Complex Litigation

No Liability for Another's Asbestos Products

By Michael Hoenig - New York Law Journal - February 17, 2012

In our October 2011 column, "Courts Shoot Down Asbestos Causation Theory,"1 we reported that waves of asbestos litigation with claimants alleging they had asbestosis, lung cancer or mesothelioma drove many corporations into bankruptcy. The U.S. Supreme Court, recognizing the existence of an "asbestos-litigation crisis" years ago, urged creation of a national dispute-resolution scheme,2 but Congress failed to respond. A Congressional Budget Office estimate in August 2005 posited that some 322,000 asbestos bodily injury cases were pending in state and federal courts.

In 1982, some 300 companies, mainly producers of asbestos and asbestos-containing products, were targeted as defendants. But, as these defendants were felled and waves of new lawsuits spread, companies farther removed from direct production, said now to number over 8,500 defendants, were sued. A well-known plaintiff's lawyer described the litigation as an "endless search for a solvent bystander." To deal with swollen case dockets, many courts over the years adopted case handling procedures that, while innovative and perceived as necessary, sometimes made mass-production factories out of halls of justice.

As the litigation waves moved away from asbestos producer defendants to target many companies farther removed from direct production, the expedient mass case handling procedures adopted by courts to rush cases through the system collided with demands for more careful, more deliberate judicial consideration of factual, legal and procedural issues raised by defendants who did not manufacture asbestos. They now raised defenses that were normal for remote "deep pocket" targets. Healthy companies more recently named in lawsuits because of tangential connections to asbestos-containing products or their use started to dig in and demand case handling protections accorded to all other litigants. Shocked by curtailed, so-called "rolling discovery" techniques, by "standing orders" from outdated, bygone years dictating that routine motions could not be made, by joinder into consolidated trials involving separate plaintiffs and loads of other defendants, and other techniques they associated with "turnstile justice," the newer defendants sought to better level the playing field.

Some courts, hardened and ossified by decades of hard-core asbestos litigation, resisted the newcomers' insistence on a more deliberate, individualized pace of case handling practices. But, as new judges took on the dreaded asbestos caseload, and, as advocacy by newcomers sharpened, a renewed focus emerged on the part of some to try to look at cases in line with traditional substantive and procedural rules. Leading this charge of "taking another look" at asbestos litigation as more remote defendants are sued, are those who ask courts to "gatekeep" experts for reliability of their opinions, methodologies and foundational underpinnings. Reliability requirements under Daubert and Frye tests have forced many courts to scrutinize more carefully purported proofs of defect and causation. Indeed, our October column analyzed recent court decisions shooting down the so-called "any fiber," or "single fiber" or "any exposure" theory of causation.3

Here we report on a new spate of court decisions rejecting yet another attempt by savvy, ever-creative, ever resourceful, ever-persistent claimants' lawyers to expand the pool of solvent deep-pocket defendants. One of the new decisions is O'Neil v. Crane Co.,4 issued last month by the California Supreme Court on Jan. 12. Another is Conner v. Alfa Laval Inc.,5 an Eastern District of Pennsylvania federal court decision under maritime law but evaluating the legal issues under the common law of products liability. The Conner opinion was issued on Feb. 1, 2012. These cases and others before them6 confront the issue whether a product manufacturer should be liable for injuries caused by adjacent products or replacement parts that were made by others and used in conjunction with the defendant's product. Sometimes, the claim is framed as a design issue; often, it is pled as a failure to warn theory.

California Decision

In O'Neil, the California Supreme Court's unanimous decision issued last month, plaintiff formerly served on an aircraft carrier. He brought products liability claims against Crane Company and Warren Pumps, which manufactured equipment used in the ship's steam propulsion system. Pursuant to Navy specifications, asbestos insulation, gaskets and other parts were used with the defendant manufacturers' equipment, some of which was originally supplied by the defendants. Patrick O'Neil, however, worked on the ship some 20 years after the defendants supplied the equipment and original parts. There was no evidence that defendants made any of the replacement parts to which plaintiff was exposed. Nor was there evidence that defendants made or distributed asbestos products to which O'Neil was exposed.

The California court held that the defendant manufacturers were not liable for the harm caused by asbestos products they did not manufacture or distribute. As to the design defect claim, the court observed that "strict products liability in California has always been premised on harm caused by deficiencies in the defendant's own product." Further, "the defective product…was the asbestos insulation, not the pumps and valves to which it was applied after defendants' manufacture and delivery."

The California court likewise rejected plaintiff's failure-to-warn claim. Plaintiff urged a strict liability for failing to warn about the hazards of the release of asbestos dust surrounding defendants' products. This duty, plaintiff argued, arose from the fact that it was "reasonably foreseeable" that defendants' products would be used with asbestos insulation. However, said the court, California law does not impose a duty to warn about dangers "arising entirely from another manufacturer's product, even if it is foreseeable that the products will be used together."

The California court indicated that policy considerations precluded any expansion of liability. Placing an obligation to compensate on those whose products caused plaintiff no harm "would exceed the boundaries established over decades of product liability law." The policy driving product liability confirms that manufacturers in the chain of distribution can be liable only for harm caused by their own products. That party is in the best position to absorb the costs of liability into the costs of production. This policy also militates against holding manufacturers liable for harm caused by asbestos products they did not manufacture or distribute because those manufacturers cannot account for the costs of liability created by third parties' products. It is unfair to require manufacturers of nondefective products to shoulder a burden of liability when they derived no economic benefit from the sale of the products that injured the plaintiff.

