UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE . . . . . . . . . . . . . . . IN RE: . . SPECIALTY PRODUCTS HOLDING . CORPORATION, et al., . . Debtors. . . . . . . . . . . . . . . . .

SPECIALTY PRODUCTS HOLDING . CORP., BONDEX INTERNATIONAL,. INC., . . Plaintiffs, . . v. . . THOSE PARTIES LISTED ON . EXHIBIT A TO COMPLAINT AND . JOHN AND JANE DOES 1-1000, . . Defendants. . . . . . . . . . . . . . . . .

Case No. 10-11780(JKF)

Adv. Pro. No. 10-51085(JKF)

5414 U.S. Steel Tower 600 Grant Street Pittsburgh, PA 15219 January 9, 2013 8:18 a.m.

TRANSCRIPT OF ASBESTOS LIABILITY ESTIMATION TRIAL BEFORE HONORABLE JUDITH K. FITZGERALD UNITED STATES BANKRUPTCY COURT JUDGE

Audio Operator:

Janet Heller

Proceedings recorded by electronic sound recording, transcript produced by transcription service ______________________________________________________________ J&J COURT TRANSCRIBERS, INC. 268 Evergreen Avenue Hamilton, New Jersey 08619 E-mail: jjcourt@jjcourt.com (609) 586-2311 Fax No. (609) 587-3599

2 APPEARANCES: For the Debtor: Jones Day By: GREGORY GORDON, ESQ. DANIEL B. PRIETO, ESQ. THOMAS R. JACKSON, ESQ. 2727 North Harwood Street Dallas, TX 75201 Evert, Weathersby, Houff By: C. MICHAEL EVERT, JR., ESQ. 3405 Piedmont Road, Suite 200 Atlanta, GA 30305 Evert, Weathersby, Houff By: EDWARD F. HOUFF, ESQ. 120 E. Baltimore Street, Suite 1300 Baltimore, MD 21202 For the Committee of Asbestos Personal Injury Claimants: Montgomery, McCracken, Walker & Rhoads By: NATALIE RAMSEY, ESQ. MARK B. SHEPPARD, ESQ. K. CARRIE SARHANGI, ESQ. KATHERINE M. FIX, ESQ. 123 South Broad Street Philadelphia, PA 19109 Montgomery, McCracken, Walker & Rhoads By: MARK FINK, ESQ. 1105 North Market Street Wilmington, DE 19801 Motley Rice LLC By: NATHAN D. FINCH, ESQ. 1000 Potomac St. NW, Suite 150 Washington, DC 20007 Waters Kraus Paul By: SCOTT L. FROST, ESQ. 222 N. Sepulveda Blvd., Suite 1900 El Segundo, CA 90245

3 APPEARANCES (cont'd): For Future Claimants Representatives: Young Conaway Stargatt & Taylor LLP By: EDWIN J. HARRON, ESQ. SHARON ZIEG, ESQ. JOHN T. DORSEY, ESQ. ERIN EDWARDS, ESQ. The Brandywine Building 1000 West Street, 17th Floor Wilmington, DE 19801 Thorp, Reed & Armstrong By: WILLIAM M. WYCOFF, ESQ. JERRI A. RYAN, ESQ. One Oxford Centre 301 Grant Street, 14th Floor Pittsburgh, PA 15219

For RPM International:

TELEPHONIC APPEARANCES: For the Debtors: Jones Day By: JOHN H. CHASE, ESQ. 2727 North Harwood Street Dallas, TX 75201 Richards, Layton & Finger, P.A. By: DANIEL DeFRANCESCHI, ESQ. ZACHERY SHAPIRO, ESQ. 920 North King Street Wilmington, DE 19801 For the Committee of Asbestos Personal Injury Claimants: Montgomery, McCracken, Walker & Rhoads By: LAURIE KREPTO, ESQ. DAVIS L. WRIGHT, ESQ. 123 South Broad Street Philadelphia, PA 19109 Otterbourg, Steindler Houston & Rosen, P.C. By: ANDREW M. KRAMER, ESQ. ROBERT GONNELLO, ESQ, 230 Park Avenue, 29th Floor New York, NY 10169 McDermott Will & Emery By: NAVA HAZAN, ESQ. 340 Madison Avenue New York, NY 10173

For Wachovia Capital Finance Corp.:

For Honeywell:

4 TELEPHONIC APPEARANCES (Contd): Financial Advisors for the Debtors: The Blackstone Group By: JAMIE OCONNELL PAUL SHEAFFER DANIEL CASIERO 345 Park Avenue New York, NY 10154 Klehr, Harrison, Harvey & Branzburg By: DOMENIC PACITTI, ESQ. 919 Market Street Wilmington, DE 19801 Orrick, Herrington & Sutcliffe By: JONATHAN P. GUY, ESQ. KATHLEEN A. ORR, ESQ. RICHARD H. WYRON, ESQ. 1152 15th Street, N.W. Washington, D.C. 20005 Hughes, Hubbard & Reed LLP By: LAUREN ASCHER, ESQ. One Battery Park Plaza New York, NY 10004 Dryvit Systems By: NIKKI WAKEMAN James F. Humphreys & Associates By: BRONWYN RINEHART, ESQ. United Center, Suite 800 500 Virginia Street East Charleston, WV 25301

Interested Party:

Interested Party:

Interested Party:

Interested Party, Dryvit Systems: For Asbestos Plaintiffs:

- - -

5 I N D E X PAGE WITNESSES DR. CHARLES H. MULLIN, JR. Continued Cross Examination by Mr. Sheppard Cross Examination by Mr. Dorsey Redirect Examination by Mr. Evert DR. KIM E. ANDERSON Direct Examination by Mr. Houff Cross Examination by Mr. Mr. Finch Redirect Examination by Mr. Houff SUSAN RATERMAN Direct Examination by Mr. Frost Cross Examination by Mr. Houff Redirect Examination by Mr. Frost DR. ARNOLD BRODY Direct Examination by Mr. Frost Cross Examination by Mr. Houff Redirect Examination by Mr. Frost JAMES SINCLAIR Direct Examination by Mr. Sheppard Cross Examination by Mr. Jackson MARK IOLA Direct Examination by Ms. Ramsey 241 218 231 183 208 215 143 175 182 60 90 132 8 33 57

6 EXHIBITS D-127 D-57 D-58 ACC-1007 ACC-1008 ACC-1009 ACC-1011 D-59 D-60 E-384 M-136 M-135 ACC-1004 ACC-1005 M-131 M-130 ACC-1006 ACC-87 ACC-1012 ACC/FCC ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR ACC/FCR 304 338 176 113 95 196 385 386 227 388 390 179 414 123 Dr. Anderson C.V. PowerPoint Presentation (Demonstrative Exhibit) Dr. Anderson Report (Demonstrative Exhibit) Nine View Points by Sir Austin Bradford Hill Dr. Lemens Article IARC Executive Summary Berman and Crump Paper Response to Mr. Brodkin Response to Mr. Dement Video Raterman C.V. Raterman Report PowerPoint Presentation Photo Brody C.V. Brody Report Slide Show Presentation James Sinclair C.V. James Sinclair Report (Demonstrative Exhibit) Document Document Document Document Document Document Document Document Document Document Document Document Document Verdict Sheet ID. 60 60 61 109 111 114 126 133 133 156 174 174 174 175 184 185 185 238 238 241 241 241 241 241 241 241 241 241 241 241 241 241 241 EVD. 62

7 1 2 MR. SHEPPARD: THE COURT: Good morning, Your Honor. Dr. Mullin, I see they

Please be seated.

3 did not give you a day to sleep in. 4 5 THE COURT: (Laughter) Okay. This is the continuation of the

6 evidentiary hearing on estimation in the Specialty Products 7 Holdings case. The list of participants I have by phone, Laura

8 Ascher, Dan Casiero, John Chase, Daniel DeFranceschi, Robert 9 Gonnello, Karen Grivner, Jonathan Guy, Nava Hazan, Andrew 10 Kramer, Laurie Krepto, Jamie OConnell, Kathleen Orr, Domenic 11 Pacitti, Bronwyn Rinehart, Zachary Shapiro, Paul Sheaffer, 12 Nikki Wakeman, Davis Wright and Richard Wyron. 13 changes in entries of appearance in court? 14 15 16 17 18 19 20 21 22 23 24 25 MR. SHEPPARD: MR. HARRON: MR. GORDON: THE COURT: DR. MULLIN: THE COURT: DR. MULLIN: None for the ACC, Your Honor. Are there any

None for the FCR. None for the debtors, Your Honor. Okay. I am. Youre still under oath, sir. I understand. Are you ready, Dr. Mullin?

DR. CHARLES H. MULLIN, WITNESS, PREVIOUSLY SWORN THE COURT: Okay. When youre ready.

MR. SHEPPARD: THE COURT:

May I, Your Honor? Good morning.

Yes, Mr. Sheppard.

MR. SHEPPARD:

Just one matter of brief housekeeping, WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 Your Honor. With our demonstrative exhibit yesterday weve

2 taken the liberty of re-marking it so that -- if I can hand 3 this up to the Court? 4 5 Thank you. 6 MR. SHEPPARD: They were not exactly in the order THE COURT: If I may? Oh. Thats -- I have a set. Okay.

7 that I had put them yesterday. 8 9 THE COURT: Oh. Okay. Thanks.

MR. SHEPPARD:

And let the record reflect that Ive

10 provided a copy to debtors counsel and to the witness. 11 12 13 BY MR. SHEPPARD: 14 Q 15 A 16 Q Dr. Mullin, good morning. Good morning. I may have to go back just a little bit to reorient us, if Im certainly not going to try to mischaracterize All right? THE COURT: Thank you.

CONTINUED CROSS EXAMINATION

17 thats okay.

18 your testimony. 19 A 20 Q 21 22 23 Im sorry. 24 Q

Thats fine. Lets go back to Slide 2, please? THE COURT: The ELMO? Oh. Can you switch it from the ELMO?

MR. SHEPPARD:

Dr. Mullin, weve talked a little bit about this

25 yesterday, and I just want to make sure, again, that we -- that WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 I understand that we understand exactly what it is that youre 2 measuring here with at least one of your forecasts. You

3 testified that youve done a number of different forecasts, is 4 that right? 5 A 6 Q Correct. And that youre recommending that all of them, in some

7 fashion or another, could be accepted by the Court depending on 8 her findings on rulings of law, isnt that right? 9 A Thats correct. I tried to quantify the loss under

10 alternative theories. 11 Q Now, speaking specifically about the -- what I call the --

12 the damages, or several liability measure, which is the first 13 one that you opined in your report, correct, the $95 million 14 estimate? 15 A 16 Q The several share of liability. Yes. Yes.

Youre not suggesting, Dr. Mullin, that the

17 plaintiffs would accept those disaggregated amounts in 18 settlement, are you? 19 A Im not suggesting that in a joint and several State Court

20 that thats what they would accept, because that has transfers 21 of liability imbedded into the State Court rules. So, in that If they

22 framework I dont think they would accept that amount.

23 were in a several jurisdiction they may, but its a different 24 set of obligations. 25 Q And as I understand your report, the vast majority of WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 states are either joint and several, or hybrid, isnt that 2 right? 3 A I mean, theres been a few different lists of I

10

4 categorizations by various sets of counsel in that regard.

5 think whats very true, as opposed to counting up states, 98, 6 99 percent of the claims are filed in jurisdictions that have 7 some form of joint and several liability rules. 8 Q Okay. So, in 95 percent of the claims what youre

9 actually measuring has nothing to do with the reality of the 10 tort system, right? 11 A It does. Its just -- its one component of it. This is

12 -- it is liability.

Its their share as though all the coSo, if -- I said a few times,

13 defendants were back with them.

14 if Johns Manville, Eagle Picher, U.S.G., all those co15 defendants were in the courtroom with them, its under that 16 world what they would pay. 17 Q Okay. But thats not the world of the United States of

18 America tort system, isnt that right? 19 A I mean, those companies have gone through reorganizations.

20 They are not there today. 21 Q 22 A 23 Q So theyre not in the room, correct, Dr. Mullin? Thats correct. And in your theory, Dr. Mullin, you also postulate that

24 there would be some reduction based upon this theory of 25 implicit defense fees, right? I have costs up there, but I

WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 think your term was fees, right? 2 A I mean, its -- as I said, its a reduction relative to

11

3 what they were paying in the 2000s.

Its an increase relative

4 to what they were paying in the 1990s. 5 Q And again, you have no evidence to suggest that a

6 plaintiff would accept that amount, do you? 7 A The -- if you want to look at -- they would need to change I mean, there is

8 how they were choosing to defend claims.

9 evidence that when they individually evaluate the claims, as 10 opposed to doing an inventory deal, they pay less per claim and 11 the claimants do accept less. So, we see that when it depends

12 on the settlement strategy that the defendants take, so when 13 they take a more aggressive defense posture they pay more to 14 their attorneys and they pay less to the claimants. 15 Q Okay. So its only in a group settlement situation where

16 you have any evidence at all that a plaintiff may accept that 17 amount that youre postulating in this theory? 18 A Im saying you can -- I dont think I agree with that.

19 Im not sure exactly where youre going. 20 Q Well, let me try it this way. You said that its possible

21 where a plaintiff engages in a group settlement that they might 22 agree to some reduction based upon implicit defense fees, is 23 that right? 24 A Well, I think we see an empirical fact that they did. So

25 when the claims were individually evaluated, the average WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 payment to claimants was about 45,000 per claim.

12 When they did So we

2 large inventory deals, it was about 63,000 per claim.

3 can see factually that thats actually what happened there. 4 Q Okay. And I believe you testified yesterday that that

5 average amount that -- between the plaintiff and the debtors 6 was the basis for coming up with the aggregate amount that was 7 used in these group settlements, an average based upon the 8 historical negotiations between the parties, right? 9 A I think what I said yesterday was that if were talking

10 about the second or the third or the fourth group inventory 11 deal, that they would have naturally referred to the earlier 12 large deal that they did. 13 negotiation from scratch. 14 do that. 15 Q They wouldnt have started the I wasnt there. I didnt see them

That seems very logical in a negotiation position.

So the past average settlement would be at least the

16 starting place for predicting the future, right? 17 A If what you want to predict is if they did another group

18 deal with the Simmons firm, a logical place to start would be 19 what was the previous group deals? 20 Q And I believe you testified yesterday that you would

21 expect that Bondex, if it were in the tort system, would 22 continue with this trend of increasing group deals, right? 23 A The economic incentive for them is when a law firm has a

24 large enough group of claims, that that makes sense to do, its 25 less expensive to them. They can have a net savings, so its WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard

13

1 definitely in their economic incentive to do group settlements 2 of the nature of the 17 when thats available. Its -- if an

3 attorney only represents two or three claimants, that doesnt 4 make sense. 5 claims. 6 Q 7 A So, is that a yes? I can tell you what the economic incentive is. I mean, It doesnt work. So you need a large inventory of

8 theyve been doing it with this -9 Q 10 A Well, my question was a yes or no, I think. I think those three firms theyve been doing it with for I mean, empirically they

11 four, five, six years, they may. 12 hadnt yet. 13 Q

I cant rule out that they would have added more. Now, in coming up with this theory youve

All right.

14 testified that it was based upon this literature, at least from 15 the 1970s, regarding econometrics in settlement, study of the 16 tort system, isnt that right? 17 A Well, the theory is well developed in the law and I mean, the original papers, where you

18 economics literature.

19 say Nicholsons, the seminal paper in 82 on disease incidence, 20 theres Landis, Gould, and Posner are the seminal papers that 21 are 70, 72. I may have the dates a little off. But on the

22 transaction cost model of settlements, thats when its first 23 introduced in that literature, and then theres 40 years of 24 subsequent publications. 25 Q Okay. In that 40 years of subsequent publications has WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 anybody used the term implicit defense fees the way you have 2 here? 3 A

14

Theyve talked about how the transaction costs cause it to

4 deviate. 5 Q 6 fees. 7 A Okay. My question was pretty simple. Implicit defense

Is it used in any of those -Thats a term that I just defined a term in my expert

8 report to refer to a concept in the literature. 9 Q So, your theory is so novel that you actually had to make

10 up a term? 11 A No. The theory has been in the literature for 40 years. They just called it the transaction

12 They didnt have a term.

13 cost model of settlement, which is a long, wordy thing to say 14 all the time how the transaction cost model of settlement 15 changes something. I shortened that to implicit defense costs That was my

16 to contrast it with the explicit defense costs.

17 choice of how I wanted to do the exposition, but the concept 18 has been there for 40 years. 19 20 51? 21 22 -23 24 Honor. 25 THE COURT: All right. Thank you. MR. SHEPPARD: Defendants Demonstrative 51, Your MR. SHEPPARD: I think its 51. THE COURT: Im sorry. What are we looking at, Mr. Can we have Defendants Demonstrative

WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 Q Okay.

15

Dr. Mullin, I think this was one of the slides that

2 Mr. Evert showed you yesterday on direct, correct? 3 A 4 Q Correct. And this has to do with your allocation across the three

5 different companies of the liability, and here were talking 6 about the historical payments, isnt that correct? 7 A 8 Q 9 Thats correct. Okay. MR. SHEPPARD: Your Honor, give me one second,

10 because I had written D-51, but I may have gotten the number 11 wrong. 12 13 MR. SHEPPARD: (Pause) Is that the one thats up there? Your

14 Honor, Im sorry.

We didnt get a marked set yesterday, so I Its the historical payments by

15 was trying to keep up. 16 exposure dates. 17 18 19 Q 20 A 21 Q 22 A 23 Q 24

UNIDENTIFIED SPEAKER: MR. SHEPPARD: Okay.

Thats it. Is that up there? All right.

Sorry about that, Dr. Mullin. Youre on D-50 now, I think? Oh. So, is it DD-50?

This is D-50, I believe. Okay. MR. SHEPPARD: Debtors Demonstrative 50. I

25 apologize, Your Honor. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 Q Okay. And here I think youve described how you

16

2 allocated, based upon your review of the historical claims the 3 different claims and where they fell in the three different 4 time periods, correct? 5 A This is really just a tabulation of the historical data.

6 Its just purely based on the alleged exposure dates. 7 Q Okay. And if it was in the middle of the column, then

8 that was solely in that era, is that right? 9 A I mean, the first row thats labeled single era means the

10 person is alleging exposure only in one of the three distinct 11 time periods. 12 Q Okay. And then you have some numbers here in the middle

13 that straddle between the two, right? 14 A 15 Q Correct. And if you look at those, 7.7, 7.0, 22.8, 47.7, which

16 represents the amount of liability that is either in Reardon 17 SPHC or SPHC Bondex, or solely SPHC, that comes up to 85.2 18 percent, is that right? 19 A 20 Q 21 Its approximately 85 percent. Thank you. MR. SHEPPARD: Can I have D-13? Defendants

22 Demonstrative 13? 23 Q All right. Now, Dr. Mullin, I also think we talked

24 yesterday a little bit about a judgment, and certain 25 assumptions. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 A

17

I think we had this issue once yesterday, but this appears

2 to be a truncated version of the exhibit, at least what Im 3 observing. 4 Q 5 6 7 8 9 Okay. THE COURT: MR. EVERT: THE COURT: What exhibit is it? Im sorry.

Demonstrative D-13, Your Honor. Thank you. Your Honor, may I approach? I have them all. They were up here

MR. SHEPPARD: THE WITNESS:

10 from yesterday. 11 Q Would you agree with me, Dr. Mullin, that in order to do a

12 forecast any forecaster would have to make certain judgments 13 and assumptions? 14 A Youre going to have to make certain judgments, and

15 theres a reason theres a level of expertise, yes. 16 Q Right. In fact, youve made judgments and assumptions in

17 this case, havent you? 18 A 19 Q Correct. Okay. And I think Mr. Evert, in D-13, took you through

20 one where if you had plotted a straight regression line on that 21 bar graph, you would end up going well past 100 percent of the 22 entire mesothelioma population by -- I guess its somewhere 23 around 2030? 24 A 25 Q Right. Okay. 2030, 2035. And you know that thats simply impossible, right? WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 A 2 Q Correct. So at some point you have to abandon your econometric

18

3 model and exercise some judgment, dont you? 4 A I dont think youre using terms correctly. This

5 extrapolation, its just a simple trend line. 6 theres not an econometric model.

Its not --

What an econometrician is

7 going to tell you you need to do is understand why its 8 changing and whats the implication. You need to get into the

9 data and understand it, and thats really what I walked through 10 yesterday was once you understand it you realize this is really 11 an irrelevant fact because these claims are just leading to an 12 increasing number of dismissals. 13 Q This line, though, is based upon a regression thats done

14 on these data points, right? 15 A 16 Q Correct. Its just a trend line on the data points. Thats where

And that is the core of econometrics, right? Its all about progression, isnt it? Its about identification.

17 you start? 18 A No.

Its understanding what

19 is a process, and -- I mean -- Ill just leave it at no, an 20 econometrician is not going to agree with you that a regression 21 is the core of econometrics. 22 Q Okay. So at some point you figure that this line has to It has to turn at some point, right? It cant -- you cant just simply

23 change, right? 24 A

Well, correct.

25 extrapolate it. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 Q And then you did the same thing in D-14, right, except

19

2 this time we went down, and this was on the average 3 settlements, right? 4 A 5 Q Correct. And in fact, by -- it looks like about 2016, 15, it looks Or the

6 like the plaintiffs are paying the defendants, right? 7 debtors? 8 A Isnt that right?

I mean, it shows you its nonsensical.

Thats right.

You

9 cant just simply extrapolate.

You need to understand the

10 underlying process of whats going on to develop a reliable 11 estimate. 12 Q Right. And once you understand that you have to make

13 certain judgments, then, on how this line doesnt really fit 14 the reality, right? 15 A Well, I mean, I view it much more as letting the data I mean, you dont

16 educate you about whats actually happening. 17 just make up a theory.

You explore the data and you let it I mean,

18 educate you about what was the underlying process.

19 here we saw this was driven down by the advent of the large 20 inventory deals. When we looked at individually evaluated

21 claims that goes away. 22 Q 23 A Okay. And its a process of getting educated from the data.

24 Its not just making an arbitrary decision. 25 Q Okay. Lets go to D-32, Defendants Demonstrative 32. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard

20

1 There youre testifying, Dr. Mullin, this is your $700 million 2 nominal -3 4 MR. SHEPPARD: (Pause) Sorry, Your Honor. I think I have the

5 wrong number up here. 6 7 8 9 you said. 10 MR. SHEPPARD: Yes. Thank you. I must have been one THE WITNESS: MR. SHEPPARD: THE WITNESS: Youre probably looking for 33. Exhibit 33? Thats -- Im guessing, based on what

11 number off. 12 Q Now, this is a model of one of the possible alternatives

13 that you suggested to the Court, right? 14 A No. This was -- the one on the screen is not the full

15 image again, but the one Im looking at in front of me is much 16 more like what I started on the first couple demonstratives I 17 put up. This is simply doing a blind extrapolation, just

18 overlying the Nicholson curve on the history without looking 19 into the data again. So its that simple extrapolation once we

20 have a picture of the history, and says that comes out in the 21 neighborhood of $700 million. 22 Q Okay. And unlike your several share analysis, youre

23 including all the claims here, including group settlements, 24 right? 25 A Thats correct. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 Q Okay. And I think the only difference then is that you

21

2 have a different starting point than Dr. Vasquez and Dr. 3 Peterson in terms of how you calculate average settlement 4 amount, isnt that right? 5 A 6 Q The only difference between what? Between their forecast method and yours in this particular

7 scenario. 8 A 9 Q No. Okay. Thats -- youre not doing just a basic Isnt that what you said? I said

10 extrapolation? 11 A

Well, one, I -- this isnt a forecast I put out.

12 this is a simple extrapolation. 13 a forecast. 14 Q 15 A Okay.

I wouldnt characterize it as

I dont think it has the rigor behind it.

What I did subsequently I would.

If you want me to

16 contrast this to what Dr. Vasquez or Dr. Peterson did, Dr. 17 Vasquez and Dr. Peterson both went in, took an incidence curve. 18 I believe youre correct that Dr. Peterson used the Nicholson 19 curve. Dr. Vasquez used KPMG curve, as well as the Peto Then they

20 method, so he used a different forecast of futures.

21 went in and each of them forecast fairly different pay rates. 22 They forecast fairly different propensities to sue, and they 23 forecast very different average settlement amounts. 24 went in and did each of those components. So they

We could get into a

25 whole discussion of what those components are and how they did WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard

22

1 them, but Im saying its not -- its not just as simple as you 2 stated that its a difference in the average settlement value. 3 They -- theres differences in every single one of those 4 components that went into their forecasts. 5 Q But then you extrapolated out in basically the same

6 amount? 7 A I mean, Dr. Peterson extrapolated along the Nicholson Dr. Vasquez used the KPMG curve, which is fairly

8 curve.

9 indistinguishable from the Nicholson over this time period, but 10 then he also used a methodology called the Peto method, which 11 forecasts approximately 20 percent more claims in his report 12 than the Nicholson curve would forecast, and he took a weighted 13 average of the two, 50/50. So, his trend line is higher So, there

14 because of putting half weight on the Peto method. 15 is a distinction there. 16 17 Q MR. SHEPPARD: Okay.

We can take that one down.

I think you testified yesterday, Dr. Mullin, that in doing

18 your analysis you looked at different types of data, including 19 data from the CCR, isnt that right? 20 A I looked at data from the CCR to confirm that the

21 methodologies I was using were reliable. 22 Q In fact, you said you took great comfort from that data,

23 isnt that right? 24 A I mean, across all the validity checks that I did on the

25 econometrics I was using, those reinforced the reliability of WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 the methods I employed. 2 Q Okay.

23

And, Dr. Mullin, you chose to use for your data set

3 from the CCR the period of 1997 to 2000, correct? 4 A 5 Q 6 you? 7 A I included all the mesothelioma claims in that time Correct. Okay. You didnt include all the mesothelioma claims, did

8 window. 9 Q 10 A 11 Q Okay. I did. Okay. So you made a judgment to use this period, 1997 to But you excluded anything outside that time window?

12 2000, and to ignore these other claims? 13 THE COURT: Im sorry. I apologize, but Im lost. I

14 Are you talking about the comparison with the CCR data? 15 thought that was non-malignant data. 16 misunderstand something? 17 MR. SHEPPARD: He used both, Your Honor, as I Am I -- did I

18 understand it. 19 mesotheliomas. 20

But Im talking now about just the

THE COURT:

Okay.

Well then, somebody has to go back

21 and show me where the CCR data was malignant data versus non22 malignant, because maybe I misunderstood something in the 23 testimony. 24 MR. EVERT: Your Honor, Dr. Mullins direct, we only

25 presented his testimony, youre correct, in regard to nonWWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 malignant data. 2 THE COURT: Okay.

24

Then Im not sure what the line of

3 questions is all about. 4 MR. SHEPPARD: Well, Your Honor, in his report he

5 relied upon the mesothelioma cases as well, but if theyre only 6 presenting the non-malignant data, then -7 Q 8 A 9 Q 10 A 11 Q Is that for the same period, 1997 to 2000? The non-malignant claims? Yes. Yes. Okay. Isnt that less than half of the CCR data that was

12 available to you? 13 A 14 Q I dont know the exact counts. And you also testified -- okay. Its likely. In your report, Dr.

15 Mullin, Exhibit 13 in your report in your case-in-chief, plots 16 out the CCR mesothelioma payments. 17 A 18 Q 19 A 20 21 Can you give me a second to catch up with you? Sure. Thank you. THE COURT: Now -- Im sorry, but where are we now? Your Honor, I am in Dr. Mullins

MR. SHEPPARD:

22 report, Exhibit 13, Page 39. 23 THE WITNESS: I actually dont have a copy of my

24 original report up here. 25 THE COURT: Its -- yes. I dont think one has been

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Mullin - Contd Cross/Sheppard 1 handed up. It was just in the binders, I believe. So its

25

2 probably in the binders behind the witness somewhere. 3 4 second. 5 MR. EVERT: Your Honor, weve marked the report, I MR. SHEPPARD: You should have this -- hang on a

6 believe, as Demonstrative -- oh, now Im going to screw it up. 7 8 THE COURT: Okay. (Pause) Here it is. I have D-10 as the

9 rebuttal, and whats the other one? 10 11 12 13 14 15 16 Honor. 17 18 Q Okay. THE COURT: All right. Thank you. MR. EVERT: Oh. It would be, then, D-9, Your Honor.

THE WITNESS: MR. EVERT: THE COURT: MR. EVERT:

D-9, I think, is the supplemental. D-9.

No, no.

D-9 is the report dated August 15th. Thats it. Thats the report in chief, Your

MR. SHEPPARD:

If youre looking at Defendants Demonstrative

19 Number 9, Dr. Mullin, which is your report, correct? 20 A 21 Q It appears to be a copy of my report. Okay. Yes.

And Exhibit 13 of that report, youre specifically

22 plotting out, are you not, that CCR mesothelioma payments as 23 being driven almost entirely by liability? 24 conclusion there, isnt it? 25 A Thats correct. About 98 percent of the payments fell on WWW.JJCOURT.COM Thats your

Mullin - Contd Cross/Sheppard 1 the blue line. 2 Q Right.

26

And thats what, I believe in your report you said

3 gave you such comfort, isnt that right? 4 A Well, I did on the order of ten different validity checks And in combination across the ten of them, given

5 in my report.

6 that all of them were supported and all came out with, you 7 know, outcomes that made sense, when I put them all together I 8 had great confidence. 9 Q But in this particular example you limited your data set

10 by your own choice to less than half the data, isnt that 11 right? 12 A Well, as I said, I wanted to use stuff that was from a

13 consistent experience in the tort system, and between the 14 Georgine period and how that affected CCR, that those claims 15 behaved differently than the 97 to 2000 window, and the post16 2000 is when the CCR was breaking up. 17 very different because of that. 18 Q Now, another thing you did in connection with this was And that starts to look

19 that you also had to plot the age, correct, which is the left 20 axis of this graph, Exhibit 13 in your report? 21 A 22 Q Yes. The age is on the left hand axis. How

And how did you calculate the age there, Dr. Mullin? Was it by date of death?

23 did you determine age? 24 A

The -- in the report this is one place where there -- I

25 believe this is the one exhibit in the report that had an error WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 in the computer code, which wasnt material to the analysis, 2 but as it turned out we had had age at death, I believe, as

27

3 opposed to age at diagnosis, when age at diagnosis was what we 4 intended to use. We subsequently ran it with the intended

5 variable and it doesnt change it, but that was an error in the 6 original calculation. 7 Q So, it was an error in your computer code which resulted

8 in you aging the plaintiffs in this case, isnt that right? 9 A Correct. I mean, in the -- we intended to run all the In this one

10 ages consistently across all the analyses we did.

11 there was a mistake in the computer code, and it picked up the 12 wrong age variable, and as I said, it didnt make any material 13 difference to the analysis, but that error did exist in the 14 code. 15 Q Another way that you checked this analysis was by looking Do you recall that in your report?

16 at Texas. 17 A 18 Q 19 A

So, I think were switching now? Yes, we are. When we say this analysis, were switching to the joint

20 and several -21 Q 22 A The joint and several analysis. Oh. Correct. That was one of the three things I did was

23 I looked at, I think what I referred to earlier as a -- kind of 24 a quasi-natural experiment that existed in Texas. 25 Q And I believe your theory there is that because Texas went WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 to a hybrid jurisdiction in 2003, that that was a natural

28

2 experiment I think is the way you put it in your report, isnt 3 that right? 4 A I mean, it was a hybrid jurisdiction before, too. I mean,

5 it used to have a 15 percent threshold -6 Q 7 A For the rate? -- and that threshold got raised to 50 percent, but there

8 was a material change in the threshold. 9 Q Okay. There were other material changes in the Texas

10 system that severely affected asbestos plaintiffs, werent 11 there, at that time? 12 A There were definitely other changes, and thats why its

13 not a perfect experiment. 14 Q Okay. There were changes in the causation laws, right --

15 in the law of causation in Texas? 16 A 17 Q 18 A I believe that was a little bit later. Right. But there was -- you know, further out in time, though, is That wasnt contemporaneous.

19 that change. 20 Q 21 A 22 Q 23 A

There was a setting up of MDLs in Texas, right? Correct. There was a set of procedural changes.

And that was at the same time, too, right? Well, the procedural changes were at the same time. The

24 causation was actually at a later point in time. 25 at the same time. WWW.JJCOURT.COM

That was not

Mullin - Contd Cross/Sheppard 1 Q

29

And you didnt include any of those variables, isnt that

2 right? 3 A Well, this is why I said the effect was twofold to The procedural changes went into effect on the

4 fourfold.

5 claims that had been filed, say, a day before the legislative 6 change were subject to the procedural changes, but not subject 7 to the change in the threshold. 8 Q 9 A Okay. And as a result you could look and see claims subject to

10 the procedural changes that were not subject to the joint and 11 several change in threshold were paid more money than the ones 12 that were subject to the change in the threshold, as well. 13 this is -- thats where you get the twofold impact I talked 14 about yesterday. 15 impact. 16 Q Okay. You didnt take any of those things into account, If you go all the way back you get a fourfold So

17 isnt that right? 18 A 19 Q 20 A I think in what I just I described I did -Okay. -- saying you can look in a period where the procedural

21 changes affected both sides. 22 Q Now, the other thing, Dr. Mullin, with regard to this was

23 that you suggested that you would use age as a proxy for 24 liability, right? 25 A Age is -- age in this context is being used as a proxy for WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 damages. Its the damages the claimant suffered, so if a

30

2 claimant is younger they have more years of lost life and they 3 tend to have higher damages. Thats what we saw in the verdict Its --

4 data thats a very strong empirical relationship. 5 liability is a question distinct from damages. 6 Q

As I understand it, though, the reason that you chose age

7 was because it was so closely correlated with those damages, 8 isnt that right? 9 A 10 Q It is very closely correlated with damages. And you had to choose a variable and you decided in your

11 judgment to choose age, right? 12 A 13 Q Correct. Okay. Take a look at the graph I have which is part of If you assume, Dr. Mullin, that we

14 ACC/FCR Demonstrative 1002.

15 did an R-squared analysis of these other factors, pain and 16 suffering, state, law firm, group settlement, the higher the 17 R-squared value the more closely correlated the factor is, 18 isnt that correct? 19 A I think -- well, first, youre doing an analysis on Is this verdict data? What are the bars

20 verdicts here? 21 representing? 22 Q 23 A 24 Q 25 A

What analysis -- what are you analyzing?

Were analyzing all settlements and all data. So this is settlements, not verdicts? Yes. So this includes all the transaction costs that are WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard 1 imbedded in settlements? 2 Q 3 A Well -This is settlements. Fine. I just wanted to know if it

31

4 was settlements or verdicts. 5 Q Well, my question is really pretty simple. From an

6 econometric standpoint, okay, the more -- the higher the R7 squared value the more closely correlated, correct? 8 A 9 Q Correct. And you would agree with me that of the variables that are

10 on here, alive or dead, resolution year, filing year, group 11 settlement, law firm, state, pain and suffering, all of those 12 are more closely correlated than age, isnt that right? 13 A I dont agree with damages. I agree with settlements, but And I think

14 not with damages.

And thats the big difference.

15 this is a replication of the graph in Dr. Petersons rebuttal 16 report, and if it is I replicated it. And if you do this on

17 the claims that are driven by liability, so if I look at just 18 the claims that were paid more than $200,000, the only variable 19 that is statistically significant out of all of these is age. 20 If I do this on verdicts the only one thats statistically 21 significant is age. 22 So, age is correlated with damages.

If youre going to go to settlements, when I go to

23 settlements for less than $200,000, settlements that are less 24 than $200,000, what the analysis has shown is they arent 25 connected to age because they arent driven by liability. WWW.JJCOURT.COM

Mullin - Contd Cross/Sheppard

32

1 These are the settlements that are driven by transaction costs. 2 Thats why age and alive or dead doesnt matter so much, 3 because the damages isnt effecting the settlement. So if you

4 were to replicate this graph once for all the settlements below 5 $200,000, the age bar will be almost zero. 6 will be almost zero. Alive versus dead If you

The other numbers will be higher.

7 look above 200,000 and you do this graph the age bar is high, 8 and all the other ones get very low. And thats the point.

9 You know, damages is really only coming into play on the 10 variables that are connected with damages on the high value 11 settlements. The rest of them they dont because its not

12 damages that are driving the settlement, so this is exactly 13 what youd expect if you look at the settlements instead of the 14 damages that the claimant suffered. 15 Q Now Im not going to mince words with you, Dr. Mullin. I

16 guess the last thing is on the PIQs, there was a substantial 17 amount of data that came in on those, isnt that right? 18 A 19 Q Yes. Okay. And it required a lot of going through papers and

20 coding things, right? 21 A Many responded with documents as opposed to filling out

22 the forms, so you had to review all the documents. 23 Q And youre certainly not assuming that that data

24 collection process was ever free, right? 25 A Oh, no. Its never error free. If you go through 2000

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Mullin - Cross/Dorsey 1 plus sets of PIQ responses theres going to be some errors in 2 that data entry process. 3 Q Okay. And you relied upon that data, though, in

33

4 connection with your analysis, right? 5 A We did quality control, so I know what the error rates

6 are, so I know that the error rates on any given variable are 7 on the order of one percent, and I know that the error rates 8 for the data holistically an error in any field for any given 9 claims exists on about five percent of the claims, but for any 10 given variable its approximately one percent of the claims. 11 12 13 14 BY MR. DORSEY: 15 Q 16 A 17 Q Good morning, Dr. Mullin. Good morning. Id like to go back and talk a little bit about the group MR. SHEPPARD: THE COURT: Okay. Nothing further, Your Honor.

Mr. Dorsey? CROSS EXAMINATION

18 settlements so I can understand -- I want to make sure I 19 understand what it is you did with the group settlements in 20 terms of forecasting future liabilities. 21 MR. DORSEY: And if I could, Your Honor, Id like to I guess I need the --

22 approach and use the chart up here. 23 24 25 MR. DORSEY: THE COURT: (Pause)

Can you hear me? Yes. WWW.JJCOURT.COM

Am I good?

Mullin - Cross/Dorsey 1 Q Now, Im not going to use the exact numbers, Dr. Mullin,

34

2 because Im awful at math, so Im just going to use 3 hypothetical numbers. 4 A 5 Q Thats fine. So if we assume, on the group settlements, the 17 group

6 settlements that youve testified about, if we assume there 7 were 1,000 claims that were resolved as a group of that group 8 settlement, okay? 9 10 11 12 Q Are you with me so far? All 17, or one? All 17, Your Honor. All right.

THE COURT: MR. DORSEY: THE COURT:

Its more than that, but Im just using a round number. So,

13 So, 1,000 claims were resolved by that group settlement.

14 across those docket things 100 claims would have been dismissed 15 in those group settlements, is that fair? 16 A 17 Q 18 A 19 Q About ten percent. About ten percent? About ten percent were dismissed. Okay. So that left 900 claims -- 900 claims that were And then what the debtors

20 resolved by those group settlements.

21 did was say were just going to pay a flat amount, we dont 22 care how you, plaintiff lawyers, whack it up among those 900 23 claimants, were just paying you a flat amount to settle those 24 claims. 25 A Is that fair?

My understanding is that that occurred at the point of the WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 thousand. 2 Q 3 A At the point of the thousand. Okay.

35

I dont think they cared whether zero got released or got They didnt pick the zero pays any differently than

4 dismissed.

5 they picked the ones that got paid. 6 Q Okay. So, they might have said -- and again, lets use a

7 hypothetical number, $100 million to settle those thousand 8 claims. Okay? And thats what the history actually shows us Thats as far as it

9 happened with these group settlements. 10 goes, correct? 11 A

And there is an allocation by the plaintiff law firm, the

12 history shows that, too, how the plaintiff law firm allocated 13 in our hypothetical the $100 million across the thousand 14 claimants. 15 Q Okay. So, but what you did then with those group

16 settlements is you said there were 1,000 claims, but then you 17 wanted to see, well, what would this look like if they had 18 resolved those claims on a case-by-case basis instead of as a 19 group, correct? 20 A Correct. How would the money have been distributed? How

21 many high value, mid value, and low value claims would I have 22 observed if these had been individually evaluated? 23 Q Okay. Of the 1,000 claims would you have assumed were You assumed about a 60 percent dismissal rate?

24 dismissed? 25 A

In the individual evaluation the dismissal rate is closer WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 to 75. 2 Q 3 A 4 Q 5 A 6 Q 75? It falls between 70 and 75 percent. Lets use 70, again, for a round number. Sure. Okay.

36

So you assumed that 700 of those 1,000 cases would

7 have been dismissed? 8 A 9 Q 10 A 11 Q Had they been individually evaluated. Okay. That left 300 claims, correct?

Correct. And then what you did was take those 300 claims and Is

12 allocate them between high, low and medium-value claims. 13 that fair? 14 A 15 Q Correct. Okay.

So, lets say -- how many would you have assigned

16 to -- of the 300 to high value? 17 A 18 Q 19 A I dont remember the statistics that well from here. Well just use round numbers hypothetically, lets say 50. About 55 out of 275, so its going to be 60, 65, probably,

20 something in that range. 21 Q 22 Okay? 23 A 24 Q Okay. So, 50 would have been high value. And then how many Can Okay. Well make it 50 again for my easy math problem.

