An HB Conference Report
How State Courts Differ on Equipment Manufacturer Liability in Asbestos Cases

By Dylan McGuire

The question of whether equipment, valve and component manufacturers can be held liable for asbestos insulation or gaskets added by third parties has been a hot topic lately in tort law and was discussed in depth by a distinguished panel of attorneys during a teleconference hosted by HB Litigation Conferences on Dec. 15, “National Spotlight on Asbestos and Equipment, Valve, & Component Manufacturers.”

The typical asbestos equipment case involves a worker who used a piece of equipment such as a boiler, turbine pump or valve that was manufactured without asbestos, but later required the use of an asbestos containing component, such as a brake, clutch or gasket that was manufactured by another company. In some cases, the use of an asbestos containing part was specified by the manufacturer, while in others it was not.

The laws of the states vary greatly on this issue. Some states, such as New York and New Jersey, hold that a manufacturer may be liable if the plaintiff can prove that it was foreseeable that the equipment may have required the use of asbestos parts. However, the majority of states have rejected the notion of liability for defective components manufactured by third parties.

West Coast

Christopher Strunk of Gordon & Rees in San Francisco said that the states of Washington and California have “led the charge” in finding equipment manufacturers to be non-liable.

Three recent California cases have established precedent for the non-liability of equipment manufacturers: Vickie L. Taylor v. Elliott Turbomachinery Co., Inc. (171 Cal. App. 4th 564; 90 Cal. Rptr. 3d 414; Decided Feb. 25, 2009); Barbara J. O’Neil v. Crane Co. (177 Cal. App. 4th 1019; 99 Cal. Rptr. 3d 533; Decided Sept. 18, 2009); and Richard Merrill v. Leslie Controls (179 Cal. App. 4th 262; 101 Cal. Rptr. 3d 614; Decided Nov. 17, 2009).

In Taylor, the plaintiff was suing Elliott Turbomachinery, arguing that it had a duty to warn him of asbestos-containing parts in the pumps and valves it supplied to the aircraft carrier upon which Taylor served during his tour of duty in the U.S. Navy in the 1960s. The trial court found that because the asbestos-containing products were manufactured by third parties, the defendant had no duty to warn Taylor.

An appeals court affirmed the trial court’s decision and recognized a “bright-line legal distinction tied to the injury-producing product in the chain of commerce,” Strunk said.

The court held that there is no liability for a part manufacturer that builds a product to specification of an equipment supplier, but doesn’t “substantially participate in the integration of their component in the final product,” Strunk said.

He also said that the court rejected the plaintiffs’ argument that the defendant was liable because it was foreseeable that its products would integrate asbestos-containing parts.

“The Taylor court recognizes that if forseeability alone were the criterion, then liability would extend far outside those responsible for the particular defective products. Defendants whose products happened to be used in conjunction with the defective product made or supplied by others would incur liability not only for their own product but also for every other product for which their product might foreseeably be used. And in this regard, ladies and gentlemen, you could, … using the foreseeability approach, hold a defendant liable for literally the entirety of a naval ship,” Strunk said.

The State of Washington also does not recognize liability for injuries caused by defective products caused by third parties, which was established in the cases Vernon Braaten v. Saberhagen Holdings (137 Wn. App. 32; 151 P.3d 1010; Decided December 11, 2008); and Joseph A. Simonetta v. Viad Corporation (165 Wn.2d 341; 197 P.3d 127; Decided December 11, 2008), Strunk said.

“So, with respect to what all this means and where we’re going … I think that it can be fairly said that on the west coast, you need to show exposure to original manufacturer installed components to survive summary judgment,” Strunk said.

Pennsylvania

According to Philadelphia attorneys Tracy McDevitt Hagan of Reilly, Janiczek & McDevitt and Bethann Schaffzin of the Shein Law Center, the law in Pennsylvania is not as clearly defined.

“We have no precedent in Pennsylvania on this issue. However, the issue itself does come up, more than just regularly,” Schaffzin said.

