Legal Updates for Toxic Torts Litigation - February 2019

New Jersey Asbestos Case Review 2018

By Paul C. Johnson, Esq.

In 2018, the New Jersey Appellate Division crafted lengthy opinions in two significant asbestos cases, one of which, Whelan v. Armstrong International, Inc., 455 N.J. 569 (2018)¹ , was published. Neither of these opinions benefited defendants.

Bare Metal – Barely There

In Whelan, the Appellate Division considered anew “whether a manufacturer has a duty to warn about the risk of harm from exposure to asbestos-containing replacement parts integral to the function of the manufacturer’s product, even if the manufacturer did not fabricate or distribute the replacement part.” Colloquially known as the “bare metal” defense, equipment manufacturers had successfully argued that they simply manufactured metal parts, such as pumps or valves, and they did not fabricate asbestos-containing components, such as gaskets or packing material. The equipment manufacturers contended they did not have a duty to warn foreseeable users about any dangers posed by any asbestos-containing component because they did not manufacture that part. A manufacturer should not be responsible for products manufactured by someone else.

In 2014, the Appellate Division previously recognized that a manufacturer owed a duty to warn about potential dangers from its products as originally manufactured and from component parts originally used on those products. Hughes v. A.W. Chesterton Co., 435 N.J.Super. 326 (App. Div. 2014). The Hughes court, however, declined to extend liability to the equipment manufacturer for replacement parts. An equipment manufacturer owed liability only if a person’s injuries arose solely out of the originally manufactured product and any original asbestos-containing component parts it may have included.

The Hughes court limited the definition of “product” to the product as originally manufactured and distributed. This definition did not include replacement parts installed as part of regular maintenance. In most situations, those replacement parts were not manufactured or supplied by the original equipment manufacturer.

The Whelan court disagreed with the co-equal Appellate Panel in Hughes on the definition of a “product.” In Whelan, the Appellate Division believed that the Hughes definition of a “product” was inconsistent with “deep rooted principles of product liability under New Jersey law.”

The Whelan court believed that a “product” is the “complete manufactured item as delivered by the manufacturer to the consumer, not just the asbestos contained in one of the product’s components.” Consequently, if one of the product’s components must be replaced as part of regular maintenance, then the definition of “product” must also include the asbestos-containing replacement part subsequently used, even if that part was neither made nor supplied by the original manufacturer of the product.

The Whelan court opined that it was foreseeable at the time the defendants placed products into the marketplace that asbestos-containing component parts of the product would be replaced with similar asbestos-containing parts. Replacement of the asbestos did not substantially alter either the injury-producing element of the product or the defect.

As a result, an equipment manufacturer has a duty to warn in strict liability if a plaintiff can show:

• The manufacturer’s product as marketed to the end user contained asbestos-containing components;
• The asbestos-containing components were integral to the function of the product; and
• The manufacturer was reasonably aware its product would require periodic and routine maintenance involving the replacement of asbestos-containing component parts with other asbestos-containing component parts.

Once the plaintiff has proven these elements to impose a duty to warn on the defendant, the plaintiff must still demonstrate exposure to asbestos from that defendant’s product with sufficient “frequency, regularity and proximity” in order to demonstrate medical causation between that specific asbestos exposure and the injury or disease.

Manufacturers in this situation should defend by demanding non-speculative evidence on the three elements identified by the court. The plaintiff must present evidence that the original product contained asbestos-containing components, that those components were “integral” to the function of the product, and that the replacement part actually contained asbestos.

The plaintiff must also present evidence that the manufacturer was aware the routine maintenance of the product would require the continued use of asbestos-containing replacement parts. This means the plaintiff's lawyers will need to present evidence from the manufacturer, whether that is prior deposition testimony or other admissible testimony. The plaintiffs will need to come forward with this evidence in order to defeat a motion.

Moreover, expert testimony may arguably be required to demonstrate that asbestos-containing components were “integral” to the function of the product as this is not information generally within the knowledge of the average juror.