25 would have been -- would you have assigned to a mid value? WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 we just say 100, just to make it simple? 2 A Well, the distribution -- so, the actual distribution in

37

3 the data is the mid value is the largest group, the high value 4 and the low value are both smaller numbers. 5 Q 6 A Right. And none of these are going to be what actually happened,

7 but go with 175 and 75. 8 Q 9 A Okay. At least it has the right basic relationships, but they

10 arent the right numbers. 11 Q 75 were low value claims. So -- and then you took that --

12 whatever that number came out to, and so instead of $100 13 million in total settlements it should have been, according to 14 you, if they had been individually reviewed, 50 million, 60 15 million? 16 A So, I didnt actually assign a value. I put them in a

17 range.

I mean, the point is I wanted to see how many high-

18 value claims, how many mid value, and how many low value, so I 19 was going to -- the demonstrative that I put up earlier was 20 saying how many claims fall into each of these categories on an 21 annual basis? 22 Q 23 A Okay. Thats what I was looking for, so I was really focused on

24 the counts. 25 Q Okay. But then you can put a range -WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 A 2 Q I didnt go through and add.

38

-- in there, whatever the range was you assigned for each

3 of those three categories -4 A 5 Q 6 A You could. You could have taken the high value claims --

And come up with a total amount? -- assigned 475,000 to each. I mean, I could have gone

7 through and do that. 8 Q Okay.

Thats a simple math exercise.

So lets assume for purposes of our hypothetical

9 here that it came out to 50 million? 10 A 11 Q 12 A You mean the ratio? Yes. I know, its -- those are about 63,000 per resolved case The individually evaluated are 45,000 per case on

13 on average. 14 average. 15 Q 16 A

So its going to be 45/63rds.

Okay. So, its not going to come out to 50 million. Its going

17 to come out to 700 million, say. 18 Q 19 A 20 Q Okay. Sorry. Not 700 million. 70 million.

70 million?

And then, and I think youve answered this

21 question for me in your last answer, but the reason that you 22 did this was then it took the group settlement values from 23 $64,000, on average, down to what? 24 A 63 -- an average resolution value was 63,000. The average

25 settlement value was 70,000.

But, I mean, the reason I did it

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Mullin - Cross/Dorsey 1 was to get the count of claims in each category. 2 motivation for doing it. That was my

39

I mean, Ive said repeatedly its

3 true, the group settlements had an extra transaction cost 4 premium of about 18,000 per claim, that was the -5 Q 6 A 7 Q So it would have -- Im sorry. -- gap between that and $45,000. Okay. So it would have reduced the average claim value Is that fair?

8 down to $45,000? 9 A 10 Q

Individually evaluated, the average is 45,000. Okay. And then you took that 45,000 average claim value

11 and you used that to estimate the future liabilities of the 12 debtors? 13 A Is that correct? I took -- and I think youre

Well, not from the groups.

14 trying to simplify my analysis, it sounds like, into the 15 framework that Drs. Vasquez and Peterson used. 16 single average settlement value. 17 right way to do it. 18 value. I didnt use a

Thats not how I think is the

That may be the overall average resolution It includes everything I feel like its much

The 45 includes all the zeros.

19 when you individually evaluate a claim.

20 more reliable to break them down into the groups where theres 21 the high value, the mid value, the low value, and the 22 dismissed. Clearly the dismissals get zero. The low value in

23 the tort system were getting 25,000.

The mid value were

24 getting 120,000 on average, and the high value were getting 25 475. When you view it that way its a stable world, so I WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 didnt have one average value.

40

I dont think -- you can found So I

2 too many factors when you try to simplify it that far.

3 was saying I took -- when individually evaluated, how many high 4 value claims are there, and what do they get? 5 evaluated the pending and future claims there. Thats how I I assumed they

6 would be individually evaluated on their own merits, and so I 7 used the historical claims that had been individually evaluated 8 on their own merits to determine what those values would be. 9 Q Okay. So you took the group settlement claims and instead

10 of saying 900 claims would have been paid, you said only 300 11 claims would have been paid, correct, on our hypothetical? 12 A Correct. In trying to figure out if they had been

13 individually evaluated, how much would this have contributed in 14 claim counts to each of the categories, the group settlements 15 clearly paid a lot more claimants than would have happened if 16 they had been individually reviewed, so I -- in our 17 hypothetical it would go from a hundred being dismissed to 700 18 being dismissed if they had been individually reviewed. 19 Q Okay. And then you took those high, low -- or high, mid

20 and low value claims and you used those to calculate your 21 future asbestos liabilities for the debtor, correct? 22 A 23 not. Well, I used the counts to see if it was a stable world or I mean, theres a different number of group settlements

24 in each year, and because of that you cant only look at the 25 individual claims and know you have a stable world. WWW.JJCOURT.COM You need

Mullin - Cross/Dorsey 1 to incorporate the claims that got resolved in these big 2 inventory deals to know that the counts are actually stable. 3 And if you dont do that step your analysis could be 4 unreliable. So thats why it was important for me to go and

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5 include those counts in what I was doing. 6 Q Well, isnt it more reliable to rely on what the actual

7 history was, rather than rewriting the group history into an 8 individual evaluation history? 9 A Again, this depends on what youre trying to accomplish.

10 If what youre trying to say is -- if the purpose of the 11 exercise is to take into account the merits of the claims, the 12 individually evaluated claims are the ones where the merits of 13 an individual claim was taken into account in the history, but 14 in the group settlements it wasnt. 15 discovery. They never took any You dont know what

You cant map those claims.

16 they look like.

You cant map them into what the pendings look

17 like on the PIQs because you dont have any data because none 18 was taken in discovery to know what are the claim 19 characteristics. 20 So, if the -- I think I said this yesterday, but if

21 the exercise you wanted to do was to say were going to settle 22 all claims sight unseen and let the plaintiffs attorneys pick 23 what everybody gets, the group settlements are a good proxy for 24 that process. If what you want to do is say -- you want to

25 evaluate claims based on their merits, we have the PIQ data for WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 all pendings, discovery has been taken, and if we want to map 2 that to what happens once discovery is taken you want to use 3 the individual claims. Thats why I used the individual

42

4 evaluated ones, not the groups. 5 Q And you did that because you wanted to eliminate the

6 transaction costs associated with the group settlements, is 7 that correct? 8 A It does do that. I mean, it does eliminate that. Thats

9 really the 700 million in that straight line extrapolation that 10 was up a minute ago versus the 600 million that I come up with 11 when I look at them individually evaluated. 12 delta. That is that

If you leave all the groups in, youre going to get

13 about 700 million for the futures if you leave group 14 settlements in, if you want to say thats a premium that can be 15 paid with no discovery -16 Q 17 A So --- thats fine. If you want to say if theyre

18 individually evaluated its 600 million. 19 Q So youre taking out the transaction costs associated with Youre categorizing these claims into the

20 group settlements?

21 high, mid and low, and then youre eliminating further 22 transaction costs by saying all those low claims wouldnt have 23 gotten paid, or shouldnt have been paid in the tort system, 24 correct? 25 A Well, Ive characterized that differently. WWW.JJCOURT.COM Im evaluating

Mullin - Cross/Dorsey 1 the pending and future claims based on their merits, so Im 2 using the historical claims that were evaluated the same way. 3 So, Im not taking anything out. Im saying Im evaluating To do that you

43

4 these pending claims based on their merits.

5 have to look at the historical claims that were evaluated based 6 on their merits. If you want to do a different exercise and

7 not evaluate them on their merits you can produce a higher 8 number. 9 Q And dont you want to -- isnt the purpose here to

10 determine what the debtors would have paid if they had remained 11 in the tort system? 12 A I think now we go back to -- I think the parties have

13 different theories on that as to what is supposed to be 14 estimated. 15 estimates. 16 Q Okay. I have tried to lay out different sets of Its not my job to decide which one is right. So if the Judge determines that the purpose of this

17 exercise is to determine what the debtors would have paid if 18 they had remained in the tort system, your analysis of the 19 group settlements and the elimination of all the other 20 transactional costs and the several share costs would be 21 completely unhelpful to the Court, correct? 22 A 23 No. I think the analysis that Ive done -THE COURT: Isnt that my determination to make, How can the witness

24 whether something is helpful to me? 25 determine whats helpful to me?

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Mullin - Cross/Dorsey 1 MR. DORSEY: Well, I think because, Your Honor, he

44

2 just testified that the purpose of his using -- rewriting the 3 history on group settlements, and then eliminating transaction 4 costs did not comport with what would have happened in the tort 5 system. 6 THE COURT: We dont know what would happen in the

7 tort system.

You cant tell me that the debtors would engage I dont know whether these three law

8 in group settlements.

9 firms still have an entire inventory of cases that would lead 10 to group settlements. If, in fact, their entire inventory was

11 settled by the group settlements they wouldnt have an 12 inventory to have group settlements. You cant predict what

13 would happen specifically in the tort system, Mr. Dorsey. 14 Nobody can. 15 Youre not in the tort system. Well, I think thats the whole part of

MR. DORSEY:

16 the purpose were here, Your Honor, is to -- and I think weve 17 argued this in our opening brief, that the purpose is to 18 determine what would have happened if they had stayed in the 19 tort system. What would the claimants have received if they

20 remained in the tort system? 21 THE COURT: Thats a different issue. What the

22 debtors liability would be if, in fact, they had to pay all 23 the present and future claims is what Im trying to estimate. 24 What that liability is is what Im trying to estimate. And the

25 distinction between whether the transaction costs, the implicit WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 defense costs are going to be included or not is a legal 2 determination Im going to have to make. 3 4 MR. DORSEY: THE COURT: Absolutely. Its a fact from what this witness has

45

5 testified to, and what everybody has been saying, that the 6 settlements did, in fact, include some portion of fees that the 7 debtor otherwise would have paid to lawyers. I mean, this

8 witnesss own testimony is that the settlements were higher in 9 the group settlements than they were on individual review, and 10 hes explained from his point of view why that is. Now, people

11 can disagree or not -- or agree with that concept, but its a 12 legal determination whether Im going to include those 13 transaction costs, and if so, how, and to what extent. So I

14 just dont see how you can ask him whats helpful to me, and I 15 dont see how you can ask him what would have happened had the 16 debtor still been in the tort system. I mean, people can try

17 to predict that, but how do we know what would happen? 18 19 MR. DORSEY: THE COURT: Well -Are you going to give me some evidence

20 that indicates that these three law firms that allegedly 21 settled their entire inventory still have massive numbers of 22 claims so that there may have even been a possibility of group 23 settlements? 24 facts. 25 I mean, so far nobody has even provided me with

Facts would be helpful. MR. DORSEY: I understand, Your Honor. WWW.JJCOURT.COM Let me ask

Mullin - Cross/Dorsey 1 the witness -2 Q You recall I took your deposition in the Leslie Control

46

3 case, correct? 4 A 5 Q I believe thats right. It was a while ago. That was a while ago.

And I asked you in that case, and

6 Ill put up on the ELMO, if we can bring that up, this 7 deposition transcript, do you have another copy? 8 MR. EVERT: Your Honor, Id offer an objection. Is

9 this for impeachment of an answer thats been given? 10 11 12 MR. DORSEY: MR. EVERT: MR. DORSEY: Yes. Oh. Im sorry. Okay.

I believe the witness testified that

13 couldnt determine what the cost would be in the tort system. 14 May I approach, Your Honor? 15 THE COURT: Yes. I dont think that was the Do you want to go back and

16 witnesss testimony, however.

17 refine that portion of the testimony, please? 18 Q Well, let me ask you that, Dr. Mullin. Can you predict

19 what the debtors liabilities would have been if they had 20 remained in the tort system? 21 A I said I could do scenario analysis. This is something I

22 do frequently, whether its in financial reporting, insurance 23 coverage, different frameworks, you do scenario analysis under 24 different assumptions about how the tort system would evolve, 25 and under those alternative assumptions you could look but you WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 really cant say one number definitively. 2 Q Okay. So -- but -- so you didnt do that in this case?

47

3 You didnt try to determine what their liabilities would have 4 been if they had stayed in the tort system? 5 A Well, I did. So, I think -- lets be careful with

6 language.

I think specifically if were talking about

7 liability, their liability, I think what my analysis has shown 8 is they have a core set of claims, its about 190, 55 high 9 value, 135 mid value, that have a material component of 10 liability in them. Those are the claims, that about 190 claims

11 per year, thats going to trend out according to future 12 mesothelioma incidents that drive their liability. 13 data shows that. I think the

But I think that is something you can fairly

14 reliably, you can go through and trend that out on an incidence 15 curve. Theres only a little bit of uncertainty about that And you can come up with a good estimate of I think that is

16 future incidence.

17 what their future liability would be. 18 something you can do.

If you want to talk about what would

19 their future torts then be, you know, you have to invoke some 20 more heroic assumptions to get there. 21 Q 22 A But did you do that, was my question, in this case? I did -- the $700 million is really still focusing on And I think if you focus

23 those claims under individual review.

24 on it that way, and assuming they would individually evaluate 25 all the claims you can do that, because whether they receive WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 500 claims a year, 1,000 claims a year, or every claimant 2 started naming them, what the analysis shows is thats not 3 relevant to liability and its not relevant if theyre

48

4 individual reviewed, because those incremental claims result in 5 more dismissals. So if the 800, 1,000, 1,200 mesothelioma

6 claims, depending on whose forecast you want to rely on for how 7 many total claims are in the tort system that currently dont 8 name the debtors, historically if all of them started naming 9 them, it wouldnt add anything to the liability or the tort 10 spend if they were individually evaluated. Those claims

11 havent been naming them because they presumably dont have 12 product I.D. And so -- but they would add to their defense So,

13 bill, because theyd still have to defend those claims.

14 when you go to the tort system and you say how much would they 15 spend, you now have to really talk about how many more nuisance 16 claims are going to get filed? 17 are going to get added on? 18 defend those claims? How many more of these claims

How are they going to choose to

All those questions come up, of which I But if you want to talk about

19 think theres great uncertainty.

20 that core group of about 200 claims that are really where the 21 liability sits, I think thats something we can talk about 22 reliably and come up with a very good number. 23 much harder. 24 Q And your $700 million claim that you talked about that you The other one is

25 put up -- that Mr. Sheppard put up on the screen, I think you WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 testified that that was kind of a -- it was not a full 2 analysis?

49

That was kind of a, for lack of a better term, back

3 of the envelope kind of simple extraopolation under the 4 Nicholson curve? 5 A The 700 million on that demonstrative was purely just The following demonstrative

6 overlaying the Nicholson curve.

7 that did the claim by claim assessment that said it was 600 8 million if individually evaluated, thats the piece thats 9 reliable. Its saying that ballpark there was about $100 If you assumed -- made a whole bunch of

10 million premium.

11 heroic assumptions about stability, you know, theyd get the 12 same number of nuisance claims theyd gotten in the past, 13 theyd choose to defend those nuisance claims in the same 14 manner they did in the past, you have to start invoking all of 15 those types of assumptions, then there would be $100 million 16 premium in transaction costs thats driven by all those 17 nuisance claims. And thats -- but you have to make a whole

18 bunch of assumptions about how many of those theyre going to 19 get, which law firms are going to represent them, and -- but it 20 has nothing to do with liability. So, those are things that

21 make the analysis harder, if thats the question you want to 22 answer. 23 Q Well, Im talking about just what would a claimant receive

24 in terms of a payment from the debtor in the tort system, 25 without regard to your theory about transaction costs and WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 implicit defense, and all those other things? 2 that analysis? 3 A 4 Q Under what assumptions? Under the assumption that they remained in the tort Have you done

50

5 system. 6 A Thats -- I mean -- let me rephrase. I mean, thats Remaining in the

7 really enough for me to give you an answer? 8 tort system, okay.

What are we assuming the tort system looks

9 like in 2020 when you ask that question? 10 Q Well, do you have any understanding of what the tort

11 system is going to look like in 2020, Doctor? 12 A Well, I think thats one of the problems with asking a

13 question where youre talking about how are future transaction 14 costs going to affect what they pay in the tort system. 15 Procedural rules, changes in the tort system affect those 16 numbers. They dont affect liability, but they do affect those

17 other factors. 18 Q But you didnt take into account any changes in the tort

19 system in producing your estimation in this case, did you? 20 A When youre looking at liability theres many fewer things

21 that could affect that as opposed to when youre looking at 22 transaction costs. Transaction costs are driven by the costs Theres a A

23 of the litigation, so procedural changes matter. 24 whole set of things that come into play.

Who names you?

25 nuisance -- more nuisance claims naming the debtors drive up WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 their transaction costs. They dont change their liability.

51

2 So, youve brought in a whole bunch of extra factors when you 3 go there. 4 5 Q (Pause) My question was actually, I thought, fairly simple. Did

6 you take into account changes in the tort system when putting 7 together your estimation in this case? 8 A When I -- I did not take into account, you know, future

9 potential changes in the tort system when coming up with the 10 $700 million number for individually evaluated claims. I think

11 as you go down to the final ones where you look at a several 12 share, that is really invariant to those changes, because 13 thats really a question of if its their several share of 14 liability thats more of a constant. The tort system could

15 cause you to deviate from that, but thats a number thats 16 really abstracting from the procedural and the legal backdrop 17 because its ignoring whether youre joint and several versus 18 several. 19 Q So that one is really invariant to changes.

Well, why dont we pull out your deposition you took in

20 this case, Dr. Mullin? 21 THE COURT: Dr. Mullin, I just want to make sure -Youre saying that the liability is

22 make sure I understand.

23 invariant to the changes, not a variant of the changes? 24 25 THE WITNESS: THE COURT: Invariant. Okay. Thank you. I have two

Invariant.

WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 copies of this one, Mr. Dorsey. 2 MR. DORSEY:

52

I dont know if thats a -- this one is

3 the single page -4 5 6 7 8 9 10 11 12 13 THE COURT: MR. DORSEY: THE COURT: MR. DORSEY: THE COURT: October 4? -- if thats easier for you. This is a single page? A single page. Yes.

Is that October 4? Thats Leslie. Oh. Okay. Im sorry. This is the wrong one.

THE WITNESS: MR. DORSEY: THE COURT: MR. DORSEY:

I have two copies of Leslie. I dont -This is Mullin. This is a

Oh, no.

UNIDENTIFIED SPEAKER:

14 full version just so she can read it. 15 MR. DORSEY: Oh. I see. Yes. You have the Leslie

16 Controls, Your Honor. 17 of this case. 18 19 witness. THE COURT:

This is the one he took, the deposition

Okay.

I think that may be for the

Maybe you intended to give that one to the witness,

20 because -21 22 23 MR. DORSEY: THE WITNESS: THE COURT: Do we have one for him? Ive got the full page version.

You may use the full page version if

24 youd like. 25 THE WITNESS: Well see what he asks me to read from WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 it or not. 2 Q 3 4 5 6 7 8 9 Q If youd turn to Page 228 of that deposition, sir? THE COURT: MR. DORSEY: THE COURT: MR. DORSEY: THE COURT: MR. DORSEY:

53

This is the deposition of November 15th? That is correct, Your Honor. And Page 228? 228. All right. Thank you.

Beginning at Line 21.

You were asked the question, In terms of the forecast

10 that you prepared in this case is it true to say that you, in 11 your expert opinion, you are not making any effort to predict 12 future changes in the tort law? 13 effort to do that. 14 sir? 15 A Yes. I think that what I just said a moment ago, too. I didnt try to forecast the future changes in the Answer: I did not make an

Is that what you said in your deposition,

16 But, yes.

17 tort system. 18 Q 19 Okay. Well, you gave an answer that talked about -MR. EVERT: Excuse me. Id ask that you read the

20 rest of the answer, please, which continues on Page 229? 21 22 the mic. 23 24 MR. EVERT: I'm sorry. Its on. Hes just not speaking COURT CLERK: Mr. Evert, if you could just turn on

MR. JACKSON:

25 towards it. WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 2 Q MR. EVERT: Mr. Jackson points out its my fault.

54

Continuing on on Page 229 you said, I think the ultimate

3 scope of the charge in estimating a several liability, its 4 harder for me to think of potential changes that would affect 5 that. You know, the historical tort reforms have not taken

6 several liability and reduced it to something less than several 7 liability in general. Now, Id like to go to Debtors If we could switch back over and

8 Demonstrative Number 47. 9 bring that up? 10 11 you going? 12 13 14 15 16 Q MR. DORSEY: THE COURT: MR. DORSEY: THE COURT:

Im sorry, Mr. Dorsey.

What -- where are

Debtors Demonstrative 47. All right. Thank you.

Ill just put it up on the -(Pause)

This is the inflation roughly offset by an aging Do you see that? Do you have that in front of

17 population.

18 you, Dr. Mullin? 19 THE COURT: Mr. Dorsey, could you take off the Im having some trouble Thank

20 Lavalier mic and use the other one? 21 hearing you. 22 you. 23 Q 24 A 25 Q

Im getting a little bit of feedback here.

Do you have that in front of you, Dr. Mullin? I do. Okay. And this is where you testified that the -- is this WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 the right one? Yes. You included an inflation rate of 2.5

55

2 percent, impact of aging on settlement amounts, minus one 3 percent, and then an impact on aging on pay rate, minus 1.9 4 percent, correct? 5 A 6 Q Correct. And if we turn to your expert report, do you have that And Im going to refer you to Page 62

7 still in front of you? 8 of that report. 9 A 10 Q I do.

Do you have that open, sir?

And in Paragraph 155, the last sentence, you said I

11 inflated the nominal claims values at a net rate of one percent 12 annually, 2.5 percent inflation net of a 1.5 percent reduction 13 to account for the aging population. 14 A 15 Q I do. You didnt say anything in there about this 1.9 percent Do you see that?

16 aging -- impact of aging on the pay rate, did you? 17 A I didnt specifically reduce the number of claims. I mean, the underlying I

18 mean, I took these two together.

19 analysis in all the working papers Ive provided had both of 20 these numbers in it, so when I did my expert report and I 21 looked at only the several share, so when I went to the one 22 thats the $125 million number and I looked at only the several 23 share of liability absent the transaction costs, and looked at 24 this, I didnt implement the full amount. 25 chose to be conservative. In that framework I

I felt like when I was looking at WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 the several share thats not what the settlement data that 2 allows me to estimate these numbers comes from.

56

And so I chose

3 to be conservative and still only take a one and a half 4 percentage point offset instead of, you know, a three 5 percentage point offset, or a 2.9 percentage point offset. 6 think when youre looking at a total tort spend number for 7 which the data is the direct data at which I can compute these, 8 its appropriate to take the full offset. So, this was done in I

9 the context of the report where I did just that $125 million 10 number. I chose to be conservative in that regard because

11 theres not a perfect alignment of the data. 12 Q Can you show me where in your report you mentioned the 1.9

13 percent reduction on the impact of aging on the pay rate? 14 A 15 1.9. I mean, the report doesnt mention the one percent or the It says 1.5 percent reduction to account for the aging of That 1.5 percent, in my working papers that I

16 the population.

17 turned over, shows the one percent and the 1.9 as all laid out 18 as to the analysis that underlines whats just a summary 19 statement here. 20 Q So, it was in your working papers, not in your report? Is

21 that what youre saying? 22 A The foundation for why I made the adjustment is in my Thats correct.

23 working papers. 24 Q

So someone would have to go through your working papers

25 and figure out what you were trying to say when you did that WWW.JJCOURT.COM

Mullin - Cross/Dorsey 1 reduction rather than just explicitly stating it in your 2 report, is that correct? 3 A You would -- my working papers were very clear. I mean,

57

4 every number in my report showed exactly the computer code and 5 everything that produced it. But, yes, if youve never looked

6 at my working papers theres many numbers in my report that you 7 wouldnt be certain exactly how I calculated them. I didnt It

8 try to make the math of every number explicit in the text. 9 was long enough as it is. 10 if I had done that. 11 Q

I would have had a 400 page report

So, adding 1.9 percent would have just made it a much more Is that what youre telling me?

12 longer report? 13 A No.

What Im telling you is I chose in general not to put If that was the only that I

14 all the math behind every number. 15 had done it to, no. 16 going to pick.

You know, I dont know which one youre

As I said, all the other numbers in the report,

17 I dont tell you in the table below the exact math for every 18 single one of those numbers, either. You have to go to the

19 working papers which show the computer code that produces every 20 single one of those numbers. And my working papers were very

21 well documented and showed exactly how I produced every number 22 in my report. 23 24 25 MR. DORSEY: THE COURT: MR. EVERT: Okay. Nothing further, Your Honor.

Redirect, Mr. Evert? Your Honor, extremely briefly. WWW.JJCOURT.COM

Mullin - Redirect/Evert 1 2 BY MR. EVERT: 3 Q Dr. Mullin, youve been very patient, and I will be very REDIRECT EXAMINATION

58

4 quick.

I would like to return to Debtors Demonstrative D-34.

5 And I put this on the board, Mr. Mullion, only because I think, 6 and I may have misunderstood, that I heard you mis-speak in 7 your response just a moment ago, you said a $700 million 8 number, not a $600 million number? Tell me what this

9 represents and what the $600 million number is? 10 A Well, the $600 million number is the value of future

11 claims under -- in the tort system, what they would have been 12 paid in settlements had they all been individually evaluated. 13 Q So this is the merits based evaluation that you were

14 discussing? 15 A 16 Q Correct. And this is before the reduction for the transaction costs

17 and then the several share that you discussed in your direct? 18 A Correct. It assumes individual evaluation, so theres not

19 these large inventory deals that dont take into account the 20 merits. 21 Q 22 A Correct. But it doesnt do anything beyond that to account for

23 transaction costs. 24 Q And this number, like all of the other numbers that I

25 believe, and correct me if Im wrong, that you mentioned in WWW.JJCOURT.COM

59 1 your cross examination, is a nominal number? 2 A 3 Thats correct. MR. EVERT: Your Honor, unless you have any Is that right?

4 questions, subject to our right to recall Dr. Mullin for 5 rebuttal, we have no further questions. 6 7 8 9 THE COURT: MR. DORSEY: Anything on recross? No, Your Honor. No, Your Honor. Dr. Mullin, youre excused,

MR. SHEPPARD: THE COURT:

All right.

10 but you are subject to recall, so you may leave, but not 11 really. 12 13 THE WITNESS: MR. HOUFF: Thank you.

Your Honor, I think were prepared to Could I have, like, five

14 call Dr. Anderson at this time. 15 minutes to set up? 16 THE COURT:

Well, Im sure the other side will ask

17 for five, too, so well just make it ten, and take a ten minute 18 recess. 19 20 21 22 THE COURT: MR. HOUFF: MR. HOUFF: Thank you, Your Honor. (Recess) Please be seated. Mr. Houff? At this time we

Thank you, Your Honor.

23 would call Dr. Kim Anderson to the stand. 24 youd stand there and be sworn, please? 25

Dr. Anderson, if

DR. KIM E. ANDERSON, DEBTORS WITNESS, SWORN WWW.JJCOURT.COM

Anderson - Direct/Houff 1 2 3 4 5 BY MR. HOUFF: 6 Q 7 A 8 Q Dr. Anderson, good morning. Good morning, Mr. Houff. Sir, I think you have with you, and I want to identify THE COURT: COURT CLERK: Please be seated. (Pause) It doesnt move. DIRECT EXAMINATION

60

9 before we get started -- well, first, let me just ask you to 10 introduce yourself to the Court, stating your name, your 11 professional address, and your profession, please? 12 A Yes, sir. Kim E. Anderson. I am with GZA

13 GeoEnvironmental, Inc.

The address of our office is 20900

14 Swenson Drive, Suite 150, Waukesha, Wisconsin. 15 Q 16 A 17 Q Okay. And your profession, sir?

I am a toxicologist, human toxicologist, more precisely. And as I was saying, we have three documents that I wanted

18 to identify, and which I think you already have up there with 19 you. First is whats been identified as Debtors Exhibit 127, Do you have that in front of

20 which is your curriculum vitae. 21 you, sir? 22 A 23 Q Yes, sir. Okay. I do.

Is this a fair and accurate and up to date copy of

24 your curriculum vitae? 25 A Yes, sir. Its dated December of this year. WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Q And the second in whats been marked as Debtors

61

2 Demonstrative Exhibit 57, which is your PowerPoint presentation 3 for today that youve prepared, is that correct, sir? 4 A Yes, sir. And my curriculum vitae is actually December of

5 last year. 6 Q Sure. And your -- the last thing we have is whats been

7 marked as Debtors Demo Exhibit 58, which is your report dated 8 September 20th, 2012. 9 A 10 Q 11 Yes, sir. Okay. MR. HOUFF: And, Your Honor, at this time I would I do. Do you have that with you, sir?

12 offer into evidence Debtors Exhibits 127, and offer to the 13 Court the remaining demonstrative exhibits. 14 15 THE COURT: MR. FINCH: Any objection to the C.V.? No objection to the C.V., as long as the

16 report and the slides are for demonstrative purposes only, 17 theres no objections to that, as well. 18 19 COURT CLERK: MR. FINCH: I cant hear you.

There is no objection to the C.V., which

20 is 126, I believe.

And as long as the slides and the report

21 are only for demonstrative purposes theres no objection to 22 that, as well. 23 24 25 THE COURT: All right. I dont --

COURT CLERK: THE COURT:

Its probably on mute.

Its still on mute? WWW.JJCOURT.COM

Anderson - Direct/Houff 1 MR. FINCH:

62

Might I just approach the podium, just so

2 we have it -- no objection to the C.V. for substantive 3 purposes. No objection to the slides and the report as long as

4 its for demonstrative purposes only. 5 MR. HOUFF: And that is accurate, Your Honor, and

6 its Debtors Exhibit 127, which is the C.V. 7 8 9 THE COURT: MR. DORSEY: THE COURT: The futures? No objection, Your Honor. All right. Exhibit 127 is admitted, and

10 27 (sic) and 28 (sic) for demonstrative purposes only. 11 12 Q MR. HOUFF: Thank you, Your Honor.

Doctor, can we agree that all of your opinions today will

13 be expressed to a reasonable degree of scientific certainty 14 used in your profession? 15 A 16 Q Yes, sir. And in support of your statement that youre a

17 toxicologist, have you prepared some slides to talk about those 18 issues? 19 A 20 Q 21 do? 22 A Specifically, a human toxicologist studies disease and Yes, sir. Okay. I have. What does a toxicologist

You are a toxicologist?

23 chemical, physical and biological agents which may have a role 24 in the disease. 25 Q Okay. Its actually called the science of poisons.

And what types of materials do you use and WWW.JJCOURT.COM

Anderson - Direct/Houff 1 regularly refer and analyze in your work as a human 2 toxicologist? 3 A Mr. Houff, I use a variety of means and measures. For

63

4 example, I would use studies that are conducted by others that 5 include exposure studies. I would also include studies that

6 are prepared and published by others which we might term 7 epidemiological studies. Then, at times I will actually have

8 the opportunity to measure certain exposures and to evaluate 9 facts related to those exposures. 10 Q And youre also trained in industrial hygiene, are you

11 not, sir? 12 A 13 Q Yes, sir. And what is an industrial hygienist, and what types of

14 work have you done in industrial hygiene? 15 A Ill divide the questions. First, my training includes a

16 Masters of Science degree in industrial hygiene, with 17 industrial hygiene being defined as the art and science related 18 to the recognition, evaluation and control of materials and 19 substances to which a worker may be exposed. During my 40 year

20 career I have been engaged and employed as an industrial 21 hygienist with the Johnson Space Center, with the United States 22 Department of Labor, the Occupational Safety and Health 23 Administration, with A.O. Smith Corporation, and in the latter 24 22 years of my career in consulting. 25 Q And you are not a medical doctor, correct, sir? WWW.JJCOURT.COM

Anderson - Direct/Houff 1 A 2 Q 3 A Thats correct. You have a Ph.D.? And what is your Ph.D. in?

64

My Ph.D. is through the College of Health at the Medical

4 Center at the University of Oklahoma, with my specialty in 5 human toxicology and my minor in engineering. 6 Q Okay. And does part of your work as a toxicologist and

7 industrial hygienist also involve risk assessment? 8 A 9 Q Yes, sir. And tell -- would you tell the Court what risk assessment

10 is and what you do in that phase? 11 A Ill do my best. Risk assessment would generally involve

12 some type of mathematical computation, including the use of a 13 variety of mathematical models to mathematically calculate 14 through the application of study results whether there is an 15 increased risk to humans from a defined dose, or perhaps 16 hypothesized dose of the specific material or substance. 17 Q Okay. And why dont we now turn to the slides and ask you

18 to briefly just tell me when you want to change them, the first 19 -- next slide here shows your education, correct? 20 A Yes, sir. As noted I completed -- all of my education is I obtained my

21 from the Oklahoma University system of schools.

22 Bachelors in 1972, with a Bachelors of Science, which 23 included a double major, chemistry and biology, and a minor in 24 economics. I then entered the graduate program and obtained my

25 Masters of Science in 1973, as I stated earlier, with a WWW.JJCOURT.COM

Anderson - Direct/Houff 1 specialty in industrial hygiene. I then began my work career

65

2 and attended school in the evenings, completed the educational 3 curriculum in 1981, and then completed my dissertation in 1985 4 and was awarded a Ph.D., again through the Department of 5 Environmental Health, with my specialty in toxicology and a 6 minor in civil engineering. 7 Q And these are your professional certifications on Slide 3?

8 What are those, sir? 9 A Yes, sir. The top two are certifications by exam. The

10 latter is a registration that was awarded predicated upon 11 training, education and experience. 12 Q And then, Number 4, some of your professional

13 accomplishments? 14 A Yes, sir. Over -- in over 40 years Ive been engaged in a

15 variety of projects that have resulted in, at least some may 16 say, accomplishments. The first, and I think outside of you

17 and me, Mr. Houff, there may be a couple others that remember 18 the Skylab program. I received a Skylab medical team award Secondly, during my tenure with

19 when I was employed as NASA.

20 OSHA I was placed upon and nominated for the OSHA asbestos task 21 force. In 1984/85 I believe I was the eighth person in the

22 United States that was awarded the National Safety Professional 23 of the Year through the American Society of Safety Engineers, 24 which is an association of about 20,000 members, as I recall. 25 Shortly thereafter, after the Challenger tragedy, I was WWW.JJCOURT.COM

Anderson - Direct/Houff

66

1 appointed by Congress to help research the causation related to 2 some of the Teflon gasketing materials, in fact, and throughout 3 my career Ive had university appointments to teach in 4 industrial hygiene, toxicology, environmental health, 5 ergonomics, at various institutions, including the University 6 of Arkansas, the University of Central Arkansas, and the 7 Medical College of Wisconsin. And Ive just been advised Im

8 going to -- I have an appointment at the University of 9 Wisconsin, Milwaukee. 10 Q And youve talked about your professional work at GZA In that capacity, sir, have you served as an

11 GeoEnvironmental.

12 expert witness in asbestos-related and other cases? 13 A Yes, sir. Ive been with GZA, as noted, over ten years,

14 and during that time I have served as an expert in asbestos 15 cases. 16 Q And youve mentioned that you were with OSHA as a senior That was during June 74 to September

17 industrial hygienist. 18 78? 19 A 20 Q

That is correct, sir. Okay. And your work with NASA was 73 to 74 as a medical

21 contractor to NASA? 22 A Yes, sir, as employed by Kelsey-Seybold Clinic, which at Kelsey-

23 that time was termed the Mayo Clinic of the Southwest.

24 Seybold Clinic had the medical contract with the Johnson Space 25 Center in Huntsville, Alabama and the Kennedy Space Center at WWW.JJCOURT.COM

Anderson - Direct/Houff 1 that time. 2 Q

67

And then you did some work with the Oklahoma Environmental Can you tell the Court briefly about that?

3 Protection Agency. 4 A Yes, sir.

While I was completing my baccalaureate degree

5 and before I started my masters program I accepted a position 6 at -- at that time what was termed the Oklahoma Environmental 7 Protections Agency as an environmental engineer in Pontotoc 8 County. Thats the department where I essentially established

9 the water quality laboratory for that county through the state 10 of Oklahoma. 11 MR. HOUFF: Your Honor, at this time I would offer

12 Dr. Anderson as an expert toxicologist, human toxicologist, 13 industrial hygienist and risk assessor. 14 15 16 17 18 Q MR. FINCH: No voir dire, Your Honor. No voir dire, Your Honor. He is so accepted.

UNIDENTIFIED ATTORNEY: THE COURT: MR. HOUFF: All right.

Thank you, Your Honor.

Dr. Anderson, Dr. Feingold testified earlier in the week

19 regarding the history of science and asbestos, and gave us some 20 of the epidemiology, and you have prepared some slides here, 21 have you not, to explain what you call the science of asbestos? 22 A 23 Q Yes, sir. Okay. I have.

Would you please use the slides and explain to the

24 Court your opinions and what the materials shown on Slides 9 to 25 12 demonstrate about the science of asbestos as they relate to WWW.JJCOURT.COM

Anderson - Direct/Houff 1 your work as a toxicologist and industrial hygienist? 2 A I will again do my best.

68

Since approximately the 1950s a

3 variety of studies have been published that have studied 4 exposures and resultant adverse human effects, including 5 mesothelioma. For example, in the 50s there were As we got into the 60s there were

6 approximately 32 studies. 7 over 600 studies. 8 studies.

In the 70s we increased to over 2,000

And then for the 80s, 90s, and up into 2009 there

9 had been over 4,000 studies of some exposure mechanism, of some 10 use, or some epidemiology related to asbestos. In those

11 studies much, if not all of the literature that has been 12 published, related to the toxicity as shown the causal 13 relationship or association with exposures to amphiboles and 14 mesothelioma, with the first study being a 1960 study by Wagner 15 that was of crocidolite and amosite in a crocidolite mine in 16 the Transvaal of South Africa. 17 Q 18 A Please continue, sir, on Slide 10? On the next three slides I have attempted to summarize

19 selected studies in seven different worker groups, or work 20 practices, the resulting size of the cohort, the year of the 21 study, and the author of the study. As we can note, there are

22 in general very large cohorts, and again, these studies 23 primarily relate to amphibole exposure or in some there is a 24 mixed exposure that would include an amphibole as well as 25 serpentine or chrysotile. WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Q 2 A And Slide 11? Slide 11 and in Slide 12 are a continuation. And again,

69

3 these are not all inclusive.

I extracted these from my report

4 to be representative of the studies that are out there, 5 specifically that speak to either a causal relationship or an 6 association between asbestos and various physical anomolies, 7 whether its asbestosis, pleural plaques, lung cancer or 8 mesothelioma. 9 Q And, sir, in your capacity as a toxicologist, industrial

10 hygienist and risk assessor have you studied the question of 11 asbestos and the causation of mesothelioma? 12 A 13 Q Yes, sir. I have.

And would you please explain to the Court your opinions

14 and views concerning that issue as reflected on Slides 13 15 through 15? 16 A Yes, sir. And again, in my career of over 40 years,

17 including being employed as a regulator where I conducted 18 numerous compliance inspections at facilities that used or 19 otherwise had asbestos products, in my work with a Fortune 300 20 company as corporate director of safety, health and environment 21 for in excess of 12 years, and now in my work as a consultant 22 engaged in human toxicology for in excess of 20 years, I have 23 never found a single study, and I would quote never, that 24 relates to non-contaminated chrysotile having any causal 25 relationship or association with mesothelioma. WWW.JJCOURT.COM What is shown

Anderson - Direct/Houff

70

1 on Slide 13 is part of the conclusive evidence that in fact Mr. 2 Finch and I discussed a few weeks ago regarding the Agency for 3 Toxic Substances Disease register, toxicological profile for 4 asbestos, where a variety of studies are denoted as having what 5 we would term a cancer effect level which some may term a no 6 observable adverse effect level for cancer. These three

7 studies are the studies that show essentially the lowest doses 8 for a mixed, and I add mixed, not chrysotile exposure, and some 9 relationship or association with mesothelioma. 10 Q 11 A Please continue, sir. In dealing with my 40 years of experience what I have

12 often found that some would like to show a causation or label a 13 causation between asbestos exposure and disease, including 14 mesothelioma. Nothing is farther than the truth. Causation

15 would apply to most of us as a direct cause and effect 16 relationship, whereas the studies where theres a defined dose 17 that results in a causative relationship is predicated upon 18 some type of increased risk, not a carte blanche one to one 19 relationship with exposure and disease. The way we prove that

20 either as an epidemiologist or as a toxicologist is to use a 21 protocol that came about in 1965 termed the Bradford Hill 22 criteria. 23 Sir Austin Bradford Hill was a renowned toxicologist

24 -- excuse me -- epidemiologist, and he had looked over the 25 years at defining the roles of studies in causation. WWW.JJCOURT.COM Bradford

Anderson - Direct/Houff 1 Hill then defined four basic criteria that would be used once 2 his nine guidelines are evaluated that Ill talk about 3 momentarily. The first would be the studies would show a Secondly, the

71

4 sufficient evidence of a causal relationship.

5 studies would show a significant evidence of an association. 6 Thirdly would be an insufficient evidence of an association. 7 And then lastly there would be sufficient evidence that there 8 wasnt an association. 9 In defining which of those four criteria a study or

10 studies would be grouped into, Bradford Hill developed nine 11 guidelines for the actual criteria that was used. 12 guidelines are shown on Slide 15. These nine

Some of the nine have a more

13 important role in determining whether theres a causal 14 relationship or association. Some have a less important role.

