text:
    Michael HOWARD, et al., Plaintiffs, v. John L. McLUCAS, et al., Defendants. AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, et al., Plaintiffs, v. John C. STETSON, Secretary, U.S. Air Force, Defendant.
    Civ. A. Nos. 75-168-MAC, 79-66-MAC.
    United States District Court, M.D. Georgia, Macon Division.
    Nov. 20, 1984.
    See also, D.C., 597 F.Supp. 1501.

      Jack Greenberg, New York City, Bill Lann Lee, Los Angeles, Cal., Thomas M. Jackson, Charles A. Mathis, Jr., Macon, Ga., Austin E. Catts, Atlanta, Ga., for plaintiffs.
    Anne L. Weismann, Dept, of Justice, Washington, D.C., John L. Lynch, Asst. U.S. Atty., Macon, Ga., for defendants.
   OWENS, Chief Judge.

Introduction

Counsel for all parties to these consolidated lawsuits have agreed to settle their differences without a trial. The terms of this settlement are set forth in a Consent Decree filed with this court on June 15, 1984. Public notice of this settlement was provided. All persons who believed they might be affected by the settlement were instructed as to how they could make their concerns known to this court. Comments and objections by both class members (black employees at Warner Robins AFB) and non-class members (white employees at Warner Robins AFB, organized as the “Warner Robins Constitutional Rights Fund”) were heard by the court at a fairness hearing held on August 9, 1984. Counsel now requests this court to give final approval to the Consent Decree proposed in settlement of these cases.

The Court’s Role in Reviewing This Settlement

In every civil lawsuit the parties are permitted to discover the strengths and weaknesses of .their opponent’s case. With full knowledge of the merits of the case, the parties are encouraged to discuss the possibility of negotiating a mutually agreeable settlement. A settlement has many advantages. It avoids a lengthy trial which frequently causes hostility and ill will to develop between the parties. A trial drags personal affairs into public view; each side frequently accuses the other of lying. In the end, a stranger (the judge) steps in, adjudicates the parties’ differences, and orders a result that is not palatable to one side of the case. A settlement, on the other hand, creates an atmosphere of conciliation; the parties agree among' themselves — without outside interference — to a compromise in which each side receives a benefit. The plaintiffs usually receive relief which they agree is fair, but without the expense and delay of trial and appeals. The defendants usually agree to pay less than what a judge or jury might award, and receive the benefit of supervising their own conduct, as opposed to being forced to submit to the judgment of a court. This court can encourage but cannot compel parties to a lawsuit to settle their differences; both plaintiffs and defendants have an absolute right to insist upon a trial. However, while perhaps less obvious but equally as true, this court cannot prevent parties to a lawsuit from settling their differences without a trial if they so desire.

In a typical civil lawsuit this court is not called . upon to approve a settlement reached by the parties. Indeed, in most personal injury settlements the court is not even apprised of the amount of money the parties agree upon — the court is simply told that the parties have agreed to dismiss the case. This case, however, is different. Since the plaintiffs number in the thousands, this case has proceeded as a class action. Obviously, each and every one of the thousands of plaintiffs could not be consulted in the negotiations leading to a settlement. Because of a fear that the named plaintiffs or their attorneys might be too quick to settle a case to the detriment of the class members who could not participate in the negotiations, Congress enacted the following rule which governs the settlement of class action lawsuits:

(e) Dismissal or Compromise. A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

Fed.R.Civ.P. 23(e). “Approval of the court” is to be granted if the settlement is basically fair to all concerned. This is why the court held a “fairness” hearing, and allowed both class members and non-class members to speak on the question of fairness. However, the court’s responsibility to approve or disapprove does not give this court the power to force the parties to agree to terms they oppose. The court must either approve or disapprove of the settlement as a whole, and as written by the parties. In this case, it was the parties, including the United States Air Force, who agreed to the 240 promotions and the monetary award to which many object. This court did not suggest either the 240 promotions or the monetary award and cannot compel either party to change either without a trial on the merits. The court’s only function is to assess the settlement’s basic fairness in light of all objections, under the standards discussed below. If the settlement is found to be a fair one, this court must approve it. This court is not empowered to force parties who choose to settle to go to trial.

The factors which this court must consider in deciding whether the settlement is fair have been firmly established by a long line of decided cases. These standards were set forth by Judge James C. Hill in a 1977 decision of the United States Court of Appeals for the Fifth Circuit:

“In determining whether to approve a proposed settlement, the cardinal rule is that the District Court must find that the settlement is fair, adequate and reasonable and is not the product of collusion between the parties. Young v. Katz, 447 F.2d 431 (5th Cir.1971).

“A threshold requirement is that the trial judge undertake an analysis of the facts and the law relevant to the proposed compromise. A 'mere boiler-plate approval phrased in appropriate language but unsupported by evaluation of the facts or analysis of the law’ will not suffice. Protective Committee v. Anderson, 390 U.S. 414, 434, 88 S.Ct. 1157, 1168, 20 L.Ed.2d 1 (1968).

“In addition to undertaking such an analysis, it is essential that the trial judge support his conclusions by memorandum opinion or otherwise in the record. An appellate court, in the event of an appeal, must have a basis for judging the exercise of the trial judge’s discretion. Protective Committee v. Anderson, supra.

“In determining the fairness, adequacy and reasonableness of the proposed compromise, the inquiry should focus upon the terms of the settlement. The settlement terms should be compared with the likely rewards the class would have received following a successful trial of the case. Protective Committee v. Anderson, supra. The relief sought in the complaint may be helpful to establish a benchmark by which to compare the settlement terms. See Norman v. McKee, 431 F.2d 769 (9th Cir.1970).

“In Title VII class actions, the District Court is particularly suited to perform this task since the trial judge is given broad discretion in the fashioning of the proper remedial relief to eliminate employment discrimination. See Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975).

“Yet, in evaluating the terms of the compromise in relation to the likely benefits of a successful trial, the trial judge ought not try the case in the settlement hearings. Young v. Katz, supra.

“ ‘It cannot be overemphasized that neither the trial court in approving the settlement nor this Court in reviewing that approval have the right or the duty to reach any ultimate conclusions on the issues of fact and law which underlie the merits of the dispute. City of Detroit v. Grinnell Corporation, 495 F.2d 448, 456 (2d Cir.1974), Grunin v. International House of Pancakes, 513 F.2d 114, 123 (8th Cir.1975).’

“Neither should it be forgotten that compromise is the essence of a settlement. The trial court should not make a proponent of a proposed settlement ‘justify each term of settlement against a hypothetical or speculative measure of what concessions might have been gained; inherent in compromise is a yielding of absolutes and an abandoning of highest hopes.’ Milstein v. Werner, 57 F.R.D. 515, 524-25 (S.D.N.Y.1972).

“In performing this balancing task, the trial court is entitled to rely upon the judgment of experienced counsel for the parties. Flinn v. FMC Corporation, 528 F.2d 1169 (4th Cir.1975). Indeed, the trial judge, absent fraud, collusion, or the like, should be hesitant to substitute its own judgment for that of counsel. Id. at 1173.

“In addition to examining the merits of a proposed settlement and ascertaining the views of counsel, the Court should consider other factors.

“Practical considerations may be taken into account. It is often said that litigants should be encouraged to determine their respective rights between themselves. United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 826 (5th Cir.1975) (and cases cited therein). Particularly in class action suits, there is an overriding public interest in favor of settlement. Id.; Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir.1976). It is common knowledge that class action suits have a well deserved reputation as being most complex. The requirement that counsel for the class be experienced attests to the complexity of the class action. Eisen v. Carlisle and Jacquelin, 391 F.2d 555 (2d Cir.1968).

“A review of the leading cases from this Circuit involving litigation of employment discrimination in class actions profitably shows the length of time and expense which must be incurred before the dust of combat has finally settled. See, e.g., United States v. United States Steel Corporation, 520 F.2d 1043 (5th Cir.1975); Pettway v. American Cast Iron Pipe Company, 494 F.2d 211 (5th Cir.1974). In these days of increasing congestion within the federal court system, settlements contribute greatly to the efficient utilization of our scarce judicial resources.

“In a Title VII case, as here, the policy favoring settlement is even stronger in view of the emphasis placed upon voluntary conciliation by the Act itself. United States v. Allegheny-Ludlum Industries, Inc., supra; Patterson v. Newspaper & Mail Del. U. of N.Y. & Vic., 514 F.2d 767 (2d Cir.1975).

‘While the public objectives embodied in Title VII warrant a careful review of the provisions of the settlement in light of these policies, ..., the clear policy in favor of encouraging settlements must also be taken into account, ... particularly in an area where voluntary compliance by the parties over an extended period will contribute significantly toward ultimate achievement of statutory goals.’ Patterson, supra at 771 (citations omitted).

“When, during the course of the litigation, it becomes known to the Court that a portion of the class objects to the proposed settlement, the trial judge must assume additional responsibilities. The trial court must extend to the objectors leave to be heard. See, Mandujano v. Basic Vegetable Products, Inc., 541 F.2d 832 (9th Cir.1976). However, this is not to say that the trial judge is required to open to question and debate every provision of the proposed compromise.

“The growing rule is that the trial court may limit its proceeding to whatever is necessary to aid it in reaching an informed, just and reasoned decision. See, Flinn v. FMC Corporation, supra; City of Detroit v. Grinnell Corporation, supra.

“The Court should examine the settlement in light of the objections raised and set forth on the record a reasoned response to the objections including findings of fact and conclusions of law necessary to support the response. Mandujano v. Basic Vegetable Products, Inc., supra.

“In assessing the fairness of the proposed compromise, the number of objectors is a factor to be considered but is not controlling. Bryan v. Pittsburg Plate Glass Co., 494 F.2d 799 (3d Cir.1974). A settlement can be fair notwithstanding a large number of class members who oppose it. Id.