The Washington Supreme Court in Simonetta v. Viad Corp.7 ruled in 2008 that a former Navy machinist could not recover against the successor to the manufacturer of an evaporator used to desalinize water on a ship for exposure to asbestos-containing parts. The evaporator required use of asbestos-containing parts to function, but the asbestos was not manufactured, provided or installed by the defendant. The court viewed the asbestos-containing components to be the harm-causing product, not the evaporator. The court said that state precedent did not support extending strict liability for failure to warn to those outside the chain of distribution of a product.

Warnings Claim

In a companion case, Braaten v. Saberhagen Holdings,8 the Washington Supreme Court took the Simonetta ruling a step further. The issue was "whether manufacturers were required to warn of the danger of exposure to asbestos in packing and gaskets in their products if they originally included in their products asbestos-containing packing or gaskets manufactured by others."9 Plaintiff was a pipefitter aboard Navy ships who contracted mesothelioma. While the manufacturers provided pumps and valves to be used on the ships, it was the Navy that insulated the products with asbestos-containing insulation. The manufacturers did not provide the insulation but, in some cases, the original products contained asbestos components when delivered to the Navy.

Plaintiff failed, however, to show that he was exposed to any asbestos products manufactured by defendants. Relying on the policy underlying products liability, the court said, "a manufacturer does not have an obligation to warn of the dangers of another manufacturer's product." The court reinstated summary judgment for defendants.

In Surre v. Foster Wheeler, LLC,10 a Dec. 20, 2011, a Southern District of New York decision by Second Circuit Judge Denny Chin, a boiler manufacturer was held not liable for failure to warn when the manufacturer "did not place into the stream of commerce the asbestos to which [the plaintiff] was exposed." The court reasoned that, generally, a manufacturer has no duty to warn against defects in third-party products so long as the manufacturer had no control over the production of the defective product and did not place it into the stream of commerce.

Citing and quoting from Rastelli v. Goodyear Tire & Rubber Co.,11 a New York Court of Appeals decision in 1992, Judge Chin noted that there is no duty to warn where defendant "did not contribute to the alleged defect in the product, had no control over it, and did not produce it." In Rastelli, a multipiece wheel rim exploded during a tire change. Plaintiff sued Goodyear, the tire manufacturer, arguing that Goodyear should have warned about the inherent dangers of multipiece rims because its tires were compatible for use with such rims. The Court of Appeals refused to impose such a duty. Rastelli was cited by the California Supreme Court in O'Neil as a holding "in accord" with California law.

In Conner v. Alfa Laval Inc.,12 just weeks ago, a Pennsylvania federal court held that a manufacturer is not liable for harm caused by asbestos products that it did not manufacture or distribute. In applying maritime law, the court reviewed and analyzed the common law of products liability, noting the recent O'Neil decision in California as well as the Washington state cases (Braaten and Simonetta) as well as many others. The court noted that the policy motivating products liability law weighs against holding manufacturers liable for harm caused by third parties' asbestos products.

Additionally, a U.S. Court of Appeals for the Sixth Circuit admiralty decision in 2005, Lindstrom v. A-C Prod. Liab. Trust,13 affirmed a grant of summary judgment to multiple defendants because a manufacturer cannot be responsible for a third party's asbestos products. There, a merchant seaman claimed he was exposed to asbestos while replacing gaskets on pumps manufactured by a defendant but the replacement gaskets themselves were not manufactured by the defendant. The federal district court in Conner "adopted" Lindstrom and so held under maritime law.

Conclusion

Asbestos litigation, over the decades, has taken products liability substantive law, case handling procedures, trial practice and evidence well beyond then-existing frontiers. Responsive to creative, persuasive and resourceful claimants' counsel, sensitive to the plight of numerous seriously injured plaintiffs, fearful of clogged court dockets and institutional paralysis, many courts rushed headlong to create systems that would force settlements and penalize those defendants who chose trial by saddling them with onerous conditions.

Many bankruptcies later, however, the new waves of asbestos litigation now reach out farther to more remote defendants, and often stretch proofs of exposure and causation in seeking to cast the broader liability net. The recent decisions reported here and in our October 2011 article reflect that bedrock evidentiary and products liability principles and the policies that underlie them ought not be compromised even though the claim is labeled as one involving "asbestos."

Michael Hoenig is a member of Herzfeld & Rubin.

Endnotes

1. New York Law Journal, Oct. 19, 2011, p. 3.

2. Amchem Products Inc. v. Windsor, 521 U.S. 591, 597-598 (1997).

3. Supra n. 1.

4. 53 Cal. 4th 335, 2012 Cal. LEXIS 3 (Cal. Sup. Ct. Jan. 12, 2012).

5. 2012 U.S. Dist. LEXIS 11812 (E.D. Pa. Feb. 1, 2012).

6. See, e.g., Surre v. Foster Wheeler, LLC, 2011 U.S. Dist. LEXIS 147731, 2011 WL 6382545 (S.D.N.Y. Dec. 20, 2011) (Judge Denny Chin); Braaten v. Saberhagen Holdings, 198 P. 3d 493 (Wash. 2008) (en banc); Simonetta v. Viad Corp., 197 P. 3d 127 (Wash. 2008) (en banc).

7. 197 P.3d 127 (Wash. 2008) (en banc).

8. Supra n. 6.

9. 198 P.3d at 501.

10. Supra n. 6.

11. 79 N.Y.2d 289, 297 (1992).

12. 2012 U.S. Dist. LEXIS 11812 (E.D. Pa. Feb. 1, 2012).

13. 424 F.3d 488 (6th Cir. 2005).

125 Broad Street, New York, New York, 10004 - Phone: 212-471-8500 - Fax: 212-344-3333
©2004 -2014 Herzfeld & Rubin, P.C.