15 Suffice it to say for asbestos and mesothelioma, there are some 16 very important factors, including temporality, which basically 17 states in non-scientific means that once you cease exposure a 18 disease or disease process would not continue. 19 would generally call it a latency period. 20 specificity. In asbestos we

Secondly would be

It has an important role and perhaps is third or And specificity basically means you can

21 fourth most important.

22 draw a conclusion without hesitation from the data provided. 23 Third would be a dose response relationship or a biological 24 gradient in Bradford Hills terms, meaning there is some type 25 of relationship between a defined exposure and an increased WWW.JJCOURT.COM

Anderson - Direct/Houff 1 risk of that disease or disease process. Next would be

72

2 consistency of association, and thats pretty basic.

It means

3 that your findings can occur on a more frequent or perhaps even 4 a repeated type of timing. Next would be strength of the

5 association, meaning is there an increase or incidence or some 6 other evidence of an increase of the disease or disease 7 process? Next would be coherence, which means theres not Next would be biological

8 conflict with other known facts.

9 plausibility, which means the effect is plausible or cant 10 happen. Next to last would be experimental evidence, which is

11 very important in asbestos because as I stated we have 12 thousands of studies. Many of those thousands of studies

13 actually relate to evaluating exposures to asbestos and a 14 disease or disease process. And then last is analogy, which

15 simply means that you could expect a similar type effect or 16 disease or disease process from an analogous or similar type of 17 chemical. 18 When these are evaluated an epidemiologist then can

19 ascertain and define whether or not his or her study would meet 20 one of the four studies. Sufficient evidence of a causal

21 relationship, not causation, sufficient evidence of an 22 association, insufficient evidence of an association, or 23 sufficient evidence that there is an association. 24 Q Thank you, Doctor. Have you also analyzed the studies and

25 science relating to the exposure risk as it relates to WWW.JJCOURT.COM

Anderson - Direct/Houff 1 mesothelioma of chrysotile asbestos in comparison to the 2 amphibole types crocidolite and amosite? 3 A 4 Q Yes, sir. I have.

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And would you please use the next set of slides to explain

5 your conclusions and your opinions regarding that issue? 6 A Yeah. In a variety of cases in which Ive retained, and

7 specifically in this case, others have opined that there are at 8 least four studies that show low dose exposure to chrysotile, 9 and that exposures or dose relationship to mesothelioma. 10 first study that I noted is Ishwabutol (phonetic). The

That is

11 also one of the studies I noted earlier and talked with Mr. 12 Finch a few weeks ago thats included in the Agency for Toxic 13 Substance Disease Registrys toxological profile for asbestos. 14 This study is interesting, and to call it in a -- a

15 low dose study that relates to chrysotile is not factually 16 correct. At best there is no fiber identification, and at best

17 perhaps it can be a mixed dose. 18 Secondly, in deriving this low dose if one were to

19 look at this study, those that were reconstructing the dose 20 remarked that they should use a .1 fiber per CC exposure 21 concentration in calculating that dose, and for some reason a 22 1.0 fiber per CC concentration was utilized, thus the dose may 23 have been greatly exaggerated. 24 The second study that is used and was referenced in

25 various reports in this case is the Yano, et al. study from WWW.JJCOURT.COM

Anderson - Direct/Houff 1 2001.

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The Yano, et al. study does not identify any dose, much The 2001 Yano study did identify

2 less a dose of asbestos.

3 chrysotile, but shortly thereafter two studies, including the 4 follow up study by Yano, clarified that there was actually 5 tremolite exposure, not just chrysotile exposure. 6 The third study that is used is a Rdelsperger

7 friction product study that shows very low doses in a very 8 small cohort of 125 German men. Interestingly, from the same

9 dose calculation 14 of the mesothelioma cases and 12 cases of 10 the control group had the same dose. Also interesting, if we

11 were to look at that study, two of the experts disagreed on the 12 dose calculation, which to me led me to have some concern on 13 the validity of that zero through .15 fiber year per CC dose. 14 The last study that Ive seen in this case and in It wasnt a study. It was a

15 others is the 2006 Rolland.

16 presentation at a symposium by Rolland, who subsequently 17 published it. And theres an error here in my slide. It When

18 should actually read 2010, that Rolland published it.

19 Rolland published the study there was no reference to a dose in 20 the actual publication of this data. 21 Q So, Doctor, do these four studies, in your opinion,

22 accurately depict any relationship between low dose exposures 23 to chrysotile and the development of mesothelioma? 24 A 25 Q No, sir. Okay. Not at all.

Lets proceed to the next one. WWW.JJCOURT.COM

Anderson - Direct/Houff 1 A Yes, sir.

75

From my research, and again, doing this kind of

2 stuff for 40 years, there have been four key studies that have 3 looked at relative risk, or potency, or both, comparing 4 amphiboles, and in some cases specifically -- some specific 5 commercially available amphiboles to chrysotile. The first

6 study was the 2000 Hodgson & Darnton study that essentially 7 compared the potencies from chrysotile to amosite to 8 crocidolite, and they found increased risk of chrysotile at 9 one, amosite at 100, and crocidolite at 500. 10 Recently some have tried to say that when Hodgson &

11 Darnton looked at the updated Loomis cohort, which was one of 12 22 cohorts included in this study that Hodgson stated in a 13 brief publication that that would change the potency factors by 14 a factor of ten. In my direct communications via e-mail with

15 Mr. Hodgson, he clarified that meaning that it should only 16 change the potencies in that Loomis study only, not the 17 entirety of every one of the 22 studies used to calculated 18 these potency factors. 19 Q And that e-mail exchange was included as an exhibit in

20 your deposition when Mr. Finch took it, correct? 21 A 22 Q 23 A 24 Q 25 A Yes, sir. Okay. The second study -Did I go too far? The second study -WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Q 2 A Right. The second study essentially has been debated very

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3 stringently by a committee that was empaneled by the U.S. EPA 4 to study to study the work of Berman and Crump. I dont

5 present this as being the primary basis of my opinion, but 6 nonetheless it is utilized to illustrate the different risk and 7 potencies that a committee empaneled by the U.S. EPA at one 8 time calculated. In this study Berman and Crump, again, using

9 chrysotile at a factor of one, found for amphiboles in 10 combination that the increased relative risk would be at 800 11 for amphiboles. The third study was by Peto and Hodgson, where

12 they looked and examined the potencies and relative risk 13 predicated upon a comparison of chrysotile and amphiboles. And

14 essentially -- I think if we click it one more time, Mr. Houff, 15 it may -- go more -16 Q 17 A There it is. The authors state we gave no weight to chrysotile. In

18 that comparison they did find the relative risk at a hundred 19 percent related to exposures to amphiboles and mesothelioma. 20 The last of the four studies that I used is the 2006 Yarborough 21 study, again, where Yarborough found no association and gave no 22 weight to chrysotile and gave a hundred percent weightiness to 23 amphiboles in respect to the increased risk. The next slide

24 will essentially show the comparison of all four of these 25 different studies. And again, Im not suggesting that the 2003 WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Berman and Crump study has been validated.

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Nonetheless it does

2 show in comparative fashion what, during their review of the 3 literature they found with the other three studies being, in my 4 opinion, more conclusive. 5 Q Dr. Anderson, have you also -- turning to the subject of

6 dose response and thresholds for the induction of mesothelioma, 7 do you have an opinion concerning whether the studies relied 8 upon by plaintiffs experts reasonably support their contention 9 that there is no safe level of exposure to asbestos in the 10 induction of mesothelioma? 11 A Well, I would relate this to two steps. I didnt find

12 reference to any of the seven studies of actual drywall workers 13 or workers that include drywall work practices in any of the 14 reports or any of the deposition transcripts. Rather, I have

15 found at least seven studies of which large cohorts of drywall 16 workers or workers engaged in some form of drywall work 17 practices, and these seven studies in large cohorts with some 18 limitations related to the use of death certificates where we 19 have found either no excess cases, no statistically valid case 20 numbers, or in some of the studies no cases at all of 21 mesothelioma, again, in these very large cohort of workers. 22 Q 23 A What does Slide 23 show, sir? It has been interesting over the years to see the reliance

24 of others on defining the importance of the fact that the 25 Consumer Product Safety Commission in 1977 and 1978 banned the WWW.JJCOURT.COM

Anderson - Direct/Houff 1 use of spackling materials and joint compound. What is never

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2 stated is that this ban was not initiated or predicated upon an 3 epidemiological or toxicological study, but rather the ban was 4 the function of a qualitative risk assessment, or in other 5 words, mathematical computations. 6 These mathematical computations, it is essentially

7 based on the exposure concentrations from the Rohl, et al. 1975 8 study which shows exposures from zero to 59 fiber years -- or 9 fibers per CC. And specifically, in this mathematical

10 computation the Consumer Products Safety Committee used an 11 exposure concentration of 20 fibers per CC. We can find in

12 studies, specifically in Verma and Middleton, time weighted 13 average exposures for dry powder joint compound is 4.5, and for 14 premix is 2.1 fibers per CC. Secondly, in performing these

15 mathematical computations the Consumer Products Safety 16 Committee used a model that was for respiratory cancer. It

17 wasnt specifically for mesothelioma using data and evaluating 18 the same type of occurrence of mesothelioma from insulating 19 using amphiboles and for factory workers where amosite was 20 used. From that we can easily see that not only was this

21 mathematical computation predicated upon excessive exposure 22 concentrations, it was based on amphibole exposures, and it 23 wasnt exclusively based on mesothelioma. 24 on respiratory cancer. Rather, it was based

We often also see that others base

25 their concerns on asbestos exposure and mesothelioma based on WWW.JJCOURT.COM

Anderson - Direct/Houff 1 the fact that theres no safe threshold.

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The no safe threshold This

2 is an anomaly thats predicated upon, again, mathematics. 3 slide attempts to show the -4 Q 5 A 6 Q 7 A This slide being 25, sir? 25. Yes, sir.

Thank you. This slide attempts to show what is known and what isnt

8 known to derive the no safe threshold statement thats often 9 made. On the right half of this slide we see the plotting of a On that right

10 specific study with a specific range of doses.

11 side of the slide a line of best fit then is mathematically 12 calculated to show what the predicted relationship or observed 13 relationship may be. The left hand side of the slide is Essentially to show linearity, the

14 completely hypothesized.

15 top dotted line of the possible responses is the downward 16 extrapolation to provide the intersect of the zero response 17 with the zero dose, completely hypothesized. 18 for that. We have no basis

But with that zero response at zero dose we have a Ive also plotted two other potential Essentially we

19 no safe threshold.

20 hypothesized responses that one might find.

21 could use any response if we were not convinced that we wanted 22 to go to the zero dose at zero response. 23 Q So, the bottom line here, Dr. Anderson, as I understand

24 your testimony, and please correct me if Im wrong, is that the 25 only thing that we actually know about threshold appears from WWW.JJCOURT.COM

Anderson - Direct/Houff 1 -- to the right of the vertical line in the center at 15, 2 approximately 15 fiber/ml per year, is that correct, sir? 3 A 4 Q Its between 10 and 15. All right. Yes, sir. Is that the same

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And thats fiber CC years?

5 thing? 6 A 7 Q 8 A 9 Q 10 A 11 Q Thats correct. Okay. And that is a dose?

That is a dose. Okay. Predicated upon exposure concentration. And everything to the left of the line is simply

12 hypothesis? 13 A 14 Q Absolutely. Okay. And its the result of downward extrapolation as

15 opposed to observed studies or any actual facts? 16 A 17 Q That is correct. All right. Now, Doctor, turning to our final topic, did I

18 ask you to conduct an analysis of the information concerning 19 the present claimants against Bondex using the PIQs and your 20 prior reports and materials in Bondex cases? 21 A 22 Q Yes, sir. You did.

And using Slides 26 to 30, would you explain to the Court

23 your opinions and your analysis? 24 A Yes, sir. I would. My analysis related to exposures or

25 doses and any resulting disease or disease process included WWW.JJCOURT.COM

Anderson - Direct/Houff 1 three different data sets. First, from the time I was first

81

2 retained by Bondex in early 2004 until their bankruptcy I had 3 actually been retained on 130 cases. Some of those cases went

4 away because of bankruptcy, and have been included elsewhere. 5 Some of the cases were settled before I reviewed the data. And

6 some of the cases were for disease or disease processes other 7 than mesothelioma. So resulting, I have 101 cases for which I

8 have drafted reports. 9 The second data set I used was a data set of 907

10 cases that were resolved prior to bankruptcy that was provided 11 to me by Bates White. Included in those 907 were actually 15

12 of my cases of which I had drafted a report that are included 13 in 101 cases. And then, thirdly, I was provided information

14 related to 2,753 PIQs of which -- 2,765 PIQs, of which 1,513 15 had received quality control evaluation by Bates White or 16 Logan, or both. 17 I selected ten percent of those, or 151.

When I looked specifically, then, at each of those

18 data sets, of the 101 cases for which I drafted reports I could 19 stratify these 101 cases into five categories. DIY-ers,

20 drywallers, bystanders, laundry exposure, and a combination of 21 the above. 22 Q 23 A 24 Q 25 A DIY-ers means do-it-yourself-er? Yes, sir. Okay. Thank you.

Weve kind of developed our own vernacular for this stuff, WWW.JJCOURT.COM

Anderson - Direct/Houff 1 havent we? 2 Q 3 A Thats okay.

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If we then look at the number of cases and the maximal or

4 range of doses compared to each of these five categories, we 5 can see that at the end of my evaluation of these 101 reports 6 that 94 percent of the cases had a maximum -- approximately 90 7 percent -- 94 percent had a maximum dose of 0.86 fiber years 8 per CC, and even more interestingly, through the information 9 and materials that I reviewed, including interrogatories, 10 deposition transcripts, work history reports, social security 11 records, and other information, essentially all of the cases 12 exposures to amphiboles were also noted. 13 Q Let me just clarify two things, Doctor, if I may. The 94

14 percent of cases that had a maximum dose of .86 fiber CC years, 15 that is to joint compound only, correct? 16 A 17 Q 18 A 19 Q 20 A Yes, sir. And the amphibole exposure is not joint compound, correct? That is correct. All right. Lets proceed to the next one, the 907.

The second database was the 907 cases that include 15 of

21 the 101 cases that I just described that were resolved prior to 22 bankruptcy. With each and every one of these 907 cases there

23 were a variety of materials being provided included -24 including a one to three page summary report by counsel, and 25 other information. From my review of those 907 cases resolved WWW.JJCOURT.COM

Anderson - Direct/Houff 1 prior to bankruptcy, I note here I found no meaningful 2 differences in these data, this information, as compared to 3 that 101 cases for which I drafted reports. 4 Q

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And when you say no meaningful difference, what does that

5 mean, sir? 6 A It means that there was no greater specificity of exposure

7 through use or being around others using Bondex joint compound. 8 There was no greater information related to the duration of 9 that exposure. There was no greater information regarding the And there was no greater

10 work practices that were conducted.

11 information on any total duration of time that a Bondex 12 material, including joint compound, could have been used by the 13 plaintiff or the worker could have worked around -- or the 14 plaintiff could have worked around others using a Bondex joint 15 compound product. 16 Q And did it also include any differences with respect to

17 their exposure to amphiboles outside of joint compound? 18 A A very good point, that these 907 cases, while I didnt

19 find in the database and case materials essentially all, but 20 essentially most of the cases there was concomitant exposure to 21 amphiboles from other products, not from Bondex. 22 Q And turning to Slide 29, the personal injury

23 questionnaires that you reviewed, sir, can you please explain 24 what this slide says? 25 A Yes. As Ive previously noted I was provided 2,765 PIQs. WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Of those 2,765 PIQs, 1,513 had undergone quality control 2 evaluation. I then selected a cohort size. My intention was

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3 not to do an epidemiological study and toxicological study, or 4 any other type of study predicated upon determining a causal 5 relationship or other type of concern, but rather was 6 attempting to find and evaluate a representative number of 7 those 1,513 cases, therefore Ive selected ten percent, or 151. 8 I partially did that because there was an immense amount of 9 data that was available. Had I wanted to look at each and From my

10 every one I still might be doing that, Mr. Houff.

11 review of those 151 PIQs, again, I found no meaningful 12 differences as compared to the 101 cases for which I drafted 13 reports or the 907 cases that resolved prior to bankruptcy. 14 found a very similar percentage when I stratified the cases, 15 again, into the five groups that I had found with the 101 cases 16 for which I drafted reports. And in total, at the end of the I

17 day I had drafted -- excuse me -- I had evaluated in excess of 18 1,150 different Bondex cases to come to the conclusions which I 19 provide next. 20 Q So, Doctor, as a result of all of your review of the PIQs,

21 the other 907 cases, and your reports, and your knowledge and 22 experience and your training, have you reached a summary and 23 conclusions regarding your findings with respect to these cases 24 to a reasonable degree of scientific certainty? 25 A Yes, sir. I have. WWW.JJCOURT.COM

Anderson - Direct/Houff 1 Q

85

Please state those conclusions as they appear or elaborate

2 on them as they appear on Slides 30 and 31. 3 A As we discussed earlier, I would first conclude that any

4 difference or differences in the toxicity including any dose 5 response relationship and potency in asbestos fiber types are 6 profound. Secondly, I have found, and I would like anyone to

7 show me any epidemiological study of drywall workers that found 8 excess cases of mesothelioma in drywall workers. Drywall

9 workers, in general -- if we look at the literature in 1988 10 Carey published a study based on census findings that between 11 150 and 160,000 drywall workers that the average employment as 12 a drywaller was 5.7 years. If we apply the 2.1 fiber per cc

13 for premixed joint compound and 4.5 fiber per cc for dry mix 14 time-weighted averages a lifetime drywall worker then would 15 have a dose that exceeded five fiber years per cc. 16 Q Can we take just one second and talk about what a

17 time-weighted average is, as opposed to some of the other 18 things that weve seen? 19 A A time-weighted average provides in this instance the

20 weighted values for all work practices for which a drywall 21 worker would be engaged using joint compound. For dry powder For From

22 it would include mixing, applying, sanding and cleanup. 23 premix it would include applying, sanding and cleanup. 24 those work practices, Verma and Middleton evaluated and

25 established percentages of the day that would be devoted to WWW.JJCOURT.COM

Anderson - Direct/Houff 1 each of those practices. They collected samples for each of

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2 those work practices and from that they mathematically computed 3 the time-weighted average for an AR workday of a drywall worker 4 using either premix or dry powder. 5 Q 6 A And those time-weighted averages were what? For premix, 2.1 fibers per cc and for dry powder, 4.5

7 fibers per cc. 8 Q And thats even though in an individual work practice for

9 a short period of time, the fibers per cc might be 20 or 30 10 fibers or whatever they might be? 11 A 12 Q 13 A 14 Q 15 A Absolutely. Okay. Thats not a time-weighted average?

That is not. Okay. Lets return to your conclusion number four.

Number four, there are no studies that have found a causal

16 relationship between non-contaminated chrysotile, such as was 17 used in some Bondex products, including joint compound and 18 mesothelioma. Fifth, a causal relationship is not causation.

19 If theres anything I want to get out in the remainder of my 20 career it is clarifying that because the general public hears 21 causation and they believe like someone exposed to the Rubella 22 virus are going to get Rubella, they think someone exposed to 23 asbestos is always going to contract or have a cause of some 24 disease. 25 Six, only through the use a downward extrapolation to WWW.JJCOURT.COM

Anderson - Direct/Houff 1 the intercept of zero dose and zero effect is a no threshold 2 found for asbestos. And lastly, my review of information and

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3 facts of 1,159 Bondex cases, including 151 PIQs, revealed that 4 in approximately seven percent of the cases a material asbestos 5 dose, and that should be chrysotile asbestos dose, resulting 6 from the use, or being around the use of Bondex asbestos 7 containing materials including joint compound may have 8 occurred. 9 Q 10 Doctor, thank you very much. MR. HOUFF: I have no further questions at this time,

11 Your Honor. 12 13 THE COURT: MR. FINCH: One second, please. Your Honor, maybe if we have a moment to

14 just switch. 15 16

We dont need a recess, just -I think shes got some questions.

THE WITNESS: THE COURT:

Doctor, just so I understand your point,

17 Number 5 as it relates to chrysotile and amphibole asbestos, 18 could you clarify for me please how youre relating your 19 finding, Number 5, to what you observed in the 1,159 cases? 20 THE WITNESS: Yes, maam. Number 5 is, actually, a

21 more universal statement which with great specificity that as I 22 attempted to show earlier in order to have linearity to this 23 zero intercept regulatory agencies and others have shown the no 24 threshold. Regardless of the no threshold, that does not mean That means, at best, we could show an WWW.JJCOURT.COM

25 that we have causation.

Anderson - Direct/Houff 1 increased risk through some type of, whether its odds ratio, 2 proportional mortality rate or other types of showing of

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3 increased risk and with that showing of increased risk is just 4 a relationship of cause. 5 THE COURT: It is not true causation.

And are you assuming or is there some

6 evidence that you saw that there is no contamination in Bondex 7 products of the chrysotile asbestos with some amphibole form? 8 THE WITNESS: Thats a very good question. From my

9 previous experience on drafting reports in 101 cases it was my 10 understanding that Bondex primarily Canadian Carey chrysotile 11 and may have used chrysotile from Jeffrey Pit in Asbestos 12 Ontario. In studies by Pully and Gunter Sanchez (phonetic) of

13 Canadian Carey they found no tremolitic contamination in the 14 ore. 15 For Jeffrey Pit, theres a study of UICC by Coyahomo

16 (phonetic), Frank, Addison Davies and Trimble (phonetic) that 17 also found no contamination in Jeffrey Pit chrysotile no 18 contamination from tremolite in Jeffrey Pit. 19 20 THE COURT: MR. HOUFF: Okay. Thank you.

Your Honor, if I may followup on Your

21 Honors questions, briefly. 22 23 BY MR. HOUFF: 24 Q Doctor, to the extent that there was some tremolitic CONTINUED DIRECT EXAMINATION

25 contamination, if any, in a Bondex joint compound, would that WWW.JJCOURT.COM

Anderson - Direct/Houff

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1 be reflected in the epidemiological studies relating to drywall 2 workers? 3 A 4 Q Yes, sir, it would. Okay. And once again, your understanding of the

5 literature relating to epidemiology and drywall workers shows 6 what with respect to the development of mesothelioma? 7 A We either have no excess cases, we have no statistical

8 establishment of excess cases, or in some studies we have no 9 cases at all of mesothelioma in large cohorts of drywall 10 workers or other workers engaged in drywall work practices. 11 12 Honor. 13 THE COURT: Did those studies include any -- well, I MR. HOUFF: Thank you. I have nothing further, Your

14 dont know how to ask that question -- any workers who would be 15 using Bondex products? I thought that you had indicated

16 earlier that the studies were from other parts of the world, 17 not necessarily here. 18 19 Im sorry. 20 21 THE WITNESS: No. If I led you to that conclusion,

The studies were of United States workers -THE COURT: All right. -- but theres no identity of any

THE WITNESS:

22 materials that they allegedly used, much less Bondex. 23 24 25 Honor. WWW.JJCOURT.COM THE COURT: MR. HOUFF: All right. Thank you.

Ill pass the witness at this time, Your

Anderson - Cross/Finch 1 THE COURT: All right. Lets take a five minute

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2 recess and then well reconvene with the committees cross 3 examination. 4 5 6 7 BY MR. FINCH: 8 Q Good morning, Dr. Anderson. Can you see the Power Point THE COURT: (Recess) Mr. Finch? CROSS EXAMINATION

9 on the screen in front of you? 10 A 11 Q 12 A 13 14 Q 15 16 Mr. Finch. 17 Q You mentioned a couple of times on direct that I was -Yes, sir. It has a picture of you, correct? Quite a handsome one. (Laughter) You mentioned a couple of times on direct that I -THE COURT: I cant hear a word youre saying,

18 that Id taken your deposition a few weeks ago, do you recall 19 that? 20 A 21 Q 22 it. Yes, sir. Youll find a transcript up there if you need to refer to But first of all, Dr. Anderson, I want to talk to you I want to talk with you briefly

23 about three things here today.

24 about your qualifications, I want to talk with you about who 25 you work for and then some of the opinions youve given, is WWW.JJCOURT.COM

Anderson - Cross/Finch 1 that okay? 2 A 3 Q Yes, sir. Im correct that toxicologists do not have licensing

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4 agencies the way that doctors having licensing agencies, 5 correct? 6 A 7 Q That is correct. You said you are not a medical doctor on direct

8 examination, correct? 9 A 10 Q I did. You understand that medical doctors can take classes in

11 medical school about the causation of disease called -- the 12 causation or aetiology, a-e-t-i-o-l-o-g-y of disease? 13 can take etiology -14 A 15 Q E-t-i-o-l-o-g-y. Doctors can take classes on how diseases get caused, Doctors

16 correct? 17 A 18 Q Thats correct. You never took any classes in medical school about the

19 cause of disease because you didnt go to medical school, 20 correct? 21 A No. Our school was a combined program that actually in --

22 matter of fact, I cant think of a single class -- there were 23 also medical college students and etiology was one of the big 24 precepts of toxicology. 25 Q Okay. But you certainly didnt get a medical degree? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q 3 A 4 Q 5 A 6 Q Oh, no. Youre not a certified industrial hygienist, correct? No, sir. You dont have a formal degree in epidemiology? I do not. Youve never designed an epidemiology study of asbestos

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7 exposed workers, correct? 8 A 9 Q That is correct. Youve never published any original epidemiology study of

10 asbestos exposed workers, correct? 11 A 12 Q That is correct. Youve never been asked by the Unite States Government to

13 do an epidemiology study of asbestos exposed workers, correct? 14 A 15 Q That is correct. Youve never been asked by any company in industry to do a

16 study of asbestos exposed workers, a published epidemiology 17 study, correct? 18 A 19 Q That is correct. You would not hold yourself out as an epidemiologist per

20 se, would you, doctor? 21 A As I described to you in my deposition, Ive had various

22 courses in epidemiology, but I do not call myself an 23 epidemiologist. 24 Q 25 A Youve published some papers on mold, correct? Thats correct. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q 2 A 3 Q 4 A 5 Q Published papers on fiberglass, correct? Well, it was actually styrene exposure.

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Styrene exposure in the fiberglass manufacturing process? Reinforced fiberglass pipe. You have several published papers on -- and this is papers

6 in the Peer Reviewed literature -- on risks to pregnant 7 employees, correct? 8 A 9 10 11 12 13 14 15 Q THE WITNESS: Really to teratogenic agents, yes, sir. THE COURT: Im sorry, to what? Im sorry?

UNIDENTIFIED SPEAKER: THE WITNESS: THE COURT:

Teratogenic agents.

Would you mind spelling? (Laughter) T-e-r-a-t-o-g-e-n-i-c.

And those are -- you see, those agents that can harm a

16 child before its born, correct, harm -17 A 18 Q Yes, sir. Okay. I just wanted to make sure I understood what youre You have two Peer Reviewed papers that relate

19 talking about.

20 to asbestos, correct? 21 A 22 Q Thats correct. Out of all the publications that you have written, one of

23 the Peer Reviewed papers that relates to asbestos involved dose 24 reconstruction, correct? 25 A Thats correct. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q And thats not an epidemiology study, thats just a

94

2 description of what dose reconstruction is, correct? 3 A Its a little broader based than that, but yes, sir. It

4 does include dose reconstruction. 5 Q 6 A 7 Q Okay. It was not an epidemiology study?

Thats correct. And well get to that paper maybe in a little while. The

8 second paper you wrote was a review paper with no original 9 research in it, correct? 10 A 11 Q Thats correct. What you did is you reviewed the work of other scientists

12 who had published things in the Peer Reviewed literature and 13 you wrote a paper about it. 14 right? 15 A 16 Q 17 A 18 Q Thats correct. You used to be at OSHA, correct? I was. While you were -- you know that OSHA has regulations Thats what a review paper is,

19 concerning asbestos exposure, correct? 20 A 21 Q I -Not why -- you were aware that it has regulations. My

22 question is just does it -- it does have regulations relating 23 to asbestos exposure, correct? 24 A 25 Q It does. And in the late 1980s and early 1990s, OSHA had hearings WWW.JJCOURT.COM

Anderson - Cross/Finch 1 about whether to change the asbestos standard, correct? 2 A 3 Q Thats correct. And you did not testify before OSHA about asbestos

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4 standards, correct? 5 A 6 Q Thats correct. You did not submit any kind of written papers to OSHA in

7 connection with its hearings on the asbestos standards, 8 correct? 9 A 10 Q Thats correct. You have never -- the Environmental Protection Agency --

11 you have never served as a member of the Science Advisory Board 12 for the Environmental Protection Agency relating to asbestos, 13 correct? 14 A 15 Q Thats correct. You have never testified at any hearings for relating to

16 NIOSH analysis of asbestos, correct? 17 A 18 Q Thats correct. There was some discussion yesterday with Dr. Feingold --

19 and you and I have talked about this before -- about the 20 International Agency for Research on Cancer, youre aware of 21 that organization, correct? 22 A 23 Q Yes, sir. The International Agency for Research on Cancer put

24 together a working group specifically looking at asbestos in 25 2009, or thereabouts, correct? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A I dont recall the exact date, but I trust youre

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2 describing the correct date. 3 Q And that resulted in a monograph that was published

4 relating to the carcinogenicity of asbestos that monographed -5 the working group decided what they decided in 2009 and the 6 monograph came out earlier this year, correct? 7 A 8 Q Yes, sir. Okay. Earlier last year. Were now in 2013. Earlier in 2012,

Thats right.

9 correct? 10 A 11 Q Yes, sir. And you were not part of the working group that IARC put

12 together on asbestos issues, correct? 13 A 14 Q Thats correct. The National Institutes of Health provides funding for

15 people to -- provides grants for people to study disease. 16 Youre aware that theres a grant process for that, correct? 17 A 18 Q Yes, sir. You never applied for and never received any grants from

19 the National Institutes of Health to study how asbestos causes 20 disease, isnt that true? 21 A 22 Q Thats correct. Im going to talk a little bit now -- theres, second area You work for a company called GZA

23 is who you work for.

24 GeoEnvironmental, correct? 25 A Inc., yes, sir. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q 2 A Inc. Its a 600 employee company, correct?

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I think we have a scooch over, but around 600 employees,

3 yes, sir. 4 Q And youve been paid $408 per hour for testimony in

5 connection with the Bondex case, correct? 6 A 7 8 Q Okay. I havent been paid yet. I hope to be paid.

(Laughter) Youre company bills out at $408 per hour for

9 testimony, correct? 10 A 11 Q In this case, yes, sir. In this case. And its $240 per hour to look at documents

12 and to do analysis and write the report that you generated, 13 correct? 14 A 15 Q Yes, sir. And you were paid -- as of the time of your deposition,

16 you had been paid about two hundred -- or your company had been 17 paid about $200,000 by Bondex in this case, correct? 18 A I dont know that weve been paid everything, but I

19 believe we billed around 200,000. 20 Q Okay. This isnt obviously the first time youve worked You have worked for Bondex in over a hundred cases

21 for Bondex.

22 in asbestos litigation, correct? 23 A 24 Q Yes, sir. There is a company called Georgia Pacific that once upon a

25 time made asbestos containing joint compound, correct? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q Yes, sir. Its got the fiber for its joint compound from Canada,

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3 correct, thats one place it got his fiber from, Quebec, 4 Canada? 5 A 6 Q Thats correct. Georgia Pacific. It also got some of its fiber from a

7 mine in California from the Union Carbide Corporation, correct? 8 A 9 Q Thats correct. And you have testified -- or excuse me, you have done work

10 for Georgia Pacific in over 100 cases, isnt that true? 11 A 12 Q Yes, sir. There is also a company called Kaiser Gypsum that made a

13 once upon a time asbestos containing joint compound, correct? 14 A 15 Q Yes, sir. Kaiser Gypsums joint compound has chrysotile asbestos in

16 it, correct? 17 A 18 Q 19 A 20 Q Yes, sir -- or had. Had? Yeah. They couldnt put asbestos in anymore because its no

21 longer allowed, correct? 22 A 23 Q Well -Let me strike the question. Kaiser Gypsum once upon a

24 time had asbestos in its joint compound, correct? 25 A Thats correct. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q 2 A 3 Q 4 A 5 Q And youve worked for them in over 50 cases, correct? Yes, sir. Youve worked for Kelly-Moore, correct? A couple times, yes, sir.

99

Kelly-Moore is a company that has had asbestos, chrysotile

6 asbestos incorporated into either joint compound or paint 7 texture products, correct? 8 A I dont recall the paint texture, but I do recall joint

9 compound. 10 Q Okay. They made joint compound with asbestos in it just

11 like Bondex and Georgia Pacific and Kaiser Gypsum, right? 12 A 13 Q 14 A 15 Q 16 A 17 Q Yes, sir. And youve worked for them too, right? Yes, sir. Youve worked for THAN, T-h-a-n, correct? Thats correct. THAN is a company that supplies asbestos fiber to other

18 companies, correct? 19 A Well, my understanding was THAN did a lot of things. That

20 was one of their business lines. 21 Q Okay. And do you have the understanding that THAN was a

22 supplier of fiber to Bondex? 23 A 24 Q I dont know that I know that. Okay. And we might come back to THAN in a minute. Youve

25 also worked for various other defendants that I havent listed WWW.JJCOURT.COM

Anderson - Cross/Finch

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1 up here, correct, various other defendants in asbestos personal 2 injury cases, right? 3 A 4 Q Yes, sir. And youve done over 500 cases for asbestos defendants,

5 isnt that right? 6 A 7 Q Yes, sir. Lets talk a little bit about your time. I think I

8 understand what you were saying.

You spent about two-thirds of

9 your time working professionally as a toxicologist, is that 10 right? 11 A 12 Q What I would call my practice, yes, sir. Whats your practice -- and 70 percent of that time you do

13 in litigation consulting? 14 A 15 Q 16 A As we discussed in my deposition, 70 percent of that -Of the two-thirds --- involves cases that may sometime in their life-cycle

17 make it to litigation. 18 Q Okay. And you work -- and of your litigation consulting

19 work, 90 percent of that time is for asbestos defendants, is 20 that correct? 21 A That feels about right, yes, sir. Ive never done a

22 specific analyses. 23 Q But thats what youve told me and is in the right ball

24 park, right? 25 A That would be my estimate, yes, sir. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q Okay.

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Youve never done any work on behalf of a plaintiff

2 in an asbestos personal injury case, correct? 3 A 4 Q As we talked, Ive never been asked. Okay. Let me talk a little bit about the review of the As I understood your testimony on

5 questionnaire that you did.

6 direct, you had 101 Anderson cases that were -- those were 7 cases youd worked on as an expert in the -- when Bondex was in 8 the tort system, right? 9 A 10 Q 11 A 12 Q 13 A 14 Q When they were what? Before Bondex went into bankruptcy -Yes, sir. -- those are the cases you had worked on -Yes, sir. And those cases you had enough information to do a dose

15 reconstruction of how much exposure they had to Bondex 16 asbestos, right? 17 A 18 Q Yes, sir. Okay. And your only job was to just, in those cases and

19 generally speaking, all you did was estimate how much exposure 20 they had to Bondex asbestos, in those hundred -- it wasnt your 21 only job, but that was -- you didnt try to estimate the dose 22 of asbestos they may have gotten from other sources on top of 23 their Bondex dose, correct? 24 A I had various tasks. I would not just state I was only to

25 calculate a dose, but the dose I did calculate would be WWW.JJCOURT.COM

Anderson - Cross/Finch

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1 specific for Bondex, and as we discussed at my deposition there 2 may have been a couple cases where I talked about a military 3 type exposure. 4 Q 5 6 7 Q 8 A 9 Q 10 that? Okay. I dont recall as I sit here.

But for the vast majority of cases -MR. FINCH: THE COURT: May I approach the easel, Your Honor? (No audible response)

I drew a big rectangle there, Dr. Anderson, right? Yes, sir. Okay. And in the bottom I wrote the word Bondex, see

And then I have a question mark and if you assume that

11 this is the total cumulative dose of asbestos that somebody 12 might have had over their life from various sources, what your 13 job was, what you typically did when you did the 101 Anderson 14 cases was you estimated this piece here, the Bondex piece and 15 you normally didnt try to put a number quantification on the 16 rest, is that a fair characterization? 17 A No. I couldnt necessarily agree to that. I was asked to

18 look at Bondex, whether or not it was a fractional component of 19 that exposure or other exposures. 20 at that. 21 Q I think were saying the same thing. You were asked to You werent I wasnt asked to even look

22 look -- you were trying to figure out this.

23 necessarily asked to figure out in a quantitative way the other 24 -- the total of the other exposure somebody might have had? 25 A Thats correct. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q Okay. I think were on the same page.

103 And you -- I think

2 I -- I think I understood your testimony on direct -- and Im 3 just going to switch just quickly here. 4 two other categories. You also talked about

You looked at the 107 summaries and you

5 looked at some personal injury questionnaires, correct? 6 A 7 Q Yes, sir. And that slide up in front of you shows roughly the number

8 of cases in each bucket that you looked at, right? 9 A 10 Q Yes, sir. Okay. And thats a slide I believe Mr. Houff showed --

11 thats the slide you helped him put together on direct, 12 correct? 13 A 14 Q Yes, sir. And what you found was essentially all the cases had

15 amphibole exposure in the 101 cases for which you drafted 16 reports when Bondex prior to going into -17 18 19 Q THE COURT: MR. FINCH: I cant hear you, Mr. Finch. Sure.

All -- essentially of the 101 cases, all of them had

20 amphibole exposures identified, right? 21 A 22 Q Yes, sir. Okay. And then you looked at the 907 cases and you found

23 no meaningful differences as compared to the 101 cases for 24 which you had drafted reports for Bondex before it went into 25 bankruptcy, right? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q Thats correct. Okay. And then you looked at the 151 personal injury

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3 questionnaires, and again I found no meaningful differences as 4 compared to either the 101 pre-bankruptcy cases you worked on 5 or the 907 reports that you -- or cases that were resolved 6 prior to bankruptcy, correct? 7 A 8 Q Thats correct. Okay. This is a slide Dr. Feingold presented. There he

9 found that there were -- ten percent of the cohort he looked at 10 had direct joint compound exposure alone. 11 than what you found, correct? 12 A He looked at -- Im trying to interpret this -- 229 cases Thats different

13 where Ive looked at over 1000 and of the 229 cases that youre 14 saying Dr. Feingold looked at he found 25 or 10.92 percent as 15 compared to approximately seven percent that I found. 16 Q No. But the difference is you said that for the 101 cases

17 and the 907 cases and the 151 that virtually all of them had 18 amphibole exposure, right? 19 A 20 Q Yes, sir. Dr. Feingolds slide says that ten percent of the ones he

21 looked at had only joint compound exposure. 22 THE COURT: Pardon me. I dont think thats what Maybe we better go

23 Dr. Feingolds testimony was, Mr. Finch. 24 back and look.

I thought what he said was that ten percent of

25 the cases showed that they -- from the information he had there WWW.JJCOURT.COM

Anderson - Cross/Finch

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1 was exposure to a Bondex product, but that he felt that had he 2 had the ability to take a look at tissue samples or something 3 else, that there may have been some proof of something else. 4 think thats what his -5 6 Q MR. FINCH: Okay. Your Honor is right. I

Dr. Feingold, based on the information he had, which was

7 an occupational history for some of them, ten percent of the 8 pleural mesotheliomas had direct joint compound exposure alone 9 and he didnt necessarily have the ability to do lung fiber 10 digestion analysis or look at the lungs to see if anything was 11 in it, correct? 12 A 13 Q Youre asking me to interpret the slide? Okay. Ill pass that slide. Back to what you did, your

14 analysis, of the -- and I believe you talked about this a 15 little bit in your deposition. 16 notes where you had -17 18 19 Q 20 21 MR. FINCH: THE COURT: May I approach the witness, Your Honor? (No audible response) You showed me some handwritten

Its Deposition Exhibit 7. THE COURT: MR. FINCH: What are you showing him, Mr. Finch? Its Exhibit 7 from his deposition. Why

22 dont we mark this for purposes -- actually Im not going to -23 Im just going to use this to refresh his recollection. 24 not going to -25 THE COURT: Whats the deposition date? WWW.JJCOURT.COM Im

Anderson - Cross/Finch 1 2 3 Q MR. FINCH: THE COURT: December 20th, 2012. All right. Thank you.

