Presented by the Asbestos and Mass Tort Litigation Practice Group

Legal Updates for Toxic Torts Litigation - March 2019

March 19, 2019

Edited by Timothy D. Rau, Esq.

Equipment Manufacturers Liable for Replacement Parts Under Maritime Law, SCOTUS Says

By Joshua Scheets, Esq. and Carol Vanderwoude, Esq.

The United States Supreme Court weighed in on the bare metal defense in an opinion issued today in the case of Air and Liquid Systems Corp. v. Devries, No. 17-1104. In a 6-3 decision, with Justice Kavanaugh writing for the Court and Justice Gorsuch dissenting (with Justices Thomas and Alito joining the Dissent), the US Supreme Court held that a manufacturer of Naval equipment can be liable for injuries resulting from exposure to asbestos through working with or around replacement components such as packing or gaskets in cases where maritime law applies. In so doing, the so-called “bare metal defense” has been effectively eliminated as a means for equipment manufacturers to shut down asbestos claims focusing on these components.

The holding stems from an appeal of two separate cases where the respective plaintiffs worked on equipment such as pumps, valves, turbines, etc., on Naval vessels. Both cases were dismissed at the trial court level and these consolidated appeals followed.

In the underlying cases, the plaintiffs (respondents in the Supreme Court proceeding) alleged they contracted cancer from asbestos exposure on Navy ships to materials the Navy added to defendants' "bare metal" products aboard the ships. The Court reviewed the Third Circuit’s holding that companies can be liable—“at least in the context of a negligence claim”—for plaintiffs’ asbestos exposures from materials the Navy added, if “the facts show the plaintiff’s injuries were a reasonably foreseeable result of the [defendants’] failure to provide a reasonable and adequate warning.” In re: Asbestos Prods. Liab. Litig. (No. VI), 873 F.3d 232, 234, 240 (3rd Cir. 2017). The Third Circuit reached its holding based on its view that “the special solicitude for the safety and protection of sailors”—which counsels that “it is better ‘to give than to withhold the remedy’”—is controlling. Id. at 238.

The Supreme Court rejected the Third Circuit’s foreseeability standard, but it also rejected the bare metal rule. Instead, the Court held that liability exists where the defendant’s product requires incorporation of asbestos, the defendant knows or has reason to know that the integrated product is dangerous for its intended use, and the defendant has no reason to believe the product’s users will realize that danger.

The new maritime duty applies in situations where the equipment manufacturer knows or should know that the fully integrated product will likely be dangerous for the end user, and where the manufacturer has no reason to believe that the end user will realize the danger. The Court began its legal analysis by recognizing the elementary tort law principle of a “duty to exercise reasonable care” where one’s actions create a risk of injury to another. (p.5, citing Restatement Third). Applying this principle to a manufacturer, the manufacturer has a “general duty of care,” including a duty to warn about any dangers associated with the normal use of its product, where the manufacturer has no reason to believe that the user will realize the danger.

The mere foreseeability that the equipment will be used with the asbestos-containing component is not enough to trigger the duty. Instead the duty is triggered when the product “requires incorporation” of the component and the manufacturer has “reason to know that the integrated product” likely presents a danger through its normal use. Id. at 6 (emphasis in original). In fact, a manufacturer could be liable even if it does not incorporate the asbestos-containing component into the equipment where the equipment requires the component. Id. at 6.

A product “requires” incorporation of the component where 1) the manufacturer specifies or directs that the component be used in or incorporated into the equipment; 2) the manufacturer makes the equipment with that asbestos-containing component, which the manufacturer knows will have to be replaced with a similar component; or 3) where the equipment would be useless without the asbestos-containing component.

The Supreme Court’s holding places a focus on what equipment manufacturers knew about the risks of their components and when they became aware of those risks. For defendants, the next battleground may be to look closely at the information specific to the actual components involved, i.e., the level of risk known or associated with a gasket or packing versus thermal insulation products.

The Court remanded for the district court to apply this new test to the facts of the case.

A copy of the Opinion can be obtained through the following link: https://www.supremecourt.gov/opinions/18pdf/17-1104_2co3.pdf

_{The material in this law alert has been prepared for our readers by Marshall Dennehey Warner Coleman & Goggin. It is solely intended to provide information on recent legal developments, and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.}

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