed.2d 766 (1978). Since we find that the trial judge has not abused his discretion, we accordingly uphold the various evidentiary rulings made by the trial judge.

Ten Year Statute of Repose

Last, we address Johns-Manville's argument that it has a vested right in the ten year statute of repose contained in the Tennessee Products Liability Act, as originally enacted, which constitutionally could not be abrogated by the retroactive application of the amendment removing asbestos cases from the purview of the statute of repose. The Tennessee Products Liability Act of 1978, Tenn.Code Ann. §§ 29-28-101 thru 29-28-108, became effective on July 1, 1978. As originally enacted, Section 29-28103 provided: Any action against a manufacturer or seller of a product for injury to person or property caused by its defective or unreasonably dangerous condition must be brought within the period fixed by §§ 28-3-104, 28-3-105, 28-3-202 and 472-725, but notwithstanding any exceptions to these provisions it must be brought within six (6) years of the date of injury, in any event, the action must be brought within ten (10) years from the date on which the product was first purchased for use or consumption, or within one (1) year after the expiration of the anticipated life of the product, whichever is the shorter, except in the case of injury to minors whose action must be brought within a period of one (1) year after attaining the age of majority, whichever occurs sooner, (emphasis added).

Within a year of its effective date, however, this statute was amended by the enactment of Section 29-28-103(b) which provided: "the foregoing limitation of actions shall not apply to any action resulting from exposure of asbestos." This amendment, making the ten year statute of repose inapplicable to asbestos-related injuries became effective on July 1, 1979.

Mr. Cavett, was first told and therefore first discovered that he was suffering from an injury as result of his exposure to asbestos on approximately November 4, 1981, as a result of a letter from his treating physician Dr. William K. Swann. See Joint Appendix at A-144. The plaintiff filed his complaint and the action was commenced on December 4, 1981. Since the plaintiff's cause of action arose and accrued in November 1981, after the effective date of the July 1, 1979, amendment to the Tennessee Products Liability Act, the application of that amendment to the present action is not violative of Article I, Section 20 of the Tennessee Constitution, dealing with retrospective laws. See Clay v. Johns-Manville Sales Corp.,  722 F.2d 1289, 1291-92 (6th Cir.1983), cert, denied, ' U.S. ------------, 104 S.Ct. 3537, 82 L.Ed.2d 842 (1984); McCroskey v. Bryant Airconditioning Co., 524 S.W.2d 487, 490 (Tenn.1975). Thus, there has been no retrospective application.

Due to the fact that Cavett's cause of action accrued after the effective date of the amendment, Johns-Manville, neither acquired nor developed a vested right. It is the time of the accrual of an action which determines the applicable statute of limitations. McCroskey v. Bryant Airconditioning Co., 524 S.W.2d at 490; Watts v. Putnam County, 525 S.W.2d 488 (Tenn. 1975); Teeters v. Currey, 518 S.W.2d 512 (Tenn.1974).

As this Court has stated, there are several exceptions to the Tennessee statute imposing the ten year limit on bringing actions against a manufacturer or seller. The third exception to the general ten year limit was adopted by the 1979 amendment to the act by the addition of subsection (b) which excepts "any action resulting from exposure to asbestos." Mathis v. Eli Lilly and Co.,  719 F.2d 134, 136 (6th Cir.1983). Further, this Court stated that in tort claims there is no cause of action and, therefore, no vesting of property rights until an injury actually occurs. 719 F.2d at 141.

The present case is distinguishable from the cases cited by Johns-Manville, for the proposition of its vested rights. In each of these cases cited by the defendant, including Murphree v. Raybestos-Manhattan, Inc., 696 F.2d 459 (6th Cir.1982), the injuries were discovered and therefore the causes of actions accrued during a time that the statutes of repose or limitations were in effect. In the present case, however, since the cause of action accrued after the effective date of the July 1, 1979 amendment, excepting the asbestos claims from the ten year statute of repose, no vested rights arguments exist. Accordingly, we hold the plaintiff was therefore not limited in proving exposures to Johns-Manville products first purchased after July 1, 1969, and the trial court was correct in so ruling.

CONCLUSION Having considered and rejected each of the arguments raised by Johns-Manville on this appeal, this Court concludes that the trial court was correct in its various rulings and properly entered judgment upon the jury's verdict.

Accordingly, the judgment of the Honorable David S. Porter is hereby affirmed.

II.