106

And I believe after we looked at this, what you ultimately

4 concluded after looking at the questionnaires is that about 88, 5 89 percent of the PIQs there was evidence of some exposure to 6 Bondex asbestos containing joint compound, correct? 7 A What I found is that for 17 of the PIQs or 11.3 percent, Then I was able to stratify the

8 Bondex wasnt even mentioned.

9 remaining cases into occupational exposure including 10 drywallers, do-it-yourselfers, laundry, bystanders, or a 11 combination of the other four. 12 Q Right. And those were all subgroups who had evidence of

13 at least some exposure to Bondex asbestos, correct? 14 A 15 Q Yes, sir. Okay. So if I did the math right, about 89 percent had

16 evidence of some exposure to Bondex -- exposure and would fall 17 into one of the four buckets you just mentioned, correct? 18 hundred minus eleven point three is 88.7. 19 A I can do the math pretty well, but what this is saying is Whether or not there A

20 Bondex was mentioned in the other cases.

21 was sufficient information to derive an actual dose, Id have 22 to look -23 Q Okay. You may not have had sufficient information to do a

24 dose estimate like you did with the cases you worked on when 25 Bondex -- before Bondex went into bankruptcy, but there was WWW.JJCOURT.COM

Anderson - Cross/Finch 1 evidence of at least some exposure mentioned in the 2 questionnaires that you look at, correct? 3 A No. Given my previous answers, my answer, there was a

107

4 reporting of some Bondex product.

It doesnt necessarily mean

5 there was specificity regarding any use or exposure to a Bondex 6 product. 7 Q Okay. Theres been a lot of talk about chrysotile You would agree with me that over 90 percent of all

8 asbestos.

9 the asbestos ever used in the United States was chrysotile 10 asbestos, correct? 11 A 12 Q Yes, sir. I believe so.

And well talk in a minute about what is a, you used the

13 term a causal relationship, do you recall that on direct 14 examination? 15 A 16 Q I do. And you would agree that there is a causal relationship

17 between exposure to chrysotile asbestos and the disease 18 asbestosis, correct?? 19 A 20 Q Yes, sir. And that is true -- and that is recognized -- generally

21 recognized by scientists and doctors around the world that 22 there is a causal relationship between chrysotile asbestos and 23 the disease asbestosis, correct? 24 A 25 Q I believe so. And thats true whether the chrysotile asbestos has WWW.JJCOURT.COM

Anderson - Cross/Finch 1 tremolite in it or not, correct? 2 A 3 Q Yes, sir. And there is also -- its generally recognized by

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4 scientists around the world that there is a causal relationship 5 between chrysotile asbestos and pleural plaques, right? 6 A 7 Q Yes, sir. Thats a disease that affects the pleura of the lung,

8 which is the lining around the lung, right? 9 A 10 Q Yes, sir. And the pleura of the lung is the same place where

11 mesothelioma occurs, correct? 12 A 13 Q In and around, yes, sir. And you would agree that the scientists around the world

14 have agreed that there is a causal relationship between 15 chrysotile asbestos and pleural plaques regardless of whether 16 or not the chrysotile has tremolite in it, correct? 17 A 18 Q I believe so. You would agree that there is a causal relationship

19 between chrysotile asbestos and lung cancer, correct? 20 A 21 Q Some types of lung cancer, yes, sir. And that scientists around the world are in general

22 agreement that chrysotile asbestos -- there is causal 23 relationship between chrysotile asbestos and various types of 24 lung cancer, correct? 25 A I believe so. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q

109

And thats true regardless of whether theres tremolite or

2 not in the lung -- in the chrysotile, correct? 3 A 4 Q I believe so. All right. Now you talked on direct examination about the

5 Bradford Hill criteria for a causal relationship or 6 association, recall that? 7 A 8 Q 9 10 I do. That -- Im going to bring up a copy of Dr. Bradford -MR. FINCH: THE COURT: Your Honor, may I approach the witness? Yes. But you need to do something with

11 the microphone because all were hearing is static. 12 MR. FINCH: May I approach the witness? And lets

13 mark this for purposes of identification as -- excuse me -- ACC 14 Exhibit for demonstrative purposes. 15 Q Excuse ACC Exhibit 1007.

Do you recognize this as Bradford Hills address where he

16 goes through the nine factors you talk about -17 A 18 19 20 21 22 23 Q It appears to be, yes, sir. THE COURT: MR. FINCH: THE COURT: MR. FINCH: THE COURT: May I have a copy of it too, please? Youd like a copy, Your Honor? Yes. Apologize, Your Honor. Thank you.

Its entitled the Environment and Disease Association and

24 -- or causation, do you see that, by Sir Austin Bradford Hill? 25 A Yes, sir. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q

110

And on Page 299, isnt it correct that Doctor Hill writes,

2 none of my nine view points can bring indisputable evidence for 3 or against the cause-and-effect hypothesis and none can be 4 required as a sine qua non. What they can do with great of

5 less strength is to help us make up our minds on the 6 fundamental question, is there any other way of explaining the 7 set of facts before us? Is there any other answers equally or Thats what Dr. Hill wrote,

8 more likely than cause-and-effect? 9 correct? 10 A 11 Q Sure. Okay.

And when you were at OSHA, there was an

12 organization called NIOSH that is sort of like the research arm 13 for OSHA, correct? 14 A 15 Q Yes, sir. Its still around, so it wasnt just when -And NIOSH does a lot of the scientific

Its still around.

16 research that OSHA makes its -- makes regulatory decisions 17 based on, correct? 18 A 19 Q Correct. Okay. And when you were at OSHA, there was a gentleman Do you know

20 named Richard Lemen who was at NIOSH, correct? 21 Dr. Richard Lemen? 22 A 23 Q I know of him, yes, sir. Yes.

He is a -- he has published many articles in the

24 Peer -- hes an epidemiologist, right? 25 A Thats my understanding. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q Hes published many articles in the Peer Reviewed

111

2 literature, original research on the epidemiology of asbestos 3 related disease, correct? 4 A 5 Q I believe so. He was a former Assistant Surgeon General of the United

6 States, correct? 7 A 8 Q I have no idea. You dont know that one way -- you dont dispute that?

9 You just dont know that one way or the other? 10 A Theres two questions there. I dont know it one way or

11 another. 12 Q Okay. And are you aware that Dr. Lemen has in the past

13 served on IARC working groups related to asbestos? 14 A 15 16 Honor? 17 18 THE COURT: (No audible response) I think that mic will clip to I dont recall. MR. FINCH: Okay. May I approach the witness, Your

UNIDENTIFIED SPEAKER:

19 your pocket. 20 21 22 23 THE COURT: No, not in your pocket. THE WITNESS: THE COURT: MR. FINCH: Okay. Up here.

Thank you. And lets mark this for purposes of Youre familiar with this article,

24 identification as ACC-1008. 25 are you not, Dr. Anderson?

WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q I believe Ive seen it before, yes, sir. Its a, article published by Dr. Lemen. Chrysotile

112

3 asbestos is a cause of mesothelioma application of the Hill 4 causation model, see that? 5 A 6 Q His commentary on such, yes, sir. And he reviewed the nine Bradford Hill criteria and isnt

7 it correct that Dr. Lemen concluded chrysotile asbestos meets 8 Hills nine proposed criteria establishing chrysotile asbestos 9 as a cause of mesothelioma? 10 A 11 Q 12 that? 13 A 14 Q 15 A 16 Q Yes, sir. Thats what it says. Can you direct me to the page? In the abstract, the last sentence before key words, see

You used to be at OSHA, correct? Yes, sir. OSHA has concluded, has examined the question and

17 concluded that there is a causal relationship between 18 chrysotile and mesothelioma, correct? 19 A 20 Q Through their risk assessment, yes, sir. The Environmental Protection Agency has concluded that

21 theres a causal relationship between chrysotile and 22 mesothelioma, correct? 23 A 24 Q Correct. The ATSDR, which is the Agency for Toxic Substances and

25 Disease Registry, has concluded theres a causal relationship WWW.JJCOURT.COM

Anderson - Cross/Finch 1 between chrysotile asbestos and mesothelioma, correct? 2 A Correct. Predicated upon my earlier testimony that we

113

3 dont have any studies on non-contaminated chrysotile. 4 Q NIOSH has concluded theres causal relationship between

5 chrysotile and mesothelioma, correct? 6 A 7 Q With the same caveat. Yes, sir.

And the last logo up there is the International Agency for

8 Research on Cancer. 9 10 11 Q MR. FINCH: THE COURT: May I approach the witness, Your Honor? Yes.

Youre aware that the working group, the IARC working

12 group, on asbestos met in 2009 and the results of their meeting 13 were published in The Lancet online journal, correct? 14 A 15 Q Yes, sir. And the -- what Ive given you is the two-page summary

16 that came out in 2009 and as we discussed when I saw you before 17 the snowstorm in January, there is -- ultimately, there was a 18 100 page monograph that IARC published, correct? 19 A 20 Q It was extensive. With approximately 400 citations to literature. I believe

21 we counted -- we didnt count them, but you didnt disagree 22 there was about 400 citations in it? 23 A 24 Q I would suggest thats approximate. Okay. And none of your papers were cited by IARC -- none

25 of your papers relating to asbestos were cited by IARC in the WWW.JJCOURT.COM

Anderson - Cross/Finch 1 monograph, isnt that true? 2 A I believe my papers were published after they completed

114

3 this review. 4 Q And ultimately, isnt it true that -- and Ive highlighted

5 it for you -- IARC concluded epidemiological evidence has 6 increasingly shown an association of all forms of asbestos, 7 chrysotile, crocidolite, amosite, tremolite, actinolite, and 8 anthophyllite with an increased risk of lung cancer and 9 mesothelioma. And then they go on an say while the potency

10 factors may be debated, the fundamental conclusion is that all 11 forms of asbestos are carcinogenic to humans, correct? 12 A You went through a whole lot. First, I would agree that

13 IARC found an association. 14 causal relationship.

They dont even state they found a And I

So with that I would agree.

15 further agree that they recognize then that there are 16 differences in the potency factors, which I discussed earlier. 17 So, Yes, sir, I would agree with that, as well. 18 19 THE COURT: MR. FINCH: Are you marking this as 1009? Yes, Your Honor. This is -- lets mark

20 this as -- ACC-1009 is the IARC Executive Summary from 2009. 21 22 23 right? 24 MR. FINCH: No, its not being admitted. Its for THE COURT: All right. Its not being admitted,

UNIDENTIFIED SPEAKER:

25 demonstrative purposes. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q

115

In the IARC monograph they talk about a cohort of workers

2 exposed to asbestos in a place called Balangero, Italy, right? 3 A 4 Q I believe so. Okay. And the -- youre familiar with the next slide,

5 youre familiar with the paper called excess of mesotheliomas 6 after exposure to asbestos in Balangero Italy, by Dino, 7 Mirabelli and other authors that are Italian, right? 8 A 9 Q Yes, sir. And that paper relates to a group of mesotheliomas that

10 they observed in -- it was published in the paper in 2008, 11 correct? 12 A 13 Q It appears to be at the bottom, yes, 2008. And this was a cohort of people exposed to Balangero

14 chrysotile, right? 15 A 16 Q 17 A 18 Q Chrysotile from the Balangero mine. Yes. Chrysotile from the Balangero mine, right?

Yes, sir. Okay. And what the authors concluded, the cluster of 14

19 mesothelioma cases among workers who were active in the mine 20 and 13 among other people exposed to Balangero chrysotile 21 provides further evidence that tremolite-free chrysotile is 22 carcinogenic? 23 A 24 Q Yes, sir. Okay. And then following that, there was a paper in the Youre familiar Thats what they concluded, correct?

25 Peer Review world wide literature by Pira. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 with the Pira paper, correct? 2 A 3 Q 4 A Yes, sir. The Pira paper was a paper published in 2009, right? I dont see the date, but I think that would be the

116

5 approximate time. 6 Q Okay. And youre familiar with the Pira paper because you

7 have reviewed it in the past, right? 8 A 9 Q 10 A 11 Q 12 A 13 Q Yes, sir. I think its --

And we talked about it at your deposition, right? We did or didnt? We did. Yes, sir. And the Pira paper is again a group of -- its a -- this

14 is actually a epidemiology study that -- looking at the same 15 chrysotile from Balangero Italy, correct? 16 A 17 Q Yes, sir. And there they found -- we found a significant excess

18 mortality from pleural cancer only, four deaths, SMR 4.67, and 19 pleural and peritoneal cancers combined, five deaths, SMR 3.16. 20 Thats what they found, right? 21 A 22 Q 23 A 24 Q Thats correct. And pleural cancer is mesothelioma, correct? I assume thats what they meant. Okay. And the chrysotile that comes from Balangero,

25 Italy, there isnt any tremolite in it, right. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q Im having a hard time hearing you at times, sir. There isnt any tremolite in the chrysotile from the

117

3 Balangero mine in Italy, correct? 4 A 5 Q No. It has balangeroite, which is -It has balangeroite, but does it have tremolite --

Okay.

6 Were going to keep our minerals straight -- correct, it has 7 balangeroite, not tremolite? 8 A Yes. Balangeroite is a hydrated iron silicate like

9 chrysotile. 10 Q And isnt it true that theres never been a study, an

11 epidemiological study of whether exposure to balangeroite by 12 itself causes mesothelioma? 13 A 14 Q I havent found one. No, sir.

Theres never been either animal injection studies or

15 inhalation studies that attempt to -- that have found that 16 balangeroite has -- is able to produce mesothelioma in animals, 17 correct? 18 A 19 Q 20 A 21 Q I would agree. You would agree theres no such study, correct? I havent found them. And you are aware that authors have published in the Peer

22 Reviewed literature a paper by Turci in 2009 entitled the Role 23 of Associated Mineral Fibers in Chrysotile Asbestos Health 24 Effects, the Case of Balangeroite? 25 paper, arent you, Dr. Anderson? WWW.JJCOURT.COM Youre familiar with that

Anderson - Cross/Finch 1 A 2 Q Yes, sir.

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And they actually looked at the balangeroite and isnt it

3 true that what -- this is a Peer Reviewed paper, right? 4 A 5 Q Yes, sir. And what they concluded is considering the profound

6 differences between the structure of balangeroite and 7 amphiboles, previous results and observations on the poor 8 ecopersistence of balangeroite, and the present data, we 9 conclude that balangeroite traces may contribute to the overall 10 toxicity of the airborne fibers in Balangero, but may not be 11 compared to tremolite, nor considered the sole responsible for 12 the excess of mesothelioma found in Balangero, right? 13 A 14 Yeah, and I would agree with that. THE COURT: Okay. Wait. You need to stop. You can

15 take this off your clock, but I have to read this. 16 going too fast and I cant comprehend it that fast. 17 Thank you. 18 19 20 MR. FINCH: THE COURT: MR. FINCH:

Youre Okay.

Your Honor, may I approach the witness? Yes. Here, Ill give you this copy. This has

21 my highlighting on it, Your Honor, but Ill substitute a clean 22 copy. 23 24 Q THE COURT: Okay.

And ACC-1010 was the exhibit we were just -- the slide you The article I just

25 were just looking at, right, Dr. Anderson? WWW.JJCOURT.COM

Anderson - Cross/Finch

119

1 handed you is the Turci article we were just discussing, right? 2 A 3 Q You asked me the exhibit number. Okay. I have no idea.

The Role of Associated Mineral Fibers in

4 Chrysotile, the Case of Balangeroite, was the article that we 5 were just discussing on the slide, right? 6 A 7 Q Thats right. Okay. And what the author concluded on Page 496 -- are

8 you there with me, sir? 9 A 10 11 Q Yes, sir. MR. FINCH: Your Honor, 496.

Under such circumstances, it may slightly -- theyre

12 talking about the balangeroite, right? 13 A Youre doing the same thing to me now, youre speed It appears to be, yes, sir. And what theyre talking about, the balangeroite,

14 reading. 15 Q

Okay.

16 what they conclude is under such circumstances, it, being the 17 balangeroite, may slightly contribute to the overall toxicity, 18 but it cannot be considered responsible for the excess of 19 mesothelioma found in Balangero in past and more recent 20 studies, correct? 21 A 22 Q Yes, sir. Thats what they conclude. Thats the slide you put up

23 talking about relative exposure risk based on various risk 24 assessments, correct? 25 A Yes, sir. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q Okay. And one of the people who has done a risk

120

2 assessment on the various, the potency of various fiber types 3 is William Nicholson, correct? 4 A 5 Q Yes, sir. He was the author of the 1986 risk assessment done by the

6 Environmental Protection Agency, correct? 7 A 8 Q Thats correct. Hes also published numerous Peer Review articles in the

9 literature concerning the epidemiology of various asbestos 10 exposed cohorts, correct? 11 A 12 Q Thats correct. He and his colleagues at Mount Sinai are among the

13 pioneers in asbestos epidemiology and asbestos medicine, 14 correct? 15 A 16 Q Yes, sir. And Dr. Nicholson, I believe we heard testimony on Monday,

17 has done a projection of the incidences, the future incidences, 18 of asbestos related mesothelioma that has proved to be 19 remarkably accurate over time, correct? 20 A 21 Q Yes, sir. And Dr. Nicholson did a paper that was published in 2001

22 on the -- we talked about this paper in December -- about the 23 carcinogenicity of chrysotile asbestos, correct? 24 A 25 Q Yes, sir. Okay. Theres two questions there. Yes on both.

And he, what he wrote in the article -- its in the WWW.JJCOURT.COM

Anderson - Cross/Finch

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1 summary section -- I have the article if you would like to have 2 the whole copy -- but he says the case that chrysotile is a 3 potent causative factor in producing mesothelioma is a strong 4 one. It is shown to be so in a comparison of more than 40

5 studies of different fiber exposure circumstances, he writes 6 that, right? 7 A He wrote that. And the 40 studies, again, are ones we

8 talked about where we dont have sole exposure to chrysotile. 9 Q And then he goes on to say, all available data suggests

10 that it -- and hes talking about chrysotile -- youd agree 11 with me that hes -- that the it means chrysotile? 12 A 13 Q I believe so. Okay. It dominates the risk in those circumstances where The risk of chrysotile in

14 it is the principle fiber used.

15 producing mesothelioma is similar to that of amosite on a per 16 fiber exposure basis. 17 A 18 Q Yes, sir. Okay. And youre aware that in 2008, the Environmental Thats what he wrote in 2001, right?

19 Protection Agency went out and convened a science advisory 20 board to look at the potency factor analysis done by some 21 people called Berman and Crump, correct? 22 A 23 Q I talked about that earlier, yes, sir. Okay. And you havent published anything in the Peer

24 Review literature about the results of the fiber potency 25 analyses done by the EPA, correct? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q No, I have not.

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And youre aware from your review of the literature that

3 Dr. Lemen and Dr. Welch and Dr. Silverstein have published an 4 article in the Peer Review literature about the fiber potency 5 analyses done by the EPA, correct? 6 A 7 Q Sure. And you were not a member, I believe we established, of

8 the Science Advisory Board of the EPA like Dr. Leslie Stayner 9 was, correct? 10 A 11 not. 12 Q And Dr. Stayner was one of the reports you reviewed as I cant speak whether Dr. Stayner was a member, but I was

13 part of the work you reviewed in this case, correct? 14 A 15 Q Yes, sir. He was one of my experts who was part of the EPA Science He was one of the experts for the

16 Advisory Board, correct? 17 ACC? 18 A 19 Q

Again, as I stated earlier, I dont know for sure. Okay. You put up this slide. Youre talking about the

20 downward extrapolation for a dose response curve and whether or 21 not a risk exists below observable data, recall that testimony, 22 generally? 23 A 24 Q 25 A Yes. Thats your slide, right? Thats my slide based on the slide that you tried to WWW.JJCOURT.COM

Anderson - Cross/Finch 1 prepare during my deposition if I recall. 2 MR. FINCH: Okay. Im going to try this one more

123

3 time and I know Mr. Evert has criticized my drawing ability, so 4 Im going to try to do -- can you see this, Your Honor? 5 6 Q Okay. THE COURT: Yes.

So what Ive drawn here is a chart where the dose

7 is on the X axis going out, right, Dr. Anderson? 8 A 9 Q Yes, sir. And the response, which is the incidence of disease that

10 you see from a given dose is on the Y axis going up and down, 11 vertical, right? 12 A The vertical, primarily be some type of increased risk,

13 not -14 Q Increased risk of getting a disease, thats what you have

15 on your chart up there, right? 16 A 17 Q 18 A I just put risk, but -You put risk --- it implies vertically it moves from zero to some

19 number. 20 Q And this is where you have observed data on various You mean you can -- this is where the -- for example

21 cohorts.

22 up there you have observed and then you have hypothesized, do 23 you see that on your chart? 24 A 25 Q Yes, sir. Okay. And then you talked about a linear, no threshold WWW.JJCOURT.COM

Anderson - Cross/Finch 1 dose model, do you see that? 2 A 3 Q I do. Okay. I never took Latin in school, but the word sub

124

4 means, like submarine means under, or sub par means less than 5 par, means lower than, right? 6 A 7 Q Yes, sir. Okay. So what youve drawn on your chart is a sub --

8 youve drawn two different sub linear dose response curves, 9 correct, because its lower than a -10 A 11 Q Hypothesized sublinear response curves. Right. And you drew one where it actually looks like it

12 intercepts with zero and the other one looks like it kind of 13 starts over here. 14 A Well the first one doesnt intercept with zero as you

15 notice. 16 Q Oh, it intercepts with something -- it doesnt -- it

17 intercepts with something to the right and the other one 18 intercepts further to the right. So thats called a sublinear

19 dose response curve, which means unless you get a dose on the X 20 axis out here, youre not going to see any increased risk in 21 disease? 22 A 23 Q I didnt see where you said out here. Out towards the right. Unless you see a dose that gets

24 past a certain threshold, if you will, youre not going to see 25 any increased risk with a sublinear dose response curve, is WWW.JJCOURT.COM

Anderson - Cross/Finch 1 that right? 2 A 3 Q 4 -5 A 6 Q Can you start again then, please? Yes. You said to the right. To the left. You mean to the left? Im sorry.

125

I did mean to the left.

I was

Just let me ask you the question like this, with a

7 sublinear dose response curve, youre not going to see any 8 increased risk until you pass some threshold? 9 A 10 Q Thats correct. Okay. Thats why I call it hypothesized.

Now there is a Latin root called supra, s-u-p-r-a,

11 right? 12 A 13 Q Correct. And supra means like superman or bigger than, or a super

14 linear dose response curve would be something that looks like 15 that, right? 16 A 17 Q Correct. And what a supralinear dose response curve would be

18 something that looks like that, right? 19 A 20 Q Correct. And now what a supralinear dose response curve means that

21 at lower exposure levels, each incremental addition of risk is 22 greater than as you get to higher exposure levels, correct? 23 A No. The way you draw the curve, at increasing dose, to

24 some point, where the curve flattens out theres an increasing 25 risk. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q Okay. So there is -- but this is the shape of a Its above, its

126

2 supralinear dose response curve, correct?

3 higher risk than a linear no threshold curve, correct? 4 A 5 Q It could be a hypothesized supralinear response curve. Okay. In your report, Reference Number 114, I believe it

6 is, you cite -- do you have your report with you? 7 A 8 Q I do. Let me just see if were on the same page here. You cite

9 to Berman and Crump, update of potency factors for asbestos 10 related lung cancer and mesothelioma in something called 11 critical reviews and toxicology, do you see that, sir? 12 Reference 114? 13 A Im trying to get there, Nate, if you can give me a second Yes, sir. MR. FINCH: THE COURT: Your Honor, may I approach the witness? Yes.

14 please. 15 16 17 Q

Another copy of that one, thats Berman and Crump 2008.

18 Thats the paper that you cited as one of your papers you were 19 relying on for your opinions in this case, right, Dr. Anderson? 20 A 21 Yes, sir. THE COURT: Mr. Finch, let me just interrupt. Is

22 this actually an Exhibit 111? 23 MR. FINCH: This is -- it should be ACC -- I dropped

24 a digit, Your Honor, ACC -- for demonstrative purposes 1011. 25 THE COURT: All right. WWW.JJCOURT.COM

Anderson - Cross/Finch 1 Q 2 A 3 Q Dr. Anderson, what did I write on your copy? 111. Okay.

127

Thats the Berman and Crump paper, right, doctor,

4 that you relied on? 5 A 6 Q 7 A 8 Q 9 A 10 Q Its one of 141 references that are included in my report. Okay. Okay. Are you there? Yes. On Page 21 there is -- do you see the paragraph that On -- could you turn to Page 21 please, sir?

11 begins, the second full paragraph, the EPA model for 12 mesothelioma assumes that the mesothelioma mortality rate 13 varies linearly with the intensity of exposure? 14 me? 15 Page -MR. FINCH: May I approach the witness, Your Honor Are you with

16 and point him to the right paragraph? 17 18 Q 19 that? THE COURT: Yes. Right here, the EPA, see I think I might have a

Are you there, Dr. Anderson?

Would you like a clearer copy?

20 slightly better copy. 21 A 22 Q 23 A 24 Q Im okay. Okay. Its the middle of the paragraph? Right. The -- so the EPA, youre with me and then they go

25 on and say, they talk about the EPA model that the mortality WWW.JJCOURT.COM

Anderson - Cross/Finch 1 rate varies linearly with the intensity of exposure, right? 2 Thats what they say. 3 talked about? 4 A 5 Q Yes, sir. Okay. Published studies rarely present the information Its a linear model, right? What you

128

6 needed to study this assumption and we are not aware of a 7 previous analysis of this issue that is comparable to the one 8 presented here. And then they talk about the analysis that

9 theyve done in their paper, you see that? 10 A 11 Q Yes, sir. Okay. Access to raw data from the cohort exposed to

12 crocidolite in the mines and mills at Wittenoom Australia, 13 three subcohorts exposed to chrysotile in the mines and mills 14 of Quebec Canada, and the cohort exposed primarily to 15 chrysotile at a textile plant in Charleston, South Carolina 16 allowed us to formally test the linearity assumption in these 17 cohorts. 18 cohorts. 19 A 20 Q 21 A 22 Q A supralinear exposure response was found in all five Thats what they concluded, correct?

Thats correct. Okay. And --

In the studies related to amphiboles, I agree. In one of the studies related to the studies of Quebec

23 exposed primarily to chrysotile, correct? 24 A 25 Q The -They referenced the little study, correct? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q They did. And what they go on to say is and this is the next

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3 paragraph over, if the true relationship for mesothelioma is 4 supralinear, this would mean that the risks at low exposures 5 are larger and would be predicted by the linear model. 6 just what supralinear means, correct? 7 A 8 Q Correct. You mentioned in response to one of the Judges questions Thats

9 about tremolite in joint compound, do you recall the Judges 10 question? 11 A 12 Q Yes, sir. You dont actually go out and test asbestos containing

13 products to find out whether they have tremolite in them, 14 correct? Thats not -- you dont -- youre not a material

15 scientist, right? 16 A No. But I have done testing of various products through

17 my career. 18 Q But you havent taken asbestos joint compound and tried to

19 determine whether or not there was tremolite in it, correct? 20 A I quite honestly dont know where theres any joint

21 compound that was manufactured from that area that still 22 remains. 23 Q Okay. You are familiar, however, with a study by

24 Fischbein that was published in the Peer Reviewed literature in 25 the late 1970s, correct, relating to asbestos containing joint WWW.JJCOURT.COM

Anderson - Cross/Finch 1 compound? 2 A 3 Q 4 A 5 Q Fischbein was 1978, 79. Late 70s, right? Yes, sir.

130

And what the Fischbein study found was that there was the

6 presence of asbestosis in career drywall workers, correct? 7 A 8 Q That was one of the findings, yes, sir. Okay. And another of the findings was that many of the

9 joint compounds that they tested had tremolite in them, right? 10 A I believe if we look at the table, at the top of like the

11 third page, it outlines the 12 of the 15 spackling compounds 12 had tremolite. I forget precisely how many of the joint

13 compound samples. 14 Q Okay. And finally, Dr. Anderson -- actually before I talk

15 about your article, youre an industrial hygienist, right? 16 A My Masters Degree, as we talked about earlier is

17 industrial hygiene. 18 Q And you would agree with me that if someone were to go out

19 in the world today and remove a wall that has asbestos 20 containing joint compound in it there would have to be 21 industrial hygiene precautions taken, correct? 22 A 23 Q The hypothetical is just remove a wall? There is -- let me strike that. Your published paper,

24 McCoy, Anderson, mesothelioma and drywall finishing workers, 25 thats your paper? WWW.JJCOURT.COM

Anderson - Cross/Finch 1 A 2 Q Yes, sir. There was commentary submitted to the same journal that

131

3 you published in your paper by Dr. Carl Brodkin, Mark Cullen, 4 John Balmes, Harry Redlich and Dr. Samuel Hammar, do you see 5 that? 6 A 7 Q I do. Okay. And Dr. Cullen is someone who is published in the

8 Peer Reviewed literature on issues concerning asbestos, 9 correct? 10 A 11 Q 12 A 13 Q I believe so. As is Dr. Hammar, correct? Yes, sir. And one of the things they said they said in their

14 commentary, while we concur with the authors that mesothelioma 15 in addition to asbestosis and lung cancer is an important 16 health sequelae of asbestos exposure with a significant public 17 health impact. Our experience does not support the authors

18 conclusion of a lack of relationship between mesothelioma and 19 drywall finishing work. 20 A 21 Q Thats what they wrote, right?

Thats what they wrote. And then subsequent to that, there was another letter

22 published from John Dement and Hester Lipscomb about your 23 article, correct? 24 A 25 Q Yes, sir. And John Dement is someone who has published numerous peer WWW.JJCOURT.COM

Anderson - Redirect/Houff

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1 viewed original research epidemiology studies in the worldwide 2 scientific literature about asbestos and mesothelioma, correct? 3 A 4 Q Yes, sir. Several of his papers are cited by the International

5 Agency for Cancer Research, correct? 6 A 7 Q Correct. And what Dr. Dement and Lipscomb said was that we disagree

8 with the conclusions of McCoy et. al and Anderson and agree 9 with the points raised by Dr. Brodkin and colleagues. 10 Furthermore we object to the unscientific and misleading manner 11 in which McCoy et. al and Anderson used two of our published 12 studies in an attempt to support their positions, thats what 13 they wrote, right? 14 A 15 16 Honor. 17 18 THE COURT: MR. FINCH: All right, one second please. Your Honor, may I approach the Court to Thats what they wrote. MR. FINCH: Thats all the questions I have, Your

19 return the microphone? 20 21 22 23 24 25 BY MR. HOUFF WWW.JJCOURT.COM THE COURT: Any cross examination? No questions, Your Honor.

UNIDENTIFIED ATTORNEY: THE COURT: MR. HOUFF: Redirect?

Yes, please, Your Honor. REDIRECT EXAMINATION

Anderson - Redirect/Houff 1 Q Doctor, lets first talk about these last two articles Do

133

2 that were mentioned, or these responses to your article.

3 you know that Dr. Brodkin is a testifier for the plaintiffs 4 regularly in asbestos litigation? 5 A 6 Q Yes, sir, very much so. And Dr. Dement has, in the past, been a testifier for

7 plaintiffs in asbestos litigation? 8 A 9 Q Yes, sir. Okay. And did you write responses that were published to

10 both of their responses? 11 A 12 Q Yes, sir, I did. Your Honor, Id like to approach the witness and the Court

13 and hand up the responses that Dr. Anderson and colleagues 14 wrote to these two articles, if I may. 15 16 THE COURT: MR. HOUFF: All right. The response to Dr. Brodkin is Debtors

17 Demo Exhibit 57 and the response to Dr. Dement is Debtors 18 Demonstrative Exhibit 58. 19 THE COURT: Thank you. I think Ive already marked a

20 57 and a 58 earlier today. 21 22 23 24 25 is. MR. HOUFF: THE COURT: MR. HOUFF: THE COURT: Oh, Im sorry. 58 is -Thats the report? The report, yes, and Im not sure what 57 I think these need to be marked as

I dont have it here.

WWW.JJCOURT.COM

Anderson - Redirect/Houff 1 59 and 60. 2 3 Honor. 4 5 6 Q THE COURT: MR. HOUFF: Okay. Thank you. MR. HOUFF:

134

Fifty-nine and sixty, I apologize, Your

Thank you, Your Honor.

Dr. Anderson, lets take the one to Dr. Brodkin first

7 which I think is 59 and briefly tell the Court what your 8 response was to their criticisms? 9 A I guess I take exception that they were criticisms. To me

10 it was apparent Dr. Brodkin didnt have familiarity with the 11 drywall workers literature. He raised his own study, the

12 vitamin study that related to plasterboard workers. 13 Plasterboard workers, from my experience is not necessarily a 14 drywall workers, but involves many other work categories, so I 15 did my best to try explain that to Dr. Brodkin. 16 Dr. Brodkin also went into detail discussing the The Stern et. al reference is again, a Plasterers include 23

17 Stern et. al reference. 18 different cohort.

Its plasterers.

19 different work categories, one of which is wallboard taper and 20 jointer, but it includes such other work classifications as 21 applying spray-on insulation, applying fireproofing and the 22 like where theres much greater exposures and primarily to 23 amphiboles, so I attempted to explain that to Dr. Brodkin. 24 With respect to Dr. Dement I was highly concerned

25 about this because it appeared to be a personal attack on my WWW.JJCOURT.COM

Anderson - Redirect/Houff 1 company, GZA GeoEnvironmental and me. In an instance where

135

2 Dr. Dement hadnt taken time to even read the entirety of my 3 paper, Dr. Dement pointed out the problems with using or 4 difficulties in using death certificates and my paper had gone 5 through, in great detail to discuss those limitations. 6 believe my responses are factual. So I

They did respond to try to

7 help Dr. Brodkin where necessary and I guess to explain to 8 Dr. Dement that it would help if hed review my paper before 9 hed criticized it. 10 Q And when we talked, when you were just asked by Mr. Finch

11 about the latest Berman and Crump review, I guess it was 2008, 12 did that change, did you take that into consideration when you 13 expressed your view points and your opinions here? 14 A Again, it was one of many, many references that only

15 provided to me continuity and what the other studies were 16 finding. It was not a primary reference that I utilized on

17 which I based any of my opinions. 18 Q And if we go back to the balangeroite, I dont know if Im

19 saying that correctly, paper where there was a followup study, 20 that followup study, am I reading it correctly did not rule out 21 a contribution by balangeroite. 22 responsible. 23 A 24 Thats exactly what it said. MR. HOUFF: Okay. One more thing, Im going to It just said it was not solely

25 depart from the podium, Ill come right back. WWW.JJCOURT.COM

Anderson - Redirect/Houff 1 MR. FINCH:

136

Your Honor, can I move so I can see what

2 hes doing? 3 4 THE COURT: MR. HOUFF: Yes. Im going to take two seconds. I just

5 didnt want to be away from the mic. 6 Q Doctor, Mr. Finch drew some extra lines on the, his

7 version of the diagram that you presented this morning, 8 correct? 9 A 10 Q Yes, sir. Let me just ask you this question. The entire area

11 contained within that red circle, your testimony today is, its 12 completely hypothetical, correct? 13 A 14 Q 15 A 16 Q 17 A 18 Q Yes, sir. It is the result of speculation? Yes, sir. There is no data to support it? Thats correct. And, in fact, the only data we know about risk and

19 threshold exist at the 15 fiber cc level, correct? 20 A 21 22 23 Ten to fifteen fiber years per cc, yes, sir. MR. HOUFF: MR. FINCH: THE COURT: I have no further questions. No recross, Your Honor. All right. May this witness be excused

24 or is he subject to recall? 25 MR. HOUFF: Certainly from my perspective, Your WWW.JJCOURT.COM

137 1 Honor. 2 3 Honor. 4 5 you. 6 THE COURT: I suppose this is probably the best THE COURT: All right, youre excused, doctor. Thank MR. FINCH: Were not going to recall him, Your

7 stopping point for lunch for the recess if we -8 MR. EVERT: Your Honor, I have just a couple of

9 administrative matters I think -10 11 THE COURT: MR. EVERT: All right. -- might be helpful to handle in this

12 short time. 13 14 THE COURT: Okay. MR. EVERT: Yes, sir. Thank you.

The first, Your Honor, is, in thinking

15 about Dr. Mullins testimony and the usefulness of the 16 demonstrative exhibits and I hesitate to mention the 17 possibility appellate record. Id like to move the admission

18 of Defendants Demonstrative Exhibits D-11 through D-54, used 19 in Dr. Mullins testimony under Federal Rule ten thousand-six, 20 1006. 21 22 23 were -24 25 THE COURT: MR. EVERT: As demonstratives? No. Id like to move their admission, WWW.JJCOURT.COM THE COURT: MR. EVERT: Which ones, Im sorry. Demonstrative D-11 through D-54, which

138 1 Your Honor, as summaries of voluminous writings under Rule 2 1006. I think these are effectively summaries of the database

3 information and I just believe that from an appellate record 4 perspective, Your Honor, infinitely easier for another court, 5 another court had the advantage of demonstratives. But another

6 court, if necessary to have the advantage of seeing the 7 demonstrative exhibits when any testimony is read. 8 THE COURT: I would think that it may be helpful to

9 the court if I transmitted all of the demonstratives for 10 somebody else if theres going to be an appeal. But theyre

11 not -- I understand your offer and Ill get to that offer, but 12 I had just assumed that the demonstratives would be provided 13 because sometimes the testimony doesnt make a lot of sense 14 when youre saying, well looking at the slide and theres no 15 copy of the slide. 16 MR. EVERT: And I may be making an inaccurate

17 assumption, Your Honor, that the demonstratives would not go up 18 in the record. I frankly do not know the answer to that

19 question one way or the other and so I was going to offer their 20 admission because I think theyre admissible, but the other 21 side may disagree. 22 23 THE COURT: Mr. Sheppard? Well, Your Honor, Im not sure that

MR. SHEPPARD:

24 they are admissible, but I would consistent with the agreements 25 that we had earlier if the demonstratives for the estimation WWW.JJCOURT.COM

139 1 experts are going to be in the record for all three, that we 2 would certainly have no objection to them being received in 3 this case. 4 THE COURT: All right. Well somebody will have to

5 identify for me specifically what exhibits youre talking about 6 if theyre going to be in as substantive evidence because 7 thats a whole different use that the Court will make of them 8 as substantive evidence. 9 MR. FINCH: May I just make one point of

10 clarification?

Were only talking about exhibits that were

11 used for the testimony of the estimation experts and not the 12 medical or industrial hygiene or those types of -13 14 UNIDENTIFIED ATTORNEY: THE COURT: That would be all for --

Right now were talking about Exhibits 11

15 through 54. 16 17 18 MR. EVERT: THE COURT: MR. DORSEY: Thats correct, Your Honor. So, Mr. Dorsey? I agree with Mr. Sheppard, Your Honor.

19 I dont believe that these are summaries under 1004 of the 20 database. I mean this is the summary of Dr. Mullins testimony But I have no objection to having

21 and we have his testimony.

22 them retained as exhibits, demonstrative exhibits that could go 23 to an appellate court to assist that court in reviewing it. 24 have no problem with that. I

But theyre not substantive -- they

25 cannot be considered as substantive evidence. WWW.JJCOURT.COM

140 1 MR. EVERT: Your Honor, it sounds like were in

2 violent agreement that the demonstrative exhibits would be 3 useful in case the record goes up on appeal and it sounds like 4 were all in agreement that the demonstrative exhibits would go 5 up on the record on appeal. 6 moot. 7 8 THE COURT: Mr. Sheppard, do you agree? Well, Your Honor, based upon the So I think my motion now becomes

MR. SHEPPARD:

9 Courts statement that Your Honor is going to treat those 10 demonstratives differently if they are in fact admitted as 11 substantive evidence -12 13 THE COURT: Well sure. I dont think were in violent We do believe if theyre helpful

MR. SHEPPARD:

14 agreement as Mr. Evert says.

15 to the Court that the Court ought to be able to take those and 16 review those in connection with your ruling, but I dont 17 believe they should be admissible as substantive evidence as a 18 summary. 19 THE COURT: No. I think thats what hes saying. He

20 wants to withdraw that motion assuming that everybody agrees 21 that if this goes on appeal that they could go up as 22 demonstratives to assist the appellate court in seeing what Im 23 looking at and what youre presenting as evidence, but not for 24 substantive evidentiary purposes. 25 MR. EVERT: Youre correct, Your Honor. WWW.JJCOURT.COM

141 1 2 corrected. 3 MR. SHEPPARD: Well then, Your Honor, I stand

We are once again in violent agreement. THE COURT: All right. So I will preserve the

4 demonstratives to be sure that they are transmitted with 5 appellate record, but it has to be clear to everyone I am not 6 using them as substantive evidence. If I use them at all, it

7 will only be to refresh whatever it was that the witness said. 8 Its the witness testimony that I will consider to be the 9 substantive evidence. 10 11 seeking. MR. EVERT: Excellent, Your Honor, thats what I was And then subject to our right

Thank you very much.

12 to rebuttal and subject to our entry of deposition testimony as 13 we described and we discussed with the Court at the very 14 beginning of the trial, we have no further witnesses at this 15 time. 16 THE COURT: All right. Why dont we pick up there

17 after lunch recess, but let me ask one question first. 18 Mr. Sheppard, Mr. Dorsey, I want to make sure that you agree 19 that the demonstratives can go up with the appellate record 20 simply as demonstratives not as substantive evidence. 21 22 23 24 MR. SHEPPARD: MR. DORSEY: THE COURT: I agree with that, Your Honor.

Yes, were in agreement, Your Honor. All right. Okay. But just to clarify, only with regard

MR. SHEPPARD:

25 to the estimation experts, not the medical experts as Mr. Finch WWW.JJCOURT.COM

142 1 -2 THE COURT: No I was expecting they would all go. I

3 mean, youve -- Mr. Finch, for example, introduced a host of 4 papers that one or two lines are referred to and I think most 5 of them have been read into the record, but Im -6 MR. SHEPPARD: Your Honor, I misunderstood Mr. Finch.