“The trial judge must then make a determination as to whether or not to approve the settlement, or he may make suggestions to the parties for modifications of the proposal. Approval must then be given or withheld.”

Cotton v. Hinton, 559 F.2d 1326, 1330-31 (5th Cir.1977) (footnotes omitted). With these standards in mind, the court now turns to the facts established to date and the terms of the proposed settlement.

Findings of Fact

1. Warner Robins is located at Robins Air Force Base, approximately 18 miles south of Macon, Georgia. Warner Robins is the largest single employer in the Macon area. It employs approximately 15,000 civilian employees, although the number of employees fluctuates.

Warner Robins is part of the Air Force Logistics Command and has the following four basic missions: (1) logistics management for assigned aircraft and commodities, (2) repair for aircraft and technologies (including the repair, modification and overhaul of aircraft and equipment), (3) receiving, storing, issuing and transporting spare parts and systems, and (4) awarding of contracts annually for Air Force-wide procurement responsibilities.

2. Warner Robins employs both blue collar and white collar employees. Blue collar employees are classified under the Wage Grade (WG) pay plan. WG employees in various occupations are divided into grade levels from 1 through 14. White collar employees are classified under the General Schedule (GS) pay plan. GS employees in various occupations are divided into grade levels from 1 through 16.

3. Warner Robins operates under an internal promotion policy in which employees in lower grades get the first opportunity to fill higher level positions. The initial “area of consideration” is base-wide for all jobs, except for higher level jobs at GS-14 and above, in which the area of consideration is Command-wide and those covered under Air Force and Department of Defense career programs. If it is determined that a position cannot be filled internally, external staffing or hiring procedures are commenced.

4. Supervisors are almost exclusively promoted from within Warner Robins.

5. Candidates for competitive promotions at Warner Robins are identified through the use of a skills locator system which, unlike the announcement method, does not require the individual employee to apply to fill an individual vacancy. In 1964, the AFLC Civilian Skills Locator System (E246) was adopted by Warner Robins and employed a computer to store and reproduce essential employee information from each employee’s Official Personnel Folder. This system was in use until October, 1978, when the Air Force instituted a new skills locator system called the Air Force Promotion and Placement Referral System (PPRS), which is currently in effect.

6. Under the E246 system, promotion registers of all qualified candidates were generated in rank order based on qualification requirements or Promotion Evaluation Patterns (PEPs). Primary ranking factors were applied to determine the basic eligibility requirements and initial ranking, while secondary factors were applied to determine final ranking and to evaluate the top five candidates and those lower ranking candidates who, with additional points, could rank among the certified group. In the event of ties or if meaningful distinctions could not be made between the candidates, as many as ten candidates could be referred.

7. Primary ranking factors under the E246 system included experience, written examinations and supervisory appraisals. Each element received one-third weight in the evaluation, unless only two elements were used and then each was weighted at 50%. Overall rankings were determined by the total number of points given for a designated element. Secondary ranking factors included awards and self-development activities.

8. The PPRS system is a more sophisticated skills locator system. In its first phase, all employees are screened for potential eligibility on the basis of such factors as pay, type of appointment and basic skills from information that has been entered into the computer through a comprehensive series of skills codes. Eligibility qualifications in this initial stage conform to standards set forth by the Office of Personnel Management.

9. All employees who satisfy the test of basic eligibility are then subject to a progression level ranking whereby candidates are ranked in groups based on promotion evaluation patterns. Each group or progression level contains up to five factors identifying general and specific skills, knowledge, and characteristics. Advancement from one level to another is made only after satisfying all requirements of the previous progression level. Each candidate within a given progression level is, in effect, in a tie with all other candidates who have progressed to that progression level. The number of progression levels is determined by the type and grade of the position to be filled.

10. A series of tie breakers, or “sort factors,” are used to establish relative standing within a progression level and include supervisory appraisals, awards, and seniority. A specific promotion register is then generated, ranking all qualified candidates in descending order. Promotion candidates are certified to the selecting supervisor in ranked order. The average life of a promotion register is ninety days, except that career-board registers normally have a life of six to twelve months.

11. Under both the E246 and PPRS systems, every employee at Warner Robins is automatically considered for every vacancy. Consonant with the operation of a “skills locator system,” employees are not notified that they have been considered for job vacancies unless they are at the top of a register and within reach for referral to a selecting official.

12. Under both the E246 and PPRA systems, no records exist for all employees who were considered for a specific job promotion. The skills locator systems only generate records of candidates who are found to be qualified.

Statistical Evidence

13. In 1973, blacks comprised 14% of the workforce at Warner Robins; in 1976 blacks comprised 15.3% of the workforce; and in 1978 blacks comprised 16.6% of the workforce.

14. In 1973, 65.2% of black GS employees were in GS 1-4 positions- and 76.3% of black WG employees were in WG 1-8 positions. For that same year, 18.6% of white GS employees were in GS 1-4 positions and 31.2% of white WG employees were in WG 1-8 positions. In 1973, 85.7% of black employees held jobs in WL 2-8 and 85.8% of blacks held supervisory jobs in WS 1-8. In that same year 2.5% of white employees held jobs in WL 2-8 and 25.9% of whites held supervisory jobs in WL 18.

15. The average grades of all employees in 1973 and 1975, respectively, were as follows:

Average Grades of White and Black Employees. 1973

Pay Plan All Employees White Employees Black Employees
GS 7.8 8.0 4.5
WG 8.7 9.2 6.7
WS 9.7 10.0 6.6
Average Grades of White and Black Employees, 1975
Pay Plan All Employees White Employees Black Employees
GS 7.8 8.0 4.6
WG 8.6 9.3 6.8
WL 9.6 9.9 5.0
WS 9.9 10.1 6.9

16. The number of supervisors by race in the workforce from 1968 through 1974 was as follows:

Year Total Supervisors White Supervisors Minority Supervisors
1968 1,605 1,605 45
1969 1,937 1,890 47
1970 1,927 1,927 45
1972 1,614 1,560 54
1973 1,327 1,327 45
1974 1,338 1,289 49

17. Plaintiffs’ statistics demonstrated that black employees were promoted to upper level jobs in proportions less than their representation in the workforce or in lower grades.

18. Plaintiffs’ statistical analysis of the computer files for the period 1971 through 1978 showed statistical disparities in promotion rates out of grade in WG grade groupings 1-4, 5-8, and 9-12, and GS grade groupings 1-4, that plaintiffs’ expert found to be statistically significant. From these statistics plaintiffs concluded that a total of 553 jobs had been lost to blacks.

Grade Group No. of Standard Deviations Expected Promotions Lost to Blacks
WG 1-4 6.01 67.98
WG 5-8 16.03 362.00
WG 9-12 4.80 50.06
GS W 3.56 72.67

Id. (Fluctuations of more than 2 or 3 standard deviations undercut the hypothesis that selections for promotions were being made randomly with respect to race. See Castaneda v. Partida, 430 U.S. 482, 496 n. 17, 97 S.Ct. 1272, 1281 n. 17, 51 L.Ed.2d 498 (1977); Hazelwood School District v. United States, 433 U.S. 299, 311, 97 S.Ct. 2736, 2743, 53 L.Ed.2d 768 (1977).

19. Plaintiffs’ more conservative analysis, controlling for occupational series, showed statistical disparities in the same WG grade groupings that plaintiffs found to be statistically significant, but no statistically significant disparities in any GS grade grouping. From this analysis, plaintiffs concluded that a total of 234 jobs had been lost to blacks.

Grade Group No. of Standard Deviations Expected Promotions Lost to Blacks
WG 1-4 3.53 36.68
WG 5-8 8.19 162.84
WG 9-12 3.75 34.74

History of this Lawsuit

. 20. Six black employees — Michael Howard, Henry Taylor, Oliver Gilbert, Clifford Scott, Lewis Jones and Thomas Miller— filed this class action complaint on October 31, 1975, against the Secretary of the Air Force, the then Civil Service Commission and various individually named defendants. Irish Smith, a black employee, and the American Federation of Government Employees (“AFGE”), the union representing all non-management employees at Warner Robins, filed a class action complaint on January 4, 1979, against the Secretary of the Air Force.

21. Defendants filed answers which contested each and every allegation of employment discrimination in the complaints and denied liability in all respects.

22. On October 27, 1976, the court certified a class in the Howard case after full briefing and hearing. The certified class consisted of: “All past, present and future black employees of the Warner Robins Air Logistics Center.” No class has been certified in AFGE and Smith. By order dated June 22, 1983, this Court ordered that the subject cases be consolidated for the purposes of trial.

23. The parties have engaged in extensive discovery on a formal and informal basis over the course of nine years. Numerous depositions were taken, great numbers of interrogatories were answered, numerous facts were admitted or stipulated, and voluminous documents were produced. Both parties engaged experts who prepared extensive statistical analyses based on Warner Robins’ computer files. All discovery, including depositions of trial witnesses, was completed by January, 1984.

24. At the direction of the court, the parties submitted a final pretrial order in October, 1982. The pretrial order listed over 250 witnesses to be called at trial. Plaintiffs filed their pretrial proposed findings of fact and conclusions of law on January 10, 1983, and defendants filed their pretrial proposed findings of fact and conclusions of law on February 25, 1983. The parties have been ready for trial since then.

25. The case, however, was not tried. Instead, the parties engaged in extended settlement negotiations over the course of many months. This court played no role in the negotiations, but encouraged the parties in periodic conferences to engage in serious discussion of their remaining differences in light of the full record and deferred trial pending settlement negotiations.

Terms of the Settlement

The Consent Decree provides promotional relief to black employees who meet basic eligibility standards for promotion to certain GS, WG, WL, and WS positions, such that Warner Robins will fill 240 specified permanent positions through internal merit promotion processes from among qualified class members. Promotions will be made to every other next available vacancy in the specified positions until the 240 specified positions have been filled.