SALES CORPORATION This products liability action was originally commenced by plaintiffs Elmer L. and Martha Jo Cathey, citizens of Tennessee, against 23 defendants, alleged to be citizens of states other than Tennessee, in Davidson County (Tennessee) Circuit Court on November 29, 1977. That action was voluntarily dismissed by the plaintiffs in March 1981, pursuant to Rule 41 of the Tennessee Rules of Civil Procedure, and the instant action was, filed in United States District Court for the Middle District of Tennessee on March 27, 1981. Federal jurisdiction was based upon diversity of citizenship. 28 U.S.C. § 1332 (1982).

In their complaint the plaintiffs alleged that the defendant, Johns-Manville, and the other defendants manufactured, distributed and sold asbestos-containing insulation

products. Plaintiffs alleged that these products were defective and unreasonably dangerous, and therefore, that the defendant manufacturers were liable under a theory of strict liability in tort. In the alternative, the plaintiffs contended that the defendants negligently manufactured and sold such products. At trial, however, the plaintiffs abandoned the negligence count and proceeded only on strict liability, and the jury was charged only on strict liability.

Prior to trial, the plaintiffs settled with defendants Nicolet, Inc., H.K. Porter Co. and Southern Textile Co., and orders of compromise and dismissal were entered. On November 27, 1981, defendants moved in limine for the court to strike plaintiffs' claim for punitive damages. At a pretrial conference of December 11, 1981, the court orally granted defendants' motion, and an order granting defendants' motion was entered on the same day.

On May 19-21, 24-27, and June 1-2, 1982, the case was tried to a jury against the remaining defendants: Johns-Manville Sales Corporation, Owens-Corning Fiberglass Corporation, Celotex Corporation, Raybestos-Manhattan, Inc., Owens-Illinois, Inc., GAF Corporation, Fibreboard Corporation, Pittsburgh Corning Corporation, and Unarco Industries, Inc., in the United States District Court for the Middle District of Tennessee before the Honorable Thomas A. Wiseman, Jr. At the close of plaintiffs proof, a directed verdict was entered in favor of GAF Corporation and Fibreboard Corporation. At the close of all proof, a directed verdict was entered in favor of Owens-Illinois.

Following deliberation, the jury returned a verdict in favor of Mr. Cathey against defendant Johns-Manville for $12,000 in compensatory damages. The jury found in favor of all other defendants, i.e. Celotex, Owens-Corning, Raybestos-Manhattan (Raymark) and Pittsburgh Corning, as to Mr. Cathey's claims, and found in favor of all defendants as to Mrs. Cathey's loss of consortium claim. Judgment pursuant to this verdict was entered by the court on June 2, 1982.

Following the trial, plaintiffs filed a motion for new trial or in the alternative an additur and defendant Johns-Manville filed a motion to alter or amend the judgment. Both of these motions were denied by the district court. On June 24, 1982, plaintiffs filed a notice of appeal, and defendant, Johns-Manville filed its notice of appeal on July 1, 1982.

On August 28, 1982, defendant, JohnsManville filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., in the United States Bankruptcy Court for the Southern District of New York. Pursuant to that filing, defendant OwensCorning, Inc. filed a motion with this Court that all proceedings in this appeal be stayed pursuant to the automatic stay provisions of the Bankruptcy Code, 11 U.S.C. § 362. See Cathey v. Johns-Manville Sales Corp.,  711 F.2d 60 (6th Cir.1983). On November 1, 1983, the bankruptcy court issued an order lifting the automatic stay for the limited purpose of allowing this appeal to proceed.

On plaintiff's motion, Martha Jo Cathey was substituted as the sole plaintiff in this case due to the death of her husband, Elmer L. Cathey, on October 21, 1983. In addition, the plaintiffs appeal and the appeal of Johns-Manville were consolidated pursuant to the procedure of this Court for cross-appeals.

In 1951, Mr. Cathey began a career as an insulation worker. Starting as an insulator's helper in 1951, Mr. Cathey became an insulator in 1958 and continued insulation work until 1980. In April 1980, he was forced to quit work because of shortness of breath.

Mr. Cathey first discovered he was suffering from asbestosis in November 1977, when he received a letter from Dr. Irving J. Selikoff of the Mount Sinai School of Medicine in New York. This letter informed Mr. Cathey of the results of a physical examination conducted by Mount Sinai the previous year.

Dr. Eugene Wolcott testified at trial that he had been the family physician of Mr.