7 Theyre fine as long as theyre not substantive evidence and 8 received as demonstratives. 9 10 purposes. 11 12 13 14 15 16 17 THE COURT: THE COURT: All right. MR. EVERT: THE COURT: MR. FINCH: Right. Theyre only for demonstrative

So everybody is in agreement? Yes, Your Honor. All right. We in recess until 1:30.

Thank you, Your Honor. Thank you, Your Honor.

MR. SHEPPARD: MR. DORSEY:

Thank you, Your Honor. (Recess) Good afternoon. Were back on the in the

18 Specialty Products case. 19 MR. FROST: Good afternoon, Your Honor. Scott Frost

20 on behalf of the Committee.

I dont believe Ive had an

21 opportunity to speak before the Court before, but the first 22 witness will be Ms. Susan Raterman. 23 24 25 THE COURT: All right. Thank you.

COURTROOM DEPUTY:

Please raise your right hand.

SUSAN RATERMAN, WITNESS, SWORN WWW.JJCOURT.COM

Raterman - Direct/Frost 1 COURTROOM DEPUTY: Please be seated and speak into

143

2 the microphone. 3 4 5 6 BY MR. FROST 7 Q 8 A 9 Q 10 A 11 Q Can you please give us your name for the record? Susan Raterman. And Ms. Raterman, what do you do? Im a certified industrial hygienist. And before we get much further into this, will you agree THE COURT: Good afternoon. Good afternoon. DIRECT EXAMINATION

THE WITNESS:

12 to keep all of your opinions here to render those within a 13 reasonable degree of scientific certainty? 14 A 15 Q 16 A Yes, I will. Okay. Yes. Can you tell us what industrial hygiene is? Its the anticipation, recognition, evaluation and

17 control of health hazards in the workplace and in the built 18 environment. 19 Q 20 A And how long has this field of industrial hygiene existed? Well we -- there have been forms of industrial hygiene for Formally in the United States it was recognized in

21 centuries. 22 the 1930s. 23 Q

And so this area that you were practiced in is not

24 something new that happened in the 70s, or the 80s, or even the 25 90s? WWW.JJCOURT.COM

Raterman - Direct/Frost 1 A 2 Q No its not. Now, I have a PowerPoint slide that sort of summarized Can you explain to the Court,

144

3 some of your qualifications.

4 first of all, whats your training, background, and experience, 5 beginning with your education, and then well kind of go 6 through the others? 7 A Sure. I have a Bachelors of Biology from St. Louis

8 University and, in that course of study, I studied biology, 9 physics, physiology, math, general science courses. And then I

10 have a Masters of Science in Environmental Health Engineering 11 from Northwestern University and my course of study focused on 12 industrial hygiene, air pollution, health physics, 13 biostatistics, different types of waste management but 14 primarily focusing both on -- in my studies as well as my work 15 practice, in industrial hygiene. 16 Q Now, we heard Dr. Anderson earlier who has a degree in

17 industrial hygiene but is not a certified industrial hygienist. 18 Can you explain what a certified industrial hygienist is? 19 A Sure. We have to have either a masters degree and four

20 years of experience or five years of experience to sit for the 21 exam that certifies us as a CIH, we call them. And so the exam

22 is two eight-hour days of questioning and once you pass that 23 exam -- about 30, 33 percent of the individuals, at least when 24 I took it, passed that exam. Once you pass that, in order to

25 maintain your certification, you have to be current with the WWW.JJCOURT.COM

Raterman - Direct/Frost 1 industrial hygiene teachings of the day.

145

We have to maintain

2 our certification by taking so many continuing education units 3 and by writing and reviewing literature and that we have to 4 turn in to the American Board of Industrial Hygiene every five 5 years. 6 Q And so your certification -- first of all, the test is --

7 well, I guess, its probably a little harder than the bar exam. 8 Theres not a lot of people that pass it the first time, is 9 that correct? 10 A 11 Q Thats correct. And then not only do you have to pass it, but you have to

12 receive a certain amount of on-the-job training and then 13 continue that training as your career progresses? 14 A 15 Q Thats correct. And have you -- when did you obtain your certified

16 industrial hygiene certification? 17 A Its -- you can take it in two parts and I passed the

18 first part when I took it in 1981 and the second part in 1984. 19 So the second part made me a fully certified industrial 20 hygienist. And there are different fields in which you can be

21 certified and Im certified in the comprehensive practice of 22 industrial hygiene. 23 MR. FROST: And I guess at this moment, Your Honor,

24 Id go ahead and offer Dr. Raterman as a expert in the field of 25 industrial hygiene. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 2 3 Q MR. HOUFF: THE COURT: No objection, Your Honor. All right. She is so certified. But,

146

Now, I want to talk a little bit about asbestos.

4 before your certification did you work in the field of 5 industrial hygiene? 6 A I did. I worked for the Occupational Safety and Health

7 Administration in 1979 as an inspector and in that capacity I 8 went to different work facilities, manufacturing plants, and 9 did air sampling and bulk sampling and surface sampling and 10 then compared those results with permissible exposure limits 11 and generally inspected work places to determine if they were 12 in compliance with all the different provisions of the 13 industrial hygiene regulations that OSHA promulgated. 14 Q And have you also done consulting in the field of

15 asbestos? 16 A Yes. Ive done consulting since 1980 basically. I worked

17 for a couple of management engineering firms as an industrial 18 hygiene consultant. Ive worked in the energy and utility

19 industries, health care industry, and various other 20 manufacturing construction industries. 21 Q So besides your work that you currently do for plaintiffs,

22 in the past your experience has been with OSHA, working with 23 large companies, talking with industrial hygiene and dealing 24 specifically with asbestos over the years? 25 A Thats correct. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q

147

Now, you also currently have the Raterman Group and thats

2 your consulting arm? 3 A 4 Q 5 A Yes. Okay. And how long have you dont that consulting?

I have -- I started the Raterman Group in 1987 doing

6 comprehensive industrial hygiene assessments and then started 7 working in the area of litigation in the mid-90s, for a couple 8 of cases, and then in 2004. 9 Q And over the years that youve done that, youve testified

10 for my law firm, Waters and Kraus, and you and I have given 11 this same type of presentation to juries throughout the 12 country? 13 A 14 Q Thats correct. Okay. Now, besides your training with -- in industrial

15 hygiene and your work as a consultant to business for asbestos, 16 do you hold any licenses in the field of asbestos? 17 A I am a licensed asbestos building inspector, a licensed

18 asbestos project manager and -- or they call it management 19 planner, and then also a project designer. 20 Q And those are all licenses that you hold dealing

21 specifically with asbestos? 22 A Right. Those are licenses that have -- again, have to be

23 kept current with refresher courses and annually recertified. 24 Q And have you also written articles in the field of I think I have the Fundamentals of WWW.JJCOURT.COM

25 industrial hygiene?

Raterman - Direct/Frost

148

1 Industrial Hygiene, the Fifth Edition, up there, but have you 2 done that in the past? 3 A Yes. I wrote the Chapter on Methods of Control in the

4 fourth, fifth, and sixth editions of this text. 5 Q And this -- I just have the cover, but this text, if we

6 had it, its about a -- I dont know -- about three inches 7 thick and its published by the National Safety Council, 8 correct? 9 A 10 Q Correct. Now, I want to talk to you about asbestos in general and

11 some concepts that I think the Courts heard from Dr. Anderson 12 and the first one is this concept of no safe level of exposure 13 to asbestos. Is that something that you have -- as a certified

14 industrial hygienist, that you have been taught and trained 15 about concerning asbestos over the years? 16 A 17 Q Yes, it is. Oh. And can you explain to the Court sort of what

18 currently the regulatory agencies and the scientific consensus 19 is concerning whether theres a safe level of exposure to 20 asbestos from an industrial hygiene point of view? 21 MR. HOUFF: Object to consensus, Your Honor. I think

22 shes here to render her opinions. 23 THE COURT: Well, thats true. You need to lay a

24 foundation for whether or not this is part of her opinion as 25 opposed to something else. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 2 Q MR. FROST: I can do that, Your Honor.

149 Thats fine.

Dr. -- Ms. Raterman, have you, over the years, studied the

3 literature concerning asbestos and asbestos-related diseases? 4 A 5 Q Yes, I have. Have you also studied the federal regulations concerning

6 asbestos? 7 A 8 Q Yes. In fact, part of your training and your licensing is to be

9 familiar with not only state and federal regulations concerning 10 asbestos, but also reviewing scientific literature concerning 11 asbestos, correct? 12 A 13 Q Thats correct. And have you also reviewed the Consumer Product Safety

14 Commissions ban on spackling products, including joint 15 compounds? 16 A 17 Q Yes, I have. And do all those formulate the basis of your opinions in

18 this case? 19 A 20 Q They do. Okay. Now, in regards to whether there is a -- whether

21 there is a scientific consensus about whether theres a safe 22 level of exposure to asbestos, have you made a review of the 23 scientific articles and the federal regulations concerning 24 asbestos that discuss this concept? 25 A Yes, I have. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q Okay.

150

Now, can you tell us from your opinion and what you

2 believe the scientific consensus is on this question of whether 3 theres a safe level of exposure to asbestos? 4 A My opinion, after studying the literature and the

5 regulatory comments on this subject, is that theres no safe 6 level of exposure to asbestos. 7 Q And, in fact, I have up on the board the section from the

8 Consumer Product Safety Commission ban on patching compounds. 9 Thats what they state, stated in 1977, was what they believed 10 at that time general agreement, correct? 11 A 12 Q Correct. And has that general agreement about there being no safe

13 level of exposure to asbestos, has that changed today in 2012? 14 A 15 Q Not even in 2013. Oh, Im sorry. 2013. Correct. Now, I want to talk to

16 you about -- now, that opinion about whether there is no safe 17 level of exposure to asbestos, I know thats your opinion. 18 have other agencies, like NIOSH, OSHA, the EPA, and others, 19 have they also published similar statements concerning 20 asbestos? 21 22 MR. HOUFF: THE COURT: Objection. Improper bolstering. But

Well, I think shes testified that its

23 part of what she considers as an expert in her field, so 24 overruled. 25 A Yes. NIOSH, OSHA, EPA, World Health Organization, IARC, WWW.JJCOURT.COM

Raterman - Direct/Frost

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1 all have published the statement that theres no safe level of 2 exposure to asbestos. 3 Q And when we say exposure to asbestos, weve been talking a

4 lot about chrysotile, but do those agencies draw any 5 distinction between amphiboles and chrysotile when they talk 6 about this no safe level of exposure? 7 A 8 Q No, they do not. And, in fact, all the asbestos regulations in the United

9 States, either the EPA or OSHA, all those regulations, none of 10 them draw any distinction as of 2013 between the different 11 fiber types? 12 A 13 Q Thats correct. Now, I want to talk briefly about this concept of We all have exposure to

14 background levels of exposure. 15 asbestos, is that correct? 16 A 17 Q Thats correct.

And can you explain to the Court what we mean by

18 background or ambient levels of exposure to asbestos? 19 A Yes. A background exposure to asbestos is exposure to

20 fiber concentration that exists in the air when theres no 21 known disturbance of asbestos-containing building materials and 22 no disturbance of naturally occurring asbestos. So its that

23 very low level or very low concentration of asbestos fibers in 24 the air at any point in time at any location, and it will vary 25 numerically from place to place. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q And why is this concept important with the next thing

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2 were going to talk about, which are exposure levels to joint 3 compounds? 4 A Its important to look at on a comparative basis because

5 at background levels, we dont see an increased incidence of 6 the -- or we dont see an increase risk of mesothelioma or 7 asbestos-related diseases. We want to keep the levels of

8 exposure very low and equivalent to background so that an 9 individual is not exposed to levels of asbestos that put them 10 at risk of disease. 11 Q Now, I want to talk about exposures to asbestos using Are you familiar with how individuals

12 joint compound work.

13 would have in the 1960s, 70s, and until asbestos was banned in 14 joint compounds, used joint compounds at the job site? 15 A 16 Q Yes, I am. Have you reviewed the literature that describes those

17 processes? 18 A 19 Q Yes, I have. And has that been published in not only the industrial

20 hygiene, but the medical literature? 21 A 22 Q Yes. Okay. Now, I want to talk about how we protect

23 individuals from asbestos, but I want to do it in the context 24 of joint compounds, okay? 25 A Okay. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q So I have the slide up there that talks about designing

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2 the hazard out, guarding or blocking access.

Can you explain

3 just briefly what types of engineering controls can be used to 4 protect people from asbestos in joint compounds? 5 A Yes. There are a hierarchy of exposure controls related But specifically with regard to asbestos,

6 to any contaminate.

7 the first level of protection would be using engineering 8 controls and with respect to joint compound, that could be 9 using a power sander with a exhaust vacuum on it and a hepa 10 filter so that the exhaust, which contains asbestos fibers, is 11 filtered. And secondly, we can use wet methods of sanding.

12 Thirdly, we can use work practices that minimize the exposure 13 to the individual and some of them include the use of personal 14 protective equipment. Thats the last line of defense because

15 that puts the burden of protection on the worker or on the 16 individual using the joint compound and, if not worn properly, 17 respirators and personal protective equipment are not adequate 18 protection. 19 So the bottom line is with respect to asbestos, the only

20 way that we are allowing work with it to occur today is in a 21 contained environment. So for work on joint compound or any

22 other asbestos-containing material to occur it has to occur in 23 a plastic enclosure under negative pressure using hepa 24 filtration thats high efficiently particulate filtration that 25 filters out 99.97 percent of the asbestos fibers. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q

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And so if -- and we couldnt do it today because asbestos But lets say we had an

2 was banned in joint compounds.

3 asbestos-containing joint compound that I wanted to take home 4 as a do-it-yourselfer and apply to a wall. Would I have to

5 take all those precautions to use the hepa filters to isolate 6 the area, fully enclose it, wear a full-face respirator in 7 order to use these products today? 8 A To use them in a manner -- a safe manner, thats

9 protective of your health, yes. 10 Q And is that true even today even though these would have

11 been made out of chrysotile asbestos? 12 A 13 Q Yes. And lets say I -- in that project, that I hypothetically

14 wanted to use asbestos-containing joint compounds, lets say I 15 did that project but then its a few years later and I want to 16 take down those same walls and maybe put paneling up. What

17 type of precautions would I have to do today, even though those 18 things contain chrysotile asbestos? 19 A The joint compound thats in place in the walls today,

20 before its removed, generally we test it to determine if its 21 asbestos or not. If its asbestos we enclose the area, as I

22 described before, in plastic, put it under negative pressure, 23 and filter the air. And then, additionally, the individuals

24 that go in to do the work, cutting through the joint compound 25 and tape, they will wear disposable coveralls and theyll wear WWW.JJCOURT.COM

Raterman - Direct/Frost 1 a respirator after theyve been tested and properly fit, 2 medically tested, to wear a respirator. 3 Q And so thats what we sometimes refer to as the moon They got to go in the special suits, the special

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4 suits?

5 respirators, and then all that stuff, after they leave that 6 enclosure and will have worked with an area thats contaminated 7 with chrysotile asbestos, all that has to then be put in 8 special bags and taken to a special place to dump it? 9 A Right. And in addition, the individual has to shower so

10 they remove their clothing, they put on the disposable 11 coveralls, they shower on the way out. And when theyre

12 actually doing the work inside the containment in the 13 protective gear, they additionally use wet methods so water 14 will be applied to the asbestos-containing joint compound 15 before its cut into. 16 Q And thats even though all these things contain chrysotile

17 asbestos? 18 A Thats true. Now, Ms. Raterman, I have asked you to

19 review a video tape of a work practice simulation that its my 20 understanding is marked as E-384. 21 tape? 22 A 23 Q 24 A Yes, I have. And just briefly, what is that video tape of? The video tape was produced by MAS, Materials Analytical Have you viewed that video

25 -- Analytic Science and it is a work simulation activity WWW.JJCOURT.COM

Raterman - Direct/Frost 1 utilizing Bondex joint compound. And so theyre in this

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2 environmental exposure chamber, which is similar to the 3 containment that I talked about, thats utilized to control 4 asbestos exposures and that containment is filtered with -5 its under negative pressure and filtered with a hepa 6 filtration. And the individual is mixing Bondex joint compound

7 and sanding the joint compound. 8 MR. FROST: And, Your Honor, just so the record is

9 clear, we would go ahead and offer E-384 into evidence and I 10 intend to play it for the Court. 11 12 13 14 15 16 Q MR. HOUFF: As I understand, we have no objection. I cant hear you.

COURT CLERK: THE COURT: MR. HOUFF: THE COURT:

Your microphone is not on. Oh, Im sorry, Your Honor. All right. No objection.

Exhibit 384 is admitted.

And before I play it, Ms. Raterman, would you explain to

17 the Court this concept of tindle lighting and what the Courts 18 going to see in the video? 19 A Yes. In the video you will see the environmental exposure

20 chamber being lit by something that we call tindle lighting and 21 its utilized to enhance the visibility of dusts and fibers in 22 the air and it just works on the refractive nature of the 23 fibers and the dust in the light, making it easier to actually 24 visualize particles that are normally not able to be seen. 25 Q And even though this light is helping us visualize what is WWW.JJCOURT.COM

Raterman - Direct/Frost 1 -- normally cant be seen from an industrial hygiene 2 perspective, why is it important to be able to see all that 3 additional dust? 4 A Well, asbestos fibers are very small in nature.

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Theyre

5 microscopic in nature and, in the case of joint compound, they 6 are mixed with other dusts. But its important to be able to

7 see it so that we can determine the pattern of dust with 8 respect to the individual working and potentially breathing in 9 that dust. And if exposure controls are used, to make sure,

10 for example, the ventilation is being -- working appropriately 11 and exhausting the dust from the work space. 12 Q 13 Okay. MR. FROST: And, Your Honor, at this time, Im going

14 to play the video. 15 16 MR. FROST: (Video Tape Played) Sorry about that. Okay. There might be a grim

17 one in there, Your Honor. 18 A

Ms. Raterman, weve watched the video tape and was that

19 generally -- and were going to talk about some specific 20 studies, but those general work processes, beginning with the 21 mixing and then the taping and then the sanding and then the 22 clean-up, are those things that have been studied in the 23 literature over the years? 24 A 25 Q Yes, they are. Okay. And, in fact, I have up on the screen the Gypsum WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Association study.

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Can you just talk generally about what that

2 study was and how that helps you in formulating your opinions 3 in this case? 4 A Yes. The Gypsum Association is a group -- or at that

5 time, was a group that included about ten or 15 joint compound 6 manufacturers and they hired an industrial hygiene firm to take 7 samples during mixing and sanding and clean-up of joint 8 compound. And the study revolved around the use of both dry

9 joint compound and pre-mixed joint compound and so, like you 10 saw in the video where the individual wore a sampling pump at 11 his waist with a piece of tubing and a filter up at his 12 breathing zone, this study measured workers in a similar way 13 and evaluated exposure in the breathing zone and then, I 14 believe, off in areas as well. 15 Q And well talk in general at the very end about the

16 numbers, but what conclusions did the Gypsum Association draw 17 in that study in 1973, 1974 time period concerning this type of 18 work with asbestos-containing joint compounds? 19 A They were -- well, first of all, one of their conclusions

20 was that theres a tremendous amount of drywall dust and 21 asbestos generated during the sanding process. And they were

22 concerned in this study to evaluate the exposures they measured 23 against permissible exposure limits in place at the time, and 24 these were OSHA PELs, we call them, and they concluded that 25 during some of these activities, the worker exposure was WWW.JJCOURT.COM

Raterman - Direct/Frost 1 actually in exceedance of a permissible exposure limit. 2 Q

159

And this was an industry study and they used not just one

3 joint compound, the study that we played for the Court -- that 4 was actually using Bondex -- but they used multiple different 5 joint compounds in that study, correct? 6 A They did. And I want to clarify when the samples were They were taken for short periods of time And the

7 actually taken.

8 during mixing and sanding, as we saw in the video.

9 reason we take such short-term samples is because the filter 10 that we use to measure the asbestos fibers, those filters are 11 overloaded in a situation where theres a lot of dust in the 12 air and fibers in the air, so the samples are very short term. 13 And then we can look at them on an eight-hour basis or just the 14 short term. 15 Q Right. But when were looking at joint compounds, is

16 there any major difference thats seen in the literature 17 concerning the different brands of joint compounds as we look 18 at how much fibers are released during these processes? 19 A 20 Q No. They all fall within the same general range. Now, besides the Gypsum Association, was there also

Okay.

21 other publications in the 1970s -- and I think I have the Rohl, 22 Langer and Selikoff article from 1975 up -- were there other 23 publications during that time period where they were talking 24 about this concept of whether using patching and jointing 25 compounds, whether those presented a risk to people? WWW.JJCOURT.COM

Raterman - Direct/Frost 1 A Yes.

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The study that you have up by Rohl, Langer, et al.,

2 looked at a number of different consumer and industrial 3 spackling and joint compound products, measured the amount of 4 asbestos in those products, and then took samples in a similar 5 fashion that Ive just talked about, and their big concern in 6 that article was that the joint compound asbestos exposures 7 were so high and they -- these authors were relating those 8 exposures to the same levels of exposures, the same types of 9 exposures, that individuals working with insulation had gotten. 10 Q And before we get to that, I want to talk about this

11 concept of people who are at risk from exposure to joint 12 compounds. Is it just the person whos working with the

13 product or is it anyone who can be in the general area? 14 A Its anyone who breathes it and that is the individual

15 using the material, whether theyre mixing, sanding, applying 16 after mixing, or cleaning up, as well as those in the vicinity. 17 And the measurements in some of these studies have shown 18 elevated fiber concentrations up to 50 feet away. 19 Q And, in fact, I have the slide up there that says

20 detectible fiber concentrations were found in adjacent rooms 21 during mixing and fibers were still suspended in the room air 22 at least 15 minutes after mixing had ceased. Is that the type

23 of either bystander or family type exposures that can occur 24 with joint compounds, in particular those that are sold for the 25 do-it-yourselfers? WWW.JJCOURT.COM

Raterman - Direct/Frost 1 A 2 Q Yes. Exactly.

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And even though this was 1975, has anything changed about

3 that, if you were using asbestos-containing joint compounds 4 even today? 5 A 6 Q No. Now, I want to go back. The Rohls article, theres been Was there any

7 some discussion about time waiting averages.

8 discussion in the 19 -- in that time frame, in 1975 when Rohl 9 and Langer and Dr. Selikoff were doing the studies, and I dont 10 -- Im not sure we established that -- but these are the folks 11 out at Mt. Sinai, correct? 12 A 13 Q Right. And this is Irving Selikoff and the folks at Mt. Sinai

14 that started the insulator studies in the 1960s? 15 A 16 Q Thats correct. And so after they studied insulators, this was one of the

17 next areas that they studied, were people working with joint 18 compounds? 19 A 20 Q Yes. Now, Dr. Rohl, Langer, and Dr. Irving Selikoff, did they

21 talk about in the literature whether time weighted averages, 22 like Dr. Anderson testified about, were appropriate when 23 looking at people working with joint compounds? 24 A They did talk about that in the article and they said

25 because of the discontinuous use or the nature of these work WWW.JJCOURT.COM

Raterman - Direct/Frost 1 activities, its inappropriate to look at eight-hour time 2 weighted averages because we see that there are very high 3 levels of exposure during mixing, again during sanding, and 4 again during clean-up.

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And individuals may be off doing other

5 activities in between, so its very hard to get a accurate 6 eight-hour time weighted average. 7 Q And even if we were talking about, lets say not workers

8 that were doing it every day, wouldnt it be difficult if were 9 just looking at consumers that, like I said, do-it-yourselfers? 10 I mean, what relevance would a time weighted average do for 11 those folks? 12 A Its of no relevance to a do-it-yourselfer. I think the

13 important point that Drs. Rohl and Selikoff talked about also 14 is its very critical to look at the peak exposures because, in 15 terms of workers, we compare those with the OSHA ceiling 16 exposure level and thats based on 15 minutes. But its also

17 very important to understand that these exposures are very 18 high, but for very short periods of time. 19 Q Could you work with asbestos-containing joint compounds,

20 mixing, sanding and doing those processes, without at some 21 point being over those peak exposure limits? 22 A 23 Q Unlikely. Now, I have Dr. Fischbeins article from 1979. Its Did they

24 called Drywall Construction and Asbestos Exposure.

25 also talk about these exposures to joint compounds and the WWW.JJCOURT.COM

Raterman - Direct/Frost 1 levels of exposures? 2 A 3 Q They did. And what is important about this article when we talk

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4 about exposure levels to joint compounds versus, say, exposure 5 levels to gaskets or other asbestos-containing materials? 6 A Well, the authors made it very clear that the exposure

7 levels that were generated in their sampling based on joint 8 compound work activities, were similar to what insulators 9 experienced during the installation or removal of insulation. 10 Q And so what they were finding, Dr. Selikoff, Dr. Rohl, Dr.

11 Fischbein, and the folks at Mt. Sinai, were that the exposure 12 levels to people working with joint compounds were very similar 13 to the high levels of exposures that thermal insulators, the 14 insulators that Dr. Selikoff began to work with in the 1960s 15 who had massive amounts of mesotheliomas, correct? 16 A 17 Q Thats correct. Now, there was some discussion about Verma and Middleton

18 and I just want to establish, when was Verma and Middleton 19 published? 20 A 21 Q 1980. Okay. So this was published post the Consumer Product

22 Safety Commission ban? 23 A 24 Q Thats correct. So Dr. Anderson mentioned that was one, a fallacy in the

25 Consumer Product Safety Commission, that they didnt use these WWW.JJCOURT.COM

Raterman - Direct/Frost 1 types of numbers but these numbers really didnt even exist? 2 A 3 Q Correct. And the only numbers that were contemporaneous with the

164

4 Consumer Product Safety Commission ban that were published in 5 the literature, were the Dr. Rohl and Selikoff numbers? 6 A 7 Q Thats correct. Okay. Now, this Verma and Middleton, theyre looking at

8 using asbestos-containing joint compounds in Canada? 9 A 10 Q 11 A 12 Q Thats right. And youve reviewed this article too? I did. And the numbers that they got just in general were less

13 than the -- than the Rohl and the Dr. Selikoff numbers? 14 A 15 Q The range was less. Okay. Yes.

But even though the range was less, what were the

16 general conclusions that Verma and Middleton came to concerning 17 peak exposures? 18 A Well, again, they looked at the peak exposures during

19 mixing, during sanding, and during clean-up, and found that 20 those exposures exceeded the ceiling limits in place at the 21 time and that those types of exposures were not equal 22 throughout all different types of workers. So one worker might

23 be mixing for a longer period of time during the day than the 24 next worker. One sander might be working for a longer or a So they too

25 shorter period of time than the next sander. WWW.JJCOURT.COM

Raterman - Direct/Frost

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1 expressed the difficulty in evaluating a time weighted average 2 exposure because of the variability of the time on task. 3 A And so even Verma and Middleton had this understanding

4 that its really difficult with somebody working with joint 5 compounds to do some type of time weighted average because 6 theres just so much variability? 7 A Theres so much variability and they indeed came to that Now, as was discussed this morning, they did take

8 conclusion.

9 some sample data and put together some time weighted average 10 exposures for those working with dry mix joint compounds as 11 well as premix joint compound. 12 Q And -- but they did show concentrations as high as 59

13 fibers per cc. in even the Verma and Middleton studies, 14 correct? 15 A Well, the Verma and Middleton, between the personal

16 exposures for mixing, sanding, and clean-up, they were as high 17 as 26.5. 18 Q Now, I have a chart that has -- and these -- this is a

19 chart using the Verma and Middleton numbers, correct? 20 A 21 Q Thats right. And so if we actually had a chart of the Selikoff and Rohl

22 numbers, these would be even higher? 23 A 24 Q Thats right. Okay. And it says the 1976 OSHA PEL -- weve talked about Could you define

25 the PEL but Im not sure weve defined it. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 that for the Court? 2 A

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PEL refers to a permissible exposure limit which is that

3 number promulgated by OSHA that indicates either an eight-hour 4 time weighted average or, at that time, a 15-minute ceiling 5 concentration above which there was a violation. 6 Q And even though we have a PEL or other exposure standards,

7 has OSHA indicated that those are some kind of safe level of 8 exposure to asbestos? 9 A No. On the contrary. Theyve indicated that there is no

10 safe level of exposure. 11 Q And, in fact, even though there is a PEL, permissible

12 exposure level, does OSHA concede and understand that, even at 13 that level, there would still be people who get disease? 14 A 15 1976. They do and were talking about the OSHA PEL in place in They, at this point in time, still with the much lower

16 current PEL of 0.1 fibers per cc., concede that there is still 17 a risk of cancer. 18 Q Now, in regards to your review of the scientific

19 literature, can you give the Court a range of exposures from an 20 industrial hygiene perspective that an individual working with 21 joint compounds would have? 22 A Depending on, you know, which study we look at, if we look

23 at the whole range of exposures, it can be -- for mixing, 24 sanding, and clean-up, it can be 1.2 fiber per cc. up to 59 25 fibers per cc. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q 2 And you heard Dr. -THE COURT: Wait. Im sorry.

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One point two fibers

3 per cc. up to what, please? 4 5 6 Q THE WITNESS: THE COURT: Fifty-nine. Okay.

Fifty-nine.

And Im not sure we defined fibers per cc. but could you

7 do that for us? 8 A Sure. We measure the concentration of fibers in the air A cubic centimeter is about

9 by fibers per cubic centimeter.

10 the size of a sugar cube and an asbestos fiber is very small, 11 about five -- excuse me; Im suffering from the same thing 12 everybody else is. So were looking at a fiber thats so small

13 its invisible and were looking at the number of fibers in a 14 very small volume of air known as a cubic centimeter. 15 Q 16 A 17 Q And its basically as big as a sugar cube? Correct. Okay. Now, you were here when Dr. Anderson testified

18 earlier about some of his calculations and I dont want to 19 spend too much time on this, but he talked about the Verma and 20 Middleton study and time weighted averages and then -- could 21 you talk to us a little bit about what disagreements you might 22 have as a certified industrial hygienist versus Dr. Andersons 23 method? 24 A Dr. Anderson took two data points from the Verma Middleton

25 study. One was a time weighted average for dry joint compound WWW.JJCOURT.COM

Raterman - Direct/Frost

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1 and one was a time weighted average for premix joint compound. 2 Now, Verma and Middleton utilized some sample times for the 3 amount of time these individuals typically spent mixing, 4 sanding, and cleaning up, to establish that time weighted 5 average. And they expressed their concern that its difficult 6 to apply one time weighted average to the whole spectrum of 7 workers. And additionally, the Verma Middleton study that

8 talked about these two time weighted averages, used median 9 values. What we like to do in industrial hygiene is look at

10 the whole range of exposure because thats more representative 11 of all the different types of conditions under which joint 12 compound is used. And so to pick out two numbers out of the

13 universe of data not using the range, I think, is unfair in 14 terms of trying to really understand the whole spectrum of 15 possible exposures to joint compound. 16 Q And also did -- he talked about bystanders. Did you have

17 any disagreement about his analysis under -- of bystander 18 exposures? 19 I believe in Dr. Andersons report, he talked about

20 bystander exposures, reducing those exposures by 50 percent for 21 use in his calculations. And we can see from the Verma

22 Middleton study and from the Rohl Langer studies that actually 23 concentrations of asbestos fibers were still equal to or up to 24 -- well, actually, more than the breedings on exposure of the 25 worker in some cases and thats up to ten to 50 feet from the WWW.JJCOURT.COM

Raterman - Direct/Frost 1 actual work. 2 the work.

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So were looking at the individual worker doing

Their concentrations or their exposures were very

3 high but not only that, up to 50 feet away, they were measured 4 at equivalent levels or at levels at least 50 to 75 percent. 5 So I dont think its fair to arbitrarily just cut a 6 concentration in half for -- and use that for a bystander 7 exposure. 8 Q And thats because the literature has shown, like the Rohl

9 and Selikoff and Verma Middleton, even, that exposures to joint 10 compounds can be in adjacent rooms, it can be -- travel and 11 stay suspended in the air for hours? 12 A It can and Dr. Selikoff even said that its not just the Its

13 individual utilizing the joint compound thats at risk.

14 other people in the vicinity of them, working at other jobs. 15 Q 16 And how long can asbestos stay suspended in the air? MR. HOUFF: Objection. Objection. Thats an

17 incomplete hypothetical. 18 Q I want you to assume for me that an individual is using Make that assumption for

19 asbestos-containing joint compounds. 20 me? 21 A 22 Q Yes.

And asbestos -- that asbestos-containing joint compound is Can you make that

23 mixed or sand and dust is liberated. 24 assumption? 25 A Yes.

WWW.JJCOURT.COM

Raterman - Direct/Frost 1 Q

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How long can the asbestos within those joint compounds or

2 that dust stay suspended in the air? 3 A 4 It can stay -MR. HOUFF: Objection. Still incomplete. It doesnt

5 say anything about the size of the room, the ventilation, 6 anything else, Your Honor, 7 8 9 10 11 12 13 COURT CLERK: MR. HOUFF: THE COURT: I cant hear you.

Im sorry. Just turn the microphone on. Just turn on your microphone. It says its on.

COURT CLERK:

UNIDENTIFIED SPEAKER: MR. HOUFF: THE COURT:

It doesnt -No. Its always green. It turns a

14 different shade of green when its on. 15 even when theyre off. 16 MR. HOUFF: Thats on now.

Theyre always green,

Your Honor, my objection is that its It doesnt talk about

17 still an incomplete hypothetical.

18 exchange, ventilation, size of room, or anything else. 19 20 Honor. 21 Q Dr. Raterman, I want you to assume that this is me working Its approximately MR. FROST: Ill ask some additional questions, Your

22 in my basement and there is no ventilation.

23 a 50 by 50 foot basement and Im working with asbestos24 containing joint compounds and I mix it and I sand it. 25 long asbestos stay suspended in an air in that type of WWW.JJCOURT.COM How

Raterman - Direct/Frost 1 environment? 2 A

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Under those conditions, asbestos can stay suspended in the And, actually, in our work in a containment

3 air for hours.

4 removing asbestos, the EPA requires the containment to sit 5 after removal of asbestos for 16 to 24 hours to allow for 6 settling before clearance sampling is taken. 7 Q And I want to finish up with the Consumer Product Safety You have reviewed the literature

8 Commission ban quickly.

9 concerning -- and the federal regulations concerning asbestos, 10 correct? 11 A 12 Q Thats right. And can you tell the Court exactly how many products have

13 actually been banned that contain asbestos? 14 A The law has banned the use of pre-molded insulation as

15 well as fireproofing insulation in addition to joint compounds. 16 Q And so of the 3,000 products that asbestos was contained

17 within, only three major types of products have actually been 18 banned by the federal government? 19 A 20 Q Correct. Now, the Consumer Product Safety Commission ban, which I

21 have up on the board, weve already dealt with it being banned 22 as a hazardous product and that they dealt with the 23 unreasonable risk. Are you aware of one of the things that

24 they were looking at concerning whether asbestos-containing 25 joint compounds had risks for things like mesothelioma? WWW.JJCOURT.COM

Raterman - Direct/Frost 1 A Yes.

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They were concerned about asbestosis, lung cancer,

2 and mesothelioma. 3 Q And, in fact, did the Consumer Product Safety Commission

4 look at a hypothetical because the Consumer Product Safety 5 Commission is not like OSHA or NIOSH? They dont have control

6 over the workplace, as you understand, correct? 7 A 8 Q Right. And so what theyre looking at is consumer use, like

9 do-it-yourselfers, people that are buying small amounts of it, 10 of joint compounds and things, correct? 11 A 12 Q Thats correct. And did they look at a hypothetical and determine what was

13 a -- not a -- that was an unacceptable risk? 14 A 15 Q They did. And I have up on the board, it says, for purposes of this

16 assessment, the Commission considered the use of patching 17 compounds by the consumer for six hours a day, four times a 18 year, to be a high yet reasonably foreseeable exposure. The

19 increased risk of death from respiratory cancer induced by this 20 exposure is estimated at between 10 and 2,000 per million. 21 five years of exposure at these levels, the risk increased 22 geometrically. And its estimated at between 1,000 and 12,000 For

23 per million, the lower estimated of ten per million is closer 24 to the actual risk for one year of exposure. And it says,

25 nevertheless, in the view of the seriousness of the injury and WWW.JJCOURT.COM

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1 the cumulative effects of asbestos exposure, even this minimum 2 figure represents an unacceptable risk. Is that what the

3 Consumer Product Safety Commission was looking at as a 4 hypothetical exposure that was an unacceptable risk in 5 formulating their ban? 6 A 7 Q Yes, they were. Now, as we sit here today, has there been any new

8 literature or anything that has changed the federal 9 governments or industrial hygienists in general view about 10 the dangers of asbestos-containing joint compounds in the 11 workplace? 12 A 13 Q No, there hasnt been. Or asbestos-containing joint compounds used by the

14 do-it-yourselfers? 15 A 16 Q 17 No. Now, Ms. Raterman, one last housekeeping matter -MR. FROST: Your Honor, I have marked or its marked Your Honor, may I approach?

18 as M-136, Ms. Ratermans CV. 19 20 Q 21 CV? 22 A 23 24 evidence. 25 THE COURT: Yes, it is. MR. FROST: THE COURT: Yes.

And, Ms. Raterman, is that a true and correct copy of your

Your Honor, we would offer that into

Its admitted. WWW.JJCOURT.COM

Raterman - Direct/Frost 1 MR. FROST: And, Your Honor, we have marked for

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2 demonstrative purposes, its M-135, Susan Ratermans report and 3 then I have marked as ACC-1004, a copy of Ms. Ratermans -- the 4 PowerPoint that we have just showed the Court. And then Ive

5 marked as ACC-1005 for demonstrative purposes some still 6 photographs from the Longo video that we showed the Court. 7 those are -- the last ones were demonstratives, Your Honor. 8 With that, Your Honor -9 10 11 12 -13 14 MR. FROST: THE COURT: Okay. -- so that I can look at them and maybe THE COURT: MR. FROST: THE COURT: I dont have any of them though. Your Honor, I have copies for the Court. It would be helpful to hand them up first And

15 the witness, too, if she needs them. 16 17 MR. FROST: THE COURT: Yes, Your Honor. All right. So its 1004 and 1005, the

18 demo exhibits, the PowerPoint and the still photos? 19 MR. FROST: Correct. And then the other one was her

20 report, Your Honor. 21 THE COURT: All right. Thank you. So I have M-135

22 and then the two that I just articulated as demonstratives? 23 24 25 MR. FROST: THE COURT: MR. FROST: Yes, Your Honor. Okay. Thank you.

And with that, Your Honor, I pass the WWW.JJCOURT.COM

Raterman - Cross/Houff 1 witness. 2 3 4 5 BY MR. HOUFF: 6 Q 7 A 8 Q 9 ban. Ms. Raterman, good afternoon. Good afternoon. THE COURT: MR. HOUFF: Mr. Houff? Thank you, Your Honor. CROSS EXAMINATION

175

Lets start where this left off, and that is with the CPSC You heard Dr. Anderson say this morning that the basis

10 for the CPSC ban was an assumption of 30 fibers per cc. as a 11 time weighted average, correct? 12 A Honestly, I couldnt hear if he said 30 or 20 or 40. I

13 had some questions in my mind. 14 Q Okay. But you agree it was a number like that? It was,

15 like, 20 or 30, right? 16 A It was the data from the Rohl Langer article so it was --

17 it could have been anywhere in that range of concentrations. 18 Q Okay. Now, and talking about a time weighted average,

19 isnt it a fact that the time weighted average is the only way 20 you can really calculate dose? 21 A The time weighted average, if you have an individuals

22 time on task and the concentration of asbestos in the air for 23 them doing whatever theyre doing during that time on task, so 24 for example, lets just say theyre doing some mixing for five 25 minutes and you have that concentration associated with that, WWW.JJCOURT.COM

Raterman - Cross/Houff 1 theyre doing sanding for 30 minutes and you have a 2 concentration associated with that, you can develop a time 3 weighted average from that information.

176

Its not -- and its

4 going to be different potentially for each individual worker. 5 Q Right. But their dose is going to be -- if you were

6 calculating the total dose of an individual who periodically or 7 one time a year used asbestos-containing joint compound, you 8 have to take into account that individuals entire year, 9 correct, and put that into a time weighted average? 10 A Well, I would -- in order to do a cumulative exposure dose

11 in the scenario you just gave me, I wouldnt put it into a time 12 weighted average first. I would just -- as you have stated, I would take that

13 theyre using this material once a year.

14 concentration times the time they were using it and then 15 calculate their cumulative dose over the course of a year. 16 Q Okay. And if they had nothing else other than ambient

17 exposure over the year, that would be fairly insignificant in 18 the course of a year, correct? 19 A I would not consider an exposure to asbestos over It would not be as high, certainly,

20 background insignificant. 21 as a career drywaller. 22 Q Right.