26. Nothing in the settlement requires Warner Robins to promote or otherwise place any person into a position for which that person is not at least minimally qualified under appropriate Federal Civil Service rules, regulations, and qualifications standards. “Normal basic eligibility requirements” are as defined by the Office of Personnel Management in Handbook X-118 or X-118C.

Only class members hired before January 1, 1980, will be eligible for the above promotional relief.

27. Commencing 240 days after court approval of the Consent Decree, defendants will report to the court every six (6) months for a period of five years, with copies to plaintiffs’ counsel, on the implementation of this Consent Decree.

28. A class compensation fund of $3,750,000.00 shall be established and distributed among class members based on length of employment since January 1, 1964, and whether any EEO administrative charge or complaint was filed, under procedures specified in the Consent Decree. A class member must submit a completed claim form, as further described below, in order to receive a share of the class compensation fund. More senior employees and employees who filed EEO charges or complaints will receive larger amounts. Individual awards, of course, will vary. No share of the class compensation fund may exceed $15,000.00. The total class compensation fund is Three Million Seven Hundred and Fifty Thousand Dollars ($3,750,000.00).

Only class members who have been employed at least one year prior to the date of this order shall be eligible to apply for a share of this fund.

29. In addition, defendants will pay the reasonable attorneys’ fees and costs of plaintiffs’ counsel, including costs incurred in the employment of experts.

30. Each of the named plaintiffs shall be accorded specified individual relief, including retroactive promotions and back pay, in addition to a share of the class compensation fund, as described in ¶ 22 of the Consent Decree. In addition, $37,-500.00 of the class compensation fund shall be distributed to named plaintiffs as specified in ¶ 22 and Exhibit “B” of the Consent Decree.

Objections to the Settlement

31. In response to public notice of the Consent Decree, 70 written objections were filed by class members. This represents approximately 2% of the class of approximately 3,200.

32. Additionally, at least 882 written objections were filed by non-class member, white employees of Warner Robins AFB. Under separate order of this court, these non-class member objectors, organized as the Warner Robins Constitutional Rights Fund, were denied leave to intervene in these actions. As non-parties, their consent to this settlement is not required. However, because their interests arguably are affected by the Consent Decree, they were allowed to be present and register their objections.

33. The thrust of the class members’ objections was that the Consent Decree should have afforded them greater relief. The thrust of the non-class members’ objections was that the settlement goes too far; they relied primarily upon the Supreme Court’s recent decision in Firefighters Local Union No. 1784 v. Stotts, — U.S. -, 104 S.Ct. 2576, 81 L.Ed.2d 483 (1984).

Conclusions of Law

1. While this court must undertake an analysis of the facts and law underlying the Consent Decree, it is not the court’s task to decide the merits of the controversy. The very purpose of a settlement is to avoid the delay and expense of trial. Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir.1983).

2. Nor is the court entitled to substitute its “own judgment as to optimal settlement terms for the judgment of the litigants and their counsel.” Armstrong v. Board of School Directors, 616 F.2d 305, 315 (7th Cir.1980); Officers for Justice v. Civil Service Comm’n, 688 F.2d at 630; Cotton v. Hinton, 559 F.2d at 1331-32.

3. The Court of Appeals for the Fifth Circuit has adopted a six-part analysis to determine whether a proposed settlement is fair, reasonable, and adequate.

(1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of plaintiffs’ success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and absent class members.

Reed v. General Motors Corp., 703 F.2d at 172.

The Absence of Fraud or Collusion Behind the Settlement

4. There is a clear absence of fraud or collusion behind the settlement; in fact no one has contended otherwise. The settlement is the result of arm’s length negotiations commenced after years of discovery and trial preparation.

The Complexity, Expense and Likely Duration of the Litigation

5. These lawsuits present complex issues of law and fact that would consume great portions of the time and resources of the parties and the judicial system if this case were to go to trial. The parties initially estimated that trial time would consume two weeks, which now appears to be an exceedingly conservative estimate. “A review of the leading cases from this circuit involving litigation of employment discrimination in class actions profitably shows the length of time and. expense which must be incurred before the dust of combat has finally settled.” Cotton v. Hinton, 559 F.2d at 1331. By settling this action, the parties avoided substantial time and expense as well as the risk of an uncertain outcome.

The State of the Proceedings and the Amount of Discovery Completed

6. This case comes before, the court after the parties have completed full discovery and trial preparation. As a result, there was an adequate basis for the parties to act intelligently and in an informed manner in framing a detailed settlement.

The Probability of Plaintiffs’ Success on the Merits

7. Both parties have developed factual support for their positions. The Supreme-Court has held that statistics can provide evidence of deliberate and purposeful discrimination. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 339-340, 97 S.Ct. 1843, 1856, 52 L.Ed.2d 396 (1977). Plaintiffs’ statistical analyses are a sufficient basis from which the court could infer that plaintiffs had made out a prima facie case of discrimination. Plaintiffs’ unrebutted statistics, which show disparities especially in WG grade groupings 1-4, 5-8, and 9-12, are a sufficient basis from which to infer that blacks were concentrated in low level jobs and certain occupations. Plaintiffs’ unrebutted analysis of defendants’ promotion patterns is sufficient from which to infer that there was a disparity in promotions between blacks and whites at Warner Robins.

8. The court finds that plaintiffs’ statistical evidence to which defendants, for purposes of this Consent Decree, have offered no evidence in rebuttal, establishes that plaintiffs have a sufficient probability of success on the merits to warrant entry of this Decree. It was reasonable for the parties to settle the litigation by providing plaintiffs classwide promotional relief and compensation for lost promotions.

9. In this case, plaintiffs’ recovery approximates the range of possible recovery. Both the monetary relief and the 240 promotions to class members provided'for in the Consent Decree were calculated from statistical evidence.

Plaintiffs’ computer-based promotional analysis for occupational series was actual evidence that approximately 240 promotions were lost to black WG employees, i.e., statistical disparities in promotion rates were attributable to at least 234 promotions that went to whites instead of blacks. Dr. Drogin’s work appears to be a conservative statistical analysis; the court has no reason to doubt its accuracy.

10. With respect to the 3.75 million dollar class compensation fund, each increase in grade was found by plaintiffs to be worth roughly $1,000.00. Assuming an average of 1.5 grade level increase per promotion, the 240 promotions lost to blacks resulted in economic loss of $360,000.00 per year. Assuming for purposes of a rough estimate that all the 240 promotions lost to blacks were evenly distributed over the period in question, the total economic loss resulting from the 240 positions was between 3.24 and 3.6 million dollars. The actual 3.75 million dollar class compensation fund, therefore, approximates the range of possible recovery if these cases were tried on their merits.

Opinions of the Class Counsel, Class Representatives and Absent Class Members

11. The court is entitled to rely on the opinion of experienced class counsel familiar with the litigation. Cotton v. Hinton, 559 F.2d at 1330. Such reliance is particularly appropriate in this case because plaintiffs’ lead counsel, Mr. Lee, and the NAACP Legal Defense Fund have been involved in all aspects of the litigation from its inception and can be presumed to be fully informed as to the strengths and weaknesses of the parties’ positions. This court, both in certifying the class in its October 27, 1976, order and in selecting them as plaintiffs’ lead counsel in its September 2, 1980, order, has determined that plaintiffs’ lead counsel and the NAACP Legal Defense Fund counsel are adequate class counsel. (The September 2, 1980, order disposed of a motion filed by one of the original counsel to withdraw the names of NAACP Legal Defense Fund attorneys as counsel in the case. The court concluded that the LDF “will best represent the class” because of its resources, its role in carrying the primary burden of the litigation and its ability to represent the interests of the absent class members.) Among the Legal Defense Fund counsel are Ronald L. Ellis, Esq., and O. Peter Sherwood, Esq., experienced Title VII lawyers familiar with the case.

Class Members’ Objections to the Consent Decree

12. The court cannot find fault with the Decree on the basis of unsupported conjecture. It is inevitable that some class members believe that the relief obtained by their counsel through negotiation is inadequate. However, all should keep in mind that “the very essence of a settlement is compromise, ‘a yielding of absolutes and an abandoning of highest hopes.’ ” Officers for Justice v. Civil Service Comm’n, 688 F.2d at 624, quoting Cotton v. Hinton, 599 F.2d at 1330. The court views as significant the fact that only 2% of all class members have objected to the settlement.

13. Several class members objected to the number of promotions provided in the Decree and stated that the promotional relief should include more supervisory and GS positions, but produced no facts in support of their opinions. Contrary to these unsupported opinions, the evidence submitted by the parties establishes that the 240 promotions to designated positions have factual support in the record and are fair, adequate, and reasonable relief. Moreover, class members will be eligible for promotions through regular promotion procedures over and above the 240 promotions; and the Consent Decree’s procedural safeguards for class members denied promotions can be expected to increase the likelihood for nondiscriminatory promotions to all positions.

The court is unwilling to speculate on the merits of particular individual claims. Compromise is an integral part of any settlement. Nor will the court take issue with the judgment of class counsel that a settlement for classwide promotional and monetary relief was preferable to the risks of trial. The Decree’s formulas for distribution of promotional and monetary relief by factoring in greater job tenure and whether administrative charges of discrimination were ever filed, appear calculated to accord relief to those with the greatest likelihood of success on the merits. The judgment of the parties that class members with greater job tenure and those who filed charges were more likely to prove discrimination is a fair and reasonable judgment.

Objections by Non-Class Members

14. As noted above, the proposed Consent Decree has naturally provoked considerable objection from white employees of Warner Robins AFB. Since these employees have not been allowed to intervene, they are not parties to these lawsuits and thus do not have to agree to the settlement. Nevertheless, the court is required to consider whether the effect on these employees is either unreasonable or proscribed. Williams v. City of New Orleans, 729 F.2d 1554, 1560 (5th Cir.1984), quoting United States v. City of Miami, 664 F.2d 435, 441 (5th Cir.1981).

