Toxic Tort/Product Liability Alert April 2008 Contact: Chris M. Temple +1.412.355.6343 chris.temple@klgates.com K&L Gates comprises approximately 1,500 lawyers in 24 offices located in North America, Europe and Asia, and represents capital markets participants, entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector entities. For more information, please visit www.klgates.com. www.klgates.com Supreme Court of California Recognizes the “Sophisticated User” Defense Johnson v. American Standard, No. S139184 (Cal. Apr. 3, 2008) As a matter of first impression, on April 3, 2008, a unanimous Supreme Court of California adopted the “sophisticated user” defense in product liability cases. Under this defense, a manufacturer is absolved of any duty to warn of the dangers associated with its product where the user of the product knows or should have known of the product’s hazards. Accordingly, failure-to-warn defendants may now reach beyond knowledge to which a plaintiff admits, and argue that there is no duty to warn one who should have known of the dangers associated with a particular product. Factual Background Johnson involved an experienced, certified HVAC technician, William Johnson, who repaired air-conditioning systems and who alleged that he was exposed to phosgene gas related to the decomposition of a refrigerant. The risk was one which Mr. Johnson was either aware of, or should have been aware of, from his employer and readily available safety regulations. In 2003, Mr. Johnson filed suit against various chemical manufacturers, chemical suppliers, and manufacturers of air-conditioning equipment, alleging that his exposure to phosgene gas caused him to develop pulmonary fibrosis. He claimed, among other things, that the defendants were both negligent and strictly liable for failing to warn him of the hazards associated with their products. A manufacturer of the evaporator that contained the refrigerant at issue moved for summary judgment, arguing that it had no duty to warn Mr. Johnson of the dangers of refrigerant/ phosgene exposure, because Mr. Johnson, and the group of trained professionals to which he belonged, was already aware of those risks. Both the trial court and Court of Appeal agreed. Supreme Court of California’s Recognition of the Defense The California Supreme Court held unequivocally that the sophisticated user defense applies in California. According to the Court, the “sophisticated user defense exempts manufacturers from their typical obligation to provide product users with warnings about the products’ potential hazards.” Under the defense, “sophisticated users need not be warned about dangers of which they are already aware or should be aware.” In essence, a sophisticated user is charged with knowledge of a product’s risks, and the manufacturer’s failure to warn cannot be “the legal cause of any harm that product may cause.” There are three noteworthy aspects to this defense, as stated by the Supreme Court in Johnson. Toxic Tort/Product Liability Alert • First, the defense applies in both strict liability and negligent failure-to-warn cases. • S econd, the defense is objective. Even if the sophisticated user did not actually know of the dangers associated with the product, if the user should have known, then the defense applies. • T hird, the relevant time for determining “user sophistication” is when the plaintiff is injured, as opposed to when the product was manufactured. Application of Johnson to Third-Party Sophisticated Users While Johnson involved a plaintiff who was a sophisticated user of a product, the Supreme Court recognized that the doctrine applies also to situations where products are sold to a third-party sophisticated intermediary, such as the plaintiff’s employer. In fact, the Supreme Court, in discussing the development of the defense, relied upon In re Related Asbestos Cases, 543 F. Supp. 1142 (N.D. Cal. 1982), a case where the court found that manufacturers of asbestos-containing products had no duty to warn of dangers allegedly associated with their products, because the plaintiff’s employer—the United States Navy—had knowledge regarding the dangers of asbestos at least equal to that of the equipment manufacturers. Conclusion The Johnson opinion provides a positive step in the right direction regarding manufacturers’ ability to defend failure-to-warn claims in California, although California continues to remain a problematic jurisdiction for product liability defendants. 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