Now, returning to the CPSC ban, and I have that up

23 there, the increased risk says its from -- to respiratory 24 cancer, correct? 25 A Yes. WWW.JJCOURT.COM

Raterman - Cross/Houff 1 Q 2 A 3 Q And what does respiratory cancer mean? To me, it means any types of lung cancer, mesothelioma. Okay. Were there any mesotheliomas reported to CPSC

177

4 pursuant to this ban? 5 A 6 Q I dont know. And were -- how many of this 10 per million, how many of

7 those would be mesotheliomas, according to the CPSC? 8 A 9 Q 10 A 11 Q 12 A 13 Q 14 A 15 Q 16 A 17 Q I dont know that information. You dont know that any of them would be, correct? I havent seen that published. Right. Ms. Raterman, youre not a toxicologist, correct?

Correct. Not an epidemiologist? Thats right. Not a physician? Correct. You claim no expertise in pulmonary medicine, oncology,

18 in-vitro studies, or amphibole halation studies? 19 A 20 Q Thats correct. And you claim no expertise in pathology or molecular Easy for me to say.

21 biology? 22 A 23 Q 24 A 25 Q

Thats correct. You are not a mineralogist? Correct again. And not a material scientist? WWW.JJCOURT.COM

Raterman - Cross/Houff 1 A 2 Q Correct. And with respect to the MAS video, you were not present

178

3 when that was done? 4 A 5 Q Thats right. Correct. And you have no personal knowledge of that

6 video, correct? 7 A 8 Q Correct. And if we look at the dust thats created there, not all

9 of that is asbestos, correct? 10 A 11 Q Correct. In fact, the majority of that is probably not asbestos,

12 correct? 13 A Well, MAS did measure what percentage and what actual

14 number of fibers per cc. was asbestos. 15 Q 16 A Um-huh. And what was their time weighted average?

I dont know that they figured out a time weighted You can figure out a time weighted average from their

17 average. 18 data. 19 Q

Okay.

And isnt it true that the dust that you can see is

20 typically not the dust thats going to harm you because you 21 cant inhale it? 22 A If were talking about that cloud of dust that we saw in

23 the video, a portion of that is going to be the size thats 24 inhalable and able to be measured as fibers in the way that 25 weve talked about when were talking about fiber per cc. and WWW.JJCOURT.COM

Raterman - Cross/Houff 1 measuring asbestos dust. 2 that description. 3 Q

179

A portion of that dust will fit into

But you dont know what proportion that is as we sit here,

4 as you look at the video? 5 A 6 Q Thats correct. And its probably not going to be majority? Its going to

7 be the minority of that dust, correct? 8 A Well, the figures stand for themselves. I mean, they

9 measured it and they reported the actual concentrations of 10 fibers. 11 Q Okay. So far as you know -- well, Ill strike that. You

12 agree that background levels of exposure of asbestos do not 13 contribute to mesothelioma? 14 A I will agree that they dont contribute to the risk of

15 mesothelioma. 16 Q 17 A 18 Q And background can contain all fiber types? Yes. There is -- you acknowledge and understand that there is a

19 difference in the potency of various fiber types to induce 20 mesothelioma? 21 A 22 Q Yes. And do you agree that the amphiboles crocidolite and

23 amosite are more potent fiber for fiber than chrysotile? 24 A I think the studies show that there is an increased

25 potency of the amphiboles. WWW.JJCOURT.COM

Raterman - Cross/Houff 1 Q Okay.

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Now, the other thing that was shown originally was In fact,

2 this CPSC statement early on about no safe level.

3 what that says is that there is general agreement that there is 4 no known threshold level below which exposure to respirable 5 free form asbestos would be considered safe. 6 that there isnt a threshold, correct? 7 A 8 Q 9 A No threshold has been identified. That doesnt mean there isnt one, correct? No one has ever published one so we dont know if there is That doesnt mean

10 one or -- because it has never been identified. 11 Q Okay. Can you -- you cannot point to a study that shows

12 the percentage of joint compound workers who contract 13 mesothelioma, correct? 14 A 15 Q No. And to your knowledge, there has never been a particular

16 dose or a cumulative exposure dose of chrysotile defined that 17 results in mesothelioma, correct? 18 A Well, that is correct if we understand -- because we

19 understand that theres no known threshold level. 20 Q Well, let me state the question again. To your knowledge,

21 there has never been a particular dose, a cumulative exposure 22 dose of chrysotile defined that results in mesothelioma, 23 correct? 24 A If your question is related to pure chrysotile, thats

25 correct. WWW.JJCOURT.COM

Raterman - Cross/Houff 1 Q Chrysotile fibers dont last as long in the lung as

181

2 amphiboles, correct? 3 A Im going to leave that to the medical professionals to

4 discuss. 5 Q Ms. Raterman, you have not reviewed any of the PIQs in

6 this case, correct? 7 A 8 Q Correct. In fact, before I took your dep -- or before you read Dr.

9 Andersons report, you didnt even know PIQs existed in this 10 case, correct? 11 A 12 Q 13 A 14 Q I didnt have any familiarity with bankruptcy cases. And you were never asked to review the PIQs in this case? Thats correct. And you cannot state to any extent that any of the 2600

15 people who completed a PIQ ever actually used or was exposed to 16 an asbestos-containing joint compound for which Bondex is 17 responsible? 18 A 19 Q I havent looked at the PIQs. Okay. And you cannot state to any extent that any of the

20 2600 persons who completed a PIQ and who claimed to have 21 mesothelioma got that mesothelioma as a result of working with 22 or around a joint compound for which Bondex is responsible? 23 A 24 25 Honor. WWW.JJCOURT.COM I havent looked at the PIQs. MR. HOUFF: Thank you. I have nothing further, Your

Raterman - Redirect/Frost 1 2 3 BY MR. FROST: 4 Q MR. FROST: Just briefly, Your Honor. REDIRECT EXAMINATION

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Ms. Raterman, throughout the literature, this concept of

5 there being differences in potencies of different asbestos 6 fibers, has this been something thats been identified and 7 discussed throughout the world literature? 8 MR. HOUFF: I object. I think she said this was out

9 of her expertise. 10 11 12 potency. 13 A MR. FROST: THE COURT: Overruled. No. The potency.

She answered the question concerning

There are two issues for an industrial hygienist As an industrial hygienist, whether its a

14 concerning potency.

15 chrysotile fiber or an amosite fiber, crocidolite or tremolite 16 fiber, we view them all the same. 17 the same. We protect worker health all In terms of the

The regulations are all the same.

18 medical literature that I have reviewed, there is a -- shall we 19 call it -- yes -- a difference in potency that has been 20 identified to a certain extent, but not -- theres not one 21 formula that I would subscribe to as being a precise estimation 22 of that difference in potency. 23 Q And, in fact, this difference of potency, its something

24 that OSHA, NIOSH, the EPA, and other world agencies have all 25 discussed and taken into account when theyre coming to WWW.JJCOURT.COM

Brody - Direct/Frost 1 conclusions concerning asbestos? 2 A 3 Q Certainly. And as we sit here today, even though theres been this

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4 discussion about potency, have any of those organizations -5 NIOSH, OSHA, the EPA, have they changed any of their 6 regulations to not regular chrysotile asbestos as the same as 7 any other asbestos? 8 A 9 10 11 12 13 14 No, they havent. MR. FROST: MR. HOUFF: THE COURT: MR. FROST: THE COURT: MR. FROST: Thats all I have, Your Honor. I have no additional questions. Will this witness be recalled? No, Your Honor. All right. Youre excused. Thank you.

Your Honor, the Committee would call Dr.

15 Arnold Brody. 16 17 18 19 20 21 BY MR. FROST: 22 Q 23 Q 24 Q 25 A Good afternoon, Dr. Brody. Good afternoon. Could you tell the Court what you do? Yes. Im a laboratory scientist. Ive been a molecular THE COURT: Good afternoon. Please raise your right hand.

COURT CLERK:

DR. ARNOLD BRODY, COMMITTEES WITNESS, SWORN COURT CLERK: Please be seated. DIRECT EXAMINATION

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Brody - Direct/Frost 1 biologist, experimental pathologist, for many years.

184 I retired

2 last year but I was honored with the position of professor 3 emeritus in the pathology department at the Tulane University 4 Medical School where Im still active intellectually with 5 students there and -- and continue to publish and work in the 6 scientific field of lung biology and pathology. 7 8 witness? 9 10 Q THE COURT: Yes. MR. FROST: And, Your Honor, may I approach the

Dr. Brody, Ive handed you whats been marked as M-131 Is that something you prepared

11 which is your curriculum vitae. 12 in the past? 13 A 14 Q Yes.

And is that a true and accurate copy of your curriculum

15 vitae? 16 A 17 Yes. MR. FROST: Your Honor, we would offer that into

18 evidence at this point. 19 20 Q 21 22 THE COURT: Its admitted.

And one other thing. MR. FROST: THE COURT: Your Honor, may I approach again? Yes. Oh, excuse me. Give me one second.

23 Stop the clock for a minute, please. 24 25 THE COURT: (Audio off) Okay. Im back. Im ready. Thank you.

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Brody - Direct/Frost 1 2 Q MR. FROST: Okay.

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And, Dr. Brody, I have handed you whats been marked as Its the expert report of Dr. Arnold R. Brody and Ive

3 M-130.

4 also marked as ACC demonstrative 1006, a copy of the slide show 5 that we intend to use with you. 6 MR. FROST: And, Your Honor, those would be for

7 demonstrative purposes for the Court and I have copies for the 8 Court. 9 10 was what? 11 12 13 14 Q 15 16 17 18 Q THE COURT: All right. Thank you. Im sorry. 130

His -- a report? THE WITNESS: MR. FROST: THE COURT: Yes.

130 is his expert report, Your Honor. Thank you. Thank you.

And, Doctor -MR. FROST: THE COURT: MR. FROST: Are you ready, Your Honor? Yes. Okay.

And, Dr. Brody, could you just briefly explain to the

19 Court your training and background concerning asbestos? 20 A Right. So I did a bachelor of science degree in zoology, I then did a master of science

21 which is the study of animals.

22 degree, University of Illinois, in anatomy, animal anatomy, 23 human anatomy. 24 biology. Then I went to Colorado to do a Ph.D. in cell

Then I did a master of science degree in anatomy. After my

25 That, as I said, was at the University of Illinois. WWW.JJCOURT.COM

Brody - Direct/Frost

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1 Ph.D., I did three years of post-doctoral study at Ohio State 2 University. 3 Then I started my academic career as an assistant

4 professor at the University of Vermont and thats where I met 5 Dr. Chris Wagner who had discovered essentially that asbestos 6 causes mesothelioma. He invited me to come and work with him

7 and thats where I started my interest in asbestos disease and 8 actually used the animal model that he established, showing 9 that when rats or mice are exposed to asbestos, they get all 10 the diseases that people do, asbestosis, lung cancer, 11 mesothelioma. And then I went on through the rest of my

12 academic career using that model system, cell systems, human 13 tissues, to publish the series of papers that I have in this 14 field. 15 Q And, Dr. Brody, how many papers have you published over

16 the years concerning asbestos and how asbestos affects the 17 body? 18 A So, I have 153 peer reviewed papers. About a hundred or

19 so of those, a hundred or more of those, relate specifically to 20 asbestos disease. 21 things like that. The others are lung disease, viral diseases, And then I also have 55 book chapters and

22 proceedings and all of those relate to asbestos disease. 23 Q And even though you have a Ph.D., have you actually taught

24 at medical schools over the years? 25 A I do, have done that regularly. Yes, sir.

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Brody - Direct/Frost 1 Q

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And how many times, how often have you been asked to teach

2 about asbestos and asbestos related diseases at medical schools 3 and throughout the world? 4 A Well, I mean, when I was part of the medical faculty, I I had recurring lecture series

5 did that on a regular basis. 6 with the medical students.

I taught the pulmonary fellows.

7 These are doctors who are treating patients and need updates on 8 pulmonary anatomy and asbestos disease. And Im asked I just last month

9 regularly to give lectures around the world.

10 gave a lecture at a conference in London and have taught with 11 various countries and universities around the world. 12 Q Now, other than your peer -- well, your peer review

13 literature, has any of that ever been funded by any 14 governmental agencies? 15 A Yes. All of my work has been funded by the National

16 Institutes of Health through a competitive process where I have 17 to write research proposals and submit them, along with tens of 18 thousands of other proposals around from universities across 19 the country, and Ive competed successfully with those 20 throughout my career and my career has then been funded by the 21 National Institutes of Health. 22 Q And, Dr. Brody, have you done hands-on research where you

23 are performing research concerning different types of asbestos 24 using amosite asbestos, crocidolite asbestos, and chrysotile 25 asbestos and how that types of asbestos affect the animals and WWW.JJCOURT.COM

Brody - Direct/Frost 1 also how they can affect humans? 2 A Yes. Of course. Thats what my papers are all about.

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3 Yes, sir. 4 Q And, Dr. Brody, do you agree today to keep all your

5 opinions within a reasonable degree of medical and scientific 6 -7 A 8 Q 9 A 10 Q 11 Certainty? -- certainty? Yes. Thank you. MR. FROST: Your Honor, we would offer Dr. Brody as Yes.

12 an expert in cell biology and experimental pathology at this 13 point. 14 15 16 Q MR. HOUFF: THE COURT: No objection. He is so certified.

Now, Dr. Brody, you have prepared a slide show of sort of

17 -- to help the Court understand how asbestos can cause 18 diseases, correct? 19 A 20 Q Yes. And although we dont have a screen out here, are you able

21 to see the screen behind you and -- so you can point some 22 things out to the Court using your -23 24 monitor? 25 MR. FROST: The problem, Your Honor, is he needs to WWW.JJCOURT.COM THE COURT: Why cant we turn the one on in his

Brody - Direct/Frost 1 be able to sort of -2 3 show -4 5 6 7 THE COURT: MR. FROST: THE COURT: Oh, certainly. Yeah, I think that would -Yes, certainly. If I can just -- if I can just stand THE WITNESS: Could I stand, Your Honor, and I can

189

THE WITNESS:

8 like this, you see I can -- I can use this pointer. 9 see that -10 11 12 13 AUDIO OPERATOR: THE WITNESS: MR. FROST: THE COURT:

If you can

But can you bring the microphone?

Okay.

Will that work, Your Honor? Well, I cant really see what hes

14 pointing to there and it doesnt show up on my screen. 15 THE WITNESS: It doesnt show on the screen but can

16 you see that red -17 18 19 20 21 22 23 Q Okay. MR. FROST: THE COURT: THE COURT: MR. FROST: No. -- marker moving? I can. Okay. Now --

THE WITNESS: MR. FROST:

Yeah, thats what Im talking about.

Okay.

So, Dr. Brody, can you explain to the Court what

24 were looking at? 25 A Right. So this just a microscope that Ive had for many WWW.JJCOURT.COM

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1 decades that I use to take pictures of the fibers and the lung 2 tissue and so I just wanted you to see what that looks like. 3 And then just off the screen is a camera so I can take a 4 permanent image of whatever the microscope magnifies for me. 5 And then, so if we go to the next slide, the first thing -6 this is what chrysotile asbestos looks like and you can see 7 that there are a large number of fibers in this bundle. 8 Theres a marker down in the lower right-hand corner that says 9 one point zero so thats a micron. 10 To help us understand size, if you make a millimeter

11 with your fingers like this, which is just barely what you can 12 see with the naked eye, and then you divide that a thousand 13 times, youve made a thousand microns. So the point is that

14 you can barely see with your naked eye a thousand microns. 15 Now, these fibers, as you can see, the longest ones are about a 16 hundred microns and then theres a number of short ones and 17 thin ones so these are impossible to see with the naked eye and 18 you have to have an electron microscope to see these fibers. 19 And these are the kinds of fibers that are aerosol, whether 20 theyre from a product like we saw in that film or whether they 21 are materials that I produce in a chambers for animals to 22 breath. And thats one of the ways that weve studied this to

23 understand the process because by the time a person comes to 24 the clinic, its typically decades after exposure. You dont

25 get to see whats going on in their lungs so we use the animal WWW.JJCOURT.COM

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1 model systems to teach us what actually goes on in the lungs. 2 The way we do that is to make an aerosol of the fibers. 3 animals inhale the aerosol. The

We can sacrifice the animals

4 immediately after exposure or hours, days, weeks, years after 5 exposure, and either produce just an initial injury or a 6 clinical disease, depending upon the experiment that we design. 7 And, again, thats what my papers are all about. 8 So I can show you in the next slide a couple of

9 examples of this, of the way we study this, and how the -- and 10 how the disease mesothelioma occurs. So, for example, this is

11 the small piece of a lung of a rat and you can see a few of the 12 hundreds of millions of air spaces that are in the lung and the 13 lung of the rat and the lung of the human are essentially the 14 same. If a rat or a mouse were running by here, it would be

15 doing exactly what you and I are doing, inhaling, exhaling the 16 room air, using exactly these kinds of air spaces, same cell 17 types, same diseases. 18 19 second. In the next slide, I want to focus -- hang on one Go back. Im going to focus on this spot right here,

20 Your Honor.

This is one of millions of spots like this around

21 a lung immediately after exposure and Im going to show you 22 where asbestos fibers land. So now we can go to the next slide

23 and here you can see a group of fibers that have landed on the 24 surface, the breathing surface of the lung, and you can see 25 theres kind of a long, curly fiber here. WWW.JJCOURT.COM This is a ten micron

Brody - Direct/Frost 1 bar down here. Remember, you can only see -- you can barely Here, the electron microscope is

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2 see a thousand microns.

3 showing you about a ten micron fiber and then theres some 4 short fibers. And what were looking at here is the breathing If you think about this room as one of

5 surface of the lung.

6 those air spaces we were looking at, and you look down at the 7 floor, you see a carpet. 8 cells. And our air spaces are lined with And thats what

They make a carpet, just like this.

9 this carpet is that you see here.

Its a kind of the cell that

10 makes a barrier between the air and the blood. 11 And it turns out, I discovered in my laboratory, that

12 some of the asbestos fibers, a proportion of the fibers, are 13 actually picked up by these carpet cells, shoved under the 14 carpet. 15 here. In fact, you can actually see that happening right

You can see some of the fibers here but then you cant

16 see them here because theyre under the carpet. 17 And then we go to the next slide, we can actually see

18 more of that going on because whats happening is the fibers 19 are being introduced into whats called the fluid flow of the 20 lung because, in order for a disease to develop, the fibers 21 have to reach the target cell; that is, the cell from which the 22 disease develops. Now, for mesothelioma, those cells are on Its a very thin

23 the outside lining of the lung, the pleura.

24 membrane, saran wrap thin membrane, wraps around the outside of 25 the lungs, makes the lungs airtight. The cells that cover that

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Brody - Direct/Frost 1 pleura are called mesothelial cells.

193

In order for the asbestos

2 that is inhaled onto these -- onto the carpet that covers all 3 of our air spaces, the fibers have to reach the fluid flow of 4 the lung and thats what were actually seeing here. 5 these characters here that look sort of like donuts? 6 what our red blood cells look like. You see Thats

They look like donuts

7 because they have a depression in the center, not a whole, but 8 a depression. 9 the vessels. And you can see where theyre all lined up in Theres one. Theres a group going down this way

10 and then theres a group going this way, and theyre flowing in 11 the blood flow of the lung. And you can see a fiber here, for Im showing

12 example, this little fiber right here, Your Honor.

13 you this one and then there are some others that are on their 14 way into the fluid flow. 15 Once asbestos fibers get into the blood, they can Now, I say this is a rat, of

16 flow anywhere in the body.

17 course, but our red blood cells look exactly like this and 18 theyre exactly the same size as that of the rat and horses and 19 dogs and guinea pigs and giraffes. 20 and shape of these red blood cells. 21 Now, theres another fluid flow of the long and its We all have the same size

22 called lymph, l-y-m-p-h, and lymph is a clear fluid that runs 23 wherever blood flows in our bodies. Theres lymph fluid

24 flowing around it and the lymph carries cells of the immune 25 system and it helps us to keep our blood pressure correct in WWW.JJCOURT.COM

Brody - Direct/Frost 1 the vessels. 2 lymph nodes.

194

Asbestos has been demonstrated in what are called Lymph nodes, we can see in the next slide. In

3 this slide, we see the lungs now with the pleura out here and 4 the pleura is a thin membrane, as I told you. These green

5 blobs that the artist has given us around the lung, those are 6 lymph nodes. Lymph nodes filter lymph flow. So wherever

7 theres a lymph flowing, the small bundles of tissue called 8 lymph nodes are filters. It can be in your armpits, the side

9 of your neck, groin, ankles, wrists; wherever theres lymph 10 flowing. 11 12 lung. Now, investigators study the lymph nodes around the They study lymph nodes in our perineal cavity. Theyre

13 called mesenteric lymph nodes.

And in people exposed to Now,

14 asbestos, theres asbestos collecting in the lymph nodes.

15 the only way that asbestos can get into those lymph nodes is by 16 flowing in the lymph. The only way they can get into the lymph

17 flow is by getting inhaled, landing on the carpet, getting 18 picked up and -- we call it translocated into the lymph flow. 19 Now, once theyre in the lymph flow, that means they can reach 20 -- and thats what this diagram is all about, its showing the 21 pattern of lymph flow to the surface of the pleura where the 22 mesothelial cells reside. So now we have the agent that causes

23 mesothelioma at the target cell and the next slide summarizes 24 all that. 25 Q Now, Dr. Brody, before we go to the next slide, youve WWW.JJCOURT.COM

Brody - Direct/Frost 1 been talking about asbestos and I want to make it clear, all

195

2 these mechanisms that youre talking about, the breathing in, 3 the getting into the lymph nodes, the going under the carpet, 4 getting in the lymph flow, all of this mechanism, is that the 5 same if its amosite, crocidolite, or chrysotile? 6 A 7 Q Absolutely. And, in fact, have there been studies of the target site,

8 the pleura, the area where the mesothelioma begins, the disease 9 process begins, that have studied what is the preferential 10 fiber in that area? 11 A 12 Q 13 A Yes. And what do those studies show us? Yes. It turns out that chrysotile asbestos is the fiber

14 that tends to accumulate in those target zones and the reason 15 for that is that chrysotile tends to break down into smaller 16 and smaller fibers and are more easily then transported in the 17 lymphatic flow. 18 Q And -- yeah, okay.

And so the -- once the fibers get into the lungs and then,

19 because of the nature of chrysotile, it gets throughout the 20 body and it starts in that lymph system, the fibers we find the 21 most at the target site of mesothelioma, are chrysotile 22 asbestos? 23 A 24 Q 25 A Correct. Okay. Right. So let me just back up one moment and let me show WWW.JJCOURT.COM

Brody - Direct/Frost 1 Your Honor.

196

What were going to do is, to summarize this, what

2 I just talked about the last five minutes, is were going to 3 take a section out of the lung here and youll see the lung on 4 the left. Youll see the pleura on the right. And then -- go Heres

5 ahead to the next side.

And thats what we have here.

6 the lung over here on the left and all the air spaces, that 7 spongy area that weve been looking at, and the pleura on the 8 right. And the artist has an asbestos fiber coming in and

9 landing in the little rooms and then he has a fiber moving from 10 the air space into this channel, and he calls it lymphatic 11 fiber transport to the pleura. 12 all about. So thats what this channel is

And then it reaches the normal mesothelial surface

13 which is the target site for mesothelioma. 14 If then you have the kinds of interactions that are

15 required for cancer, then you can develop this mesothelioma and 16 I can spend the next five minutes finishing explaining how 17 asbestos interacts with the mesothelial cells to cause cancer. 18 Okay. 19 20 21 A Okay. And this is what the -UNIDENTIFIED SPEAKER: MR. FROST: Yeah. You wanted to skip that --

So now we have the fiber at the target cell and

22 were now going to go into this discussion that we call 23 cellular and molecular aspects of fiber carcinogenics. This is

24 actually the name of a conference that I was at a few years ago 25 where I gave a talk and the concept was how fibers cause WWW.JJCOURT.COM

Brody - Direct/Frost 1 cancer, carcinogenisis.

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And I showed -- Ive showed you cells

2 and Ive shown you the fibers picked up by cells, but you 3 cannot talk about carcinogenisis unless you talk about the 4 molecular aspects. 5 disease. That means your genes. Cancer is a genetic

The simplest definition of cancer is the loss of We have a series of genes that keep a

6 control of cell growth.

7 very rigid control on how often our cells divide and make new 8 cells. Cancer is the loss of control of that process of cell

9 division. 10 Humans have about 20,000 or so genes that make us Of those 20,000 or so genes, about a hundred of Theyre dedicated to

11 what we are.

12 them are called growth control genes. 13 keeping that normal rate. 14 control of cell growth.

As I said, cancer is the loss of

Cancer occurs when there are a series

15 of errors in genes that control cell growth, those hundred or 16 so. Some of them are very specific called tumor suppressor That gives you some inkling of what they might do and But one of the ways we

17 genes.

18 well talk about a couple of those.

19 study how fibers cause cancer is by taking cells out of the 20 body of humans and animals, putting the cells in a dish, give 21 them the right nutrients and theyll grow in the dish, and then 22 you can add the various agents that youre interested in. 23 I mean, you can expose animals and cause a cancer or But

24 you can inject fibers into the animals and cause cancers.

25 in order to get a better look at whats actually happening at WWW.JJCOURT.COM

Brody - Direct/Frost

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1 the molecular level, the genetic level, we take the cells out 2 and even the DNA out, and look at the interactions between the 3 fibers and those genes and you can see on the surface, on the 4 -- Im sorry -- on the cover of this proceedings, there are two 5 cells and Im outlining one of those cells here. You can see

6 that this is one cell and then theres another one right next 7 to it, and theres a center circle in these cells. That center

8 circle is called a nucleus and the nucleus of our cells 9 contains all of our genes. 10 Notice that fibers have been added to these cells and

11 theres kind of a long fiber in the cell on the left and there 12 are other fibers that are collected around the nucleus. But

13 the fibers are excluded from the nucleus where are genes are 14 because we have a membrane that protects out DNA which is a 15 good thing. We dont want carcinogens like asbestos in our

16 nuclei, interacting with the DNA, so we have this protective 17 membrane. 18 One of the things thats been known for a long time

19 is that when cells divide to make new cells, we lose that 20 protective membrane. So we asked in my laboratory what would

21 happen if the cells were exposed to asbestos and we used lung 22 cells and mesothelial cells and other kinds of cells, and asked 23 what would happen to those cells when we add the fibers and the 24 cells are divided. 25 next view slide. And so thats what we can look at in the

So lets see whats supposed to happen. WWW.JJCOURT.COM

Brody - Direct/Frost 1 As you can see, it says normal cell division.

199 There

2 are three cells, one, two, three.

The two cells on the outside

3 with the normal circle nucleus and the blue stain material, 4 thats DNA. 5 is. The DNA is stained blue so you can see where it The cell in the center has Now, that could mean a whole If you fall down and you scrape

The nucleus is intact.

6 received a signal to divide. 7 variety of different things.

8 your skin -- your normal skin rate of division is about ten 9 percent. You always have to make new skin cells. If you fall

10 down and scrape it away, that cell division can go up to 40 or 11 50 percent of those cells. And then, when it heals, it goes

12 back to the normal ten percent. 13 Your lung, your liver, are about one percent. You

14 shouldnt have to be making a lot of new lung and liver cells. 15 But in the face of injury, those cells will start to divide 16 more rapidly. The point is that when a cell divides, the idea

17 is to make a new cell just like the original and the way we do 18 that is by organizing our DNA into these white threads which 19 you see in the center cell called chromosomes. 20 are bands of condensed DNA. So chromosomes

The idea now is to make another

21 set of chromosomes just like this one and have two cells as a 22 result. 23 Let me show you what your chromosomes look like. Ive made a -- set up a chromosome array with all Youve got one chromosome

24 Next slide.

25 23 pairs of the human chromosomes.

WWW.JJCOURT.COM

Brody - Direct/Frost 1 from your mother, one from your father. The light and dark

200

2 bands on the chromosomes represent where all the different 3 20,000 or so genes are distributed. The important point here

4 is that every one of our 20,000 or so genes must be on the 5 correct chromosome and in the right place on that chromosome. 6 Theres no mixing and matching allowed when it comes to where 7 our chromosomes are, where our genes are distributed on a 8 chromosome. 9 So thats why, if we go to the next slide, thats why

10 when we have normal cell division, and in the top, one of the 11 chromosomes again are formed. This is stained purple. If you

12 get faithful replication, meaning each gene in the correct 13 place on the correct chromosome, you then get what are called 14 daughter cells. And on the bottom, there are two cells just Thats what is supposed to happen every

15 like the original. 16 time. 17

Now, in order to get cancer, what happens is that

18 some of the genes, a set of genes scattered about on different 19 chromosomes, over time are damaged and we can see how asbestos 20 does that in the next couple of slides. 21 cells there, A and B. 22 seen asbestos. Now, there are two

Theres a cell in panel A that has not

These are one of millions of slides that are in

23 this experiment, one of millions of cells in this experiment, 24 and you can see one or them in panel A. The other one in panel

25 B has crocidolite asbestos in it and you can see that the long WWW.JJCOURT.COM

Brody - Direct/Frost

201

1 fibers -- so the cell is about 40 microns across from one side 2 to the next. That makes the long fiber about 30 microns and

3 then the fiber with the arrow about ten microns and then the 4 small fibers. The small fibers with the arrowheads on them Thats why theyre pointed out for

5 have DNA bound to them. 6 this publication.

And this is one the studies among many now

7 that have been published showing that asbestos fibers, only 8 asbestos fibers, bind DNA. 9 Now, this leads to a condition, as you see in the Aneuploidy means

10 upper right-hand corner, called aneuploidy. 11 abnormal chromosome separation.

So lets go to the next slide

12 because what I want to show you is that chrysotile also induces 13 aneuploidy, in this case in mesothelial cells. So the cell on

14 the right where the chromosomes have separated has not seen any 15 fibers and that is a normally dividing cell. The two cells

16 that you see at the bottom have mostly divided but theres a 17 chrysotile fiber spanning the two cells. If you can see that,

18 Your Honor, this is the fiber spanning the two cells and 19 theres some DNA bound to the surface of the fiber and out of 20 its normal location, again resulting in this condition called 21 aneuploidy. 22 Now, these are not cancer cells but the door has been Ill just take 60 seconds to

23 opened and let me explain that.

24 explain what the significance of this finding of aneuploidy is. 25 Ill tell you about two genes that weve studied in my WWW.JJCOURT.COM

Brody - Direct/Frost

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1 laboratory out of about 20 or so that are typically found in a 2 person with a mesothelioma, typically found damaged in a person 3 with mesothelioma. One of them is called P53. P53 was

4 actually the molecule of the year in 1993 and it was the 5 molecule of the year because it was found to play an 6 exceptionally important role in preventing cancer in all of us. 7 When a -- when genes are damaged in a dividing cell, P53, the 8 gene that makes the protein, P53, gets activated and stops the 9 cell from dividing. If the cell cant divide, it cant pass on

10 the mistakes to the daughter cells, which is a requirement for 11 cancer. 12 You have to pass on these errors. Remember it takes -- Im going to talk a bit more

13 about latency in a minute, but it takes decades for this to 14 develop. Well, whats going on? Well, one of the things Other genes

15 thats going on is that P53 stops this process.

16 that make what are called DNA repair enzymes or activated can 17 actually knit the DNA back together. And if the damaged genes

18 are then working properly, the cell can then go on into its 19 normal life cycle. If -- what if there were P53 in this bit of Well, I told you that the gene

20 DNA that stuck to the fiber?

21 must be in the correct place on the correct chromosome or it 22 does not work. 23 Ill tell you about one other gene. Its actually a One of the

24 set of genes.

Theyre called death pathway genes.

25 things that we know happens when there is DNA damage is that WWW.JJCOURT.COM

Brody - Direct/Frost 1 these death pathway genes get activated and drive the cells

203

2 down whats called a suicide pathway, cell suicide; big name, 3 apoptosis. This again prevents cancer because the cell with The

4 the mistakes, with the errors cannot pass on the errors. 5 cell dies.

You never hear anything more about it, going on in What if in this DNA that were not --

6 all of us all the time.

7 that is not in the right place is a set of these death pathway 8 genes? Theyre not going to work correctly. The cell then can

9 go on and pass on those errors. 10 this kind of finding. 11

Thats the significance of

Now, not only does asbestos bind DNA, but it also These are high The

12 generates what are called oxygen radicals.

13 energy, short lived compounds that we know damage DNA.

14 main cause of cancer from cigarette smoking is from the oxygen 15 radicals caused by the cigarette smoke, again causing genetic 16 damage. So asbestos -- all the asbestos varieties -- we just

17 published a paper in 2004 showing chrysotile generating oxygen 18 radicals. We know that all of the asbestos varieties generate So you sort of get a double whammy from

19 oxygen radicals. 20 asbestos.

It binds DNA, generates oxygen radicals, both of

21 which cause the genetic errors that can lead to cancer. 22 I have one more slide. This is a summary of

23 everything I really just talked about, and hopefully when Im 24 finished well understand whats happened during that third 28 25 to 50 year latency that are common in these mesothelioma cases. WWW.JJCOURT.COM

Brody - Direct/Frost 1 So here the artist has given us a mesothelial layer.

204 You can

2 see a single cell layer, each cell with a single nucleus spread 3 across the mesothelial surface, and the artist has given us a 4 couple lightning bolts as a generic DNA damaging agent. Since

5 were talking about an environmental agent in mesothelioma, you 6 can just talk about asbestos coming in and causing DNA damage. 7 Now, you can see the cell is dividing. You know the cell is Thats the only

8 dividing because you can see the chromosomes.

9 time you can see the chromosomes is when a cell is divided. 10 Now, going to the upper lefthand corner, the artist

11 knows very well because the artist was drawing for a Nobel 12 laureate who discovered some of these genes, and he knows very 13 well that cells with DNA damage typically die. So one of the But

14 daughter cells he has dying in the upper lefthand corner. 15 were also talking about a tumor.

Were talking about a cancer

16 having formed, and thats what is over here in the right-hand, 17 tumor genesis of tumor formation. In order for that to happen, So Now,

18 one of the daughter cells with DNA damage must survive. 19 thats this daughter cell right here that has survived.

20 the time between the surviving daughter cell, the development 21 of the tumor is the latency period. Now, theres not much

22 space on this diagram, but if youll give me those decades, 23 Ill just take a minute to explain whats happened. 24 So just think about the mesothelial surface with

25 hundreds of millions of mesothelial cells and one cell with DNA WWW.JJCOURT.COM

Brody - Direct/Frost 1 damage in that group.

205

And that cell with DNA damage will live

2 -- will look and act just like a normal mesothelial cell for 3 months. Mesothelial cells have a very low background rate of

4 division, less than one percent, but eventually they have to 5 divide. So the mesothelial cell, as I say, can sit there You would never know it

6 looking and acting like a normal cell.

7 was there, but it gets hit by a second fiber, eventually has to 8 divide. Now, its sitting on the mesothelial surface, two One or more of them can get

9 cells, four cells, eight cells. 10 hit again, some of them die. 11 cells with two errors.

Now, you can have one or two Those cells

And it sits like that.

12 then sit like that for months.

Eventually, they have to Some

13 divide, two cells, four cells, eight cells, thirty-two. 14 of them die. 15 Some of them get hit again.

Now, do that for decades and eventually -- you notice

16 how the artist made all of this tumor the same color, the same 17 odd color? Thats because mesothelial tumors typically are

18 derived from a single mesothelial cell with a set of damaged 19 genes sufficient for that person -- a combination of genes 20 sufficient for that person. They are -- I cant say theyre

21 never the same because if weve not looked at all -- cant look 22 at the genetic components of every mesothelial tumor, but the 23 ones that are looked at are not the same. They have a similar

24 wrist, but the combination that caused the tumor is different 25 for different people. So finally decades after exposure, a WWW.JJCOURT.COM

Brody - Direct/Frost 1 single cell among the many with errors, a single cell with

206

2 sufficient errors in combination for that person grows out into 3 that tumor and brings the person to the clinic. 4 Q And, Dr. Brody, were here about chrysotile asbestos, and

5 Ive prepared one last slide that sort of summarizes what we 6 know from the studies that you have conducted and have been 7 published in the Peer Review literature. 8 through this and -- quickly with you. And I just want to go

The first statement

9 says, highly toxic to human and animal mesothelial cells. 10 Thats what weve been talking about, correct? 11 A 12 Q Thats right. And this is entitled chrysotile because I want to focus So do you agree that chrysotile

13 only on chrysotile asbestos.

14 asbestos is highly toxic to human and animal mesothelial cells? 15 A 16 Q It is, yes. And then it has cytotoxic to human/animal macrofacias. Do

17 you agree with that? 18 A 19 Q Yes. And it says, causes mesothelioma in mice. Have there been

20 studies that have shown that? 21 A 22 Q Certainly. It says, scars the lungs of rats and mice/humans. Do you

23 agree that chrysotile asbestos does that? 24 A 25 Q Yes. And it says, mutogenic to cells and damages the DNA. WWW.JJCOURT.COM Do

Brody - Direct/Frost 1 you agree that chrysotile asbestos does that? 2 A 3 Q Yes. And then it says, causes mesothelioma in rats. I guess

207

4 mice and rats are similar, but they are slightly different. 5 A 6 Q 7 A 8 Q Sure. Have there been studies that have shown that? Yes. And it says lastly, causes mesothelioma in humans. Do you

9 have an opinion whether chrysotile asbestos has been shown to 10 cause mesothelioma in humans? 11 A 12 13 witness. 14 THE COURT: Doctor, in your studies have you been Yes, thats my opinion. MR. FROST: Thank you, Your Honor. I pass the

15 dealing specifically with chrysotile asbestos and no form of an 16 amphibole? 17 THE WITNESS: No, Ive used amosite and crocidolite

18 in my studies as well, but understand that when I started my 19 studies we knew that all the asbestos varieties caused 20 mesothelioma. 21 animals. And I did not try to produce the cancers in the Just like in people, they develop So my focus was using

That takes years.

22 it at the end of their lives.

23 crocidolite and amosite to produce the initial lesions and 24 damage thats required to cause the diseases later on down the 25 line. WWW.JJCOURT.COM

Brody - Cross/Hoff 1 THE COURT:

208

I guess Im trying to get to the question

2 of whether or not youve done any particular work that has 3 focused solely on chrysotile without having mixed the various 4 fibers? 5 THE WITNESS: Oh, absolutely. In fact, Ive never

6 done a study where fibers are mixed.

Ive only used a single

7 fiber type in any of the studies Ive done. 8 9 10 11 12 13 BY MR. HOUFF: 14 Q 15 A 16 Q Good afternoon, Dr. Brody. Good afternoon. You began testifying in asbestos litigation in about 1989 THE COURT: MR. HOUFF: THE COURT: MR. HOUFF: Thank you. May I proceed, Your Honor? Yes. Thank you, Your Honor. CROSS EXAMINATION

17 I guess? 18 A 19 Q Right, I had one case nearby here, Mount Lebanon. Okay. And I think the first time that you and I met in

20 courtroom was in 1992 in Baltimore? 21 A 22 Q 23 A 24 Q 25 A Probably. Right. Right. Not an MD? Not a lot of things, thats one of them, right. WWW.JJCOURT.COM Youre not an epidemiologist?

Brody - Cross/Hoff 1 Q Right. Well, were all not a lot of things, but youre

209

2 also not a certified industrial hygienist? 3 A 4 Q 5 A 6 Q Correct. Youve not conducted any workplace exposure assessments? Correct. And youre really not here to offer an opinion about the

7 level, nature or dose of any Bondex claimant as to any Bondex 8 product, correct? 9 A 10 Q 11 A 12 Q 13 A 14 Q I agree. You have not studied the facts of any Bondex claimant? Correct. You have not been asked to do that? Correct. And youve not studied the population of persons who claim

15 to be exposed to Bondex and have mesothelioma, correct? 16 A 17 Q Thats correct. You have not reviewed any of the epidemiological

18 literature relating to joint compound products, correct? 19 A 20 Q True. You have not reviewed any of the PIQs of any Bondex

21 claimants in this case? 22 A 23 Q I have not. And your studies involve -- your inhalation studies now

24 Im talking about with your mice and rats involved very high 25 concentrations of exposures in the range of about 800 to 5,000 WWW.JJCOURT.COM

Brody - Cross/Hoff 1 fibers per cc? 2 A 3 Q Right.

210

And the predominant length of the fibers I think you told

4 me was about ten to fifteen microns in length? 5 A 6 Q 7 A Well, thats -It was a mixture but -Well, thats the predominant above five microns, but I

8 mean most of the fibers are going to be short and theyre going 9 to break down. But theres a broad range, everything from

10 fragments to hundreds of microns long. 11 Q And an inhalation research such as the research that

12 youve done does not simulate real life low exposure to 13 chrysotile asbestos, does it? 14 A It does not simulate low concentration exposures, thats

15 right. 16 Q And it would be far more difficult to initiate the

17 response you want at low doses, correct? 18 A 19 Q I agree. Okay. And youre not attempting here to quantify the

20 number of fibers needed to cause disease, correct? 21 A Right. I mean, youre pointing out the shortcomings of Animal models tell us a lot about human

22 animal models.