15. First, the consent decree is not “proscribed” by law. Contrary to would-be intervenors’ claims, the promotional relief of the Consent Decree is as “victim specific” as factually possible under the circumstances. The parties have fairly demonstrated that the relief is targeted to those positions actually lost by blacks. The actual victims cannot be identified due to the very nature of the Warner Robins promotion scheme, i.e., there are no applicants for promotions.

16. Second, the promotional relief does not unreasonably trammel the interests of white employees. As the statistics demonstrate, the positions to be filled by blacks should have been filled by blacks years ago. The promotions set aside for blacks will be filled within approximately two years. More importantly, the 240 promotions set aside for blacks represent only a fraction of the total number of promotions anticipated during this two-year period— 3,600 promotions will most likely take place; only 240, or 6.5%, of those are set aside for class members. The interests of white objectors are not unreasonably affected.

Conclusion

The court has carefully considered the amended Consent Decree, and is confident that the Decree is fair, adequate, and reasonable to the parties. The settlement is most definitely in the public interest.

The Consent Decree, as amended, provides a fair, adequate, and reasonable resolution of this class action controversy. FINAL APPROVAL should be and is hereby GRANTED. Fed.R.Civ.P. 23(e).

      . This statement of facts is not intended to be exhaustive or exclusive. Rather than repeat the voluminous details established by nine years of discovery, the court simply adopts the factual stipulations set forth in the jointly submitted Consent Decree and proposed Order Granting Final Approval to the Consent Decree.

      . A complete explanation of the statistical methodology used to identify the 240 wage grade positions lost by blacks can be found in the Proposed Order Granting Final Approval to the Consent Decree, ¶¶ 36-41.


source: Caselaw Access Project

author: THOMAS F. HOGAN, District Judge.

license: Public Domain

text:
    OWENS-ILLINOIS, INC., Plaintiff, v. AETNA CASUALTY AND SURETY COMPANY, Defendant.
    Civ. A. No. 82-0089.
    United States District Court, District of Columbia.
    Nov. 21, 1984.

      Paul C. Warnke, Harold D. Murry, Jr., Bryan Jay Yolles, Clifford & Warnke, Washington, D.C., for plaintiff.
    John F. Mahoney, Jr., Herbert J. Miller, James E. Rocap, III, Stephen Nightingale, Washington, D.C., for defendant.
   MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

This declaratory judgment action involves a dispute between Owens-Illinois, Inc. (“O-I”) and its excess indemnity insurer, Aetna Casualty and Surety Company (“Aetna”), concerning whether Aetna is obligated to indemnify O-I for asbestos-related claims brought against it and, if so, to what extent. Two issues are before the Court on separate motions for partial summary judgment:

(1) The “Keene” Issue: Whether this Circuit’s holding in Keene Corp. v. Insurance Company of North America, 667 F.2d 1034 (D.C.Cir.1981), cert. denied, 455 U.S. 1007, 102 S.Ct. 1644, 71 L.Ed.2d 875, reh’g denied, 456 U.S. 951, 102 S.Ct. 2023, 72 L.Ed.2d 476 (1982) is dispositive of the interpretation of the policies’ coverage provisions; and
(2) The “Per Occurrence” Issue: What constitutes an “occurrence” for purposes of the policies’ retained limit, or deductible, provisions?

I. STATEMENT OF FACTS

O-I is an Ohio corporation with its principal place of business in Toledo, Ohio. It is engaged in the manufacture and sale of a diversified line of products fabricated from various substances including glass, paper and plastic materials. (First Amended Complaint, ¶ 1.) Between the years 1948 and 1958 O-I manufactured and sold a thermal insulation product, “Kaylo,” that contained asbestos. (Affidavit of Lawrence Fitzpatrick in support of O-I’s motion for partial summary judgment, Keene issue, [hereinafter cited as “Fitzpatrick Affidavit”] ¶ 2; Aetna’s Statement of Material Facts Not in Dispute [hereinafter cited as “Aetna I”] ¶ 2.) As a result, O-I has been named in thousands of lawsuits alleging injury or wrongful death caused by exposure to the asbestos in O-I’s Kaylo product. (Fitzpatrick Affidavit, supra, ¶ 3; Aetna I, ¶ 3.) The majority of these claims allege exposure to asbestos in the late 1940s through 1958, with “manifestation” of the injuries alleged to have occurred in the mid to late 1970s and early 1980s. (Fitzpatrick Affidavit, supra, ¶ 4.) Thus, the time period between the claimants’ initial exposure and the alleged actual knowledge of bodily injury typically exceeds 20 years. (Id.)

From September 1, 1963 through September 1, 1977, O-I was continuously insured by Aetna for products liability claims under excess indemnity, or “umbrella” policies, the premiums of which have been fully paid. (Affidavit of R.S. Johnson in support of O-I’s motion for partial summary judgment, Keene issue, [hereinafter cited as “Johnson Affidavit”], ¶ 4 & Exhibits 4-14; Affidavit of Stephen L. Nightingale in support of Aetna’s motion for partial summary judgment, “Per Occurrence” issue, ¶ 2 & Exhibit A.) Although the language of these policies varied slightly over the years, the coverage provided was similar in all relevant respects.

Under these policies, O-I was self-insured for each occurrence resulting in personal injury up to the “retained limit” or “per occurrence deductible” set forth in the policies. Between September 1, 1963 and September 1, 1971, the per occurrence deductible was $100,000. From September 1, 1971 through September 1, 1977 the deductible was $250,000. Above the deductible amount, the policies provided that Aetna would cover O-I’s “ultimate net loss” up to the “aggregate annual” and “per occurrence” limits set in the policies.

In 1978, O-I began tendering asbestos-related damage claims to Aetna for indemnification. (Affidavit of Jama Cashdollar in support of Aetna’s opposition to summary judgment, Keene issue [hereinafter cited as “Cashdollar Affidavit I”], ¶ 2, Exhibits A-CC; Johnson Affidavit, supra, ¶ 5). Aetna responded that it would indemnify O-I pursuant to the terms of the policies if (1) “manifestation” of the claimant’s injury occurred during a policy year, and (2) O-I’s net loss for each claim exceeded the policy’s per occurrence deductible. (Aetna I supra, ¶ B6; Cashdollar Affidavit I, supra, Exhibits C and D.) O-I disputes each part of this position, and consequently initiated this action.

II. PROCEDURAL HISTORY

O-I filed the first motion for partial summary judgment in this case, concerning whether the insurance policies in dispute provide any coverage for asbestos claims brought against O-I. O-L asserts that this Circuit’s decision in Keene Corp. v. Insurance Company of North America, 667 F.2d 1034 (D.C.Cir.1981), cert. denied, 455 U.S. 1007, 102 S.Ct. 1644, 71 L.Ed.2d 875, reh’g denied, 456 U.S. 951, 102 S.Ct. 2023, 72 L.Ed.2d 476 (1982), is controlling on this issue. Under that decision O-I asserts that the “trigger” of coverage, the events or conditions that determined that the insurance policies apply to the asbestos claims, were the exposure of the claimants to asbestos fibers, or the continuing development of the disease after exposure, or manifestation of the injury. Consequently, O-I argues that since it was insured by Aetna at the time of exposure, or during some period of development of the disease, Aetna may be held liable under the policies even if the injury did not manifest itself during a policy term.

Aetna strenuously opposes O-I’s motion, arguing that Ohio law, rather than the Keene decision, is controlling. Aetna asserts that a material issue of fact exists under Ohio law as to whether O-I’s subjective construction of the policies was that manifestation of the injury was necessary to trigger coverage. Aetna argues, therefore, that summary judgment on this issue is precluded.

After O-I filed its motion on the Keene issue, Aetna moved for partial summary judgment on a separate issue. Aetna argues that even if coverage under the policies was triggered, by an event prior to manifestation on the injury, the retained limit provisions of the policies are clear and unambiguous, and require O-I to pay a deductible “per occurrence.” Aetna asserts that, under the terms of the policies, each asbestos claimant’s injury was a separate occurrence. Therefore, Aetna argues that O-I must pay a deductible on each asbestos claimant’s lawsuit before Aetna is obligated to indemnify O-I. As a practical matter, Aetna’s position on this “per occurrence” issue would effectively deny O-I coverage since the deductibles set in the policies are larger than the amount of any claim yet successfully brought against O-I.

O-I subsequently filed a cross-motion for partial summary judgment on the “per occurrence” issue. O-I asserts that, rather than each claimant’s exposure to asbestos constituting an occurrence, the overall injury caused by the exposure of these claimants to O-I was the result of a single occurrence, the manufacture and sale of an asbestos-containing product. O-I argues that to the extent the policies are ambiguous as to what constitutes an occurrence, the provision must be construed in favor of O-I as the insured. Therefore, O-I contends that it should be liable only for a single deductible on the total of the claims brought against it for asbestos injury.

Aetna’s opposition to O-I’s cross-motion for partial summary judgment on the per occurrence issue argues that resolution of the “per occurrence” dispute requires further discovery to develop a factual framework of the conditions that asbestos claimants were exposed to, and O-I’s “business purpose” in purchasing insurance. In effect, therefore, Aetna has retreated from its initial position asserting the absence of disputed material facts and seeking partial summary judgment on the per occurrence issue, and Aetna now opposes summary judgment on both the Keene and “per occurrence” issues. Nevertheless, the Court finds this matter ripe for summary judgment.

III. DISCUSSION

Summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. The issues before this Court concern the proper construction of excess indemnity policies. As a general rule, the construction and effect of a written contract of insurance is a matter of law to be determined by the Court. See 2 G. COUCH, INSURANCE 2d § 15.3, at 116 (1984). Where the Court decides that, as a matter of law, extrinsic evidence is inadmissible, a case is appropriately resolved by summary procedure. See Douglas Equipment Co. v. Hartford Accident & Indemnity Co., 435 F.2d 1024, 1028 (7th Cir.1970); McKeithen v. S.S. Frosta, 430 F.Supp. 899, 901 n. 2 (E.D.La.1977).

