Toxic Tort Litigation Blog : Toxic Tort Lawyer & Attorney : Epstein Becker Green Law Firm : Product Liability, Contamination, Pollution

Guest bloggers David M. Governo and Corey M. Dennis are attorneys at Governo Law Firm in Boston, where they focus on the defense of toxic tort, product liability, environmental, and insurance coverage claims. Mr. Governo is the immediate past Chairman of the Toxic Tort and Environmental Law Section of the Federation of Defense & Corporate Counsel (FDCC).

Earlier this month, Judge Robreno of the U.S. District Court of the Eastern District of Pennsylvania, who presides over the federal Asbestos Products Liability Litigation consolidated Multidistrict Litigation docket (MDL 875), considered an issue of first impression under maritime law in Mack v. General Electric Company, MDL-875, No. 2:10-78940-ER, 2012 WL 4717918 (E.D. Pa. Oct. 3, 2012): whether a Navy ship is a “product” under strict product liability law.

The defendants were Navy ship builders—General Dynamics, Northrop Grumman Shipbuilding, and Todd Pacific Shipyards—who moved for summary judgment on the ground that a Navy ship is not a product for which strict product liability applies and that the sophisticated user defense relieved them of liability. Judge Robreno agreed that a Navy ship is not a “product” for purposes of strict product liability law, reasoning that: (1) the role of a Navy ship builder is “more like a provider of a service” than “a manufacturer or supplier of a product”; and (2) imposing liability on a Navy shipbuilder for thousands of products would be an undue burden likely to discourage shipbuilding. He concluded, therefore, that the manufacturers of the various asbestos-containing products aboard the ships, rather than the ship builders, should “bear the burden of preventing harm” to Navy seamen.

Judge Robreno also adopted the “sophisticated user” defense under maritime law, which relieves a product manufacturer of its duty to warn end users who are “sophisticated” regarding the hazards of the product by virtue of their training, education, or employment. However, he rejected the defendants’ argument that the Navy’s sophistication regarding asbestos discharged their duty to warn the plaintiff, finding that the lack of evidence of the seaman plaintiff’s sophistication was fatal to the defense.

Judge Robreno limited the applicability of the sophisticated user defense under maritime law, concluding that the defense only applies: (1) to negligent failure to warn claims; and (2) where the end user himself (e.g., Navy seaman) was a sophisticated user of the product. As a result, the defendants’ motions for summary judgment were granted as to the plaintiff’s strict liability claims, but denied as to the plaintiff’s negligent failure to warn claims.

While not binding precedent, the Mack decision represents persuasive authority that Navy ship builders may rely on to establish that they should not be held liable, at least under strict liability, for Navy ships. However, Judge Robreno’s ruling on the sophisticated user defense, the applicability of which varies greatly by jurisdiction, is less helpful for defendants. Although he adopted the sophisticated user defense under maritime law, under his interpretation, the sophisticated user defense is very limited.

 This ruling is at odds with the laws of some states, including Massachusetts. See Carrel v. Nat'l Cord & Braid Corp., 447 Mass. 431, 441 (2006) (adopting sophisticated user doctrine as a defense to claims of negligent failure to warn and failure to warn under breach of warranty, as pertaining to end users or intermediaries); Taylor v. Am. Chemistry Council, 576 F.3d 16, 25 (1st Cir. 2009) (explaining sophisticated user defense applies to end users or intermediate parties, such as employers).
 

BNA Toxics Law Reporter reports that on August 3, 2009, the First Circuit affirmed the dismissal of the American Chemistry Council ("ACC"), formerly known as the Chemical Manufacturers Association, in a case arising from a plaintiff's long-term exposure to vinyl chloride. The First Circuit's decision in June Taylor et al v. ACC, et al is attached. The ACC is the chemical industry's trade association.  The ACC has been effective in improving the image of the chemical industry in the United States and in promoting safety and environmental initiatives within its membership.  The family of Claude Taylor alleged in federal district court in Massachusetts that ACC, along with several chemical manufacturers, should be found liable for failure to warn, conspiracy and fraud for helping to produce false and misleading warnings that were adopted by the PVC industry.  The plaintiff focused on an ACC publication entitled, "Chemical Safety Data Sheet SD-56", which was first published in 1954 and later revised in 1972, claiming that the publication downplayed the danger of VC exposure.  In upholding the trial court's dismissal of the claims against the ACC, the First Circuit held that there was no evidence that the trade association had the "unlawful intent" necessary to establish "substantial assistance liability" under MA law.  The court held that it would have been necessary for plaintiff to prove that ACC was aware of Monsanto's tortious conduct and that it intended to assist or encourage that conduct.  The wide dissemination of SD-56 within the industry was not sufficient to support the claim that the ACC was aware that Monsanto was incorporating SD-56 into its own literature.  ACC's lawyer, Tim Couglin of Thompson Hine, successfully convinced the appeals court that: (1) ACC did not provide "substantial assistance" to Monsanto; (2) ACC had no knowledge of Monsanto's activities; and (3) there was no record evidence to support the underlying conspiracy claim. 

Trade associations do not manufacture or market products, but they have been the targets of toxic tort and product liability plaintiffs nonetheless.  The threshold issue in these cases is whether the association owed a duty of care to the plaintiff.  In cases in which the trade association is alleged to have promulgated a safety standard, the issue often comes down to the degree of control the trade association has over its members.  In the absence of control, the trade association is not as likely to be held liable for failure to warn.  What about a trade association that endorses products?  If a plaintiff's injury is due to a defect in a product bearing the "Good Housekeeping Seal of Approval", for example, is the association potentially liable?  One California court replied in the affirmative if it could be demonstrated that the association obtained economic gain from the endorsement and encouraged the public to purchase the product, and that  the plaintiff relied on the representation to his detriment.  Courts appear to recognize that it is not in the public interest to hold trade associations liable for injuries to remote plaintiffs in tort litigation.  The AAA might rank hotels on the basis of service and cleanliness.  Should the AAA be subject to liability for injuries allegedly resulting from its failing to warn its members that a hotel was located in a bad neighborhood?