23 disease, but there are some things you cant answer by using 24 animal models and youre pointing out some of those, sure. 25 Q Okay. And at the concentrations that you used, this 800 WWW.JJCOURT.COM

Brody - Cross/Hoff

211

1 to 5,000 fibers per cc in your inhalation studies, you have not 2 induced mesothelioma, correct? 3 A Well, as I say, we havent tried, but other investigators

4 using those kinds of levels certainly have. 5 Q To actually induce mesothelioma, it would take significant

6 concentrations over a significant time for a sufficient 7 latency, correct? 8 A 9 Q Thats the nature of the animal model, that is correct. Okay. And your research is not proof of disease causation

10 in humans, correct? 11 A Its not proof of causation. Its the proof of how the

12 asbestos causes the disease. 13 Q Your research cannot tell us what amount of asbestos

14 fibers are necessary to induce a mesothelioma, correct? 15 A 16 Q I agree. And you agree that it is possible that a safe level of

17 exposure to asbestos exists, correct? 18 A Well, its possible. I dont think its been defined, but

19 its possible. 20 Q But its possible. And nobody has tested the idea that

21 any exposure above background can contribute to mesothelioma 22 through the scientific method, correct? 23 A 24 Q Would you ask me that again, please? Certainly. Nobody has tested the idea that any exposure

25 above background can contribute to mesothelioma through the WWW.JJCOURT.COM

Brody - Cross/Hoff 1 scientific method? 2 A Well, any exposure above background I mean when science

212

3 deals with what causes a cancer, they always consider what the 4 person was exposed to. 5 me. So I think thats what youre asking

In other words, we cant point out every exposure a person

6 gets, but when you look at the totality of their exposure then 7 use the scientific method to establish what they were exposed 8 to. 9 Q Doctor, do you recall having your deposition taken in the

10 case of Katherine Lopez v. BASF Catalyst on the 28th of March 11 2012? 12 A 13 Q 14 A 15 Q 16 17 18 19 myself. 20 Q 21 A 22 Q 23 A 24 Q 25 A Let me ask you to look at Page 123, sir. Okay. First of all, do you recognize the deposition? Yes. Okay. Yes. WWW.JJCOURT.COM And this is your deposition? Vaguely, yes. Okay. Yes. Okay. MR. HOUFF: THE COURT: MR. HOUFF: Your Honor, may I approach the witness? Yes. Okay. Make sure I have a copy for Been a few since then?

Brody - Cross/Hoff 1 Q Okay.

213

And if you look at Page 123 starting at Line 23 and

2 going over to the top of Page 124, the question is, So nobody 3 has tested this idea that exposure above background can 4 contribute to mesothelioma through the scientific method? 5 you see the question? 6 A 7 Q Yes. And your answer, sir, was, Yeah, I dont think you can. I dont think you can. I Do

8 I dont think thats been done.

9 think whats been done is that investigators -- what scientists 10 do is look at the history of exposure of that person to a 11 carcinogen. Its like if you were exposing a person to You

12 cigarette smoke, they -- the person smokes cigarettes.

13 know, you go back and you look at their entire history and you 14 say, well, you know, which component of that can cause disease? 15 They all can. 16 17 said that. 18 Q Is that what your answer was? Your Honor, I think I just basically

THE WITNESS:

Thats what I tried to say, sure.

And so the next question was, Setting aside whether it

19 can be tested or not, nobody has tested the principle that 20 asbestos exposure above background can contribute to 21 mesothelioma through the scientific method? 22 Yeah, I dont think its been done. 23 done as youre suggesting, correct? 24 A 25 Q Thats fine. Okay. The question of what the threshold is, that is how WWW.JJCOURT.COM Your answer was,

I dont think it can be

Brody - Cross/Hoff

214

1 much exposure there must be before you can get a meso is still 2 -- a mesothelioma is still an unanswered question, correct? 3 A 4 Q Yes. There is no threshold for mesothelioma thats actually

5 been specified for any group of people for mesothelioma, 6 correct? 7 A 8 Q As far as I know. Your research does not tell us how much additional

9 exposure above background is necessary to be causal in 10 mesothelioma, correct? 11 A 12 Q 13 A 14 Q 15 A 16 Q True. And youve not calculated that? I have not. And you dont know anyone who has? Correct. And background levels of asbestos do not cause or

17 contribute to mesothelioma, correct? 18 A As far as we can tell. I mean, I dont know about

19 contribute, but as far as we can tell, we dont know. 20 Q And when you look -- just because there are lung fibers or

21 asbestos fibers in a persons lung doesnt mean that they cause 22 disease, correct? 23 A Well, we all have asbestos fibers in our lungs, and so But if a person

24 its not necessarily so what you say is true.

25 has an asbestos disease, we can go back and see whats in the WWW.JJCOURT.COM

Brody - Redirect/Frost 1 lung and help you understand what caused it. 2 Q

215

But even in a person who has been exposed only to ambient

3 levels for their entire lifetime, you would expect to see a 4 range of asbestos fibers in their lungs that could be from a 5 few to a million fibers per gram, correct? 6 A 7 Q 8 A 9 Q True. And you find all fiber types in ambient air? Typically chrysotile, but the answer is yes. Okay. And exposure to chrysotile at the levels found in

10 ambient air is not sufficient in your opinion to increase the 11 risk of mesothelioma, correct? 12 A 13 14 15 BY MR. FROST: 16 Q Very briefly, Dr. Brody. You were asked this question Yes. MR. HOUFF: I have no other questions, Your Honor. REDIRECT EXAMINATION

17 about whether it was possible that there was a safe level of 18 exposure to asbestos. 19 A 20 Q 21 A Yes. How long have people been studying asbestos? Oh, many decades, through the -- from the 30s on I Do you remember that?

22 suppose. 23 Q So in the published Peer Review literature beginning in

24 the 1930s, people have been studying the substance asbestos? 25 A Yes. WWW.JJCOURT.COM

Brody - Redirect/Frost 1 Q How many articles are there about asbestos and asbestos

216

2 diseases and all the different types of people and exposures to 3 asbestos are there in the world literature? 4 A 5 Q Thousands. In fact, is asbestos one of the most studied substances in

6 the world? 7 A 8 Q It is. And even though asbestos is one of the most studied

9 substance in the world from the 1930s even to today has anyone 10 ever been able to establish some kind of safe level? 11 A 12 Q No. So even though it may be possible, it hasnt happened over

13 all those years? 14 A 15 Q 16 17 18 19 20 21 22 23 That is true. Thank you, Doctor. THE COURT: MR. FROST: THE COURT: Will anyone need the doctor back? No, Your Honor. All right, youre excused. Thank you, Your Honor.

THE WITNESS: THE COURT:

Thank you. Thank you.

THE WITNESS: THE COURT: MR. FROST:

Want to take a short recess perhaps? Yes, Your Honor. I think that would make

24 some sense. 25 THE COURT: All right, well take a five-minute WWW.JJCOURT.COM

217 1 recess. 2 3 4 5 MR. SHEPPARD: THE COURT: (Recess) May we proceed, Your Honor?

Yes, sir. Your Honor, the claimants would call

MR. SHEPPARD:

6 James Sinclair. 7 8 9 10 COURT CLERK: Stand and raise your right hand.

JAMES SINCLAIR, COMMITTEES WITNESS, SWORN COURT CLERK: MR. SHEPPARD: Please be seated. Your Honor, just a matter of

11 housekeeping, I am going to present to the Court ACC premarked 12 Exhibit 87 as well as ACC Demonstrative I believe -- here it is 13 -- 1012. 14 15 16 17 18 Eighty-seven is Mr. Sinclairs CV. COURT CLERK: THE COURT: You have to use the microphone.

Thank you. Do you want to walk the room? No, Ill do it from the podium.

COURT CLERK: MR. SHEPPARD:

ACC-87, Your Honor, is Mr. Sinclairs curriculum vitae, and

19 the demonstrative exhibit is his report in this case. 20 21 22 BY MR. SHEPPARD: 23 Q 24 A 25 Q Good afternoon, Mr. Sinclair. Good afternoon, Mr. Sheppard. Can you introduce yourself to the Court, please, tell her WWW.JJCOURT.COM THE COURT: All right, thank you. DIRECT EXAMINATION

Sinclair - Direct/Sheppard 1 why youre here? 2 A Im James Sinclair.

218

Im a member of Charter Oak Financial

3 Consultants, and Im here to testify on the matter of 4 appropriate discount rate for determining net present value of 5 asbestos liabilities. 6 Q Okay. And before we get to that opinion, Mr. Sinclair,

7 let me very briefly go through -- tell us a little bit about 8 your educational and professional experience and why you 9 believe youre in a position to render such an opinion. 10 A I got my bachelors degree from Princeton University and My

11 MBA from what is now Darden at the University of Virginia.

12 experience has been as an investment banker at First Boston, 13 Smith Barney. I was the managing director of capital markets And Ive done a

14 for Continental Illinois in New York.

15 substantial amount of financial advisory work as an investment 16 banker and have advised creditors in bankruptcies over the last 17 20 plus years. 18 Q 19 A 20 Q Okay. And where are you employed right now, Mr. Sinclair?

As a member of Charter Oak Financial Consultants. Okay. Now, you mentioned just a second ago that you have

21 been retained and employed as a financial advisor in certain 22 bankruptcy matters. 23 A 24 Q 25 A Do you know how many?

Certainly over 20. Okay. And thats over what period of time?

That would be over 20 years. WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 Q 2 A 3 Q Okay. Twenty to twenty-five years.

219

And in each one of those retentions, as Im sure the Court

4 is well aware, your retention was approved by the bankruptcy 5 court in those matters? 6 A 7 Q 8 A 9 Q 10 A 11 Q Yes, it was. As a financial advisor? Yes. And did you ever testify in any of those proceedings? Yes, I did. And were you offered as an expert to offer opinions in

12 connection with matters of finance? 13 A 14 Q 15 A 16 Yes, I was. Okay. And were those opinions accepted by the court?

Yes, they were. MR. SHEPPARD: Your Honor, Id tender Mr. Sinclair as

17 an expert in the area of finance. 18 19 20 Q MR. JACKSON: THE COURT: No objection, Your Honor.

He is so certified.

Now, you testified at the outset that you were retained as

21 the FA for the Asbestos Creditors Committee in this case, isnt 22 that right? 23 A 24 Q Thats correct. Okay. And in connection with those duties were you asked

25 to offer an opinion on what the appropriate discount rate would WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 be to be applied to the aggregate asbestos liability in this 2 matter? 3 A 4 Q 5 A Yes, I was. And what was that opinion, Mr. Sinclair?

220

That opinion was that it would be a risk-free rate of 3.70

6 percent as of May 31, 2010. 7 Q 8 A 9 Q Okay. And you chose May 31, 2010 because?

That was the filing date of the bankruptcy. Okay. Now why, Mr. Sinclair, are you suggesting that the Well, let me backup a step if I

10 Court employ a risk-free rate? 11 could.

Can you tell the Court what you mean when you say a

12 risk-free rate? 13 A Well, a risk-free rate is generally viewed as U.S.

14 Treasury security rates. 15 Q Okay. And as the name would imply, I assume risk-free

16 means its a very safe rate? 17 A 18 Q I think its deemed the safest possible rate. Okay. Now, I can get to my question of why a risk-free

19 rate in this case? 20 A Well, this is a mass tort liability, and inasmuch as these

21 are involuntary claims that have been put upon victims by a 22 tortfeasor in discounting the stream of -- and these payments 23 are made over a long period of time, 40 years for example, that 24 they should not have a rate -- should not be discounted at a 25 rate other than a risk-free rate for any particular risk WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 adjustment. They are not due a risk adjustment. They were

221

2 involuntarily injured and you bring them back -- you have to 3 present value them because money does have a time value. And

4 so you bring them back at the time value of money at the lowest 5 possible rate, which would be your Treasury rates. 6 Q So your answer would imply that you apply a different

7 rate, a higher rate, a rate with some risk factor in it where 8 its a voluntary transaction or an investment made by a party, 9 is that correct? 10 A 11 Q 12 A 13 Q Yes, that could -Okay. Right. And the fact that these asbestos claimants here are not

14 voluntarily making an investment, youre applying the risk-free 15 rate, is that correct? 16 A 17 Q Thats correct. Okay, good. Now, Mr. Sinclair, have you offered this same

18 advice in connection with any other bankruptcy matters? 19 A Ive advised other committees on asbestos cases, yes. And

20 again, the risk-free rate was the rate that we advised and I 21 think has always been the rate used by anything that Ive been 22 involved with. 23 Q Can you recall specifically any cases where you advised

24 that the risk-free rate should be employed and it was in fact 25 used? WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 A 2 case.

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I think in Owens Corning, in Manfield Trust, and in this Those are the ones where specifically we were asked and Weve generally -- the subject comes up

3 they have been used.

4 and it usually is not dragged out very long, but we will -5 weve always expressed that opinion. 6 Q Okay. So in those matters where you advised the risk-free

7 rate and the court approved it for purposes of plan 8 confirmation, is that correct? 9 A Yes, in all the cases Ive been involved in, the risk-free

10 rate has been approved -11 Q 12 A 13 Q 14 A And --- where its been -Im sorry. -- other than those that were settled or some -- but even

15 in the settled cases, its always been at that level. 16 Q Thats what I was going to ask. Now, you werent here the

17 other day when Mr. Coleman testified on behalf of the debtors, 18 but have you had a chance to review his rough testimony? 19 A 20 Q I did look at his transcript, yes. Now, Mr. Coleman suggested two other possible alternative

21 rates, isnt that right? 22 A 23 Q 24 A Yes. And what were those rates, sir? Weighted average cost of capital, generally referred to as

25 WACC, and median discount -- median pension return rate, which WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 he computed by using I think the 15 largest public pension 2 funds. 3 Q Okay.

223

So I guess the first question is is it -- what is a

4 weighted average cost of capital rate? 5 A Well, the weighted average cost of capital rate is a

6 determination of a companys equity capital cost and debt 7 capital cost, and theyre weighted proportionately as the debt 8 and equity proportionate to the total capitalization. And this

9 is the cost that a company effectively pays in the marketplace 10 to raise capital. An investor will presumably require a return

11 of that equity cost of capital in order to make an investment 12 -- could be induced to make an investment if its a public 13 stock offering, or if its a debt offering the interest rate 14 has to be such that the investor will invest, and thats based 15 on the credit of the company. 16 Q And obviously the WACC rate would be higher than the

17 risk-free rate because it has a risk component to it? 18 A 19 Q 20 this. Correct. Okay. And why, Mr. Sinclair -- well, no, let me ask you

In what matters is the weighted average cost of capital What -- in the investment banking or finance

21 generally used? 22 -23 A

Well, in the investment banking world, its used in The

24 valuations in connection with discounted cash flows.

25 different ways of valuing companies, you can use market WWW.JJCOURT.COM

Sinclair - Direct/Sheppard

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1 multiple comparisons, you can use precedent transactions, which 2 is really a merger and acquisition measure, and you can use a 3 discounted cash flow measure where you will use the weighted 4 average cost of capital and -5 Q 6 A 7 Q Excuse me. Go ahead. And in connection with your activities as a financial

8 advisor on behalf of various creditors committees have you ever 9 seen a situation where a weighted average cost of capital rate 10 was applied to an aggregate mass tort estimate? 11 A No, Ive only seen weighted average cost of capital used

12 in financing transactions, in determining the value of a 13 company for merger and acquisition purposes, in really 14 corporate finance transactions. 15 Q Okay. The second rate that Mr. Coleman talked about was

16 the median average cost of return or pension rate of return, is 17 that correct? 18 A He came up with I think a five-year and a ten-year average I

19 -- or median rather of the 15 largest public pension funds.

20 think it was around five and a half percent for ten years and 21 something less than that for the five-year period. The problem

22 of using a pension or any kind of investment return rate, all 23 of those are -- have some risk aspect because the investments 24 within those funds are not just all Treasurys. 25 of debt, equity, private equity and so forth. WWW.JJCOURT.COM Theyre a mix

So theres a

Sinclair - Direct/Sheppard

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1 risk factor in there and thats really not appropriate to apply 2 to a -- determining what the amount of a tort claim is. Weve

3 seen these averages that Mr. Coleman put forth, and within that 4 an average may be true over a long period of time. But as the

5 asbestos trusts have found out, they arent living with 6 long-term average returns. They have to live day to day on

7 what the assets of the trust are, and these fluctuated quite 8 sharply. In fact, I think Mr. Coleman in his report pointed

9 out that in the California Public Employee Pension Plan, 10 CalPERS, that in a three-year period it went from a plus -- a 11 minus 24 percent, two years later it was a plus 21 percent 12 return. 13 Q Let me just stop you right there, Mr. Sinclair, because I Why is that a problem

14 want to make sure I understand this. 15 here? 16 A

The problem is that the trusts have to pay the claimants

17 as these claims are submitted to them under the trust 18 distribution procedures. And for example weve done some work

19 on the Owens Corning trust advising the trust advisory 20 committee. And they had to reduce there -- because of the

21 sharp downturn in that 2009 period, they found their trust 22 value decline sharply. And the claims that were coming in were So they reduced the

23 running ahead of what they expected.

24 payment percentage from 35 percent to 12 percent, so that using 25 some kind of average return, investment return of pension funds WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 just doesnt work in the real world for the asbestos trusts. 2 Q Now, its been suggested here that while the trust can

226

3 certainly invest in something other than a risk-free rate, and 4 in fact it probably would and it has, why wouldnt you apply a 5 higher rate as a discount rate here? 6 A 7 Q Would you repeat the question, please? Ill try, excuse me. Its been suggested here that trusts

8 would invest the money in instruments that would return a 9 higher than a risk-free rate, something other than Treasurys. 10 And I believe theres some testimony that in fact some trusts 11 have. 12 A 13 Q Correct, okay. Okay. And my question for you, sir, is why dont you

14 apply those rates to the discount rate here for the money going 15 into the trust? 16 A Most of these asbestos trusts because they are impaired,

17 their claimants are impaired, they are well under 100 percent, 18 have chosen to invest in risk assets or assets with some degree 19 of risk in order to get their returns up in hopes of being able 20 to meet the claimants claims. Its not something that they There, they

21 would do if they had 100 cents on the dollar.

22 would presumably match it up with the claims using Treasury, 23 but they dont have that situation. 24 get as much return as they can. They really have to try to

But thats not why you would Theyre

25 discount the liability itself back at that rate. WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 accepting a risk trying to optimize their investment, but 2 thats unrelated to what the actual amount of the claim is. 3 The claim is what it is. And even if its payable in ten

227

4 years, you would discount it back at a risk-free rate because 5 there shouldnt be a risk associated with that -- the 6 determination of what the amount of that claim is. The

7 recovery maybe something less, but the amount of the claim 8 should not be penalized for some sort of risk adjustment. 9 Q Okay. And just so that Im clear and I want to understand

10 that distinction, there maybe a problem with collectibility in 11 connection with a potential bankrupt defendant, correct? You

12 dont think that has anything to do with the discount rate? 13 A No, theyre not associated. You could have two -- say a

14 man was run over by a truck driven by a drunk driver, and one 15 belonged to IBM and the other belonged to an insolvent company. 16 He loses a year or twos earnings. It would be rather similar What is his claim?

17 to the Jones and Laughlin (phonetic) case.

18 Well, his claim is his lost earnings brought back at a 19 risk-free rate. He may get the whole 100 percent from IBM, and

20 he may get just a tiny amount from the fly by night company, 21 the insolvent company. But that doesnt mean that the amount Its just that his recovery is

22 of the claim is different. 23 different. 24 Q

Okay, just a couple of other things to finish up.

I put

25 on the ELMO, Mr. Sinclair, this is the exhibit to the report -WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 or the declaration that you prepared in this case, is that 2 right? 3 4 5 6 ahead. 7 8 MR. SHEPPARD: THE COURT: Okay. Well, Id like to -Is that on the screen in front of you there? THE COURT: No, its not. I dont know how to switch it. I think I know it pretty well, so go

228

MR. SHEPPARD: THE WITNESS:

Are they still keeping control at the

9 podium, Jan, of the -10 11 COURT CLERK: THE COURT: I think --

I think Mr. Finch did something with the

12 remote that made us lose control. 13 UNIDENTIFIED SPEAKER: Well, its always Mr. Finch,

14 Your Honor. 15 16 Honor. 17 18 19 20 COURT CLERK: THE COURT: Does that do anything, Jan? UNIDENTIFIED SPEAKER: At least he didnt draw, Your

No, it turned it off. Okay, hold on. We were going to object the

COURT CLERK:

UNIDENTIFIED SPEAKER:

21 next time, Judge. 22 23 24 25 COURT CLERK: Wait a minute, wait, wait. Can we stop the clock?

UNIDENTIFIED SPEAKER: THE COURT:

Yes, we can stop the clock. Let me try again. WWW.JJCOURT.COM

COURT CLERK:

Sinclair - Direct/Sheppard 1 THE COURT:

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I dont know if the witnesss monitor is It looks as though its on.

2 -- oh, yes, I see a light. 3 4 something? 5 6 7 8 9 COURT CLERK: THE WITNESS: MR. SHEPPARD: THE COURT: No. No? THE WITNESS:

Do I need to push a button or

Well, can Your Honor see the exhibit?

I can. Okay. Well, I think we can proceed. Just a couple of

MR. SHEPPARD:

10 Are you comfortable proceeding, Mr. Sinclair?

11 quick questions as to what this exhibit is and what it means. 12 13 okay. 14 Q 15 A 16 Q 17 18 19 20 that far. 21 22 Q Okay. THE WITNESS: Thank you. THE WITNESS: Sure, just bring the headings down,

Do you want me just to walk you through it? Well, here, let me ask a question or two, okay? Okay. And -MR. JACKSON: MR. SHEPPARD: MR. JACKSON: You want to give him my copy? Oh, thank you, Mr. Jackson. I dont know about you, but I cant see

Mr. Sinclair, this was an exhibit attached to the

23 declaration that you prepared in this case setting forth your 24 opinion, correct? 25 A Correct. WWW.JJCOURT.COM

Sinclair - Direct/Sheppard 1 Q 2 A Okay. And just briefly tell the Court what this is.

230

The years of course are self-explanatory and the years to Theyre based on what Mr. -- Dr. Peterson

3 payment likewise.

4 sent me to review and determine what the present value was. 5 Youll notice that the total payments is $100. 6 percents. He used I

So youre really talking in terms of percents.

7 just converted them to dollars because that was the way the 8 computer tends to work, but its effectively the same thing. 9 In other words, in the year 2011 out of the 100 percent, 12.4 10 percent of that 100 percent was coming in that year, and so it 11 goes on down until you get to 100 percent. 12 bond years, you can disregard. The next column,

I did that for my own

13 edification to see what the average life of -- the weighted 14 average life was of this stream of payments, much as you would 15 a bond. 16 Q So this is basically the discount actuarial calculation

17 using the rate that you suggested, is that right? 18 A Right, I used zero coupon Treasuries at each maturity

19 going out to 2051, although the last Treasury again I think is 20 around 2039 or 40 because 30 years is as far as the Treasuries 21 go and after that I just assumed a flat rate because the heel 22 curve is pretty flat out there. 23 Q 24 25 Okay. MR. SHEPPARD: THE COURT: No further questions, Your Honor.

Any questions on cross? WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 2 3 BY MR. JACKSON: 4 Q 5 A 6 Q Good afternoon, Mr. Sinclair. Good afternoon, Mr. Jackson. Its kind of fun to actually be in the same room. How are you? MR. JACKSON: Just a few, Your Honor. CROSS EXAMINATION

231

I know

7 the last time we talked, we did it through the benefits of the 8 mechanical video process. So good to see you, sir. You used Do you

9 an example with Mr. Sheppard about a drunk driver. 10 recall that example? 11 A 12 Q 13 A 14 Q Yeah. And that was a current claimant, right? Oh, I -- this is just a hypothetical.

Right, but it was -- you were talking about a current

15 claimant when you were in that hypothetical, werent you, sir? 16 A Right, but he would be paid over time for his lost income

17 was I think the point I was trying to make. 18 Q And I think youve testified that youve advised for a

19 number of years in this area, but this is the first time in 20 which youve actually had to file a separate declaration on 21 your own, isnt that right? 22 A On this subject this is the first time Ive filed one,

23 right. 24 Q And we could agree, cant we, that the weighted average

25 cost of capital is the proper way to do a solvency analysis, WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 right? 2 A

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That would be the way of valuing the enterprise value of

3 the corporation in a solvency analysis. 4 Q Right. So if you were doing any solvency analysis of the

5 debtors, you would apply a weighted average cost of capital, 6 right? 7 A Id apply that and market multiple and precedent But in terms of the discounted cash flow

8 transaction.

9 methodology, yes, you would use weighted average cost of 10 capital. 11 Q And if I recollect correctly, you told me the weighted

12 average cost of capital you calculated thus far for the debtors 13 was somewhere over 11 percent, is that right? 14 A 15 Q We came up with a higher number, right. And what youre doing with the risk-free rate is saying

16 there is no risk than the future that youre willing to account 17 for, is that right? 18 A What Im saying is, and even if youre going -- taking

19 your solvency analysis, the weighted average cost of capital 20 determines the enterprise value. But thats unrelated to the

21 liabilities that are going against that enterprise value to 22 determine the solvency or insolvency of the company. 23 Q And I was really trying to shift geers back to the

24 discount rate discussion for the estimation process, if I 25 could, and I apologize for having a sloppy transition. WWW.JJCOURT.COM So

Sinclair - Cross/Jackson 1 going back now to the discussion of the discount rate in the 2 estimation process, okay? 3 A 4 Q Right. The rate that youre proposing assumes no risk to the

233

5 future claims, isnt that right? 6 A 7 Q Thats right. In fact, I think you told me that it wasnt your purpose

8 to try and take account of any potential risk in the future in 9 that calculation? 10 A 11 Q In determining the amount of the claim. All right. And you understand that the FCR has an expert

12 on the discount rate that came up with a calculation of a 13 discount rate as well, do you not? 14 A 15 Q 16 A Yes. And you disagree with that rate, do you not? In a slight matter of degree. I think they use the

17 30-year Treasury, which is the longest Treasury, and I think 18 their number was 345. And we matched up maturities on using

19 Treasury strips, which if you were a trust manager and you 20 wanted to be -- take the safest possible course and you had 100 21 cents on the dollar, the best way for you to make sure that 22 that money was there when the claims came in would be to take 23 the dollars and put them in in -- well, its not up there any 24 more. 25 Q What would you like to have up here, Exhibit A? WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 A Oh, it doesnt matter.

234

But if you just took that schedule

2 and invested those amounts -3 Q 4 A Here, well get it back for you. -- at those rates, then when those claims came in at those

5 particular dates, 2025, 2030, whenever, those Treasury strips 6 would be mature at the principle amount. 7 essentially a perfect hedge. 8 Q Now, sir, when you -- you referred to the exhibit to your And if I understand it correctly, these are as of the So you would have

9 report.

10 dates certain, isnt that right? 11 A 12 Q The date, May 31, 2010, yeah. These are the yields you would have gotten had you bought

13 Treasury securities having these dates on that day? 14 A In other words, if the lump sum of money were given to you

15 at that date, yes, those are the rates at which you would have 16 invested it. 17 Q You did not try and take any sort of historical average of

18 those rates for purposes of determining the rate that you 19 propose in this case, isnt that right? 20 A 21 Q 22 A You mean Treasury rates? Yes, Im sorry, Treasury rates. No, because I did it on the basis that if the money was

23 there that day, thats what you would put it in. 24 Q Right. And so you just took that single day? You didnt

25 try and look at an historical average for the same Treasury WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 securities to see how that rate might have varied over time, 2 fair? 3 A 4 Q I did not for this purpose, no. Okay. And you understand, dont you, sir, that theres

235

5 possibilities in the future that the cost of medical care for a 6 person with mesothelioma will change either up or down? 7 A 8 Q 9 A 10 Q Right. There is a possibility that a cure could be found? That would be nice. And theres a possibility that it could be determined --

11 and I dont know if youve heard any of the discussions so far 12 in the room about whether or not the Bondex joint compound can 13 cause mesothelioma or not. 14 discussion. Theres been some doctors

I dont know how much of that youve heard or not.

15 But its possible in the future that that issue will be decided 16 to a reasonable medical certainty that Bondex products cannot 17 cause -- and if that happened it wouldnt be accounted for in 18 your risk-free rate either, would it? 19 A 20 Q No, theres no factor in there for that type of thing. Now, when you were talking about Mr. Colemans asbestos

21 trust analysis, you werent suggesting that he had calculated 22 rate of return the trust had received incorrectly, were you? 23 A 24 Q 25 A You mean the pension funds, yes. No, not the pension funds, the asbestos trust. That he calculated what improperly? WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 Q Did he calculate the rate of return that the asbestos

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2 trust had been receiving over a five-year period and a ten-year 3 period incorrectly? 4 5 A 6 7 8 saying. 9 10 11 12 13 14 15 MR. DORSEY: THE COURT: MR. DORSEY: MR. JACKSON: COURT CLERK: MR. JACKSON: MR. DORSEY: No. No, that was about the pensions. The pensions. Oh, Im sorry. I screwed up? MR. DORSEY: I dont -MR. DORSEY: MR. JACKSON: That was not the testimony. There was a question asking what he was Objection, Your Honor.

Put on your microphone, please. Ill -No, Your Honor, hes referring to the

16 asbestos trust, but that exhibit was only for the returns for 17 2010 and 2011. 18 returns. 19 20 Q 21 A MR. JACKSON: Good point. Thank you, Mr. Dorsey. They werent five-year returns and ten-year

Ive been corrected correctly. Yes, I did note that he had mentioned two years of returns

22 in there, yes. 23 Q And did you check to see if they were calculated

24 correctly? 25 A No. WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 Q Okay. Now, putting the pension funds to one side and

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2 talking about asbestos trust, he did an asbestos trust 3 calculation for the year 2010 and 2011. 4 A 5 Q Right, yes. And did you agree or disagree with the manner in which he Did you see that?

6 calculated? 7 A 8 Q 9 A 10 Q I have no idea how he calculated it. Did you look to see yourself? All I have is a transcript that I read. No, sir, Im sorry. Did you look at any of the asbestos

11 trusts that Mr. Coleman referred to to see if the rate of 12 return in 2010 and 2011 was as Mr Coleman represented it to be? 13 A Well, he said -- Ive forgotten how many trusts he

14 mentioned, but he didnt name them. 15 Q 16 used? 17 A 18 Q 19 20 21 22 No. All right, thank you. MR. JACKSON: MR. SHEPPARD: THE COURT: I have no further questions. No redirect, Your Honor. Okay. So you didnt actually see the exhibit that he

Will he be needed again? Im certain he will but not in

UNIDENTIFIED SPEAKER:

23 this case, Your Honor. 24 25 UNIDENTIFIED SPEAKER: THE COURT: No, Your Honor.

Youre excused, thank you. WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 2 THE WITNESS: MR. SHEPPARD: Thank you. Your Honor, before we move on may I

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3 move into evidence ACC-87, which is the curriculum vitae, and 4 move in the Demonstrative 1012? 5 THE COURT: Exhibit 87, the curriculum vitae, is

6 admitted, and 1012 will be accepted as a demonstrative. 7 8 9 MR. SHEPPARD: THE COURT: MS. RAMSEY: Thank you, Your Honor.

Ms. Ramsey? Good afternoon, Your Honor. The

10 Committee calls to the stand Mark Iola.

Your Honor, before Mr.

11 Iola is sworn and begins to testify, there are several 12 documents that we would move the admission of. 13 are without objection. I believe these

They are ACC/FCR Exhibits 304, 338,

14 176, 113, 95, 196, 385, 386, 227, 388, 390, 179 and 414, and I 15 have one addition to the list that I had not mentioned to 16 debtors counsel in advance and that is 123, which is the 17 verdict sheet attached to the debtors interrogatories. 18 MR. EVERT: Your Honor, those documents are admitted

19 without objection.

However, well note to the Court that

20 several of those documents are subject to the confidentiality 21 order and theyre privileged. They were documents produced Weve worked with

22 pursuant to a limited waiver of privilege.

23 the other side and we think were okay in terms of the use of 24 the documents today. But what I would suggest to the Court is

25 that after -- at the conclusion of the proceedings, the WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 privileged documents I think should be sealed in the record,

239

2 which if thats acceptable to the Court we can deal with that 3 after the trial is over. 4 THE COURT: Well, I think what will have to happen is

5 youre going to collectively have to give me a list of the 6 exhibits that have to remain under seal, because I mean just 7 from this identification, I dont know what they are. I dont

8 know which documents will be -- have to be kept under seal. 9 MR. EVERT: I completely agree, Your Honor, and in

10 fact not all of the documents and notes that Ms. Ramsey just 11 read. So with the Courts indulgence next week some time we And I dont think theres going to

12 can get that to the Court.

13 be disagreement among the parties. 14 15 either. MS. RAMSEY: I dont believe theres any disagreement

Your Honor, generally they fall into the categories

16 that we mentioned to the Court yesterday, which are either 17 historical documents that were the underlying documents of the 18 debtors relating to the asbestos litigation that mentioned 19 specific information about plaintiffs, and also, although not 20 subject to any of the documents that I just moved the admission 21 of, some of the PIQ responses. 22 THE COURT: Yes, you have to understand as well.

23 These documents -- the trial exhibits are not going to be put 24 onto the Courts docket in any place. So I mean your briefs

25 and those matters that youve actually filed with the Court are WWW.JJCOURT.COM

Sinclair - Cross/Jackson 1 on the docket, but these trial exhibits will not be on the 2 docket. So Im happy to do whatever you need to keep them

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3 confidential, but theyre going to go up with the record 4 because some other court is going to have to look at them. 5 6 Honor. 7 it. MR. EVERT: Well, well work all that out, Your

I think it sounds like were all on the same page about

And to the extent that theyre not available publicly on

8 the docket, it may be that theres not a lot that we need to 9 do. But with the Courts indulgence, if youll just let us

10 deal with that after, you know, after the conclusion of this we 11 can get it sorted out. 12 13 THE COURT: MR. EVERT: Sure, thats fine. The only other thing I would mention is

14 weve reserved the Courts relevance objections to various of 15 these documents, but I feel fairly certain Mr. Iola is going to 16 establish their relevance. So if any of that comes up at the

17 time, then we will deal with that. 18 THE COURT: All right. Exhibits 304, 338, 176, 113,

19 95, 196, 385, 386, 227, 388, 390, 179, 414 and 123 are all 20 admitted subject to any relevance objection that may arise 21 during the course of the testimony. 22 sworn, Mr. -23 24 25 Iola. WWW.JJCOURT.COM THE WITNESS: THE COURT: I wasnt. We need to swear you in, Mr. I dont believe you were

All right.

Iola - Direct/Ramsey 1 2 3 BY MS. RAMSEY: 4 Q 5 A 6 Q 7 A 8 Q 9 A 10 Q Good morning, sir. Mark Iola. Mr. Iola, where do you reside? In Dallas, Texas. And what is your profession? Im a lawyer. Do you have a particular specialty of law that you Please state your full name. MARK IOLA, COMMITTEES WITNESS, SWORN DIRECT EXAMINATION

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11 practice in? 12 A Almost all of my practice is involving representing

13 victims of asbestos exposure. 14 Q 15 A And within that practice area do you have a subspecialty? I do. I principally represent people that have malignant

16 mesothelioma, and principally what I did in the last ten or 17 twelve years is work with other law firms to help them digest 18 the information about the case, evaluate the case, price the 19 case and negotiate resolution of the case. 20 Q Okay. And although I know that the Court is well aware,

21 but could you describe what the specialty of mesothelioma 22 representation involves? 23 A Ive represented other personal injury cases over the

24 years as well, but when I started my career -- I became a 25 lawyer in 1982 -- I went to work for my family law firm that WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 had been around since 1929, and we were a labor law firm.

242 And

2 as the labor unions began to screen their workers for asbestos 3 disease, there began to be personal injury cases involving 4 asbestos exposure and they fell in my lap. And over the last

5 30 years thats principally what Ive done, is represent people 6 that are exposed to asbestos in bringing law suits against 7 responsible parties and trying to resolve them in a fair way. 8 Q And have you had experience with different types of

9 asbestos products and different types of asbestos defendants in 10 your practice? 11 A 12 Q Yes, I have. And specifically have you had experience prosecuting

13 claims against joint compound manufacturers? 14 A 15 Q 16 A Yes. And can you describe that generally? Well, over the years all the way back to the mid 1980s,

17 Ive represented people who had exposure to various asbestos 18 containing products, including joint compound. And when the

19 facts of a given case demonstrated a given joint compound 20 defendant belonged in the case, I brought them into the case 21 and tried to prosecute my case against them and get them to 22 either pay money or take a verdict against them. 23 Q And youve heard testimony that Bondex, the debtor here,

24 targeted principally use for the do-it-yourself market? 25 A I would call it the consumer market, but yes. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q The consumer market? Is there a difference between

243

2 representing a plaintiff pursuing a claim against a consumer 3 market product than there is a commercial product? 4 A 5 Q 6 A Yes. And can you describe that, please? Well, when I started in the 1980s and I represented

7 drywaller unions, most of those people were commercial 8 drywallers and they were using different -- they were using 9 joint compound products manufactured by different defendants. 10 They were usually buying from warehouses or clearinghouses 11 associated with their commercial business. And they were

12 buying those products that were designed and marketed almost 13 exclusively for the commercial market. 14 than what Bondex did. Those are different

Bondex was developing joint compounds

15 not for the trade but for the do-it-yourself guy who went to 16 the local, you know, in those days I guess it wasnt -- well, 17 what would be today the big box store of -- I dont know -18 Q 19 A Mom and pop stores? Yeah, well Home Depot or whatever. Whatever the

20 equivalent was in those days, the guy would go and, you know, 21 if he was going to redo two rooms in his house, hed buy what 22 was on the shelf, and thats the market that Bondex marketed 23 to. 24 Q And can you estimate the number of cases you might have

25 handled against lets say manufacturers of products that were WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 targeted for consumer use? 2 A 3 Q Thousands, thousands of mesotheliomas. Okay. And is there a difference in representing

244

4 mesothelioma claimants than other types -- claimants with other 5 types of asbestos injury? 6 A Well, over the years Ive represented all kinds, In the first 15

7 asbestosis, lung cancer and mesothelioma.

8 years of my practice, I tried over 100 asbestos cases to 9 verdict all across the country in many different states. 10 firms would hire me to come try their cases. Law

Mesothelioma

11 involves obviously a particularly devastating disease thats 12 debilitating, painful, difficult emotionally, not only for the 13 person that has it, but for the family members around them. 14 And it presents unique emotional challenges for the lawyers in 15 representing people who are dying and trying to get their case 16 up and resolved so that they have peace of mind that their 17 family has been taken care of during their lifetime. 18 Q And turning now to the debtors here, when did you first

19 learn of Bondex products? 20 A I was working with a law firm in Madison County, Wise and

21 Julian, and we had a client that came to us and described this 22 product. I never heard of the product before. And we didnt

23 really have a lot of information about whether the product even 24 contained asbestos. We had no interrogatory answers or And so we sued the company and began WWW.JJCOURT.COM

25 anything of that nature.

Iola - Direct/Ramsey

245

1 our process of discovery thats allowed under the tort system. 2 Q 3 A And do you recall the case or the time frame? Well, I thought we werent supposed to do names. So I do

4 recall the case and I think the time frame was about 1999. 5 Q 6 A 7 Q 8 A And if you call the claimant Claimant A -Okay. -- what would you remember about that claimants case? I dont remember the specific details of the case other

9 than the case involved some identification from either the 10 client or coworkers of this Bondex product. And I learned

11 about that same time that Steve Crick, a lawyer in Kansas, also 12 had a case involving the same company, Bondex. And I started

13 coordinating with him the development of a discovery plan to 14 see if we could learn what the company made, when they made it, 15 what products they made that contained asbestos, what 16 percentage of asbestos it contained, where did the asbestos 17 come from, what did the company know about asbestos, how did 18 they respond to that knowledge, et cetera. 19 MS. RAMSEY: Your Honor, Im going to ask the

20 debtors counsel, this was a case that was publicly filed and 21 that we have video depositions that were taken in connection 22 with it. I assume that we -- theres no confidentiality

23 concern about the name? 24 25 Honor. WWW.JJCOURT.COM MR. JACKSON: We have no problem with that, Your

Iola - Direct/Ramsey 1 2 Q 3 A MR. RAMSEY: Okay.

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Mr. Iola, are you describing the Cerniglia case? Well, there was an earlier case, the French case, oh,

4 sorry. 5 Q 6 A Thats okay. There was an earlier A minus case, but the A case that Im sorry, its very

7 were referring to is Cerniglia. 8 difficult for me in that regard. 9 Q Did -- okay.

With respect to the A minus case, is that

10 the case that you were referring to first? 11 A 12 Q It was. All right. And what happened with the A -- how did the A

13 minus case resolve? 14 A 15 Q 16 A 17 Q 18 A It got resolved through settlement. Okay. Yes. And do you recall the settlement amount? If my recollection serves me correct, I believe it was Through a settlement?

19 $850,000. 20 Q And subsequent to that did you come to represent other

21 plaintiffs who pursued claims against Bondex? 22 A 23 Q Many. Okay. And in connection with that did you come to take

24 the depositions of corporate representatives? 25 A I did in March of 2000. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q Okay.

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And can you tell me the corporate representatives

2 -- do you recall the names of the corporate representatives 3 that you deposed at that time? 4 A We took Eber Himbidros (phonetic), who was their chemist.