Although the Court is mindful that extrinsic evidence is often admissible to aid the Court in construing policy language, this Circuit’s decision in Keene v. Insurance Company of North America, 667 F.2d 1034 (D.C.Cir.1981), cert. denied, 455 U.S. 1007, 102 S.Ct. 1644, 71 L.Ed.2d 875, reh’g denied, 456 U.S. 951, 102 S.Ct. 2023, 72 L.Ed.2d 476 (1982), makes it clear that the construction of an insurance policy with respect to coverage of asbestos-related diseases is based on the terms of the policy, the principles embodied therein, and the expectations that the insured could have reasonably formed as an objective matter on the basis of the policy’s language. Keene, 667 F.2d at 1038 n. 3, 1041-42 and n. 12. Accord AC & S v. Aetna Casualty & Surety Co., 576 F.Supp. 936, 940-41 (E.D.Pa.1983); Commercial Union v. Pittsburgh Corning Corp. 553 F.Supp. 425, 433 (E.D.Pa.1981). Accordingly, the issues before this Court are purely legal.

For the reasons that follow, the Court finds, first, that Keene is dispositive of the interpretation of the subject policies’ coverage provisions. Hence, Aetna’s duty to indemnify O-I for asbestos claims is triggered if a policy was in effect at any time between a claimant’s initial exposure to asbestos and the manifestation of asbestos-related injury. Further, the Court finds O-I’s manufacture and sale of Kaylo a single “occurrence” for purposes of the policies’ retained limit, or deductible, provisions.

A. The Keene Issue

Asbestos manufacturers and their insurers are familiar litigants to the courts of this Circuit. In Keene the Court of Appeals for this Circuit was called upon to adjudicate the rights and obligations of Keene Corporation, an asbestos manufacturer, and its primary insurance carriers under Comprehensive General Liability Policies (CGL’s) with respect to Keene’s liability for asbestos related injuries. The Keene Court held that the policies’ “trigger” — the occurrence of injury — was a continuing process beginning with the inhalation of asbestos fibers, proceeding through the damage caused by fibers in residence in the lungs, and ending with the manifestation of an asbestos related disease. 667 F.2d at 1047. Accordingly, the Court held in Keene that any policy in effect during any point in this process covered Keene’s potential liability. Id. The Court further held that, once triggered, a policy covered Keene’s entire liability up to its stated limits, subject to the policies’ “other insurance” clauses. Id. In order to prevent the insured’s “stacking” of limits, however, the Court held that only one policy could be applied to each injury, and that Keene was to select the policy under which it was to be indemnified. Id. at 1049-50.

O-I argues that principles of stare decisis and collateral estoppel require this Court to follow the decision in Keene. Aetna counters that Ohio law, not Keene, controls the disposition of this case, and argues that under Ohio law, as enunciated in Eagle Picker Industries, Inc. v. Liberty Mutual Insurance Co., 682 F.2d 12 (1st Cir.1982), cert. denied, 460 U.S. 1028, 103 S.Ct. 1279, 75 L.Ed.2d 500 (1983), extrinsic evidence of the parties’ subjective construction of the policies is admissible to assist the Court. In particular, Aetna argues that correspondence between the parties may demonstrate that O-I itself took the position that the manifestation of injury determines the trigger of coverage, rendering summary judgment on this issue inappropriate. For the reasons that follow, the Court finds Keene controlling.

The doctrine of stare decisis compels district courts to adhere to a decision of the Court of Appeals of their Circuit until such time as the Court of Appeals or the Supreme Court of the United States sees fit to overrule the decision. See, e.g., Brewster v. Commissioner of Internal Revenue, 607 F.2d 1369, 1373 (D.C.Cir.1979); Breakefield v. District of Columbia, 442 F.2d 1227, 1229-30 (D.C.Cir.1970); 1B. J. Moore, J. Lucas, T. Currier, MOORE’S FEDERAL PRACTICE ¶ 0.402 [1], [2] (2 ed. 1983). District courts are not at liberty to resolve splits between Circuits no matter how egregiously in error they feel their Circuit to be. See Hasbrouck v. Texaco, 663 F.2d 930, 933 (9th Cir.1981). Further, stare decisis requires that a court follow its own, or its Circuit’s, earlier determination as to the law of a state in the absence of any subsequent change in the state law. Newell v. Harold Shaffer Leasing Co., 489 F.2d 103, 107 (5th Cir.1974). Accord Sprinkle v. Farm Bureau Ins. Companies, 492 F.2d 469, 471-72 (5th Cir.1974).

The Keene decision was issued against a backdrop of generally accepted principles of insurance' interpretation that find their source in state law. In Keene the Court found it unnecessary to identify the applicable state law, finding that none of the potentially applicable state laws provided specific guidance in resolving the case, and that basic principles governing the interpretation of insurance policies were the same in each state. See Keene at 667 F.2d 1041 & n. 10. These principles of insurance policy interpretation are: (1) the objective in construing the policies’ coverage of liability must be to give effect to the policies’ dominant purpose of indemnity; (2) ambiguity in an insurance contract must be construed in favor of the insured; and (3) the Court should ordinarily strive to give effect to the objectively reasonable expectations of the insured. Id. at 1041.

A searching review of Ohio law reveals that the Ohio courts have yet to decide the specific issues before this Court. However, because the basic principles underlying the Keene decision find general acceptance in Ohio precedent, this Court finds that it is bound by the decision in Keene as to what these general principles mandate. Accordingly, this Court must hold that coverage was triggered if the claimant was exposed to asbestos during the term of the policy, or if the disease was developing during the term, or when manifestation occurred.

The Court rejects Aetna's attempt to establish inconsistencies between Ohio law and the basic precepts of insurance law that guided the court in Keene. As Judge Flannery’s Order of May 30, 1982 makes clear, Ohio insurance law does not deviate from general insurance jurisprudence in any important respect or contain any nuances unique to that jurisdiction. Owens-Illinois v. Aetna Casualty and Surety Co., No. 82-89, slip op. at 2, (D.D.C. March 30, 1982). For example, the first principle embodied in Keene of construing coverage provisions to give effect to the policies’ dominant purpose of indemnity is consistent with Ohio precedent. See, e.g., Bobier v. National Casualty Co., 143 Ohio St. 215, 219, 54 N.E.2d 798, 800 (1944) (contract of indemnity should be construed in light of the purpose to be accomplished); Moss v. Travelers Ins. Co., 9 Ohio Misc. 71, 221 N.E.2d 607, 611 (1965) (policy must be construed most favorably to the insured in order to effectuate its obvious purpose); Clements v. Aetna Casualty & Surety Co., 15 Ohio Misc. 252, 236 N.E.2d 799, 801-02 (1968) (“in accord with the presumed intention of the parties, the construction should not be such as to defeat, ... the insured’s claim to the indemnity which it was his object to secure and for which he paid a premium”) (citing 30 Ohio Jur.2d Insurance ¶ 217).

The second Keene principle, to construe ambiguities in favor of the insured, is also universally accepted in Ohio. See, e.g., Travelers Indemnity Co. v. Reddick, 37 Ohio St.2d 119, 121, 308 N.E.2d 454, 455-56 (1974) (well settled that ambiguous insurance contract language to be strictly construed against insurer); Morfoot v. Stake, 174 Ohio St. 506, 507, 190 N.E.2d 573, 574 (1963) (policy open to different interpretations to be construed in favor of insured); Home Indemnity Co. v. Village of Plymouth, 146 Ohio St. 96, 101, 64 N.E.2d 248, 250 (1945) (same); Toms v. Hartford Fire Ins. Co., 146 Ohio St. 39, 42, 63 N.E.2d 909, 910-11 (1945) (well recognized in Ohio that insurance contract prepared by insurer to be liberally construed in favor of insured).

Finally, Ohio courts also utilize the reasonable expectations doctrine embodied in Keene. See e.g., Sommer v. General Insurance Co., 22 Ohio App.2d 149, 159, 259 N.E.2d 142, 146 (1970) (to deny insured right to adduce proof would defeat “the reasonable expectations of coverage of the purchaser”); Carpenter v. Gasper, 116 Ohio App. 45, 48, 186 N.E.2d 481, 484 (1962) (must consider what a reasonable person in the position of the insured would have expected); Brescoll v. Nationwide Mutual Insurance Co., 116 Ohio App. 537, 541, 189 N.E.2d 173, 175 (1961); Carter v. Bernard, 27 Ohio Misc. 165, 168, 269 N.E.2d 139, 141 (Ohio Com.Pl.1971) (any doubtful language should be construed most strongly against the surety and in favor of the indemnity which the insured had reasonable ground to expect); Wagner v. Nationwide Mutual Insurance Co., 14 Ohio Misc. 220, 222, 235 N.E.2d 741, 743 (Ohio Com.Pl.1968) (presumption that the insurer intended the insured to understand that he would be protected to the full extent that any fair interpretation would allow).

The Court rejects Aetna’s contention that Keene’s principles conflict with the Ohio principle of construing an insurance policy to effectuate the parties’ intent. The Keene rationale, in emphasizing the language of the policies and the expectations that the insured could have reasonably formed on the basis of the language, plainly seeks to ascertain and effectuate the intent of the parties in light of the policies’ purpose of indemnity. See Keene, 667 F.2d at 1041-42. Cf. Eli Lilly & Co. v. Home Insurance Co., No. 82-0669, Mem.Op. at 18 (D.D.C. September 30, 1982). As one commentator notes:

[T]he Courts have pursued two basic methods of analysis in the interpretation of insurance contracts. One involves investigating the meaning of the words themselves, while the other concerns ascertaining the intention of the parties. Although courts have often described the latter as the “polar star” or controlling element in the construction of an insurance policy, it is not always analytically feasible to or entirely rational to separate the inquiry into discrete channels of investigation and conclude that one clearly dominates the other. As a practical matter language and intent are counterpoised in a reciprocal posture____
* * * * * *
[Ljanguage used in a contract or any writing represents the drafter’s conscious preference of some terms to the exclusion of others. This act of rhetorical selection is, in and of itself, a manifestation of intent.