Pack Your Bags, You’re Heading to Middlesex County

In Rowe v. Bell & Gossett Company, (unpublished opinion) (A-4530-14T2)², the Appellate Division evaluated the evidentiary proofs required to allocate liability to a settled defendant at the time of trial—to pin a percentage of fault on the “empty chair.” Merely presenting a settled defendant’s answers to interrogatories or prior deposition transcripts from their corporate representatives without a sufficient demonstration of unavailability may no longer suffice. According to Rowe, the New Jersey Rules of Evidence exclude answers to interrogatories and prior deposition testimony as hearsay. Per Rowe, a defendant at trial must exhaust all reasonable means to procure live testimony from a corporate representative from each of the settled defendants.

In Rowe, the trial court permitted the sole remaining defendant at trial, Universal Supply, to rely upon answers to interrogatories and prior deposition testimony from each of the settled defendants as evidence to allocate liability to those settled defendants.

The Appellate Division reversed the trial court, initially noting that New Jersey Court Rule 4:16-1(b), pertaining to the use of answers to interrogatories, and New Jersey Rule of Evidence 803(b)(1), pertaining to statements made by a party-opponent, both require that any prior out-of-court statement must be offered against the statement maker. In this case, the court believed that Universal could use the interrogatory answers and prior deposition transcripts against the settled defendants only. For evidentiary purposes, the settled defendants were no longer parties and Universal Supply no longer had any viable cross claims against them. As such, any statement by those settled defendants could not, by definition, be used by Universal Supply against them.

The Appellate Division believed that Universal Supply could only use these prior statements from the settled defendants as statements against the plaintiff in order to reduce the potential liability of Universal Supply to the plaintiff. Since the plaintiff was not the “statement maker,” the Appellate Division concluded the settled defendant’s prior statements constituted inadmissible hearsay. Universal Supply, therefore, could not rely upon the prior answers to interrogatories or deposition testimony from the settled defendants to allocate liability to the settled defendants at trial.

Moreover, the Appellate Division opined that Universal Supply failed to diligently pursue efforts to procure live testimony from the settled defendants and failed to demonstrate the settled defendants were “unavailable” for trial. The court required Universal Supply to demonstrate due diligence in ascertaining the unavailability of the settled defendants by showing that all reasonable means to procure their trial attendance had been exhausted.

Universal Supply had issued Notices in Lieu of Subpoena to each of the settled defendants prior to trial. Universal Supply, however, failed to judicially enforce these Notices in Lieu of Subpoena to compel their attendance at trial. According to Rowe, the duty to appear pursuant to a Notice in Lieu of Subpoena stands unless it has been specifically released by the noticing party or by the trial judge. The duty to appear is not abrogated because the party leaves the case. A party served with a Notice in Lieu of Subpoena is subject to sanction for failing to appear. Universal Supply should have enforced the Notices in Lieu of Subpoena before any declaration of unavailability would be appropriate.

Under this holding, therefore, a defendant in asbestos litigation in New Jersey may need to serve Notices in Lieu of Subpoena upon all other parties after the first listing for trial. Thereafter, if the defendant is taking the case to trial, the defendant must exhaust all reasonable means of procuring the attendance of the settled defendant at trial, including seeking court enforcement of the Notice in Lieu of Subpoena and any sanctions that may be appropriate.

From a settled defendant’s perspective, this holding may require them to produce a representative for trial testimony in a case that has been resolved. Moreover, since the settled defendant is no longer considered a party to the action, it is unclear whether counsel may be present to represent the testifying witness at trial.

With these two rulings, the Appellate Division has eliminated a potential liability defense for equipment manufacturers and has seemingly imposed significant additional trial expenses on defendants by requiring them to exhaust all reasonable means to procure live testimony from settled defendants.  

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^{1   Petition for Certification to the New Jersey Supreme Court is pending.}

^{2   No trial in New Jersey has had to confront this issue at present. The Rowe opinion is an unpublished opinion and, as such, does not bind the trial court in future cases.}