Yesterday the California Supreme Court released an important unanimous opinion in an asbestos case that limits a manufacturer's liability and duties to its own products -- not the products of other manufacturers. See O'Neil v. Crane Co., 2012 WL 88533 (Cal. Jan 12, 2012).
In O'Neil, plaintiff's decedent had served on the USS Oriskany, an Essex class, steam-powered aircraft carrier, from 1965 to 1967. He supervised enlisted men who repaired equipment in the engine and boiler rooms, and thus was exposed to airborne asbestos fibers as the workers cut into the external insulation of the pipes, valves, and gaskets to replace parts.
Two of the companies plaintiff had sued were Crane Co. and Warren Pumps Co. Crane made valves for Navy ships according to Navy specifications (which required the use of asbestos), and Warren made Pumps for the ship's steam propulsion system according to Navy specifications. Crane and Warren's parts were incorporated into the ship in 1943, more than 20 years before plaintiff's decedent first came aboard the ship. It was undisputed that any asbestos-containing parts of the defendants' pumps or valves had been replaced long before 1965, and that plaintiff's decedent therefore did not encounter them.
Plaintiff sued Crane and Warren anyway, asserting at trial that they should be liable because: (1) their products originally had included some asbestos containing components, (2) it was foreseeable that the parts would wear out and be replaced with other asbestos-containing products, and (3) these repair and replacement procedures would release harmful asbestos dust.
The trial court had granted the defendants' motion for non-suit, but the California Court of Appeal had reversed, restating the strict liability rule in this way: "A manufacturer is liable in strict liability for the dangerous components of its products, and for dangerous products with which its product will necessarily be used."
In a decision that harkens back to the fundamental precepts underlying strict liability and the whole concept of product liability, the California Supreme Court reversed. In a series of very quotable passages, the court hewed to the notion that liability must be tied to the product that the manufacturer made, and that manufacturers have no duties to end users that arise from the use of other manufacturers' products.
With respect to strict liability claims, the court held that there could be no strict liability design claim because the alleged design defect in Crane's and Warren's products -- the inclusion of asbestos-containing gaskets -- was not a legal cause of Mr. O'Neil's injury because these asbestos-containing parts were not on the ship by the time Mr. O'Neil got there. As for the strict liability failure to warn claim, the court held that defendants had no duty to warn of risks arising from other manufacturers' products, namely other asbestos-containing valves and insulation that the Navy used with Crane's and Warren's products.
In a section of the opinion entitled "No Liability Outside a Defective Product's Chain of Distribution," the California Supreme Court explained:
From the outset, strict products liability in California has always been premised on harm caused by deficiencies in the defendant's own product. . . .
Strict liability encompasses all injuries caused by a defective product, even those traceable to a defective component part supplied by another. However, the reach of strict liability is not limitless. We have never held that strict liability extends to harm from entirely distinct products that the consumer can be expected to use with, or in, the defendant's nondefective product. Instead, we have consistently adhered to the Greenman formulation requiring proof that the plaintiff suffered injury caused by a defect in the defendant's own product. Regardless of a defendant's position in the chain of distribution, "the basis for his liability remains that he has marketed or distributed a defective product" and that product caused the plaintiff's injury.
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In this case, it is undisputed that O'Neil was exposed to no asbestos from a product made by the defendants. Although he was exposed to potentially high levels of asbestos dust released from insulation the Navy had applied to the exterior of the pumps and valves, Crane and Warren did not manufacture or sell this external insulation. They did not mandate or advise that it be used with their products. O'Neil was also exposed to asbestos from the replacement gaskets and packing inside the pumps and valves. Yet, uncontroverted evidence established that these internal components were not the original parts supplied by Crane and Warren. They were replacement parts the Navy had purchased from other sources.
It is fundamental that the imposition of liability requires a showing that the plaintiff's injuries were caused by an act of the defendant or an instrumentality under the defendant's control.