Comment, Liability Insurance for Insidious Disease: Who Picks Up the Tab? 48 FORDHAM L.REV. 673, 676 (1980).

Because the general principles embodied in Keene comport with Ohio law regarding the interpretation of insurance contracts, including effectuating the intent of the parties, this Court rejects Aetna’s argument that summary judgment must be denied to allow consideration of extrinsic evidence of the parties’ subjective construction of the policies. The Keene Court expressly based its decision on “the expectations that Keene could have reasonably formed as an objective matter, on the basis of the policies’ language.” Keene, 667 F.2d at 1042 n. 12 (emphasis added). Implicit in this statement is a finding that extrinsic evidence of the parties subjective intent or construction is irrelevant to the policies' interpretation. See Emons Industries, Inc. v. Liberty Mutual Fire Ins., 567 F.Supp. 335, 339 (S.D.N.Y.1983).

A review of the briefs submitted by the parties in Keene further substantiates this finding. As in the present case, the insurance companies in Keene argued that Keene’s own admissions and conduct belied its position before the Court. See, e.g., Appellee Liberty Mutual Insurance Company’s Opening Brief, at 67 (arguing that Keene acquiesced in Liberty’s manifestation approach); Appellee Hartford Accident and Indemnity Company’s Opening Brief, at 21-22 (arguing that a number of documents prepared by Keene demonstrated Keene’s specific recognition that Keene itself would bear responsibility for uninsured period); Appellee Liberty Mutual Insurance Company’s Opening Brief, at 28 (arguing that the fact that Keene threw its policies away demonstrated that no one, insurers or insured, ever imagined policies from past decades have any bearing on diseases manifest today). The Keene litigants also extensively briefed the effects to be given the insurers’ conduct and whether or not they had subjectively adopted an obligation to pay “all sums” as opposed to only prorating a share to Keene. See Appellant Keene Corporation’s Opening Brief, at 14-15, 24-27; Hartford’s Opening Brief at 23; Insurance Company of North America’s Opening Brief at 8; Amicus Curiae Armstrong World Industries, et al. Opening Brief at 15-19, Reply Brief at 8-10; Amici Curiae Federal Insurance Company and Fireman’s Fund Insurance Company’s Opening Brief at 28-31; Appellant Keene Corporation’s Reply Brief at 9-10; Liberty Mutual’s Opening Brief at 11-13. The Keene Court disregarded these arguments, thus implicitly finding the parties’ subjective constructions irrelevant. Accordingly, the constructions placed on the policies by O-I during its course of dealings with Aetna are irrelevant to the disposition of this case.

Aetna next attempts to bar application of Keene by arguing that there is a material issue of fact as to whether the purpose and principles underlying the Keene decision are present here. In particular, Aetna asserts that the reasonable expectations principle applied by the Keene court applies only where there is a contract of adhesion, and, Aetna argues, there is a material issue as to whether the contract of adhesion characterization is justified as applied to O-I. This attempt to avoid application of Keene, however, is also unavailing.

Professor Keeton, now Judge Keeton, formulated the reasonable expectations doctrine as follows: “The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.” Keeton, Insurance Law Rights at Variance With Policy Provisions, 83 HARV.L.REV. 961, 967 (1970). Although the expectations principle arose as a response to the adhesive insurance contract and is generally used in consumer cases, the principle is now being employed in varying situations with varying justifications, including situations where, as here, the insured is alleged to be sophisticated. See, e.g., Crown Cork & Seal Co., Inc. v. Aetna Casualty & Surety Co., No. 1292, slip op. at 7 (Pa.Com.Pl. August 1983) (even though parties of comparable bargaining power, if policy language unclear and court finds insured could reasonably expect coverage not explicitly within the contract terms, the ambiguity is construed in favor of coverage). See also Note, Insurers Liability in the Asbestos Disease Context— Application of the Reasonable Expectations Doctrine, 27 S.D.L.REV. 239, 253-54 (1982) [hereinafter cited as Insurer’s Liability]; Abraham, Judge Made Law and Judge Made Insurance: Honoring the Reasonable Expectations of the Insured, 67 VA.L.REV. 1151, 1153 (1981).

Not only have courts deciding coverage disputes between asbestos manufacturers and their insurers relied on the reasonable expectations principle, but some authors suggest that the apparently divergent interpretations of the Comprehensive General Liability (CGL) policy in the context of asbestos related disease are reconcilable in that each represents an attempt to honor the parties’ reasonable expectations. See Note, Insurer’s Liability, supra, 27 S.D.L.REV. at 241; Ingram, Insurance Coverage Problems in Latent Disease and Injury Cases, 12 ENVTL.L 317, 344 (1982); Note, The Insurance Problem in Asbestos Litigation: A Case for the Manifestation Theory, 57 ST. JOHN’S L.REV. 485, 506 (1983).

Finally, the Court notes that the Keene Court was presented with the argument that the reasonable expectations principle should not apply where the insured is sophisticated, see Amici Curiae Federal Insurance Company and Firemen’s Fund Insurance Company’s Opening Brief at 25-26, and therefore implicitly rejected it. See also, Crown Cork & Seal Co., Inc. v. Aetna Casualty & Surety Co., supra, at 8 n. 6 (rejecting Aetna’s argument that contra preferentum does not apply where there is relative parity in bargaining power); Commercial Union Insurance v. Pittsburgh Corning Corp., 553 F.Supp. 425, 429 (E.D.Pa.1981) (balance of economic resources does not create an exception to the rule of strict construction). But see Schering Corp. v. Home Insurance Co., 712 F.2d 4, 10 n. 2 (2d Cir.1983) (accepting Aetna’s argument). Aetna’s assertion of disputed issues of material fact must therefore fail.

As noted previously, principles of stare decisis compel adherence to a factually indistinguishable case decided by the Court of Appeals of this Circuit. E.g., Brewster v. Commissioner of Internal Revenue, 607 F.2d 1369, 1373 (D.C.Cir.1979). The policies before the Court in Keene required the insurer to “pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury ... caused by an occurrence.” Keene at 1039. Bodily injury was defined as “bodily injury, sickness or disease sustained by any person.” Id. Occurrence was defined as “an accident including injurious exposure to conditions, which results, during the policy period, in bodily injury ... neither expected nor intended from the standpoint of the insured.” Id. The policies at issue here provide that Aetna will indemnify O-I for its “ultimate net loss in excess of the applicable underlying limit which the insured becomes legally obligated to pay as damages because of personal injury ... caused by an occurrence,” and define personal injury as “bodily injury, shock, mental anguish, sickness or disease,” and occurrence as “an accident, including injurious exposure to conditions, which results, while this policy is in force, in personal injury ... neither expected nor intended from the standpoint of the insured.” Thus, the indemnification provisions here are identical to those before the Keene Court. The sole difference between the policies is that Keene dealt with primary insurers while the policies here are excess policies. This difference, however, is insignificant. Accordingly, the Keene holding is dispositive of the instant coverage dispute. See, e.g., 1B J. Moore, J. Lucas, T. Currier, MOORE’S FEDERAL PRACTICE ¶ 0.402[1] at 42-44 (2 ed. 1983) (inferior courts are not free to limit appellate court rules to the precise facts of the case).

Aetna’s duty to indemnify O-I for asbestos-related claims was therefore triggered if a policy was in effect at any point in time between a claimant’s initial exposure to asbestos and manifestation of the injury. Once triggered, a policy provides coverage for O-I’s full liability according to its terms without any proration of that liability to O-I. If more than one policy applies to a given claim, O-I may designate the policy whose limits will apply in that case but may not “stack” policy limits.

B. The Per Occurrence Issue

As noted above, the policies at issue here are excess indemnity or “umbrella” policies. Under these umbrella policies, O-I retains responsibility for any liability from, its products until the loss from one occurrence exceeds the per occurrence deductible. Above this amount, Aetna is required to indemnify O-I for its losses subject to the “per occurrence” and “aggregate annual” limits set forth in the policies.

Under this Court’s ruling as set forth above, O-I may assign its liability for asbestos-related disease to a policy if any part of the injurious process associated with asbestos occurred while that policy was in effect. The remaining issue is whether O-I’s liability arose from a single occurrence, that being O-I’s manufacture and sale of the product containing asbestos, or multiple occurrences, being each individual claimant’s exposure to asbestos. Regarding the manufacture and sale of Kaylo as the single occurrence triggering liability would require O-I to absorb a single deductible from the aggregate of claims against it, leaving Aetna to satisfy the excess liability. If each claimant’s exposure to the product must be regarded as a separate occurrence, on the other hand, O-I must absorb a deductible on each asbestos claimant’s lawsuit before Aetna is obligated to indemnify it. This “multiple occurrence” interpretation would (effectively deny O-I coverage because the deductibles are larger than the amount of any single claim successfully brought against O-I to date.

The term “occurrence” is generally defined in the policies as “an accident, including continuous or repeated exposure to conditions, which results in personal injury ... which is neither expected nor intended from the standpoint of the insured.” The policies’ “Limits of Liability” provisions [hereinafter “unifying definitional provisions”] are also relevant here. They provide in pertinent part:

Regardless of the number of ... (2) persons or organizations who sustain injury or damages, or (3) claims made or suits brought on account of personal injury ... [Aetna’s liability] resulting from any one occurrence shall be limited to the amount stated in Section 1 as applicable to “each occurrence” ... [and] “aggregate annual”____
For the purpose of determining the limit of [Aetna’s] liability, all personal injury ... arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.