All of the asbestos cases in the state are consolidated before Judge Sandra Mazer Moss in the Court of Common Pleas in Philadelphia, who decides all summary judgment motions. Judge Moss, however, has yet to release an authoritative opinion on the issue of equipment manufacturer liability, Schaffzin said.

“The standard in Pennsylvania for a strict liability, failure to warn case … [is] liability does not attach unless a plaintiff can show that the injuries were caused by the product of the manufacturer/supplier,” McDevitt Hagan added.

Although not binding authority, the Pennsylvania Superior Court issued an unpublished opinion in the case Schaffner v. Aesys Techs., LLC (991 A.2d 369; 2010 Pa. Super.; Decided Jan. 21, 2010), and found that a manufacturer cannot be held liable under theories of strict liability or failure to warn for asbestos-containing component parts supplied by third parties. McDevitt Hagan said that the defendants in the case asked the superior court to publish the opinion, which it denied.

In two recent cases, the Philadelphia Court of Common pleas followed the same line of reasoning in Schaffner and granted summary judgment for equipment manufacturer defendants: Kolar v. Buffalo Pumps, Inc., et al. (15 Pa. D. & C.5th 38.; Decided Aug. 2, 2010); and Stralo v. Yarway Corp. et al. (2010 Phila. Ct. Com. Pl. LEXIS 125; June 11, 2010).

Schaffzin said, based on these cases, in order to succeed against an equipment manufacturer, a plaintiff must have some evidence of a “first-time repair” where a manufacturer supplied an asbestos component, or have testimony proving that the defendant specified an asbestos component in the repair or remanufacture of a piece of equipment.

Plaintiff’s Attorney Mark Weingarten of the Locks Law Firm added that, although not issued in state court, federal trial court Judge Thomas O’Neill of the Eastern District of Pennsylvania denied a summary judgment motion by the defense in an equipment manufacturer case, Raymond Chicano, et al. v. General Electric Company, et al., (2004 U.S. Dist. LEXIS 20330; Decided Oct. 5, 2004). In that case, the court found that a genuine issue of material fact existed as to the defendant’s duty to supply warnings regarding the use of asbestos-containing products that it knew would be used to cover the turbines it supplied to the U.S. Navy.

“The evidence also — and I think this was critical to the court’s decision — showed that G.E. also was aware of the hazards of asbestos, but did not provide any warning on the turbines with respect to asbestos danger,” Weingarten said.

“I look at Chicano as somewhat of a sore thumb in terms of a lot of these opinions. Although as a plaintiff’s lawyer, it is a very bright and shining sore thumb because it does show that there is the ability to at least get some of these cases on this type of a theory at least to the jury,” Weingarten said.

New York

Defense Attorney Mark Gaffrey of Hoagland, Longo, Moran, Dunst, and Doukas in New York said that the courts in his state are steadfast that the new line of cases out of California and Washington have not impacted New York law. The state of New York recognizes the “foreseeability” standard set forth in Berkowitz v. A.C. and S., Inc. (733 N.Y.S.2d 410 [NY Ct. App. 2001]).

Gaffrey said that defense attorneys in New York, however, would like the courts to recognize the Rastelli v. Goodyear Tire & Rubber (70 N.Y. 2d 289, 582 N.Y. S. 2d. 373 [1992]) standard. The Rastelli court made the distinction between “concertive” conduct, or two companies working together on a product, and parallel conduct. It ruled that a manufacturer should not be liable for the parallel conduct of a third party.

Gaffrey’s firm recently challenged the Berkowitz standard before the Appellate Court of New York County in an equipment manufacturer case that was decided for the plaintiff for a relatively low amount.

“By virtue of how oral argument occurred, the justices appeared to be leaning towards, at least from what we gathered sitting in the courtroom, applying Rastelli rather than Berkowitz, which really heartened us and concerned the plaintiff’s firm that we were up against as well as other plaintiff’s firms that practice in New York county,” Gaffrey said.

