On March 19, 2019, the US Supreme Court, in a 6–3 decision, decided a case that expands the maritime products liability duty to warn in Air & Liquid Systems Corp. v. DeVries, 27 Fla. L. Weekly Fed. S. 715 (U.S. 2019).
This case is sure to make the plaintiff's bar happy but will cause great consternation with manufacturers.
This maritime tort case raises a question about the scope of a manufacturer's duty to warn. The manufacturers here produced equipment such as pumps, blowers, and turbines for three Navy ships. The equipment required asbestos insulation or asbestos parts in order to function as intended. When used on the ships, the equipment released asbestos fibers into the air. Two Navy veterans who were exposed to asbestos on the ships developed cancer and later died. The veterans' families sued the equipment manufacturers, claiming that the manufacturers were negligent in failing to warn of the dangers of asbestos.
The plaintiffs contend that a manufacturer has a duty to warn when the manufacturer's product requires incorporation of a part (here, asbestos) that the manufacturer knows is likely to make the integrated product dangerous for its intended uses. The manufacturers respond that they had no duty to warn because they did not themselves incorporate the asbestos into their equipment; rather, the Navy added the asbestos to the equipment after the equipment was already onboard the ships.
We agree with the plaintiffs. In the maritime tort context, a product manufacturer has a duty to warn when (i) its product requires incorporation of a part, (ii) the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and (iii) the manufacturer has no reason to believe that the product's users will realize that danger.
Facts of the Case
Under the facts of the case, the defendant manufacturers produced equipment in a condition known as "bare-metal." The Navy later added asbestos to the equipment as insulation. Plaintiffs claimed the manufacturers negligently failed to warn them of the dangers of asbestos in the integrated products. The manufacturers asserted what is known as the "bare-metal defense," claiming they should not be liable for later-added third-party parts.
The district court granted the defense summary judgment. The Third Circuit Court of Appeals vacated the ruling and remanded, holding "'a manufacturer of a bare-metal product may be held liable for a plaintiff 's injuries suffered from later-added asbestos-containing materials' if the manufacturer could foresee that the product would be used with the later-added asbestos-containing materials." The US Supreme Court granted certiorari to resolve a circuit split on the issue.
The Applicable Law
This was a case that was governed by federal maritime law. Maritime law has recognized the principles of products liability for decades. A manufacturer has a duty to warn when it "knows or has reason to know" that its product "is or is likely to be dangerous for the use for which it is supplied" and the manufacturer "has no reason to believe" that the product's users will realize that danger.
The court noted state and federal courts were using three approaches on how to apply the duty to warn.
The first approach is the more plaintiff-friendly foreseeability rule that the Third Circuit adopted in this case: A manufacturer may be liable when it was foreseeable that the manufacturer's product would be used with another product or part, even if the manufacturer's product did not require use or incorporation of that other product or part (citations omitted).
The second approach is the more defendant-friendly bare-metal defense that the manufacturers urge here: If a manufacturer did not itself make, sell, or distribute the part or incorporate the part into the product, the manufacturer is not liable for harm caused by the integrated product—even if the product required incorporation of the part and the manufacturer knew that the integrated product was likely to be dangerous for its intended uses (citations omitted).
The third approach falls between those two approaches. Under the third approach, foreseeability that the product may be used with another product or part that is likely to be dangerous is not enough to trigger a duty to warn. But a manufacturer does have a duty to warn when its product requires incorporation of a part and the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses. Under that approach, the manufacturer may be liable even when the manufacturer does not itself incorporate the required part into the product (citations omitted).
The Supreme Court Decision
The court concluded the third approach was the most appropriate. The court believed the rule of mere foreseeability "would sweep too broadly" and would create "uncertainty and unfairness" to manufacturers. Conversely, the "bare-metal defense" goes too far the other direction, according to the court. The court reasoned the following.
Importantly, the product manufacturer will often be in a better position than the parts manufacturer to warn of the danger from the integrated product.… The product manufacturer knows the nature of the ultimate integrated product and is typically more aware of the risks associated with that integrated product. By contrast, a parts manufacturer may be aware only that its part could conceivably be used in any number of ways in any number of products. A parts manufacturer may not always be aware that its part will be used in a way that poses a risk of danger.
The court went on to the following.
And the rule that we adopt here is tightly cabined. The rule does not require that manufacturers warn in cases of mere foreseeability. The rule requires that manufacturers warn only when their product requires a part in order for the integrated product to function as intended.
The court noted its rule was especially appropriate in the maritime context in which those that "venture upon hazardous and unpredictable sea voyages" have always been protected by the courts. As a point of clarity, the court added the following.
Courts have determined that this rule applies in certain related situations, including when: (i) a manufacturer directs that the part be incorporated, (cite omitted); (ii) a manufacturer itself makes the product with a part that the manufacturer knows will require replacement with a similar part, (cite omitted); or (iii) a product would be useless without the part, (cite omitted).
The court required the district court to reconsider its grant of summary judgment to the defendants.
The dissent presents a very well-reasoned analysis for the difficulty in applying the new standard and provides a number of practical examples, after which it states: "Headscratchers like these are sure to enrich lawyers and entertain law students, but they also promise to leave everyone else wondering about their legal duties, rights, and liabilities."
It remains to be seen how this new, more plaintiff-friendly, standard will affect future cases.
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