Given the policies’ definition of “occurrence” and the policies’ unifying definitional provisions, the calculation of the number of occurrences must focus on the underlying circumstances which resulted in the personal injury and claims for damage rather than each individual claimant’s injury. See Michigan Chemical Corp. v. American Home Assurance Co., 728 F.2d 374, 379-80 (6th Cir.1984), (noting vast majority of courts have concluded that number of occurrences for purposes of coverage limitations determined by reference to cause(s) of the damage, and not number of injuries or claims). Accord Appalachian Insurance Co. v. Liberty Mutual Insurance Co., 676 F.2d 56, 61 (3rd Cir.1982); Champion International Corp. v. Continental Casualty Co., 546 F.2d 502, 505-06 (2d Cir.1976); Transport Insurance Co. v. Lee Way Motor Freight, Inc., 487 F.Supp. 1325, 1330 (N.D.Tex.1980); Cargill, Inc. v. Liberty Mutual Ins. Co., 488 F.Supp. 49, 53 (D.Minn.1979).

The unifying definitional provisions make it clear that the number of injuries or claims, even if temporally removed from their causes, are irrelevant when determining the number of occurrences. Accord, Michigan Chemical, supra, 728 F.2d at 379-80; Appalachian, supra, 676 F.2d at 61. “Using this analysis, the Court asks if there was but one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damages.” Id. at 61. See also, Michigan Chemical, supra, at 379 n. 5; Champion, supra, 546 F.2d at 505-06; Lee Way Motor, supra, 487 F.Supp. at 1330; Cargill, supra, 488 F.Supp. at 53.

Although the parties agree that the determination of the number of occurrences focuses on the cause, rather than the effect, of the injury, this is the extent of their agreement. Aetna instituted the initial motion for summary judgment on this issue, arguing that O-I is required to pay a deductible for each claimant’s lawsuit before Aetna is obligated to provide O-I any coverage. O-I cross-moved for summary judgment arguing that all asbestos-related personal injury alleged by claimants in the underlying suits against O-I was caused by a single occurrence, the continuous or repeated exposure to the asbestos in the Kay-lo product commercially manufactured and sold by O-I. Aetna thereupon retreated from its earlier position and it now argues that O-I’s cross-motion on this issue rests on certain factual assumptions that are either in dispute or without support in the record before the Court. First, Aetna argues that O-I “injected” a new factual issue into this case concerning O-I’s “business purpose” in purchasing insurance. Second, Aetna posits that this Court is required to examine elements such as a claimant’s time, place and length of exposure, type of product and similar factors in order to properly determine whether claims may be aggregated into a single occurrence pursuant to the unifying definitional provision. Despite Aetna’s assertions of disputed factual matters, the Court finds this issue ripe for summary judgment.

Aetna implies that the rights and obligations created by the “occurrence” provisions cannot be determined without consideration of the facts of a particular claimant’s exposure to asbestos. The Court has before it, however, the terms of the insurance policies, the fact that asbestos related disease developed after exposure to O-I’s product and the fact that O-I can be held liable for the injuries. Cf. Keene, 667 F.2d at 1038 n. 3, 1040. The Court is not aware of any facts that would come to light in an underlying claim that would be relevant to the interpretation of-the retained limit/per occurrence provisions in the context presented here. Aetna concedes that its requested factual framework does not go to the meaning of the subject provisions but to the facts in the underlying cases. Since Aetna admits that it is not known how little exposure to asbestos is required to cause disease, the Court has difficulty in discerning the relevance of these underlying facts.

More importantly, Aetna’s request that this Court stay resolution of this case until it is able to ascertain thousands or possibly tens of thousands of individual claimants’ conditions of exposure to asbestos would entail an administrative nightmare. Such a task would necessarily span several calendar years. To posit that such an undertaking is contemplated by the language of the unifying definitional provisions is a clear distortion of the policy language. Accordingly, the Court finds Aetna’s underlying “framework” irrelevant to the disposition of the present issue. Since irrelevant evidence is by definition immaterial, a proffer of it does not and cannot create an issue of material fact. Fed.R.Civ.P. 56; McKeithen v. S.S. Frosta, 430 F.Supp. 899, 905 (E.D.La.1977).

Aetna’s request for discovery of O-I’s “business purpose” in purchasing indemnity insurance is likewise an irrelevant issue of fact for purposes of summary judgment. The Keene decision has already enumerated an insured’s “business purpose” in purchasing insurance: “an exchange of an uncertain loss [the possibility of incurring legal liability] for a certain loss [the premium payment] ____ At the heart of the transaction is the insured’s purchase of certainty — a valuable commodity.” 667 F.2d at 1041.

This Circuit’s decision in Keene makes it clear that the principles embodied in the policies provide a sufficient basis for resolving this case. See Keene, 667 F.2d at 1041. In discerning these principles, the Court is to be guided by the expectations that O-I could have reasonably formed, as an objective matter, on the basis of the policies’ language. Id. at 1041-42 and n. 12. Cf. Champion International Corp. v. Continental Casualty Co., 546 F.2d 502, 505 (2d Cir.1976) (deductible provisions should be examined in light of the business purpose sought to be achieved and plain meaning of the words chosen by the parties to effect those purposes); Transport Insurance Co. v. Lee Way Motor Freight, Inc., 487 F.Supp. 1325, 1327 (N.D.Tex.1980) (same). See also Union Carbide Corp. v. Travelers Indemnity Co., 399 F.Supp. 12, 17 (W.D.Pa.1975) (terms of policy should be construed in light of the hazard insured against).

In determining O-I’s reasonable, objective interpretation of the policies, the starting point must be an examination of O-I’s expectations regarding Aetna’s promise of certainty to O-I. Such a reasonable interpretation is that the policies issued to O-I were intended to relieve O-I of the risk of liability of which O-I could not be aware when it purchased insurance. Cf. Keene, 667 F.2d at 1047. O-I did not expect, nor should it have expected, that its security would be undermined by the arrival of a proliferation of products litigation virtually unprecedented in the history of the American judicial system. If O-I were obligated to pay a deductible on each claimant’s lawsuit, O-I would be deprived of the security for which it paid. Such an interpretation would effectively emasculate the coverage purchased by O-I since no individual claim exceeds the amount of the deductible. On the other hand, the single occurrence interpretation maintains O-I’s reasonable expectations.

As discussed previously, the policies’ definition of occurrence and unifying definitional provisions focus on the cause of injury. Therefore, the Court’s inquiry is whether there was one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damage. E.g., Appalachian, supra, 676 F.2d at 61. Analysis should focus on “the underlying circumstances which resulted in the claim for damages.” Champion, supra, 546 F.2d at, 505-06. Here, the underlying circumstance that gave rise to the claims for damages was O-I’s manufacture and sale of a hazardous asbestos containing product. O-I was insuring against its liability for personal injuries arising out of its products. O-I’s liability in the underlying suits is premised on the claimants’ submission of proof that among the asbestos fibers that he inhaled was an asbestos fiber from O-I’s “Kaylo.” See, e.g. Borel v. Fibreboard Paper Products, 493 F.2d 1076, 1096 (5th Cir.1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974) (holding asbestos manufacturers jointly and severally liable for asbestos related diseases that were caused, in part, by its products). It is undisputed that all suits brought by all claimants share a common feature: each claimant alleges at least one exposure to O-I’s asbestos-containing product. See Affidavit of John S. Backer in Support of Aetna’s Opposition to Partial Summary Judgment, “per occurrence” issue.

. An examination of the policies’ large annual and per occurrence limit provisions also supports the conclusion that, when O-I purchased the policies, the parties reasonably expected that O-I would be required to pay only one deductible for claims like those resulting from asbestos-related injury. The insurance package purchased by O-I in 1972, for example, provides for a total limit of $20 million for each occurrence, an aggregate annual limit of $20 million and a per occurrence deductible for products of $250,000. If, as Aetna initially argued, each separate claim constituted one occurrence, then Aetna’s limit of liability provisions would be rendered meaningless as it strains the imagination to conceive of a single claim that would generate $20 million of damage. On the other hand, it is reasonably foreseeable that a manufacturer, who is principally engaged in the manufacture and sale of glass containers, would be involved in a causative event producing multiple injuries and resulting in total damages of $20 million or more.

Finally, the single occurrence characterization of all personal injury arising out of exposure to O-I’s asbestos-containing Kay-lo product is confirmed by courts that have addressed similar disputes concerning per occurrence deductibles. See, e.g., Champion International Corp. v. Continental Casualty Corp., 546 F.2d at 505-06 (2d Cir.1976) (insured’s sale and subsequent distribution of defective panels to 1400 claimants single occurrence under unifying definitional provision); Transport Insurance Co. v. Lee Way Motor, 487 F.Supp. 1325, 1330-31 (N.D.Tex.1980) (pattern and practice of discrimination single occurrence); Cargill, Inc. v. Liberty Mutual Insurance, 488 F.Supp. 49 at 53 (D.Minn.1979) (production of defective medium for growing antibiotics single occurrence despite separate sales of defective product and numerous “batches” affected); Wilkinson & Son, Inc. v. Providence Washington Insurance Co., 124 N.J.Super. 466, 471, 307 A.2d 639, 642 (1973) (contractor damaging several apartments by tracking paint on carpets single occurrence); Southern International Corp. v. Poly-Urethane Industries, Inc., 353 So.2d 646, 648 (Fla.Dist.Ct.App.1977) (contractors damaging several different condominiums while applying sealant to each roof single occurrence).

In sum, the allocation of rights and obligations established by the insurance policies would be undermined if O-I’s coverage is subject to multiple deductibles. The Court finds that in order to preserve O-I’s reasonable expectations, the manufacture and sale of Kaylo must be regarded as the single occurrence triggering liability for asbestos-related injury. The Court concludes, therefore, that O-I’s coverage under a policy for asbestos-related claims is subject to payment of a single deductible. “Occurrence” is interpreted to mean all personal injury arising out of the asbestos contained in O-I’s Kaylo products. CONCLUSION

In view of the foregoing, there being no genuine issue as to any material facts and O-I being entitled to judgment as a matter of law on both the Keene and per occurrence issues, the Court finds that summary judgment must be granted on both of O-I’s motions.