5 We took Janine Garner (phonetic), who was a person who had 6 books and records of the company. 7 (phonetic). We took Jack Fleming. We took Tom Sullivan We took -- help me on all

8 the other names. 9 Q 10 A Julius Nemeth (phonetic)? Yeah, Julius Nemeth. There were seven or eight people

11 that we took.

Basically what we were trying to do was start

12 with the president on down anybody who claimed to have 13 knowledge about what this company had done with asbestos and 14 how they had done it we wanted to depose. 15 Q 16 Okay. MS. RAMSEY: Your Honor, at this point we would like

17 to play a video clip from the deposition -- excuse me -- of Mr. 18 Nemeth that was taken in the Cerniglia case. 19 objection? 20 21 22 23 24 25 THE WITNESS: MS. RAMSEY: THE WITNESS: MR. JACKSON: THE COURT: Is it going to appear on here for me? It will appear on there I think. Okay. We have no objection. Debtors, any

All right. Your Honor, I suppose while were WWW.JJCOURT.COM

MR. JACKSON:

Iola - Direct/Ramsey

248

1 waiting for this to play, I should note that this may be one of 2 the depositions we will want to do the supplemental designation 3 that we talked about. 4 THE COURT: Thats fine. I think the agreement is

5 that you can do the supplementals with respect to anything 6 because -7 MR. JACKSON: I understand, but just as I said no

8 objection, I started thinking about whether I needed to state 9 that on the record. 10 THE COURT: No, thats clear on the record. Well

11 work out a schedule at the end of the trial. 12 13 MR. JACKSON: THE COURT: Thank you, Your Honor.

In fact, you folks maybe tonight can talk

14 about the schedule for what -- because youve got a few things 15 that youre going to have to file. 16 17 18 Honor. 19 20 THE COURT: MS. RAMSEY: All right. This is a relatively long video. So MR. JACKSON: MS. RAMSEY: Thank you, Your Honor. Okay. I understand were ready, Your

21 with the Courts permission, I was going to sit down until it 22 was completed. 23 24 THE COURT: MS. RAMSEY: Thats fine. Thank you. Will you let me know when

25 thats ready?

Im going to -- yeah, I dont want to waste the WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Courts time or our clock. 2 3 THE COURT: MS. RAMSEY: Well, should we take a few minute --

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Could we take a couple of minutes break,

4 Your Honor? 5 6 7 8 9 on here. 10 THE COURT: Well just take a five-minute stretch THE COURT: MS. RAMSEY: THE COURT: Yes, well take a few minute recess. That would -- thank you. How long will you need to -I just need to find the audio

UNIDENTIFIED SPEAKER:

11 break and let everyone move. 12 MS. RAMSEY: Thank you very much, Your Honor. I

13 appreciate that. 14 15 16 THE COURT: THE COURT: Thank you. (Recess) Please be seated. Whenever youre ready,

17 Ms. Ramsey. 18 MS. RAMSEY: Okay. Your Honor, I understand that the

19 video is ready to play now. 20 21 BY MS. RAMSEY: 22 Q Okay, Mr. Iola, we joined a number of different clips from (Video played)

23 that deposition together for the interest of time savings. 24 Having watched the video again, do you recall the impression 25 that you had on behalf of your client leaving that deposition? WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 A 2 Q 3 A 4 Q 5 A 6 Q Absolutely. And can you describe some of the reaction that you had? They were dead in front of a jury. Okay. And can --

250

You lie, and a jury will kill you. And your conclusion was that Mr. Nemeth (phonetic) had not

7 told the truths? 8 A 9 it. Not only Mr. Nemeth, but a lot of the corporate people on I think well see clips from them as well. They did not

10 tell the truth. 11 Q Okay. And specifically, what were some of the aspects of

12 this deposition that stood out as you reflected on it? 13 A Well, the first thing is, and this accounts for why it

14 took us so long to find out and bring this company into the 15 litigation is that they were not telling truth to the 16 marketplace about the presence of asbestos. 17 UNIDENTIFIED SPEAKER: Pardon the interruption, Your

18 Honor, this is the operator. 19 the courtroom at this time. 20 21 22 23 24 THE COURT:

Counsel on the phone cannot hear

All right.

Just a minute. Okay.

UNIDENTIFIED SPEAKER: THE COURT:

Can you hear now? Yes, we can. Thank you.

UNIDENTIFIED SPEAKER: THE COURT: Thank you.

25 BY MS. RAMSEY: WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q 2 A 3 Q 4 A Im sorry, Mr. Iola. Well --- a response You were in the middle of --

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I said the first thing, which accounts for why it was that

5 they came to the marketplace later, was at least in part, 6 because they were lying on their ingredients that they were 7 publishing about the product. So we had no reason to believe

8 that the product contained asbestos, because they were putting 9 out a list of ingredients in the product, and they were 10 specifically failing to identify asbestos as one of those 11 products. 12 Second thing is, that when a corporate witness

13 testifies that they have no -- first off, he testified were 14 safe in our plant. 15 that theyre not. And then, hes confronted with evidence And then, he continues to assert that he had And then, we show him the check where they

16 no knowledge of it.

17 signed and paid the OSHA violation, it was clear to everyone in 18 the room at the end of the week, including Mr. Bowers and the 19 corporate lawyers at the law firm where we took the thing, that 20 they were in a heap of trouble in these tort cases. 21 Q Okay. And are you aware of any other misrepresentations

22 that you later learned about that delayed the identification of 23 Bondex as a defendant in the tort system? 24 A Well, originally, when interrogatories and requests for

25 admissions and requests for documents was sent to the WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 defendant, they did not identify all of the products that 2 contained asbestos that the company manufactured and sold. 3 it took us a series of depositions and discovery for us to

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So

4 finally get the complete list of all of the products that the 5 company made that contained asbestos that consumers came in 6 contact with. 7 A Okay. And Your Honor, we would like to, at this time, This ones fairly short. Its six

8 play one more video clip. 9 minutes long.

It was another designee deposition taken in

10 connection with the Cerniglia case of the chemist Abraham 11 Bedros (phonetic). 12 A 13 14 Q 15 A 16 Q Okay. Do you recall that deposition, Mr. Iola? Mr. Bedros was a delightful man. (Video played) Mr. Iola, do you recall that deposition?

Oh, absolutely.

Absolutely. Okay. And what was your impression leaving that

17 deposition? 18 A I just couldnt believe that a company who had the

19 technical knowledge to remove asbestos all the way back before 20 all these people got exposed didnt take advantage of it. And

21 particularly when they were trying to assert the defense in the 22 litigation that they did not have the technical capability 23 until OSHA told them to remove asbestos to remove asbestos. 24 Turns out thats obviously not true. 25 Q Okay. Turning now to Exhibit 176. WWW.JJCOURT.COM Lets get that on the

Iola - Direct/Ramsey 1 screen. This is a pretrial report that was delivered to

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2 various representatives of the debtor, if we could have the 3 first page, by then, national coordinating counsel, Bowers Orr 4 and Dougall, LLP. Is that correct -- is that your recollection

5 that Bowers Orr served as national coordinating counsel at that 6 time? 7 A 8 Q At that time, thats correct. And if you look at the individuals to whom this letter is

9 addressed, do you recognize the names of those individuals? 10 A I knew that they might have had insurers involved, but I

11 know John Fleming, Jack, and I know Kelly Tompkins. 12 Q 13 A And what did you understand their positions to be? Jack was president of Bondex. And Kelly was in charge of

14 everything. 15 Q 16 A Okay --

Like, his general counsel.

And I know that he was in the decision-making process of

17 the decisions as to whether to resolve cases, how much to 18 resolve cases and whether to let them go to trial. 19 Q And the date of this letter is March 8, 2000. Is that

20 correct? 21 A 22 Q Yes. Okay. If we turn to Page 5 and specifically focus on the

23 section that says, its entitled, summary? 24 A 25 Q Yes. Is your -WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 A 2 Q 3 A 4 Q 5 6 A 7 Yeah. 8 9 copy. 10 11 MS. RAMSEY: Okay. Fair enough. Im sorry. UNIDENTIFIED SPEAKER:

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Is it possible for them to make it a little bigger for me? Yes. Could you make that larger, please?

Thank you. I also have a hard copy if I could approach, Your Honor? THE COURT: Yes. Im fine. Oh, this is good.

He can make it bigger.

Natalie, Ill steal your hard

UNIDENTIFIED SPEAKER:

We

12 have extra. 13 THE WITNESS: You feel my pain on not being able to

14 read it, huh? 15 UNIDENTIFIED SPEAKER: Could we unplug that audio

16 because Im getting feedback? 17 THE COURT: Can you unplug the audio, please, were Thank you.

18 getting some feedback in the recording system? 19 BY MS. RAMSEY: 20 Q 21 A 22 Q 23 A 24 Q

Mr. Iola, have you seen this document before? You showed it to me in preparation for testimony. Before today, had you seen it before? No. Okay. If you read the section entitled summary, it starts The plaintiff was relatively

25 with, this is a dangerous case.

WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 young, 53, when he died. In addition, there are a limited

255

2 number of five identified defendants.

It goes on to state that

3 the father testified that the plaintiff was exposed to 4 asbestos-containing joint compounds manufactured and sold by 5 U.S.G., Georgia Pacific and Bondex. He also testified the

6 plaintiff was exposed to asbestos-containing floor tiles 7 manufactured and sold by Armstrong and GAF. 8 correctly? 9 A 10 Q You did read it correctly. Are you familiar -- do you have a recollection of whether Did I read that

11 or not that is an accurate summary of the facts of the case? 12 A Yeah. But it also left out the point that all of those And this

13 five identified were all pure chrysotile defendants. 14 person had no amphibole exposure of any kind. 15 Q

And if you move to the next paragraph, you will see that

16 defense counsel was advising its client that this was a 17 defensible case, including for reasons that their belief was 18 the Bondex identification product. 19 and weak. 20 evidence. 21 A 22 Q Identification was vague

And that they believe that there was impeachment Do you see that?

I see that thats what they wrote. And do you have a recollection as to whether or not you

23 agreed with that in your assessment on behalf of the plaintiff? 24 A I wanted so much for them to allow us to try this case

25 against them. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q 2 A And do -I did not agree with that, and obviously they didnt

256

3 either, because they paid me millions of dollars to resolve the 4 case. 5 Q 6 A Do you recall what the outcome of the Cerniglia case was? I believe that we settled the case for -- help me on the

7 number? 8 Q 9 A 10 Q 11 A 12 Q About $600,000? Yes. Does that sound correct? Yes. Okay. And that case settled in April of 2000. Is that

13 correct? 14 A 15 Q Yes. Okay. And following the settlement in Cerniglia and the

16 corporate designee depositions that were taken in connection 17 with that case, was it your impression that word began to 18 spread more generally concerning Bondex? 19 A Well, if I might explain. I worked for and on behalf of a

20 number of law firms in the capacity of performing this role of 21 evaluating the information and pricing it and negotiating. And

22 I shared this information with all of the law firms that I did 23 work with. I worked hard at the request of Glenn Bowers to try

24 to keep the information that I had as close to my vest as I 25 could. I have an ethical obligation obviously, to share it WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 with all the people I work with and to the extent that its 2 relevant in individual cases to utilize the information. 3

257

But it was not my desire to necessarily publish this

4 information to everybody in the bar, because I was concerned 5 about the very reason that were here. 6 Q Did you come to learn that the information had been

7 published in the bar? 8 A 9 Q There came a point in time where -- where -- yes. And can you advise the Court or relate to the Court how

10 you came to know that? 11 A Wise and Julian hired Shep Hoffman to try the cases as And at some point, Shep

12 part of my team of me evaluating them.

13 parted ways with us, and Shep also holds in our business, he 14 holds the largest seminar once a year where every plaintiffs 15 lawyer comes. 16 Its the biggest one by far.

And he chose to share the information we had

17 developed at Wise and Julian with everyone in the bar, so that 18 everybody in the bar would then have the information and could 19 decide for themselves whether or not it was appropriate to sue 20 those people in their cases. 21 Q Okay. And in or about this same time, did you become

22 aware more generally of some high verdict -- verdicts against 23 joint compound manufacturers? 24 A I believe there was $55 million verdict that Baron and

25 Budd got in El Paso against Georgia Pacific, perhaps others. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Yes. 2 Q Okay. And do you recall, if we can have Exhibit 113,

258

3 please?

Do you recall, roughly around the time, that this --

4 these judgments were coming down? 5 A 6 Q 7 A 8 Q 9 113. 2001, I think. Okay. Yes. And are you familiar with the Hutchinson case? I was involved in it. Yes. This is Exhibit

And if you look at what is on the screen.

Its a memorandum from outside counsel to the debtors

10 notifying them of these large verdicts and the settlement that 11 was reached in the Hutchinson case? 12 A 13 Q Correct. Did you become aware from the debtors at that time that

14 they were becoming concerned about word spreading in the 15 marketplace about Bondex exposure? 16 A 17 Q 18 A 19 day. 20 Q Okay. Mr. Iola, to go back, do you recall about the time Well, they were concerned about word spreading from Day 1. Okay. And how did you know that?

Well, I talked with their national counsel almost every

21 of the PAL seminar given by Mr. Hoffman that you testified to? 22 Would that have been around 2004, 2005? 23 A 24 Q 25 In that range, yes. Okay. If we could have ACC Exhibit 1013? UNIDENTIFIED SPEAKER: No, youd have to --

WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 2 3 MS. RAMSEY: Oh, its not marked? No, thats a new one.

259

UNIDENTIFIED SPEAKER: MS. RAMSEY: Okay.

Im sorry.

Then, lets go with

4 instead Debtors Demonstrative 11, please? 5 Q Mr. Iola, youve heard testimony, I believe, as youve

6 been in the courtroom the last couple of days that the debtors 7 witnesses contend that the bankruptcy waive that is, the 8 bankruptcy of many co-defendants in the tort system resulted in 9 a substantial increase in claims being made against Bondex. 10 And the chart that you have in front of them is a

11 chart that they presented that reflects the claiming or 12 settlement history with respect to mesothelioma claims with a 13 spike in the 2003, 2004, 2005 time frame. Would you agree with

14 the debtors that it is the bankruptcy waive that resulted in 15 that spiking in the settlements? 16 A 17 Q Absolutely not. Okay. And what would you attribute the settlement

18 experience to? 19 A Well, I think its two things. I think, one, its the

20 development of liability case against Bondex, which also 21 includes finally finding out all of the asbestos-containing 22 products that they manufactured that contained asbestos. 23 think that that second thing was the publication of the 24 material at the PALS conference. In my opinion, the filing of And I

25 bankruptcies by other joint compound companies played zero WWW.JJCOURT.COM

Iola - Direct/Ramsey

260

1 role, at least in my practice, in the evaluation of what this 2 company should pay in any given individual case. 3 Q Okay. Mr. Iola, were going to turn now to your

4 experience with the debtors in settling cases, do you know 5 approximately how many cases youve settled with Bondex? 6 A 7 Q 8 A We talking only mesothelioma cases? Mesothelioma cases, yes. I think that I settled somewhere in the vicinity of about

9 130 mesothelioma cases with Bondex. 10 Q And do you have -- do you know what the average amount

11 that you would have settled those cases would be? 12 A I believe the average amount is somewhere in the vicinity

13 of about $700,000 per claim. 14 Q 15 A And do you know what the range of settlements would be? Well, the ranges went all the way from $45,000 settlement

16 to a $2.5 million settlement. 17 Q 18 A Did you try any cases against Bondex? The firms that I work with that I was co-counsel with

19 tried a number of cases against Bondex. 20 Q And do you know how many cases that the firms that you

21 worked with tried against Bondex? 22 A 23 this. 24 Q 25 If I could have ACC/FCR Exhibit 123, please? (Pause) WWW.JJCOURT.COM I dont, but I believe theres a document that discusses

Iola - Direct/Ramsey 1 Q Okay. Can I -- I dont know if I can use the ELMO with Im sorry.

261

2 the video. 3 A 4 Q

Well, maybe thatll come on my screen here. This is a very small document. I will represent to you,

5 Mr. Iola, that this was a document -6 A 7 Q Oh, okay, thanks. -- that was produced by the debtors in discovery. I dont

8 think were going to be able to see that. 9 A 10 Q 11 A 12 13 14 15 Q 16 17 18 19 Yeah. And Ive seen this.

Have you seen this before? Yeah. They were shown to me at my deposition. MS. RAMSEY: THE COURT: MS. RAMSEY: Mr. Iola, I -UNIDENTIFIED SPEAKER: MS. RAMSEY: I dont. This is ACC-1? Well, well pass by this, Natalie, do you have one more? Your Honor, may I hand this up to -Yes. -- Your Honor so the Court can see it?

UNIDENTIFIED SPEAKER: MS. RAMSEY: 123.

Okay.

20 Your Honor, and well come back to it if we need to. 21 BY MS. RAMSEY: 22 Q Do you have a recollection, Mr. Iola, of approximately how

23 many cases, did I ask you that, have been tried by -24 A 25 Q My guess is --- firms that you represented? WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 A -- that the firms that I was involved with that tried

262

2 cases against Bondex, it looks like from that list, it was 18, 3 19, 20 something like that. 4 Q Okay. Out of approximately 32 or 32 cases that the

5 debtors tried? 6 A If the debtors representation is accurate that that list

7 is accurate, then that would be accurate. 8 Q Okay. And so is it fair to say that you have had

9 extensive experience with Bondex in the tort system? 10 A 11 Q Im sorry? Is it fair to say that youve had extensive experience

12 with Bondex in the tort system? 13 A I would say theres probably no plaintiffs lawyer in the

14 country that has as extensive experience with Bondex in the 15 tort system than I have. 16 Q Okay. If we could pull up Exhibit one -- okay, we have to

17 switch back -- Exhibit 196, okay. 18 Q And Mr. Iola, this is the first exhibit that is going to Is that -- Im not seeing that its

19 be hopefully redacted? 20 redacted. 21 22 23 24 Q Okay.

UNIDENTIFIED SPEAKER: MS. RAMSEY:

Its redacted.

Is it redacted? Its redacted.

UNIDENTIFIED SPEAKER: All right.

This is the first exhibit that is

25 redacted as to the identification of the plaintiff -WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 A 2 Q 3 A 4 Q 5 A 6 7 8 A 9 Q 10 A 11 Q 12 A 13 14 please? 15 16 record. 17 A 18 Q 19 A 20 Q 21 A 22 Q Oh, Im sorry. And if I could direct your attention -I apologize, Judge. -- Mr. Iola, to the second page? Yes. It identifies under plaintiff some details of the MS. RAMSEY: Strike the name, please, yes, for the Do you have a copy that tells me -I do. -- for my edification -Yes. -- who the plaintiff is? UNIDENTIFIED SPEAKER: THE COURT: Thanks. Do you have it too? Okay. Thank you. Yes. May I approach, Your Honor?

263

All right.

Mr. Iola, do you recall this particular case?

I remember Mr. Miller, yes. THE COURT: Well strike the name from the record,

23 plaintiffs personal lives? 24 A 25 Q Correct. Is that consistent with your recollection of this case? WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 A 2 Q Yes. All right. And on Page 4, it addresses the plaintiffs

264

3 identification of product identification evidence, and I ask 4 you if you can take a look at that and see if you recall the 5 facts of this case? 6 A 7 Q Yes. Okay. And this was a case where there appears to be a

8 very good product identification evidence and it plays 9 decidedly in the case evaluation if you could take a look at 10 that. 11 A 12 Q Is that a fair summary? Okay. Is there a question? Im sorry.

That product identification appears to be significant in

13 this case? 14 A 15 Q 16 A Correct. And do you recall what this -- how this case was resolved? I believe that this case got tried, did it not? I think -- Id have to look -Or, no.

17 Maybe not. 18 Q 19 A 20 Q

You dont recall resolution? -- youd have to provide me something there. Why is product identification important from the case

21 evaluation to the extent that you understand that? 22 A Well, I mean, both of us, both the defendant and I are

23 trying to evaluate whether or not the testimony that I have in 24 the case, whether it comes from the plaintiff or comes from a 25 son or comes from a co-worker, were trying to evaluate whether WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 or not we think its correct. And if its not correct, what

265

2 defects does it have, and whats the impact of those defects in 3 front of a jury. 4 For example, one potential defect could be that the Bondex would make a big

5 guy might mis-describe the packaging.

6 deal out of it at trial and say a guy doesnt really know the 7 product because he cant identify the packaging. And we might

8 say that, you know, he knows everything but the packaging and, 9 you know, it shouldnt be that big a deal, and if he had 10 remembered it, Bondex would have said that he had made it up or 11 we coached him to remember it, because no one should remember 12 the packaging all those years later. 13 So both of us were trying very, very hard to try to

14 evaluate the strengths and weakness of the ID amongst a number 15 of other factors that went into evaluation of the case. 16 Q 17 A Okay -And some of the time, Bondex and I would agree and some of But I will say that the counsel I worked Very

18 the time we wouldnt.

19 with at the national level, they were very good lawyers. 20 sophisticated, very mature litigation. 21 were doing.

And they knew what they

And the conversations we had, I would say most of

22 the time, we kind of saw the case the same way. 23 Q If you turn to page -- back to Page 2 where they describe

24 the plaintiff? 25 A Yes. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q

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Some of the details here about the plaintiff include that

2 he has four daughters that are a hundred percent dependent upon 3 him, including one daughter who is disabled. 4 A 5 Q 6 A Yes. Would that have been an important fact in valuing a case? No question. The special damage facts make a difference. The nature of the dependents that are Do the dependents have any

7 How old the person is.

8 -- that hes responsible for.

9 special needs that would require more care over time and 10 therefore, be more support that he needs to provide them. 11 of those factors were important for both sides in the 12 evaluation of the -- of how much a case is worth. 13 Q And if I can ask you to turn back to the first page, the All

14 second line of this indicates that Bondex is the only viable 15 defendant. 16 A 17 Q 18 case? 19 A 20 Q 21 A Yes and no. Okay, and explain that answer, please? Well, this case is being brought in Madison County, which And the legal Thats correct. Would that have been an important fact in valuing the

22 is a joint and several jurisdiction.

23 responsibility of Bondex in the case is for the total amount of 24 whatever the damages are subject to their rights of 25 contribution and indemnity under Illinois law. WWW.JJCOURT.COM I would have

Iola - Direct/Ramsey 1 the exact same thing about U.S.G. if they were a viable 2 defendant.

267

The law provides me an entire remedy against them.

3 And then, provides them a remedy back against other responsible 4 parties if they choose to exercise it. 5 So the lack of USG in the case because they were

6 bankrupt didnt affect the value of the case, it simply 7 affected who had to pay for the case now and whether Bondex was 8 going to have to go and assert their contribution right, which 9 they have the right to under the USG trust. The reality is

10 that the loss of USG cost my client money and didnt cost 11 Bondex anything. 12 Because I know in the marketplace from being in here

13 for 32 years that a single-defendant case, I rarely have the 14 ability to get one defendant to pay what the total loss of a 15 60-year-old man dying of mesothelioma who has four dependent 16 children. And so, the reality is that the bankruptcy of USG

17 affected my value, it didnt affect theirs. 18 Q Okay. And if I can ask you, would it sound correct that

19 this case would have resolved in the neighborhood of $2 20 million? 21 right? 22 A 23 Q It would not surprise me. Okay. All right. If we could turn to Exhibit 386, and Is that -- would that surprise you? Does that sound

24 Your Honor, can I approach and hand Mr. Iola unredacted copy -25 THE COURT: Yes. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 Q 2 A 3 Q 4 A 5 Q -- for identification? Ill be careful. Do you recall this case, Mr. Iola? Yes.

268

And what do you recall about it before looking at the -- a

6 copy of the document in front of you? 7 A I just know that it was a case that we brought in Texas,

8 and it was a case that involved Waters and Kraus. 9 Q 10 A 11 Q 12 A 13 Q Okay. That I was co-counsel on. And do you recall that this case settled? I believe thats the case. And do you recall that this was one of the higher

14 settlements that you referenced earlier in your range of 15 settlements? 16 A 17 Q I believe thats correct. Okay. Turning to the first page of this report, you

18 indicated that this was a case that was pending in El Paso, 19 Texas, why was that jurisdiction important? 20 A Juries in El Paso, Texas have shown an ability to evaluate

21 fairly the facts of these mesothelioma cases and fairly award 22 money thats deserving to my clients. 23 Q Okay. And if you continue on under the venue

24 jurisdiction, the defense counsel was reporting to their client 25 that the plaintiff has 14 children, 12 of whom are dependent WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 and seven of them who are adopted. 2 A 3 Q 4 A I do.

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Do you recall those facts?

And why would those facts be important in valuing a case? This case was an extraordinary special case. This family

5 had adopted these special-needs children. 6 beautiful home for them.

They had built a

They spent their life caring for And the loss of

7 these people, and they were wonderful people.

8 this gentleman was devastating to his family and to the kids. 9 And there wasnt a single defendant that looked at

10 this case that didnt realize that no matter what the facts of 11 the case, there was no way they could go down and try this 12 case. 13 Q Okay. And turning to the last page, with respect to the

14 assessment of the -- Im sorry -- to the verdict range on Page 15 18 of the case. 16 3860012? 17 18 19 20 UNIDENTIFIED SPEAKER: MS. RAMSEY: Is this Exhibit 386 or? Its -- if you can get that up, I think to

It is Exhibit 386. Okay. Thanks.

UNIDENTIFIED SPEAKER: MS. RAMSEY:

I was trying to identify the Bates

21 number for purpose of page identification. 22 BY MS. RAMSEY: 23 Q The defense counsel is describing a verdict range of 15 to Is that consistent with what

24 20 million dollars in this case. 25 you just testified to?

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Iola - Direct/Ramsey 1 A 2 Q 3 A 4 Q 5 A No. You would -- how you would price the case? No. Okay. Tell me how you disagree?

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I think this case would be worth at least $30 million in Just on the compensatory side. Let alone the

6 front of a jury. 7 punitive risk. 8 Q

Wasnt even close.

And with respect to this, lets take it a little bit more

9 generally now, having read a couple of these case evaluations, 10 what factors do you think were most important from the 11 plaintiffs side in settling a case with Bondex? 12 A 13 Q 14 A I couldnt answer the question the way you asked it. Okay. I would say that for any given case based upon the

15 constellation of facts in that given case, certain facts in one 16 case might be far more important than the same facts in another 17 case. The factors that generally go into it are the things Age, dependents,

18 that we would all think would be relevant.

19 special damage facts, strength of the ID, the nature of that ID 20 versus the total exposure, the jurisdiction that its in, is he 21 alive or is he not? Those are all the kinds of things that

22 their national counsel and I exchanged information about and 23 discussed and evaluated. 24 Q So in a case where there was poor product identification,

25 could that case still be a valuable case for settlement WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 purposes? 2 A No question. And this is a good example of that. The And

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3 idea in this case against Bondex was not extraordinary.

4 thats now why the case is worth an extraordinary amount of 5 money, but it was good enough to get a jury to award against 6 Bondex and the damages of the case were incredible. 7 ever seen in 33 years of being a lawyer. 8 And so, I think Bondex recognized that there was Best Ive

9 weakness in the ID, but the risk to them at trial, if they 10 didnt win that weakness in front of a jury, would have been 11 way, way, way too much for them. And so they, like everybody

12 else in this case, settled this case for what I asked for, 13 because it was that kind of a case. 14 Q And if it could now have Exhibit 390, please? And Your

15 Honor, Id ask to approach again? 16 17 Q 18 A 19 Q THE COURT: Thats fine.

Mr. Iola, do you recall this case? I -- yes. Okay. And is this another case where there was a poor Do you recall?

20 product ID? 21 A 22 Q 23 A

I would say the product ID wasnt perfect. Okay. And describe what you mean by that, please?

Well, I think that the lawyers for Bondex had something to And, you know, and it just wasnt perfect. And

24 talk about.

25 its not surprising that its not perfect. WWW.JJCOURT.COM

I mean, bear in

Iola - Direct/Ramsey 1 mind, were asking people to go back many decades to recall 2 products, and theyre not always going to get it perfectly 3 right. And frankly, to be honest, I dont think the juries

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4 expect them to get it perfectly right. 5 Q If you turn to Page 3 of this report that Ive just placed And specifically, to the first full We have

6 in front of you.

7 paragraph, starting both of this plaintiffs sons? 8 that page on the screen? 9 enough to read? 10 A 11 Q 12 A 13 Q 14 A 15 Q Were on Page 4? Were on Page 3, I believe. Okay.

And could you make that large

I believe that the paragraph youre looking for is -Page 4? Page 4, okay.

-- actually at the top of Page 3, yeah. Page 4. In that paragraph, if youll take a look at that,

16 this report that defense counsel is writing to the debtors 17 indicates that the products that the plaintiff had identified 18 never contained asbestos. Do you recall a discussion along

19 those lines with defense counsel? 20 A 21 Q 22 A 23 Q 24 A I do. And with Jack Fleming.

And in the next paragraph -Can I explain that a little bit? Yes. Oh, please.

Jack was a very honest guy, and when I took Jacks And later on in the litigation as

25 deposition, I believed Jack.

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Iola - Direct/Ramsey 1 product ID got developed, Jack would look at the product ID, 2 and he would tell me whether or not he thought it was right. 3 And I put a lot of stock in what Jack said. Because he was

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4 honest, and I think that he was trying to do the same thing I 5 was doing, which we were trying to fairly evaluate what we had. 6 And in this case, Jack took a look at the product ID

7 and decided that he thought that what the guy was discussing 8 might have been another product of Bondex that did not contain 9 asbestos. And that became a substantially relevant fact for me

10 in the evaluation of my case, because I believed Jack. 11 Q In the next paragraph, there is reference to -- first of

12 all, something described as a possible inventory settlement 13 package. 14 A 15 Q 16 A 17 Q 18 A Do you know what the debtors meant by that?

Absolutely not. Okay. I dont do that. Did you ever settle more than one case at a time? I had a number of discussions going on with Bondex counsel

19 and a number of cases at the same time, but my practice has 20 always been from Day 1 to evaluate each individual case against 21 each individual defendant and make an individual demand for 22 each plaintiff in every case. 23 Q 24 A 25 Q And I negotiated in that way.

And thats how Bondex negotiated with you as well? Absolutely. Okay. In that same paragraph, defense counsel talks about WWW.JJCOURT.COM

Iola - Direct/Ramsey

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1 a possible affidavit that places this plaintiff around Bondex 2 joint compound. 3 A I do. Do you recall that?

I knew that there were affidavits in the case that

4 did that, yes. 5 Q And would this be a case that you would describe as one

6 that had less good product identification in front of a jury? 7 A Well, anytime the product ID doesnt come from the

8 plaintiff but comes from family members who the defendants can 9 stand up and tell the jury, which is obvious that they have a 10 self interest, Im always concerned about how a jury will view 11 that information. And so that plays some role in how I

12 evaluate what I have and most importantly in this case was 13 Jacks opinion. 14 And although I think that maybe I had the right

15 product, I had to concede to myself if I was honest that maybe 16 Jack was right, and I did have the right product. And that

17 played a role, clearly, in how we resolved this case. 18 Q 19 case? 20 A 21 Q I dont. If you could -Okay. And do you recall what the settlement was in this

Do you recall -- would it sound correct to say that that

22 case settled for $400,000? 23 A 24 Q That would -- that sounds about right. And why would you expect that this case settled for

25 $400,000 if there were questions about the identification of WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 the product? 2 A Well, because questions dont mean that its not real.

275

3 And it still presents risk for both sides. 4 evaluation of risk.

I mean, this is an

Were not really searching out for what Were

5 the truth is, because we dont have a crystal ball.

6 looking at the facts that are presented to us, and were trying 7 to evaluate what we think they mean in front of a jury and how 8 much risk is there for them, and how much risk is there for me 9 and my client. 10 And, you know, I think in this case to be honest, I

11 made a pretty big demand on them, because I thought I had a 12 different case than I had. And after Jack told me that he

13 thought I had the wrong product, I re-evaluated my view of the 14 case. 15 Q 16 A 17 Q 18 A And I think thats what were supposed to do, I think. Did you ever resolve a case with Bondex for no payment? Oh, definitely. I dismissed cases.

And do you know about how often that happened? No. Mike Evert told me the other day that they did an

19 analysis of my cases and somewhere about 50 percent of the 20 cases, I dismissed with no payment. I dont know that to be to And the

21 be case, but Ill take his representation for it. 22 reason for thats clear.

I told Glenn Bowers from the

23 beginning, and Ive told everybody and Mikes heard me say this 24 to him a million times, I only want them to pay in legitimate 25 cases. If they dont belong in the case, then they shouldnt WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 pay in the case. 2

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And so if we believe we have something, and we go and

3 we do discovery, and it shows that there isnt any ID, then Id 4 let them go. This is not a stick up. You know, they only

5 belong in cases where they really belong, and then, when they 6 belong there, I want them to pay real money. Thats -- that

7 was the relationship we tried to have, and I think we did a 8 pretty good job of it. 9 Q Okay. While were talking about zero value cases, I

10 believe you were in the room when Dr. Mullin was testifying and 11 testified that under his analysis which he describes as merit 12 based that cases that settled for under $50,000 were settled as 13 a matter of cost of litigation. 14 A Do you agree with that that -No, I

I dont think Mr. Mullin understands our business.

15 do not agree with that. 16 Q 17 A Okay. And why do you not agree with that?

Well, because there could be reasons for a case to settle I can give you an example. In a

18 for that amount of money.

19 joint and several jurisdiction, where theres a dollar for 20 dollar credit, sometimes Bondex would say to me, and I might 21 say to them, look, I have some other ID in the case, okay? And

22 Im going to try, and Im going to try to maximize the value of 23 that other ID, and if I can get full value from those other 24 people, Im happy to give you a little bit of a discount here, 25 because Im just looking for full value. WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 And so, there were times in joint and several

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2 jurisdictions where theyve waited to the very last time so 3 they knew what the offset credit was, and that substantially 4 helped them in many, many opportunities. Now, you couldnt do But in a

5 that in a several liability jurisdiction, obviously. 6 joint and several jurisdiction, you could. 7 another reason, too.

There could be

I might think that I have a case, because

8 the guy says to me I remember Bondex, and then, we he 9 testifies, he calls it Bondo. And says that it was a gasket,

10 and then he corrects himself later and says, yeah, I think it 11 was a joint compound, and I might be able to get by summary 12 judgment, because, you know, were going to infer to my benefit 13 in a summary judgment. 14 Yet, I might realize that its not a triable case and

15 so that kind of a case might settle for a small amount of 16 money. And over, you know, I think I had one or two in my time

17 with Bondex that I settled for less than $100,000 something 18 like that. 19 categories. And I think they fit into those kinds of There were also times where we had a number of

20 large cases up on the docket across the country with Bondex in 21 relatively the same time period. And it was not unusual for

22 national counsel to come to me and say, I know Mark, we got 23 this case over here that looks like youre going to dismiss it, 24 but hold on to it for a second and lets see if we cant reach 25 resolution here and then, wed like to settle it kind of at the WWW.JJCOURT.COM

Iola - Direct/Ramsey 1 same time.

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And I think what they were doing is that they were I didnt

2 using it to average down their average settlement. 3 cared. 4 Q So.

Okay.

And do you -- for the cases that you had that

5 resolved for less than $50,000, were those cases that involved 6 discovery in the manner that you described where the evidence 7 might already be starting to form? 8 A Yeah. If I sued them, I thought I had something. Or I

9 wouldnt have sued them.

And those cases clearly through the

10 discovery process, turned out not to be cases that necessarily 11 involve them or not, obviously, in a substantial way. 12 Q Do you recall specifically, with respect to the cases that

13 you resolve for less than $50,000 whether there was any 14 discovery that had taken place -15 A 16 Q 17 A Well, there was only one. Oh, there was -- okay. And I remember the case was one where the guy just I mean, I think

18 couldnt get the ID out in an effective way.

19 he actually used the product, but he didnt really say it in an 20 effective way, and it was what it was. 21 Q And you also heard Dr. Mullin report that he has analyzed

22 the cases and determined that Bondex paid less in individually 23 evaluated cases than it paid in group settlements. 24 testimony make sense to you? 25 A No. WWW.JJCOURT.COM Did that

Iola - Direct/Ramsey 1 Q 2 A And tell me why not?

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Well, I just think that it strains the credibility of what Look, they were doing group settlements They

3 passes the smell test.

4 as they showed me at their deposition with three firms. 5 showed me three agreements.

They did those, because they made

6 a business decision that it was cheaper to do business that way 7 than to individually evaluate the cases and go through the 8 discovery process to find out what the cases were really about. 9 Okay? 10 I dont understand if thats the case how it could

11 possibly be that you would pay more in a group settlement than 12 you would in an individual evaluation of a case. Obviously,

13 the only reason they were doing a group settlement was to have 14 cheaper resolution of the case. It doesnt make sense why they

15 would do group settlements if individual settlements were 16 cheaper. 17 Q 18 A 19 Q I simply dont believe that to be true.

And in your personal experience, you only individually -Yeah, I dont do the group thing, so I cant really. But you heard testimony that Bondexs average resolution

20 value was in the $60,000 range with respect to group 21 settlements, and I think that youve testified that your 22 resolution average was much higher? 23 A My resolution average, I believe, was about little bit shy I would add one thing that I think

24 of $700,000 on average.

25 that he might have done in order to fabricate his argument WWW.JJCOURT.COM

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1 which was, he probably included in the individual settlements 2 all the zero settlements, which would not be appropriate to do. 3 Q With respect to -- and why would the zero value

4 settlements not be appropriate? 5 A Because the zeroes arent settlements. Theyre a belief

6 that we had a claim, we go through the discovery process as 7 appropriate, and we do the ethical thing by dismissing the case 8 if it turns out theres not product ID. 9 settlement. 10 Q In a circumstance where a case was settled in order to -Thats not a

11 at a lower value, at the debtors request for whatever reason 12 the debtor decided to do that in conjunction with a resolution 13 of a high value case, could that be an explanation for why the 14 settlement average would be lower -15 A 16 Q 17 A 18 Q 19 A 20 It could. -- with respect to individual -It could. -- evaluated cases? I think -THE COURT: Ms. Ramsey, were going to have to wrap Okay.

21 up for the night. 22 MS. RAMSEY: Okay. One more question for this

23 evening, Your Honor. 24 Q

And Im almost at a breaking point.

Mr. Iola, you also heard Dr. Mullins statement that 99

25 percent of Bondexs settlements were reached in joint and WWW.JJCOURT.COM

281 1 several jurisdictions. 2 A 3 Q 4 A No. And can you tell us why? Because the bulk of the states where the cases are being Do you agree with that conclusion?

5 brought are several liability jurisdictions. 6 Q 7 A And how do you know that? Thats my business. I mean, look, I have a list of not

8 hundreds, but tens, twenties, I dont know, fifty, sixty 9 mesothelioma settlements with them in California with the 10 Waters and Kraus firm. Its a several-liability jurisdiction.

11 Theyre paying their several liability share only. 12 The idea of Dr. Mullins that somehow Bondex was -That we -- that They

13 and Kelly Tompkins said it too, its not true.

14 they were paying for everybody elses share is not true. 15 never paid for anybodys share but their own.

The law didnt

16 allow me to make them pay for somebody elses responsibility. 17 MS. RAMSEY: Okay. And I think, Your Honor, with And I have a few more

18 that, we can break for this evening.

19 questions for Mr. Iola that I can pick up on tomorrow morning. 20 THE COURT: All right. Mr. Iola, youre going to be

21 excused for the evening.

But youre still under oath, so

22 please do not discuss your testimony with anyone. 23 24 THE WITNESS: THE COURT: Okay. Well be in recess until 8:30

All right?

25 tomorrow morning, and you folks will remember that Im taking a WWW.JJCOURT.COM

282 1 short break tomorrow at nine oclock? 2 3 4 5 MS. RAMSEY: THE COURT: Yes, Your Honor. Okay. Thank you. Were in recess.

UNIDENTIFIED SPEAKER: UNIDENTIFIED SPEAKER:

Thank you, Your Honor. Your Honor, do you want to get

6 your time count? 7 8 9 MS. RAMSEY: THE COURT: Yes. Oh, sure. Its -- for the ACC and FCR, For the debtor, seven

UNIDENTIFIED SPEAKER:

10 six hours, forty six minutes remaining. 11 hours, fifty one minutes. 12 13 14 15 16 17 18 19 20 21 22 23 24 THE COURT: Thank you. Okay.

Thank you.

UNIDENTIFIED SPEAKER: UNIDENTIFIED SPEAKER:

Thank you, Your Honor. Thank you, Your Honor.

* * * * *

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283 C E R T I F I C A T I O N We, TAMMY DeRISI, ANNEMARIE DeANGELO, CEIL ASHBOCK, CARLA OAKLEY and FELICIA HUTH, court approved transcribers, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter, and to the best of our ability.

/s/ Tammy DeRisi TAMMY DeRISI

/s/ Annemarie DeAngelo ANNEMARIE DeANGELO

/s/ Ceil Ashbock CEIL ASHBOCK

/s/ Carla Oakley CARLA OAKLEY

/s/ Felicia Huth FELICIA HUTH J&J COURT TRANSCRIBERS, INC. DATE: January 17, 2013

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