As a result, however, Gaffrey said that the case resolved for a lower amount than the verdict called for and the appellate court was not able to rule on the Berkowitz challenge. He said that the courts in New Jersey recognize the same standard.

Texas

Jim Lowery, a partner at K&L Gates in Dallas, said all asbestos cases in Texas are consolidated in a multi-district litigation (MDL) before Judge Mark Davidson in the Harris County 11th District Court in Houston.

Lowery said that the court has applied the Third Restatement of Torts, Section 5 to cases involving component parts and raw materials. That section says that a manufacturer or supplier can only be found liable if it “made the defective product, and the defective product was in and of itself defective, or, alternatively, the supplier substantially participated in the design of the finished product that caused the harm.” Lowery said.

As a result, premises owners and contractor defendants are no longer able to blame equipment manufacturers for external asbestos insulation added to the equipment, Lowery said.

“The court has been very clear that the same burden of proof applies to those seeking to impose a percentage of liability on someone in the courtroom as opposed to out of the courtroom,” Lowery said. “As a result, it has been very difficult for anyone to designate liability to a manufacturer whose equipment had external insulation applied by a third party at the specification and control of the third party.”

He said there has also been a lot of activity regarding asbestos gasket and packing issues and how they would apply to equipment cases. Despite some instructive rulings regarding the Texas Borg-Warner v. Flores (153 S.W.3d 209; Decided Dec. 14, 2004) standard for causation, the MDL is not settled on these issues, Lowery said.

Lowery said that the additional issue of premises liability was recently ruled upon in the case Union Carbide, et al. v. Oliver D. Smith, et al., (No. 01-08-00641-CV, Texas Court of Appeals, First District; Decided Oct. 1, 2009), in which an appeals court overturned the finding that premises owner Union Carbide was liable for the injuries of a contractor who was injured by exposure to asbestos-containing gaskets, finding that there was no evidence that the defendant controlled the plaintiff’s work.

Ohio

John Mismas, a plaintiff’s attorney with Bevan & Associates in Northfield, Ohio, said that defendants in equipment manufacturer cases in his state often cite Rolf L. Lindstrom, et al. v. A-C Product Liability Trust (05a0400p.06; 424 F.3d 488; 2005 U.S. App. LEXIS 21010; 2005 FED App. 0400P (6th Cir.); 2005 AMC 2425; Decided Sept. 28, 2005), to support the argument that they cannot be found liable for asbestos gaskets.

He said that the Cuyahoga County Court of Common Pleas, which handles all Ohio state asbestos cases, has issued recent conflicting decisions on the issue of equipment manufacturer liability. In 2008, the court in Ralph Parry v. A Best Products Company, et al. (No. CV-00-417716, Ohio Comm. Pls., Cuyahoga Co.), denied summary judgment for the defense, finding that the evidence showed that the defendant specified that asbestos insulation be placed on its pumps. However, in 2009, the court granted summary judgment in Albert Fisher, et al. v. A Best Products Company, et al., (No. CV-98-347689, Ohio Comm. Pls., Cuyahoga Co.), finding that there was no evidence that the equipment companies explicitly specified the use of asbestos insulation.

Mismas noted that the Ohio asbestos court does not normally issue written opinions on summary judgment motions.

“I would advise people that if they’re going to take an Ohio case, and they’re going to file somewhere and they’re going to apply Ohio law, you’d better check with somebody that knows Ohio law… There are a lot of good decisions that will help you get by some of these issues,” Mismas said.

Visit our store or call 484-324-2755 to order the audio package of HB’s National Spotlight on Asbestos and Equipment, Valve, & Component Manufacturers.

Join us April 7-8, 2011, in Chicago for more on equipment manufacturer liability and other developing issues in asbestos litigation at HB’s 4th Annual Emerging Trends in Asbestos Litigation Conference, chaired by William Sayers, Esq., of McKenna Long & Aldridge and Scott L. Frost, Esq., of Waters & Kraus, LLP. Register by February 25th for a $200 discount!