Id. at pp. 4-5 (citations omitted).
The California Supreme Court similarly rejected any duty to warn about dangers inherent in somebody else's products:
Generally speaking, manufacturers have a duty to warn consumers about the hazards in their products. The requirement's purpose is to inform consumers about a product's hazards and faults of which they are unaware, so that they can refrain from using the product altogether or evade the danger by careful use. Typically, under California law, we hold manufacturers strictly liable for injuries caused by their failure to warn of dangers that were known to the scientific community at the time they manufactured and distributed their product. However, we have never held that a manufacturer's duty to warn extends to hazards arising exclusively from other manufacturers' products. A line of Court of Appeal cases holds instead that the duty to warn is limited to risks arising from the manufacturer's own product.
Id. at p. 6 (citations omitted).
The court proceeded to address a number of California and out-of-state authorities. Ultimately, the court refused to adopt the plaintiff's argument, which focused exclusively on the foreseeability of the harm alone:
We reaffirm that a product manufacturer generally may not be held strictly liable for harm caused by another manufacturer's product. The only exceptions to this rule arise when the defendant bears some direct responsibility for the harm, either because the defendant's own product contributed substantially to the harm or because the defendant participated substantially in creating a harmful combined use of the products.
. . . However, the foreseeability of harm, standing alone, is not a sufficient basis for imposing strict liability on the manufacturer of a nondefective product, or one whose arguably defective product does not actually cause harm. . . .
The question whether to apply strict liability in a new setting is largely determined by the policies underlying the doctrine. The conclusion we reach here is most consistent with the policies the strict liability doctrine serves. Although "an important goal of strict liability is to spread the risks and costs of injury to those most able to bear them," "it was never the intention of the drafters of the doctrine to make the manufacturer or distributor the insurer of the safety of their products. It was never their intention to impose absolute liability." . . . [P]roduct manufacturers "generally have no 'continuing business relationship'" with each other. This means that a manufacturer cannot be expected to exert pressure on other manufacturers to make their products safe and will not be able to share the costs of ensuring product safety with these other manufacturers. It is also 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.
A contrary rule would . . . impose an excessive and unrealistic burden on manufacturers. Perversely, such an expanded duty could also undermine consumer safety by inundating users with excessive warnings. "To warn of all potential dangers would warn of nothing."
Id. at 13-14 (citations omitted).
The court also rejected the notion of imposing any duty to warn in negligence:
Assuming that a manufacturer can "reasonably be expected to foresee the risk of latent disease arising from products supplied by others that may be used with the manufacturer's product years or decades after the product leaves the manufacturer's control," we nevertheless conclude strong policy considerations counsel against imposing a duty of care on pump and valve manufacturers to prevent asbestos-related disease.
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In short, expansion of the duty of care as urged here would impose an obligation to compensate on those whose products caused plaintiffs no harm. To do so would exceed the boundaries established over decades of product liability law. "'[S]ocial policy must at some point intervene to delimit liability' even for foreseeable injury . . . ." The same policy considerations that militate against imposing strict liability in this situation apply with equal force in the context of negligence.
Id. at 15 (citations omitted).
The court's opinion in O'Neil is a forceful reminder that liability in this field of law must be grounded in the actual sale or distribution of a defective product that actually causes harm. To go beyond that -- chasing some form of "foreseeability" -- leaves liability untethered to reality and allows for defendants to be saddled with liability for products and situations far outside of their control.
O'Neil, of course, involved one plaintiff. But there are thousands of asbestos cases out there in which defendants like Crane and Warren are sued every day, despite the fact that their products did not -- and could not -- have caused the plaintiff's harm. The sheer cost of defending these actions through pleadings, motions practice, and, ultimately, trial, is enormous. That's why O'Neil, which sets a bright-line rule of non-liability as a matter of law, is so important. Such defendants should now be dropped from these suits entirely, and where they are not, they should be able to move to dismiss and seek costs.