Toxic Tort/Product Liability Alert February 2009 Author: Nicholas P. Vari nick.vari@klgates.com +1.412.355.8365 Additional Contact: Raymond L. Gill ray.gill@klgates.com +1.415.249.1088 K&L Gates comprises approximately 1,700 lawyers in 29 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. No Duty to Warn: California Court of Appeal Rejects Claim That Equipment Manufacturers Had Duty to Warn of Asbestos-Containing Products Supplied by Others to be Used With Equipment on Navy Ships On February 25, 2009, in an appeal argued by Raymond Gill of K&L Gates on behalf of its client Crane Co., a California Court of Appeal confirmed that Navy equipment suppliers have no legal responsibility in strict liability or negligence to warn of alleged dangers associated with the allegedly foreseeable use of asbestoscontaining products manufactured and supplied by others that were used with equipment on Navy ships.1 This decision places California courts in accord with a growing majority of courts that have decided this issue, and it may represent the end of efforts to misdirect responsibility unfairly in California asbestos claims, in which it has been argued that the liability of Navy equipment suppliers was limited only by what was foreseeable with 50-plus years of hindsight. Reginald Taylor joined the Navy in 1964. He was assigned to the USS Hornet, a steam-driven aircraft carrier originally commissioned in 1943, on which he served as a fireman apprentice, fireman, and machinist mate. As part of his job duties, Mr. Taylor removed and replaced asbestos-containing internal gaskets, flange gaskets, packing and blanket insulation for equipment on the ship, such as pumps and valves. Although plaintiff alleged that certain of the pumps and valves were supplied originally with asbestos-containing internal components, such as gaskets and packing material,2 it was undisputed that, in the 20-plus years since Hornet was commissioned, those original components had long since been removed and replaced with components manufactured and sold by other entities. Mr. Taylor was diagnosed with pleural mesothelioma3 in 2004. He and his wife filed a lawsuit in San Francisco Superior Court in which they alleged, among other things, that various entities that supplied equipment to the Navy were liable for failing to warn Mr. Taylor of the dangers associated with the subsequent, allegedly foreseeable, use of asbestos-containing materials with that equipment. The Taylors asserted causes of action for, inter alia, strict liability and negligence based upon the defendants purported failure to warn of dangers allegedly associated with the 1 Taylor v. Elliott Turbomachinery Co., et al., Case No. A116816 (Cal. App. 1st Dist., Div. 5, Feb. 25, 2009) ( Taylor ). 2 Packing material is often a rope-like material that seals the stem of a valve. During the 1940s, 1950s, and 1960s some packing materials contained asbestos. 3 Pleural mesothelioma is a cancer of the lining of the lungs. Toxic Tort/Product Liability Alert asbestos-containing products that were used with the equipment at some future point.4 Over the past several years, many trial courts have permitted claims of this type to be submitted to jurors, and multi-million dollar awards have been based upon the theory that Navy equipment manufacturers may be held forever responsible for asbestos-containing products manufactured and supplied by others, so long as the future use of asbestos-containing products was foreseeable to the equipment manufacturer. The Taylor opinion rejects that theory in its entirety, finding that it has never been viable under California law. The court first addressed plaintiff s strict liability claims, and after engaging in a lengthy review and analysis of the various relevant precedents, found three reasons why the equipment manufacturer defendants could not be held liable in strict liability for failing to warn of dangers allegedly associated with asbestos-containing products used with their products post-sale: California law restricts the duty to warn to the parties that manufactured or supplied the allegedly defective product (here the asbestoscontaining products that were used with the equipment); A product manufacturer has no duty to warn of defects in products supplied by others and used in conjunction with the manufacturer s product, unless the manufacturer s product, itself, caused the risk of harm (which the pumps and valves did not), and The component-part doctrine insulates manufacturers and suppliers of non-defective component parts (here pumps and valves) who do not substantially participate in this integration of those components into a final product. containing product with the equipment was foreseeable to the defendants. In so doing, the court found that foreseeability is not synonymous with duty; nor is it a substitute. 5 The court went on to balance numerous policy factors regarding the imposition of a tort duty, since [e]ven if an injury is foreseeable, policy reasons may dictate a cause of action should not be sanctioned no matter how foreseeable the risk. 6 In deciding that policy reasons militated against the imposition of a duty to warn of alleged damages associated with the use of other manufacturers asbestos-containing products two decades after the defendants equipment was sold to the Navy, the court found that little moral blame can be attached to the conduct of which plaintiff complained.7 Moreover, the court found that the imposition of such a duty would not prevent further injury, since asbestos has been subject to strict regulation for at least 30 years. The court concluded by recognizing that there was no doubt regarding the high social utility of the conduct of Crane Co. and the other defendants in providing parts essential to powering an aircraft carrier that was used to defend the United States during the greatest armed conflict of the 20th century. 8 On balance, the court simply rejected the notion that the equipment manufacturers conduct in this regard was anything that the legal system should seek to discourage or punish. The Taylor decision is not based upon any novel proposition. To the contrary, it is grounded in decades of California tort jurisprudence, which leads to the inescapable conclusion that California has never imposed a duty to warn regarding products manufactured and supplied by others in this context, and that any effort to impose liability of this type in California courts is, and always has been, without support, and should not continue in the future. The court, then, addressed plaintiff s negligence claim, and rejected the notion that a duty to warn existed if the subsequent use of an asbestos5 4 While there were other causes of action asserted, the court s opinion addressed the failure-to-warn theories only, although at least some of its analysis would seem to control design defect claims as well. Taylor, slip op. at 30. Id. 7 Taylor, slip op. at 32. 8 Taylor, slip op. at 33. 6 February 2009 2 Toxic Tort/Product Liability Alert K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and maintaining offices throughout the U.S., in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), and in Shanghai (K&L Gates LLP Shanghai Representative Office); a limited liability partnership (also named K&L Gates LLP) incorporated in England and maintaining our London and Paris offices; a Taiwan general partnership (K&L Gates) which practices from our Taipei office; and a Hong Kong general partnership (K&L Gates, Solicitors) which practices from our Hong Kong office. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners in each entity is available for inspection at any K&L Gates office. This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. ©2009 K&L Gates LLP. All Rights Reserved. February 2009 3