APPENDIX

POLICY NO. 02XS 7525SCA (9/1/71-9/1/72)

[Section 1 — Declaration sets forth policy's Limits of Liability as (1) “Each Occurrence” — $20,000,000; (2) “Aggregate Annual” — $20,000,000; (3) “Retained Limit” — $50,000]
* * * * * *

2.1 COVERAGE. The company will indemnify the insured for ultimate net loss in excess of the applicable underlying limit which the insured shall become legally obligated to pay as damages because of

A. Personal Injury,
B. Property Damage, or
C. Advertising Offense
to which this policy applies, caused by an occurrence anywhere in the world,

4.1 Regardless of the number of (1) insureds under this policy, (2) persons or organizations who sustain injury or damages, or (3) claims made or suits brought on account of personal injury, property damage or advertising offense, the company’s liability for ultimate net loss resulting from any one occurrence shall be limited to the amount stated in Section 1 as applicable to “each occurrence”; provided, however, that the company’s liability shall be further limited to the amount stated in Section 1 as “aggregate annual” with respect to all ultimate net loss because of personal injury or property damage which occurs during each annual period while this policy is in force commencing from its effective date, and arises out of (1) the products hazard or the completed operations hazard or (2) occupational diseases of employees of the insured, such limit applying separately to (1) and (2).

For the purpose of determining the limit of the company’s liability, all personal injury, property damage and advertising offense arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.
* * * * * *

5.3 “applicable underlying limit” means (a) the amount of the applicable limits of liability of the policies of Underlying Insurance as stated in Section 1, or the amount stated in Section 1 as the Retained Limit, whichever is the greater, less the amount or amounts, if any, by which any aggregate limit so stated has been reduced solely by payment of claims in respect of personal injury, property damage or advertising offense which occurs while this policy is in force, or

(b) if the insurance afforded by such policies of Underlying Insurance is inapplicable to the occurrence, the amount stated in Section 1 as the Retained Limit; ...
* * * * * *

5.10 “occurrence” means an accident, including injurious exposure to conditions, which results, while this policy is in force, in personal injury, property damage or advertising offense which is neither expected nor intended from the standpoint of the insured;

5.11 “personal injury” means bodily injury, shock, mental anguish, sickness or disease ... except with respect to injury occurring in the course of the named insured’s advertising activities, injury arising out of the publication or utterance of a libel or slander or of other defamatory or disparaging material, or a publication or utterance in violation of an individual’s right of privacy.

5.14 “ULTIMATE NET LOSS” MEANS THE SUM ACTUALLY PAID OR PAYABLE IN CASH IN THE SETTLEMENT OR SATISFACTION OF ANY CLAIM OR SUIT FOR WHICH THE INSURED IS LIABLE EITHER BY ADJUDICATION OR SETTLEMENT WITH THE WRITTEN CONSENT OF THE COMPANY, AFTER MAKING PROPER DEDUCTION FOR ALL RECOVERIES AND SALVAGES COLLECTIBLE, AND INCLUDES ALL LOSS EXPENSES AND LEGAL EXPENSES (INCLUDING ATTORNEYS FEES, COURT COSTS, AND INTEREST ON ANY JUDGMENT OR AWARD) INCURRED BY THE INSURED IN ANY SUCH CLAIM OR SUIT, BUT EXCLUDES ALL SALARIES OF EMPLOYEES AND OFFICE EXPENSES OF THE INSURED OR THE COMPANY SO INCURRED.

6.5 When Loss Payable. The company’s liability under this policy for ultimate net loss with respect to any occurrence shall not attach until the amount of the applicable underlying limit has been paid by or on behalf of the insured on account of such occurrence. The insured shall make claim for any loss under this policy as soon as practicable after

(a) the insured shall have paid ultimate net loss in excess of the applicable underlying limit with respect to any occurrence or
(b) the insured’s obligation to pay such amounts shall have been finally determined either by judgment.against the insured after actual trial or by written agreement of the insured, the claimant and the company.
Claim for any subsequent payments made by the insured on account of the same occurrence shall be similarly made. All losses covered by this policy shall be due and payable by the company within thirty days after they are respectively claimed and proven in accordance with the terms of this policy.

      . On or about May 1, 1958, O-I sold its "Kaylo” manufacturing operations and thereafter did not manufacture or sell any product containing asbestos. (Fitzpatrick Affidavit, ¶ 2.)

      . O-I was also insured by Aetna under an excess indemnity policy from September 1, 1960 to September 1, 1963. That policy, however, is not the subject of O-I’s present motions for summary judgment. See, infra, footnote 7 and accompanying text.

      . There is one exception. For the policy years 1969 to 1971, Aetna’s duty to indemnify O-I did not include defense costs. The Court finds, however, that the differences between the policies do not warrant different interpretations with respect to the issues involved in this case. Cf. Keene, supra, at 1039 n. 6.

      . The coverage language of the 1971 policy is typical. See Appendix ¶ 2.1.

      . See, e.g., Appendix ¶ 5.14.

      . The aggregate annual and per occurrence limits were the same within each policy, and ranged from $20 million under the 1963-1966 policy to $50 million under the 1976-1977 policy. These provisions are not at issue here.

      . Since the parties’ insurance agreement effective September 1, 1960 expressly provided that "manifestation" of the injury triggered coverage, it is not included in O-I’s motions.

      . For a discussion of previous disputes between asbestos manufacturers and their insurers, as well as among a manufacturer’s various insurers, see, e.g., Note, Adjudicating Asbestos Insurance Liability: Alternatives to Contract Analyses, 97 HARV.L.REV. 739 (1984); Note, Asbestos Litigation: The Insurance Coverage Question, 15 IND.L.REV. 831 (1982).

      . Like O-I policies with Aetna, the policies at issue in Keene clearly provided that the “injury,” and not the "occurrence” that causes it, must fall within a policy period for coverage to be triggered. Keene, 667 F.2d at. 1040. In the usual case of injury, both the occurrence and injury transpire simultaneously, or, at least in close temporary proximity to one another. Id. In cases involving asbestos-related disease, however, the “occurrence" that causes the injury takes place substantially before the manifestation of the ultimate injury. Further, medical evidence demonstrates that latent injury occurs before the diseases manifest themselves. Accordingly, determining the trigger, or time of injury, presents difficult problems of contractual interpretation in the area of asbestos-related diseases. Id.

      . O-I's collateral estoppel assertion rests on the fact that Aetna was one of the defendant insurers in Keene. Because the Court finds Keene dispositive under principles of stare decisis, it does not address O-I’s collateral estoppel arguments.

      . Jurisdiction in this case exists under 28 U.S.C. § 1332 by virtue of diversity of citizenship between O-I and Aetna. The parties and the Court agree that Ohio law is the applicable state law as it is the state with the more substantial interest in the resolution of these issues. See Fowler v. A & A Co., 262 A.2d 344, 348 (D.C.App.1970); Stevens v. American Service Mutual Ins. Co., 234 A.2d 305, 309 (D.C.App.1967).

      . It should be noted that other circuits dealing with precisely the same issue as the Keene court have reached different results, with the First Circuit’s adopting the "manifestation theory” advocated by Aetna in this case. See Eagle-Picher Industries v. Liberty Mutual Insurance Company, 682 F.2d 12, 23 (1st Cir.1982), cert. denied, 460 U.S. 1028, 103 S.Ct. 1279, 75 L.Ed.2d 500 (1983) (policy triggered by claim that asbestos related disease has manifested itself during the policy period). The Eighth Circuit, contrary to both Eagle-Picher and Keene, has held that exposure alone triggers coverage. See Insurance Company of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212, 1225 (6th Cir.1980), cert. denied, 454 U.S. 1109, 102 S.Ct. 686, 70 L.Ed.2d 650 (1981), reh'g denied, 455 U.S. 1009, 102 S.Ct. 1648, 71 L.Ed.2d 878 (1982). See also Porter v. American Optical Corp., 641 F.2d 1128, 1145 (5th Cir.1981) (rejecting manifestation theory and adopting Forty-Eight’s injurious exposure holding). As the Sixth Circuit noted in Forty-Eight, each of these different theories has its "flaws and anomalies” resulting in no truly satisfactory solution to the issue. Id. at 1226. Nevertheless, Keene is the law of this Circuit, and this Court is therefore bound by that decision; however, the serious social problem presented by these many claims cry out for legislative resolution, not court imposed socioeconomic solutions.

      . This key footnote was added, sua sponte, some two weeks after the opinion was released, subsequent to the filing of a petition for reconsideration.

      . For the same reasons, the Court also rejects Aetna's contention that O-I is estopped from "disavowing its earlier contract interpretation."

      . Adhesion contracts have been defined as standard form contracts, offered on a take it leave it basis by one party to a second party with much less bargaining power. Note, A Common Law Alternative to the Doctrine of Reasonable Expectations in the Construction of Insurance Contracts, 57 N.Y.U.L.REV. 1175, 1178 (1982).

        . See supra, Appendix (setting forth provisions of 1971 policy).

      . Generally, an insured will carry primary insurance to cover initial liability. Here, however, O-I was "self-insured" for this amount.

      . See Appendix ¶ 5.10 (setting forth typical definition of "occurrence).

      . See Appendix ¶ 4.1 (setting forth typical “Limits of Liability” provision).

      . See Special Project, An Analysis of the Legal, Social and Political Issues Raised by Asbestos Litigation, 36 VANDER.L.REV. 573, 577-80 (1983) (noting that approximately 30,000 individual plaintiffs have filed suits against asbestos manufacturers since 1973, and experts predict that plaintiffs will file an additional 500 suits each month).

      . This definition of "ultimate net loss” is found in endorsement 5 to each of the policies.